Document:

Exhibit 10.21

Exhibit 10.21

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the
“Security Agreement”) is entered into as of October 12, 2005, by and among Core-Mark
Holding Company, Inc., a Delaware corporation (“Holdings”), Core-Mark International, Inc.,
a Delaware corporation (“International”), Core-Mark Holdings I, Inc., a Delaware
corporation (“Holdings I”), Core-Mark Holdings II, Inc., a Delaware corporation
(“Holdings II”), Core-Mark Holdings III, Inc., a Delaware corporation (“Holdings
III”), Core-Mark Midcontinent, Inc., a Arkansas corporation (“Midcontinent”), Core-Mark
Interrelated Companies, Inc., a California corporation (“Interrelated”), Head Distributing
Company, a Georgia corporation (“Head”), Minter-Weisman Co., a Minnesota corporation
(“Minter-Weisman”; each of Holdings, International, Holdings I, Holdings II, Holdings III,
Midcontinent, Interrelated, Head and Minter-Weisman referred to herein as a “Grantor” and
collectively such entities are referred to herein as the “Grantors”), and JPMorgan Chase
Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the
lenders party to the Credit Agreement referred to below.

PRELIMINARY STATEMENT

Each of the Grantors, the Administrative Agent, the Loan Parties and the Lenders are entering
into a Credit Agreement dated as of October 12, 2005 (as it may be amended or modified from time to
time, the “Credit Agreement”). The Grantors are entering into this Security Agreement in
order to induce the Lenders to enter into and extend credit to the Grantors under the Credit
Agreement.

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Lenders, hereby agree
as follows:

ARTICLE I

DEFINITIONS

1.1. Terms Defined in Credit Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in
this Security Agreement are used herein as defined in the UCC.

1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in
addition to the terms defined in the Preliminary Statement, the following terms shall have the
following meanings:

“Accounts” shall have the meaning set forth in Article 9 of the UCC and as set forth
in the PPSA, as applicable.

“Article” means a numbered article of this Security Agreement, unless another document
is specifically referenced.

“Assigned Contracts” means, collectively, all of the Grantors’ rights and remedies
under, and all moneys and claims for money due or to become due to any Grantor under those
contracts set forth on Exhibit J hereto, and any other material contracts, and any and all
amendments, supplements, extensions, and renewals thereof including all rights and claims of any
Grantor now or hereafter existing: (a) under any insurance, indemnities, warranties, and guarantees
provided for or arising out of or in connection with any of the foregoing agreements; (b) for any
damages arising out of or for breach or default under or in connection with any of the foregoing
contracts; (c) to all other amounts from time to time paid or payable under or in connection with
any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies,
powers and privileges thereunder.

 

 

 

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC and as set
forth in the PPSA, as applicable.

“Closing Date” means the date of the Credit Agreement.

“Collateral” shall have the meaning set forth in Article II.

“Collateral Access Agreement” means any landlord waiver or other agreement, in form
and substance reasonably satisfactory to the Administrative Agent, between the Administrative Agent
and any third party (including any bailee, consignee, customs broker, or other similar Person) in
possession of any Collateral or any landlord of any Loan Party for any real property where any
Collateral is located, as such landlord waiver or other agreement may be amended, restated, or
otherwise modified from time to time.

“Collateral Deposit Accounts” shall have the meaning set forth in Section 7.1(a).

“Collateral Report” means any certificate (including any Borrowing Base Certificate),
report or other document delivered by any Grantor to the Administrative Agent or any Lender with
respect to the Collateral pursuant to any Loan Document.

“Collection Account” shall have the meaning set forth in Section 7.1(b).

“Commercial Tort Claims” means the following existing commercial tort claims of the
Grantors: None.

“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Copyrights” means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of
any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or
payable under any of the foregoing, including, without limitation, damages or payments for past or
future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing
throughout the world.

“Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Deposit Account Control Agreements” means agreements, in form and substance
reasonably satisfactory to the Administrative Agent, among any Loan Party, a banking institution
holding such Loan Party’s funds, and the Administrative Agent with respect to collection and
control of all deposits and balances held in a deposit account maintained by any Loan Party with
such banking institution.

“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC and shall
include any bank account (with a deposit function) domiciled in Canada.

“Documents” shall have the meaning set forth in Article 9 of the UCC and shall include
“documents of title” as defined in the PPSA.

“Equipment” shall have the meaning set forth in Article 9 of the UCC and as set forth
in the PPSA, as applicable.

“Event of Default” shall have the meaning set forth in the Credit Agreement.

 

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“Excluded Equity” means any Voting Stock in excess of 65% of the total outstanding
Voting Stock of any direct Subsidiary of any Grantor that is a Non-U.S. Person. For the purposes of
this definition, “Voting Stock” means, as to any issuer, the issued and outstanding shares
of each class of capital stock or other ownership interests of such issuer entitled to vote (within
the meaning of Treasury Regulations § 1.956-2(c)(2)).

“Excluded Property” means, collectively, (i) Excluded Equity, (ii) any permit, lease,
license, contract, instrument or other agreement held by any Grantor that prohibits or required the
consent of any Person other than a Grantor and its Affiliates as a condition to the creation by
such Grantor of a Lien thereon, or any permit, lease, license contract or other agreement held by
any Grantor to the extent that any Requirement of Law applicable thereto prohibits the creation of
a Lien thereon, but only, in each case, to the extent, and for so long as, such prohibition is not
terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other
Requirement of Law (iii) any “intent to use” Trademark applications for which a statement of use
has not been filed (but only until such statement is filed) and (iv) Equipment owned by any Grantor
that is subject to a purchase money Lien or a Capital Lease if the contract or other agreement in
which such Lien is granted (or in the documentation providing for such Capital Lease) prohibits or
requires the consent of any Person other than a Grantor and its Affiliates as a condition to the
creation of any other Lien on such Equipment; provided, however, “Excluded
Property” shall not include any Proceeds, substitutions or replacements of Excluded Property
(unless such Proceeds, substitutions or replacements would constitute Excluded Property).

“Exhibit” refers to a specific exhibit to this Security Agreement, unless another
document is specifically referenced.

“Fixtures” shall have the meaning set forth in Article 9 of the UCC.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC and
includes, without limitation, credits for tobacco stamp taxes paid and “intangibles” as defined in
the PPSA.

“Goods” shall have the meaning set forth in Article 9 of the UCC and as set forth in
the PPSA, as applicable.

“Instruments” shall have the meaning set forth in Article 9 of the UCC and as set
forth in the PPSA, as applicable.

“Inventory” shall have the meaning set forth in Article 9 of the UCC and as set forth
in the PPSA, as applicable, and includes, without limitation, unaffixed tobacco stamps.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

“Lenders” means the lenders party to the Credit Agreement and their successors and
assigns.

“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC.

“Licenses” means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements in and to its
Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or
hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past and future breaches thereof, and (c) all rights to sue for past, present, and
future breaches thereof.

“Lock Boxes” shall have the meaning set forth in Section 7.1(a).

“Lock Box Agreements” shall have the meaning set forth in Section 7.1(a).

 

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“Patents” means, with respect to any Person, all of such Person’s right, title, and
interest in and to: (a) any and all patents and patent applications; (b) all inventions and
improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals,
extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and
payments now or hereafter due or payable under and with respect thereto, including, without
limitation, damages and payments for past and future infringements thereof; (e) all rights to sue
for past, present, and future infringements thereof; and (f) all rights corresponding to any of the
foregoing throughout the world.

“Pledged Collateral” means all Instruments, Securities and other Investment Property
of the Grantors, whether or not physically delivered to the Administrative Agent pursuant to this
Security Agreement; provided that stock and other ownership interests in inactive
Subsidiaries of the Loan Parties that do not have material assets shall not constitute “Pledged
Collateral”.

“PPSA” means the Personal Property Security Act of Ontario (or any successor statute)
or similar legislation (including, without limitation, the Civil Code) of any other province or
territory of Canada the laws of which are required by such legislation to be applied in connection
with the issue, perfection, enforcement, validity or effect of security interests.

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments and any other rights or claims to receive money which are General Intangibles or which
are otherwise included as Collateral.

“Required Secured Parties” means (a) prior to an acceleration of the Obligations under
the Credit Agreement, the Required Lenders, and (b) after an acceleration of the Obligations under
the Credit Agreement but prior to the date upon which the Credit Agreement has terminated by its
terms and all of the obligations thereunder have been paid in full or otherwise satisfied, Lenders
holding in the aggregate at least a majority of the sum of the Aggregate Credit Exposure
plus the Banking Services Obligations.

“Section” means a numbered section of this Security Agreement, unless another document
is specifically referenced.

“Security” has the meaning set forth in Article 8 of the UCC and as set forth in the
PPSA, as applicable.

“Stock Rights” means all dividends, instruments or other distributions and any other
right or property which any Grantor shall receive or shall become entitled to receive for any
reason whatsoever with respect to, in substitution for or in exchange for any Equity Interest
constituting Collateral, any right to receive an Equity Interest and any right to receive earnings,
in which any Grantor now has or hereafter acquires any right, issued by an issuer of such Equity
Interest.

“Supporting Obligations” shall have the meaning set forth in Article 9 of the UCC.

“Trademarks” means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all trademarks (including service marks), trade names, trade
dress, and trade styles and the registrations and applications for registration thereof and the
goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and
payments now or hereafter due or payable with respect thereto, including, without limitation,
damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for
past, present, and future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights corresponding to any of the
foregoing throughout the world.

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State
of New York or of any other state the laws of which are required as a result thereof to be applied
in connection with the attachment, perfection or priority of, or remedies with respect to,
Administrative Agent’s or any Lender’s Lien on any Collateral.

The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.

 

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ARTICLE II

GRANT OF SECURITY INTEREST

2.1 Each of the Grantors hereby pledges, assigns and grants to the Administrative Agent, on
behalf of and for the ratable benefit of the Lenders, a security interest in all of its right,
title and interest in, to and under all personal property and other assets, whether now owned by or
owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade
name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such
Grantor, and regardless of where located (all of which will be collectively referred to as the
“Collateral”), including, without limitation:

	 	(i)	 	all Accounts;
	 
	 	(ii)	 	all Chattel Paper;
	 
	 	(iii)	 	all Copyrights, Patents and Trademarks;
	 
	 	(iv)	 	all Documents;
	 
	 	(v)	 	all Equipment;
	 
	 	(vi)	 	all Fixtures (excluding business fixtures not owned by the Grantors);
	 
	 	(vii)	 	all General Intangibles;
	 
	 	(viii)	 	all Goods;
	 
	 	(ix)	 	all Instruments;
	 
	 	(x)	 	all Inventory;
	 
	 	(xi)	 	all Investment Property;
	 
	 	(xii)	 	all cash or cash equivalents;
	 
	 	(xiii)	 	all letters of credit, Letter-of-Credit Rights and Supporting Obligations;
	 
	 	(xiv)	 	all Deposit Accounts with any bank or other financial institution;
	 
	 	(xv)	 	all Commercial Tort Claims;
	 
	 	(xvi)	 	all Assigned Contracts;
	 
	 	(xvii)	 	and all accessions to, substitutions for and replacements, proceeds
(including Stock Rights), insurance proceeds and products of the
foregoing, together with all books and records, customer lists,
credit files, computer files, programs, printouts and other
computer materials and records related thereto and any General
Intangibles at any time evidencing or relating to any of the
foregoing;

to secure the prompt and complete payment and performance of the Secured Obligations;
provided, however, that (notwithstanding any other provisions of this Agreement)
“Collateral” shall not include any Excluded Property; and provided, further, that
if and when any property shall cease to be Excluded Property, such property shall be deemed at all
times from and after the date hereof to constitute Collateral.

 

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2.2 The last day of the term of any lease, oral or written, or any agreement therefor, now
held or hereafter acquired by a Grantor, shall be excepted from the security interest hereby
granted and shall not form part of the Collateral, but such Grantor shall stand possessed of such
one day remaining, upon trust to assign and dispose of the same as the Administrative Agent or any
assignee of such lease or agreement shall direct. If any such lease or agreement therefor contains
a provision which provides in effect that such lease or agreement may not be assigned, sub leased,
charged or encumbered without the leave, license, consent or approval of the lessor, the
application of the security interest created hereby to any such lease or agreement shall be
conditional upon such leave, license, consent or approval having been obtained.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each of the Grantors represents and warrants to the Administrative Agent and the Lenders that:

3.1. Title, Perfection and Priority. Each Grantor has good and valid rights in or the
power to transfer the Collateral and title to the Collateral with respect to which it has purported
to grant a security interest hereunder, free and clear of all Liens except for Liens permitted
under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant hereto. When financing statements have been filed in
the appropriate offices against each Grantor in the locations listed on Exhibit H, the
Administrative Agent will have a fully perfected first priority security interest in that
Collateral in which a security interest may be perfected by filing, subject only to Liens permitted
under Section 4.1(e); provided that unless the Administrative Agent shall file fixture
filings in the appropriate filing offices for the counties where the Fixtures are located, the
Administrative Agent’s perfected security interest in Fixtures may not be a first priority security
interest.

3.2. Type and Jurisdiction of Organization, Organizational and Identification Numbers.
The type of entity of each Grantor, its state or province of organization, the organizational
number issued to it by its state of organization and its federal employer identification number are
set forth on Exhibit A.

3.3. Principal Location. Except as may be notified to the Administrative Agent
following the date hereof, each Grantor’s mailing address and the location of its place of business
(if it has only one) or its chief executive office (if it has more than one place of business), is
disclosed in Exhibit A; no Grantor has other places of business except those set forth in
Exhibit A.

3.4. Collateral Locations. As of the date hereof, all of each Grantor’s locations
where Collateral is located are listed on Exhibit A. As of the date hereof, all of said
locations are owned by each Grantor except for locations (i) which are leased by such Grantor as
lessee and designated in Exhibit A and (ii) at which Inventory is held in a public
warehouse or is otherwise held by a bailee or on consignment as designated in Exhibit A. 

3.5. Deposit Accounts. As of the date hereof, all of each Grantor’s Deposit Accounts
are listed on Exhibit B.

3.6. Exact Names. Each Grantor’s name in which it has executed this Security Agreement
is the exact name as it appears in such Grantor’s organizational documents, as amended, as filed
with such Grantor’s jurisdiction of organization.

3.7. Letter-of-Credit Rights and Chattel Paper. As of the date hereof, Exhibit
C lists all Letter-of-Credit Rights and Chattel Paper of each Grantor, in each case having a
value in excess of $150,000 individually or $500,000 in the aggregate. Promptly upon request by the
Administrative Agent following the occurrence and during the continuation of an Event of Default,
all action by each Grantor necessary or desirable to protect and perfect the Administrative Agent’s
Lien on each item listed on Exhibit C (including the delivery of all originals and the
placement of a legend on all Chattel Paper as required hereunder) shall be duly taken and
thereafter the Administrative Agent will have a fully perfected first priority security interest in
the Collateral listed on Exhibit C, subject only to Liens permitted under Section 4.1(e).

 

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3.8. Accounts and Chattel Paper.

(a) The names of the obligors, amounts owing, due dates and other information with
respect to the Accounts and Chattel Paper are and will be correctly stated in all material
respects in all records of each Grantor relating thereto and in all invoices and Collateral
Reports with respect thereto furnished to the Administrative Agent by each Grantor from time
to time. As of the time when each Account or each item of Chattel Paper arises, each Grantor
shall be deemed to have represented and warranted that such Account or Chattel Paper, as the
case may be, and all records relating thereto, are genuine and in all material respects what
they purport to be.

(b) The Accounts included on the most recent Borrowing Base Certificate are Eligible
Accounts. All Accounts represent bona fide sales of Inventory or rendering of services to
Account Debtors in the ordinary course of each Grantor’s business.

3.9. Inventory. The Inventory included on the most recent Borrowing Base Certificate
is Eligible Inventory. Each Grantor has good, indefeasible and merchantable title to its Inventory.
The sale or other disposition of the Eligible Inventory by the Administrative Agent following an
Event of Default shall not require the consent of any Person and shall not constitute a breach or
default under any contract or agreement to which any Grantor is a party or to which such property
is subject.

3.10. Intellectual Property. As of the date hereof, no Grantor has any interest in, or
title to, any material Patent, Trademark or Copyright except as set forth in Exhibit D.
This Security Agreement is effective to create a valid and continuing Lien and, upon filing of
appropriate financing statements in the offices listed on Exhibit H and this Security
Agreement with the United States Copyright Office, the United States Patent and Trademark Office
and the Canadian Intellectual Property Office, fully perfected first priority security interests in
favor of the Administrative Agent on each Grantor’s Patents, Trademarks and Copyrights, such
perfected security interests are enforceable as such as against any and all creditors of and
purchasers from such Grantor; and all action necessary or desirable to protect and perfect the
Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been
duly taken.

3.11. Filing Requirements. None of the Equipment that constitutes a portion of the
PP&E Component is covered by any certificate of title, except for the vehicles described in
Exhibit E. None of the Collateral is of a type for which security interests or liens may be
perfected by filing under any federal statute except for (a) vehicles and (b) Patents, Trademarks
and Copyrights held by each Grantor and described in Exhibit D.

3.12. No Financing Statements, Security Agreements. No financing statement or security
agreement describing all or any portion of the Collateral which has not lapsed or been terminated
naming any Grantor as debtor has been filed or is of record in any jurisdiction except (a) for
financing statements or security agreements naming the Administrative Agent on behalf of the
Lenders as the secured party, (b) as permitted by Section 4.1(e), and (c) precautionary financing
statements filed by lessors of Equipment or Fixtures.

3.13. Pledged Collateral.

(a) As of the date hereof, Exhibit G sets forth a complete and accurate list of
all material Pledged Collateral, including all stock and other ownership interests in the Loan
Parties that constitute Pledged Collateral. As of the date hereof, each Grantor is the direct,
sole beneficial owner and sole holder of record of the Pledged Collateral listed on
Exhibit G as being owned by it, free and clear of any Liens, except for the security
interest granted to the Administrative Agent for the benefit of the Lenders hereunder and as
permitted by Section 4.1(e). Each Grantor further represents and warrants that (i) all Pledged
Collateral constituting an Equity Interest has been (to the extent such concepts are relevant
with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and
non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent
representing an Equity Interest, either such certificates are Securities as defined in

 

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Article 8 of the UCC (and in the PPSA) as a result of actions by the issuer or otherwise, or,
if such certificates are not Securities, the Grantors have so informed the Administrative
Agent so that the Administrative Agent may take steps to perfect its security interest therein
as a General Intangible, and (iii) all Pledged Collateral (unless subject to a prior Lien
permitted by Section 4.1(e)) held by a securities intermediary is covered by a control
agreement among such Grantor, the securities intermediary and the Administrative Agent
pursuant to which the Administrative Agent has Control. Notwithstanding anything to the
contrary contained herein, prior to the occurrence and continuation of an Event of Default,
(A) the Administrative Agent will not perfect upon stock of third parties held by any Grantor
or notes receivable held by any Grantor and (B) the Grantors will have the ability to dispose
of any such stock and notes receivable without the requirement of consent from the
Administrative Agent, provided that in the event that cash dominion is triggered pursuant to
Section 7.3(c), all proceeds of any such sale or disposition shall be deposited into the
Administrative Agent’s Collection Account.

(b) As of the date hereof, except as set forth in Exhibit G, the Grantors own
100% of the issued and outstanding Equity Interests which constitute Pledged Collateral and
none of the Pledged Collateral which represents Indebtedness owed to any Grantor is
subordinated in right of payment to other Indebtedness or subject to the terms of an
indenture.

ARTICLE IV

COVENANTS

From the date of this Security Agreement, and thereafter until this Security Agreement is
terminated, each of the Grantors agrees that:

4.1. General.

(a) Collateral Records. Each Grantor will maintain, in all material respects,
complete and accurate books and records with respect to the Collateral, which books and
records shall be consistent with all Collateral reports distributed by the Borrowers to the
Administrative Agent or any Lender, and furnish to the Administrative Agent, such reports
relating to the Collateral as the Administrative Agent may from time to time request in
accordance with the Credit Agreement.

(b) Authorization to File Financing Statements; Ratification. Each Grantor hereby
authorizes the Administrative Agent to file, and if requested will deliver to the
Administrative Agent, all financing statements and other documents as may from time to time be
requested by the Administrative Agent in order to maintain a first perfected security interest
in the Collateral. Any financing statement filed by the Administrative Agent may be filed in
any filing office in any UCC or PPSA jurisdiction and may (i) indicate the Collateral (1) as
all assets of such Grantor or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of the PPSA or Article 9 of the UCC
or such jurisdiction, or (2) by any other description which reasonably approximates the
description contained in this Security Agreement, and (ii) contain any other information
required by the PPSA or part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of any financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organization identification number issued to
such Grantor, and (B) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description
of real property to which the Collateral relates. Each Grantor also agrees to furnish any such
information to the Administrative Agent promptly upon request. Each Grantor also ratifies its
authorization for the Administrative Agent to have filed in any UCC or PPSA jurisdiction any
initial financing statements or amendments thereto if filed prior to the date hereof.

(c) Further Assurances. Each Grantor will, if so reasonably requested by the
Administrative Agent, furnish to the Administrative Agent, as often as the Administrative
Agent reasonably requests, statements and schedules further identifying and describing the
Collateral and such other reports and information in connection with the Collateral as the
Administrative Agent may reasonably request, all in such detail as the
Administrative Agent may specify in accordance with the Credit Agreement. Each Grantor
also agrees to take any and all actions necessary to defend title to the Collateral against
all persons and to defend the security interest of the Administrative Agent in the Collateral
and the priority thereof against any Lien not expressly permitted hereunder.

 

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(d) Disposition of Collateral. No Grantor will sell, lease or otherwise dispose
of the Collateral except for dispositions specifically permitted pursuant to Section 6.05 of
the Credit Agreement.

(e) Liens. No Grantor will create, incur, or suffer to exist any Lien on the
Collateral except (i) the security interest created by this Security Agreement, (ii) Permitted
Encumbrances, and (iii) any other Liens permitted by the Credit Agreement.

(f) Other Financing Statements. No Grantor will authorize the filing of any
financing statement naming it as debtor covering all or any portion of the Collateral, except
as permitted by Section 4.1(e) and precautionary financing statements filed by lessors of
Equipment and Fixtures. Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any financing
statement without the prior written consent of the Administrative Agent, subject to such
Grantor’s rights under Section 9-509(d)(2) of the UCC.

(g) Locations. No Grantor will (i) maintain any Collateral having a value in
excess of $150,000 at any location other than those locations listed on Exhibit A,
(ii) otherwise change, or add to, its locations without providing written notification of such
changed or added locations to the Administrative Agent (and such Grantor will concurrently
therewith use commercially reasonable efforts to obtain a Collateral Access Agreement for each
such location to the extent required by the Credit Agreement), (iii) change its principal
place of business or chief executive office from the location identified on Exhibit A
without providing 21 days’ prior written notice to the Administrative Agent (and such Grantor
will concurrently therewith use commercially reasonable efforts to obtain a Collateral Access
Agreement for each such location to the extent required by the Credit Agreement and subject to
the terms of Section 4.13), or (iv) maintain any Collateral at any locations outside of the
United States or Canada.

4.2. Receivables.

(a) Certain Agreements on Receivables. No Grantor will (i) make or agree to make
any discount, credit, rebate or other reduction in the original amount owing on a Receivable
or (ii) accept in satisfaction of a Receivable less than the original amount thereof, in
either case except in the ordinary course of such Grantor’s business, except that, prior to
the occurrence of an Event of Default, the Grantors may make discounts, credits, rebates and
other reductions and accept satisfaction less than the original amount of Accounts arising
from the sale of Inventory in accordance with their present policies and in the ordinary
course of business.

(b) Collection of Receivables. Except as otherwise provided in this Security
Agreement, each Grantor will collect and enforce, at the Grantors’ sole expense, all amounts
due or hereafter due to such Grantor under the Receivables in accordance with its present
policies and in the ordinary course of business.

(c) Delivery of Invoices. Each Grantor will deliver to the Administrative Agent
promptly upon its request after the occurrence and during the continuation of an Event of
Default duplicate invoices with respect to each Account bearing such language of assignment as
the Administrative Agent shall reasonably specify.

(d) Electronic Chattel Paper. Promptly upon request by the Administrative Agent
following the occurrence and during the continuation of an Event of Default, each Grantor
shall take all steps necessary to grant the Administrative Agent Control of all electronic
chattel paper having a value in excess of $150,000 individually or $500,000 in the aggregate
in accordance with the UCC and all “transferable records” as defined in each of the Uniform
Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

 

9

 

4.3. Inventory and Equipment.

(a) Maintenance of Goods. Each Grantor will do all things necessary to maintain,
preserve, protect and keep the Inventory and, in all material respects, the Equipment in good
repair and working and saleable condition, except for damaged or defective goods arising in
the ordinary course of such Grantor’s business and except for ordinary wear and tear in
respect of the Equipment.

(b) Returned Inventory. If an Account Debtor returns any Inventory to any Grantor
when no Event of Default exists, then such Grantor shall promptly determine the reason for
such return and shall issue a credit memorandum if appropriate to the Account Debtor in the
appropriate amount. In the event any Account Debtor returns a material amount of Inventory
outside the normal course of business to any Grantor when an Event of Default exists and the
Obligations have been accelerated pursuant to the terms of the Credit Agreement, such Grantor,
upon the reasonable request of the Administrative Agent, shall: (i) hold the returned
Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from
all of its other property; (iii) dispose of the returned Inventory solely according to the
Administrative Agent’s written instructions; and (iv) not issue any credits or allowances with
respect thereto without the Administrative Agent’s prior written consent. All returned
Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory
is returned, the related Account shall be deemed ineligible to the extent of the amount owing
by the Account Debtor with respect to such returned Inventory.

(c) Inventory Count; Perpetual Inventory System. The Grantors will conduct a
physical count of the Inventory at least once per Fiscal Year, and after and during the
continuation of an Event of Default, at such other times as the Administrative Agent
reasonably requests. The Grantors, at their own expense, shall deliver to the Administrative
Agent the results of each physical verification, which any Grantor has made, or has caused any
other Person to make on its behalf, of all or any portion of its Inventory. The Grantors will
maintain a perpetual inventory reporting system at all times.

(d) PP&E Component Equipment. Each Grantor shall promptly inform the
Administrative Agent of any additions to or deletions from the Equipment that constitutes a
portion of the PP&E Component which individually exceed $250,000. The Grantors shall not
permit any Equipment that constitutes a portion of the PP&E Component to become a fixture with
respect to real property or to become an accession with respect to other personal property
with respect to which real or personal property the Administrative Agent does not have a Lien.
The Grantors will not, if applicable, without the Administrative Agent’s prior written
consent, alter or remove any identifying symbol or number on any of the Grantors’ Equipment
constituting Collateral.

(e) Titled Vehicles. Each Grantor will give the Administrative Agent notice of
its acquisition of any vehicle covered by a certificate of title that constitutes a portion of
the PP&E Component and deliver to the Administrative Agent, upon request, the original of the
vehicle title certificate with respect to any such vehicle and provide and/or file all other
documents or instruments necessary to have the Lien of the Administrative Agent noted on any
such certificate or with the appropriate state office.

4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. Each Grantor
will (a) promptly upon the request of the Administrative Agent after the occurrence and during the
continuation of an Event of Default, deliver to the Administrative Agent the originals of all
Chattel Paper, Securities and Instruments constituting Collateral (if any then exist), (b) hold in
trust for the Administrative Agent upon receipt and promptly upon the request of the Administrative
Agent after the occurrence and during the continuation of an Event of Default, deliver to the
Administrative Agent any Chattel Paper, Securities and Instruments constituting Collateral, (c)
hold in trust for the Administrative Agent upon receipt and (i) upon the Administrative Agent’s
request, deliver to the Administrative Agent any Document evidencing, constituting or relating to
Inventory, in each case having a value in excess of $150,000 individually, and (ii) upon the
Administrative Agent’s request after the occurrence and during the continuation of an Event of
Default, deliver to the Administrative Agent any Document evidencing, constituting or relating to
other Collateral, in each case having a value in excess of $150,000 individually, and (d) upon the
Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to
this Security
Agreement, in the form of Exhibit I hereto (the “Amendment”), pursuant to
which the Grantor will pledge such additional Collateral. Each Grantor hereby authorizes the
Administrative Agent to attach each Amendment to this Security Agreement and agrees that all
additional Collateral set forth in such Amendments shall be considered to be part of the
Collateral.

 

10

 

4.5. Uncertificated Pledged Collateral. Each Grantor will take any actions necessary
to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any
securities intermediary which is the holder of any Pledged Collateral, to cause the Administrative
Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, the
Grantors will, with respect to Pledged Collateral held with a securities intermediary having a
value in excess of $150,000 individually, cause such securities intermediary to enter into a
control agreement with the Administrative Agent, in form and substance reasonably satisfactory to
the Administrative Agent, giving the Administrative Agent Control.

4.6. Pledged Collateral.

(a) Changes in Capital Structure of Issuers. No Grantor will (i) permit or suffer
any issuer of an Equity Interest constituting Pledged Collateral to dissolve, merge,
liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing
ownership, reduce its capital, sell or encumber all or substantially all of its assets (except
for Permitted Encumbrances and sales of assets permitted pursuant to Section 4.1(d))
or merge, amalgamate or consolidate with any other entity, or (ii) vote any Pledged Collateral
in favor of any of the foregoing, except in each case to the extent permitted by the Credit
Agreement.

(b) Issuance of Additional Securities. No Grantor will permit or suffer the
issuer of an Equity Interest constituting Pledged Collateral, if such issuer is a wholly owned
Subsidiary of such Grantor, to issue additional Equity Interests, any right to receive the
same or any right to receive earnings, except to such Grantor.

(c) Registration of Pledged Collateral. After the occurrence and during the
continuation of an Event of Default, each Grantor will permit any registerable Pledged
Collateral to be registered in the name of the Administrative Agent or its nominee at any time
at the option of the Required Secured Parties.

(d) Exercise of Rights in Pledged Collateral.

(i) Without in any way limiting the foregoing and subject to clause (ii) below, the
Grantors shall have the right to exercise all voting rights or other rights relating to
the Pledged Collateral for all purposes not inconsistent with this Security Agreement,
the Credit Agreement or any other Loan Document; provided however, that no vote or other
right shall be exercised or action taken which would have the effect of impairing the
rights of the Administrative Agent in respect of the Pledged Collateral.

(ii) The Grantors will permit the Administrative Agent or its nominee at any time
after the occurrence and during the continuation of an Event of Default, without notice,
to exercise all voting rights or other rights relating to Pledged Collateral, including,
without limitation, exchange, subscription or any other rights, privileges, or options
pertaining to any Equity Interest or Investment Property constituting Pledged Collateral
as if it were the absolute owner thereof.

