CANADIAN PLEDGE AGREEMENT
Exhibit 10.6
EXECUTION COPY
EXECUTION COPY
CANADIAN PLEDGE AGREEMENT, dated as of October 13, 2010 (this “Agreement”), by
ASSOCIATED MATERIALS CANADA LIMITED (“Associated”), an Ontario Corporation, GENTEK CANADA
HOLDINGS LIMITED (“Gentek”), an Ontario Corporation and GENTEK BUILDING PRODUCTS LIMITED
PARTNERSHIP, an Ontario limited partnership, by its general partner, Gentek (“LP”), each of
the subsidiaries listed on Schedule 1 hereto (each such subsidiary, individually, a “Canadian
Subsidiary Pledgor” and, collectively, the “Canadian Subsidiary Pledgors”; and,
together with Associated, Gentek and LP, the “Canadian Pledgors”), and UBS AG CANADA
BRANCH, as Canadian Collateral Agent for the Secured Parties (as defined below) (in such capacity,
together with its successors in such capacity, the “Canadian Collateral Agent”).
W I T N E S S E T H:
WHEREAS, (1) XXXXX INTERMEDIATE HOLDINGS CORP., a Delaware corporation (“Holdings”), the US
Borrowers and the Canadian Borrowers (collectively, the “Borrowers”) have entered into a Revolving
Credit Agreement, dated as of October 13, 2010 (the “Credit Agreement”), with the banks, financial
institutions and other institutional lenders and investors from time to time parties thereto (each
individually a “Lender” and collectively, the “Lenders”), UBS AG, STAMFORD BRANCH, as US
Administrative Agent, US Collateral Agent, and a US Letter of Credit Issuer and a Canadian Letter
of Credit Issuer, UBS AG CANADA BRANCH, as Canadian Administrative Agent and Canadian Collateral
Agent, XXXXX FARGO CAPITAL FINANCE, LLC, as Co-Collateral Agent, DEUTSCHE BANK AG NEW YORK BRANCH,
as a US Letter of Credit Issuer, DEUTSCHE BANK AG CANADA BRANCH, as a Canadian Letter of Credit
Issuer, XXXXX FARGO BANK, NATIONAL ASSOCIATION as a US Letter of Credit Issuer and a Canadian
Letter of Credit Issuer and UBS LOAN FINANCE LLC, as Swingline Lender, pursuant to which the
Canadian Lenders have severally agreed to make loans to the Borrowers and the Letter of Credit
Issuers have agreed to issue letters of credit for the account of the Borrowers upon the terms and
subject to the conditions set forth therein, (2) one or more Cash Management Banks may from time to
time provide Cash Management Services pursuant to Secured Cash Management Agreements to any Credit
Party and (3) one or more Hedge Banks may from time to time enter into Secured Hedging Agreements
with any Credit Party (clauses (1), (2) and (3) collectively, the “Extensions of Credit”);
WHEREAS, pursuant to the Canadian Guarantee, dated as of October 13, 2010 (the “Canadian
Guarantee”), each of the Canadian Pledgors (other than in respect of their own obligations) and
their subsidiaries party thereto have agreed to guarantee to the Canadian Collateral Agent, for the
benefit of the Secured Parties, the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Canadian Obligations;
WHEREAS, each Canadian Pledgor acknowledges that it will derive substantial direct and
indirect benefit from the making of the Extensions of Credit and have agreed to secure their
obligations with respect thereto pursuant to this Agreement;
WHEREAS, it is a condition precedent to the obligations of the Canadian Lenders and Canadian
the Letter of Credit Issuers to make their respective Extensions of Credit to the Canadian
Borrowers under the Credit Agreement that the Canadian Pledgors shall have executed and delivered
this Agreement to the Canadian Collateral Agent for the benefit of the Secured Parties; and
WHEREAS, (1) the Canadian Pledgors are the legal and beneficial owners of the Capital Stock
described in Schedule 2 and issued by the entities named therein (such Capital Stock, together with
all other Capital Stock required to be pledged pursuant to Section 9.11 of the Credit Agreement
(the “After-acquired Shares”), are referred to collectively herein as the “Pledged
Shares”), and (2) each of the Canadian Pledgors is the legal and beneficial owner of the
promissory notes, chattel paper and instruments evidencing Indebtedness owed to it described in
Schedule 2 and issued by the entities named therein (such notes and instruments, together with any
other Indebtedness owed to any Canadian Pledgor hereafter and required to be pledged pursuant to
Section 9.11(a) of the Credit Agreement (the “After-acquired Debt”), are referred to
collectively herein as the “Pledged Debt”), in each case as such schedule may be amended
pursuant to Section 9.11(a) of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and to induce the Agents
and the Canadian Lenders and the Canadian Letter of Credit Issuers to enter into the Credit
Agreement and to induce the Canadian Lenders and the Canadian Letter of Credit Issuers to make
their respective Extensions of Credit to the Canadian Borrowers under the Credit Agreement, to
induce one or more Cash Management Banks to provide Cash Management Services pursuant to Secured
Cash Management Agreements to any Credit Party and to induce one or more Hedge Banks to enter into
Secured Hedging Agreements with each Credit Party, the Canadian Pledgors hereby agree with the
Canadian Collateral Agent, for the benefit of the Secured Parties, as follows:
1. Defined Terms.
(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein
(including terms used in the preamble and the recitals) shall have the meanings given to them in
the Credit Agreement and all terms defined in the PPSA from time to time in effect or in the
Securities Transfer Act (Ontario) from time to time in effect (together with any regulations
thereunder, the “STA”) and not defined herein or in the Credit Agreement shall have the
meanings specified therein. References to sections of the PPSA or the STA shall be construed to
also refer to any successor sections.
