CANADIAN SECURITY AGREEMENT
CANADIAN
SECURITY AGREEMENT
CANADIAN
SECURITY AGREEMENT, dated as of June 9, 2008, made by CWD WINDOWS AND
DOORS, INC., a Canada corporation (the “Canadian Borrower”)
to GENERAL ELECTRIC CAPITAL CORPORATION, as collateral agent (in such capacity,
together with any successor collateral agent, the “Collateral
Agent”) for the Secured Parties.
PRELIMINARY
STATEMENTS
(1) The
Specified U.S. Borrower and the other Loan Parties party thereto have entered
into a Credit Agreement dated of even date herewith (said Agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the “Credit
Agreement”) with the Lenders, the L/C Issuers and the agents party
thereto.
(2) Pursuant
to the Credit Agreement, the Canadian Borrower is entering into this Agreement
in order to grant to the Collateral Agent for the ratable benefit of the Secured
Parties a security interest in the Collateral (as hereinafter defined) to secure
the Obligations.
(3) It
is a condition precedent to the making of Loans and the issuance of Letters of
Credit by the Lenders under the Credit Agreement, the entry into Secured Hedge
Agreements by the Hedge Banks and the entry into Secured Cash Management
Agreements by the Cash Management Banks from time to time that the Canadian
Borrower shall have granted the assignment and security interest and made the
pledge and assignment contemplated by this Agreement.
(4) The
Canadian Borrower will derive substantial direct and indirect benefit from the
transactions contemplated by the Loan Documents.
(5) Terms
defined in the Credit Agreement or the Intercreditor Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the Credit
Agreement or the Intercreditor Agreement, as applicable. Further,
unless otherwise defined in this Agreement or in the Credit Agreement, terms
defined in the PPSA and/or STA (each as defined below) or any regulation issued
pursuant thereto and grammatical variations thereof are used in this Agreement
as such terms are defined in the PPSA and/or STA (each as defined below) or any
regulation issued pursuant thereto. Additionally, the following terms
shall have the following meanings:
“Accounts”
means all accounts, and (where the context so admits) any item or part thereof,
including rights to receive royalties or license fees, which are now owned by or
are due, owing or accruing due to the Canadian Borrower or which may hereafter
be owned by or become due, owing or accruing due to the Canadian Borrower or in
which the Canadian Borrower now or hereafter has any other rights, including all
debts, claims and demands of any kind whatever, claims against the Crown and
claims under insurance policies.
“Chattel
Paper” means all chattel paper in which the Canadian Borrower now or
hereafter has rights, and (as the context so admits) any item or part
thereof.
“Control”
means (i) in the case of each Deposit Account, if the deposit taking
institution at which such Deposit Account is maintained will transfer any
amounts on deposit in the Deposit Account as directed by the Collateral Agent
without further consent by the Canadian Borrower, (ii) in the case of any
security entitlement, “control”, as such term is defined in the STA and
(iii) in the case of any Futures Contract, “control”, as such term is
defined in Subsection 1(1.1)(d) and (e) of the PPSA.
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“Control
Agreements” shall mean, collectively, the Deposit Account Control
Agreements, the Securities Account Control Agreements and the Futures Account
Control Agreements.
“Deposit
Account” means an account maintained with a bank, foreign bank, trust
company, credit union or other deposit-taking institution in which the Canadian
Borrower now or hereafter has rights.
“Deposit Account
Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Collateral Agent sufficient to grant the Collateral Agent
Control over a specified Deposit Account.
“Documents of
Title” means all documents of title, whether negotiable or
non-negotiable, including all warehouse receipts and bills of lading, in which
the Canadian Borrower now or hereafter has rights, and (as the context so
admits) any item or part thereof.
“Equipment”
means all goods in which the Canadian Borrower now or hereafter has rights,
other than Inventory or consumer goods, and (as the context so admits) any item
or part thereof.
“Excluded
Accounts” shall mean each of the following, but in each case only to the
extent that Control of the same has not been provided to or for the benefit of
any other creditor or as security for any other obligations:
(i)all Deposit Accounts maintained by
the Canadian Borrower solely for the purpose of making current payments of
payroll obligations in the ordinary course of business;
(ii)for a period of not more than 30 days
(or such longer period as may be approved by the Collateral Agent in its sole
discretion) following any Permitted Acquisition of a new Subsidiary, the Deposit
Accounts, Securities Accounts and Futures Accounts of such new Subsidiary;
and
(iii)any Deposit Accounts, Securities
Accounts and Futures Accounts as to which (A) during the first 90 days
following the Closing Date, the aggregate book balances thereof, taken as a
whole, do not exceed $5,000,000, and (B) thereafter, the aggregate
collected balances thereof, taken as a whole, do not exceed $5,000,000 (or such
greater amount as may be agreed from time to time by the Collateral Agent in its
discretion).
“Excluded
Assets” shall mean (i) Excluded Equity and (ii) Special Property other
than the following:
(a) the
right to receive any payment of money (including Accounts and Intangibles) or
any other rights referred to in Section 4 of the PPSA to the extent that such
section of the PPSA is effective to limit the prohibitions which make such
property “Special Property”;
(b) any
proceeds, substitutions or replacements of any Special Property (unless such
Proceeds, substitutions or replacements would constitute Special
Property).
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“Excluded
Equity” shall mean each of the following, but in each case only to the
extent that the same has not been pledged to or for the benefit of any other
creditor or as security for any other obligations:
(i) Equity
Interests in Foreign Subsidiaries that are not Material Foreign Subsidiaries;
and
(ii) any
Equity Interests of any Subsidiary with respect to which the Agents and the
Canadian Borrower agree that the costs of providing a pledge of such Equity
Interests hereunder is excessive in view of the benefits to be provided by such
pledge.
“Financial
Assets” means financial assets in which the Canadian Borrower now or
hereafter has rights, and (as the context so admits) any item or part
thereof.
“Fixtures”
means fixtures in which the Canadian Borrower now or hereafter has rights, and
(as the context so admits) any item or part thereof.
“Futures
Account” means a futures account in which the Canadian Borrower now or
hereafter has rights, and (as the context so admits) any item or part
thereof.
“Futures Account
Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Collateral Agent sufficient to grant the Collateral Agent
Control over a specified Futures Account.
“Futures
Intermediary” is used with the defined meaning assigned to “futures
intermediary” in the PPSA.
“Goods”
means goods in which the Canadian Borrower now or hereafter has rights, and (as
the context so admits) any item or part thereof.
“Instruments”
means all letters of credit, advices of credit and all other instruments in
which the Canadian Borrower now or hereafter has rights, and (as the context so
admits) any item or part thereof.
“Intangibles”
means all intangibles, all permits, licences and authorizations of whatever kind
in which the Canadian Borrower now or hereafter has rights, and (as the context
so admits) any item or part thereof, including all of the Canadian Borrower’s
choices in action, contractual rights, goodwill and Intellectual
Property.
“Inventory”
means all inventory of whatever kind in which the Canadian Borrower now or
hereafter has rights, and (as the context so admits) any item or part thereof,
including all goods, wares, merchandise, materials, supplies, raw materials,
goods in process, finished goods and other tangible personal property, including
all goods, wares, materials and merchandise used or procured for packing or
storing thereof, now or hereafter held for sale, lease, resale or exchange or
that are to be furnished or have been furnished under a contract of service or
that are used or consumed in the business of the Canadian Borrower.
“Investment
Property” means investment property in which the Canadian Borrower now or
hereafter has rights, and (as the context so admits) any item or part
thereof.
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“letter of credit” means any
credit (as defined in Uniform Customs and Practice for Documentary
Credits, ICC Publications 600) or standby (as defined in the International
Standby Practices - ISP98, ICC Publication No. 590).
“Letter of Credit
Rights” means all rights in which the Canadian Borrower now or hereafter
has in any letter of credit.
“Money”
means all money in which the Canadian Borrower now or hereafter has rights, and
(as the context so admits) any item or part thereof.
“Noteholder
Security Agreement” shall mean have the meaning specified in the
Intercreditor Agreement.
“PPSA” means the Personal Property Security
Act (Alberta).
“Receiver”
means any receiver for the Collateral or any of the business, undertakings,
property and assets of the Canadian Borrower appointed by the Collateral Agent
pursuant to this Agreement or by a court on application by the Collateral
Agent.
“Release
Date” shall have the meaning specified in Section 20.
“Securities”
means all shares, stock, warrants, bonds, debentures, debenture stock, bills,
notes and other securities in which the Canadian Borrower now or hereafter has
rights, and (as the context so admits) any item or part thereof.
“Securities
Account Control Agreement” shall mean an agreement in form reasonably
satisfactory to the Collateral Agent sufficient to grant the Collateral Agent
Control with respect to a specified Securities Account.
“Securities
Act” means the Securities Act
(Alberta).
“Security
Entitlement” means all security entitlements in which the Canadian
Borrower now or hereafter has rights, and (as the context so admits), any item
or part thereof.
“Special
Property” shall mean:
(a) any
contract, Intangible, permit, lease or license held by the Canadian Borrower
that validly prohibits the creation by the Canadian Borrower of a security
interest therein;
(b) any
contract, Intangible, permit, lease or license held by the Canadian Borrower to
the extent that any Law applicable thereto prohibits the creation of a security
interest therein;
(c) any
contract, Intangible, permit, lease or license held by the Canadian Borrower to
the extent that the creation by the Canadian Borrower of a security interest
therein is permitted only with the consent of another party, if the requirement
to obtain such consent is legally enforceable and such consent has not been
obtained;
(d)
Equipment owned by the Canadian Borrower on the date hereof or hereafter
acquired that is subject to a purchase money lien or capital lease permitted to
be incurred or outstanding pursuant to the provisions of the Credit Agreement if
the contract or other agreement in which such Lien is granted (or the
documentation providing for such purchase money lien or capital lease) validly
prohibits the
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creation
of any other Lien on such Equipment or requires consent of another party (which
requirement is legally enforceable) to create such other Lien, which consent can
not be obtained;
(e) any
property owned on the date hereof or acquired after the date hereof by the
Canadian Borrower that is subject to a Lien permitted by either Section 7.01(c)
or (g) of the Credit Agreement if the contract or agreement pursuant to which
such Lien is granted validly prohibits the creation of any other Lien on such
property or requires the consent of another party to create such Lien, if the
requirement to obtain such consent is legally enforceable and such consent has
not been obtained;
provided, however, that to the extent
such property constitutes Special Property due to a prohibition on the creation
of any other Lien in the relevant permit, lease, license, contract or other
agreement or by Law, then in each case described in clauses (a), (b), (c) or (d)
of this definition, such property shall constitute “Special Property” only to
the extent and for so long as such permit, lease, license, contract or other
agreement or by Law applicable thereto validly prohibits the creation of a Lien
on such property in favour of the Collateral Agent and, upon the termination of
such prohibition (howsoever occurring), such property shall cease to constitute
“Special Property.” In addition, to the extent such property constitutes
“Special Property” due to failure of the Canadian Borrower to obtain consent as
described in clauses (c) and (d), the Canadian Borrower shall use its
commercially reasonable efforts to obtain such consent, and, upon obtaining such
consent, such property shall cease to constitute “Special
Property.”