(iii) Each Grantor shall be entitled to collect and receive for its own use all cash
dividends and interest paid in respect of the Pledged Collateral to the extent not in
violation of the Credit Agreement other than any of the following distributions
and payments (collectively referred to as the “Excluded Payments”): (A) dividends
and interest paid or payable other than in cash in respect of any Pledged Collateral, and
instruments and other property received, receivable or otherwise distributed in respect
of, or in exchange for, any Pledged Collateral; (B) dividends and other distributions
paid or payable in cash in respect of any Pledged Collateral in connection with a partial
or total liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in capital of an issuer; and (C) cash paid, payable or otherwise
distributed, in respect of principal of, or in redemption of, or in exchange for, any
Pledged Collateral; provided however, that until actually paid, all rights to such
distributions shall remain subject to the Lien created by this Security Agreement; and

 

11

 

(iv) All Excluded Payments and all other distributions in respect of any of the
Pledged Collateral, whenever paid or made, shall be delivered to the Administrative Agent
to hold as Pledged Collateral and shall, if received by any Grantor, be received in trust
for the benefit of the Administrative Agent, be segregated from the other property or
funds of such Grantor, and be forthwith delivered to the Administrative Agent as Pledged
Collateral in the same form as so received (with any necessary endorsement).

4.7. Intellectual Property.

(a) Each Grantor shall notify the Administrative Agent promptly if it knows or has reason
to know that any application or registration relating to any material Patent, Trademark or
Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse
determination or development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office, the Canadian Intellectual Property Office or any court) regarding any
Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or
to keep and maintain the same.

(b) If any Grantor, either directly or through any agent, employee, licensee or designee,
files an application for the registration of any material Patent, Trademark or Copyright with
the United States Patent and Trademark Office, the United States Copyright Office, the
Canadian Intellectual Property Office or any similar office or agency such Grantor shall give
the Administrative Agent written notice thereof on a quarterly basis, and, upon request of the
Administrative Agent, such Grantor shall execute and deliver any and all security agreements
as the Administrative Agent may reasonably request to evidence the Administrative Agent’s
first priority security interest on such Patent, Trademark or Copyright, and the General
Intangibles of such Grantor relating thereto or represented thereby.

(c) Each Grantor shall take all actions necessary or requested by the Administrative
Agent to maintain and pursue each application, to obtain the relevant registration and to
maintain the registration of each of the material Patents, Trademarks and Copyrights (now or
hereafter existing), including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and cancellation proceedings,
unless such Grantor shall reasonably determine that such Patent, Trademark or Copyright is not
material to the conduct of such Grantor’s business.

(d) Each Grantor shall, unless it shall reasonably determine that such Patent, Trademark
or Copyright is in no way material to the conduct of its business or operations, promptly sue
for infringement, misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and shall take such other actions as the
Administrative Agent shall reasonably request under the circumstances to protect such Patent,
Trademark or Copyright. In the event that any Grantor institutes suit because any of the
Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.

4.8 Commercial Tort Claims. Each Grantor shall promptly, and in any event within two
Business Days after the same is acquired by it having a value in excess of $150,000 individually,
notify the Administrative Agent of any commercial tort claim (as defined in the UCC) acquired by it
after the Closing Date and, unless the Administrative Agent otherwise consents, the Grantor shall
enter into an amendment to this Security Agreement, in the form of Exhibit I hereto,
granting to Administrative Agent a first priority security interest in such commercial tort claim.

 

12

 

4.9. Letter-of-Credit Rights. If, following the occurrence and during the continuation
of an Event of Default, any Grantor is or becomes the beneficiary of a letter of credit, such
Grantor shall promptly, and in any event within two Business Days after becoming a beneficiary,
notify the Administrative Agent thereof and if requested by the Administrative Agent promptly
request the issuer and/or confirmation bank to (i) consent to the assignment of any
Letter-of-Credit Rights to the Administrative Agent and (ii) if the Administrative Agent has the
right to exercise cash dominion pursuant to the terms of Section 7.3 of this Agreement, agree to
direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a
Deposit Account Control Agreement for application to the Secured Obligations, in accordance with
Section 2.18 of the Credit Agreement, all in form and substance reasonably satisfactory to the
Administrative Agent.

4.10. [Intentionally omitted.]

4.11. No Interference. Each Grantor agrees that it will not interfere with any right,
power and remedy of the Administrative Agent provided for in this Security Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of
the exercise by the Administrative Agent of any one or more of such rights, powers or remedies,
provided that the foregoing are exercised by the Administrative Agent in accordance with the terms
hereof and all Requirements of Law.

4.12. Insurance. (a) In the event any Collateral is located in any area that has been
designated by the Federal Emergency Management Agency or by any other Governmental Authority as a
“Special Flood Hazard Area” or “flood zone or area”, the Grantors shall purchase and maintain flood
insurance on such Collateral (including any personal property which is located on any real property
leased by such Loan Party within a “Special Flood Hazard Area” or “flood zone or area”). The amount
of all insurance required by this Section shall at a minimum comply with applicable law, including,
without limitation, the Flood Disaster Protection Act of 1973, as amended. All premiums on such
insurance shall be paid when due by the Grantors, and copies of the policies delivered to the
Administrative Agent. If the Grantors fail to obtain any insurance as required by this Section, the
Administrative Agent at the direction of the Required Lenders may obtain such insurance at the
Grantors’ expense. By purchasing such insurance, the Administrative Agent shall not be deemed to
have waived any Default arising from the Grantors’ failure to maintain such insurance or pay any
premiums therefor.

(b) All insurance policies required under Section 5.09 of the Credit Agreement shall name
the Administrative Agent (for the benefit of the Administrative Agent and the Lenders) as an
additional insured or as loss payee, as applicable, and shall contain loss payable clauses or
mortgagee clauses, through endorsements in form and substance satisfactory to the
Administrative Agent, which provide that: (i) all proceeds thereunder with respect to any
Collateral shall be payable to the Administrative Agent; (ii) no such insurance shall be
affected by any act or neglect of the insured or owner of the property described in such
policy; and (iii) such policy and loss payable or mortgagee clauses may be canceled, amended,
or terminated only upon at least thirty days prior written notice given to the Administrative
Agent.

4.13. Collateral Access Agreements. The Grantors shall use commercially reasonable
efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, mortgagee
of owned property or bailee or consignee with respect to any warehouse, processor or converter
facility or other location where Collateral is stored or located, which agreement or letter shall
provide access rights, contain a waiver or subordination of all Liens or claims that the landlord,
mortgagee, bailee or consignee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the Administrative Agent. With
respect to such locations or warehouse space leased as of the Closing Date and thereafter, if the
Administrative Agent has not received a Collateral Access Agreement within 45 days after the
Closing Date (or, if later, as of the date such location is acquired or leased), Borrower’s
Eligible Inventory at that location shall be subject to such Reserves as may be established by the
Administrative Agent in accordance with the Credit Agreement. After the Closing Date, no real
property or warehouse space shall be leased by any Grantor and no Inventory shall be shipped to a
processor or converter under arrangements established after the Closing Date, unless and until a
satisfactory Collateral Access Agreement shall first have been obtained with respect to such
location and if it has not been obtained, Borrower’s Eligible Inventory at that location shall be
subject to the establishment of Reserves in accordance with the Credit Agreement. Each Grantor
shall timely and fully pay and perform its material obligations under all leases and other
agreements with respect to each leased location or third party warehouse where any Collateral
is or may be located except in the case of a bona fide dispute.

 

13

 

4.14. Deposit Account Control Agreements. Each Grantor will provide to the
Administrative Agent upon the Administrative Agent’s request, a Deposit Account Control Agreement
duly executed on behalf of each financial institution holding a deposit account of such Grantor as
set forth in the Security Agreement other than (i) payroll, tax, escrow and other fiduciary
accounts (provided that such accounts will be funded only from an account that is subject
to a Deposit Account Control Agreement and if at any time any payments from account debtors or
other proceeds of Collateral are sent directly to any of such accounts, a Deposit Account Control
Agreement will be required with respect to such account) and (ii) the deposit account maintained at
Wilson & Muir Bank & Trust Co., wherein Grantor will not retain collected funds for more than one
business day (all other funds being transferred to an account governed by a Deposit Account Control
Agreement).

4.15. Change of Name or Location; Change of Fiscal Year. No Grantor shall (a) change
its name as it appears in official filings in the state or province of its incorporation or
organization, (b) change its chief executive office, principal place of business, mailing address,
corporate offices or warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral as set forth in the Security Agreement, (c) change the
type of entity that it is, (d) change its organization identification number, if any, issued by its
state or province of incorporation or other organization, or (e) change its state or province of
incorporation or organization, in each case, unless the Administrative Agent shall have received at
least thirty days prior written notice of such change and the Administrative Agent shall have
acknowledged in writing that either (1) such change will not adversely affect the validity,
perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2)
any reasonable action requested by the Administrative Agent in connection therewith has been
completed or taken (including any action to continue the perfection of any Liens in favor of the
Administrative Agent, on behalf of Lenders, in any Collateral), provided that, any new location
shall be in the continental U.S.

4.16 Assigned Contracts. Upon request by the Administrative Agent after the occurrence
and during the continuation of an Event of Default, each Grantor will use its best efforts to
secure all consents and approvals necessary or appropriate for the assignment to or for the benefit
of the Administrative Agent of any Assigned Contract held by such Grantor and to enforce the
security interests granted hereunder. Each Grantor shall fully perform all of its material
obligations under each of the Assigned Contracts, and shall enforce all of its material rights and
remedies thereunder, in each case, as it deems appropriate in its business judgment; provided
however, that no Grantor shall take any action or fail to take any action with respect to its
Assigned Contracts which would cause the termination of an Assigned Contract. Without limiting the
generality of the foregoing, each Grantor shall take all action necessary or appropriate to permit,
and shall not take any action which would have any materially adverse effect upon, the full
enforcement of all indemnification rights under its Assigned Contracts. The Grantors shall notify
the Administrative Agent and the Lenders in writing, promptly after any Grantor becomes aware
thereof, of any event or fact which could give rise to a material claim by it for indemnification
under any of its Assigned Contracts, and shall diligently pursue such right and report to the
Administrative Agent on all further developments with respect thereto. If the Administrative Agent
has the right to exercise cash dominion pursuant to the terms of Section 7.3 of this Agreement, the
Grantors shall deposit into a Deposit Account at the Administrative Agent or subject to a Deposit
Account Control Agreement for application to the Secured Obligations, in accordance with Section
2.18 of the Credit Agreement, all amounts received by any Grantor as indemnification or otherwise
pursuant to its Assigned Contracts. If any Grantor shall fail after the Administrative Agent’s
demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then
exists, the Administrative Agent may, and at the direction of the Required Secured Parties shall,
directly enforce such right in its own or such Grantor’s name and may enter into

 

14

 

such settlements
or other agreements with respect thereto as the Administrative Agent or the Required Secured Parties, as
applicable, shall determine. In any suit, proceeding or action brought by the Administrative Agent
for the benefit of the Lenders under any Assigned Contract for any sum owing thereunder or to
enforce any provision thereof, the Grantors shall indemnify and hold the Administrative Agent and
Lenders harmless from and against all expense, loss or damage suffered by reason of any defense,
setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder
arising out of a breach by any Grantor of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing from any Grantor to or in favor of such
obligor or its successors. All such obligations of the Grantors shall be and remain enforceable
only against the Grantors and shall not be enforceable against the Administrative Agent or the
Lenders. Notwithstanding any provision hereof to the contrary, each Grantor shall at all times
remain liable to observe and perform all of its duties and obligations under its Assigned
Contracts, and the Administrative Agent’s or any Lender’s exercise of any of their respective
rights with respect to the Collateral shall not release any Grantor from any of such duties and
obligations. Neither the Administrative Agent nor any Lender shall be obligated to perform or
fulfill any of any Grantor’s duties or obligations under its Assigned Contracts or to make any
payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or
property received by it thereunder or the sufficiency of performance by any party thereunder, or to
present or file any claim, or to take any action to collect or enforce any performance, any payment
of any amounts, or any delivery of any property.

ARTICLE V

REMEDIES

5.1. [Intentionally omitted.]

5.2. Remedies.

(a) Upon the occurrence and during the continuation of an Event of Default, the
Administrative Agent may exercise any or all of the following rights and remedies:

(i) those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall not be
understood to limit any rights or remedies available to the Administrative Agent and the
Lenders prior to an Event of Default;

(ii) those rights and remedies available to a secured party under the UCC (whether
or not the UCC applies to the affected Collateral), the PPSA or under any other
applicable domestic or foreign law (including, without limitation, any law governing the
exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under
a security agreement;

(iii) give notice of sole control or any other instruction under any Deposit Account
Control Agreement or other control agreement with any securities intermediary and take
any action therein with respect to such Collateral;

(iv) concurrently with written notice to the Grantors (except as specifically
provided in Section 8.1 or elsewhere herein), enter the premises of any Grantor where any
Collateral is located (through self-help and without judicial process) to collect,
receive, assemble, process, appropriate, sell, lease, assign, grant an option or options
to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part
thereof in one or more parcels at public or private sale or sales (which sales may be
adjourned or continued from time to time with or without notice and may take place at
such Grantor’s premises or elsewhere), for cash, on credit or for future delivery without
assumption of any credit risk, and upon such other terms as the Administrative Agent may
deem commercially reasonable; and

 

15

 

(v) concurrently with written notice to the Grantors, transfer and register in its
name or in the name of its nominee the whole or any part of the Pledged Collateral, to
exchange certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations, to exercise the voting
and all other rights as a holder with respect thereto, to collect and receive all cash
dividends, interest, principal and other distributions made thereon and to otherwise act
with respect to the Pledged Collateral as though the Administrative Agent was the
outright owner thereof.

(b) The Administrative Agent, on behalf of the Lenders, shall comply with any applicable
state, provincial or federal law requirements in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

(c) The Administrative Agent shall have the right upon any such public sale or sales and,
to the extent permitted by law, upon any such private sale or sales, to purchase for the
benefit of the Administrative Agent and the Lenders, the whole or any part of the Collateral
so sold, free of any right of equity redemption, which equity redemption each Grantor hereby
expressly releases.

(d) Until the Administrative Agent is able to effect a sale, lease, or other disposition
of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any
part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral
or its value or for any other purpose deemed appropriate by the Administrative Agent. The
Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to
take possession of Collateral and to enforce any of the Administrative Agent’s remedies (for
the benefit of the Administrative Agent and Lenders), with respect to such appointment without
prior notice or hearing as to such appointment.

(e) Notwithstanding the foregoing, neither the Administrative Agent nor the Lenders shall
be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies
against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect
to the payment of the Secured Obligations or to pursue or exhaust any of their rights or
remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Secured Obligations or to resort to the
Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any
Collateral.

(f) Each Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to resort to one or more
private sales thereof in accordance with clause (a) above. Each Grantor also
acknowledges that any private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. The Administrative Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral for the period
of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register
such securities for public sale under the Securities Act of 1933, as amended, or under
applicable state securities laws, even if such Grantor and the issuer would agree to do so.

(g) The Administrative Agent may, in addition to any other rights it may have, appoint by
instrument in writing a receiver or receiver and manager (both of which are herein called a
“Receiver”) of all or any part of the Collateral or may institute proceedings in any court of
competent jurisdiction for the appointment of such a Receiver. Any such Receiver is hereby
given and shall have the same powers and rights and exclusions and limitations of liability as
the Administrative Agent has under this Security Agreement or the Credit Agreement, at law or
in equity. In exercising any such powers, any such Receiver shall, to the extent permitted by
law, act as and for all purposes shall be deemed to be the agent of the Grantors and the
Administrative Agent and the Lenders shall not be responsible for any act or default of any
such Receiver. The Administrative Agent may appoint one or more Receivers hereunder or under
the Credit Agreement and may remove any such Receiver or Receivers and appoint another or
others in his or their stead from time to time. Any Receiver so appointed may be an officer
or employee of the Administrative Agent. A court need not appoint, ratify the appointment by
the Administrative Agent of or otherwise supervise in any manner the actions of any Receiver.
Upon a Grantor receiving notice from the Administrative Agent of the taking of possession of
the Collateral or the appointment of a Receiver, all powers, functions, rights and privileges
of each of the directors and officers of such Grantor with respect to the Collateral shall
cease, unless specifically continued by the written consent of the Administrative Agent.

 

16

 

(h) The Administrative Agent may charge on its own behalf and pay to others, sums for
costs and expenses incurred including, without limitation, legal fees and expenses on a
solicitor and his own client scale and Receivers’ and accounting fees, in or in connection
with seizing, collecting, realizing, disposing, enforcing or otherwise dealing with the
Collateral and in connection with the protection and enforcement of the rights of the
Administrative Agent hereunder including, without limitation, in connection with advice with
respect to any of the foregoing. The amount of such sums shall be deemed advanced to the
Grantors by the Administrative Agent, shall become part of the Secured Obligations and shall
be secured by this Security Agreement.

5.3. Grantors’ Obligations Upon Events of Default. Upon the request of the
Administrative Agent after the occurrence and during the continuation of an Event of Default, the
Grantors will:

(a) assemble and make available to the Administrative Agent the Collateral and all books
and records relating thereto at any place or places reasonably specified by the Administrative
Agent in accordance with applicable law, whether at the Grantors’ premises or elsewhere;

(b) permit the Administrative Agent, by the Administrative Agent’s representatives and
agents, to enter, occupy and use any premises where all or any part of the Collateral, or the
books and records relating thereto, or both, are located, to take possession of all or any
part of the Collateral or the books and records relating thereto, or both, to remove all or
any part of the Collateral or the books and records relating thereto, or both, and to conduct
sales of the Collateral, without any obligation to pay the Grantors for such use and
occupancy;

(c) take, or cause an issuer of Pledged Collateral to take, any and all reasonable
actions necessary to enable the Administrative Agent to consummate a public sale or other
disposition of the Pledged Collateral; and

(d) at its own expense, cause the independent certified public accountants then engaged
by the Grantors or such other auditors selected by the Grantors and reasonably acceptable to
the Administrative Agent to prepare and deliver to the Administrative Agent and each Lender,
at any time, and from time to time, promptly upon the Administrative Agent’s request, the
following reports with respect to the Grantors: (i) a reconciliation of all Accounts; (ii) an
aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

5.4. Grant of Intellectual Property License. For the purpose of enabling the
Administrative Agent to exercise the rights and remedies under this Article V at such time
as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies
following the occurrence and during the continuation of an Event of Default, each Grantor hereby
(a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, an irrevocable, nonexclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, license or sublicense any Intellectual property Rights now
owned or hereafter acquired by any Grantor, and wherever the same may be located, and including in
such license access to all media in which any of the licensed items may be recorded or stored and
to all computer software and programs used for the compilation or printout thereof and (b)
irrevocably agrees that the Administrative Agent may sell any of the Grantors’ Inventory directly
to any person, including without limitation persons who have previously purchased the Grantors’
Inventory from any Grantor and in connection with any such sale or other enforcement of the
Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any
Trademark owned by or licensed to any Grantor and any Inventory that is covered by any Copyright
owned by or licensed to any Grantor and the Administrative Agent may finish any work in process and
affix any Trademark owned by or licensed to any Grantor and sell such Inventory as provided herein.

 

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ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

6.1. Account Verification. The Administrative Agent may at any time, in the
Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the
name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account
Debtors of such Grantor, parties to contracts with such Grantor and obligors in respect of
Instruments of such Grantor to verify with such Persons, to the Administrative Agent’s
satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts,
Instruments, Chattel Paper, payment intangibles and/or other Receivables.

6.2. Authorization for Secured Party to Take Certain Action.

(a) Each Grantor irrevocably authorizes the Administrative Agent at any time and from
time to time in the reasonable discretion of the Administrative Agent and appoints the
Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as
debtor and to file financing statements necessary or desirable in the Administrative Agent’s
reasonable discretion to perfect and to maintain the perfection and priority of the
Administrative Agent’s security interest in the Collateral, (ii) either if the Administrative
Agent has the right to exercise cash dominion pursuant to the terms of Section 7.3 of this
Agreement or upon the occurrence and during the continuation of an Event of Default, to
endorse, apply and, after the occurrence and during the continuation of any Event of Default,
collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Security Agreement or any financing statement with respect to the
Collateral as a financing statement and to file any other financing statement or amendment of
a financing statement (which does not add new collateral or add a debtor) in such offices as
the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the Administrative Agent’s security interest in the
Collateral, (iv) upon the occurrence and during the continuation of an Event of Default, to
contact and enter into one or more agreements with the issuers of uncertificated securities
which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as
may be necessary or advisable to give the Administrative Agent Control over such Pledged
Collateral, (v) either if the Administrative Agent has the right to exercise cash dominion
pursuant to the terms of Section 7.3 of this Agreement or upon the occurrence and during the
continuation of an Event of Default, to apply the proceeds of any Collateral received by the
Administrative Agent to the Secured Obligations as provided in Section 7.3, (vi) upon the
occurrence and during the continuation of an Event of Default, to discharge past due taxes,
assessments, charges, fees or Liens on the Collateral (except for such Liens as are
specifically permitted hereunder), (vii) to contact Account Debtors in accordance with the
Administrative Agent’s customary practices in order to verify information regarding the
Accounts, (viii) upon the occurrence and during the continuation of an Event of Default, to
demand payment or enforce payment of the Receivables in the name of the Administrative Agent
or such Grantor and to endorse any and all checks, drafts, and other instruments for the
payment of money relating to the Receivables, (ix) upon the occurrence and during the
continuation of an Event of Default, to sign such Grantor’s name on any invoice or bill of
lading relating to the Receivables, drafts against any Account Debtor of such Grantor,
assignments and verifications of Receivables, (x) upon the occurrence and during the
continuation of an Event of Default, to exercise all of such Grantor’s rights and remedies
with respect to the collection of the Receivables and any other Collateral, (xi) upon the
occurrence and during the continuation of an Event of Default, to settle, adjust, compromise,
extend or renew the Receivables, (xii) upon the occurrence and during the continuation of an
Event of Default, to settle, adjust or compromise any legal proceedings brought to collect
Receivables, (xiii) upon the occurrence and during the continuation of an Event of Default, to
prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar
document against any Account Debtor of such Grantor, (xiv) upon the occurrence and during the
continuation of an Event of Default, to prepare, file and sign such Grantor’s name on any
notice of Lien, assignment or satisfaction of Lien or similar document in connection with the
Receivables, (xv) upon the occurrence and during the continuation of an Event of Default, to
change the address for delivery of mail addressed to such Grantor to such address as the
Administrative Agent may designate and to receive, open and dispose of all mail addressed to
such Grantor, and (xvi) upon the occurrence and during the continuation of an Event of
Default, to do all other acts and things necessary to carry out this Security Agreement; and
each Grantor agrees to reimburse the Administrative Agent on demand for any payment made or
any expense incurred by the Administrative Agent in connection with any of the foregoing;
provided that, this authorization shall not relieve any Grantor of any of its obligations
under this Security Agreement or under the Credit Agreement.

 

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(b) All acts of said attorney or designee in accordance with the terms hereof are hereby
ratified and approved. The powers conferred on the Administrative Agent, for the benefit of
the Administrative Agent and Lenders, under this Section 6.2 are solely to protect the
Administrative Agent’s interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers.

6.3. Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE
ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) OF SUCH
GRANTOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED
COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH
PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL
INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER
OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF
SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY
SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER
OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING
THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A
DEFAULT.

6.4. Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE AGENT AS PROXY
AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL
THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE AGENT, NOR ANY LENDER, NOR ANY OF THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY
DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND
SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF
DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE
FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

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ARTICLE VII

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

7.1. Collection of Receivables.

(a) On or before the Closing Date, each Grantor shall (a) execute and deliver to the
Administrative Agent Deposit Account Control Agreements for each Deposit Account maintained by
such Grantor into which all cash, checks or other similar payments relating to or constituting
payments made in respect of Receivables will be deposited, to the extent a Deposit Account
Control Agreement over such Deposit Account is required by the terms of Section 4.14 (each, a
“Collateral Deposit Account”), which Collateral Deposit Accounts are identified as
such on Exhibit B, and (b) enter into to irrevocable lockbox agreements in the form
provided by or otherwise acceptable to the Administrative Agent for all existing lock boxes of
the Grantors into which all cash, checks or other similar payments relating to or constituting
payments made in respect of Receivables will be deposited (the “Lock Boxes”), which
Lock Boxes are identified as such on Exhibit B, which agreements shall be accompanied
by an acknowledgment by the bank where the Lock Box is located of the Lien of the
Administrative Agent granted hereunder and of irrevocable instructions to wire all amounts
collected therein to the Collection Account (a “Lock Box Agreement”) upon receipt by
the depository banks of a control notice from the Administrative Agent pursuant to the terms
of such agreements. After the Closing Date, each Grantor will comply with the terms of Section
7.2.

(b) At all times that the Administrative Agent has the right to exercise cash dominion
pursuant to the terms of Section 7.3(c) of this Agreement and upon receipt by the depository
banks of a control notice from the Administrative Agent, each depository bank will restrict
Grantor’s access to funds within the Collateral Deposit Account. Each Grantor shall insure
that future deposits constituting payments made in respect of Receivables continue to be made
into Collateral Deposit Accounts. At all times that the Administrative Agent has the right to
exercise cash dominion pursuant to the terms of Section 7.3(c) of this Agreement, (i) the
Administrative Agent shall have sole access to the Lock Boxes and the Collateral Deposit
Accounts and each Grantor shall take all actions necessary to grant the Administrative Agent
such sole access, (ii) no Grantor shall remove any item from the Lock Boxes or the Collateral
Deposit Accounts without the Administrative Agent’s prior written consent, (iii) if any
Grantor should refuse or neglect to notify any Account Debtor to forward payments directly to
a Lock Box subject to a Lock Box Agreement or a Collateral Deposit Account subject to a
Deposit Account Control Agreement after notice from the Administrative Agent, the
Administrative Agent shall be entitled to make such notification directly to Account Debtor,
(iv) if notwithstanding the foregoing instructions, any Grantor receives any proceeds of any
Receivables, such Grantor shall receive such payments in trust for the Administrative Agent,
and shall immediately deposit all cash, checks or other similar payments related to or
constituting payments made in respect of Receivables received by it to a Collateral Deposit
Account, (v) all funds deposited into any Lock Box subject to a Lock Box Agreement or any
Collateral Deposit Account will be swept on a daily basis into a collection account maintained
by the Grantor with the Administrative Agent (the “Collection Account”), and (vi) the
Administrative Agent shall hold and apply funds received into the Collection Account as
provided by the terms of Section 2.18(b) of the Credit Agreement.

7.2. Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing
any Collateral Deposit Account, other Deposit Account, or establishing a new Lock Box, the Grantors
shall (a) obtain the Administrative Agent’s consent in writing to the opening of such Deposit
Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to open (i)
a Deposit Account, to enter into a Deposit Account Control Agreement with the Administrative Agent
in order to give the Administrative Agent Control of such Deposit Account in the event rights of
cash dominion are exercised, or (ii) a Lock Box, to enter into a Lock Box Agreement with the
Administrative Agent in order to give the Administrative Agent Control of the Lock Box in the event
rights of cash dominion are exercised. In the case of Deposit Accounts or Lock Boxes maintained
with Lenders, the terms of such letter shall be subject to the provisions of the Credit Agreement
regarding setoffs. The main disbursement accounts of the Borrowers shall at all times be located at
a bank that is a Lender under the Credit Agreement or with banks otherwise acceptable to the
Administrative Agent in its Permitted Discretion.

7.3. Application of Proceeds; Deficiency. (a) At all times that Administrative Agent
does not have the right to exercise cash dominion or has chosen not to exercise such right, all
amounts deposited into Grantor’s accounts shall remain at the disposal of the Grantor and may be
disbursed or otherwise used in the Grantor’s sole discretion.

(b) If, at any time, cash dominion under Section 7.3(c) has been triggered, and the
Grantor thereafter maintains (i) average Availability greater than or equal to $40,000,000 for
a 90-day period and (ii) Availability not less than $35,000,000 at all times during such
90-day period, the cash dominion in Section 7.3(c) shall no longer be deemed to be triggered
and discretionary rights to the use of funds in a depository account shall return to the
Grantor and funds deposited in Collateral Deposit Accounts shall no longer be swept into the
Collection Account.

 

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(c) If at any time, (i) Availability is less than $35,000,000, or (ii) a Default or Event
of Default has occurred and is continuing, the Administrative Agent may exercise its cash
dominion rights by delivering instructions to each depository bank having a Deposit Account
Control Agreement that requires all other cash proceeds in the account to be directed to the
Administrative Agent’s Collection Account as described in Section 7.1(b). If this Section
7.3(c) has been triggered, the Administrative Agent shall (or, in the case of Canadian
Collateral Deposit Accounts, may) have exclusive control over said Collateral Deposit Account
and any such proceeds shall be applied in the order set forth in Section 2.18(b) of the Credit
Agreement. If proceeds are being applied according to Section 2.18(b) of the Credit Agreement,
the balance, if any, after all of the Secured Obligations have been satisfied shall be
deposited by the Administrative Agent into the Grantors’ general operating account with the
Administrative Agent or such other account with a Lender and subject to a Deposit Account
Control Agreement designated by the Grantors in writing to the Administrative Agent. The
Grantors shall remain liable for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all Secured Obligations, including any reasonable
attorneys’ fees and other reasonable expenses incurred by Administrative Agent or any Lender
to collect such deficiency.

ARTICLE VIII

GENERAL PROVISIONS

8.1. Waivers. Each Grantor hereby waives, to the extent permitted under applicable
law, notice of the time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made. To the extent such notice may
not be waived under applicable law, any notice made shall be deemed reasonable if sent to the
Grantors, addressed as set forth in Article IX, at least ten days prior to (i) the date of any such
public sale or (ii) the time after which any such private sale or other disposition may be made. To
the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and
demands against the Administrative Agent or any Lender arising out of the repossession, retention
or sale of the Collateral, except such as arise solely out of the gross negligence or willful
misconduct of the Administrative Agent or such Lender as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert against the
Administrative Agent or any Lender, any valuation, stay, appraisal, extension, moratorium,
redemption or similar laws and any and all rights or defenses it may have as a surety now or
hereafter existing which, but for this provision, might be applicable to the sale of any Collateral
made under the judgment, order or decree of any court, or privately under the power of sale
conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this Security Agreement or any
Collateral.