(b) The rules of construction and other interpretive provisions specified in Sections 1.2,
1.5, 1.6 and 1.7 of the Credit Agreement shall apply to this Agreement, including terms defined in
the preamble and recitals hereto.
(c) The following terms shall have the following meanings:
“After-acquired Debt” shall have the meaning assigned to such term in the recitals
hereto.
-2-
“After-acquired Shares” shall have the meaning assigned to such term in the recitals
hereto.
“Agreement” shall have the meaning assigned to such term in the preamble hereto.
“Canadian Borrowers” shall have the meaning assigned to the term “Canadian Borrowers”
in the Credit Agreement.
“Canadian Collateral Agent” shall have the meaning assigned to such term in the
preamble hereto.
“Canadian Guarantee” shall have the meaning assigned to such term in the recitals
hereto.
“Canadian Obligations” shall have the meaning assigned to the term “Canadian
Obligations” in the Credit Agreement.
“Canadian Pledgors” shall have the meaning assigned to such term in the preamble
hereto.
“Canadian Subsidiary Pledgors” shall have the meaning assigned to such term in the
preamble hereto.
“Company” shall have the meaning assigned to such term in the preamble hereto.
“Credit Agreement” shall have the meaning assigned to such term in the recitals
hereto.
“Extensions of Credit” shall have the meaning assigned to such term in the recitals
hereto.
“Lenders” shall have the meaning assigned to such term in the recitals hereto.
“Permitted Liens” shall mean any Lien on the Collateral expressly permitted to be
granted pursuant to the Credit Agreement.
“Pledged Debt” shall have the meaning assigned to such term in the recitals hereto.
“Pledged Shares” shall have the meaning assigned to such term in the recitals hereto.
“PPSA” shall mean the Personal Property Security Act (Ontario), the Civil Code of
Québec or any other applicable Canadian federal, provincial or territorial statute pertaining to
the granting, perfecting, priority or ranking of security interests, liens, hypothecs on personal
property, and any successor statutes, together with any regulations thereunder, in each case as in
effect from time to time. References to sections of the PPSA shall be construed to also refer
to any successor sections.
-3-
“Secured Debt Documents” shall mean, collectively, the Credit Documents, each Secured
Cash Management Agreement entered into with a Cash Management Bank and each Secured Hedging
Agreement entered into with a Hedge Bank.
“Securities Act” shall have the meaning assigned to such term in Section 12(e).
“Termination Date” shall mean the date on which all Canadian Obligations are paid in
full in cash (other than Cash Management Obligations under Secured Cash Management Agreements,
Hedging Obligations under Secured Hedging Agreements or contingent indemnification obligations not
then due and payable) and the Total Revolving Credit Commitments and all Letters of Credit are
terminated (other than Letters of Credit that have been Cash Collateralized in the manner set
forth in Section 3.7 of the Credit Agreement following the termination of the Total Revolving
Credit Commitments).
(d) Where the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Canadian Pledgor, shall refer to such Canadian Pledgor’s Collateral or the
relevant part thereof.
2. Grant of Security. As security for the prompt and complete payment when due
(whether at the stated maturity, by acceleration or otherwise) of the Canadian Obligations, each
Canadian Pledgor hereby transfers, assigns and pledges to the Canadian Collateral Agent, for the
benefit of the Secured Parties, and hereby grants to the Canadian Collateral Agent, for the benefit
of the Secured Parties, a security interest in and continuing lien on all of such Canadian
Pledgor’s right, title and interest in and to all of the following, whether now owned or anytime
hereafter acquired or existing (collectively, the “Collateral”):
(a) the Pledged Shares held by such Canadian Pledgor and the certificates, if any,
representing such Pledged Shares and any interest of such Canadian Pledgor, including all
interests documented in the entries on the books of the issuer of the Pledged Shares or any
financial intermediary pertaining to the Pledged Shares and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of, or in exchange for, any or all of the Pledged Shares;
provided that the Pledged Shares under this Agreement shall not include any Excluded
Capital Stock;
(b) the Pledged Debt and the instruments evidencing the Pledged Debt owed to such
Canadian Pledgor, and all payments of principal or interest, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Debt;
(c) all other property that may be delivered to and held by the Canadian Collateral
Agent pursuant to the terms of this Section 2;
-4-
(d) subject to Section 8, all rights and privileges of such Canadian Pledgor with
respect to the securities and other property referred to in clauses (a), (b) and (c) above;
and
(e) to the extent not covered by clauses (a), (b), (c) and (d) above, respectively, all
proceeds of any or all of the foregoing Collateral. For purposes of this Agreement, the
term “proceeds” includes whatever is receivable or received when Collateral or proceeds are
sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary
or involuntary, and includes proceeds of any indemnity or guarantee payable to any Canadian
Pledgor or the Canadian Collateral Agent from time to time with respect to any of the
Collateral.
TO HAVE AND TO HOLD the Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Canadian Collateral Agent,
for the benefit of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
3. Security for the Canadian Obligations. This Agreement secures the full and prompt
payment when due (whether at stated maturity, by acceleration or otherwise) of, and the performance
of, all the Canadian Obligations. Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts that constitute part of the Canadian Obligations and would be
owed to the Canadian Collateral Agent or the Secured Parties under the Secured Debt Documents but
for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy,
insolvency, reorganization or similar proceeding involving any Canadian Pledgor.
4. Delivery of the Collateral and Filing.
(a) Each Canadian Pledgor represents and warrants that all certificates or instruments, if
any, representing or evidencing the Collateral in existence on the date hereof have been delivered
to the Canadian Collateral Agent (or its non-fiduciary agent or designee) in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or assignment in
blank; provided that in no event shall any certificates, instruments or transfer of stock powers be
required with respect to the pledge of any Capital Stock of any Foreign Subsidiary other than a
Canadian Subsidiary. All certificates or instruments, if any, representing or evidencing the
Collateral acquired or created after the date hereof shall be promptly (but in any event within
thirty days after acquisition or creation thereof) delivered to and held by or on behalf of the
Canadian Collateral Agent (or its non fiduciary agent or designee) pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank. The Canadian Collateral Agent shall have the right, at any time
after the occurrence and during the continuation of an Event of Default and without notice to any
Canadian Pledgor (except as otherwise expressly provided herein), to transfer to or to register in
the name of the Canadian Collateral Agent or any of its nominees any or all of the Pledged Shares.