“STA” means
the Securities Transfer Act
(Alberta).
“Trustee”
shall mean the Noteholder Collateral Agent as defined in the Intercreditor
Agreement.
“Unlimited
Company” means any unlimited company incorporated or otherwise
constituted under the laws of the Province of Alberta or any similar body
corporate formed under the laws of any other jurisdiction whose members may at
any time become responsible for any of the obligations of that body
corporate.
“Unlimited
Liability Shares” means member or shareholder interests in an Unlimited
Company in which the Canadian Borrower now or hereafter has rights, and (as the
context so admits) any item or part thereof.
NOW,
THEREFORE, in consideration of the premises and in order to induce the Lenders
to make Loans and issue Letters of Credit under the Credit Agreement, to induce
the Hedge Banks to enter into Secured Hedge Agreements and to induce the Cash
Management Banks to enter into Secured Cash Management Agreements from time to
time, the Canadian Borrower hereby agrees with the Collateral Agent for the
ratable benefit of the Secured Parties as follows:
Section
1. Grant of
Security. The Canadian Borrower hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in all of the Borrower’s present and after-acquired personal property,
including without limitation, each type of property described below and all of
the Canadian Borrower’s right, title and interest therein and thereto, whether
now owned or hereafter acquired by the Canadian Borrower, wherever located, and
whether now or hereafter existing or arising (collectively, the “Collateral”):
(a) all
Accounts;
(b) all
Chattel Paper;
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(c) all
Deposit Accounts;
(d) all
Documents of Title;
(e) all
Equipment;
(f) all
Fixtures;
(g) all
Futures Accounts;
(h) all
Goods;
(i) all
Instruments;
(j) all
Inventory;
(k) all
Letter of Credit Rights (together with all Accounts, Chattel Paper, Instruments,
Deposit Accounts, Intangibles and other obligations of any kind,
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services and whether or not earned by performance, the
“Receivables”;
and all rights now or hereafter existing in and to all supporting obligations
and in and to all security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the Receivables,
being the “Related
Contracts”);
(l) all
Money;
(m) the
following (the “Security
Collateral”):
(i)all indebtedness from time to time
owed to the Canadian Borrower, including without limitation, all promissory
notes or instruments, if any, evidencing such indebtedness, all indebtedness
owed to the Canadian Borrower pursuant to the Intercompany Note and the
instruments set forth on Schedule 8 to the Perfection Certificate (the
“Pledged
Debt”), and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(ii)all Equity Interests, other than
Excluded Equity, from time to time acquired, owned or held by the Canadian
Borrower in any manner, including, without limitation, the Equity Interests of
the Canadian Borrower set forth opposite the Canadian Borrower’s name on and
otherwise described on Schedule 7 to the Perfection Certificate,
and the certificates, if any, representing such shares or units or other Equity
Interests (collectively, the “Pledged
Equity”), and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all subscription warrants, rights or options
issued thereon or with respect thereto; and
(iii)all Investment Property and all
Financial Assets (including, without limitation, all securities, security
entitlements and securities accounts), the certificates or instruments, if any,
representing or evidencing such Investment Property or Financial Assets and all
dividends, distributions, return of capital, interest, cash, instruments
and
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other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange therefor and all subscription warrants, rights or
options issued thereon or with respect thereto;
(n) all
contracts and agreements between the Canadian Borrower and one or more
additional parties (including, without limitation, any Swap Contracts, licensing
agreements and any partnership agreements, joint venture agreements, limited
liability company agreements), the Related Contracts and the IP Agreements (as
hereinafter defined), in each case as such agreements may be amended, amended
and restated, supplemented or otherwise modified from time to time
(collectively, the “Assigned
Agreements”), including, without limitation, (i) all rights of the
Canadian Borrower to receive moneys due and to become due under or pursuant to
the Assigned Agreements, (ii) all rights of the Canadian Borrower to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Assigned Agreements, (iii) claims of the Canadian Borrower for damages arising
out of or for breach of or default under the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder (all such Collateral being the “Agreement
Collateral”);
(o) the
following (collectively, the “Intellectual
Property Collateral”):
(i)all patents, patent applications,
utility models and statutory invention registrations, all inventions claimed or
disclosed therein and all improvements thereto (“Patents”);
(ii)all trademarks, service marks, domain
names, trade dress, logos, designs, slogans, trade names, business names,
corporate names and other source identifiers, whether registered or unregistered
(provided that no security interest shall be granted in any trademark, whether
registered, unregistered or applied for, to the extent that, and solely during
the period in which, the grant of a security interest therein would impair the
validity or enforceability of such trademark under applicable federal law),
together, in each case, with the goodwill symbolized thereby (“Trademarks”);
(iii)all copyrights, including, without
limitation, copyrights in Computer Software (as hereinafter defined), internet
web sites and the content thereof, whether registered or unregistered (“Copyrights”);
(iv)all computer software, programs and
databases (including, without limitation, source code, object code and all
related applications and data files), firmware and documentation and materials
relating thereto, together with any and all maintenance rights, service rights,
programming rights, hosting rights, test rights, improvement rights, renewal
rights and indemnification rights and any substitutions, replacements,
improvements, error corrections, updates and new versions of any of the
foregoing (“Computer
Software”);
(v)all confidential and proprietary
information of the Canadian Borrower, including, without limitation, know-how,
trade secrets, manufacturing and production processes and techniques,
inventions, research and development information, databases and data, including,
without limitation, technical data, financial, marketing and business data,
pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade
Secrets”), and all other intellectual, industrial and intangible property
of any type, including, without limitation, industrial designs and mask
works;
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(vi)all registrations and applications
for registration for any of the foregoing, including, without limitation, those
registrations and applications for registration set forth in Schedule 13 to
the Perfection Certificate, together with all reissues, divisions,
continuations, continuations-in-part, extensions, renewals and reexaminations
thereof;
(vii)all tangible embodiments of the
foregoing, all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of the Canadian Borrower accruing thereunder or
pertaining thereto;
(viii)all agreements, permits, consents,
orders and franchises relating to the licence, development, use or disclosure of
any of the foregoing to which the Canadian Borrower, now or hereafter, is a
party or a beneficiary (“IP
Agreements”); and
(ix)any and all claims for damages and
injunctive relief for past, present and future infringement, dilution,
misappropriation, violation, misuse or breach with respect to any of the
foregoing, with the right, but not the obligation, to xxx for and collect, or
otherwise recover, such damages (the property described in this Section 1(o) is
referred to herein as the “Intellectual
Property”);
(p) all
books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of the Canadian
Borrower pertaining to any of the Collateral;
(q) and
all other tangible and intangible personal property of whatever nature whether
or not covered by the PPSA;
(r) all
proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to and supporting obligations relating
to, any and all of the Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in clauses (a) through (q) of this Section 1) and, to the extent not
otherwise included, all payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral;
provided that notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute
a grant of a security interest in any Excluded Asset.
Section
2. Security for
Obligations. This Agreement secures, in the case of the
Canadian Borrower, the payment of all Obligations of the Canadian Borrower now
or hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest (including interest and fees that accrue after the commencement by or
against the Canadian Borrower of any proceeding under any Debtor Relief Laws
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding), fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or
otherwise (all such obligations being the “Secured
Obligations”).
Section
3. Canadian Borrower Remains
Liable. Anything herein to the contrary notwithstanding,
(a) the Canadian Borrower shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the
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Collateral
Agent of any of the rights hereunder shall not release the Canadian Borrower
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement or any other Loan Document, nor shall any
Secured Party be obligated to perform any of the obligations or duties of the
Canadian Borrower thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
Section
4. Delivery and Control of
Security Collateral. (a) (i) All certificates
representing or evidencing the Pledged Equity and (ii) all instruments
representing or evidencing the Pledged Debt (excluding, unless an Event of
Default has occurred and is continuing, Pledged Debt in an aggregate principal
amount not in excess of $1,000,000), shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto (unless the Trustee is granted a
prior security interest in such certificates and instruments and the same are
required to be delivered (and are delivered) to the Trustee for the benefit of
the Secured Parties pursuant to the Intercreditor Agreement) and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent. During the continuation of an
Event of Default, the Collateral Agent shall have the right, at any time in its
discretion and without notice to the Canadian Borrower, to (i) transfer to
or to register in the name of the Collateral Agent or any of its nominees any or
all of the Security Collateral, subject only to the revocable rights specified
in Section 11(a), (ii) exchange certificates or instruments representing or
evidencing Security Collateral for certificates or instruments of smaller or
larger denominations, and (iii) convert Security Collateral consisting of
financial assets credited to any Securities Account to Security Collateral
consisting of financial assets held directly by the Collateral Agent, and to
convert Security Collateral consisting of financial assets held directly by the
Collateral Agent to Security Collateral consisting of financial assets credited
to any Securities Account.
(b) The
Canadian Borrower acknowledges and agrees that (i) to the extent each interest
in any Unlimited Liability Company, limited liability company or limited
partnership controlled now or in the future by the Canadian Borrower and pledged
hereunder is a Security, such interest shall be certificated and (ii) each such
interest shall at all times hereafter continue to be such a Security and
represented by such certificate. The Canadian Borrower further
acknowledges and agrees that with respect to any interest in any Unlimited
Liability Company, limited liability company or limited partnership controlled
now or in the future by the Canadian Borrower and pledged hereunder that is not
a “Security” the Canadian Borrower shall at no time elect to treat any such
interest as a “Security”, nor shall such interest be represented by a
certificate, unless the Canadian Borrower provides prior written notification to
the Collateral Agent of such election and such interest is thereafter
represented by a certificate that is promptly delivered to the Collateral Agent
pursuant to the terms hereof.
(c) With
respect to any Security Collateral in which the Canadian Borrower has any right,
title or interest and that constitutes an uncertificated security, the Canadian
Borrower will promptly notify the Collateral Agent thereof and, at the
Collateral Agent’s request and option, pursuant to an agreement in form and
substance satisfactory to the Collateral Agent, either (i) cause the issuer to
agree to comply with instructions from the Collateral Agent as to such
Securities, without further consent of the Canadian Borrower, or (ii) arrange
for the Collateral Agent to become the registered owner of the
Securities. During the continuation of an Event of Default, with
respect to any Security Collateral in which the Canadian Borrower has any right,
title or interest, promptly upon the request of the Collateral Agent, the
Canadian Borrower will notify each such issuer of Security Collateral that such
Security Collateral is subject to the security interest granted
hereunder.
(d) Except
as otherwise set forth herein, if any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument,
certificated
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security
or Chattel Paper, such Instrument, certificated security or Chattel Paper shall
be promptly delivered to the Collateral Agent (unless the Trustee is granted a
prior security interest in such Collateral and the same is required to be
delivered (and is delivered) to the Trustee for the benefit of the Secured
Parties pursuant to the Intercreditor Agreement), duly endorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement and, if applicable, the Intercreditor Agreement, provided that, unless an
Event of Default has occurred and is continuing, the Canadian Borrower shall not
be required to deliver the same pursuant to this clause (d) to the extent that
the aggregate value of the Collateral not so delivered does not exceed
$1,000,000.