8.2. Limitation on Administrative Agent’s and Lenders’ Duty with Respect to the
Collateral. The Administrative Agent shall have no obligation to clean-up or otherwise prepare
the Collateral for sale. The Administrative Agent and each Lender shall use reasonable care with
respect to the Collateral in its possession or under its control. Neither the Administrative Agent
nor any Lender shall have any other duty as to any Collateral in its possession or control or in
the possession or control of any agent or nominee of the Administrative Agent or such Lender, or
any income thereon or as to the preservation of rights against prior parties or any other rights
pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to
exercise remedies in a commercially reasonable manner, the Grantors acknowledge and agree that it
is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed
significant by the Administrative Agent to prepare Collateral for disposition or otherwise to
transform raw material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by

 

21

 

other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to
be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors
or other Persons obligated on Collateral or to remove Liens on or any adverse claims against
Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as the Grantors, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail
markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi)
to purchase insurance or credit enhancements to insure the Administrative Agent against risks of
loss, collection or disposition of Collateral or to provide to the Administrative Agent a
guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by the Administrative Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent in the collection
or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section
8.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative
Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against
the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section 8.2. Without
limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant
any rights to any Grantor or to impose any duties on the Administrative Agent that would not have
been granted or imposed by this Security Agreement or by applicable law in the absence of this
Section 8.2.

8.3. Compromises and Collection of Collateral. The Grantors and the Administrative
Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors
with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or in part and that the expense and probability of success in litigating a
disputed Receivable may exceed the amount that reasonably may be expected to be recovered with
respect to a Receivable. In view of the foregoing, each Grantor agrees that the Administrative
Agent may at any time and from time to time, if an Event of Default has occurred and is continuing,
compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount
as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and
any such action by the Administrative Agent shall be commercially reasonable so long as the
Administrative Agent acts in good faith based on information known to it at the time it takes any
such action.

8.4. Secured Party Performance of Debtor Obligations. Without having any obligation to
do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to
perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent
for any amounts paid by the Administrative Agent pursuant to this Section 8.4. The Grantors’
obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a
Secured Obligation payable on demand.

8.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees
that a breach of any of the covenants contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7,
4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7 or in Article VII will cause irreparable
injury to the Administrative Agent and the Lenders, that the Administrative Agent and Lenders have
no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the
right of the Administrative Agent or the Lenders to seek and obtain specific performance of other
obligations of the Grantors contained in this Security Agreement, that the covenants of the
Grantors contained in the Sections referred to in this Section 8.5 shall be specifically
enforceable against each Grantor.

8.6. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1(d) and notwithstanding any course of
dealing between the Grantors and the Administrative Agent or other conduct of the Administrative
Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in
Section 4.1(d)) shall be binding upon the Administrative Agent or the Lenders unless such
authorization is in writing signed by the Administrative Agent with the consent or at the direction
of the Required Secured Parties.

 

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8.7. No Waiver; Amendments; Cumulative Remedies. No delay or omission of the
Administrative Agent or any Lender to exercise any right or remedy granted under this Security
Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an
acquiescence therein, and any single or partial exercise of any such right or remedy shall not
preclude any other or further exercise thereof or the exercise of any other right or remedy. No
waiver, amendment or other variation of the terms, conditions or provisions of this Security
Agreement whatsoever shall be valid unless in writing signed by the Administrative Agent with the
concurrence or at the direction of the Lenders required under Section 9.02 of the Credit Agreement
and then only to the extent in such writing specifically set forth. All rights and remedies
contained in this Security Agreement or by law afforded shall be cumulative and all shall be
available to the Administrative Agent and the Lenders until the Secured Obligations have been paid
in full.

8.8. Limitation by Law; Severability of Provisions. All rights, remedies and powers
provided in this Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this Security Agreement
are intended to be subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any
provision in this Security Agreement that is held to be inoperative, unenforceable, or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the provisions of this
Security Agreement are declared to be severable.

8.9. Reinstatement. This Security Agreement shall remain in full force and effect and
continue to be effective should any petition or proposal be filed by or against any Grantor for
liquidation or reorganization, should any Grantor become insolvent or make an assignment for the
benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made.
In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned,
the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall
be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the Lenders
and their respective successors and assigns (including all persons who become bound as a debtor to
this Security Agreement), except that no Grantor shall have the right to assign its rights or
delegate its obligations under this Security Agreement or any interest herein, without the prior
written consent of the Administrative Agent. No sales of participations, assignments, transfers, or
other dispositions of any agreement governing the Secured Obligations or any portion thereof or
interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, hereunder.

8.11. Survival of Representations. All representations and warranties of the Grantors
contained in this Security Agreement shall survive the execution and delivery of this Security
Agreement.

 

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8.12. Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable
by Federal, Provincial or State authority in respect of this Security Agreement shall be paid by
the Grantors, together with interest and penalties, if any. The Grantors shall reimburse the
Administrative Agent for any and all out-of-pocket expenses and internal charges (including
reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Administrative Agent) paid or
incurred by the Administrative Agent in connection with the preparation, execution, delivery,
administration, collection and enforcement of this Security Agreement and in the audit, analysis,
administration, collection, preservation or sale of the Collateral (including the expenses and
charges associated with any periodic or special audit of the Collateral). Any and all costs and
expenses incurred by any Grantor in the performance of actions required pursuant to the terms
hereof shall be borne solely by the Grantors.

8.13. Headings. The title of and section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of any of the terms and
provisions of this Security Agreement.

8.14. Termination. This Security Agreement shall continue in effect (notwithstanding
the fact that from time to time there may be no Secured Obligations outstanding) until (i) the
Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured
Obligations have been indefeasibly paid and performed in full (or with respect to any outstanding
Letters of Credit, a cash deposit or Supporting Letter of Credit has been delivered to the
Administrative Agent as required by the Credit Agreement) and no commitments of the Administrative
Agent or the Lenders which would give rise to any Secured Obligations are outstanding.

8.15. Entire Agreement. This Security Agreement embodies the entire agreement and
understanding between the Grantors and the Administrative Agent relating to the Collateral and
supersedes all prior agreements and understandings between the Grantors and the Administrative
Agent relating to the Collateral.

8.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. PROVIDED, HOWEVER, THAT IF ANY LAWS OF
ANY JURISDICTION, OTHER THAN NEW YORK, SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT
OF PERFECTION OF ANY LIEN IN THE COLLATERAL, OR IN REGARD TO PROCEDURAL MATTERS AFFECTING
ENFORCEMENT OF ANY LIENS IN THE COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTION SHALL CONTINUE TO
APPLY TO THAT EXTENT.

8.17. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT
MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK. If any action or proceeding is
filed in a court of the State of California by or against any party hereto in connection with any
of the transactions contemplated by this Agreement or any document related hereto, (a) the court
shall, and is hereby directed to, make a general reference pursuant to California Code of Civil
Procedure Section 638 to a referee or referees to hear and determine all of the issues in such
action or proceeding (whether of fact or of law) and to report a statement of decision, provided
that at the option of Lender, any such issues pertaining to a “provisional remedy” as defined in
California Code of Civil Procedure Section 1281.8 shall be
heard and determined by the court, and (b) the Borrowers shall be solely responsible to pay
all fees and expenses of any referee appointed in such action or proceeding.

 

24

 

8.18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.

8.19. Indemnity. Each Grantor hereby agrees to indemnify the Administrative Agent and
the Lenders, and their respective successors, assigns, agents and employees, from and against any
and all liabilities, damages, penalties, suits, costs, and expenses of any kind and nature
(including, without limitation, all expenses of litigation or preparation therefor whether or not
the Administrative Agent or any Lender is a party thereto) imposed on, incurred by or asserted
against the Administrative Agent or the Lenders, or their respective successors, assigns, agents
and employees, in any way relating to or arising out of this Security Agreement, or the
manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of any Collateral (including, without
limitation, latent and other defects, whether or not discoverable by the Administrative Agent or
the Lenders or the Grantors, and any claim for Patent, Trademark or Copyright infringement).

8.20. Counterparts. This Security Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and any of the parties
hereto may execute this Security Agreement by signing any such counterpart.

8.21. Judgment Currency. If for the purpose of obtaining judgment in any court it is
necessary to convert an amount due hereunder in the currency in which it is due (the “Original
Currency”) into another currency (the “Second Currency”), the rate of exchange applied shall be
that at which, in accordance with normal banking procedures, the Lender(s) or the Administrative
Agent on behalf of the Lenders could purchase in the Chicago foreign exchange market, the Original
Currency with the Second Currency on the date two (2) Business Days preceding that on which
judgment is given. Each Grantor agrees that its obligation in respect of any Original Currency due
from it hereunder shall, notwithstanding any judgment or payment in such other currency, be
discharged only to the extent that, on the Business Day following the date the Lender(s) or the
Administrative Agent on behalf of the Lenders receives payment of any sum so adjudged to be due
hereunder in the Second Currency, the Lender(s) or the Administrative Agent on behalf of the
Lenders may, in accordance with normal banking procedures, purchase, in the Chicago foreign
exchange market, the Original Currency with the amount of the Second Currency so paid; and if the
amount of the Original Currency so purchased or could have been so purchased is less than the
amount originally due in the Original Currency, each Grantor agrees as a separate obligation and
notwithstanding any such payment or judgment to indemnify the Lender(s) or the Administrative Agent
on behalf of the Lenders against such loss. The term “rate of exchange” in this Section 8.21 means
the spot rate at which the Administrative Agent, in accordance with normal practices, is able on
the relevant date to purchase the Original Currency with the Second Currency, and includes any
premium and costs of exchange payable in connection with such purchase.

 

25

 

It is the express wish of the parties that this agreement and any related documents be drawn up and
executed in English. Il est la volonte expresse des Parties que cette convention et tous les
documents s’y rattachant soient rediges et signes en anglais.

ARTICLE IX

NOTICES

9.1. Sending Notices. (a) Any notice required or permitted to be given under this
Security Agreement shall be sent by United States mail, telecopier, personal delivery or nationally
established overnight courier service, and shall be deemed received (i) when received, if sent by
hand or overnight courier service, or mailed by certified or registered mail notices or (ii) when
sent, if sent by telecopier (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next Business Day
for the recipient), in each case addressed to the Grantors at the address(es) set forth on
Exhibit A as their principal place of business, and to the Administrative Agent and the
Lenders at the addresses set forth in accordance with Section 9.01 of the Credit Agreement.

(b) Any reporting notice required to be given under this Security Agreement by the
Grantors to the Administrative Agent may be given on a quarterly basis unless otherwise
specified herein.

9.2. Change in Address for Notices. Each of the Grantors, the Administrative Agent and
the Lenders may change the address for service of notice upon it by a notice in writing to the
other parties.

ARTICLE X

THE ADMINISTRATIVE AGENT

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Lenders hereunder
pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the
parties to this Security Agreement that any authority conferred upon the Administrative Agent
hereunder is subject to the terms of the delegation of authority made by the Lenders to the
Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed
to act (and any successor Administrative Agent shall act) as such hereunder only on the express
conditions contained in such Article VIII. Any successor Administrative Agent appointed pursuant to
Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of
the Administrative Agent hereunder.

[Signature Page Follows]

 

26

 

IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Security
Agreement as of the date first above written.

	 	 	 	 	 
	 	GRANTORS:

CORE-MARK HOLDING COMPANY, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CORE-MARK INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CORE-MARK HOLDINGS I, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CORE-MARK HOLDINGS II, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CORE-MARK HOLDINGS III, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CORE-MARK MIDCONTINENT, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 

 

 

 

	 	 	 	 	 
	 	CORE-MARK INTERRELATED COMPANIES, INC.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	HEAD DISTRIBUTING COMPANY

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 
	 	MINTER-WEISMAN CO.

 	 
	 	By:  	/s/ Stacy Loretz-Congdon
 	 
	 	 	Name:  	Stacy Loretz-Congdon 	 
	 	 	Title:  	Treasurer 	 
	 

 

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 	 
	 	By:  	/s/ Courtney Jeans
 	 
	 	 	Name:  	Courtney Jeans 	 
	 	 	Title:  	Vice President 	 

 

 

 

	 	 	 	 	 

My Commission Expires: 12-03-08

	 	 	 	 	 	 	 
	STATE OF California

	 	 	)	 	 	 
	 

	 	 	) SS
	 	 
	COUNTY OF San Mateo

	 	 	)	 	 	 

The foregoing instrument was acknowledged before me this 12 day of October, 2005, by
Stacey Loretz-Congden, a Treasurer of  each of the Grantors, on behalf of said
entities.

Notary Public Christina Vilches

My commission expires: 12-03-08

 

 

 

My Commission Expires:

	 	 	 	 	 	 	 
	STATE OF Texas

	 	 	)	 	 	 
	 

	 	 	) SS
	 	 
	COUNTY OF Dallas

	 	 	)	 	 	 

The foregoing instrument was acknowledged before me this 12 day of October, 2005, by
Courtney Jeans, a V.P. of JPM Chase, on behalf of said _____.

Notary
Public Maria E. Cortes

My commission expires:                     

 

 

 

EXHIBIT A

to

PLEDGE AND SECURITY AGREEMENT

Grantors’ Information and Collateral Locations

(See Sections 3.2, 3.3, 3.4, 9.1 of Security Agreement)

	 	 	 
	Paragraph 3.2

	 	Type and Jurisdiction of Organization. Organizational and Identification Numbers.
	 
	 	 
	 

	 	Refer to Credit Agreement Schedule 3.15.
	 
	 	 
	Paragraph 3.3

	 	Principal Location.
	 
	 	 
	 

	 	395 Oyster Point Blvd.

Suite 415

South San Francisco, CA 94080
	 
	 	 
	Paragraph 3.4

	 	Collateral Locations.
	 
	 	 
	 

	 	Refer to Credit Agreement Schedule 3.05(a).
	 
	 	 
	Paragraph 9.1

	 	Sending Notices.
	 
	 	 
	 

	 	395 Oyster Point Blvd.

Suite 415

South San Francisco, CA 94080

Attn: Treasurer

Fax #: 650-589-4010

 

 

 

EXHIBIT B

to

PLEDGE AND SECURITY AGREEMENT

(see Section 3.5 of Security Agreement)

As of September 2, 2005

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Check if a	 	 	 	 
	 	 	 	 	Collateral	 	 	 	 
	 	 	 	 	Deposit	 	 	 	 
	Company Name	 	Name of Institution	 	Account	 	Type of Account	 	Description of Account
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	JP Morgan Chase
	 	 	 	Depository
	 	US Cash Concentration account
	 
	 	 	 	 	 	 	 	 
	Head Distributing Co.

	 	Bank Of America
	 	ü
	 	Depository
	 	Depository
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Wells Fargo
	 	ü
	 	Lockbox — Depository
	 	Depository / includes Lockbox/NON CA
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Wells Fargo
	 	ü
	 	Lockbox — Depository
	 	Depository / includes Lockbox/CALIF
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Wells Fargo
	 	ü
	 	Depository
	 	Depository non a/r receipts
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Bank Of Montreal
	 	ü
	 	Depository/Disbursement
	 	C$ Concentration acct
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Scotia Bank
	 	ü
	 	Depository
	 	Visa / Calgary
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Scotia Bank
	 	ü
	 	Depository
	 	Visa / Vancouver
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Scotia Bank
	 	ü
	 	Depository
	 	Visa / Winnipeg
	 
	 	 	 	 	 	 	 	 
	Core-Mark International, Inc.

	 	Wilson & Muir
	 	 	 	Depository
	 	Kentucky Depository

 

 

 

EXHIBIT C

to

PLEDGE AND SECURITY AGREEMENT

Letter of Credit Reporting, Chattel Paper

(See Section 3.7 of Security Agreement)

Letter of Credit Rights 

None.

Chattel Paper 

Refer to Credit Agreement Schedule 6.04 (2). [See Attached]

 

 

 

Schedule 6.04 to Credit Agreement

Existing Investments

Stock Holdings

1) Investments

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number	 	 	Estimated Share	 	 	Holdings	 	 	 	 	 
	Company Name	 	Shares	 	 	Price	 	 	Value	 	 	 Exchange	 	Holder
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ILD Holdings, Inc.
	 	 	600	 	 	$	120.00	 	 	$	72,000	 	 	Non-Public	 	Head Distributing Company
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Prudential Financial
	 	 	51	 	 	$	65.87	 	 	$	3,359	 	 	NYSE	 	Minter — Weisman Co. Can
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Altria Group, Inc. Direct Stock
Purchase and Dividend Reinvestment
Plan
	 	 	6.084	 	 	$	71.94	 	 	$	438	 	 	NYSE	 	Minter — Weisman Co. Can
	Altria Group, Inc. Direct Stock
Purchase and Dividend Reinvestment
Plan
	 	 	6.102	 	 	$	71.94	 	 	$	439	 	 	NYSE	 	Adel Grocery Company
	Altria Group, Inc. Direct Stock
Purchase and Dividend Reinvestment
Plan
	 	 	6.148	 	 	$	71.94	 	 	$	442	 	 	NYSE	 	Core-Mark Distribution Inc.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Duckwall-Alco Stores
	 	 	262	 	 	$	23.73	 	 	$	6,217	 	 	NASDAQ	 	Core-Mark International, Inc.
	 
	Duckwall-Alco Stores
	 	 	482	 	 	$	23.73	 	 	$	11,438	 	 	NASDAQ	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ames Department Stores
	 	 	3,654	 	 	$	0.0015	 	 	$	5	 	 	Pink Sheet	 	Core-Mark Distributors
	Affiliated Foods, Inc.
	 	 	169	 	 	$	207.10	 	 	$	35,000	 	 	 	 	Core-Mark Midcontinent
	Affiliated Foods, Inc.
	 	 	6	 	 	$	206.00	 	 	$	1,236	 	 	 	 	 
	Affiliated Foods, Inc.
	 	 	25	 	 	$	100.00	 	 	$	2,500	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	133,075	 	 	 	 	 

	 	 	 	 	 	 	 
	2) Notes Receivable
	 	 	 	 	 	 
	 
	Customer Name
	 	Original
Date	 	Note Receivable
	 
	 	 	 	 	 	 
	BLUE CHIP (Eureka Management Group)
	 	 	2/18/2003	 	 	218,510
	 
	 	 	 	 	 	 
	MLK
	 	 	11/10/1991	 	 	40,224
	 
	 	 	 	 	 	 
	LOGANVILLE CHEVRON
	 	 	11/1/2000	 	 	15,568

3) Guarantees

Include by reference Schedule 6.01, Item (1) to the Credit Agreement

 

 

 

EXHIBIT D

to

PLEDGE AND SECURITY AGREEMENT

INTELLECTUAL PROPERTY

(See Sections 3.10 and 3.11 of Security Agreement)

Refer to Schedule 3.05(b) to the Credit Agreement. [See Attached]

 

 

 

SCHEDULE 3.05(b)

to

CREDIT AGREEMENT

INTELLECTUAL PROPERTY

Trademarks

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mark	 	Legal Entity	 	Country	 	Classes	 	 	App. No.	 	 	App. Date	 	 	Reg. No.	 	 	Reg. Date	 	 	Status
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CORE-MARK
	 	Core-Mark International, Inc.	 	Canada	 	NA	 	 	 	480,956	 	 	 	1/15/82	 	 	TMA272,823	 	 	 	10/15/82	 	 	Registered
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CORE-MARK
	 	Core-Mark International, Inc.	 	United States	 	 	42	 	 	 	73/360,195	 	 	 	4/16/82	 	 	 	1,283,707	 	 	 	6/26/84	 	 	Registered
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CORE-MARK & Design (new design)
	 	Core-Mark International, Inc.	 	Canada	 	NA	 	 	 	729,697	 	 	 	5/19/93	 	 	TMA433,460	 	 	 	9/16/94	 	 	Registered
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CORE-MARK INTERNATIONAL & Design (New Design Logo)
	 	Core-Mark International, Inc.	 	United States	 	 	42	 	 	 	74/389,810	 	 	 	5/13/93	 	 	 	1,834,121	 	 	 	5/3/94	 	 	Registered
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CORE-MARK & Design (YOU CAN COUNT ON US)
	 	Core-Mark International, Inc.	 	Canada	 	NA	 	 	 	729,698	 	 	 	5/19/93	 	 	TMA432,801	 	 	 	9/2/94	 	 	Registered
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CORE-MARK INTERNATIONAL & Design Logo (YOU CAN COUNT ON US)
	 	Core-Mark International, Inc.	 	United States	 	 	42	 	 	 	74/391,973	 	 	 	5/18/93	 	 	 	1,834,123	 	 	 	5/3/94	 	 	Registered
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SMARTSTOCK
	 	Core-Mark International, Inc.	 	United States	 	 	35	 	 	 	75/334,833	 	 	 	8/2/97	 	 	 	2,271,065	 	 	 	8/17/99	 	 	Registered

Tradenames

The company uses and has registered a number of trade names including derivatives of the legal
corporate names listed on schedule 3.15. In addition, the company runs its two consolidation
warehouses using the names Allied Merchandising Industry and Artic Cascade and a number of
derivatives thereof.

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Documents for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	 	LICENSE #
	 
	 	4/1/2005	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	M97047
	 	Penske-Mt	 	7	 	1993	 	B	 	NAV/INTL	 	22’	 	1HTSCACLXRH574988	 	 	 	 	 	9A47459
	332119
	 	Penske-Mt	 	7	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANEZ49005115	 	 	 	 	 	1WX1220
	332120
	 	Penske-Mt	 	7	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE6Z9005149	 	 	 	 	 	1WX1219
	332121
	 	Penske-Mt	 	7	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE7T9002365	 	 	 	 	 	4CX672
	332122
	 	Penske-Mt	 	7	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANEXV9001049	 	 	 	 	 	1VL4890
	332123
	 	Penske-Mt	 	7	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE6V9001050	 	 	 	 	 	1VL4891
	332124
	 	Penske-Mt	 	7	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE5T9002364	 	 	 	 	 	1WB7274
	332129
	 	Penske-Mt	 	7	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE9V9003651	 	 	 	 	 	1VC5664
	332125
	 	Penske-Mt	 	7	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE3T9002363	 	 	 	 	 	1VC5665
	332126
	 	Penske-Mt	 	7	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE2T9009206	 	 	 	 	 	1VC5657
	332127
	 	Penske-Mt	 	7	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE0V9004705	 	 	 	 	 	1WA5435
	332128
	 	Penske-Mt	 	7	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE2V9004706	 	 	 	 	 	1WA5436
	332130
	 	Penske-Mt	 	7	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE7V9007065	 	 	 	 	 	1WC2783
	332131
	 	Penske-Mt	 	7	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE7V9007066	 	 	 	 	 	1WC2785
	332132
	 	Penske-Mt	 	7	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE4V9005615	 	 	 	 	 	1VL9158
	334291
	 	Penske-Mt	 	7	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE0Y9011562	 	 	 	 	 	1VT6224
	334292
	 	Penske-Mt	 	7	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE2Y9011563	 	 	 	 	 	1VT6225
	334293
	 	Penske-Mt	 	7	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE9Y9011561	 	 	 	 	 	1VT6223
	334294
	 	Penske-Mt	 	7	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE1Y9011975	 	 	 	 	 	1WM5155
	 
	 	Penske-Mt	 	7	 	2002	 	T	 	TRLMO	 	28’	 	1PT01ANL629002050	 	 	 	 	 	1XA3157
	 
	 	Penske-Mt	 	7	 	2002	 	T	 	TRLMO	 	28’	 	1PT01ANL829002051	 	 	 	 	 	1XA3159
	21
	 	Penske-Mt	 	7	 	1980	 	T	 	STRICK	 	27’	 	 	 	239010	 	 	 	1VB1749
	NEW
	 	Penske-Mt	 	7	 	2005	 	T	 	UTILITY	 	28’	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	6/14/2005	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	747436
	 	Ryd-Mt	 	16/61	 	1997	 	T	 	TRLMO	 	27’	 	1PTO7ANE5V9003324	 	 	 	 	 	1WN3124
	747437
	 	Ryd-Mt	 	16/61	 	1994	 	T	 	UTIL	 	28’	 	1UYVS1285RU330703	 	 	 	 	 	1WN3125
	747438
	 	Ryd-Mt	 	16	 	1995	 	T	 	TRLMO	 	53’	 	1UYVS2537TU748001	 	 	 	 	 	1WH5496
	747439
	 	Ryd-Mt	 	16	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANEXV9001052	 	 	 	 	 	1VL5003
	747440
	 	Ryd-Mt	 	16	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE7V9004703	 	 	 	 	 	1WA5433
	747441
	 	Ryd-Mt	 	16	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE9V9004704	 	 	 	 	 	1WA5434
	747442
	 	Ryd-Mt	 	16	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE4V9004707	 	 	 	 	 	1WA5437
	747443
	 	Ryd-Mt	 	16	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE6V9004708	 	 	 	 	 	1WA5438
	747444
	 	Ryd-Mt	 	16	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE8V9005617	 	 	 	 	 	1VL8834
	747445
	 	Ryd-Mt	 	16	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE6V9005616	 	 	 	 	 	1VL8835
	749708
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANE3W9007101	 	 	 	 	 	1WE4595
	749709
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANE5W9007102	 	 	 	 	 	1WE4596
	749710
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANE1W9007100	 	 	 	 	 	1WE4594
	749711
	 	Ryd-Mt	 	16	 	1999	 	T	 	UTILITY	 	28’	 	1UYVS1284XU742303	 	 	 	 	 	1WF8786
	749712
	 	Ryd-Mt	 	16	 	1999	 	T	 	UTILITY	 	28’	 	1UYVS1286XU742304	 	 	 	 	 	1WF8787
	754702
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM1X9013276	 	 	 	 	 	1WL4266
	754703
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM3X9013277	 	 	 	 	 	1WL4267
	756077
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	35’	 	1FTO7ANK1X9003722	 	 	 	 	 	1WL4333
	756127
	 	Ryd-Mt	 	16	 	1999	 	T	 	TRLMO	 	48’	 	1PTO1ANH4Y9003718	 	 	 	 	 	1WL4385
	761792
	 	Ryd-Mt	 	16	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE1Y9011568	 	 	 	 	 	1VT6006
	761793
	 	Ryd-Mt	 	16	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE8Y9011566	 	 	 	 	 	1VT6004
	761794
	 	Ryd-Mt	 	16	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANEXY9011567	 	 	 	 	 	1VT6005
	761795
	 	Ryd-Mt	 	16	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE6Y9011565	 	 	 	 	 	1VT6002
	770295
	 	Ryd-Mt	 	16	 	2001	 	T	 	TRLMO	 	28’	 	1PTO1ANE519007321	 	 	 	 	 	1WF7672
	770297
	 	Ryd-Mt	 	16	 	2001	 	T	 	TRLMO	 	28’	 	1PTO1ANLE319007320	 	 	 	 	 	1WF7673
	770298
	 	Ryd-Mt	 	16	 	2001	 	T	 	TRLMO	 	28’	 	1PTO1ANE019007324	 	 	 	 	 	1WF7670
	770299
	 	Ryd-Mt	 	16	 	2001	 	T	 	TRLMO	 	28’	 	1PTO1ANL419007309	 	 	 	 	 	1WF7675
	770300
	 	Ryd-Mt	 	16	 	2001	 	T	 	TRLMO	 	28’	 	1PTO1ANL019007310	 	 	 	 	 	1WF7674

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Document for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	4/1/2005	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	102T
	 	T.C.I.-Mt	 	21	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE2P9016908	 	 	 	4AS5315
	103T
	 	T.C.I.-Mt	 	21	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE3P9016905	 	 	 	4AS5316
	104T
	 	T.C.I.-Mt	 	21	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE4P9016906	 	 	 	4AS5317
	105T
	 	T.C.I.-Mt	 	21	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE6P9016910	 	 	 	4AS5351
	106T
	 	T.C.I.-Mt	 	21	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE5T9016909	 	 	 	4AS5352
	108T
	 	T.C.I.-Mt	 	21	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE3S9003463	 	 	 	4AS5319
	109T
	 	T.C.I.-Mt	 	21	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANE8S9009209	 	 	 	4AS5320
	111T
	 	T.C.I.-Mt	 	21	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANE4S9009210	 	 	 	4AS5339
	112T
	 	T.C.I.-Mt	 	21	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANE6S9009208	 	 	 	4AS5340
	113T
	 	T.C.I.-Mt	 	21	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE5T9009671	 	 	 	4AS5341
	114T
	 	T.C.I.-Mt	 	21	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE7T9009672	 	 	 	4AS5342
	115T
	 	T.C.I.-Mt	 	21	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANE9T9009673	 	 	 	4AS5343
	116T
	 	T.C.I.-Mt	 	21	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANEOT9009674	 	 	 	4AS5344
	117T
	 	T.C.I.-Mt	 	21	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANEXV9004694	 	 	 	4AS5345
	118T
	 	T.C.I.-Mt	 	21	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE1V9004695	 	 	 	4AS5346
	119T
	 	T.C.I.-Mt	 	21	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE4V9004691	 	 	 	4AS5347
	120T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE219007213	 	 	 	4AS5348
	121T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANEX19007217	 	 	 	4AS5349
	122T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE619007215	 	 	 	4AS5350
	123T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE019007212	 	 	 	4AS5337
	32T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE419007214	 	 	 	4AS5336
	33T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE119007218	 	 	 	4AS5309
	34T
	 	T.C.I.-Mt	 	21	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE819007216	 	 	 	4AS5310
	35T
	 	T.C.I.-Mt	 	21	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE6V9004692	 	 	 	4AS5311
	36T
	 	T.C.I.-Mt	 	21	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE8V9004693	 	 	 	4AS5312
	37T
	 	T.C.I.-Mt	 	21	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE3V9004696	 	 	 	4AS5313
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Updated 4-1-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	331002
	 	Penske-Mt	 	23	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE4P9007836	 	 	 	4AA8222
	331003
	 	Penske-Mt	 	23	 	1993	 	T	 	TRLMO	 	28’	 	1PTO7ANE6P9007837	 	rfr removed	 	4AA8220
	331595
	 	Penske-Mt	 	23	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE1V9003323	 	 	 	1WB7254
	331596
	 	Penske-Mt	 	23	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE1V9003322	 	 	 	1WB7253
	331597
	 	Penske-Mt	 	23	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE5V9004697	 	 	 	4AB6679
	331598
	 	Penske-Mt	 	23	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE7V9004698	 	totaled 7-25-05	 	4AB6676
	331599
	 	Penske-Mt	 	23	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE9V9004699	 	 	 	4AB6678
	331600
	 	Penske-Mt	 	23	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE1V9004700	 	 	 	1WA5431
	334313
	 	Penske-Mt	 	23	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE4Y9011564	 	 	 	1VT6003
	334314
	 	Penske-Mt	 	23	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE0Y9011576	 	 	 	1VT6007
	863476
	 	Penske-Mt	 	23	 	2002	 	T	 	TRLMO	 	32’	 	1PTO1ANL219007311	 	 	 	4AA3222
	863477
	 	Penske-Mt	 	23	 	2002	 	T	 	TRLMO	 	32’	 	1PTO1ANL219007312	 	 	 	4AA3221
	871622
	 	Penske-Mt	 	23	 	2003	 	T	 	UTILITY	 	32’	 	1UYVS23203U936904	 	 	 	4CH2455
	1282
	 	Penske-Mt	 	23	 	2004	 	T	 	UTILITY	 	28’	 	1UYVS12823U128201	 	 	 	 
	1283
	 	Penske-Mt	 	23	 	2004	 	T	 	UTILITY	 	35’	 	1UYVS23533U128301	 	 	 	4FC4354
	1284
	 	Penske-Mt	 	23	 	2004	 	T	 	UTILITY	 	28’	 	1UYVS12845U632607	 	 	 	 
	NEW
	 	Penske-Mt	 	23	 	2005	 	T	 	UTILITY	 	28’	 	 	 	 	 	 