After the occurrence and during the continuance of an Event of Default, each Canadian Pledgor will
promptly give to the Canadian Collateral Agent copies of any notices or other communications
received by it with respect to Pledged Shares registered in the name of such Canadian Pledgor.
After the occurrence and during the continuance of an
Event of Default, the Canadian Collateral Agent shall have the right to exchange the
certificates representing Pledged Shares for certificates of smaller or larger denominations for
any purpose consistent with this Agreement. Each delivery of Collateral (including any
After-acquired Shares and After-acquired Debt) shall be accompanied by a schedule describing the
securities theretofore and then being pledged hereunder, which shall be attached hereto as part of
Schedule 2 and made a part hereof; provided that the failure to attach any such schedule
hereto shall not affect the validity of such pledge of such securities. Each schedule so delivered
shall supersede any prior schedules so delivered.
-5-
(b) Each Canadian Pledgor hereby irrevocably authorizes the Canadian Collateral Agent at any
time and from time to time to file in any relevant jurisdiction any initial financing statements
with respect to the Collateral or any part thereof and amendments thereto and renewals thereof that
contain the information required by the PPSA for the filing of any financing statement or amendment
or renewal. Such financing statements may describe the Collateral in the same manner as described
herein or may contain an indication or description of collateral that describes such property in
any other manner such as “all assets” or “all personal property, whether now owned or hereafter
acquired” of such Canadian Pledgor or words of similar effect as being of an equal or lesser scope
or with greater detail. Each Canadian Pledgor agrees to provide such information to the Canadian
Collateral Agent promptly after any such request. Each Canadian Pledgor agrees to furnish the
Canadian Collateral Agent with written notice as required by Section 4.2 of the Canadian Security
Agreement.
5. Representations and Warranties. Each Canadian Pledgor represents and warrants to
the Canadian Collateral Agent and each other Canadian Secured Party that:
(a) Schedule 2 hereto (i) correctly represents as of the date hereof (A) the issuer,
the issuer’s jurisdiction of formation, the certificate number, if any, the Canadian Pledgor
and the record and beneficial owner, the number and class and the percentage of the issued
and outstanding Capital Stock of such class of all Pledged Shares and (B) the issuer, the
issuer’s jurisdiction, the initial principal amount, the Canadian Pledgor and holder, date
of issuance and maturity date of all Pledged Debt and (ii) together with the comparable
schedule to each supplement hereto, includes, all Capital Stock, debt securities and
promissory notes required to be pledged pursuant to Section 9.11 of the Credit Agreement and
Section 9(b) hereof. Except as set forth on Schedule 2 and except for Excluded Capital
Stock, the Pledged Shares represent all of the issued and outstanding Capital Stock of each
class of Capital Stock in the issuer on the date hereof.
(b) Such Canadian Pledgor is the legal and beneficial owner of the Collateral pledged
or assigned by such Canadian Pledgor hereunder free and clear of any Lien, except for the
Liens created by this Agreement and the Credit Documents.
(c) As of the date of this Agreement, the Pledged Shares pledged by such Canadian
Pledgor hereunder have been duly authorized and validly issued and, in the case of Pledged
Shares issued by a corporation, are fully paid and non-assessable.
-6-
(d) Except for restrictions and limitations imposed by the Credit Documents or
securities laws generally and except as described in the Perfection Certificate, the
Collateral is freely transferable and assignable, and none of the Collateral is subject
to any option, right of first refusal, shareholders agreement, charter or by-law provisions
or contractual restriction of any nature that might prohibit, impair, delay or otherwise
affect the pledge of such Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Canadian Collateral Agent of rights and remedies hereunder.
(e) No consent or approval of any Governmental Authority, any securities exchange or
any other Person was or is necessary to the validity of the pledge effected hereby (other
than such as have been obtained and are in full force and effect).
(f) The execution and delivery by such Canadian Pledgor of this Agreement and the
pledge of the Collateral pledged by such Canadian Pledgor hereunder pursuant hereto create a
valid and enforceable security interest in such Collateral and (i) in the case of
certificates or instruments representing or evidencing the Collateral, upon the earlier of
(x) delivery of such Collateral and any necessary endorsements to the extent necessary to
the Canadian Collateral Agent (or its non fiduciary agent or designee) in accordance with
this Agreement and (y) the filing of financing statements naming each Canadian Pledgor as
‘debtor” and the Canadian Collateral Agent as “secured party” (in the applicable filing
offices, and (ii) in the case of all other Collateral which is capable of being perfected by
the filing of financing statements upon the filing of financing statements naming each
Canadian Pledgor as “debtor” and the Canadian Collateral Agent as “secured party” and
describing the Collateral in the applicable filing offices, shall create a perfected first
priority security interest in such Collateral, securing the payment of the Canadian
Obligations, in favor of the Canadian Collateral Agent, for the benefit of the Secured
Parties, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting creditors’ rights generally
and general principles of equity (whether considered in a proceeding in equity or law).
(g) The pledge effected hereby is effective to vest in the Canadian Collateral Agent,
for the benefit of the Secured Parties, the rights of the Canadian Collateral Agent in the
Collateral as set forth herein.