(e) Notwithstanding
any provisions to the contrary contained in this Agreement or any other Loan
Document, the Canadian Borrower is the sole registered and beneficial owner of
each Unlimited Liability Share pledged hereunder and will remain so until such
time as such pledged Unlimited Liability Shares are effectively transferred into
the name of the Collateral Agent or another person on the books and records of
the Unlimited Company issuer thereof. Accordingly, the Canadian
Borrower shall be entitled to receive and retain for its own account any
dividend on or other distribution, if any, in respect of such pledged Unlimited
Liability Shares (except insofar as the Canadian Borrower has granted a security
interest in such dividend or other distribution in favour of the Collateral
Agent hereunder, and any Securities which constitute Collateral shall be
delivered forthwith upon receipt by the Canadian Borrower to the Collateral
Agent to hold as Collateral hereunder) and shall have the right to vote such
Unlimited Liability Shares and to control the direction, management and policies
of the issuer Unlimited Company to the same extent as the Canadian Borrower
would if such Unlimited Liability Shares were not pledged to the Collateral
Agent pursuant hereto. Nothing in this Agreement shall, constitute
any Secured Party or any person other than the Canadian Borrower, a member of
any Unlimited Company for the purposes of its applicable governing statute until
such time as notice is given to the Canadian Borrower (and not revoked) as
provided herein and further steps are taken thereunder so as to register any
Secured Party or such other person as holder of such pledged Unlimited Liability
Shares. Except upon the exercise of rights to sell or otherwise
dispose of pledged Unlimited Liability Shares following the occurrence of an
Event of Default and while it is continuing, the Canadian Borrower shall not
cause, permit or enable any Unlimited Company issuer to cause, permit, or enable
the Collateral Agent to:
(i) be
registered as a shareholder or member of the Unlimited Company;
(ii) have
any notation entered in its favour in the share register in respect of Unlimited
Liability Shares;
(iii) hold
any Secured Party out as a shareholder or member of an Unlimited
Company;
(iv) act
or purport to act as a member of an Unlimited Company, or obtain, exercise or
attempt to exercise any rights of a shareholder or member, of the Unlimited
Company;
(v) be
held out as shareholder or member of the Unlimited Company;
(vi) receive,
directly or indirectly, any dividends, property or other distributions from the
Unlimited Company by reason of the Collateral Agent holding a security interest
in the pledged Unlimited Liability Shares; or
(vii) act
as a shareholder or member of the Unlimited Company, or exercise any rights of a
shareholder or member including the right to attend a meeting of, or to vote the
shares of, an
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Unlimited
Company or to be entitled to receive or receive any distribution in respect of
Unlimited Liability Shares.
The
foregoing limitation shall not restrict the Collateral Agent from exercising the
rights which it is entitled to exercise hereunder in respect of any Collateral
constituting Unlimited Liability Shares or Security Entitlements in Unlimited
Liability Shares at any time that the Collateral Agent shall be entitled to
enforce the Security and realize on all or any portion of the Collateral
pursuant to the Security.
Section
5. Maintaining Deposit Accounts
and Letter of Credit Rights. Unless the Release Date shall
have occurred:
(a) The
Canadian Borrower will maintain Deposit Accounts (other than Excluded Accounts)
only with a bank (which may include the Collateral Agent) (a “Pledged Account
Bank”) that has entered into a Deposit Account Control
Agreement. The Collateral Agent hereby agrees that it will not
deliver a notice indicating that the Collateral Agent will take Control over a
Deposit Account, Securities Account or Futures Account under any Control
Agreement unless an Event of Default or Cash Dominion Event has occurred and is
continuing.
(b) The
Collateral Agent may, at any time and without notice to, or consent from, the
Canadian Borrower, transfer, or direct the transfer of, funds from the Pledged
Deposit Accounts to satisfy the Canadian Borrower’s obligations under the Loan
Documents if an Event of Default or Cash Dominion Event shall have occurred and
be continuing.
(c) Upon
any termination by the Canadian Borrower of any Pledged Deposit Account, the
Canadian Borrower will immediately (i) transfer all funds and property held in
such terminated Pledged Deposit Account to another Pledged Deposit Account and
(ii) notify all Account Debtors and any other obligors that were making payments
to such Pledged Deposit Account to make all future payments to another Pledged
Deposit Account, in each case so that the Collateral Agent shall have a
continuously perfected security interest in such Account Collateral, funds and
property.
(d) The
Canadian Borrower, by granting a security interest in its Receivables consisting
of Letter of Credit Rights to the Collateral Agent, intends to (and hereby does)
assign to the Collateral Agent its rights (including its contingent rights) to
the proceeds of all Related Contracts consisting of letters of credit of which
it is or hereafter becomes a beneficiary or assignee (except to the extent that
the Canadian Borrower is required by applicable law to apply such proceeds to a
specified purpose). If the Canadian Borrower is at any time a
beneficiary under a letter of credit now or hereafter issued in favour of the
Canadian Borrower, and (i) the face amount of such letter of credit is in
excess of $1,000,000 individually or (ii) the face amount of such letter of
credit, together with the face amount of all other letters of credit issued in
favour of the Canadian Borrower in which the Collateral Agent does not have a
perfected security interest exceeds $2,500,000 in the aggregate, the Canadian
Borrower shall promptly notify the Collateral Agent thereof and the Canadian
Borrower shall use commercially reasonable efforts to either (A) arrange
for the issuer and any confirmer of such letter of credit to consent to an
assignment to the Collateral Agent of the proceeds of any drawing under such
letter of credit or (B) arrange for the Collateral Agent to become the
transferee beneficiary of such letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under such letter of
credit are to be applied as provided in the Credit Agreement.
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(e) Upon
the occurrence of an Event of Default, the Canadian Borrower shall, promptly
upon request by the Collateral Agent, (i) notify (and the Canadian Borrower
hereby authorizes the Collateral Agent to notify) the issuer and each nominated
person with respect to each of the Related Contracts consisting of letters of
credit that the proceeds thereof have been assigned to the Collateral Agent
hereunder and any payments due or to become due in respect thereof are to be
made directly to the Collateral Agent or its designee and (ii) arrange for the
Collateral Agent to become the transferee beneficiary of letter of
credit.
Section
6. Representations and
Warranties. The Canadian Borrower represents and warrants as
follows:
(a) All
Pledged Equity consisting of certificated securities and all Pledged Debt has
been delivered to the Collateral Agent (or the Trustee) in accordance
herewith. If the Canadian Borrower is an issuer of Security
Collateral, the Canadian Borrower confirms that it has received notice of the
security interest granted hereunder.
(b) The
Canadian Borrower is the legal and beneficial owner of the Collateral granted or
purported to be granted by the Canadian Borrower free and clear of any Lien,
claim, option or right of others, except for the security interest created under
this Agreement, subject to Liens permitted under Section 7.01 of the Credit
Agreement. To the best knowledge of the Canadian Borrower, no
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral or listing the Canadian Borrower or any trade name
of the Canadian Borrower as debtor is on file in any recording office, except
such as may have been filed in favour of the Collateral Agent relating to the
Loan Documents or as otherwise permitted under the Credit
Agreement.
(c) All
of the Equipment and Inventory of the Canadian Borrower are located at the
places specified therefor in Schedule 2 to the Perfection Certificate or at
another location as to which the Canadian Borrower has complied with the
requirements of Sections 8 and 9(b). The Canadian Borrower has
obtained and maintains insurance with respect to its Equipment and Inventory in
compliance with Section 8(d).
(d) The
Pledged Equity issued by the Canadian Borrower or any of its Subsidiaries
hereunder has been duly authorized and validly issued and is fully paid and
non-assessable. The Pledged Debt issued by the Specified U.S.
Borrower or any of its Subsidiaries and pledged by the Canadian Borrower
hereunder has been duly authorized, authenticated or issued and delivered
and is the legal, valid and binding obligation of the issuers
thereof. The Pledged Debt is evidenced by one or more
promissory notes (which promissory notes have been delivered to the Collateral
Agent (unless required to be delivered and so delivered to the Trustee pursuant
to the Intercreditor Agreement) and is not in default.
(e) As
of the Closing Date, the Pledged Equity pledged by the Canadian Borrower
constitutes the percentage of the issued and outstanding Equity Interests of the
issuers thereof indicated on Schedule 7 to the Perfection
Certificate. As of the Closing Date, the Canadian Borrower does not
have any Investment Property or Financial Assets other than the Investment
Property and Financial Assets listed on Schedules 7, 8 and 9 to the
Perfection Certificate.
(f) The
Canadian Borrower has good and valid rights in and title to the Collateral with
respect to which it has purported to grant a security interest hereunder and has
full power and authority to grant to the Collateral Agent the security interest
in such Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this
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Agreement,
without the consent or approval of any other person, other than any consent or
approval that has been obtained and is in full force and effect or the need for
which has been specifically disclosed herein or in the Credit
Agreement.
(g) The
Perfection Certificate has been duly prepared, completed and executed by
Holdings and the Specified U.S. Borrower and the information set forth therein,
including the exact legal name of the Canadian Borrower, its jurisdiction of
organization, its organizational number and its location (within the meaning of
section 7 of the PPSA) is true, accurate and complete as of the Closing
Date and as of each subsequent delivery required pursuant to Section 6.2(g) of
the Credit Agreement.
(h) This
Agreement creates in favour of the Collateral Agent for the benefit of the
Secured Parties a valid security interest in the Collateral granted by the
Canadian Borrower, securing the payment of the Secured Obligations; and (i) when
the financing statements set forth in Schedule 5 of the Perfection Certificate
are filed or recorded with the appropriate Governmental Authority referred to
therein with respect to the Collateral described therein in which a security
interest may be perfected by filing or recordation and (ii) upon the taking of
possession or control by the Senior Representative pursuant to Article III of
the Intercreditor Agreement of the Collateral described in Schedules 7, 8 and 9
of the Perfection Certificate with respect to which a security interest may be
perfected only by possession or control, all filings and other actions necessary
to perfect the security interest in the Collateral granted by the Canadian
Borrower have been duly made or taken and are in full force and effect; and such
security interest is, in the case of ABL Priority Collateral, first priority
and, in the case of Term Priority Collateral, second priority.
(i) The
Canadian Borrower has not filed or consented to the filing of (i) any financing
statement or analogous document under the PPSA or any other applicable laws
covering any Collateral, (ii) any assignment in which the Canadian Borrower
assigns any Collateral or any security agreement or similar instrument covering
any Collateral with the United States Patent and Trademark Office, the United
States Copyright Office or the Canadian Intellectual Property Office or (iii)
any assignment in which the Canadian Borrower assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 7.01 of the Credit Agreement.
(j) The
Inventory that has been produced or distributed by the Canadian Borrower has
been produced in compliance with all requirements of applicable
law.
(k) No
amount payable to the Canadian Borrower under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper in excess of $500,000
which has not been delivered to the Collateral Agent to the extent otherwise
required to be delivered hereunder (other than purchase orders, supply
agreements and invoices).