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Document for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	Updated 4-1-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	527746
	 	Ryd-Mt	 	35	 	1994	 	CG	 	EIGHT	 	CONGEAR	 	1E9501135R1016140	 	 	 	1VR3881
	768435
	 	Ryd-Mt	 	35	 	2001	 	CG	 	GR TDNE	 	CONGEAR	 	1PTOYR0G429000270	 	 	 	1WE1780
	768739
	 	Ryd-Mt	 	35	 	2001	 	CG	 	GR TDNE	 	CONGEAR	 	1PTOYR0G629000271	 	 	 	1WE1778
	768436
	 	Ryd-Mt	 	35	 	2001	 	CG	 	GR TDNE	 	CONGEAR	 	1PTOYR0G829000269	 	 	 	1WE1779
	235626
	 	Ryd-Mt	 	35	 	1993	 	T	 	TRLMO	 	53’ DRY	 	1H2V05324PB033427	 	 	 	X58573
	256126
	 	Ryd-Mt	 	35	 	1995	 	T	 	UTILITY	 	48’	 	1UYVS2482SM603427	 	 	 	QQ73603
	617567
	 	Ryd-Mt	 	35	 	1991	 	T	 	TRLMO	 	28’	 	1PT071NE3L9001679	 	 	 	1VE3607
	617609
	 	Ryd-Mt	 	35	 	1993	 	T	 	TRLMO	 	28’	 	1PT07ANE6P9016893	 	 	 	1VM1258
	617610
	 	Ryd-Mt	 	35	 	1993	 	T	 	TRLMO	 	28’	 	1PT07ANEXP9016895	 	 	 	1VJ8952
	617611
	 	Ryd-Mt	 	35	 	1993	 	T	 	TRLMO	 	28’	 	1PT07ANE8P9016894	 	 	 	1VJ8949
	617612
	 	Ryd-Mt	 	35	 	1993	 	T	 	TRLMO	 	28’	 	1PT07ANE1P9016896	 	 	 	1UU6565
	617613
	 	Ryd-Mt	 	35	 	1994	 	T	 	UTILITY	 	28’	 	1UYVS1295RU194601	 	 	 	1VN8167
	617614
	 	Ryd-Mt	 	35	 	1994	 	T	 	UTILITY	 	28’	 	1UYVS1297RU194602	 	 	 	1VN8168
	617615
	 	Ryd-Mt	 	35	 	1994	 	T	 	UTILITY	 	28’	 	1UYVS1299RU194603	 	 	 	1VN8169
	617616
	 	Ryd-Mt	 	35	 	1994	 	T	 	UTILITY	 	28’	 	1UYVS1290RU194604	 	 	 	1VN8170
	617617
	 	Ryd-Mt	 	35	 	1994	 	T	 	TRLMO	 	32’	 	1PTO7ANL0R9015014	 	 	 	1VR2075
	617618
	 	Ryd-Mt	 	35	 	1994	 	T	 	TRLMO	 	28’	 	1PT07ANE1R9012351	 	 	 	1VR2867
	710456
	 	Ryd-Mt	 	35	 	1995	 	T	 	TRLMO	 	28’	 	1PT07ANE0S9009205	 	 	 	1WX1337
	710457
	 	Ryd-Mt	 	35	 	1995	 	T	 	TRLMO	 	28’	 	1PT07ANE9S9009204	 	 	 	1WK5882
	710458
	 	Ryd-Mt	 	35	 	1995	 	T	 	TRLMO	 	28’	 	1PT07ANE7S9009203	 	 	 	1VT1073
	717511
	 	Ryd-Mt	 	35	 	1996	 	T	 	TRLMO	 	28’	 	1PT07ANE1T9009666	 	 	 	1WR7881
	717512
	 	Ryd-Mt	 	35	 	1996	 	T	 	TRLMO	 	28’	 	1PT07ANE3T9009667	 	 	 	1VT9806
	717513
	 	Ryd-Mt	 	35	 	1996	 	T	 	TRLMO	 	28’	 	1PT07ANE5T9009668	 	 	 	1VT9811
	717514
	 	Ryd-Mt	 	35	 	1996	 	T	 	TRLMO	 	28’	 	1PT07ANE7T9009669	 	 	 	1VT9749
	717515
	 	Ryd-Mt	 	35	 	1996	 	T	 	TRLMO	 	28’	 	1PT07ANE3T9009670	 	 	 	1VT9807
	717517
	 	Ryd-Mt	 	35	 	1996	 	T	 	TRLMO	 	28’	 	1PT07ANE4T9009676	 	 	 	1VT9816
	733343
	 	Ryd-Mt	 	35	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE6W9007088	 	 	 	1WG3583
	733344
	 	Ryd-Mt	 	35	 	1998	 	T	 	TRLMO	 	40’	 	1PTO1ANK8W9007103	 	 	 	1WG3587
	753778
	 	Ryd-Mt	 	35	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM7X9013282	 	 	 	1WH7397
	753779
	 	Ryd-Mt	 	35	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM9X9013283	 	out of svc 12-21-04	 	1WH7394
	753780
	 	Ryd-Mt	 	35	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM0X9013284	 	 	 	1WH7395
	756322
	 	Ryd-Mt	 	35	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE3X9003729	 	 	 	1WL4406
	768430
	 	Ryd-Mt	 	35	 	2001	 	T	 	TRLMO	 	40’	 	1PT07ANK619007206	 	 	 	1WE1768
	768431
	 	Ryd-Mt	 	35	 	2001	 	T	 	TRLMO	 	28’	 	1PT07ANK819007207	 	 	 	1WE1775
	768432
	 	Ryd-Mt	 	35	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE919007208	 	 	 	1WE1776
	768433
	 	Ryd-Mt	 	35	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE019007209	 	 	 	1WE1777
	602962
	 	Ryd-Mt	 	35	 	2004	 	T	 	UTILITY	 	48’	 	1UYVS24863U128401	 	 	 	 
	NEW
	 	Ryd-Mt	 	35	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12855U683307	 	 	 	 
	NEW
	 	Ryd-Mt	 	35	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12835U683306	 	 	 	 

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Documents for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	Updated 1-1-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	803583
	 	Storage	 	44	 	1980	 	T	 	PIKE	 	DRY	 	79V598	 	 	 	415Y9
	5331015
	 	Penske-Mt	 	44	 	1994	 	T	 	TRLMO	 	32’	 	1PTO7ANLX9016880	 	 	 	 
	5331016
	 	Penske-Mt	 	44	 	1994	 	T	 	TRLMO	 	32’	 	1PTO7ANL19016881	 	 	 	 
	5331078
	 	Penske-Mt	 	44	 	1994	 	T	 	UTILITY	 	28’	 	1UYVS1283RU330702	 	 	 	 
	5331079
	 	Penske-Mt	 	44	 	1994	 	T	 	UTILITY	 	28’	 	1UYVS1281RU330701	 	 	 	 
	5331080
	 	Penske-Mt	 	44	 	1994	 	T	 	TRLMO	 	32’	 	1PTO7ANL8R9016721	 	 	 	 
	5331081
	 	Penske-Mt	 	44	 	1994	 	T	 	TRLMO	 	32’	 	1PTO7ANL6R9016720	 	 	 	 
	5331222
	 	Penske-Mt	 	44	 	1996	 	T	 	TRLMO	 	32’	 	1PTO1ANL3T9002358	 	 	 	 
	5331223
	 	Penske-Mt	 	44	 	1996	 	T	 	TRLMO	 	32’	 	1PTO1ANL3T9002359	 	 	 	 
	5331224
	 	Penske-Mt	 	44	 	1996	 	T	 	TRLMO	 	32’	 	1PTO1ANM8T9010613	 	 	 	 
	5331225
	 	Penske-Mt	 	44	 	1996	 	T	 	TRLMO	 	32’	 	1PTO1ANM8T9010614	 	 	 	 
	5331686
	 	Penske-Mt	 	44	 	1997	 	T	 	TRLMO	 	32’	 	1PTO1ANL1W9002995	 	 	 	 
	5331842
	 	Penske-Mt	 	44	 	1999	 	T	 	TRLMO	 	32’	 	1PTO1ANLOX9003685	 	 	 	 
	5331843
	 	Penske-Mt	 	44	 	1999	 	T	 	TRLMO	 	32’	 	1PTO1ANL2X9003686	 	 	 	 
	5334329
	 	Penske-Mt	 	44	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANE5Y9011573	 	 	 	 
	5332141
	 	Penske-Mt	 	44	 	2000	 	T	 	TRLMO	 	32’	 	1PTO1ANL5Y9003733	 	 	 	 
	5332142
	 	Penske-Mt	 	44	 	2000	 	T	 	TRLMO	 	32’	 	1PTO1ANL3Y9003732	 	 	 	 
	5334330
	 	Penske-Mt	 	44	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE3Y9011572	 	 	 	 
	868223
	 	Penske-Mt	 	44	 	2001	 	T	 	TRLMO	 	32’	 	1PTO7ANLX19007220	 	 	 	 
	868224
	 	Penske-Mt	 	44	 	2001	 	T	 	TRLMO	 	32’	 	1PTO7ANL319007219	 	 	 	 
	868225
	 	Penske-Mt	 	44	 	2001	 	T	 	TRLMO	 	32’	 	1PTO7ANL119007221	 	 	 	 
	871623
	 	Penske-Mt	 	44	 	2002	 	T	 	UTILITY	 	35’	 	1UYVS23593U936801	 	 	 	HS77501
	871624
	 	Penske-Mt	 	44	 	2002	 	T	 	UTILITY	 	32’	 	1UYVS23293U936903	 	 	 	HS77503
	871625
	 	Penske-Mt	 	44	 	2002	 	T	 	UTILITY	 	32’	 	1UYVS23223U936905	 	 	 	HS75829
	868226
	 	Penske-Mt	 	44	 	2003	 	T	 	UTILITY	 	35’	 	1PTO1ANL629002050	 	 	 	 
	868227
	 	Penske-Mt	 	44	 	2003	 	T	 	UTILITY	 	35’	 	11PYO1ANL829002051	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Updated 6-14-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9829
	 	 	 	45	 	1989	 	P	 	FRTLNR	 	 	 	1FUKZKY85KH408653	 	 	 	YABH205
	1310
	 	 	 	45	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE3R9012352	 	 	 	HP77963
	1320
	 	 	 	45	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANE5S9003464	 	 	 	HP88144
	1338
	 	Artic/storage	 	45	 	1986	 	T	 	COMET	 	32’	 	1COR32014GS033490	 	 	 	HP62662
	1340
	 	 	 	45	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANEXT9009665	 	 	 	HQ30394
	1350
	 	 	 	45	 	1996	 	T	 	TRLMO	 	35’	 	1PTO1ANL5T9010612	 	 	 	HR15919
	1360
	 	 	 	45	 	1998	 	T	 	TRLMO	 	35’	 	1PTO1ANL9W9007104	 	 	 	HR16000
	1370
	 	 	 	45	 	1999	 	T	 	TRLMO	 	35’	 	1PTO1ANL3X9017581	 	 	 	HR69786
	1380
	 	 	 	45	 	2000	 	T	 	TRLMO	 	35’	 	1PTO1ANL219001900	 	 	 	HS371143
	9835
	 	 	 	45	 	1991	 	T	 	TRLMO	 	28’	 	1PTO7ANEON9006517	 	 	 	HR42138
	1390
	 	 	 	45	 	2003	 	T	 	UTILITY	 	28’	 	1UYVS128234995601	 	 	 	 
	1395
	 	 	 	45	 	2003	 	T	 	UTILITY	 	35’	 	1UYVS23533U995701	 	 	 	HS70790

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Documents for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	Updated 6-28-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	823051
	 	Penske-Mt	 	48	 	1994	 	T	 	TRLMO	 	48’	 	1PTO1ANH6R9003866	 	 	 	97175K
	826409
	 	Penske-Mt	 	48	 	1989	 	T	 	TRLMO	 	27’	 	1PTO71NEOK9006062	 	 	 	 
	827155
	 	Penske-Mt	 	48	 	1995	 	T	 	UTILITY	 	28’	 	1UYVS1281SU374302	 	 	 	6039FTA
	827156
	 	Penske-Mt	 	48	 	1995	 	T	 	UTILITY	 	28’	 	1UYVS128XSU374301	 	 	 	6038FTA
	831358
	 	Penske-Mt	 	48	 	1996	 	T	 	TRLMO	 	48’	 	1PTO1ANH6T9010419	 	 	 	1807FTB
	831359
	 	Penske-Mt	 	48	 	1996	 	T	 	TRLMO	 	40’	 	1PT01ANK9V9001132	 	 	 	9828FTB
	831360
	 	Penske-Mt	 	48	 	1996	 	T	 	UTILITY	 	28’	 	1PT07ANE2T9009675	 	 	 	0284FTB
	837672
	 	Penske-Mt	 	48	 	1997	 	T	 	TRLMO	 	35’	 	1PTO1ANL8V9006041	 	 	 	0851FTB
	842167
	 	Penske-Mt	 	48	 	1998	 	T	 	TRLMO	 	40’	 	1PTO1ANL1W9012622	 	 	 	6895FTB
	849041
	 	Penske-Mt	 	48	 	1999	 	T	 	TRLMO	 	35’	 	1PTO1ANL1X9017580	 	 	 	6755FTB
	855319
	 	Penske-Mt	 	48	 	2000	 	T	 	TRLMO	 	35’	 	1PTO7ANLXY9013819	 	 	 	0316FTC
	855320
	 	Penske-Mt	 	48	 	2000	 	T	 	TRLMO	 	35’	 	1PTO7ANL6Y9013820	 	 	 	0317FTC
	861128
	 	Penske-Mt	 	48	 	2001	 	T	 	TRLMO	 	48’	 	1PTO1ANH529000303	 	 	 	4232FTC
	861129
	 	Penske-Mt	 	48	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE719007210	 	 	 	4233FTC
	861130
	 	Penske-Mt	 	48	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE919007211	 	 	 	4230FTC
	861131
	 	Penske-Mt	 	48	 	2001	 	T	 	TRLMO	 	35’	 	1PTO7ANL319007222	 	 	 	4231FTC
	866993
	 	Penske-Mt	 	48	 	2002	 	T	 	TRLMO	 	40’	 	1PTO1ANKX29002706	 	 	 	4274FTC
	866994
	 	Penske-Mt	 	48	 	2002	 	T	 	TRLMO	 	40’	 	1PTO1ANK029002049	 	 	 	4283FTC
	868066
	 	Penske-Mt	 	48	 	2002	 	T	 	TRLMO	 	48’	 	1PT01ANH729003509	 	 	 	4285FTC
	871621
	 	Penske-Mt	 	48	 	2002	 	T	 	UTILITY	 	40’	 	1UYVS24003U937001	 	 	 	9240FTC
	871622
	 	Penske-Mt	 	48	 	2006	 	T	 	UTILITY	 	48’	 	1UYVS24815U683601	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Updated 6-14-5	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3
	 	 	 	53	 	1980	 	B	 	FORD	 	LN6000	 	N61HVJE0027	 	 	 	 
	 
	 	 	 	53	 	1976	 	CG	 	TRLMO	 	DOLLY	 	N92063	 	 	 	 
	 
	 	 	 	53	 	1980	 	CG	 	TRLMO	 	DOLLY	 	CV1271	 	 	 	 
	146
	 	 	 	53	 	1999	 	T	 	TRLMO	 	32’	 	1PTO7ANMMX9013261	 	 	 	4442MH
	147
	 	 	 	53	 	1999	 	T	 	TRLMO	 	32’	 	1PTO7ANMMX9013262	 	 	 	4441MH
	1796
	 	54	 	53	 	1979	 	T	 	UTIL	 	27’	 	7L94247003	 	selling	 	32031TR
	3202
	 	103	 	53	 	1988	 	T	 	UTIL	 	32’	 	1UYVS2474JU903203	 	selling	 	2547KQ
	3203
	 	102	 	53	 	1988	 	T	 	UTIL	 	32’	 	1UYVS2472JU903202	 	selling	 	2548KQ
	12
	 	 	 	53	 	2001	 	T	 	TRLMO	 	28’	 	1PT07ANE629000301	 	 	 	9522-NS
	218
	 	 	 	53	 	2000	 	T	 	TRLMO	 	32’	 	APT01ANL5Y9015218	 	 	 	3907MZ
	219
	 	 	 	53	 	2000	 	T	 	TRLMO	 	32’	 	1PT01ANL7Y9015219	 	 	 	3906MZ
	48-1
	 	 	 	53	 	2000	 	T	 	TRLMO	 	48’	 	1PT01ANH7Y9016219	 	 	 	3909MZ
	48-2
	 	 	 	53	 	2000	 	T	 	TRLMO	 	48’	 	1PT01ANH5Y9016218	 	 	 	3908MZ
	232
	 	 	 	53	 	2002	 	T	 	UTILITY	 	32’	 	1UYVS23253U936901	 	 	 	0699PJ
	253
	 	 	 	53	 	2002	 	T	 	UTILITY	 	53’	 	1UYVS25303U936701	 	 	 	0166PM
	228
	 	 	 	53	 	2002	 	T	 	UTILITY	 	28’	 	1UYVS12833U938601	 	 	 	0746PJ

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Documents for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	Updated 6-8-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	631374
	 	Ryd-Mt	 	65	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE9R9013893	 	 	 	4078AT
	631375
	 	Ryd-Mt	 	65	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE5R9013891	 	 	 	4079AT
	631477
	 	Ryd-Mt	 	65	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE0R9013894	 	 	 	4077AT
	711409
	 	Ryd-Mt	 	65	 	1996	 	T	 	TRLMO	 	28’	 	1PTO7ANE1T9002362	 	 	 	7448AT
	735255
	 	Ryd-Mt	 	65	 	1996	 	T	 	UTIL	 	28’	 	1UYVS12BOTU833806	 	 	 	05893AT
	735368
	 	Ryd-Mt	 	65	 	1997	 	T	 	TRLMO	 	35’	 	1PTO1ANLXV9006042	 	 	 	05648AT
	737374
	 	Ryd-Mt	 	65	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE6W9007089	 	 	 	0658AT
	737375
	 	Ryd-Mt	 	65	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE8W9007090	 	 	 	06459AT
	737377
	 	Ryd-Mt	 	65	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE8W9007093	 	 	 	04543AT
	753776
	 	Ryd-Mt	 	65	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM5X9013278	 	 	 	06803AT
	753777
	 	Ryd-Mt	 	65	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM5X9013279	 	 	 	06804AT
	995711
	 	Ryd-Mt	 	65	 	2001	 	T	 	TMBL	 	28’	 	1PT07ANE919007323	 	 	 	33455T
	 
	 	Ryd-Mt	 	65	 	2003	 	T	 	UTIL	 	35’	 	1UYVS23553U900801	 	 	 	33772T
	NEW
	 	Ryd-Mt	 	65	 	2005	 	T	 	UTIL	 	28’	 	1UYVS12875U683308	 	 	 	 
	NEW
	 	Ryd-Mt	 	65	 	2005	 	T	 	UTIL	 	35’	 	1UYVS23545U683809	 	 	 	 
	760824
	 	Ryd-Mt	 	65	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE3Y9011569	 	 	 	08158AT
	760825
	 	Ryd-Mt	 	65	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANEXY9011570	 	 	 	08159AT
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Updated 2-2-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12324
	 	Penske-Mt	 	71	 	1972	 	CG	 	COMET	 	Dolly	 	 	 	47210366	 	 
	2
	 	Penske-Mt	 	71	 	1984	 	CG	 	GR TDNE	 	Dolly	 	4F00816DJ017404	 	 	 	 
	826659
	 	Penske-Mt	 	71	 	1983	 	CG	 	AZTE	 	Dolly	 	1AZAA1D15D1013470	 	 	 	 
	823046
	 	Penske-Mt	 	71	 	1985	 	T	 	TRLMO	 	40’	 	1UYVS2405FC405706	 	 	 	83087E
	823048
	 	Penske-Mt	 	71	 	1994	 	T	 	TRLMO	 	28’	 	1UYVS1292RU194605	 	 	 	4F73454
	823049
	 	Penske-Mt	 	71	 	1988	 	T	 	TRLMO	 	48’	 	1PTO1ANHOJ9000739	 	 	 	85365E
	826350
	 	Penske-Mt	 	71	 	1995	 	T	 	TRLMO	 	42’	 	1PTO11NJ2S9015098	 	 	 	52073K
	837351
	 	Penske-Mt	 	71	 	1996	 	T	 	TRLMO	 	48’	 	1PTO1ANH9V9006898	 	 	 	32624L
	837352
	 	Penske-Mt	 	71	 	1996	 	T	 	TRLMO	 	35’	 	1PTO1ANL3V9007047	 	 	 	82810K
	837353
	 	Penske-Mt	 	71	 	1996	 	T	 	TRLMO	 	28’	 	1PTO1ANE3V9007064	 	 	 	32799L
	837354
	 	Penske-Mt	 	71	 	1996	 	T	 	TRLMO	 	28’	 	1PTO1ANE1V9007063	 	 	 	34001L
	841951
	 	Penske-Mt	 	71	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANE4W9007091	 	 	 	45524L
	842801
	 	Penske-Mt	 	71	 	1999	 	T	 	TRLMO	 	48’	 	1PTO1ANH8X9002375	 	 	 	64907L
	849243
	 	Penske-Mt	 	71	 	2000	 	T	 	TRLMO	 	48’	 	1PTO1ANH1Y9003739	 	 	 	256YPL
	849244
	 	Penske-Mt	 	71	 	2000	 	T	 	TRLMO	 	48’	 	1PTO1ANH8Y9003740	 	 	 	257YPL
	846127
	 	Penske-Mt	 	71	 	1999	 	T	 	TRLMO	 	48’	 	1PTO1ANHXX9017492	 	 	 	521YKM
	871627
	 	Penske-Mt	 	71	 	2002	 	T	 	UTILITY	 	35’	 	1UYVS23573U938501	 	 	 	91874M
	883917
	 	Penske-Mt	 	71	 	1997	 	T	 	TRLMO	 	53’	 	1PT01ACHXS9007900	 	 	 	9077CK
	883918
	 	Penske-Mt	 	71	 	1994	 	T	 	TRLMO	 	50’	 	1PTO1ANH9W9003629	 	 	 	9023CB
	891616
	 	Penske-Mt	 	71	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS235154632803	 	 	 	 
	891622
	 	Penske-Mt	 	71	 	2005	 	T	 	UTILITY	 	48’	 	1UYVS24845U683401	 	 	 	 
	891623
	 	Penske-Mt	 	71	 	2005	 	T	 	UTILITY	 	48’	 	1UYVS24865U683402	 	 	 	 

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Documents for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	Updated 4-1-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	72	 	1985	 	CG	 	REGENT-1	 	DOLLY	 	2R9E00311F1015108	 	 	 	905260
	 
	 	 	 	72	 	1987	 	CG	 	TOW-2	 	DOLLY	 	TOW398712-131676	 	 	 	 
	 
	 	 	 	72	 	1985	 	CG	 	TOW-5	 	DOLLY	 	1DF660003F203646	 	 	 	P17846
	 
	 	 	 	72	 	1988	 	CG	 	FRUE-6	 	DOLLY	 	TOW121866-131648	 	 	 	851683
	3
	 	 	 	72	 	1985	 	T	 	UTILITY	 	27’ DRY	 	1UYVS1280F213206	 	 	 	425328
	5
	 	 	 	72	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE3R9013888	 	 	 	829034
	6
	 	 	 	72	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE5R9013889	 	 	 	825035
	7
	 	 	 	72	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE7R9013887	 	 	 	829033
	8
	 	 	 	72	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE8S9003460	 	 	 	833919
	9
	 	 	 	72	 	1994	 	T	 	TRLMO	 	28’	 	1PTO7ANE8S9003461	 	 	 	833921
	10
	 	 	 	72	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANE8T9002360	 	 	 	897635
	11
	 	 	 	72	 	1995	 	T	 	TRLMO	 	28’	 	1PTO7ANEXT9002361	 	 	 	897636
	12
	 	 	 	72	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE9V9005612	 	 	 	985442
	13
	 	 	 	72	 	1997	 	T	 	TRLMO	 	28’	 	1PTO7ANE0V9005613	 	 	 	985443
	14
	 	 	 	72	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE7W9007098	 	 	 	W28593
	15
	 	 	 	72	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE9W9007099	 	 	 	W28594
	17
	 	 	 	72	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM5X9005972	 	 	 	ABN84529
	16
	 	 	 	72	 	1999	 	T	 	TRLMO	 	28’	 	1PTO7ANM5X9005973	 	 	 	ABN84530
	21
	 	 	 	72	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE7Y9011574	 	 	 	P69032
	20
	 	 	 	72	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANE9Y9011575	 	 	 	P69033
	18
	 	 	 	72	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANEXY9003730	 	 	 	LPP39318
	19
	 	 	 	72	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANEXY9006093	 	 	 	LPP39319
	22
	 	 	 	72	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7AWE519007318	 	 	 	R31458
	23
	 	 	 	72	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7AW3719007319	 	 	 	R31456
	24
	 	 	 	72	 	2002	 	T	 	TRLMO	 	28’	 	1PTO7ANE129003168	 	 	 	R59533
	25
	 	 	 	72	 	2003	 	T	 	UTILITY	 	28’	 	1UYVS12873U938603	 	 	 	541115
	26
	 	 	 	72	 	2003	 	T	 	UTILITY	 	28’	 	1UYVS12853U938602	 	 	 	541114
	NEW
	 	 	 	72	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS23555U683804	 	 	 	 
	NEW
	 	 	 	72	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS23595U683806	 	 	 	 

 

 

 

EXHIBIT E

to

PLEDGE AND SECURITY AGREEMENT

Title Documents for PP Component of Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	VEHICLE	 	 	 
	Unit#	 	VENDOR	 	DC	 	YEAR	 	TYPE	 	MAKE	 	MODEL	 	SERIAL NUMBER	 	Title	 	LICENSE #
	 	 	6/13/2005	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	835737
	 	Penske-Mt	 	75	 	1997	 	T	 	TRLMO	 	28’	 	1PT07ANE2V9005614	 	 	 	Z01437
	839768
	 	Penske-Mt	 	75	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE3W9007096	 	 	 	Z46676
	839769
	 	Penske-Mt	 	75	 	1998	 	T	 	TRLMO	 	28’	 	1PTO7ANE5W9007097	 	 	 	Z46677
	846695
	 	Penske-Mt	 	75	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANMMX9013280	 	 	 	 
	846696
	 	Penske-Mt	 	75	 	2000	 	T	 	TRLMO	 	28’	 	1PTO7ANMMX9013281	 	 	 	Z71311
	858300
	 	Penske-Mt	 	75	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE519004550	 	 	 	70691Y
	858301
	 	Penske-Mt	 	75	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE719004551	 	 	 	70692Y
	858302
	 	Penske-Mt	 	75	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE919004552	 	 	 	70693Y
	858303
	 	Penske-Mt	 	75	 	2001	 	T	 	TRLMO	 	28’	 	1PTO7ANE019004553	 	 	 	70694Y
	858304
	 	Penske-Mt	 	75	 	2002	 	T	 	TRLMO	 	28’	 	1PTO7ANE219004554	 	 	 	70695Y
	861047
	 	Penske-Mt	 	75	 	2002	 	T	 	TRLMO	 	35’	 	1PTO7ANL529000872	 	 	 	Z99684
	861048
	 	Penske-Mt	 	75	 	2002	 	T	 	TRLMO	 	28’	 	1PTO7ANE729000873	 	 	 	Z99685
	861049
	 	Penske-Mt	 	75	 	2002	 	T	 	TRLMO	 	28’	 	1PTO7ANE929000874	 	 	 	Z99686
	861050
	 	Penske-Mt	 	75	 	2002	 	T	 	TRLMO	 	28’	 	1PTO7ANEO29000875	 	 	 	Z99687
	867551
	 	Penske-Mt	 	75	 	2002	 	T	 	TRLMO	 	35’	 	1PT1ANL829003510	 	 	 	99757Y
	891600
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12835U632601	 	 	 	W21592
	891601
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12855U632602	 	 	 	W21593
	891602
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12875U632603	 	 	 	W21842
	891603
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12895U632604	 	 	 	W21841
	891604
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12805U632605	 	 	 	W21840
	891605
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12825U632606	 	 	 	W21843
	891606
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS235X5U683801	 	 	 	W21736
	891607
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS23515U683802	 	 	 	W21734
	891608
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS23535U683803	 	 	 	W21735
	891609
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS23525U683808	 	 	 	W21858
	891610
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS23505U683807	 	 	 	W21857
	891611
	 	Penske-Mt	 	75	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS23575U683805	 	 	 	W54202
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Updated 1-1-05	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NEW
	 	 	 	79	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12845U683301	 	 	 	 
	NEW
	 	 	 	79	 	2005	 	T	 	UTILITY	 	28’	 	1UYVS12865U683302	 	 	 	 
	47745
	 	 	 	79	 	95	 	T	 	UTILITY	 	28’	 	1UYVS128XSU507901	 	 	 	 
	47746
	 	 	 	79	 	95	 	T	 	UTILITY	 	28’	 	1UVYS1281SU507902	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	6/8/2005	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5331226
	 	Penske-Mt	 	256	 	1996	 	T	 	TRLMO	 	35’	 	1PTO1ANLOT9010159	 	 	 	 
	5331227
	 	Penske-Mt	 	256	 	1996	 	T	 	TRLMO	 	35’	 	1PTO1ANL9T9010158	 	 	 	 
	5331694
	 	Penske-Mt	 	256	 	1997	 	T	 	TRLMO	 	48’	 	1PTO1ANH5W9002994	 	 	 	 
	5331774
	 	Penske-Mt	 	256	 	1998	 	T	 	TRLMO	 	35’	 	1PTO1ANLOW9007105	 	 	 	 
	5331833
	 	Penske-Mt	 	256	 	1998	 	T	 	TRLMO	 	48’	 	1PTO1ANH4W9002244	 	 	 	 
	866987
	 	Penske-Mt	 	256	 	2002	 	T	 	TRLMO	 	28’	 	1PTO1ANH129003506	 	 	 	 
	866988
	 	Penske-Mt	 	256	 	2002	 	T	 	TRLMO	 	28’	 	1PTO1ANH329003507	 	 	 	 
	866989
	 	Penske-Mt	 	256	 	2002	 	T	 	TRLMO	 	28’	 	1PTO1ANH529003508	 	 	 	 
	875405
	 	Penske-Mt	 	256	 	2003	 	T	 	UTILITY	 	48’	 	1UYVS24863U050802	 	 	 	 
	875406
	 	Penske-Mt	 	256	 	2003	 	T	 	UTILITY	 	48’	 	1UYVS24843U050801	 	 	 	 
	891614
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891615
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891616
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891617
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891618
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891619
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891620
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	891621
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	 	 	 	 	 	 	 
	NEW
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	35’	 	1UYVS23545U683812	 	 	 	 
	NEW
	 	Penske-Mt	 	256	 	2005	 	T	 	UTILITY	 	35’	 	1UYV523525U683811	 	 	 	 

 

 

 

EXHIBIT F

to

PLEDGE AND SECURITY AGREEMENT

Fixtures

(See Section 3.11 of Security Agreement)

Intentionally Omitted

 

 

 

EXHIBIT G

to

PLEDGE AND SECURITY AGREEMENT

List of Pledged Collateral, Securities, and Other Investment Property

(See Section 3.13 of Security Agreement)

Refer to Schedule 3.15 of the Credit Agreement except for the stock of Core-Mark Holding Company,
Inc. [See Attached]

All direct and indirect subsidiaries of Core-Mark Holding Company, Inc. (other than the companies
listed below) are considered Pledged Collateral.