(h) Such Canadian Pledgor has full power, authority and legal right to pledge all the
Collateral pledged by such Canadian Pledgor pursuant to this Agreement and this Agreement
constitutes a legal, valid and binding obligation of such Canadian Pledgor (in the case of
the Capital Stock of Foreign Subsidiaries, to the extent the creation of such security
interest in the Capital Stock of Foreign Subsidiaries other than a Subsidiary that is
organized under the Applicable Laws of a jurisdiction in Canada is governed by the PPSA),
enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating to or affecting
creditors’ rights generally and general principles of equity (whether considered in a
proceeding in equity or law).
(i) None of the Canadian Pledgors have any Subsidiaries as of the Closing Date and the
only partnership interests of any Canadian Pledgor as of the Closing Date are listed on
Schedule 2.
-7-
(j) The Pledged Debt constitutes all of the outstanding Indebtedness for money borrowed
owed to such Canadian Pledgor as of the Closing Date and required to be pledged hereunder or
pursuant to Sections 6.2 and 9.11(a) of the Credit Agreement. Such Pledged Debt that
constitutes intercompany Indebtedness has been duly authorized, authenticated or issued and
delivered, is the legal, valid and binding obligation of the issuers thereof, is evidenced
by a Canadian Intercompany Note (which note has been delivered to the Canadian Collateral
Agent (or is non fiduciary agent or designee)) and, as of the date of this Agreement, is not
in default.
6. Certification of Limited Partnership Interests and Pledged Debt.
(a) Unless otherwise consented to by the Canadian Collateral Agent, Capital Stock required to
be pledged hereunder in any Subsidiary that is organized as a limited partnership and pledged
hereunder shall either (i) be represented by a certificate, and in the Organizational Documents of
such Subsidiary the applicable Canadian Pledgor shall cause the issuer of such interests to elect
to treat such interests as a “security” within the meaning of the STA of its jurisdiction of
organization or formation, as applicable, by including in its organizational documents language
substantially similar to the following and, accordingly, such interests shall be governed by the
STA:
“The [limited partnership] hereby irrevocably elects that all [limited partnership]
interests in the [limited partnership] shall be securities governed by the STA of
[jurisdiction of organization or formation, as applicable]. Each certificate
evidencing [limited partnership] interests in the [limited partnership] shall be
deemed to bear the following legend: “This certificate evidences an interest in
[name of [limited partnership]] and shall be a security for purposes of the STA.”
No change to this provision shall be effective until all outstanding certificates
have been surrendered for cancellation and any new certificates thereafter issued
shall not bear the foregoing legend.”
or (ii) not have elected to be treated as a “security” within the meaning of the STA and shall not
be represented by a certificate.
(b) Subject to the limitations set forth herein and in Section 9.11 of the Credit Agreement,
each Canadian Pledgor will cause any Indebtedness (i) for borrowed money (other than intercompany
Indebtedness) having an aggregate principal amount in excess of $5,000,000 (individually) owed to
it and required to be pledged and delivered pursuant to the terms hereof and the Credit Agreement
to be evidenced by a duly executed promissory note, which shall be accompanied by instruments of
transfer with respect thereto endorsed in blank, that is pledged and delivered to the Canadian
Collateral Agent (or its non fiduciary agent or designee) pursuant to the terms hereof and (ii) of
each Borrower and each of its Restricted Subsidiaries that is owing to any Canadian Pledgor to be
evidenced by the Canadian Intercompany Note, which shall be accompanied by instruments of transfer
with respect thereto endorsed in blank, that is pledged and delivered to the Canadian Collateral
Agent (or its non-fiduciary agent or designee) pursuant to the terms hereof.
-8-
7. Further Assurances. Subject to any limitations set forth in the Credit Documents,
each Canadian Pledgor agrees that at any time and from time to time, at the expense of such
Canadian Pledgor, it will execute or otherwise authorize the filing of any and all further
documents, financing statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements deeds of trust and other documents),
which may be required under any Applicable Law, or which the Canadian Collateral Agent may
reasonably request, in order (x) to perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby (including the priority thereof) or (y) to enable the
Canadian Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral.
8. Voting Rights; Dividends and Distributions; Etc.
(a) So long as no Event of Default shall have occurred and be continuing:
(i) Each Canadian Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any purpose not
prohibited by the terms of this Agreement or the other Secured Debt Documents;
provided that such voting and other rights shall not be exercised in any manner that
could materially and adversely affect the rights inuring to a holder of any Pledged Shares
or the rights and remedies of any of the Canadian Collateral Agent or the other Secured
Parties under this Agreement, the Credit Agreement or any other Credit Document or the
ability of the Secured Parties to exercise the same.
(ii) The Canadian Collateral Agent shall execute and deliver (or cause to be executed
and delivered) to each Canadian Pledgor all such proxies and other instruments as such
Canadian Pledgor may reasonably request for the purpose of enabling such Canadian Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to paragraph
(i) above.
(b) Subject to paragraph (c) below, each Canadian Pledgor shall be entitled to receive and
retain and use, free and clear of the Lien of this Agreement, any and all dividends, distributions,
redemptions, principal and interest made or paid in respect of the Collateral to the extent not
prohibited by any Secured Debt Document; provided, however, that any and all
noncash dividends, interest, principal or other distributions that would constitute Pledged Shares
or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the
outstanding Capital Stock of the issuer of any Pledged Shares or received in exchange for Pledged
Shares or Pledged Debt or any part thereof, or in redemption thereof, or as a result of any merger,
consolidation, amalgamation, acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be, and shall be forthwith delivered to the Canadian Collateral Agent to
hold as, Collateral and shall, if received by such Canadian Pledgor, be received in trust for the
benefit of the Canadian Collateral Agent, be segregated from the other property or funds of such
Canadian Pledgor and be forthwith delivered to the Canadian Collateral Agent as Collateral in the
same form as so received (with any necessary endorsement).