(l) As
to itself and its Intellectual Property Collateral:
(i) To
the Canadian Borrower’s knowledge, the operation of the Canadian Borrower’s
business as currently conducted and the use of the Intellectual Property in
connection therewith do not materially infringe, misappropriate or otherwise
violate the intellectual property rights of any third party.
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(ii) The
Canadian Borrower is the exclusive owner of all right, title and interest in and
to the material Intellectual Property Collateral owned by the Canadian Borrower,
and is entitled to use all material Intellectual Property Collateral subject
only to the terms of the IP Agreements, in each case as used in or necessary to
its operations.
(iii) The
IP Agreements, patents, trademarks, service marks, trade names and all
applications for any of the foregoing included in the Intellectual Property
Collateral are set forth on Schedule 13 to the Perfection Certificate and such
Intellectual Property Collateral constitutes all Intellectual Property and all
IP Agreements material to the operations of the Canadian Borrower.
(iv) None
of the Canadian Borrower’s Intellectual Property material to the operations of
the Canadian Borrower, has been abandoned or has been adjudged invalid or
unenforceable in whole or part.
(m) The
Collateral does not include consumer goods.
Section
7. Further
Assurances. (a) The Canadian Borrower agrees that
from time to time, at the expense of the Canadian Borrower, the Canadian
Borrower will promptly execute and deliver, or otherwise authenticate, all
further instruments and documents, and take all further action that may be
reasonably necessary or desirable, or that the Collateral Agent may reasonably
request, in order to perfect and protect any pledge or security interest granted
or purported to be granted by the Canadian Borrower hereunder or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral of the Canadian Borrower. Without limiting
the generality of the foregoing, the Canadian Borrower will
promptly:
(i) xxxx
conspicuously each document included in Inventory and, at the request of the
Collateral Agent if an Event of Default has occurred and is continuing, each
Chattel Paper, each Related Contract and each Assigned Agreement and, at the
request of the Collateral Agent, each of its records pertaining to such
Collateral with a legend, in form and substance reasonably satisfactory to the
Collateral Agent, indicating that such document, Chattel Paper, Related
Contract, Assigned Agreement or Collateral is subject to the security interest
granted hereby;
(ii)
execute or authenticate and file such financing or renewal statements, or
amendments thereto, and such other instruments or notices, as may be reasonably
necessary or desirable, or as the Collateral Agent may reasonably request, in
order to perfect and preserve the security interest granted or purported to be
granted by the Canadian Borrower hereunder;
(iii) execute
and deliver to the Collateral Agent an executed Control Agreement with respect
to each Deposit Account of the Canadian Borrower owned, maintained or
established by the Canadian Borrower after the Closing Date (other than an
Excluded Account), including any such Deposit Account which at any time ceases
to be an Excluded Account (it being understood that the Collateral Agent shall
not give any instructions directing the disposition of funds from time to time
credited to any Deposit Account or withhold any withdrawal rights from the
Canadian Borrower with respect to funds from time to time credited to any
Deposit Account unless an Event of Default or Cash Dominion Event has occurred
and is continuing);
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(iv) if
the Canadian Borrower shall, following the Closing Date, establish and maintain
any Securities Account or Futures Account (other than an Excluded Account) with
any Securities Intermediary or Futures Intermediary, the Canadian Borrower
shall, within 30 days (or such longer period as the Collateral Agent may agree
in its sole discretion) of opening such Securities Account or Futures Account,
notify the Collateral Agent thereof and deliver to the Collateral Agent an
executed Control Agreement with respect to such Securities Account or Futures
Account, as the case may be; and
(v) deliver
to the Collateral Agent evidence that all other actions that the Collateral
Agent may deem reasonably necessary or desirable in order to perfect and protect
the security interest granted or purported to be granted by the Canadian
Borrower under this Agreement has been taken.
(b) The
Canadian Borrower hereby authorizes the Collateral Agent to file one or more
financing or renewal statements, and amendments thereto, including, without
limitation, one or more financing statements indicating that such financing
statements cover all assets or all personal property (or words of similar
effect) of the Canadian Borrower, in each case without the signature of the
Canadian Borrower, and regardless of whether any particular asset described in
such financing statements falls within the scope of the PPSA or the granting
clause of this Agreement. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by
law. The Canadian Borrower ratifies its authorization for the
Collateral Agent to have filed such financing statements, renewal statements or
amendments filed prior to the date hereof.
(c) The
Canadian Borrower will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of
the Canadian Borrower and such other reports in connection with such Collateral
as the Collateral Agent may reasonably request, all in reasonable
detail.
(d) The
Canadian Borrower shall at all times defend its title to Collateral and the
Collateral Agent’s Liens therein against all Persons, claims and demands
whatsoever, except for Liens permitted under Section 7.01 of the Credit
Agreement.
(e) The
Collateral will not include consumer goods.
Section
8. As to Equipment and
Inventory and Insurance. (a) The Canadian Borrower will
keep its Equipment and Inventory (other than Inventory sold in the ordinary
course of business or pursuant to a disposition in accordance with Section 7.05
of the Credit Agreement) at the places therefor specified in Section 2 to the
Perfection Certificate or at such other locations as the Canadian Borrower may
determine from time to time, provided that the Canadian
Borrower shall give written notice to the Collateral Agent specifying any such
other location within 30 days’ after the first date on which any
Equipment or Inventory is moved to such location.
(b) The
Canadian Borrower will promptly furnish to the Collateral Agent a statement
respecting any loss or damage exceeding $1,000,000 to any of the Inventory of
the Canadian Borrower.
(c) In
producing its Inventory, the Canadian Borrower will comply in all material
respects with all requirements of applicable law.
(d) The
Canadian Borrower will, at its own expense, maintain insurance with respect to
its Equipment and Inventory in such amounts, against such risks, in such form
and with such insurers, as
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required
under Section 6.07 of the Credit Agreement. Without limitation to the
foregoing, the Canadian Borrower shall maintain insurance with respect to the
Collateral, covering casualty, hazard, public liability, theft, malicious
mischief, flood and other risks, in amounts, with endorsements and with insurers
(with a Best Rating of at least A7, unless otherwise approved by the Collateral
Agent) reasonably satisfactory to the Collateral Agent. All proceeds
under each policy shall be payable to the Collateral Agent or deposited directly
to a Dominion Account. From time to time upon request, the Canadian
Borrower shall deliver to the Collateral Agent the originals or certified copies
of its insurance policies and updated flood plain searches. Unless
the Collateral Agent shall agree otherwise, each policy of property insurance
shall include satisfactory endorsements: (i) showing the Collateral Agent (or,
in the case of property insurance, the Collateral Agent and the Trustee, as
their interests may appear) as sole loss payee; (ii) requiring the insurer to
endeavor to provide 30 days prior written notice to the Collateral Agent in the
event of cancellation of the policy for any reason whatsoever; and (iii)
specifying that the interest of the Collateral Agent shall not be impaired or
invalidated by any act or neglect of the Canadian Borrower or the
owner of the property, nor by the occupation of the premises for purposes more
hazardous than are permitted by the policy. If the Canadian Borrower
fails to provide and pay for any insurance, the Collateral Agent may, at its
option, but shall not be required to, procure the insurance and charge the
Canadian Borrower therefor. The Canadian Borrower agrees to deliver
to the Collateral Agent, promptly as rendered, copies of all material reports
made to insurance companies in respect of the insurance described
herein. So long as no Event of Default has occurred and is
continuing, the Canadian Borrower may settle, adjust or compromise any insurance
claim, as long as the proceeds are delivered to the Collateral Agent or
deposited to a Dominion Account as provided above. If an Event of
Default has occurred and is continuing, only the Collateral Agent shall be
authorized to settle, adjust and compromise such claims. Further, the
Canadian Borrower will, at the request of the Collateral Agent, duly execute and
deliver instruments of assignment of such insurance policies to comply with the
requirements of the Loan Documents and cause the insurers to acknowledge notice
of such assignment.
(e) So
long as no Event of Default or Cash Dominion Event shall have occurred and be
continuing, all insurance payments, proceeds of insurance and any awards arising
from condemnation of any Collateral received by the Collateral Agent in
connection with any loss, damage or destruction of any Collateral shall be
transferred to a Dominion Account, and to the extent required to be applied to
the Obligations in accordance with Section 2.05(b) of the Credit Agreement, the
Collateral Agent may direct the applicable Pledged Account Bank to release to
the Canadian Borrower any such amount if and to the extent that any prepayment
of Obligations is required under the Credit Agreement in connection with the
receipt of such amount and such prepayment has been
made. Reimbursement under any liability insurance maintained by the
Canadian Borrower pursuant to this Section 8 may be paid directly to the Person
who shall have incurred liability covered by such insurance.
Section
9. Post-Closing Changes;
Bailees; Collections on Assigned Agreements and Accounts; Assigned
Agreements. (a) The Canadian Borrower will not
change its name, type of organization, jurisdiction of organization,
organizational identification number or location from those set forth in 1 to
the Perfection Certificate, or its location within the meaning of section 7
of the PPSA, without giving notice thereof to the Collateral Agent within 30
days (or such lesser period of time as the Collateral Agent may agree) of such
change and thereafter taking all action required by the Collateral Agent for the
purpose of perfecting or protecting the security interest granted by this
Agreement. The Canadian Borrower will hold and preserve its records
relating to the Collateral, including, without limitation, the Assigned
Agreements and Related Contracts.
(b) If
any Collateral of the Canadian Borrower is at any time in the
possession or control of a warehouseman, bailee or agent (including as set forth
on Schedule 2(e) to the Perfection Certificate) or is located at leased premises
or mortgaged property, upon the request of the Collateral Agent, the Canadian
Borrower will (i) notify any such warehouseman, bailee, agent or landlord of
the
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security
interest created hereunder, (ii) instruct any such warehouseman, bailee or agent
to hold all such Collateral solely for the Collateral Agent’s account subject
only to the Collateral Agent’s instructions, and (iii) if at any time the value
of the Collateral in the possession or control of such warehouseman, bailee or
agent or located at such leased or mortgaged premises exceeds or is reasonably
likely to exceed $1,000,000, use commercially reasonable efforts to (A) cause
such warehouseman, bailee or agent to authenticate a record acknowledging that
it holds possession of such Collateral for the Collateral Agent’s benefit and
shall act solely on the instructions of the Collateral Agent without the further
consent of the Canadian Borrower or any other Person and make such
authenticated record available to the Collateral Agent, and (B) obtain a Lien
Waiver from such warehouseman, bailee or agent or the applicable landlord or
mortgagee.