C/M Products, Inc.

ASI Office Automation, Inc.

General Acceptance Corporation

Marquise Ventures Company, Inc.

 

 

 

EXHIBIT H

to

PLEDGE AND SECURITY AGREEMENT

State and Provincial Offices in Which UCC and PPSA Financing Statements Have Been Filed

(See Section 3.1 of Security Agreement)

Refer to the states relating to active companies listed on Schedule 3.15 to the Credit Agreement.
[See Attached]

 

 

 

Schedule 3.15 to Credit Agreement

Core-Mark Holding Company, Inc. and Subsidiaries

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Organization	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Number	 	Federal	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	assigned by	 	Employer	 	Authorized	 	Par Value of	 	Authorized	 	Par Value of	 	Issued as of	 	Issued as of
	 	 	Type of	 	Active/	 	State of	 	State of	 	Identification	 	Common	 	Common	 	Preferred	 	Preferred	 	August 23,	 	Dec. 31,
	Company	 	Entity	 	Inactive	 	Incorporation	 	Incorporation	 	Number	 	Stock	 	Stock	 	Stock	 	Stock	 	2004	 	2004
	 
	Core-Mark Holding Company, Inc.
	 	Corporation	 	Active	 	Delaware	 	3845035	 	20-1489747	 	50,000,000	 	$0.01	 	n/a	 	n/a	 	9,81 5,375	 	9,815,375
	Core-Mark Holdings I, Inc.
	 	Corporation	 	Active	 	Delaware	 	3843173	 	20-1489777	 	1,000	 	$0.01	 	n/a	 	n/a	 	1,000	 	1,000
	Core-Mark Holdings II, Inc.
	 	Corporation	 	Active	 	Delaware	 	3843174	 	20-1489798	 	1,000	 	$0.01	 	n/a	 	n/a	 	1,000	 	1,000
	Core-Mark Holdings III, Inc.
	 	Corporation	 	Active	 	Delaware	 	3843172	 	20-1489834	 	1,000	 	$0.01	 	n/a	 	n/a	 	1,000	 	1,000
	Core-Mark International, Inc.
	 	Corporation	 	Active	 	Delaware	 	2484265	 	91-1295550	 	100	 	$0.0001	 	n/a	 	n/a	 	100	 	100
	Core-Mark Midcontinent, Inc.
	 	Corporation	 	Active	 	Arkansas	 	CP00013272	 	74-2354997	 	2,000	 	$1.00	 	n/a	 	n/a	 	2,000	 	2,000
	Minter-Weisman Company
	 	Corporation	 	Active	 	Minnesota	 	1P-571	 	41-0809931	 	100,000	 	$1.00	 	n/a	 	n/a	 	1,000	 	1,000
	Head Distributing Company
	 	Corporation	 	Active	 	Georgia	 	7006574	 	58-1095258	 	10,000,000 shares (1,000,000 class A Voting) (9,000,000 class B non-voting)	 	$0.01 (for bothing voting & non-voting class)	 	n/a	 	n/a	 	773,136 (90,000 class A & 683,136 class B)	 	773,136 (90,000 class A & 683,136 class B)
	Core-Mark Interrelated Companies, Inc.
	 	Corporation	 	Active	 	California	 	734331	 	94-2317385	 	1,000,000	 	$1.00	 	n/a	 	n/a	 	1,00 0,000	 	1,000,000
	C/M Products, Inc.
	 	Corporation	 	Inactive	 	California	 	N/A	 	94-3104739	 	1,000	 	$1.00	 	n/a	 	n/a	 	100	 	100
	ASI Office Automation, Inc.
	 	Corporation	 	Inactive	 	California	 	N/A	 	95-3256944	 	300,000	 	$0.05	 	150,000	 	no par value	 	300,000	 	300,000
	General Acceptance Corporation
	 	Corporation	 	Inactive	 	California	 	N/A	 	95-3895935	 	400,000	 	none	 	n/a	 	n/a	 	2 00	 	200
	Marquise Ventures Company, Inc.
	 	Corporation	 	Inactive	 	California	 	N/A	 	95-3983880	 	75,000	 	none	 	n/a	 	n/a	 	75,000	 	75, 000

 

 

 

EXHIBIT I

(See Section 4.4 and 4.8 of Security Agreement)

AMENDMENT

This Amendment, dated                     ,
 _____ 

is delivered pursuant to Section 4.4 of the Security
Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or
incorporated by reference in the Security Agreement. The undersigned hereby certifies that the
representations and warranties in Article III of the Security Agreement are and continue to be true
and correct. The undersigned further agrees that this Amendment may be attached to that certain
Pledge and Security Agreement, dated October [_____], 2005, between the undersigned, as the Grantors,
and JPMorgan Chase Bank, N.A., as the Administrative Agent, (the “Security Agreement”) and
that the Collateral listed on Schedule I to this Amendment shall be and become a part of
the Collateral referred to in said Security Agreement and shall secure all Secured Obligations
referred to in said Security Agreement.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

 

EXHIBIT J

TO

PLEDGE & SECURITY AGREEMENT

Assigned Contracts

(See “Assigned Contracts” Definition)

None

 

 

 

SCHEDULE I TO AMENDMENT

STOCKS

	 	 	 	 	 	 	 	 	 
	 	 	Certificate	 	 	 	 	 	Percentage of
	Issuer	 	Number(s)	 	Number of Shares	 	Class of Stock	 	Outstanding Shares
	 

	 	 	 	 	 	 	 	 

BONDS

	 	 	 	 	 	 	 	 	 	 	 	 
	Issuer	 	Number	 	 	Face Amount	 	 	Coupon Rate	 	 	Maturity
	 	 	 	 	 	 	 	 	 	 	 	 

GOVERNMENT SECURITIES

	 	 	 	 	 	 	 	 	 	 	 
	Issuer	 	Number	 	Type	 	Face Amount	 	Coupon Rate	 	Maturity
	 

	 	 	 	 	 	 	 	 	 	 

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

	 	 	 	 	 
	Issuer	 	Description of Collateral	 	Percentage Ownership Interest
	 

	 	 	 	 

[Add description of custody accounts or arrangements with securities intermediary, if applicable]

COMMERCIAL TORT CLAIMS

	 	 	 	 	 
	 	 	 	 	Case Number; Name of
	Description of Claim	 	Parties	 	Court where Case was Filedexv4w1

    SHAREHOLDER
    RIGHTS PLAN AGREEMENT

 

    Dated as of March 12,
    2010

 

    BETWEEN

 

    LIONS GATE ENTERTAINMENT
    CORP.

 

    - and -

 

    CIBC MELLON
    TRUST COMPANY

    as Rights Agent

 

 

    TABLE OF
    CONTENTS

 

	 	 	 	 	 	 	 
	

    ARTICLE 1 INTERPRETATION

	
 
	
 
	
    2
	
 

	

    1.1

	
 
	
    Certain Definitions
	
 
	
 
	
    2
	
 

	

    1.2

	
 
	
    Percentage of Voting Shares Beneficially Owned
	
 
	
 
	
    11
	
 

	

    1.3

	
 
	
    Currency
	
 
	
 
	
    12
	
 

	

    1.4

	
 
	
    Number and Gender
	
 
	
 
	
    12
	
 

	

    1.5

	
 
	
    Descriptive Headings and References
	
 
	
 
	
    12
	
 

	

    1.6

	
 
	
    Acting Jointly or in Concert
	
 
	
 
	
    12
	
 

	

    ARTICLE 2 THE RIGHTS

	
 
	
 
	
    12
	
 

	

    2.1

	
 
	
    Evidence of Holdings of Rights
	
 
	
 
	
    12
	
 

	

    2.2

	
 
	
    Initial Exercise Price; Exercise of Rights; Detachment of Rights
	
 
	
 
	
    13
	
 

	

    2.3

	
 
	
    Adjustments to Exercise Price; Number of Rights
	
 
	
 
	
    15
	
 

	

    2.4

	
 
	
    Date on Which Exercise is Effective
	
 
	
 
	
    17
	
 

	

    2.5

	
 
	
    Execution. Authentication. Delivery and Dating of Rights
    Certificates
	
 
	
 
	
    17
	
 

	

    2.6

	
 
	
    Registration, Registration of Transfer and Exchange
	
 
	
 
	
    17
	
 

	

    2.7

	
 
	
    Mutilated. Destroyed. Lost and Stolen Rights Certificates
	
 
	
 
	
    18
	
 

	

    2.8

	
 
	
    Persons Deemed Owners
	
 
	
 
	
    18
	
 

	

    2.9

	
 
	
    Delivery and Cancellation of Certificates
	
 
	
 
	
    18
	
 

	

    2.10

	
 
	
    Agreement of Rights Holders
	
 
	
 
	
    19
	
 

	

    ARTICLE 3 ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF A FLIP-IN
    EVENT

	
 
	
 
	
    19
	
 

	

    3.1

	
 
	
    Flip-in Event
	
 
	
 
	
    19
	
 

	

    ARTICLE 4 THE RIGHTS AGENT

	
 
	
 
	
    20
	
 

	

    4.1

	
 
	
    General
	
 
	
 
	
    20
	
 

	

    4.2

	
 
	
    Merger or Consolidation or Change of Name of Rights Agent
	
 
	
 
	
    21
	
 

	

    4.3

	
 
	
    Duties of Rights Agent
	
 
	
 
	
    21
	
 

	

    4.4

	
 
	
    Change of Rights Agent
	
 
	
 
	
    22
	
 

	

    ARTICLE 5 MISCELLANEOUS

	
 
	
 
	
    23
	
 

	

    5.1

	
 
	
    Redemption of Rights
	
 
	
 
	
    23
	
 

	

    5.2

	
 
	
    Waiver of Flip-In Events
	
 
	
 
	
    24
	
 

	

    5.3

	
 
	
    Expiration
	
 
	
 
	
    24
	
 

	

    5.4

	
 
	
    Issuance of New Rights Certificates
	
 
	
 
	
    24
	
 

	

    5.5

	
 
	
    Supplements and Amendments
	
 
	
 
	
    25
	
 

	

    5.6

	
 
	
    Fractional Rights and Fractional Shares
	
 
	
 
	
    26
	
 

	

    5.7

	
 
	
    Rights of Action
	
 
	
 
	
    26
	
 

	

    5.8

	
 
	
    Holder of Rights Not Deemed a Shareholder
	
 
	
 
	
    26
	
 

	

    5.9

	
 
	
    Notice of Proposed Actions
	
 
	
 
	
    26
	
 

	

    5.10

	
 
	
    Notices
	
 
	
 
	
    27
	
 

	

    5.11

	
 
	
    Costs of Enforcement
	
 
	
 
	
    27
	
 

	

    5.12

	
 
	
    Successors
	
 
	
 
	
    27
	
 

	

    5.13

	
 
	
    Benefits of this Agreement
	
 
	
 
	
    27
	
 

	

    5.14

	
 
	
    Governing Law
	
 
	
 
	
    27
	
 

	

    5.15

	
 
	
    Severability
	
 
	
 
	
    28
	
 

	

    5.16

	
 
	
    Determinations and Actions by the Board of Directors
	
 
	
 
	
    28
	
 

	

    5.17

	
 
	
    Regulatory Approvals
	
 
	
 
	
    28
	
 

	

    5.18

	
 
	
    Declaration as to Non-Canadian Holders
	
 
	
 
	
    28
	
 

	

    5.19

	
 
	
    Effective Time
	
 
	
 
	
    28
	
 

	

    5.20

	
 
	
    Termination Prior to Shareholder Approval
	
 
	
 
	
    28
	
 

	

    5.21

	
 
	
    Time of the Essence
	
 
	
 
	
    28
	
 

	

    5.22

	
 
	
    Counterparts
	
 
	
 
	
    28
	
 

 

    SHAREHOLDER
    RIGHTS PLAN AGREEMENT

 

    SHAREHOLDER RIGHTS PLAN AGREEMENT dated as of
    March 12, 2010 between LIONS GATE ENTERTAINMENT CORP., a
    corporation existing under laws of British Columbia, (the
    “Corporation”), and CIBC MELLON
    TRUST COMPANY, a trust company existing under the laws of
    Canada, as rights agent (the “Rights Agent”,
    which term shall include any successor Rights Agent hereunder).

 

    WHEREAS:

 

    A. The Board of Directors has determined that it is
    advisable and in the best interests of the Corporation to adopt
    a shareholder rights plan (the “Rights Plan”);

 

    B. In order to implement the Rights Plan, the Board of
    Directors has:

 

    (i) authorized and declared the issuance of one right (a
    “Right”), effective as of the Record Time, in
    respect of each Common Share outstanding at the Record
    Time; and

 

    (ii) authorized the issuance of one Right in respect of
    each Common Share issued after the Record Time and prior to the
    earlier of the Separation Time and the Expiration Time;

 

    C. Each Right entitles the holder thereof, after the
    Separation Time, to purchase securities of the Corporation
    pursuant to the terms and subject to the conditions set forth
    herein; and

 

    D. The Corporation desires to appoint the Rights Agent to
    act on behalf of the Corporation and the holders of Rights, and
    the Rights Agent has agreed to act on behalf of the Corporation
    and the holders of Rights, in connection with the issuance,
    transfer, exchange and replacement of Rights Certificates, the
    exercise of Rights and other matters referred to herein.

 

    NOW THEREFORE, in consideration of the premises and the
    respective agreements set forth herein, the Corporation and the
    Rights Agent hereby agree as follows:

 

    ARTICLE 1

    

 

    INTERPRETATION

 

    1.1 Certain
    Definitions

 

    For purposes of this Agreement, the following terms have the
    meanings indicated:

 

    “Acquiring Person” means any Person who is the
    Beneficial Owner of a Significant Interest; provided, however,
    that the term “Acquiring Person” shall not include:

 

    (a) the Corporation or any Subsidiary of the Corporation;

 

    (b) any Person who becomes the Beneficial Owner of a
    Significant Interest as a result of one or any combination of:

 

    (A) a Voting Share Reduction,

 

    (B) a Pro Rata Acquisition,

 

    (C) a Permitted Bid Acquisition,

 

    (D) an Exempt Acquisition, or

 

    (E) a Convertible Security Acquisition;

 

    provided further, however, that if a Person shall become the
    Beneficial Owner of a Significant Interest by reason of any one
    or a combination of a Voting Share Reduction, a Pro Rata
    Acquisition, a Permitted Bid Acquisition, an Exempt Acquisition,
    or a Convertible Security Acquisition and thereafter becomes the
    Beneficial Owner of more than an additional 1% of the
    outstanding Voting Shares (other than pursuant to a Voting Share
    Reduction, a Pro Rata Acquisition, a Permitted Bid

    

    2

 

    Acquisition, an Exempt Acquisition, or a Convertible Security
    Acquisition), then as of the date that such Person becomes the
    Beneficial Owner of such additional Voting Shares, such Person
    shall become an Acquiring Person;

 

    (c) for a period of 10 days after the Disqualification
    Date (as hereinafter defined), any Person who becomes the
    Beneficial Owner of a Significant Interest as a result of such
    Person becoming disqualified from relying on Clause (B) of
    the definition of “Beneficial Owner” solely because
    such Person makes or proposes to make a Take-over Bid (excluding
    an Offer to Acquire Voting Shares or other securities made by a
    Manager, Trust Company, Crown Agent, Statutory Body,
    Administrator or Plan referred to in Clause (B) of the
    definition of “Beneficial Owner” pursuant to a
    distribution by the Corporation or by means of ordinary market
    transactions (including pre-arranged trades entered into in the
    ordinary course of business of such Person) in the circumstances
    contemplated in said Clause (B)) alone or by acting jointly
    or in concert with any other Person (the first date of public
    announcement (which, for the purposes of this definition, shall
    include, without limitation, a report filed pursuant to
    Section 13(d) of the U.S. Exchange Act) of facts
    indicating the making of or the intent to make such a Take-over
    Bid being herein referred to as the “Disqualification
    Date”);

 

    (d) a Person (a “Grandfathered Person”)
    who is the Beneficial Owner of a Significant Interest determined
    as at 12:01 a.m. (Pacific time) on the date of this
    Agreement; provided, however, that this exemption shall not be,
    and shall cease to be, applicable to a Grandfathered Person in
    the event that such Grandfathered Person shall, after the date
    of this Agreement, (i) cease to own a Significant Interest,
    or (ii) become the Beneficial Owner of any Voting Shares
    not Beneficially Owned by such Person as at the date of this
    Agreement (other than through any one or any combination of a
    Voting Share Reduction, a Pro Rata Acquisition, a Permitted Bid
    Acquisition, an Exempt Acquisition, or a Convertible Security
    Acquisition); or

 

    (e) an underwriter or member of a banking or selling group
    that acquires Voting Shares from the Corporation in connection
    with a distribution of securities pursuant to a prospectus or by
    way of private placement.

 

    “Affiliate”, when used to indicate a
    relationship with a specified Person, shall mean a Person that
    directly, or indirectly through one or more controlled
    intermediaries, controls, or is controlled by, or is under
    common control with, such specified Person.

 

    “Agreement” means this shareholder rights plan
    agreement between the Corporation and the Rights Agent, as may
    be amended
    and/or
    supplemented or restated from time to time.

 

    “Associate”, when used to indicate a
    relationship with a specified Person, shall mean (i) a
    spouse of such specified Person, (ii) any Person of either
    sex with whom such specified Person is living in a conjugal
    relationship outside marriage or (iii) any relative of such
    specified Person or of a Person mentioned in Clauses (i) or
    (ii) of this definition if that relative has the same
    residence as the specified Person.

 

    A Person shall be deemed to be the “Beneficial
    Owner” and to have “Beneficial
    Ownership” of and to “Beneficially
    Own”:

 

    (a) any securities of which such Person or any of such
    Person’s Affiliates or Associates is the owner at law or in
    equity;

 

    (b) any securities as to which such Person or any of such
    Person’s Affiliates or Associates has the right to become
    the owner at law or in equity, where such right is exercisable
    immediately or within 60 days of the date of the
    determination of Beneficial Ownership and whether or not on
    condition or the occurrence of any contingency or payment of
    installments, upon the exercise of any conversion right,
    exchange right or purchase right attaching to Convertible
    Securities, or pursuant to any agreement, arrangement, pledge or
    understanding, written or oral (other than customary agreements
    with and between underwriters
    and/or
    banking group
    and/or
    selling group members with respect to a distribution of
    securities pursuant to a prospectus or by way of private
    placement and other than pursuant to pledges of securities in
    the ordinary course of the pledgee’s business);

 

    (c) any securities which are beneficially owned, directly
    or indirectly, by a Counterparty (or any of such
    Counterparty’s Affiliates or Associates) under any
    Derivatives Contract (without regard to any short or similar
    position under the same or any other Derivatives Contract) to
    which such Person or any of such Person’s

    

    3

 

    Affiliates or Associates is a Receiving Party; provided, however
    that the number of Common Shares that a Person is deemed to
    Beneficially Own pursuant to this Clause (c) in connection
    with a particular Derivatives Contract shall not exceed the
    number of Notional Securities with respect to such Derivatives
    Contract; provided, further, that the number of securities
    beneficially owned by each Counterparty (including their
    respective Affiliates and Associates) under a Derivatives
    Contract shall for purposes of this Clause (c) be deemed to
    include all securities that are beneficially owned, directly or
    indirectly, by any other Counterparty (or any of such other
    Counterparty’s Affiliates or Associates) under any
    Derivatives Contract to which such first Counterparty (or any of
    such first Counterparty’s Affiliates or Associates) is a
    Receiving Party and this proviso shall be applied to successive
    Counterparties as appropriate; and

 

    (d) any securities which are Beneficially Owned within the
    meaning of Clauses (a), (b) or (c) of this definition
    by any other Person with whom such Person or any of such
    Person’s Affiliates or Associates is acting jointly or in
    concert;

 

    provided, however, that a Person shall not be deemed the
    “Beneficial Owner” of, or to have “Beneficial
    Ownership” of, or to “Beneficially Own”, any
    security:

 

    (A) by reason of:

 

    (1) such security having been deposited or tendered
    pursuant to a Take-over Bid made by such Person or any of such
    Person’s Affiliates or Associates or any other Person
    referred to in Clause (d) of this definition until the
    earlier of such deposited or tendered security being accepted
    unconditionally for payment or exchange or being taken up and
    paid for, or

 

    (2) the holder of such security having agreed pursuant to a
    Permitted
    Lock-up
    Agreement to deposit or tender such security pursuant to a
    Take-over Bid made by any such Person or any of such Persons
    Affiliates or Associates or any other Person referred to in
    Clause (d) of this definition;

 

    (B) by reason of such Person, any of such Persons
    Affiliates or Associates or any other Person referred to in
    Clause (d) of this definition holding such security,
    provided that:

 

    (1) the ordinary business of the Person (in this
    definition, a “Manager”) includes the
    management of investment funds for others and such security is
    held by the Manager in the ordinary course of such business in
    the performance of such Manager’s duties for the account of
    any other Person (in this definition, a
    “Client”) including non-discretionary accounts
    held on behalf of a Client by a broker or dealer registered
    under applicable law;

 

    (2) the Person (in this definition, a
    “Trust Company”) is licensed to carry on
    the business of a trust company under applicable law and, as
    such, acts as a trustee or administrator or in a similar
    capacity in relation to the estates of deceased or incompetent
    Persons (each, in this definition, an “Estate
    Account”) or in relation to other accounts (each, in
    this definition, an “Other Account”) and holds such
    security and is acting in the ordinary course of such duties for
    the Estate Account or for such Other Accounts;

 

    (3) such Person is a Crown agent or agency (in this
    definition, the “Crown Agent”);

 

    (4) the Person is established by statute for purposes that
    include, and the ordinary business or activity of such Person
    (in this definition, a “Statutory Body”)
    includes, the management of investment funds for employee
    benefit plans, pension plans, insurance plans of various public
    bodies and the Statutory Body holds such security for the
    purposes of its activities as such; or

 

    (5) the person (in this definition, an
    “Administrator”) is the administrator or
    trustee of one or more pension funds or plans (each, in this
    definition, a “Plan”) registered under the laws
    of Canada or any province thereof or the corresponding laws of
    the jurisdiction by which such Plan is governed or is such a
    Plan and the Administrator or Plan holds such security for the
    purposes of its activities as such;

 

    but only if the Manager, the Trust Company, the Crown
    Agent, the Statutory Body, the Administrator or the Plan, as the
    case may be, is not then making and has not announced a current
    intention to make a Take-over

    

    4

 

    Bid, other than an Offer to Acquire Voting Shares or other
    securities pursuant to a distribution by the Corporation, or by
    means of ordinary market transactions (including prearranged
    trades entered into in the ordinary course of business of such
    Person) executed through the facilities of a stock exchange or
    an organized over-the-counter market, alone or by acting jointly
    or in concert with any other Person;

 

    (C) because such Person:

 

    (1) is a Client of the same Manager as another Person on
    whose account the Manager holds such security,

 

    (2) has an Estate Account or an Other Account with the same
    Trust Company as another Person on whose account the
    Trust Corporation holds such security, or

 

    (3) is a Plan with the same Administrator as another Plan
    on whose account the Administrator holds such security,

 

    (D) because such Person:

 

    (1) is a Client of a Manager and such security is owned at
    law or in equity by the Manager,

 

    (2) has an Estate Account or an Other Account with a
    Trust Company and such security is owned at law or in
    equity by the Trust Company, or

 

    (3) is a Plan and such security is owned at law or in
    equity by the Administrator of the Plan; or

 

    (E) because such Person is the registered holder of
    securities as a result of carrying on the business of, or acting
    as nominee for, a securities depositary.

 

    “Board of Directors” shall mean the board of
    directors of the Corporation [or a duly constituted committee
    thereof].

 

    “Business Day” shall mean any day other than a
    Saturday, Sunday or a day on which banking institutions in
    Vancouver are authorized or obligated by law to close.

 

    “Canadian Dollar Equivalent” of any amount
    which is expressed in United States dollars shall mean, on any
    date, the Canadian dollar equivalent of such amount determined
    by multiplying such amount by the U.S. – Canadian
    Exchange Rate in effect on such date.

 

    “Close of Business” on any given date shall
    mean the time on such date (or, if such date is not a Business
    Day, the time on the next succeeding Business Day) at which the
    office of the transfer agent for the Common Shares in the City
    of Vancouver (or, after the Separation Time, the office of the
    Rights Agent in the City of Vancouver) is closed to the public.

 

    “Common Shares” shall mean the common shares in
    the capital of the Corporation.

 

    “Competing Permitted Bid” shall mean a
    Take-over Bid which is made by an Offeror by means of a
    take-over bid circular and which also complies with the
    following additional provisions:

 

    (a) the Take-over Bid is made after a Permitted Bid or
    another Competing Permitted Bid has been made and prior to the
    expiry of that Permitted Bid or Competing Permitted Bid (in this
    definition, the “Prior Bid”);

 

    (b) the Take-over Bid satisfies all the provisions of the
    definition of a Permitted Bid, other than the requirement set
    out in Clause (b)(A) and (D) of the definition of Permitted
    Bid; and

 

    (c) the Take-over Bid shall contain and the
    take-up and
    payment for securities tendered or deposited thereunder shall be
    subject to, irrevocable and unqualified conditions that:

 

    (A) no Voting Shares shall be taken up or paid for pursuant
    to such Take-over Bid (x) prior to the Close of Business on
    a date that is not earlier than the later of the last day on
    which the Take-over Bid must be open for acceptance after the
    date of such Take-over Bid under applicable Canadian provincial
    securities legislation and the earliest date on which Voting
    Shares may be taken up or paid for under any Prior Bid in
    existence at the date of such Take-over Bid, and (y) then
    only if, at the Close of Business on

    

    5

 

    the date Voting Shares are first taken up or paid for under the
    Take-over Bid, more than 50% of the then outstanding Voting
    Shares held by Independent Shareholders have been deposited or
    tendered pursuant to such Take-over Bid and not
    withdrawn; and

 

    (B) in the event that the requirement set forth in
    Subclause (c)(A)(y) of this definition is satisfied, the Offeror
    will make a public announcement of that fact and the Take-over
    Bid will remain open for deposits and tenders of Voting Shares
    for not less than 10 days from the date of such public
    announcement,

 

    provided always that a Competing Permitted Bid will cease to be
    a Competing Permitted Bid at any time when such Take-over Bid
    ceases to meet any of the provisions of this definition and
    provided further that, at such time, any acquisition of Voting
    Shares made pursuant to such Take-over Bid, including any
    acquisitions of Voting Shares theretofore made, will cease to be
    a Permitted Bid Acquisition.

 

    “controlled” a specified Person is
    “controlled” by another Person if:

 

    (a) securities entitled to vote in the election of
    directors carrying more than 50% of the votes for the election
    of directors of the specified Person are held, directly or
    indirectly, by or on behalf of the other Person, and the votes
    carried by such securities are entitled, if exercised, to elect
    a majority of the board of directors of such specified Person;

 

    (b) in the case of a specified Person that is a partnership
    that does not have directors, other than a limited partnership,
    the other Person holds more than 50 percent of the
    interests in the partnership; or

 

    (c) in the case of a specified Person that is a limited
    partnership, the other Person is the general partner of the
    limited partnership

 

    and “controls”, “controlling” and
    “under common control with” shall be interpreted
    accordingly.

 

    “Convertible Securities” shall mean, at any
    time, any securities (including rights, warrants and options but
    other than the Rights) carrying any purchase, exercise,
    conversion or exchange right, pursuant to which the holder
    thereof may acquire Voting Shares or other securities
    convertible into or exercisable or exchangeable for Voting
    Shares (in each case, whether such right is exercisable
    immediately or after a specified period and whether or not on
    condition or the occurrence of any contingency or payment of
    installments).

 

    “Convertible Security Acquisition” shall mean
    the acquisition of Voting Shares upon the exercise of
    Convertible Securities acquired by a Person pursuant to a
    Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata
    Acquisition.

 

    “Co-Rights Agent” shall have the meaning
    ascribed thereto in Subsection 4.1(a).

 

    “Corporations Act” shall mean the Business
    Corporations Act (British Columbia), as it may be amended
    from time to time, and the regulations made thereunder and any
    comparable or successor laws or regulations thereto.