-9-
(c) Upon written notice to the Canadian Pledgors by the Canadian Collateral Agent following
the occurrence and during the continuation of an Event of Default:
(i) all rights of such Canadian Pledgor to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to exercise pursuant
to Section 8(a)(i) shall cease, and all such rights shall thereupon become vested in the
Canadian Collateral Agent, which shall thereupon have the sole right to exercise or refrain
from exercising such voting and other consensual rights during the continuation of such
Event of Default; provided that, unless otherwise directed by the Required Lenders,
the Canadian Collateral Agent shall have the right from time to time following the
occurrence and during the continuation of an Event of Default to permit the Canadian
Pledgors to exercise such rights. After all Events of Default have been cured or waived or
otherwise cease to be continuing and the Company has delivered to the Canadian Collateral
Agent a certificate to that effect, each Canadian Pledgor will have the right to exercise
the voting and consensual rights that such Canadian Pledgor would otherwise be entitled to
exercise pursuant to the terms of Section 8(a)(i) (and the obligations of the Canadian
Collateral Agent under Section 8(a)(ii) shall be reinstated);
(ii) all rights of such Canadian Pledgor to receive the dividends, distributions and
principal and interest payments that such Canadian Pledgor would otherwise be authorized to
receive and retain pursuant to Section 8(b) shall cease, and all such rights shall thereupon
become vested in the Canadian Collateral Agent, which shall thereupon have the sole right to
receive and hold as Collateral such dividends, distributions and principal and interest
payments during the continuation of such Event of Default. After all Events of Default have
been cured or waived or otherwise cease to be continuing and the Company has delivered to
the Canadian Collateral Agent a certificate to that effect, the Canadian Collateral Agent
shall repay to each Canadian Pledgor (without interest) and each Canadian Pledgor shall be
entitled to receive, retain and use all dividends, distributions and principal and interest
payments that such Canadian Pledgor would otherwise be permitted to receive, retain and use
pursuant to the terms of Section 8(b);
(iii) all dividends, distributions and principal and interest payments that are
received by such Canadian Pledgor contrary to the provisions of Section 8(b) shall be
received in trust for the benefit of the Canadian Collateral Agent, shall be segregated from
other property or funds of such Canadian Pledgor and shall forthwith be delivered to the
Canadian Collateral Agent as Collateral in the same form as so received (with any necessary
endorsements); and
(iv) in order to permit the Canadian Collateral Agent to receive all dividends,
distributions and principal and interest payments to which it may be entitled under Section
8(b) above, to exercise the voting and other consensual rights that it may be entitled to
exercise pursuant to Section 8(c)(i), and to receive all dividends, distributions and
principal and interest payments that it may be entitled to under Sections 8(c)(ii) and
(c)(iii), such Canadian Pledgor shall from time to time execute and deliver to the Canadian
Collateral Agent, appropriate proxies, dividend payment orders and other instruments as the
Canadian Collateral Agent may reasonably request.
-10-
(d) Any notice given by the Canadian Collateral Agent to the Canadian Pledgors suspending
their rights under paragraph (c) of this Section 8 (i) may be given by telephone if promptly
confirmed in writing, (ii) may be given to one or more of the Canadian
Pledgors at the same or different times and (iii) may suspend the rights of the Canadian
Pledgors under paragraph (a)(i) or paragraph (b) of this Section 9 in part without suspending all
such rights (as specified by the Canadian Collateral Agent in its sole and absolute discretion) and
without waiving or otherwise affecting the Canadian Collateral Agent’s rights to give additional
notices from time to time suspending other rights so long as an Event of Default has occurred and
is continuing.
9. Transfers and Other Liens; Additional Collateral; Etc. Each Canadian Pledgor
shall:
(a) not (i) except as expressly permitted by the Credit Agreement (including pursuant
to waivers and consents thereunder), sell or otherwise Dispose of, or grant any option or
warrant with respect to, any of the Collateral or (ii) create or suffer to exist any
consensual Lien upon or with respect to any of the Collateral, except for the Lien created
by this Agreement and the other Security Documents; provided that in the event such
Canadian Pledgor sells or otherwise disposes of assets as permitted by the Credit Agreement
(including pursuant to waivers and consents thereunder) and such assets are or include any
of the Collateral, the Canadian Collateral Agent shall release such Collateral to such
Canadian Pledgor free and clear of the Lien created by this Agreement concurrently with the
consummation of such sale in accordance with Section 13.17 of the Credit Agreement and with
Section 14 hereof;
(b) pledge and, if applicable, cause each Domestic Subsidiary required to become a
party hereto to pledge, to the Canadian Collateral Agent for the benefit of the Secured
Parties, immediately upon acquisition thereof, all After-acquired Shares and After-acquired
Debt required to be pledged pursuant to Section 9.11(a) of the Credit Agreement, in each
case pursuant to a supplement to this Agreement substantially in the form of Annex A hereto
or such other form reasonably satisfactory to the Canadian Collateral Agent (it being
understood that the execution and delivery of such a supplement shall not require the
consent of any Canadian Pledgor hereunder and that the rights and obligations of each
Canadian Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Canadian Subsidiary Pledgor as a party to this Agreement); and
(c) defend its and the Canadian Collateral Agent’s title or interest in and to all the
Collateral (and in the Proceeds thereof) against any and all Liens (other than the Lien
created by this Agreement), however arising, and any and all Persons whomsoever and, subject
to Section 13.17 of the Credit Agreement and Section 14 hereof, to maintain and preserve the
Lien and security interest created by this Agreement until the Termination Date.
10. Canadian Collateral Agent Appointed Attorney-in-Fact. Each Canadian Pledgor
hereby appoints, which appointment is irrevocable and coupled with an interest, the Canadian
Collateral Agent as such Canadian Pledgor’s attorney-in-fact, with full authority in the place and
stead of such Canadian Pledgor and in the name of such Canadian Pledgor or otherwise, to take any
action and to execute any instrument, in each case after the occurrence and during the continuation
of an Event of Default, that the Canadian Collateral Agent may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement, including to
receive, endorse and collect all instruments made payable to such Canadian Pledgor representing any
dividend, distribution or principal or interest payment in respect of the Collateral or any part
thereof and to give full discharge for the same.