(c) Except
as otherwise provided in this subsection (c), the Canadian Borrower will
continue to collect, at its own expense, all amounts due or to become due the
Canadian Borrower under the Receivables, Assigned Agreements and Related
Contracts. In connection with such collections, the Canadian Borrower
may take (and, at the Collateral Agent’s direction during the continuation of an
Event of Default, may take) such commercially reasonable action as the Canadian
Borrower (or the Collateral Agent) may deem necessary or advisable to enforce
collection thereof; provided,
however, that the Collateral Agent shall have the right at any time upon
the occurrence and during the continuance of an Event of Default, to notify the
Obligors under any Receivables, Assigned Agreements and Related Contracts, of
the assignment of such Receivables, Assigned Agreements and Related Contracts,
to the Collateral Agent and to direct such Obligors to make payment of all
amounts due or to become due to the Canadian Borrower thereunder directly to the
Collateral Agent and, upon such notification and at the expense of the Canadian
Borrower, to enforce collection of any such Receivables, Assigned Contracts and
Related Contracts, to adjust, settle or compromise the amount or payment
thereof, and to otherwise exercise all rights with respect to such Receivables,
Assigned Agreements and Related Contracts, including, without limitation, those
set forth set forth in Part V of the PPSA. Upon the occurrence
and during the continuation of an Event of Default or a Cash Dominion
Event, all amounts and proceeds (including, without limitation,
Instruments) received by the Canadian Borrower in respect of the Receivables,
Assigned Agreements and Related Contracts of the Canadian Borrower shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be
segregated from other funds of the Canadian Borrower and shall be transferred to
the Payment Accounts as set forth in Section 6.19 of the Credit Agreement for
application to the Obligations as provided in Section 8.03 of the Credit
Agreement. Upon the occurrence and during the continuation of an
Event of Default, (i) without the prior written consent of the Collateral Agent,
the Canadian Borrower will not grant any extension with respect to the time of
payment of any Receivable or any amount due on any Assigned Agreement or Related
Contract, adjust, settle or compromise the amount or payment of any Receivable
or any amount due on any Assigned Agreement or Related Contract for less than
the full amount thereof, release wholly or partly any Account Debtor or obligor
thereof, allow any credit or discount thereon (except, in each case, in the
ordinary course of business consistent with past practice unless the Collateral
Agent shall have notified the Canadian Borrower that its right to do so has been
terminated) or make any amendment, supplement or modification thereto, in each
case in any manner that could adversely affect the value thereof and (ii) the
Canadian Borrower shall deliver to the Collateral Agent a copy of each material
demand, notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of its then
outstanding Accounts. Except in the ordinary course of business and
consistent with past practice, the Canadian Borrower will not permit or consent
to the subordination of its right to payment under any of the Receivables,
Assigned Agreements or Related Contracts to any other indebtedness or
obligations of the Account Debtor or obligor thereof.
(d) Anything
herein to the contrary notwithstanding, the Canadian Borrower shall remain
liable under each of the Receivables, Assigned Agreements and Related Contracts
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in
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accordance
with the terms of any agreement giving rise thereto. Neither the
Collateral Agent nor any Secured Party shall have any obligation or liability
under any Receivable, Assigned Agreement or Related Contract by reason of or
arising out of this Agreement or the receipt by the Collateral Agent or any
Secured Party of any payment relating thereto, nor shall the Collateral Agent,
nor any Secured Party, be obligated in any manner to perform any of the
obligations of the Canadian Borrower under or pursuant to any Receivable,
Assigned Agreement or Related Contract, to make any payment, to make any inquiry
as to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(e) The
Canadian Borrower will at its expense: (i) maintain the Assigned Agreements to
which it is a party in full force and effect and enforce the Assigned Agreements
to which it is a party in accordance with the terms thereof, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (ii) if reasonably requested by the Collateral Agent following the
occurrence of a Cash Dominion Event, furnish to the Collateral Agent promptly
upon receipt thereof copies of all material notices, requests and other
documents received by the Canadian Borrower under or pursuant to any material
Assigned Agreements to which it is a party, and from time to time (A) furnish to
the Collateral Agent such information and reports regarding the Assigned
Agreements and such other Collateral of the Canadian Borrower as the Collateral
Agent may reasonably request and (B) upon the reasonable request of the
Collateral Agent, make to each other party to any Assigned Agreement to which it
is a party such demands and requests for information and reports or for action
as the Canadian Borrower is entitled to make thereunder.
(f) The
Canadian Borrower hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Collateral Agent for benefit of
the Secured Parties of each Assigned Agreement to which it is a party by any
other Loan Party. The Canadian Borrower agrees, and will promptly
instruct each other party to each Assigned Agreement to which it is a party,
that all payments due or to become due under or in connection with such Assigned
Agreement will be made directly to a Pledged Deposit Account.
Section
10. As to Intellectual Property
Collateral. (a) With respect to material
Intellectual Property Collateral owned by the Canadian Borrower, the Canadian
Borrower agrees to take, at its expense, all commercially reasonable steps,
including, without limitation, in the United States Patent and Trademark Office,
the United States Copyright Office, the Canadian Intellectual Property Office
and any other governmental authority located in the United States or Canada, to
(i) maintain the validity and enforceability of such Intellectual Property
Collateral and maintain such Intellectual Property Collateral in full force and
effect, and (ii) if consistent with the reasonable business judgment of the
Canadian Borrower, pursue the registration and maintenance of each patent,
trademark, or copyright registration or application, now or hereafter included
in such Intellectual Property Collateral owned by the Canadian Borrower,
including, without limitation, the payment of required fees and taxes, the
filing of responses to office actions issued by the United States Patent and
Trademark Office, the United States Copyright Office, the Canadian Intellectual
Property Office or other governmental authorities, the filing of applications
for renewal or extension, the filing of affidavits under the Trade-Marks Act (Canada), the
filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. The Canadian Borrower
shall not, without the written consent of the Collateral Agent, discontinue use
of or otherwise abandon any of its material Intellectual Property Collateral,
unless the Canadian Borrower shall have previously determined that such use or
the pursuit or maintenance of such Intellectual Property Collateral is no longer
desirable in the conduct of the Canadian Borrower’s business.
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(b) The
Canadian Borrower agrees promptly to notify the Collateral Agent if the Canadian
Borrower becomes aware that any item of Intellectual Property Collateral
material to the conduct of its business may have become abandoned, placed in the
public domain, invalid or unenforceable, or of any adverse determination or
development regarding the Canadian Borrower’s ownership of any of such
Intellectual Property Collateral or its right to register the same or to keep
and maintain and enforce the same, unless the maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of the Canadian
Borrower’s business.
(c) In
the event that the Canadian Borrower becomes aware that any material item of its
Intellectual Property Collateral is being infringed or misappropriated by a
third party in any way that would reasonably be expected to have a Material
Adverse Effect, the Canadian Borrower shall promptly notify the Collateral Agent
and shall take such actions, at its expense, as the Canadian Borrower or the
Collateral Agent reasonably deems appropriate under the circumstances to protect
or enforce such Intellectual Property Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against such
infringement or misappropriation.
(d) The
Canadian Borrower shall not do or permit any act or knowingly omit to do any act
whereby any Intellectual Property Collateral material to the conduct of its
business may lapse or become invalid or unenforceable or placed in the public
domain, unless the maintenance of such Intellectual Property Collateral is no
longer desirable in the conduct of the Canadian Borrower’s
business.
(e) The
Canadian Borrower shall take all commercially reasonable steps which it or the
Collateral Agent (during the continuation of an Event of Default) reasonably
deems appropriate under the circumstances to preserve and protect each item of
its material Intellectual Property Collateral, including, without limitation,
maintaining the quality of any and all products or services used or provided in
connection with any of the Trademarks, consistent with the quality of the
products and services as of the date hereof, and taking all steps necessary to
ensure that all licenced users of any of the Trademarks use such consistent
standards of quality.
(f) With
respect to its Intellectual Property Collateral, the Canadian Borrower agrees to
execute or otherwise authenticate an acknowledgement, in substantially the form
set forth in Exhibit A hereto or otherwise in form and substance
satisfactory to the Collateral Agent (an “Intellectual
Property Security Acknowledgement”) and an agreement, in substantially
the form set forth in Exhibit B hereto or otherwise in form and substance
satisfactory to the Collateral Agent (an “Intellectual Property
Security Agreement”), for recording the security interest granted
hereunder to the Collateral Agent in such Intellectual Property Collateral with
the United States Patent and Trademark Office, the United States Copyright
Office, the Canadian Intellectual Property Office and any other U.S. or Canadian
governmental authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.
(g) The
Canadian Borrower agrees that should it obtain an ownership interest in any item
of the type set forth in Section 1(o) that is not on the date hereof a part of
the Intellectual Property Collateral (“After-Acquired
Intellectual Property”) (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall
automatically become part of the Intellectual Property Collateral subject to the
terms and conditions of this Agreement with respect thereto. The
Canadian Borrower shall, concurrently with the delivery of financial statements
under Section 6.01(a) of the Credit Agreement, execute and deliver to the
Collateral Agent, or otherwise authenticate, an Intellectual Property Security
Acknowledgement or an agreement substantially in the form of Exhibit C hereto or
otherwise in form and substance satisfactory to the Collateral Agent (an “IP Security
Agreement Supplement”) covering such After-Acquired Intellectual Property
which IP Security Agreement Supplement shall be recorded with the United States
Patent and Trademark Office, the United States Copyright Office,
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Canadian
Intellectual Property Office and any other U.S. or Canadian governmental
authorities necessary to perfect the security interest hereunder in such
After-Acquired Intellectual Property.
(h) Nothing
in this Agreement prevents the Canadian Borrower from discontinuing the use or
maintenance of any of its Intellectual Property Collateral to the extent
permitted by the Credit Agreement if the Canadian Borrower determines in its
reasonable business judgment that such discontinuance is desirable in the
conduct of its business.
Section
11. Voting Rights; Dividends;
Etc. (a) So long as no Event of Default shall have
occurred and be continuing:
(i)The Canadian Borrower shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Security Collateral of the Canadian Borrower or any part thereof for any
purpose consistent with this Agreement, the Credit Agreement and the other Loan
Documents; provided
however, that the Canadian Borrower will not exercise or refrain from
exercising any such right if such action could materially and adversely affect
the rights and remedies of any of the Collateral Agent or the other
Secured Parties under this Agreement or the Credit Agreement or any other Loan
Document or the ability of the Secured Parties to exercise the
same.
(ii)The Canadian Borrower shall be
entitled to receive and retain any and all dividends, interest and other
distributions paid in respect of the Security Collateral of the Canadian
Borrower if and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Loan Documents; provided, however, that any and all
dividends, interest and other distributions paid or payable other than in cash
in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Agent (unless
required to be delivered to the Trustee pursuant to the Intercreditor Agreement)
to hold as Security Collateral and shall, if received by the Canadian Borrower,
be received in trust for the benefit of the Collateral Agent, be segregated from
the other property or funds of the Canadian Borrower and be forthwith delivered
to the Collateral Agent (unless required to be delivered to the Trustee pursuant
to the Intercreditor Agreement) as Security Collateral in the same form as so
received (with any necessary endorsement).