 

    “Derivatives Contract” shall mean a contract
    between two parties (the “Receiving Party” and
    the “Counterparty”) that is designed to expose
    the Receiving Party to economic benefits and risks that
    correspond substantially to the ownership by the Receiving Party
    of a number of Voting Shares or Convertible Securities specified
    or referenced in such contract (the number corresponding to such
    economic benefits and risks, the “Notional
    Securities”), regardless of whether obligations under
    such contract are required or permitted to be settled through
    the delivery of cash, Voting Shares, Convertible Securities or
    other property, without regard to any short position under the
    same or any other Derivatives Contract. For the avoidance of
    doubt, interests in broad-based index options, broad-based index
    futures and broad-based publicly traded market baskets of stocks
    approved for trading by the appropriate federal governmental
    authority shall not be deemed to be Derivatives Contracts.

 

    “Election to Exercise” shall have the meaning
    attributed thereto in Subsection 2.2(d).

 

    “Exempt Acquisition” shall mean an acquisition
    of Voting Shares or Convertible Securities (i) in respect
    of which the Board of Directors has waived the application of
    Section 3.1 pursuant to the provisions of Section 5.2
    hereof, or (ii) pursuant to a distribution of Voting Shares or
    Convertible Securities made by the Corporation pursuant to a
    prospectus or private placement provided that the Person does
    not acquire a greater percentage of the

    

    6

 

    securities offered in the distribution than the percentage of
    Voting Shares Beneficially Owned by that Person immediately
    prior to the distribution, or (iii) pursuant to an amalgamation,
    merger or other statutory procedure having similar effect which
    has been approved by the Board of Directors and the holders of
    Voting Shares by the requisite majority or majorities of the
    holders of Voting Shares at a meeting duly called and held for
    such purpose in accordance with the provisions of the
    Corporations Act, the by-laws of the Corporation and any other
    applicable legal requirements.

 

    “Exercise Price” shall mean, as of any date
    from and after the Separation Time, the price at which a holder
    of a Right may purchase the securities issuable upon exercise of
    one whole Right which, subject to adjustment in accordance with
    the terms hereof, shall be an amount equal to four times the
    Market Price per Common Share determined as at the Separation
    Time.

 

    “Expansion Factor” shall have the meaning
    ascribed thereto in Clause 2.3(b)(E).

 

    “Expiration Time” shall mean the earlier of
    (i) the Termination Time, and (ii) the close of the
    third annual meeting of holders of Voting Shares of the
    Corporation following the meeting of such holders at which this
    Agreement is first approved in accordance with
    Section 5.19, unless the term of this Agreement is extended
    in accordance with Section 5.5.

 

    “Flip-in Event” shall mean a transaction in or
    pursuant to which any Person becomes an Acquiring Person.

 

    “Independent Shareholders” shall mean holders
    of Voting Shares other than voting shares Beneficially owned by
    (i) any Acquiring Person, (ii) any Offeror,
    (iii) any Affiliate or Associate of any Acquiring Person or
    Offeror, (iv) any Person acting jointly or in concert with
    any Acquiring Person or Offeror or any of their respective
    Affiliates or Associates and (v) any employee benefit plan,
    deferred profit sharing plan, stock participation plan and any
    similar plan or trust for the benefit of employees of the
    Corporation or a wholly-owned Subsidiary of the Corporation,
    unless the beneficiaries of such plan or trust direct the manner
    in which such Voting Shares are to be voted or withheld from
    voting or direct whether the Voting Shares are to be tendered to
    a Take-over Bid.

 

    “Market Price” per security of any securities
    on any date of determination shall mean the average of the daily
    closing prices per security of such securities (determined as
    described below) on each of the 20 consecutive Trading Days
    through and including the Trading Day immediately preceding such
    date; provided, however, that if an event of a type analogous to
    any of the events described in Section 2.3 hereof shall
    have caused the closing prices used to determine the Market
    Price on any Trading Day not to be fully comparable with the
    closing price on such date of determination (or, if the date of
    determination is not a Trading Day, on the immediately preceding
    Trading Day), each such closing price so used shall be
    appropriately adjusted in a manner analogous to the applicable
    adjustment provided for in Section 2.3 hereof in order to
    make it fully comparable with the closing price on such date of
    determination (or, if the date of determination is not a Trading
    Day, on the immediately preceding Trading Day). The closing
    price per security of any securities on any date shall be:

 

    (a) closing board lot sale price per security or, in case
    no such sale takes place on such date, the average of the
    closing bid and asked prices for each of such securities as
    reported by the principal stock exchange in the United States
    (as determined by volume of trading) on which such securities
    are listed or admitted to trading,

 

    (b) if for any reason none of such prices described in
    Clause (a) of this definition is available for such day or
    the securities are not listed or admitted to trading on a United
    States stock exchange, the last sale price or, if such price is
    not available, the average of the closing bid and asked prices,
    for each such security on such date as reported by such other
    securities exchange on which such securities are listed or
    admitted to trading,

 

    (c) if for any reason none of such prices described in
    Clause (b) of this definition is available for such day or
    the securities are not listed or admitted to trading on a United
    States stock exchange or other securities exchange, the last
    sale price, or if no sale takes place, the average of the high
    bid and low asked prices for each such security on such date in
    the over-the-counter market, as quoted by any reporting system
    then in use (as determined by the Board of Directors), or

 

    (d) if for any such date none of such prices described in
    Clause (c) of this definition is available or the
    securities are not listed or admitted to trading on a United
    States stock exchange or any other securities exchange or not
    quoted by any such reporting system, the average of the closing
    bid and asked prices for such

    

    7

 

    date as furnished by a professional market maker making a market
    in the securities selected in good faith by the Board of
    Directors;

 

    provided, however, that if on any such date none of such prices
    is available, the closing price per security of such securities
    on such date shall mean the fair value per security of such
    securities on such date as determined by a nationally or
    internationally recognized firm of investment dealers or
    investment bankers selected by the Board of Directors and
    provided further that if an event of a type analogous to any of
    the events described in Section 2.3 hereof shall have
    caused any price used to determine the Market Price on any
    Trading Day not to be fully comparable with the price as so
    determined on the Trading Day immediately preceding such date of
    determination, each such price so used shall be appropriately
    adjusted in a manner analogous to the applicable adjustment
    provided for in Section 2.3 hereof in order to make it
    fully comparable with the price on the Trading Day immediately
    preceding such date of determination. The Market Price shall be
    expressed in Canadian dollars and, if initially determined in
    respect of any day forming part of the 20 consecutive Trading
    Day period in question in United States dollars, such amount
    shall be translated into Canadian dollars on such date at the
    Canadian Dollar Equivalent thereof.

 

    “Nominee” shall have the meaning ascribed
    thereto in Subsection 2.2(c).

 

    “Offer to Acquire” shall include:

 

    (a) an offer to purchase, or a solicitation of an offer to
    sell, Voting Shares or Convertible Securities of any series or
    class, and

 

    (b) an acceptance of an offer to sell Voting Shares or
    Convertible Securities of any series or class, whether or not
    such offer to sell has been solicited,

 

    or any combination thereof, and the Person accepting an offer to
    sell shall be deemed to be making an Offer to Acquire to the
    Person that made the offer to sell.

 

    “Offeror” shall mean a Person who has announced
    an intention to make or who has made a Take-over Bid (including
    a Permitted Bid or Competing Permitted Bid but excluding an
    Offer to Acquire Voting Shares or other securities made by a
    Manager, Trust Company, Crown Agent, Statutory Body,
    Administrator or Plan referred to in Clause (B) of the
    definition of “Beneficial Owner” pursuant to a
    distribution by the Corporation or by means of ordinary market
    transactions (including pre-arranged trades entered into in the
    ordinary course of business of such Person) in the circumstances
    contemplated in said Clause (B)), but only so long as the
    Take-over Bid so announced or made has not been withdrawn or
    terminated or has not expired.

 

    “Offeror’s Securities” shall mean the
    aggregate of the Voting Shares Beneficially Owned on the date of
    an Offer to Acquire by an Offeror.

 

    “Permitted Bid” shall mean a Take-over Bid
    which is made by an Offeror by means of a take-over bid circular
    and which also complies with the following additional provisions:

 

    (a) the Take-over Bid is made to all holders of Voting
    Shares, other than the Offeror, for all Voting Shares held by
    them; and

 

    (b) the Take-over Bid shall contain, and the
    take-up and
    payment for securities tendered or deposited thereunder shall be
    subject to, irrevocable and unqualified conditions that:

 

    (A) no Voting Shares shall be taken up or paid for pursuant
    to the Take-over Bid (x) prior to the Close of Business on
    a date which is not earlier than 60 days following the date
    the take-over bid circular is sent to holders of Voting Shares
    and (y) then only if, at the Close of Business on the date
    Voting Shares are first taken up or paid for under the Take-over
    Bid, more than 50% of the then outstanding Voting Shares held by
    Independent Shareholders have been deposited or tendered
    pursuant to the Take-over Bid and not withdrawn;

 

    (B) Voting Shares may be deposited pursuant to such
    Take-over Bid, unless such Take-over Bid is withdrawn, at any
    time prior to the Close of Business on the date Voting Shares
    are first taken up or paid for under the Take-over Bid;

    

    8

 

    (C) any Voting Shares deposited pursuant to the Take-over
    Bid may be withdrawn until taken up and paid for; and

 

    (D) in the event that the requirement set forth in
    Subclause (b)(A)(y) of this definition is satisfied, the Offeror
    will make a public announcement of that fact and the Take-over
    Bid will remain open for deposits and tender of Voting Shares
    for not less than 10 Business Days from the date of such public
    announcement;

 

    provided always that a Take-over Bid will cease to be a
    Permitted Bid at any time when such Take-over Bid ceases to meet
    any of the provisions of this definition and provided further
    that, at such time, any acquisition of Voting Shares made
    pursuant to such Take-over Bid, including any acquisition of
    Voting Shares theretofore made, will cease to be a Permitted Bid
    Acquisition;

 

    “Permitted Bid Acquisition” shall mean an
    acquisition of Voting Shares made pursuant to a Permitted Bid or
    a Competing Permitted Bid.

 

    “Permitted
    Lock-Up
    Agreement” means an agreement between a Person and one
    or more holders of Voting Shares or Convertible Securities (each
    a
    “Locked-up
    Person”) (the terms of which are publicly disclosed and
    a copy of which is made available to the public (including the
    Corporation) not later than the date the
    Lock-up Bid
    (as defined below) is publicly announced or, if the
    Lock-up Bid
    has been made prior to the date on which such agreement is
    entered into, forthwith, and in any event not later than the
    date of such agreement), pursuant to which each such
    Locked-up
    Person agrees to deposit or tender Voting Shares or Convertible
    Securities (or both) (the
    “Locked-up
    Securities”) to a Take-over Bid (the
    “Lock-up
    Bid”) made or to be made by the Person or any of such
    Person’s Affiliates or Associates or any other Person
    referred to in Clause (d) of the definition of Beneficial
    Owner; provided that:

 

    (a) the agreement:

 

    (A) permits the
    Locked-up
    Person to withdraw Locked-up Securities from the
    Lock-up Bid
    in order to tender or deposit such securities to another
    Take-over Bid or to support another transaction that provides
    for a consideration for such securities that exceeds the
    consideration contained in or proposed to be contained in the
    Lock-up Bid
    and that is made for at least the same number of Locked-up
    Securities as, the
    Lock-up
    Bid; or

 

    (B) (1) permits the
    Locked-up
    Person to withdraw Locked-up Securities from the
    Lock-up Bid
    in order to tender or deposit such securities to another
    Take-over Bid, or to support another transaction that provides
    for a consideration for such securities that exceeds by as much
    as or more than a specified amount (the “Specified
    Amount”) the consideration contained in or proposed to
    be contained in the Lock-up Bid and that is made for at least
    the same number of Locked-up Securities as the
    Lock-up
    Bid; and

 

    (2) does not by its terms provide for a Specified Amount
    that is greater than 7% over the consideration for Locked-up
    Securities contained in or proposed to be contained in the
    Lock-up Bid;

 

    and, for greater clarity, the agreement may contain a right of
    first refusal or permit a period of delay of not more than five
    Business Days to give such Person an opportunity to at least
    match a higher price or value in another Take-over Bid or
    transaction and may provide for any other similar limitation on
    a Locked-up
    Person’s right to withdraw Locked-up Securities from the
    Lock-up Bid,
    as long as the
    Locked-Up
    Person can tender or deposit Locked-up Securities to another
    Take-over Bid or support to another transaction; and

 

    (b) no
    “break-up”
    fees,
    “top-up”
    fees, penalties, expenses or other amounts that exceed in the
    aggregate the greater of:

 

    (A) the cash equivalent of 2.5% of the price or value
    payable under the
    Lock-up Bid
    to a
    Locked-up
    Person; and

    

    9

 

    (B) 50% of the amount by which the price or value payable
    under another Take-over Bid or transaction to a
    Locked-up
    Person exceeds the price or value of the consideration that such
    Locked-up
    Person would have received under the
    Lock-up Bid,

 

    shall be payable by a
    Locked-up
    Person pursuant to the agreement in the event a
    Locked-up
    Person fails to deposit or tender
    Locked-up
    Securities to the
    Lock-up Bid,
    withdraws
    Locked-up
    Securities previously tendered thereto or supports another
    transaction.

 

    “Person” shall include any individual, firm,
    partnership, syndicate, association, trust, trustee, executor,
    administrator, legal personal representative, government,
    governmental body or authority, corporation or other
    incorporated or unincorporated organization.

 

    “Pro Rata Acquisition” shall mean an
    acquisition by a Person of Voting Shares or Convertible
    Securities (i) as a result of a stock dividend, a stock
    split or other event pursuant to which such Person receives or
    acquires Voting Shares or Convertible Securities on the same pro
    rata basis as all other holders of securities of the same class
    or series of the Corporation, or (ii) pursuant to a regular
    dividend reinvestment or other plan of the Corporation made
    available by the Corporation to the holders of Voting Shares,
    where such plan permits the holder to direct that the dividends
    paid in respect of such Voting Shares be applied to the purchase
    from the Corporation of Voting Shares or Convertible Securities,
    or (iii) pursuant to the receipt
    and/or
    exercise of rights (other than the Rights) issued by the
    Corporation to all of the holders of a series or class of Voting
    Shares on a pro rata basis to subscribe for or purchase Voting
    Shares or Convertible Securities, provided that the Person does
    not acquire a greater percentage of the Voting Shares or
    Convertible Securities, as applicable, than the percentage of
    the series or class of Voting Shares Beneficially Owned by that
    Person immediately prior to such receipt or exercise and that
    such rights are acquired directly from the Corporation as part
    of a rights offering and not from any other Person.

 

    “Record Time” shall mean the Close of Business
    on the tenth day following the date of this Agreement.

 

    “Redemption Price” shall have the meaning
    attributed thereto in Section 5.1.

 

    “Rights” shall mean the herein described rights
    to purchase securities pursuant to the terms and subject to the
    conditions set forth herein.

 

    “Rights Certificate” shall mean the
    certificates representing the Rights after the Separation Time
    which shall be substantially in the form attached hereto as
    Exhibit A or such other form as the Corporation and the
    Rights Agent may agree.

 

    “Rights Register” shall have the meaning
    ascribed thereto in Subsection 2.6(a).

 

    “Securities Act” shall mean the Securities
    Act (British Columbia), as it may be amended from time to
    time, and the rules and regulations made thereunder and any
    comparable or successor laws or regulations thereto.

 

    “Separation Time” shall mean the later of:

 

    (a) the Close of Business on the tenth Business Day after
    the earliest of:

 

    (A) the Stock Acquisition Date;

 

    (B) the date of the commencement of, or first public
    announcement (which, for the purposes of this definition, shall
    include, without limitation, a report filed pursuant to
    Section 13(d) of the U.S. Exchange Act) of the intent
    of any Person (other than the Corporation or any Subsidiary of
    the Corporation) to commence, a Take-over Bid (other than a
    Permitted Bid or Competing Permitted Bid); provided that if any
    such Take-over Bid expires, is cancelled, terminated or
    otherwise withdrawn prior to the Separation Time, such Take-Over
    Bid shall be deemed, for the purposes of this provision, never
    to have been made; and

 

    (C) the date upon which a Permitted Bid or Competing
    Permitted Bid ceases to be such; or

 

    (b) the Record Time, if any of the circumstances in
    Clause (a) of this definition have occurred more than ten
    Business Days prior to such time,

 

    or, in each case, such later date as may be determined by
    the Board of Directors.

    

    10

 

    “Significant Interest” a Person has a
    Significant Interest where that Person Beneficially Owns:

 

    (a) 20% or more of the outstanding Voting Shares; or

 

    (b) if the Corporation has completed an offering of its
    securities (other than securities issued pursuant to the
    Corporation’s incentive stock option plans) after the date
    hereof and in connection with that offering the Board of
    Directors has so determined, 24.9% or more of the outstanding
    Voting Shares.

 

    “Stock Acquisition Date” shall mean the first
    date of public announcement (which, for the purposes of this
    definition, shall include, without limitation, a report filed
    pursuant to Section 13(d) of the U.S. Exchange Act) by
    the Corporation or an Acquiring Person of facts indicating that
    an Acquiring Person has become such.

 

    “Subsidiary” a specified Person is a Subsidiary
    of another Person if:

 

    (a) it is controlled by (A) that other, or
    (B) that other and one more or Persons, each of which is
    controlled by that other, or (C) two or more Persons, each
    of which is controlled by that other; or

 

    (b) it is a Subsidiary of a Person that is that
    other’s Subsidiary.

 

    “Take-over Bid” means an Offer to Acquire where
    the Voting Shares that would be Beneficially Owned upon
    completion of the Offer to Acquire, together with the
    Offeror’s Securities at the date of the Offer to Acquire,
    constitute a Significant Interest.

 

    “Termination Time” shall mean the time at which
    the right to exercise Rights shall terminate pursuant to
    Subsection 5.1(d) hereof.

 

    “Trading Day” when used with respect to any
    securities, shall mean a day on which the principal United
    States securities exchange (as determined by trading volume) on
    which such securities are listed or admitted to trading is open
    for the transaction of business or, if the securities are not
    listed or admitted to trading on any United States securities
    exchange, a Business Day.

 

    “U.S. – Canadian Exchange Rate” shall
    mean, on any date:

 

    (a) if, on such date, the Bank of Canada sets an average
    noon spot rate of exchange for the conversion of one United
    States dollar into Canadian dollars, such rate; or

 

    (b) in any other case, the rate for such date for the
    conversion of one United States dollar into Canadian dollars
    calculated in such manner as may be determined by the Board of
    Directors from time to time in good faith.

 

    “U.S. Exchange Act” shall mean the United
    States Securities Exchange Act of 1934, as it may be amended
    from time to time, and the rules and regulations made thereunder
    and any comparable or successor laws or regulations thereto.

 

    “U.S. Securities Act” shall mean the
    United States Securities Act of 1933, as it may be amended from
    time to time, and the rules and regulations made thereunder and
    any comparable or successor laws or regulations thereto.

 

    “Voting Share Reduction” means an acquisition
    or a redemption by the Corporation of Voting Shares.

 

    “Voting Shares” shall mean collectively the
    Common Shares of the Corporation and any other shares in the
    capital stock or voting interests of the Corporation entitled to
    vote generally in the election of directors.

 

    1.2 Percentage
    of Voting Shares Beneficially Owned

 

    For the purposes of this Agreement, the percentage of Voting
    Shares Beneficially Owned by any Person shall be and be deemed
    to be the quotient (expressed as a percentage) determined by the
    formula:

 

	 	 	 	 	 
	

    100

	
 
	
    ×
	
 
	
    A

	
 

	
 

	

    B

    

    11

 

    where

 

			
	 	    A = 
	
    the number of votes for the election of all directors on the
    Board of Directors generally attaching to the Voting Shares
    Beneficially Owned by such Person; and

 

			
	 	    B = 
	
    the number of votes for the election of all directors on the
    Board of Directors generally attaching to all outstanding Voting
    Shares.

 

    Where any Person is deemed to Beneficially Own unissued Voting
    Shares, such Voting Shares shall be deemed to be outstanding for
    the purposes of both A and B above, but no other unissued Voting
    Shares shall, for the purposes of such calculation, be deemed to
    be outstanding.

 

    1.3 Currency

 

    All sums of money which are referred to in this Agreement are
    expressed in lawful money of Canada, unless otherwise specified.

 

    1.4 Number
    and Gender

 

    Wherever the context so requires, terms used herein importing
    the singular number only shall include the plural and vice versa
    and words importing any one gender shall include all others.

 

    1.5 Descriptive
    Headings and References

 

    Descriptive headings and the Table of Contents appear herein for
    convenience of reference only and shall not affect the meaning
    or construction of any of the provisions hereof. All references
    to Articles, Sections, Subsections, Clauses and Exhibits are to
    the articles, sections, subsections, clauses and exhibits
    forming part of this Agreement. The words “hereto”,
    “herein”, “hereof, “hereunder”,
    “this Agreement” and similar expressions refer to this
    Agreement including the Exhibits, as the same may be amended,
    modified or supplemented from time to time.

 

    1.6 Acting
    Jointly or in Concert

 

    For purposes of this Agreement, a Person is acting jointly or in
    concert with every other Person (and such Person’s
    Affiliates and Associates) who is a party to any agreement,
    commitment or understanding (whether formal or informal and
    whether or not in writing) with the first mentioned Person to
    acquire or offer to acquire Voting Shares (other than customary
    agreements with and between underwriters
    and/or
    banking group
    and/or
    selling group members with respect to a distribution of
    securities pursuant to a prospectus or by way of private
    placement and other than pursuant to pledges of securities in
    the ordinary course of business).

 

    As used in this Agreement, unless the context otherwise
    requires, the term “holder” of any Rights shall mean
    the registered holder of such Rights (or, prior to the
    Separation Time, of the associated Common Shares).

 

    ARTICLE 2

    

 

    THE
    RIGHTS

 

    2.1 Evidence
    of Holdings of Rights

 

    (a) Common Share certificates issued prior to the Close of
    Business on the earlier of the Separation Time and the
    Expiration Time shall evidence, in addition to the Common Shares
    represented thereby, one Right for each Common Share represented
    thereby and shall have impressed on, printed on, written on or
    otherwise affixed to them a legend, substantially in the
    following form:

 

    “Until the Separation Time (as such term is defined in the
    Rights Agreement referred to below), this certificate also
    evidences and entitles the holder hereof to certain Rights as
    set forth in the Shareholder Rights Plan Agreement dated as of
    March 12, 2010, as amended from time to time (the
    “Rights Agreement”), between Lions Gate
    Entertainment Corp. and CIBC Mellon Trust Company, as
    Rights Agent (“CIBC Mellon”), the terms of
    which are hereby incorporated herein by reference and a copy
    each of which is on

    

    12

 

    file and may be inspected during normal business hours at the
    principal executive office of the Corporation. Under certain
    circumstances, as set forth in the Rights Agreement, such Rights
    may be amended, redeemed, may expire, may become void or may be
    evidenced by separate certificates and may no longer be
    evidenced by this certificate. The Corporation will mail or
    arrange for the mailing of a copy of the Rights Agreement to the
    holder of this certificate without charge as soon as practicable
    after the receipt of a written request therefor.”

 

    Certificates representing Common Shares that are issued and
    outstanding shall also evidence one Right for each Common Share
    evidenced thereby, notwithstanding the absence of the foregoing
    legend, until the earlier of the Separation Time and the
    Expiration Time.

 

    (b) Registered holders of Common Shares who have not
    received a share certificate and are entitled to do so on the
    earlier of the Separation Time and the Expiration Time shall be
    entitled to Rights as if such certificates had been issued and
    such Rights shall for all purposes hereof be evidenced by the
    corresponding entries on the Corporation’s securities
    register for common shares.

 

    2.2 Initial
    Exercise Price; Exercise of Rights; Detachment of
    Rights

 

    (a) Subject to adjustment as herein set forth, each Right
    will entitle the holder thereof, from and after the Separation
    Time and prior to the Expiration Time, to purchase, for the
    Exercise Price, one Common Share (which Exercise Price and
    number of Common Shares are subject to adjustment as set forth
    below). Notwithstanding any other provision of this Agreement,
    any Rights held by the Corporation or any of its Subsidiaries
    shall be void.

 

    (b) Until the Separation Time, (i) the Rights shall
    not be exercisable and no Right may be exercised, and
    (ii) each Right will be evidenced by the certificate for
    the associated Common Share registered in the name of the holder
    thereof (which certificate shall also be deemed to represent a
    Rights Certificate) and will be transferable only together with,
    and will be transferred by a transfer of, such associated Common
    Share.

 

    (c) From and after the Separation Time and prior to the
    Expiration Time, the Rights may be exercised and the
    registration and transfer of the Rights shall be separate from
    and independent of Common Shares. Promptly following the
    Separation Time, the Corporation will prepare and the Rights
    Agent will mail to each holder of record of Common Shares as of
    the Separation Time (other than an Acquiring Person, any other
    Person whose Rights are or become void pursuant to the
    provisions of Section 3.1(b) hereof and, in respect of any
    Rights Beneficially Owned by such Acquiring Person which are not
    held of record by such Acquiring Person, the holder of record of
    such Rights (a “Nominee”)), at such
    holder’s address as shown by the records of the Corporation
    (the Corporation hereby agreeing to furnish copies of such
    records to the Rights Agent for this purpose),

 

    (A) a Rights Certificate, in substantially the form set out
    in Exhibit “A” hereto, appropriately completed,
    representing the number of Rights held by such holder at the
    Separation Time and having such marks of identification or
    designation and such legends, summaries or endorsements printed
    thereon as the Corporation may deem appropriate and as are not
    inconsistent with the provisions of this Agreement, or as may be
    required to comply with any law or with any rule or regulation
    or judicial or administrative order made pursuant thereto or
    with any rule or regulation of any self-regulatory organization,
    stock exchange or quotation system on which the Rights may from
    time to time be listed or traded, or to conform to standard
    usage, and

 

    (B) a disclosure statement prepared by the Corporation
    describing the Rights;

 

    provided that a Nominee shall be sent the materials provided for
    in Clauses (A) and (B) in respect of all Common Shares
    held of record by it which are not Beneficially Owned by an
    Acquiring Person. In order for the Corporation to determine
    whether any Person is holding Common Shares which are
    Beneficially Owned by another Person, the Corporation may
    require such first mentioned Person to furnish such information
    and documentation as the Corporation deems necessary or
    appropriate in order to make such determination.

 

    (d) Rights may be exercised in whole or in part on any
    Business Day after the Separation Time and prior to the
    Expiration Time by submitting to the Rights Agent at its office
    in the City of Vancouver, Canada or at any other

    

    13

 

    office of the Rights Agent in the cities designated (with the
    approval of the Rights Agent) from time to time for that purpose
    by the Corporation:

 

    (A) the Rights Certificate evidencing such Rights with an
    Election to Exercise (an “Election to
    Exercise”) substantially in the form attached to the
    Rights Certificate appropriately completed and duly executed by
    the holder or his or their executors or administrators or other
    personal representatives or his legal attorney duly appointed by
    an instrument in writing in form and executed in a manner
    satisfactory to the Rights Agent; and

 

    (B) payment by certified cheque or money order payable to
    the Rights Agent for credit to or to the order of the
    Corporation, of a sum equal to the Exercise Price multiplied by
    the number of Rights being exercised and a sum sufficient to
    cover any transfer tax or charge which may be payable in respect
    of the transfer or delivery of Rights Certificates or the
    issuance or delivery of certificates for Common Shares in a name
    other than that of the holder of the Rights being exercised.

 

    (e) Upon receipt of a Rights Certificate, with a completed
    Election to Exercise appropriately completed and duly executed
    which does not indicate that such Right is null and void as
    provided by Subsection 3.1(b), accompanied by payment as set
    forth in Clause 2.2(d)(B), the Rights Agent (unless otherwise
    instructed in writing by the Corporation) will thereupon
    promptly:

 

    (A) register the number of Common Shares to be purchased in
    the securities register of the Corporation in such name or names
    as may be designated by such holder of a Rights Certificate or,
    upon written request of such holder, requisition from the
    transfer agent of the Corporation certificates for the number of
    Common Shares to be purchased (the Corporation hereby
    irrevocably agreeing to authorize its transfer agent to comply
    with all such requisitions),

 

    (B) after receipt of any certificates referred to in
    Clause 2.2(e)(A), deliver such certificates to or upon the
    order of the registered holder of such Rights Certificate,
    registered in such name or names as may be designated by such
    holder,

 

    (C) when appropriate, requisition from the Corporation the
    amount of cash to be paid in lieu of issuing fractional Common
    Shares,

 

    (D) after receipt, deliver such cash referred to in
    Clause 2.2(e)(C) to or to the order of the registered
    holder of the Rights Certificate, and

 

    (E) tender to the Corporation all payments received on the
    exercise of the Rights.

 

    (f) In case the holder of any Rights shall exercise less
    than all the Rights evidenced by such holder’s Rights
    Certificate, a new Rights Certificate evidencing the Rights
    remaining unexercised will be issued by the Rights Agent to such
    holder or to such holder’s duly authorized assigns.

 

    (g) The Corporation covenants and agrees that it will:

 

    (A) take all such action as may be necessary and within its
    power to ensure that all Common Shares delivered upon exercise
    of Rights shall, at the time of delivery of the certificates for
    or registration in the Corporation’s securities register of
    such Common Shares (subject to payment of the Exercise Price),
    be duly and validly authorized, executed, issued and delivered
    as fully paid and non-assessable;

 

    (B) cause to be reserved and kept available out of its
    authorized and unissued Common Shares, the number of Common
    Shares that, as provided in this Agreement, will from time to
    time be sufficient to permit the exercise in full of all
    outstanding Rights;

 

    (C) take all such action as may be necessary and within its
    power to comply with any applicable requirements of the
    Corporations Act, the Securities Act, the U.S. Securities
    Act, the U.S. Exchange Act and the securities statute or
    comparable legislation of each of the other provinces and
    territories of Canada, and other applicable securities laws in
    other applicable jurisdictions and the rules and regulations
    thereunder, and any other applicable law, rule or regulation, in
    connection with the issuance and delivery of the Rights
    Certificates and the issuance of any Common Shares upon exercise
    of Rights;

    

    14

 

    (D) use reasonable efforts to cause all Common Shares
    issued upon the exercise of Rights to be listed upon issuance on
    the New York Stock Exchange and each other stock exchange on
    which the Common Shares were traded immediately prior to the
    Stock Acquisition Date;

 

    (E) pay when due and payable any and all Canadian, United
    States or foreign federal, provincial, state or other transfer
    taxes (not in the nature of income or withholding taxes) and
    charges which may be payable in respect of the original issuance
    or delivery of the Rights Certificates or certificates for
    Common Shares to be issued upon the exercise of any Rights or
    registration of the Common Shares in the securities register of
    the Corporation upon the exercise of any Rights; provided that
    the Corporation shall not be required to pay any transfer tax or
    charge which may be payable in respect of the transfer or
    delivery of Rights Certificates or the issuance or delivery of
    certificates for Common Shares or registration of the Common
    Shares in the securities register of the Corporation in a name
    other than that of the holder of the Rights being transferred or
    exercised; and

 

    (F) after the Separation Time, except as permitted by
    Section 5.1, not take (or permit any Subsidiary to take) any
    action if at the time such action is taken it is reasonably
    foreseeable that such action will diminish substantially or
    otherwise eliminate the benefits to be afforded by the Rights.