-11-
11. The Canadian Collateral Agent’s Duties. The powers conferred on the Canadian
Collateral Agent hereunder are solely to protect its 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 Canadian
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
Pledged Shares, whether or not the Canadian Collateral Agent or any other Canadian 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 Canadian
Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation
of any Collateral in its possession if such Collateral is accorded treatment substantially equal to
that which the Canadian Collateral Agent accords its own property.
12. Remedies. If any Event of Default shall have occurred and be continuing:
(a) The Canadian 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, any other statute or
otherwise at law or in equity and also may 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
exchange broker’s board or at any of the Canadian Collateral Agent’s offices or elsewhere,
for cash, on credit or for future delivery, at such price or prices and upon such other
terms as the Canadian Collateral Agent may deem commercially reasonable irrespective of the
impact of any such sales on the market price of the Collateral. The Canadian Collateral
Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers of Collateral to Persons who will represent and agree
that they are purchasing the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and, upon consummation of any such sale, the
Canadian Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part of any
Canadian Pledgor, and each Canadian Pledgor hereby waives (to the extent permitted by
Applicable Law) all rights of redemption, stay and/or appraisal that it now has or may at
any time in the future have under any rule of law or statute now existing or hereafter
enacted. The Canadian Collateral Agent or any other Canadian Secured Party shall have the
right upon any such public sale, and, to the extent permitted by Applicable Law, upon any
such private sale, to purchase all or any part of the Collateral so sold, and the Canadian
Collateral Agent or such other Canadian Secured Party may, subject to (x) the satisfaction
in full of all payments due pursuant to Section 12(b)(i) and (y) the ratable satisfaction of
the Canadian Obligations in accordance
-12-
with Section 12(b), pay the purchase price by
crediting the amount thereof against the
Canadian Obligations. Each Canadian Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days’ notice to such Canadian Pledgor of the time and
place of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Canadian Collateral Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The Canadian
Collateral Agent may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. To the extent permitted by Applicable Law,
each Canadian Pledgor hereby waives any claim against the Canadian Collateral Agent arising
by reason of the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price that might have been obtained at a public sale, even if
the Canadian Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree. As an alternative to exercising the power of sale
herein conferred upon it, the Canadian Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction
or pursuant to a proceeding by a court-appointed receiver.
(b) The Canadian Collateral Agent shall apply the proceeds of any collection or sale of
the Collateral at any time after receipt in accordance with the priority set forth in
Section 5.4 of the Canadian Security Agreement;
Upon any sale of the Collateral by the Canadian Collateral Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt of the
Canadian Collateral Agent or of the officer making the sale shall be a sufficient discharge
to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase money paid over
to the Canadian Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
(c) The Canadian Collateral Agent may exercise any and all rights and remedies of each
Canadian Pledgor in respect of the Collateral.
(d) All payments received by any Canadian Pledgor after the occurrence and during the
continuation of an Event of Default in respect of the Collateral shall be received in trust
for the benefit of the Canadian Collateral Agent, shall be segregated from other property or
funds of such Canadian Pledgor and shall be forthwith delivered to the Canadian Collateral
Agent (or its non fiduciary agent or designee) as Collateral in the same form as so received
(with any necessary endorsement).
(e) If the Canadian Collateral Agent shall determine to exercise its right to sell all
or any of the Pledged Shares pursuant to this Section 12, each Canadian Pledgor recognizes
that the Canadian Collateral Agent may be unable to effect a public sale of any or all of
the Pledged Shares, by reason of certain prohibitions contained in the Securities Act of any
applicable Canadian jurisdiction, as from time to time amended (a “Securities Act”)
or otherwise, and may be compelled to resort to one or more
-13-
private
sales thereof to a restricted group of purchasers which will be obliged to agree, among
other things, to acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. Each Canadian Pledgor acknowledges and agrees
that any such private sale may result in prices and other terms less favorable than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable manner. The
Canadian Collateral Agent shall be under no obligation to delay a sale of any of the Pledged
Shares for the period of time necessary to permit the issuer thereof to register such
securities for public sale under any such Securities Act, or under other applicable laws,
even if such issuer would agree to do so.
(f) If the Canadian Collateral Agent determines to exercise its right to sell any or
all of the Collateral, upon written request, each Canadian Pledgor shall, from time to time,
furnish to the Canadian Collateral Agent all such information as the Canadian Collateral
Agent may request in order to determine the number of shares and other instruments included
in the Collateral which may be sold by the Canadian Collateral Agent as exempt transactions
under a Securities Act, as the same are from time to time in effect.