(iii)The Collateral Agent will execute and
deliver (or cause to be executed and delivered) to the Canadian Borrower all
such proxies and other instruments as the Canadian Borrower may reasonably
request for the purpose of enabling the Canadian Borrower to exercise the voting
and other rights that it is entitled to exercise pursuant to paragraph (i)
above and to receive the dividends or interest payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon
the occurrence and during the continuance of an Event of Default:
(i)All rights of the Canadian Borrower
(x) to exercise or refrain from exercising the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to Section
11(a)(i) shall, upon notice to the Canadian Borrower by the Collateral Agent,
cease and (y) to receive the dividends, interest and other distributions
that it would otherwise be authorized to receive and retain pursuant to Section
11(a)(ii) shall automatically cease, and all such rights shall thereupon become
vested in the Collateral Agent (or the Trustee, if required pursuant to the
Intercreditor Agreement), which shall thereupon have the sole right to exercise
or refrain from
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exercising
such voting and other consensual rights and to receive and hold as Security
Collateral such dividends, interest and other distributions.
(ii)All dividends, interest and other
distributions that are received by the Canadian Borrower contrary to the
provisions of paragraph (i) of this Section 11(b) shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other
funds of the Canadian Borrower and shall be forthwith paid over to the
Collateral Agent (unless required to be delivered to the Trustee pursuant to the
Intercreditor Agreement) as Security Collateral in the same form as so received
(with any necessary endorsement).
(c) Upon
the occurrence and during the continuation of an Event of Default or a Cash
Dominion Event, the Collateral Agent shall be authorized to exercise exclusive
control over all Deposit Accounts, Securities Accounts and Futures Accounts
(other than Excluded Accounts).
Section
12. Transfers and Other Liens;
Additional Shares. (a) The Canadian Borrower agrees
that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Collateral, other than sales, assignments and
other dispositions of Collateral, and options relating to Collateral, permitted
under the terms of the Credit Agreement, or (ii) create or suffer to exist
any Lien upon or with respect to any of the Collateral of the Canadian Borrower
except for the pledge, assignment and security interest created under this
Agreement and Liens permitted under the Credit Agreement.
(b) The
Canadian Borrower agrees that it will (i) cause each issuer of the Pledged
Equity pledged by the Canadian Borrower that is Controlled by the Canadian
Borrower not to issue any Equity Interests or other securities in addition to or
in substitution for the Pledged Equity issued by such issuer, except to the
Canadian Borrower or another Loan Party, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional Equity Interests (other than Excluded Equity) or other
securities.
Section
13. Collateral Agent Appointed
Attorney-in-Fact. The Canadian Borrower hereby irrevocably
appoints the Collateral Agent the Canadian Borrower’s attorney-in-fact, with
full authority in the place and stead of the Canadian Borrower and in the name
of the Canadian Borrower or otherwise, from time to time, in the Collateral
Agent’s discretion, to take any action and to execute any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement (but at the cost and expense of the Canadian
Borrower). Without limiting the generality of foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default:
(a) to
endorse the Canadian Borrower’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into the Collateral
Agent’s possession or control;
(b) to
obtain and adjust insurance required to be paid to the Collateral Agent;
and,
upon the
occurrence and during the continuance of an Event of Default:
(a) to
ask for, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;
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(b) to
receive, indorse and collect any drafts or other instruments, documents and
Chattel Paper;
(c) to
(i) notify any Account Debtors of the assignment of the Canadian Borrower’s
Accounts, demand and enforce payment of the Canadian Borrower’s Accounts, by
legal proceedings or otherwise, and generally exercise any rights and remedies
with respect to the Canadian Borrower’s Accounts; (ii) settle, adjust, modify,
compromise, discharge or release any Accounts or other Collateral, or any legal
proceedings brought to collect Accounts or Collateral; (iii) sell or assign any
Accounts and other Collateral upon such terms, for such amounts and at such
times as the Collateral Agent deems advisable; (iv) take control, in any manner,
of any proceeds of Collateral; (v) prepare, file and sign the Canadian
Borrower’s name to a proof of claim or other document in a bankruptcy of an
Account Debtor, or to any notice, assignment or satisfaction of Lien or similar
document; (vi) receive, open and dispose of mail addressed to the Canadian
Borrower, and notify postal authorities to change the address for delivery
thereof to such address as the Collateral Agent may designate; (vii) endorse any
Chattel Paper, Document, Instrument, invoice, freight xxxx, xxxx of lading, or
similar document or agreement relating to any Accounts, Inventory or other
Collateral; (viii) use the Canadian Borrower’s stationery and sign its name to
verifications of Accounts and notices to Account Debtors; (ix) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to any Collateral; or (x) take any
action as may be necessary or appropriate to obtain payment under any letter of
credit or banker’s acceptance for which the Canadian Borrower is a beneficiary;
and
(d) to
file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce compliance with the terms and conditions
of any Assigned Agreement or the rights of the Collateral Agent with respect to
any of the Collateral or any other action as the Collateral Agent deems
appropriate to fulfill the Canadian Borrower’s obligations under the Loan
Documents.
Section
14. Collateral Agent May
Perform. If the Canadian Borrower fails to perform any
agreement contained herein, the Collateral Agent may, but without any obligation
to do so and without notice, itself perform, or cause performance of, such
agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by the Canadian Borrower under Section
17.
Section
15. The Collateral Agent’s
Duties. The powers conferred on the Collateral Agent hereunder
are solely to protect the Secured Parties’ interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not any Secured Party has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which it accords its own property.
(b) Anything
contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent in its reasonable discretion deems it to
be necessary, appoint one or more subagents (each a “Subagent”)
for the Collateral Agent hereunder with respect to all
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or any
part of the Collateral. In the event that the Collateral Agent so
appoints any Subagent with respect to any Collateral, (i) the assignment and
pledge of such Collateral and the security interest granted in such Collateral
by the Canadian Borrower hereunder shall be deemed for purposes of this
Agreement to have been made to such Subagent, in addition to the Collateral
Agent, for the ratable benefit of the Secured Parties, as security for the
Secured Obligations of the Canadian Borrower, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,
powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Collateral, and (iii) the term “Collateral Agent,” when
used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Agent with respect to such Collateral, shall include
such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
the Collateral Agent.
(c) All
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping any Collateral, all Taxes payable with respect to any Collateral
(including any sale thereof), and all other payments required to be made by the
Collateral Agent to any Person to realize upon any Collateral, shall be borne
and paid by the Canadian Borrower. The Collateral Agent shall not be
liable or responsible in any way for the safekeeping of any Collateral, for any
loss or damage thereto (except for reasonable care in its custody while
Collateral is in the Collateral Agent actual possession), for any diminution in
the value thereof, or for any act or default of any warehouseman, carrier,
forwarding agency or other Person whatsoever, but the same shall be at the
Canadian Borrower’s sole risk.
Section
16. Remedies. If
any Event of Default shall have occurred and be continuing:
(a) The
Collateral Agent may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party upon default under the PPSA (whether or
not the PPSA applies to the affected Collateral) and also
may: (i) require the Canadian Borrower to, and the Canadian
Borrower hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral as directed
by the Collateral Agent and make it available to the Collateral Agent at a place
and time to be designated by the Collateral Agent that is reasonably convenient
to both parties; (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or to the extent
lawful and permitted leased by the Canadian Borrower where the Collateral or any
part thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under law, without obligation to
the Canadian Borrower in respect of such occupation; and (iv) exercise any
and all rights and remedies of the Canadian Borrower under or in connection with
the Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) any and all rights of the Canadian Borrower to demand or
otherwise require payment of any amount under, or performance of any provision
of, the Receivables, Assigned Agreements, Related Contracts and the other
Collateral, (B) withdraw, or cause or direct the withdrawal of, all funds
and all other property held in or credited to any Deposit Account, Securities
Account or Futures Account and (C) exercise all other rights and remedies
with respect to the Receivables, Assigned Agreements, the Related Contracts and
the other Collateral, including, without limitation, those set forth in Part V
of the PPSA. The Canadian Borrower agrees that, to the extent notice
of sale shall be required by law, at least fifteen (15) days’ notice to the
Canadian Borrower of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale
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having
been given. The Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefore,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Any
cash held by or on behalf of the Collateral Agent and all cash proceeds received
by or on behalf of the Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the
discretion of the Collateral Agent, be held by the Collateral Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Collateral Agent pursuant to Section 17) in
whole or in part by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations, as set forth in
Section 8.03 of the Credit Agreement. Any surplus of such cash
or cash proceeds held by or on the behalf of the Collateral Agent and remaining
after payment in full of all the Secured Obligations shall be paid over to the
Canadian Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
(c) All
payments received by the Canadian Borrower under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from other
funds of the Canadian Borrower and shall be forthwith paid over to the
Collateral Agent in the same form as so received (with any necessary
endorsement).
(d) The
Collateral Agent may, without notice to the Canadian Borrower except as required
by law and at any time or from time to time, charge, set-off and otherwise apply
all or any part of the Secured Obligations against any funds held with respect
to any Deposit Account.
(e) In
the event of any sale or other disposition of any of the Intellectual Property
Collateral of the Canadian Borrower, the goodwill symbolized by any Trademarks
subject to such sale or other disposition shall be included therein, and, upon
the Collateral Agent’s reasonable request, the Canadian Borrower
shall supply to the Collateral Agent or its designee the Canadian Borrower’s
know-how and expertise, and the Canadian Borrower’s documents and things
relating to any Intellectual Property Collateral subject to such sale or other
disposition, and the Canadian Borrower’s customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services of the
Canadian Borrower.
(f) If
the Collateral Agent shall determine to exercise its right to sell all or any of
the Security Collateral of the Canadian Borrower pursuant to this
Section 16, the Canadian Borrower agrees that, upon request of the
Collateral Agent, the Canadian Borrower will, at its own expense, do or cause to
be done all such other acts and things as may be necessary to make such sale of
such Security Collateral or any part thereof valid and binding and in compliance
with applicable law.
(g) The
Collateral Agent is authorized, in connection with any sale of the Security
Collateral pursuant to this Section 16, to deliver or otherwise disclose to
any prospective purchaser of the Security Collateral: (i) any
registration statement or prospectus, and all supplements and amendments
thereto; (ii) any information and projections; and (iii) any other
information in its possession relating to such Security Collateral.
(h) The
Canadian Borrower acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Secured Parties by reason of the failure
by the Canadian Borrower to perform any of the covenants contained in
subsection (d) above and,
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consequently,
agrees that, if the Canadian Borrower shall fail to perform any of such
covenants, it will pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Security Collateral on the date the Collateral Agent
shall demand compliance with subsection (d) above.