 

    2.3 Adjustments
    to Exercise Price; Number of Rights

 

    (a) The Exercise Price, the number and kind of securities
    subject to purchase upon exercise of each Right and the number
    of Rights outstanding are subject to adjustment from time to
    time as provided in this Section 2.3.

 

    (b) In the event the Corporation shall at any time after
    the Separation Time and prior to the Expiration Time:

 

    (A) declare or pay a dividend on the Common Shares of the
    Corporation payable in Common Shares (or securities exchangeable
    for or convertible into or giving a right to acquire Common
    Shares) other than pursuant to any optional stock dividend
    program;

 

    (B) subdivide or change the then outstanding Common Shares
    into a greater number of Common Shares;

 

    (C) consolidate or change the then outstanding Common
    Shares into a smaller number of Common Shares; or

 

    (D) issue any Common Shares (or securities exchangeable for
    or convertible into or giving a right to acquire Common Shares)
    in respect of, in lieu of, or in exchange for existing Common
    Shares,

 

    the Exercise Price and the number of Rights outstanding, or, if
    the payment or effective date therefor shall occur after the
    Separation Time, the securities issuable upon exercise of
    Rights, shall be adjusted as follows:

 

    (E) the Exercise Price in effect after such adjustment will
    be equal to the Exercise Price in effect immediately prior to
    such adjustment divided by the number of Common Shares (the
    “Expansion Factor”) that a holder of one Common
    Share immediately prior to such dividend, subdivision, change,
    consolidation or issuance would hold thereafter as a result
    thereof (assuming the exercise of all such exchange, conversion
    or acquisition rights, if any); and

 

    (F) each Right held prior to such adjustment will become
    that number of Rights equal to the Expansion Factor, and the
    adjusted number of Rights will be deemed to be distributed among
    the Common Shares with respect to which the original Rights were
    associated (if they remain outstanding) and the shares issued in
    respect of such dividend, subdivision, change, consolidation or
    issuance, so that each such Common Share will have exactly one
    Right associated with it.

 

    (c) If the Corporation shall, at any time after the Record
    Time and prior to the Separation Time, issue any Common Shares
    otherwise than in a transaction referred to in Subsection
    2.3(b), each such Common Share so issued shall automatically
    have one new Right associated with it, which Right shall be
    evidenced by the certificate representing such Common Share.

 

    (d) If, after the Separation Time and prior to the
    Expiration Time, the Corporation shall issue any shares of
    capital stock other than Common Shares (or other securities
    exchangeable for or convertible into or giving a right to

    

    15

 

    acquire shares of any such capital stock) in a transaction of a
    type described in Clause 2.3(b)(A) or 2.3(b)(D), the shares of
    such capital stock shall be treated herein as nearly equivalent
    to Common Shares to the extent practicable and appropriate under
    the circumstances and the shares purchasable upon exercise of
    Rights shall be adjusted as necessary such that the shares
    purchasable upon exercise of each Right after such adjustment
    will be the shares that a holder of the shares purchasable upon
    exercise of one Right immediately prior to such issuance would
    hold thereafter as a result of such issuance.

 

    Notwithstanding Section 5.5, the Corporation and the Rights
    Agent are authorized and agree to amend this Agreement in order
    to give effect to the foregoing.

 

    (e) If an event occurs which would require an adjustment
    under both this Section 2.3 and Section 3.1 hereof,
    the adjustment provided for in this Section 2.3 shall be in
    addition to, and shall be made prior to, any adjustment required
    pursuant to Section 3.1 hereof.

 

    (f) Notwithstanding anything herein to the contrary, no
    adjustment of the Exercise Price shall be required unless such
    adjustment would require an increase or decrease of at least one
    percent in such Exercise Price; provided, however, that any
    adjustments which by reason of this Subsection 2.3(f) are not
    required to be made shall be carried forward and taken into
    account in any subsequent adjustment. All adjustments made
    pursuant to this Section 2.3 shall be made to the nearest
    cent or to the nearest ten-thousandth of a Common Share, as the
    case may be.

 

    (g) If as a result of an adjustment made pursuant to this
    Section 2.3, the holder of any Right thereafter exercised shall
    become entitled to receive any securities other than Common
    Shares, thereafter the number of such other securities so
    receivable upon exercise of any Right and the applicable
    Exercise Price thereof shall be subject to adjustment from time
    to time in a manner and on terms as nearly equivalent as
    practicable to the provisions with respect to the Common Shares
    contained in this Section 2.3 and the provisions of this
    Agreement with respect to the Common Shares shall apply on like
    terms to any such other securities.

 

    (h) All Rights issued by the Corporation subsequent to any
    adjustment made to the Exercise Price hereunder shall evidence
    the right to purchase, at the adjusted Exercise Price, the
    number of Common Shares purchasable from time to time hereunder
    upon exercise of the Rights, all subject to further adjustment
    as provided herein.

 

    (i) Irrespective of any adjustment or change in the
    securities purchasable upon exercise of the Rights, the Rights
    Certificates theretofore and thereafter issued may continue to
    express the securities so purchasable which were expressed in
    the initial Rights Certificates issued hereunder.

 

    (j) In any case in which this Section 2.3 shall
    require that an adjustment in the Exercise Price be made
    effective as of a record date for a specified event, the
    Corporation may elect to defer until the occurrence of such
    event the issuance to the holder of any Right exercised after
    such record date of the number of Common Shares and other
    securities of the Corporation, if any, issuable upon such
    exercise over and above the number of Common Shares and other
    securities of the Corporation, if any, issuable upon such
    exercise on the basis of the relevant Exercise Price in effect
    prior to such adjustment; provided, however, that the
    Corporation shall deliver to such holder an appropriate
    instrument evidencing such holder’s right to receive such
    additional Common Shares (fractional or otherwise) or other
    securities upon the occurrence of the event requiring such
    adjustment.

 

    (k) Notwithstanding anything in this Section 2.3 to
    the contrary, the Corporation shall be entitled to make such
    reductions in the Exercise Price, in addition to those
    adjustments expressly required by this Section 2.3, as and
    to the extent that in their good faith judgment the Board of
    Directors shall determine to be advisable in order that any
    (i) subdivision or consolidation of the Common Shares,
    (ii) issuance (wholly or in part for cash) of any Common
    Shares or securities that by their terms are exchangeable for or
    convertible into or give a right to acquire Common Shares,
    (iii) stock dividends or (iv) issuance of rights,
    options or warrants referred to in this Section 2.3,
    hereafter made by the Corporation to holders of its Common
    Shares, subject to applicable taxation laws, shall not be
    taxable to such shareholders.

 

    (l) The Corporation covenants and agrees that, after the
    Separation Time, it will not, except as permitted by the
    provisions hereof, take (or permit any Subsidiary of the
    Corporation to take) any action if at the time such action is

    

    16

 

    taken it is reasonably foreseeable that such action will
    diminish substantially or otherwise eliminate the benefits
    intended to be afforded by the Rights.

 

    (m) Whenever an adjustment to the Exercise Price or the
    securities purchasable upon exercise of the Rights is made
    pursuant to this Section 2.3, the Corporation shall
    promptly:

 

    (A) file with the Rights Agent and with the transfer agent
    for the Common Shares (if different than the Rights Agent) a
    certificate specifying the particulars of such
    adjustment, and

 

    (B) cause notice of the particulars of such adjustment to
    be given to the holders of the Rights.

 

    Failure to file such certificate or to cause such notice to be
    given as aforesaid, or any defect therein, shall not affect the
    validity of any such adjustment.

 

    2.4 Date
    on Which Exercise is Effective

 

    Each Person in whose name any certificate for Common Shares is
    issued upon the exercise of Rights shall for all purposes be
    deemed to have become the holder of record of the Common Shares
    represented thereby on, and such certificate shall be dated, the
    date upon which the Rights Certificate evidencing such Rights
    was duly surrendered in accordance with Subsection 2.2(e)
    (together with a duly completed Election to Exercise) and
    payment of the Exercise Price for such Rights (and any
    applicable transfer taxes and other governmental charges payable
    by the exercising holder hereunder) was made; provided, however,
    that if the date of such surrender and payment is a date upon
    which the Common Share transfer books of the Corporation are
    closed, such Person shall be deemed to have become the record
    holder of such shares on, and such certificate shall be dated,
    the next succeeding Business Day on which the Common Share
    transfer books of the Corporation are open.

 

    2.5 Execution.
    Authentication. Delivery and Dating of Rights
    Certificates

 

    (a) The Rights Certificates shall be executed on behalf of
    the Corporation by its Chief Executive Officer or its Chief
    Financial Officer, under its corporate seal reproduced thereon
    attested by its Secretary. The signature of any of these
    officers on the Rights Certificates may be manual or facsimile.
    Rights Certificates bearing the manual or facsimile signatures
    of individuals holding the above offices of the Corporation
    shall bind the Corporation, notwithstanding that such
    individuals or any of them have ceased to hold such offices
    prior to the countersignature and delivery of such Rights
    Certificates.

 

    (b) Promptly after the Corporation learns of the Separation
    Time, the Corporation will notify the Rights Agent of such
    Separation Time and will deliver Rights Certificates executed by
    the Corporation to the Rights Agent for countersignature and a
    statement describing the Rights, and the Rights Agent shall
    countersign (manually or by facsimile signature in a manner
    reasonably satisfactory to the Corporation) and deliver such
    Rights Certificates and statement to the holders of the Rights
    pursuant to Subsection 2.2(c). No Rights Certificate shall be
    valid for any purpose until countersigned by the Rights Agent as
    aforesaid.

 

    (c) Each Rights Certificate shall be dated the date of
    countersignature thereof.

 

    2.6 Registration,
    Registration of Transfer and Exchange

 

    (a) Following the Separation Time, the Corporation will
    cause to be kept a register (the “Rights
    Register”) in which, subject to such reasonable
    regulations as it may prescribe, the Corporation will provide
    for the registration and transfer of Rights. The Rights Agent is
    hereby appointed “Rights Registrar” for the purpose of
    maintaining the Rights Register for the Corporation and
    registering Rights and transfers of Rights as herein provided.
    In the event that the Rights Agent shall cease to be the Rights
    Registrar, the Rights Agent will have the right to examine the
    Rights Register at all reasonable times.

 

    (b) After the Separation Time and prior to the Expiration
    Time, upon surrender for registration of transfer or exchange of
    any Rights Certificate, and subject to the provisions of
    Subsection 2.6(d), the Corporation will execute, and the Rights
    Agent will countersign and deliver, in the name of the holder or
    the designated transferee or transferees, as required pursuant
    to the holder’s instructions, one or more new Rights
    Certificates evidencing the same aggregate number of Rights as
    did the Rights Certificates so surrendered.

    

    17

 

    (c) All Rights issued upon any registration of transfer or
    exchange of Rights Certificates shall be the valid obligations
    of the Corporation, and such Rights shall be entitled to the
    same benefits under this Agreement as the Rights surrendered
    upon such registration of transfer or exchange.

 

    (d) Every Rights Certificate surrendered for registration
    of transfer or exchange shall be duly endorsed, or be
    accompanied by a written instrument of transfer in form
    satisfactory to the Corporation or the Rights Agent as the case
    may be, duly executed by the holder thereof or such
    holder’s attorney duly authorized in writing. As a
    condition to the issuance of any new Rights Certificate under
    this Section 2.6, the Corporation may require the payment
    of a sum sufficient to cover any tax or other governmental
    charge that may be imposed in relation thereto and any other
    expenses (including the fees and expenses of the Rights Agent)
    connected therewith.

 

    2.7 Mutilated,
    Destroyed, Lost and Stolen Rights Certificates

 

    (a) If any mutilated Rights Certificate is surrendered to
    the Rights Agent prior to the Expiration Time, the Corporation
    shall execute and the Rights Agent shall countersign and deliver
    in exchange therefor a new Rights Certificate evidencing the
    same number of Rights as did the Rights Certificate so
    surrendered.

 

    (b) If there shall be delivered to the Corporation and the
    Rights Agent prior to the Expiration Time (i) evidence to
    their satisfaction of the destruction, loss or theft of any
    Rights Certificate and (ii) such security or indemnity as
    may be required by them to save each of them and any of their
    agents harmless, then, in the absence of notice to the
    Corporation or the Rights Agent that such Rights Certificate has
    been acquired by a bona fide purchaser, the Corporation shall
    execute and upon its request the Rights Agent shall countersign
    and deliver, in lieu of any such destroyed, lost or stolen
    Rights Certificate, a new Rights Certificate evidencing the same
    number of Rights as did the Rights Certificate so destroyed,
    lost or stolen.

 

    (c) As a condition to the issuance of any new Rights
    Certificate under this Section 2.7, the Corporation may
    require the payment of a sum sufficient to cover any tax or
    other governmental charge that may be imposed in relation
    thereto and any other expenses (including the fees and expenses
    of the Rights Agent) connected therewith.

 

    (d) Every new Rights Certificate issued pursuant to this
    Section 2.7 in lieu of any destroyed, lost or stolen Rights
    Certificate shall evidence a contractual obligation of the
    Corporation, whether or not the destroyed, lost or stolen Rights
    Certificate shall be at any time enforceable by anyone, and
    shall be entitled to all the benefits of this Agreement equally
    and proportionately with any and all other Rights duly issued
    hereunder.

 

    2.8 Persons
    Deemed Owners

 

    Prior to due presentment of a Rights Certificate (or, prior to
    the Separation Time, the associated Common Share certificate)
    for registration of transfer, the Corporation, the Rights Agent
    and any agent of the Corporation or the Rights Agent may deem
    and treat the Person in whose name such Rights Certificate (or,
    prior to the Separation Time, such Common Share certificate) is
    registered as the absolute owner thereof and of the Rights
    evidenced thereby for all purposes whatsoever. As used in this
    Agreement, unless the context otherwise requires, the term
    “holder” of any Rights shall mean the registered
    holder of such Rights (or, prior to the Separation Time, of the
    associated Common Shares).

 

    2.9 Delivery
    and Cancellation of Certificates

 

    All Rights Certificates surrendered upon exercise or for
    redemption, registration of transfer or exchange shall, if
    surrendered to any Person other than the Rights Agent, be
    delivered to the Rights Agent and, in any case, shall be
    promptly cancelled by the Rights Agent. The Corporation may at
    any time deliver to the Rights Agent for cancellation any Rights
    Certificates previously countersigned and delivered hereunder
    which the Corporation may have acquired in any manner
    whatsoever, and all Rights Certificates so delivered shall be
    promptly cancelled by the Rights Agent. No Rights Certificate
    shall be countersigned in lieu of or in exchange for any Rights
    Certificates cancelled as provided in this Section 2.9,
    except as expressly permitted by this Agreement. The Rights
    Agent shall destroy all cancelled Rights Certificates and
    deliver a certificate of destruction to the Corporation.

    

    18

 

    2.10 Agreement
    of Rights Holders

 

    Every holder of Rights, by accepting such Rights, consents and
    agrees with the Corporation and the Rights Agent and with every
    other holder of Rights that:

 

    (a) such holder shall be bound by and subject to the
    provisions of this Agreement, as amended from time to time in
    accordance with the terms hereof, in respect of all Rights held;

 

    (b) prior to the Separation Time, each Right will be
    transferable only together with, and will be transferred by a
    transfer of, the associated Common Share certificate
    representing such Right;

 

    (c) after the Separation Time, the Rights will be
    transferable only on the Rights Register as provided herein;

 

    (d) prior to due presentment of a Rights Certificate (or,
    prior to the Separation Time, the associated Common Share
    certificate) for registration of transfer, the Corporation, the
    Rights Agent and any agent of the Corporation or the Rights
    Agent may deem and treat the person in whose name the Rights
    Certificate (or, prior to the Separation Time, the associated
    Common Share certificate) is registered as the absolute owner
    thereof and of the Rights evidenced thereby (notwithstanding any
    notations of ownership or writing on such Rights Certificate or
    the associated Common Share certificate made by anyone other
    than the Corporation or the Rights Agent) for all purposes
    whatsoever, and neither the Corporation nor the Rights Agent
    shall be affected by any notice to the contrary;

 

    (e) such holder is not entitled to receive any fractional
    Rights or fractional Common Shares upon the exercise of
    Rights; and

 

    (f) notwithstanding anything in this Agreement to the
    contrary, neither the Corporation nor the Rights Agent shall
    have any liability to any holder of a Right or any other Person
    as a result of its inability to perform any of its obligations
    under this Agreement by reason of any preliminary or permanent
    injunction or other order, decree or ruling issued by a court of
    competent jurisdiction or by a governmental, regulatory or
    administrative agency or commission, or any statute, rule,
    regulation or executive order promulgated or enacted by any
    governmental authority, prohibiting or otherwise restraining
    performance of such obligation.

 

    ARTICLE 3

    

 

    ADJUSTMENTS
    TO THE RIGHTS IN THE EVENT OF A FLIP-IN EVENT

 

    3.1 Flip-in
    Event

 

    (a) Subject to Section 3.1(b) and Section 5.2, in
    the event that prior to the Expiration Time a Flip-in Event
    shall occur, each Right shall constitute, effective from and
    after the Close of Business on the tenth Business Day following
    the Stock Acquisition Date, the right to purchase from the
    Corporation, upon exercise thereof in accordance with the terms
    hereof, that number of Common Shares of the Corporation having
    an aggregate Market Price on the date of consummation or
    occurrence of such Flip-in Event equal to twice the Exercise
    Price for an amount in cash equal to the Exercise Price (such
    right to be appropriately adjusted in a manner analogous to the
    applicable adjustment provided for in Section 2.3 in the
    event that after such date of consummation or occurrence an
    event of a type analogous to any of the events described in
    Section 2.3 shall have occurred with respect to such Common
    Shares).

 

    (b) Notwithstanding anything in this Agreement to the
    contrary, upon the occurrence of a Flip-in Event, any Rights
    that are or were Beneficially Owned on or after the earlier of
    the Separation Time or the Stock Acquisition Date by:

 

    (A) an Acquiring Person, or any Affiliate or Associate of
    an Acquiring Person, or any Person acting jointly or in concert
    with an Acquiring Person or with any Associate or Affiliate of
    an Acquiring Person; or

 

    (B) a transferee or other successor in title, direct or
    indirect, of an Acquiring Person (or of any Affiliate or
    Associate of an Acquiring Person or any Person acting jointly or
    in concert with an Acquiring Person or any

    

    19

 

    Associate or Affiliate of an Acquiring Person), where such
    transferee becomes a transferee concurrently with or subsequent
    to the Acquiring Person becoming such, in a transfer of Rights,
    whether or not for consideration, that the Board of Directors
    has determined is part of an agreement, arrangement or
    understanding of an Acquiring Person (or of any Affiliate or
    Associate of an Acquiring Person or any Person acting jointly or
    in concert with an Acquiring Person or any Affiliate or
    Associate of an Acquiring Person) that would otherwise have the
    purpose or effect of avoiding the provisions of this Subsection
    3.1(b), shall become null and void without any further action
    and any holder of such Rights (including transferees or other
    successors in title) shall thereafter have no right to exercise
    or transfer such Rights under any provision of this Agreement
    and shall have no other rights whatsoever with respect to such
    Rights, whether under any provision of this Agreement or
    otherwise. The holder of any Rights represented by a Rights
    Certificate which is submitted to the Rights Agent upon exercise
    or for registration of transfer or exchange which does not
    contain the necessary certifications set forth in the Rights
    Certificate establishing that such Rights are not void under
    this Subsection 3.1(b) shall be deemed to be an Acquiring Person
    for the purposes of this Subsection 3.1(b) and such rights shall
    be null and void.

 

    (c) Any Rights Certificate that would represent Rights
    Beneficially Owned by a Person described in either
    Clause 3.1(b)(A) or Clause 3.1(b)(B) or transferred to
    any nominee of any such Person, and any Rights Certificate that
    would be issued upon transfer, exchange, replacement or
    adjustment of any other Rights Certificate referred to in this
    sentence, shall either not be issued upon the instruction of the
    Corporation in writing to the Rights Agent or contain the
    following legend:

 

    “The Rights represented by this Rights Certificate were
    issued to a Person who was an Acquiring Person, or an Affiliate
    or an Associate of an Acquiring Person, or a Person acting
    jointly or in concert with any of them (as such terms are
    defined in the Rights Agreement). This Rights Certificate and
    the Rights represented hereby are void or shall become void in
    the circumstances specified in Subsection 3.1(b) of the Rights
    Agreement.”

 

    provided, however, that the Rights Agent shall not be under any
    responsibility to ascertain the existence of facts that would
    require the imposition of such legend but shall be required to
    impose such legend only if instructed to do so in writing by the
    Corporation or if a holder fails to certify upon transfer or
    exchange in the space provided on the Rights Certificate that
    such holder is not a Person described in such legend. The
    issuance of a Rights Certificate without the legend referred to
    in this Subsection 3.1(c) shall not affect the provisions of
    Subsection 3.1(b).

 

    ARTICLE 4

    

 

    THE
    RIGHTS AGENT

 

    4.1 General

 

    (a) The Corporation hereby appoints the Rights Agent to act
    as agent for the Corporation and the holders of Rights in
    accordance with the terms and conditions hereof, and the Rights
    Agent hereby accepts such appointment. The Corporation may from
    time to time appoint one or more co-rights agents (each a
    “Co-Rights Agent”) as it may deem necessary or
    desirable, subject to the approval of the Rights Agent. In the
    event the Corporation appoints one or more Co-Rights Agents, the
    respective duties of the Rights Agents and Co-Rights Agents
    shall be as the Corporation may determine with the approval of
    the Rights Agent and the Co-Rights Agents. The Corporation
    agrees to pay to the Rights Agent reasonable compensation for
    all services rendered by it hereunder and, from time to time, on
    demand of the Rights Agent, its reasonable expenses and counsel
    fees and other disbursements incurred in the administration and
    execution of this Agreement and the exercise and performance of
    its duties hereunder (including the reasonable fees and other
    disbursements of any expert retained by the Rights Agent with
    the approval of the Corporation, such approval not to be
    unreasonably withheld). The Corporation also agrees to indemnify
    the Rights Agent and its directors, officers, employees and
    agents for, and to hold them harmless against, any loss,
    liability, cost, claim, action, suit, damage or expense,
    incurred without negligence, bad faith or wilful misconduct on
    the part of the Rights Agent, for anything done or omitted by
    the Rights Agent in connection with the acceptance and
    administration of this Agreement, including the costs and
    expenses of defending against any claim of liability, which
    right to indemnification will survive the termination of this
    Agreement and the resignation or removal of the Rights Agent.

    

    20

 

    (b) The Rights Agent shall be protected and shall incur no
    liability for or in respect of any action taken, suffered or
    omitted by it in connection with its administration of this
    Agreement in reliance upon any certificate for Common Shares,
    Rights Certificate, certificate for other securities of the
    Corporation, instrument of assignment or transfer, power of
    attorney, endorsement, affidavit, letter, notice, direction,
    consent, certificate, statement or other paper or document
    believed by it to be genuine and to be signed, executed and,
    where necessary, verified or acknowledged, by the proper Person
    or Persons.

 

    (c) The Corporation shall inform the Rights Agent in a
    reasonably timely manner of events which may materially affect
    the administration of this Agreement by the Rights Agent and, at
    any time upon request shall provide to the Rights Agent an
    incumbency certificate certifying the then current officers of
    the Corporation.

 

    4.2 Merger
    or Consolidation or Change of Name of Rights Agent

 

    (a) Any corporation into which the Rights Agent or any
    successor Rights Agent may be merger or amalgamated or with
    which it may be consolidated, or any corporation resulting from
    any merger, amalgamation or consolidation to which the Rights
    Agent or any successor Rights Agent is a party, or any
    corporation succeeding to the shareholder services business of
    the Rights Agent or any successor Rights Agent, will be the
    successor to the Rights Agent under this Agreement without the
    execution or filing of any paper or any further act on the part
    of any of the parties hereto, provided that such corporation
    would be eligible for appointment as a successor Rights Agent
    under the provisions of Section 4.4 hereof. In case at the
    time such successor Rights Agent succeeds to the agency created
    by this Agreement any of the Rights Certificates have been
    countersigned but not delivered, any such successor Rights Agent
    may adopt the countersignature of the predecessor Rights Agent
    and deliver such Rights Certificates so countersigned; and in
    case at that time any of the Rights Certificates have not been
    countersigned, any successor Rights Agent may countersign such
    Rights Certificates either in the name of the predecessor Rights
    Agent or in the name of the successor Rights Agent; and in all
    such cases such Rights Certificates will have the full force
    provided in the Rights Certificates and in this Agreement.

 

    (b) In case at any time the name of the Rights Agent is
    changed and at such time any of the Rights Certificates shall
    have been countersigned but not delivered, the Rights Agent may
    adopt the countersignature under its prior name and deliver
    Rights Certificates so countersigned; and in case at that time
    any of the Rights Certificates shall not have been
    countersigned, the Rights Agent may countersign such Rights
    Certificates either in its prior name or in its changed name;
    and in all such cases such Rights Certificates shall have the
    full force provided in the Rights Certificates and in this
    Agreement.

 

    4.3 Duties
    of Rights Agent

 

    The Rights Agent undertakes the duties and obligations imposed
    by this Agreement upon the following terms and conditions, by
    all of which the Corporation and the holders of Rights
    Certificates, by their acceptance thereof, shall be bound:

 

    (a) The Rights Agent may retain and consult with legal
    counsel (who may be legal counsel for the Corporation), and the
    opinion of such counsel will be full and complete authorization
    and protection to the Rights Agent as to any action taken or
    omitted by it in good faith and in accordance with such opinion
    and the Rights Agent may also retain and consult with such other
    experts or advisors as the Rights Agent shall consider necessary
    or appropriate to properly carry out the duties and obligations
    imposed under this Agreement (at the Corporation’s expense)
    and the Rights Agent shall be entitled to act and rely in good
    faith on the advice of such expert or advisor;

 

    (b) Whenever in the performance of its duties under this
    Agreement the Rights Agent deems it necessary or desirable that
    any fact or matter be proved or established by the Corporation
    prior to taking or suffering any action hereunder, such fact or
    matter (unless other evidence in respect thereof be herein
    specifically prescribed) may be deemed to be conclusively proved
    and established by a certificate signed by a person believed by
    the Rights Agent to be the Chief Executive Officer, the Chief
    Financial Officer or the Secretary of the Corporation and
    delivered to the Rights Agent; and such certificate will be full
    authorization to the Rights Agent for any action taken, omitted
    or suffered in good faith by it under the provisions of this
    Agreement in reliance upon such certificate;

    

    21

 

    (c) The Rights Agent will be liable hereunder only for its
    own negligence, bad faith or wilful misconduct;

 

    (d) The Rights Agent will not be liable for or by reason of
    any of the statements of fact or recitals contained in this
    Agreement or in the certificates for Common Shares or the Rights
    Certificates (except its countersignature thereof) or be
    required to verify the same, but all such statements and
    recitals are and will be deemed to have been made by the
    Corporation only;

 

    (e) The Rights Agent will not be under any responsibility
    in respect of the validity of this Agreement or the execution
    and delivery hereof (except the due authorization, execution and
    delivery hereof by the Rights Agent) or in respect of the
    validity or execution of any Common Share certificate or Rights
    Certificate (except its countersignature thereof); nor will it
    be responsible for any breach by the Corporation of any covenant
    or condition contained in this Agreement or in any Rights
    Certificate; nor will it be responsible for any change in the
    exercisability of the Rights (including the Rights becoming void
    pursuant to Subsection 3.1(b) or any adjustment required under
    the provisions of Section 2.3 or responsible for the
    manner, method or amount of any such adjustment or the
    ascertaining of the existence of facts that would require any
    such adjustment (except with respect to the exercise of Rights
    after receipt of the certificate contemplated by
    Section 2.3 hereof describing any such adjustment); nor
    will it by any act hereunder be deemed to make any
    representation or warranty as to the authorization of any Common
    Shares to be issued pursuant to this Agreement or any Rights or
    as to whether any Common Shares will, when issued, be duly and
    validly authorized, executed, issued and delivered and fully
    paid and non-assessable;

 

    (f) The Corporation agrees that it will perform, execute,
    acknowledge and deliver or cause to be performed, executed,
    acknowledged and delivered all such further and other acts,
    instruments and assurances as may reasonably be required by the
    Rights Agent for the carrying out or performing by the Rights
    Agent of the provisions of this Agreement;

 

    (g) The Rights Agent is hereby authorized and directed to
    accept instructions with respect to the performance of its
    duties hereunder from any person believed by the Rights Agent to
    be the Chief Executive Officer, the Chief Financial Officer or
    the Secretary of the Corporation, and to apply to such persons
    for advice or instructions in connection with its duties, and it
    shall not be liable for any action taken, omitted or suffered by
    it in good faith in accordance with instructions of any such
    Person;

 

    (h) The Rights Agent and any shareholder, director, officer
    or employee of the Rights Agent may buy, sell or deal in Common
    Shares, Rights or other securities of the Corporation or become
    pecuniarily interested in any transaction in which the
    Corporation may be interested, or contract with or lend money to
    the Corporation or otherwise act as fully and freely as though
    it were not Rights Agent under this Agreement. Nothing herein
    shall preclude the Rights Agent from acting in any other
    capacity for the Corporation or for any other legal
    entity; and

 

    (i) The Rights Agent may execute and exercise any of the
    rights or powers hereby vested in it or perform any duty
    hereunder either itself or by or through its attorneys or
    agents, and the Rights Agent will not be answerable or
    accountable for any act, default, neglect or misconduct of any
    such attorneys or agents or for any loss to the Corporation
    resulting from any such act, default, neglect or misconduct,
    provided reasonable care was exercised in good faith in the
    selection and continued employment thereof.

 

    4.4 Change
    of Rights Agent

 

    The Rights Agent may resign and be discharged from its duties
    under this Agreement upon 60 days’ notice (or such
    lesser notice as is acceptable to the Corporation) in writing
    mailed to the Corporation and to the transfer agent of Voting
    Shares (if different than the Rights Agent) by registered or
    certified mail, and to the holders of the Rights in accordance
    with Section 5.10, all of which shall be at the expense of
    the Corporation. The Corporation may remove the Rights Agent
    upon 30 days’ notice in writing, mailed to the Rights
    Agent and to the transfer agent of the Common Shares by
    registered or certified mail, and to the holders of the Rights
    in accordance with Section 5.10. If the Rights Agent should
    resign or be removed or otherwise become incapable of acting,
    the Corporation will appoint a successor to the Rights Agent. If
    the Corporation fails to make such appointment within a period
    of 30 days after such removal or after it has been notified
    in writing of such resignation or incapacity by the resigning

    

    22

 

    or incapacitated Rights Agent (at the Corporation’s
    expense) or by the holder of any Rights (which holder shall,
    with such notice, submit such holder’s Rights Certificate
    for inspection by the Corporation), then the holder of any
    Rights may apply to any court of competent jurisdiction for the
    appointment of a new Rights Agent. Any successor Rights Agent,
    whether appointed by the Corporation or by such a court, shall
    be a corporation incorporated under the laws of Canada or a
    province thereof authorized to carry on the business of a trust
    company in the Province of British Columbia. After appointment,
    the successor Rights Agent will be vested with the same powers,
    rights, duties and responsibilities as if it had been originally
    named as Rights Agent without further act or deed; but the
    predecessor Rights Agent, upon receipt of any and all
    outstanding amounts owing pursuant to this Agreement, shall
    deliver and transfer to the successor Rights Agent any property
    at the time held by it hereunder, and execute and deliver any
    further assurance, conveyance, act or deed necessary for the
    purpose. Not later than the effective date of any such
    appointment, the Corporation will file notice thereof in writing
    with the predecessor Rights Agent and the transfer agent of the
    Common Shares, and mail a notice thereof in writing to the
    holders of the Rights. Failure to give any notice provided for
    in this Section 4.4, however, or any defect therein, shall
    not affect the legality or validity of the resignation or
    removal of the Rights Agent or the appointment of the successor
    Rights Agent, as the case may be.

 

    ARTICLE 5

    

 

    MISCELLANEOUS

 

    5.1 Redemption
    of Rights

 

    (a) Until the occurrence of a Flip-in Event as to which the
    application of Section 3.1 has not been waived pursuant to
    Section 5.2, the Board of Directors:

 

    (A) may, at any time prior to the Separation Time, with the
    prior consent of the holders of Voting Shares given in
    accordance with Subsection 5.5(e), or

 

    (B) may, at any time after the Separation Time, with the
    prior consent of the holders of Rights given in accordance with
    Subsection 5.5(f),

 

    elect to redeem all but not less than all of the then
    outstanding Rights at a redemption price of $0.001 per Right,
    appropriately adjusted in a manner analogous to the applicable
    adjustment provided for in Section 2.3, if an event of the type
    analogous to any of the events described in Section 2.3
    shall have occurred (such redemption price being herein referred
    to as the “Redemption Price”).

 

    (b) If, at any time prior to the occurrence of a Flip-in
    Event, a Person acquires, pursuant to a Permitted Bid
    Acquisition or an Exempt Acquisition under Subsection 5.2(b)
    hereof, outstanding Voting Shares, the Board of Directors of the
    Corporation shall, immediately upon such acquisition and without
    further formality, be deemed to have elected to redeem the
    Rights at the Redemption Price.

 

    (c) Where a Take-over Bid that is not a Permitted Bid or a
    Competing Permitted Bid expires, is withdrawn or otherwise
    terminated after the Separation Time has occurred and prior to
    the occurrence of a Flip-in Event, the Board of Directors may
    elect to redeem all of the outstanding Rights at the
    Redemption Price.

 

    (d) If the Board of Directors elects to or is deemed to
    have elected to redeem the Rights (i) the right to exercise
    the Rights will thereupon, without further action and without
    notice, terminate and the only right thereafter of the holders
    of Rights shall be to receive the Redemption Price, and
    (ii) subject to Subsection 5.1(f), no further Rights shall
    thereafter be issued.

 

    (e) Within 10 Business Days of the Board of Directors
    electing or having been deemed to have elected to redeem the
    Rights, the Corporation shall give notice of redemption to the
    holders of the then outstanding Rights by mailing such notice to
    each such holder at his last address as it appears upon the
    Rights Register of the Rights Agent, or, prior to the Separation
    Time, on the share register maintained by the Corporation’s
    transfer agent or transfer agents. Each such notice of
    redemption shall state the method by which the payment of the
    Redemption Price shall be made.

    

    23

 

    (f) Upon the Rights being redeemed pursuant to Subsection
    5.1(c), all the provisions of this Agreement shall continue to
    apply as if the Separation Time had not occurred and Rights
    Certificates representing the number of Rights held by each
    holder of record of Common Shares as of the Separation Time had
    not been mailed to each such holder and for all purposes of this
    Agreement, the Separation Time shall be deemed not to have
    occurred.

 

    5.2 Waiver
    of Flip-In Events

 

    (a) With the prior consent of the holders of Voting Shares
    obtained in accordance with Subsection 5.5(c), the Board of
    Directors may, at any time prior to the occurrence of a Flip-in
    Event that would occur by reason of an acquisition of Voting
    Shares otherwise than pursuant to a Take-over Bid made by means
    of a take-over bid circular to all holders of Voting Shares or
    convertible securities or otherwise than in the circumstances
    set forth in Subsection 5.2(c), waive the application of
    Section 3.1 to such Flip-in Event by written notice
    delivered to the Rights Agent. In such event, the Board of
    Directors shall extend the Separation Time to a date at least 10
    Business Days subsequent to the meeting of shareholders called
    to approve such waiver.

 

    (b) The Board of Directors may, at any time prior to the
    occurrence of a Flip-in Event that would occur as a result of a
    Take-over Bid made by way of a take-over bid circular sent to
    all holders of Voting Shares, waive the application of
    Section 3.1 to such Flip-in Event by written notice
    delivered to the Rights Agent; provided, however, that if the
    Board of Directors waives the application of Section 3.1 to
    such a Flip-in Event, the Board of Directors shall be deemed to
    have waived the application of Section 3.1 to any other Flip-in
    Event occurring by reason of any Take-over Bid which is made by
    means of a take-over bid circular to all holders of Voting
    Shares prior to the expiry of any Take-over Bid in respect of
    which a waiver is, or is deemed to have been, granted under this
    Subsection 5.2(b).

 

    (c) The Board of Directors may waive the application of
    Section 3.1 to a Flip-in Event provided that the following
    conditions are satisfied:

 

    (A) the Board of Directors has determined that the
    Acquiring Person became an Acquiring Person by inadvertence and
    without any intention to become, or knowledge that it would
    become, an Acquiring Person; and

 

    (B) such Acquiring Person has reduced its Beneficial
    Ownership of Voting Shares such that at the time of the waiver
    pursuant to this Subsection 5.2(c), it is no longer an Acquiring
    Person.

 

    (d) The Board of Directors may, prior to the close of
    business on the tenth Trading Day following a Stock Acquisition
    Date or such later Business Day as they may from time to time
    determine, upon prior written notice delivered to the Rights
    Agent, waive the application of Section 3.1 to the related
    Flip-in Event, provided that the Acquiring Person has reduced
    its Beneficial Ownership of Voting Shares (or has entered into a
    contractual arrangement with the Corporation, acceptable to the
    Board of Directors, to do so within 10 calendar days of the date
    on which such contractual arrangement is entered into or such
    other date as the Board of Directors may have determined) such
    that at the time the waiver becomes effective pursuant to this
    Section 5.2(d) such Person is no longer an Acquiring
    Person. In the event of such a waiver becoming effective prior
    to the Separation Time, for the purposes of this Agreement, such
    Flip-in Event shall be deemed not to have occurred.

 

    5.3 Expiration

 

    No Person shall have any rights pursuant to this Agreement or in
    respect of any Right after the Expiration Time, except the
    Rights Agent as specified in Subsection 4.1(a) hereof.

 

    5.4 Issuance
    of New Rights Certificates

 

    Notwithstanding any of the provisions of this Agreement or of
    the Rights to the contrary, the Corporation may, at its option,
    issue new Rights Certificates evidencing Rights in such form as
    may be approved by the Board of Directors to reflect any
    adjustment or change in the number or kind or class of shares
    purchasable upon exercise of Rights made in accordance with the
    provisions of this Agreement.

    

    24

 

    5.5 Supplements
    and Amendments

 

    (a) The Corporation may from time to time prior to or after
    the Separation Time supplement or amend this Agreement without
    the approval of any holders of Rights or Voting Shares in order
    to correct any clerical or typographical error or to maintain
    the validity and effectiveness of this Agreement as a result of
    any change in applicable laws, rules or regulatory requirements.
    The Corporation may, prior to the date of the shareholders
    meeting referred to in Section 5.19, amend, vary or rescind
    any of the provisions of this Agreement without the approval of
    any holders of Voting Shares. Notwithstanding anything in this
    Section 5.5 to the contrary, no such amendment, variation or
    rescission shall be made to the provisions of Article 4
    except with the written concurrence of the Rights Agent to such
    amendment, variation or rescission.

 

    (b) Subject to Subsection 5.5(a), the Corporation may, with
    the prior consent of the holders of Rights or Voting Shares,
    obtained as set forth below, at any time prior to the Separation
    Time, amend, vary or rescind any of the provisions of this
    Agreement and the Rights (whether or not such action would
    materially adversely affect the interest of the holders of
    Rights generally), in order to effect any amendments, variations
    or rescissions of any of the provisions of this Agreement which
    the Board of Directors considers necessary or desirable.

 

    (c) Subject to Subsection 5.5(a), the Corporation may, with
    the prior consent of the holders of Rights obtained as set forth
    below, at any time after the Separation Time and before the
    Expiration Time, amend, vary or rescind any of the provisions of
    this Agreement and the Rights (whether or not such action would
    materially adversely affect the interest of the holders of
    Rights generally), in order to effect any amendments, variations
    or rescissions of any of the provisions of this Agreement which
    the Board of Directors considers necessary or desirable.

 

    (d) Any amendments made by the Corporation to this
    Agreement pursuant to Subsection 5.5(a) which are required to
    maintain the validity and effectiveness of this Agreement as a
    result of any change in any applicable laws, rules or regulatory
    requirements shall:

 

    (A) if made before the Separation Time, be submitted to the
    holders of Voting Shares at the next meeting of holders of
    Voting Shares and the holders of Voting Shares may, voting as
    set forth below, confirm or reject such amendment; and

 

    (B) if made after the Separation Time, be submitted to the
    holders of Rights (voting as set forth below) for confirmation
    or rejection.

 

    provided that any such amendment shall, unless the Board of
    Directors otherwise stipulates, be effective from the date of
    the resolution of the Board of Directors adopting such
    amendment, until it is confirmed or rejected or until it ceases
    to be effective (as described in the next sentence) and, where
    such amendment is confirmed, it shall continue in effect in the
    form so confirmed. If such amendment is rejected by the holders
    of Voting Shares or the holders of Rights or is not submitted to
    the holders of Voting Shares or holders of Rights as required,
    then such amendment shall cease to be effective from and after
    the termination of the meeting at which it was rejected or to
    which it should have been but was not submitted or if such a
    meeting of the holders of Rights is not called within
    90 days, at the end of such period, and no subsequent
    resolution of the Board of Directors to amend this Agreement to
    substantially the same effect shall be effective until confirmed
    by the holders of Voting Shares or holders of Rights as the case
    may be.

 

    (e) Any approval of the holders of Voting Shares required
    under this Agreement shall be deemed to have been given if the
    action requiring such approval is approved by (i) a
    majority of the votes cast in respect thereof by Independent
    Shareholders present or represented in person or by proxy and
    entitled to vote at a meeting of such holders duly held in
    accordance with applicable laws and the by-laws of the
    Corporation or (ii) a written instrument signed by holders
    of over 50% of the outstanding Voting Shares that are held by
    Independent Shareholders.

 

    (f) Any approval of the holders of Rights required under
    this Agreement shall be deemed to have been given if the action
    requiring such approval is approved by (i) a majority of
    the votes cast in respect thereof by holders of Rights present
    or represented in person or by proxy and entitled to vote at a
    meeting such holders (for which purposes each outstanding Right
    (other than Rights which are void pursuant to the provisions
    hereof) shall be entitled to one vote, and the procedures for
    the calling, holding and conduct of the meeting shall be those,
    as nearly as may be, which are provided in the
    Corporation’s by-laws, the Corporations Act and any other
    applicable law, rule

    

    25

 

    or regulation with respect to meetings of shareholders of the
    Corporation), or (ii) a written instrument signed by
    holders of over 50% of the outstanding Rights (other than Rights
    which are void pursuant to the provisions hereof).

 

    5.6 Fractional
    Rights and Fractional Shares

 

    (a) The Corporation shall not be required to issue
    fractions of Rights or to distribute Rights Certificates which
    evidence fractional Rights and the Corporation shall not be
    required to pay any amount to a holder of record of Rights
    Certificates in lieu of such fractional Rights.

 

    (b) Share certificates for Common Shares shall only be
    issued upon written request to the Corporation and the
    Corporation shall not be required in any circumstances to issue
    fractional Common Shares upon exercise of the Rights or to
    distribute certificates which evidence fractional Common Shares.
    In lieu of issuing fractional Common Shares, the Corporation
    shall pay to the registered holder of Rights Certificates at the
    time such Rights are exercised as herein provided, an amount in
    cash equal to the same fraction of the Market Value of one
    Common Share. The Rights Agent shall have no obligation to make
    any payments in lieu of fractional Common Shares unless the
    Corporation shall have provided the Rights Agent with the
    necessary funds to pay in full all amounts payable in accordance
    with this subsection 5.6(b).

 

    5.7 Rights
    of Action

 

    Subject to the terms of this Agreement, rights of action in
    respect of this Agreement, other than rights of action vested
    solely in the Rights Agent, are vested in the respective holders
    of the Rights; and any holder of any Rights, without the consent
    of the Rights Agent or of the holder of any other Rights, may,
    on such holders own behalf and for such holders own benefit and
    the benefit of other holders of Rights, enforce, and may
    institute and maintain any suit, action or proceeding against
    the Corporation to enforce, or otherwise act in respect of, such
    holder’s right to exercise such holder’s Rights in the
    manner provided in such holder’s Rights Certificate and in
    this Agreement. Without limiting the foregoing or any remedies
    available to the holders of Rights, it is specifically
    acknowledged that the holders of Rights would not have an
    adequate remedy at law for any breach of this Agreement and will
    be entitled to specific performance of the obligations under,
    and injunctive relief against actual or threatened violations
    of, the obligations of any Person subject to this Agreement.

 

    5.8 Holder
    of Rights Not Deemed a Shareholder

 

    No holder, as such, of any Rights shall be entitled to vote,
    receive dividends or be deemed for any purpose the holder of
    Common Shares or any other securities which may at any time be
    issuable on the exercise of such Rights, nor shall anything
    contained herein or in any Rights Certificate be construed to
    confer upon the holder of any Rights, as such, any of the rights
    of a shareholder of the Corporation or any right to vote for the
    election of directors or upon any matter submitted to
    shareholders at any meeting thereof, or to give or withhold
    consent to any corporate action, or to receive notice of
    meetings or other actions affecting shareholders (except as
    provided in Section 5.9 hereof), or to receive dividends or
    subscription rights or otherwise, until such Rights shall have
    been exercised in accordance with the provisions hereof.

 

    5.9 Notice
    of Proposed Actions

 

    If after the Separation Time and prior to the Expiration Time:

 

    (A) there shall occur an adjustment in the rights attaching
    to the Rights pursuant to Section 3.1 as a result of the
    occurrence of a Flip-in Event, or

 

    (B) the Corporation proposes to effect the liquidation,
    dissolution or winding up of the Corporation or the sale of all
    or substantially all of the Corporation’s assets,

 

    then, in each such case, the Corporation shall give to each
    holder of a Right, in accordance with Section 5.10, a
    notice of such event or proposed action, which shall specify the
    date on which such change to the Rights, liquidation,
    dissolution or winding up occurred or is to take place, and such
    notice shall be so given within 10 Business Days after the
    occurrence of a change to the Rights and not less than 20
    Business Days prior to the date of taking such proposed action
    by the Corporation.

    

    26

 

    5.10 Notices

 

    Notices or demands authorized or required by this Agreement to
    be given or made by the Rights Agent or by the holder of any
    Rights to or on the Corporation shall be sufficiently given or
    made if delivered or sent by first class mail, postage prepaid
    or sent by fax, addressed (until another address is filed in
    writing with the Rights Agent) as follows:

 

    Lions Gate Entertainment Corp.

    1700 Colorado Avenue

    Santa Monica, California 90404

 

    Attention: General Counsel

    Fax No.: 310.255.3792

 

    Any notice or demand authorized or required by this Agreement to
    be given or made by the Corporation or by the holder of any
    Rights to or on the Rights Agent shall be sufficiently given or
    made if delivered or sent by first-class mail, postage prepaid
    or sent by fax, addressed (until another address is filed in
    writing with the Corporation) as follows:

 

    CIBC Mellon Trust Company

    1600-1066
    West Hastings St

    Vancouver, BC

    V6E 3XI

 

    Attention: Van Bot

    Fax No.: 604-688-4301

 

    Notices or demands authorized or required by this Agreement to
    be given or made by the Corporation or the Rights Agent to or on
    the holder of any Rights shall be sufficiently given or made if
    delivered or sent by first-class mail, postage prepaid,
    addressed to such holder at the address of such holder as it
    appears upon the Rights Register (as defined in Subsection
    2.6(a)) or, prior to the Separation Time, on the registry books
    of the Corporation for the Common Shares. Any notice which is
    mailed in the manner herein provided shall be deemed given,
    whether or not the holder receives the notice.

 

    5.11 Costs
    of Enforcement

 

    The Corporation agrees that if the Corporation fails to fulfil
    any of its obligations pursuant to this Agreement, then the
    Corporation will reimburse the holder of any Rights for the
    costs and expenses (including legal fees) reasonably incurred by
    such holder in actions to enforce his rights pursuant to any
    Rights or this Agreement.

 

    5.12 Successors

 

    All the covenants and provisions of this Agreement by or for the
    benefit of the Corporation or the Rights Agent shall bind and
    inure to the benefit of their respective successors and assigns
    hereunder.

 

    5.13 Benefits
    of this Agreement

 

    Nothing in this Agreement shall be construed to give to any
    Person other than the Corporation, the Rights Agent and the
    holders of the Rights any legal or equitable right, remedy or
    claim under this Agreement; but this Agreement shall be for the
    sole and exclusive benefit of the Corporation, the Rights Agent
    and the holders of the Rights.

 

    5.14 Governing
    Law

 

    This Agreement and each Right issued hereunder shall be deemed
    to be a contract made under the laws of the Province of British
    Columbia and for all purposes shall be governed by and construed
    in accordance with the laws of such province applicable to
    contracts to be made and performed entirely within such
    province.

    

    27

 

    5.15 Severability

 

    If any term or provision hereof or the application thereof to
    any circumstance shall, in any jurisdiction and to any extent,
    be invalid or unenforceable, such term or provision shall be
    ineffective as to such jurisdiction to the extent of such
    invalidity or unenforceability without invalidating or rendering
    unenforceable the remaining terms and provisions hereof or the
    application of such term or provision to circumstances other
    than those as to which it is held invalid or unenforceable.

 

    5.16 Determinations
    and Actions by the Board of Directors

 

    All actions, calculations and determinations (including all
    omissions with respect to the foregoing) which are done or made
    by the Board of Directors in good faith pursuant to this
    Agreement, shall not subject the Board of Directors to any
    liability to the holders of the Rights.

 

    5.17 Regulatory
    Approvals

 

    Any obligation of the Corporation or action or event
    contemplated by this Agreement, or any amendment or supplement
    to this Agreement, shall be subject to receipt of any requisite
    approval or consent from any governmental or regulatory
    authority having jurisdiction including, while any securities of
    the Corporation are listed and admitted to trading thereon, the
    New York Stock Exchange.

 

    5.18 Declaration
    as to Non-Canadian Holders

 

    If, in the opinion of the Board of Directors (who may rely upon
    the advice of counsel), any action or event contemplated by this
    Agreement would require compliance by the Corporation with the
    securities laws or comparable legislation of a jurisdiction
    outside Canada or the United States, the Board of Directors
    acting in good faith shall take such actions as it may deem
    appropriate to ensure such compliance. In no event shall the
    Corporation or the Rights Agent be required to issue or deliver
    Rights or securities issuable on exercise of Rights to persons
    who are citizens, residents or nationals of any jurisdiction
    other than Canada or the United States, in which such issue or
    delivery would be unlawful without registration of the relevant
    Persons or securities for such purposes.

 

    5.19 Effective
    Time

 

    This Agreement is effective and in full force and effect in
    accordance with its terms from and after the date hereof. At the
    first annual or special meeting of holders of Voting Shares of
    the Corporation following the date hereof, the Corporation shall
    request confirmation of this Agreement by the holders of its
    Voting Shares. If this Agreement is not confirmed by a majority
    of the votes cast by Independent Shareholders who vote in
    respect of confirmation of this Agreement at such meeting, then
    this Agreement and all outstanding Rights shall terminate and be
    void and of no further force and effect on and from the close of
    business on the date of termination of such meeting.

 

    5.20 Termination
    Prior to Shareholder Approval

 

    Notwithstanding anything in this Agreement to the contrary, at
    any time before this Agreement is confirmed by the shareholders
    of the Corporation in accordance with Section 5.19, the
    Board of Directors may in its absolute discretion terminate the
    Agreement by adopting a resolution to such effect and all
    outstanding Rights shall terminate and shall be void and of no
    further force and effect from the date specified in such
    resolution.

 

    5.21 Time
    of the Essence

 

    Time shall be of the essence in this Agreement.

 

    5.22 Counterparts

 

    This Agreement may be executed in any number of counterparts and
    each of such counterparts shall for all purposes be deemed to be
    an original, and all such counterparts shall together constitute
    one and the same instrument.

 

    

    28

 

    IN WITNESS WHEREOF, the parties hereto have caused this
    Agreement to be duly executed as of the date first above written.

 

    LIONS GATE ENTERTAINMENT CORP.

 

			
	 	    Per: 
	
    /s/  

 

			
	 	    Per: 
	
    /s/  

 

    CIBC MELLON TRUST COMPANY

 

			
	 	    Per: 
	
    /s/  

 

			
	 	    Per: 
	
    /s/  

 

    EXHIBIT
    “A”

    (Form of Rights Certificate)

		
	    Certificate
    No.
    	     Rights
                
    

 

    THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
    CORPORATION, ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS
    AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION
    3.1(b) OF THE SHAREHOLDER RIGHTS AGREEMENT), RIGHTS BENEFICIALLY
    OWNED BY AN ACQUIRING PERSON OR ITS AFFILIATES OR ASSOCIATES OR
    ANY PERSON ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM (AS
    SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES
    OF ANY OF THE FOREGOING WILL BECOME NULL AND VOID WITHOUT
    FURTHER ACTION.

 

    Rights
    Certificate

 

    This certifies that
                                 ,
    or registered assigns, is the registered holder of the number of
    Rights set forth above, each of which entitles the registered
    holder thereof, subject to the terms, provisions and conditions
    of the Shareholder Rights Plan Agreement dated as of
    March 12, 2010 (the “Rights Agreement”) between
    Lions Gate Entertainment Corp., a corporation existing under the
    laws of British Columbia (the “Corporation”) and CIBC
    Mellon Trust Company, a trust company existing under the
    laws of Canada, as Rights Agent (the “Rights Agent”,
    which term shall include any successor Rights Agent under the
    Rights Agreement), to purchase from the Corporation at any time
    after the Separation Time and prior to the Expiration Time (as
    such terms are defined in the Rights Agreement), one fully paid
    common share of the Corporation (a “Common Share”) at
    the Exercise Price referred to below, upon presentation and
    surrender of this Rights Certificate with the Form of Election
    to Exercise duly executed and submitted to the Rights Agent at
    its office in the City of Vancouver or at any other office of
    the Rights Agent in the cities designated from time to time for
    that purpose by the Corporation. Until adjustment thereof in
    certain events as provided in the Rights Agreement, the Exercise
    Price shall be an amount equal to four times the Market Price
    Per Common Shares (as such term is defined in the Rights
    Agreement) determined as at the Separation Time.

 

    In certain circumstances described in the Rights Agreement, each
    Right evidenced hereby may entitle the registered holder thereof
    to purchase more or less than one Common Share, all as provided
    in the Rights Agreement.

 

    This Rights Certificate is subject to all of the terms,
    provisions and conditions of the Rights Agreement which terms,
    provisions and conditions are hereby incorporated herein by
    reference and made a part hereof and to which Rights Agreement
    reference is hereby made for a full description of the rights,
    limitations of rights, obligations, duties and immunities
    thereunder of the Rights Agent, the Corporation and the holders
    of the Rights. Copies of the Rights Agreement are on file at the
    head office of the Corporation and are available upon written
    request.

 

    This Rights Certificate, with or without other Rights
    Certificates, upon surrender at any of the offices of the Rights
    Agent designated for such purpose, may be exchanged for another
    Rights Certificate or Rights Certificates of like tenor and date
    evidencing an aggregate number of Rights equal to the aggregate
    number of Rights evidenced by the Rights Certificate or Rights
    Certificates surrendered. If this Rights Certificate shall be
    exercised in part, the registered holder shall be entitled to
    receive, upon surrender hereof, another Rights Certificate or
    Rights Certificates for the number of whole Rights not exercised.

 

    Subject to the provisions of the Rights Agreement, the Rights
    evidenced by this Certificate may be, and under certain
    circumstances are required to be, redeemed by the Corporation at
    a redemption price of C$0.001 per Right, subject to adjustment
    in certain events.

 

    No fractional Common Shares will be issued upon the exercise of
    any Right or Rights evidenced hereby, but in lieu thereof, a
    cash payment will be made, as provided in the Rights Agreement.

 

    No holder of this Rights Certificate, as such, shall be entitled
    to vote or receive dividends or be deemed for any purpose the
    holder of Common Shares or any other securities which may at any
    time be issuable upon the exercise hereof, nor shall anything
    contained in the Rights Agreement or herein be construed to
    confer upon the holder hereof, as such, any of the rights of a
    shareholder of the Corporation or any right to vote for the
    election of directors

 

    or upon any matter submitted to shareholders at any meeting
    thereof, or to give or withhold consent to any corporate action,
    or to receive notice of meeting or other actions affecting
    shareholders (except as provided in the Rights Agreement), or to
    receive dividends or subscription rights, or otherwise, until
    the Rights evidenced by this Rights Certificate shall have been
    exercised as provided in the Rights Agreement.

 

    This Rights Certificate shall not be valid or obligatory for any
    purpose until it shall have been countersigned by the Rights
    Agent.

 

    WITNESS the facsimile signature of the proper officer of the
    Corporation and its corporate seal.

 

    Date:

 

    LIONS GATE ENTERTAINMENT CORP.

 

			
	 	    Per: 
	

    Authorized Signing Officer

 

			
	 	    Per: 
	

    Authorized Signing Officer

 

    Countersigned:

 

    CIBC MELLON TRUST COMPANY

 

			
	 	    Per: 
	

    Authorized Signing Officer

 

			
	 	    Per: 
	

    Authorized Signing Officer

 

    (To be
    attached to each Rights Certificate)

 

    FORM OF
    ELECTION TO EXERCISE

 

    TO:

 

    The undersigned hereby irrevocably elects to exercise whole
    Rights represented by the attached Rights Certificate to
    purchase the Common Shares issuable upon the exercise of such
    Rights and requests that such shares be registered in the name
    of:

 

		
	    Name: 	
    

 

		
	    Address: 	
    

 

		
	    Social Insurance, Social Security or

    Other Taxpayer Identification Number: 	
    

 

    DATED:

 

		
	    Signature: 	
    

 

    (Signature must correspond to name as written upon the face of
    this Rights Certificate in every particular, without alteration
    or enlargement or any change whatsoever)

 

    Signature
    Guaranteed

 

    Signature must be guaranteed by a major Schedule I Canadian
    chartered bank, a major Canadian trust company or a member of a
    recognized Medallion Guarantee Program.

 

 

    (To be completed if true)

 

    The undersigned hereby represents, for the benefit of all
    holders of Rights and Common Shares, that the Rights evidenced
    by this Rights Certificate are not, and, to the knowledge of the
    undersigned, have never been, Beneficially Owned by an Acquiring
    Person or an Affiliate or Associate thereof or by any Person
    acting jointly or in concert with any of the foregoing (all as
    defined in the Rights Agreement).

 

		
	    Signature: 	
    

 

 

    Notice

 

    In the event the certification set forth above is not completed,
    the Corporation will deem the Beneficial Owner of the Rights
    evidenced by this Rights Certificate to be an Acquiring Person
    (as defined in the Rights Agreement) and, accordingly, such
    Rights shall be null and void and not transferable or
    exercisable.

 

    (To be executed by the registered holder if such holder
    desires to transfer the Rights evidenced by
    this Certificate.)

 

    FORM OF
    ASSIGNMENT

 

    FOR VALUE
    RECEIVED          
    hereby sells, assigns and transfers
    unto          
    (please print name and address of transferee) the Rights
    evidenced by this Rights Certificate, together with all right,
    title and interest therein, and does hereby irrevocably
    constitute and
    appoint          
    attorney, to transfer the within Rights on the books of the
    within-named Corporation, with full power of substitution.

 

    DATED:

 

		
	    Signature: 	
    

 

    (Signature must correspond to name as written upon the face of
    this Rights Certificate in every particular, without alteration
    or enlargement or any change whatsoever)

 

    Signature
    Guaranteed

 

    Signature must be guaranteed by a major Schedule I Canadian
    chartered bank or a member of a recognized Medallion Guarantee
    Program.

 

 

    (To be completed if true)

 

    The undersigned hereby represents, for the benefit of all
    holders of Rights and Common Shares, that the Rights evidenced
    by this Rights Certificate are not, and, to the knowledge of the
    undersigned, have never been, Beneficially Owned by an Acquiring
    Person or an Affiliate or Associate thereof or by any Person
    acting jointly or in concert with any of the foregoing (as
    defined in the Rights Agreement).

 

		
	    Signature: 	
    

 

 

    Notice

 

    In the event the certification set forth above is not completed,
    the Corporation will deem the Beneficial Owner of the Rights
    evidenced by this Rights Certificate to be an Acquiring Person
    (as defined in the Rights Agreement) and, accordingly, such
    Rights shall be null and void and not transferable or
    exercisable.

    

    2

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