(i) For
the purpose of enabling the Collateral Agent, during the continuance of an Event
of Default, to exercise rights and remedies under this Section 16 at such
time as the Collateral Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, the Canadian Borrower hereby grants to
the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive
licence to use, licence or sublicence any of the Intellectual Property
Collateral now owned or hereafter acquired by the Canadian Borrower, wherever
the same may be located. Such licence shall include access to all
media in which any of the licenced items may be recorded or stored and to all
computer programs used for the compilation or printout thereof to the extent
that such non-exclusive licence does not violate the express terms of any
agreement between the Canadian Borrower and a third party governing the Canadian
Borrower’s use of such Intellectual Property Collateral. If
(i) an Event of Default shall have occurred and, by reason of cure, waiver,
modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Collateral Agent of any rights, title and
interests in and to the Intellectual Property Collateral shall have been
previously made in accordance with the terms hereof and shall have become
absolute and effective, and (iv) the Obligations shall not have become
immediately due and payable, the Collateral Agent shall promptly execute and
deliver to the Canadian Borrower, at the Canadian Borrower’s sole cost and
expense, such assignments or other transfer as may be necessary to reassign to
the Canadian Borrower any such rights, title and interests as may have been
assigned to the Collateral Agent; provided, after giving effect to such
reassignment, the Collateral Agent’s security interest granted pursuant hereto,
as well as all other rights and remedies of the Collateral Agent granted
hereunder, shall continue to be in full force and effect; and provided further,
the rights, title and interest so reassigned shall be free and clear of any
other Liens granted by or on behalf of the Collateral Agent and the Secured
Parties.
(j) The
Canadian Borrower recognizes that, by reason of certain prohibitions contained
in the Securities Act, and applicable provincial or territorial securities laws,
the Collateral Agent may be compelled, with respect to any sale of all or any
part of the Securities Collateral and Investment Property, to limit purchasers
to persons who will agree, among other things, to acquire such Security
Collateral or Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. The Canadian
Borrower acknowledges that any such private sales may be at prices and on terms
less favourable to the Collateral Agent than those obtainable through a public
sale without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act), and, so long as such private
sale is made in a commercially reasonable manner and that the Collateral Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Security Collateral or Investment Property for the period of
time necessary to permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under applicable
provincial or territorial securities laws, even if such issuer would agree to do
so.
(k) In
addition to its other enforcement rights expressed herein or otherwise at law,
the Collateral Agent may appoint by instrument in writing one or more Receivers
of any Collateral. Any such Receiver shall have the rights set out in
paragraph (l) below. In exercising such rights, any Receiver shall
act as and for all purposes shall be deemed to be the agent of the Canadian
Borrower and no Secured Party shall be responsible for any act or default of any
Receiver. The Collateral Agent may remove any Receiver and appoint
another from time to time. No Receiver appointed by the Collateral
Agent need be appointed by, nor need its appointment be
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ratified
by, or its actions in any way supervised by, a court. If two or more
Receivers are appointed to act concurrently, they shall, unless otherwise
expressly provided in the instrument appointing them, so act severally and not
jointly and severally. The appointment of any Receiver or anything
done by a Receiver or the removal or termination of any Receiver shall not have
the effect of constituting any Secured Party a mortgagee in possession in
respect of the Collateral.
(l) Any
Receiver appointed by the Collateral Agent shall have such of the following
rights, powers, authorities and remedies as the Collateral Agent shall grant to
such Receiver in the instrument appointing such Receiver:
(i) Any
Receiver may exercise any rights, powers and remedies to which the Collateral
Agent is entitled, save that only the Collateral Agent, and not the Receiver,
shall have the right to exercise any rights or remedies with respect to
Unlimited Liability Shares.
(ii) Any
Receiver may at any time enter upon any premises owned, leased or otherwise
occupied by the Canadian Borrower or where any Collateral is located to take
possession of, disable or remove any Collateral, and may use whatever means the
Receiver considers advisable to do so.
(iii) Any
Receiver shall be entitled to immediate possession of Collateral and the
Canadian Borrower shall forthwith upon demand by any Receiver deliver up
possession to a Receiver of any Collateral.
(iv) Any
Receiver may carry on, or concur in the carrying on of, any of the business or
undertaking of the Canadian Borrower and may, to the exclusion of all others,
including the Canadian Borrower, enter upon, occupy and use any of the premises,
buildings, plant and undertaking of or occupied or used by the Canadian Borrower
and may use any of the Equipment and Intangibles of the Canadian Borrower for
such time and such purposes as the Receiver sees fit. No Receiver
shall be liable to the Canadian Borrower for any negligence in so doing or in
respect of any rent, charges, costs, depreciation or damages in connection with
any such action.
(v) Any
Receiver may have, enjoy and exercise all of the rights of and enjoyed by the
Canadian Borrower with respect to the Collateral or incidental, ancillary,
attaching or deriving from the ownership by the Canadian Borrower of the
Collateral, including the right to enter into agreements pertaining to
Collateral, the right to commence or continue proceedings to preserve or protect
Collateral and the right to grant or agree to Liens and grant or reserve profits à prendre, easements,
rights of ways, rights in the nature of easements and licenses over or
pertaining to the whole or any part of the Collateral.
(m) The
Collateral Agent may, at any time, apply to a court of competent jurisdiction
for the appointment of a Receiver, or other official, who may have powers the
same as, greater or lesser than, or otherwise different from, those capable of
being granted to a Receiver appointed by the Collateral Agent pursuant to
this Agreement.
Section
17. Indemnity and
Expenses. (a) The Canadian Borrower agrees to
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates, each Receiver and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified
Party”) from and against, and shall pay on demand, any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except to
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the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s bad faith, gross negligence or willful
misconduct.
(b) The
Canadian Borrower will upon demand pay to the Collateral Agent the amount of any
and all reasonable expenses, including, without limitation, the reasonable fees
and expenses of its counsel and of any experts and agents, that the Collateral
Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of the
Canadian Borrower, (iii) the exercise or enforcement of any of the rights
of the Collateral Agent or the other Secured Parties hereunder or (iv) the
failure by the Canadian Borrower to perform or observe any of the provisions
hereof.
Section
18. Amendments; Waivers;
Etc. Subject to Section 10.01 of the Credit Agreement and
Section 2.11(b) of the Intercreditor Agreement, no amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Canadian
Borrower herefrom, shall in any event be effective unless the same shall be in
writing and signed by (i) the Canadian Borrower and (ii) the Collateral
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on
the part of the Collateral Agent or any other Secured Party to exercise, and no
delay in exercising any right hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
Section
19. Notices,
Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication or facsimile transmission) and mailed, telegraphed, telecopied,
telexed, faxed or delivered to it, if to the Canadian Borrower, addressed to it
in care of the Specified U.S. Borrower at the Specified U.S. Borrower’s address
specified in Section 10.02 of
the Credit Agreement and if to the Collateral Agent, at its address specified in
Section 10.02 of
the Credit Agreement. All such notices and other communications shall
be deemed to be given or made at such time as shall be set forth in Section 10.02 of the
Credit Agreement.
Section
20. Continuing Security
Interest; Assignments under the Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the date (such date being
the “Release
Date”) of (i) the termination of the Aggregate Commitments and payment in
full of all Obligations (other than (A) contingent indemnification obligations
and (B) obligations and liabilities under Secured Cash Management Agreements and
Secured Hedge Agreements as to which arrangements satisfactory to the applicable
Cash Management Bank or Hedge Bank shall have been made) and (ii) the expiration
or termination of all Letters of Credit (other than Letters of Credit as to
which other arrangements satisfactory to the Collateral Agent and the applicable
L/C Issuer shall have been made), (b) be binding upon the Canadian
Borrower, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the
Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion
of its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitments, the Loans owing to it and the
Note or Notes, if any, held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, in each case as provided in Section 10.06 of
the Credit Agreement.
Section
21. Release;
Termination. (a) Upon (y) any sale, lease, transfer
or other disposition of any item of Collateral of the Canadian Borrower
permitted by, and in accordance with, the terms of the Loan Documents, or upon
the effectiveness of any consent to the release of the security interest granted
hereby in any Collateral pursuant to Section 9.10 of the Credit Agreement, or
(z) the
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Canadian Security Agreement
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release
of a Lien in any Collateral of the Canadian Borrower required by Section 2.05 of
the Intercreditor Agreement, the Collateral Agent will, at the Canadian
Borrower’s expense, execute and deliver to the Canadian Borrower such documents
as the Canadian Borrower shall reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted
hereby; provided,
however, that (i) at the time of such request and such release no Default
shall have occurred and be continuing and (ii) the Canadian Borrower shall have
delivered to the Collateral Agent, at least ten Business Days (or such shorter
period as the Collateral Agent may agree) prior to the date of the proposed
release, a written request for release describing the item of Collateral and the
terms of the sale, lease, transfer or other disposition in reasonable detail,
including, without limitation, the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Collateral Agent
and a certificate of the Canadian Borrower to the effect that the transaction is
in compliance with the Loan Documents and as to such other matters as the
Collateral Agent may reasonably request and (iii) the proceeds of any such sale,
lease, transfer or other disposition required to be applied, or any payment to
be made in connection therewith, in accordance with Section 2.05 of the Credit
Agreement shall, to the extent so required, be paid or made to, or in accordance
with the instructions of, the Collateral Agent when and as required under
Section 2.05 of the Credit Agreement.
(b) Upon
the occurrence of the Release Date, the pledge and security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
Canadian Borrower. Upon any such termination, the Collateral Agent
will, at the Canadian Borrower’s expense, execute and deliver to the Canadian
Borrower such documents as the Canadian Borrower shall reasonably request to
evidence such termination.
Section
22. Execution in
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to
this Agreement, or of any amendment or waiver of any provision of this Agreement
or of any Security Agreement Supplement, by telecopier or in “pdf” or similar
format by electronic mail, shall be effective as delivery of an original
executed counterpart thereof.
Section
23. The
Mortgages. In the event that any of the Collateral hereunder
is also subject to a valid and enforceable Lien under the terms of any Mortgage
and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and real estate leases, letting and
licences of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of
all other Collateral.
Section
24. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Province of Alberta, including the federal laws
of Canada applicable therein, but excluding choice of law rules.
Reference
is made to the Lien Subordination and Intercreditor Agreement dated as of June
9, 2008, among General Electric Capital Corporation, as Collateral Agent for the
Revolving Facility Secured Parties referred to therein, U.S. Bank National
Association, as Trustee and as Noteholder Collateral Agent, Ply Gem Holdings,
Inc., Ply Gem Industries, Inc. and the subsidiaries of Ply Gem Industries, Inc.
named therein (the “Intercreditor Agreement”). Notwithstanding any
other provision contained herein, this Agreement, the Liens created hereby and
the rights, remedies, duties and obligations provided for herein are subject in
all respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the applicable Senior Secured Obligations Security Documents
(as defined in the Intercreditor Agreement). In the event of
any
CWD -
Canadian Security Agreement
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conflict
or inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall
control.
[Remainder
of Page Intentionally Blank]
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Canadian Security Agreement
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- -
IN
WITNESS WHEREOF, the Canadian Borrower has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
CWD
WINDOWS AND DOORS, INC.
By:
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Name:
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Title:
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CWD -
Canadian Security Agreement
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GENERAL
ELECTRIC CAPITAL CORPORATION
as
Collateral Agent
By:
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Name:
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Title:
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By:
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Name:
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Title:
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CWD -
Canadian Security Agreement
-ii-
Exhibit
A to the
Security
Agreement
CWD
WINDOWS AND DOORS, INC.
CONFIRMATION
OF SECURITY INTEREST IN INTELLECTUAL PROPERTY
RECITALS:
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A.
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CWD
Windows and Doors, Inc. (the “Obligor”),
a Canada corporation, is the owner of (i) the trade marks and trade
xxxx registrations set forth in Exhibit A, and the underlying
goodwill of said trade marks (collectively, the “Trade
Marks”), (ii) the copyright and copyright registrations set
forth in Exhibit A (the “Copyrights”)
and (iii) the patent application(s) and/or issued patent(s) set forth in
Exhibit A, (the “Patents”
and together with the Trade Marks and the Copyrights, collectively the
“Intellectual
Property”).
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B.
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The
Obligor has entered into a security agreement dated June 9, 2008 in favour
of General Electric Capital Corporation (the “Collateral Agent”)
(as amended, modified, supplemented or restated from time to time, the
“Security
Agreement”) under which, among other things, the Obligor granted to
the Collateral Agent a security interest in certain property, including
the Intellectual Property, as security, inter alia, for its
obligations under a certain credit
agreement.
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NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged and in accordance with the terms and obligations set
forth in the Security Agreement, the Obligor confirms the grant to the
Collateral Agent under the Security Agreement of a security interest in and to
the Intellectual Property.
[Remainder
of Page Intentionally Blank]
DATED this
day of ______________, 2008.
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CWD
WINDOWS AND DOORS, INC.
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By:
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___________________________________
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Name:
Title:
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By:
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___________________________________
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Name:
Title:
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Exhibit A to
Confirmation
of Security Interest in Intellectual Property
INTELLECTUAL
PROPERTY
TRADEMARKS
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Registration
Number
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Trademark
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Registration
Date
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COPYRIGHTS
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Registration
Number
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Title
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Registration
Date
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PATENTS
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Patent
or Patent Application No.
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Title
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Owner
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Status
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Filing
Date
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Exhibit
B to the
Security
Agreement
This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “IP Security
Agreement”) dated June 9, 2008, is made by CWD Doors and Windows, Inc.
(the “Canadian
Borrower”) in favour of General Electric Capital Corporation, as
Collateral Agent (the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement
referred to below).
WHEREAS,
Ply Gem Industries, Inc., a Delaware corporation (the “Specified U.S.
Borrower”)
and the other Loan Parties party thereto have entered into a Credit Agreement
dated as of June 9, 2008 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), with, inter alia, General Electric
Capital Corporation, as Collateral Agent, and the Lenders party
thereto. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein as defined in the Credit Agreement.
WHEREAS,
as a condition precedent to the making of Loans and the issuance of Letters of
Credit by the Lender Parties under the Credit Agreement and the entry into
Secured Hedge Agreements by the Hedge Banks and the entry into Secured Cash
Management Agreements by the Cash Management Banks from time to time, the
Canadian Borrower has executed and delivered that certain Security Agreement
dated June 9, 2008 made by the Canadian Borrower to the Collateral Agent
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Security
Agreement”).
WHEREAS,
under the terms of the Security Agreement, the Canadian Borrower has granted to
the Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, among other property, certain intellectual property of the Canadian
Borrower, and has agreed as a condition thereof to execute this IP Security
Agreement for recording with the United States Patent and Trademark Office, the
United States Copyright Office, the Canadian Intellectual Property Office and
other governmental authorities.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Canadian Borrower agrees as
follows:
SECTION
1. Grant of
Security. The Canadian Borrower hereby grants to the
Collateral Agent for the ratable benefit of the Secured Parties a security
interest in each type of property described below, and all of the Canadian
Borrower’s right, title and interest therein and thereto, (the “Collateral”):
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(a)
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the
patents and patent applications set forth in Schedule A hereto (the “Patents”);
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(b)
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the
trademark and service xxxx registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in
any trademark, whether registered, unregistered or applied for, to the
extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity or enforceability of
such trademark under applicable federal law), together with the goodwill
symbolized thereby (the “Trademarks”);
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(c)
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all
copyrights, whether registered or unregistered, now owned or hereafter
acquired by the Canadian Borrower, including, without limitation, the
copyright registrations and applications and exclusive copyright licences
set forth in Schedule C hereto (the “Copyrights”);
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(d)
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all
reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of the Canadian Borrower accruing thereunder or pertaining
thereto;
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(e)
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any
and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or
breach with respect to any of the foregoing, with the right, but not the
obligation, to xxx for and collect, or otherwise recover, such damages;
and
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(f)
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any
and all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral of or arising from
any of the foregoing.
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SECTION
2. Security
for Obligations. The grant of a security interest in, the
Collateral by the Canadian Borrower under this IP Security Agreement secures the
payment of all Secured Obligations of the Canadian Borrower now or hereafter
existing under or in respect of the Loan Documents. Without limiting
the generality of the foregoing, this IP Security Agreement secures, as to the
Canadian Borrower, the payment of all amounts that constitute part of the
Secured Obligations and that would be owed by the Canadian Borrower to any
Secured Party under the Loan Documents but for the fact that such Secured
Obligations are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan
Party.
SECTION
3. Recordation. The
Canadian Borrower authorizes and requests that the Register of Copyrights, the
Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer record this IP Security Agreement.
SECTION
4. Execution in
Counterparts. This IP Security Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
SECTION
5. Grants,
Rights and Remedies. This IP Security Agreement has been
entered into in conjunction with the provisions of the Security
Agreement. The Canadian Borrower does hereby acknowledge and confirm
that the grant of the security interest hereunder to, and the rights and
remedies of, the Collateral Agent with respect to the Collateral are more fully
set forth in the Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein.
SECTION
6. Governing
Law. This IP Security Agreement shall be governed by, and
construed in accordance with, the laws of the Province of Alberta, including the
federal laws of Canada, but excluding choice of law rules.
Reference
is made to the Lien Subordination and Intercreditor Agreement dated as of June
9, 2008, among General Electric Capital Corporation, as Collateral Agent for the
Revolving Facility Secured Parties referred to therein, U.S. Bank National
Association, as Trustee and as Noteholder Collateral Agent, Ply Gem Holdings,
Inc., Ply
-ii-
Gem
Industries, Inc. and the subsidiaries of Ply Gem Industries, Inc. named therein
(the “Intercreditor Agreement”). Notwithstanding any other provision
contained herein, this Agreement, the Liens created hereby and the rights,
remedies, duties and obligations provided for herein are subject in all respects
to the provisions of the Intercreditor Agreement and, to the extent provided
therein, the applicable Senior Secured Obligations Security Documents (as
defined in the Intercreditor Agreement). In the event of any conflict
or inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall
control.
[Remainder
of Page Intentionally Blank]
-iii-
IN
WITNESS WHEREOF, the Canadian Borrower has caused this IP Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CWD
WINDOWS AND DOORS, INC.
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By
__________________________
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Name:
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Title:
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-iv-
Exhibit
C to the
Security
Agreement
FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
This
INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this “IP Security
Agreement Supplement”) dated __________, 200_, is made by CWD Windows and
Doors, Inc. (the “Canadian
Borrower”) in favour of General Electric Capital Corporation, as
collateral agent (the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement
referred to below).
WHEREAS
Ply Gem Industries, Inc., a Delaware corporation (the “Specified U.S.
Borrower”)
and the other Loan Parties party thereto have entered into a Credit Agreement
dated as of June 9, 2008 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), with General Electric Capital Corporation, as Collateral
Agent, and the Lenders party thereto. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as defined in the
Credit Agreement.
WHEREAS,
pursuant to the Credit Agreement, the Canadian Borrower has executed and
delivered that certain Security Agreement dated June 9, 2008 made by the
Canadian Borrower to the Collateral Agent (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security
Agreement”).
WHEREAS,
under the terms of the Security Agreement, the Canadian Borrower has granted to
the Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in the Additional Collateral (as defined in Section 1 below) of the
Canadian Borrower and has agreed as a condition thereof to execute this IP
Security Agreement Supplement for recording with the United States Patent and
Trademark Office, the United States Copyright Office, the Canadian Intellectual
Property Office and other governmental authorities.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Canadian Borrower agrees as
follows:
SECTION
1. Grant of
Security. The Canadian Borrower hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in each type of property described below, and all of the Canadian
Borrower’s right, title and interest therein and thereto, (the “Collateral”):
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(a)
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the
patents and patent applications set forth in Schedule A hereto (the “Patents”);
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(b)
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the
trademark and service xxxx registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in
any trademark, whether registered, unregistered or applied for, to the
extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity or enforceability of
such trademark under applicable federal law), together with the goodwill
symbolized thereby (the “Trademarks”);
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(c)
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all
copyrights, whether registered or unregistered, now owned or hereafter
acquired by the Canadian Borrower, including, without limitation, the
copyright registrations and applications and exclusive copyright licences
set forth in Schedule C hereto (the “Copyrights”);
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-v-
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(d)
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all
reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of the Canadian Borrower accruing thereunder or pertaining
thereto;
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(e)
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any
and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or
breach with respect to any of the foregoing, with the right, but not the
obligation, to xxx for and collect, or otherwise recover, such damages;
and
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(f)
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any
and all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Additional Collateral of or
arising from any of the foregoing.
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SECTION
2. Security
for Obligations. The grant of a security interest in the
Additional Collateral by the Canadian Borrower under this IP Security Agreement
Supplement secures the payment of all Secured Obligations of the Canadian
Borrower now or hereafter existing under or in respect of the Loan
Documents.
SECTION
3. Recordation. The
Canadian Borrower authorizes and requests that the Register of Copyrights, the
Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer record this IP Security Agreement
Supplement.
SECTION
4. Grants,
Rights and Remedies. This IP Security Agreement Supplement has
been entered into in conjunction with the provisions of the Security
Agreement. The Canadian Borrower does hereby acknowledge and confirm
that the grant of the security interest hereunder to, and the rights and
remedies of, the Collateral Agent with respect to the Additional Collateral are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated herein by reference as if fully set forth
herein.
SECTION
5. Governing
Law. This IP Security Agreement Supplement shall be governed
by, and construed in accordance with, the laws of the Province of Alberta,
including the federal laws of Canada applicable therein, excluding choice of law
rules.
Reference
is made to the Lien Subordination and Intercreditor Agreement dated as of
June 9, 2008, among General Electric Capital Corporation, as Collateral
Agent for the Secured Parties referred to therein, U.S. Bank National
Association, as Trustee and Noteholder Collateral Agent, Ply Gem Holdings, Inc.
Ply Gem Industries, Inc. and the subsidiaries of Ply Gem Industries, Inc. named
therein (the “Intercreditor Agreement”). Notwithstanding any other
provision contained herein, this Agreement, the Liens created hereby and the
rights, remedies, duties and obligations provided for herein are subject in all
respects to the provisions of the Intercreditor Agreement and, to the extent
provided therein, the applicable Senior Secured Obligations Security Documents
(as defined in the Intercreditor Agreement). In the event of any
conflict or inconsistency between the provisions of this Agreement and the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control.
[Remainder
of Page Intentionally Blank]
-vi-
IN
WITNESS WHEREOF, the Canadian Borrower has caused this IP Security Agreement
Supplement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
CWD
WINDOWS AND DOORS, INC.
By
__________________________
Name:
Title:
-vii-