(g) The Canadian Collateral Agent may seek the appointment of a receiver,
receiver-manager or keeper (a “Receiver”) under the laws of Canada or any Province
thereof to take possession of all or any portion of the Collateral of the Canadian Pledgor
or to operate same and, to the maximum extent permitted by law, may seek the appointment of
such a receiver without the requirement of prior notice or a hearing. Any such Receiver
shall, so far as concerns responsibility for his/her acts, be deemed agent of the Canadian
Pledgor and not the Canadian Collateral Agent and the Secured Parties, and the Canadian
Collateral Agent and the Secured Parties shall not be in any way responsible for any
misconduct, negligence or non-feasance on the part of any such Receiver, his/her servants or
employees other than for gross negligence or wilful misconduct. Subject to the provisions
of the instrument appointing him/her, any such Receiver shall have power to take possession
of Collateral of the Canadian Pledgor, to preserve Collateral of the Canadian Pledgor or its
value, to carry on or concur in carrying on all or any part of the business of the Canadian
Pledgor and to sell, lease, license or otherwise dispose of or concur in selling, leasing,
licensing or otherwise disposing of Collateral of the Canadian Pledgor. To facilitate the
forgoing powers, any such Receiver may, to the exclusion of all others, including the
Canadian Pledgor, enter upon, use and occupy all premises owned or occupied by the Canadian
Pledgor wherein Collateral of the Canadian Pledgor may be situated, maintain Collateral of
the Canadian Pledgor upon such premises, borrow money on its own behalf or on behalf of the
Secured Parties on a secured or unsecured basis and use Collateral of the Canadian Pledgor
directly in carrying on the Canadian Pledgor’s business or as security for loans or advances
to enable the Receiver to carry on the Canadian Pledgor’s business or otherwise, as such
Receiver shall, in its discretion, determine. Except as may be otherwise directed by Agent,
all money received from time to time by such Receiver in carrying out his/her appointment
shall be received in trust for and paid over to Agent. Every such Receiver may, in the
discretion of the Canadian Collateral Agent, be vested with all or any of the rights and
powers of the Canadian Collateral Agent and the Secured Parties. The
Canadian Collateral Agent may, either directly or through its nominees, exercise any or
all powers and rights given to a receiver by virtue of the foregoing provisions of this
paragraph.
-14-
13. Amendments, etc. with Respect to the Canadian Obligations; Waiver of Rights.
Except for the termination of a Canadian Pledgor’s Canadian Obligations hereunder as expressly
provided in Section 14, each Canadian Pledgor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Canadian Pledgor and without notice to or
further assent by any Canadian Pledgor, (a) any demand for payment of any of the Canadian
Obligations made by the Canadian Collateral Agent or any other Canadian Secured Party may be
rescinded by such party and any of the Canadian Obligations continued, (b) the Canadian
Obligations, or the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Canadian Collateral Agent or any other Canadian Secured Party, (c)
the Secured Debt Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, in accordance with the
terms of the applicable Secured Debt Document, and (d) any collateral security, guarantee or right
of offset at any time held by the Canadian Collateral Agent or any other Canadian Secured Party for
the payment of the Canadian Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Canadian Collateral Agent nor any other Canadian Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it as security for
the Canadian Obligations or for this Agreement or any property subject thereto. When making any
demand hereunder against any Canadian Pledgor, the Canadian Collateral Agent or any other Canadian
Secured Party may, but shall be under no obligation to, make a similar demand on the Canadian
Borrowers (to the extent such demand is in respect of any Canadian Obligations owing by the
Canadian Borrowers) or any other Canadian Pledgor or pledgor, and any failure by the Canadian
Collateral Agent or any other Canadian Secured Party to make any such demand or to collect any
payments from the Canadian Borrowers or any other Canadian Pledgor or pledgor or any release of the
Canadian Borrowers or any other Canadian Pledgor or pledgor shall not relieve any Canadian Pledgor
in respect of which a demand or collection is not made or any Canadian Pledgor not so released of
its several obligations or liabilities hereunder, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Canadian Collateral Agent or any other
Canadian Secured Party against any Canadian Pledgor. For the purposes hereof “demand” shall
include the commencement and continuation of any legal proceedings.
14. Continuing Security Interest; Assignments Under the Secured Debt Documents;
Release.
(a) This Agreement and the security interest granted hereunder shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon each Canadian Pledgor
and the successors and assigns thereof, and shall inure to the benefit of the Canadian Collateral
Agent and the other Secured Parties and their respective successors, indorsees, transferees and
assigns, until the Termination Date, notwithstanding that from time to
time prior to the Termination Date the Canadian Pledgors may be free from any Canadian
Obligations.
-15-
(b) A Canadian Subsidiary Pledgor shall automatically be released from its obligations
hereunder and the pledge of such Canadian Subsidiary Pledgor shall be automatically released upon
the consummation of any transaction permitted by the Credit Agreement as a result of which such
Canadian Subsidiary Pledgor ceases to be a Restricted Foreign Subsidiary of the Canadian Borrowers
or otherwise becomes an Excluded Subsidiary; provided that the Required Lenders shall have
consented to such transaction (to the extent such consent is required by the Credit Agreement) and
the terms of such consent did not provide otherwise.
(c) The obligations created hereby of any Canadian Pledgor with respect to the Collateral
shall be automatically released and such Collateral sold free and clear of the Lien and security
interests created hereby upon any Disposition by such Canadian Pledgor of any Collateral that is
(i) permitted under the Credit Agreement (other than to the Company or any Canadian Subsidiary
Pledgor) or, (ii) upon the effectiveness of any written consent to the release of the security
interests granted hereby in any Collateral pursuant to Section 13.1 of the Credit Agreement.
(d) In connection with any termination or release pursuant to paragraph (a), (b) or (c), the
Canadian Collateral Agent shall execute and deliver to any Canadian Pledgor or authorize the filing
of, at such Canadian Pledgor’s expense, all documents that such Canadian Pledgor shall reasonably
request to evidence such termination or release provided, however, that with respect to the release
of any item of Collateral pursuant to Section 14(c)(i) in connection with any request of evidence
of termination or release made of the Canadian Collateral Agent, the Canadian Collateral Agent may
request that Canadian US Pledgor deliver a certificate of an Authorized Officer to the effect that
the sale or transfer transaction is in compliance with the Credit Documents. Any execution and
delivery of documents pursuant to this Section 14 shall be without recourse to or warranty by the
Canadian Collateral Agent.
15. Reinstatement. This Agreement shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of the Canadian Obligations
is rescinded or must otherwise be restored or returned by the Canadian Collateral Agent or any
other Canadian Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of either Canadian Borrower or any other Canadian Pledgor, or upon or as a result of
the appointment of a receiver, intervenor receiver and manager, or conservator of, or trustee or
similar officer for, the Canadian Borrowers or any other Canadian Pledgor or any substantial part
of its property, or otherwise, all as though such payments had not been made.
16. Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.2 of the Credit Agreement. All communications and notices hereunder to
any Canadian Subsidiary Pledgor shall be given to it in care of the Company at the Company’s
address set forth in Section 13.2 of the Credit Agreement.
17. Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by facsimile or
other electronic transmission (i.e., a “pdf” or “tif” file)), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Canadian Collateral Agent and the
Company.
-16-
18. Severability. Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
19. Integration. This Agreement represents the agreement of each of the Canadian
Pledgors with respect to the subject matter hereof and there are no promises, undertakings,
representations or warranties by the Canadian Collateral Agent or any other Canadian Secured Party
relative to the subject matter hereof not expressly set forth or referred to herein or in the other
Secured Debt Documents.
20. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) None of the terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the affected Canadian Pledgor(s) and
the Canadian Collateral Agent in accordance with Section 13.1 of the Credit Agreement.
(b) Neither the Canadian Collateral Agent nor any other Canadian Secured Party shall by any
act (except by a written instrument pursuant to Section 20(a) hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Canadian Collateral Agent or any other
Canadian Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.
No single or partial exercise of any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right, power or privilege. A waiver by
the Canadian Collateral Agent or any other Canadian Secured Party of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy that the Canadian
Collateral Agent or such other Canadian Secured Party would otherwise have on any future occasion.
(c) The rights, remedies, powers and privileges herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or remedies provided by
law.
21. Section Headings. The Section headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.
-17-
22. Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns, except
that no Canadian Pledgor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Canadian Collateral Agent, except pursuant
to a transaction expressly permitted by the Credit Agreement.
23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
24. Submission to Jurisdiction; Waivers. Each of the Canadian Pledgors hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to
this Agreement, and the other Credit Documents to which it is a party, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive jurisdiction of a
court of competent jurisdiction in the Province of Ontario;
(b) consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such Canadian Pledgor at its address referred to in Section 16 or
at such other address of which the Canadian Collateral Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right of the Canadian Collateral Agent
or any other Canadian Secured Party to effect service of process in any other manner
permitted by law or shall limit the right of the Canadian Collateral Agent or any other
Canadian Secured Party to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim
or recover in any legal action or proceeding referred to in this Section 24 any special,
exemplary, punitive or consequential damages.
25. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
[Remainder of page intentionally left blank]
-18-
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and
delivered by its duly authorized officer as of the day and year first above written.
ASSOCIATED MATERIALS CANADA LIMITED, as a Canadian Pledgor |
||||
By: | /s/ Xxxxx X. Xxxxx | |||
Name: | Xxxxx X. Xxxxx | |||
Title: | President, Secretary | |||
GENTEK CANADA HOLDINGS LIMITED, as a Canadian Pledgor |
||||
By: | ||||
Name: | ||||
Title: |
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and
delivered by its duly authorized officer as of the day and year first above written.
ASSOCIATED MATERIALS CANADA LIMITED, as a Canadian Pledgor |
||||
By: | ||||
Name: | ||||
Title: | ||||
GENTEK CANADA HOLDINGS LIMITED, as a Canadian Pledgor |
||||
By: | /s/ Xxxxx Xxxxxxx | |||
Name: | XXXXX XXXXXXX | |||
Title: | VICE PRESIDENT |
GENTEK BUILDING PRODUCTS LIMITED PARTNERSHIP, by its general partner GENTEK CANADA HOLDINGS LIMITED, as a Canadian Pledgor |
||||
By: | /s/ Xxxxx Xxxxxxx | |||
Name: | XXXXX XXXXXXX | |||
Title: | VICE PRESIDENT |
UBS AG CANADA BRANCH, as Canadian Collateral Agent |
||||
By: | /s/ Xxxx X. Xxxxx | |||
Name: | Xxxx X. Xxxxx | |||
Title: | Associate Director Banking Products Services. US | |||
By: | /s/ Xxxx X. Xxxx | |||
Name: | Xxxx X. Xxxx | |||
Title: | Associate Director Banking Products Services. US |
SCHEDULE 1
TO THE CANADIAN
PLEDGE AGREEMENT
TO THE CANADIAN
PLEDGE AGREEMENT
CANADIAN SUBSIDIARY PLEDGORS
SCHEDULE 2
TO THE CANADIAN
PLEDGE AGREEMENT
TO THE CANADIAN
PLEDGE AGREEMENT
PLEDGED SHARES AND PLEDGED DEBT
Pledged Shares1
Issuer’s | Class of | Certificate | Percentage of | |||||||||||||||
jurisdiction | Equity | No(s), if | Number of | Issued and | ||||||||||||||
Pledgor | Issuer | of formation | Interest | any | Units | Outstanding Units | ||||||||||||
Gentek Canada Holdings Limited |
Gentek Building Products Limited Partnership |
Ontario | Partnership Unit | 1 | 1 | 0.1 | % | |||||||||||
Associated Materials Canada Limited |
Gentek Building Products Limited Partnership |
Ontario | Partnership Unit | 2 | 1 | 0.1 | % | |||||||||||
Associated Materials Canada Limited |
Gentek Building Products Limited Partnership |
Ontario | Partnership Unit | 3 | 998 | 99.8 | % |
Pledged Debt
Issuer’s | Initial | |||||||||||
jurisdiction | Principle | Date of | Maturity | |||||||||
Pledgor | Issuer | of formation | Amount | Issuance | Date | |||||||
Gentek Building Products Limited Partnership |
Gentek Building Products, Inc. | Delaware | $ | 44,500,000 | October 13, 2010 | Termination Date |
1 | The Pledged Shares of the Canadian Pledgors included in
this Schedule 2 represent unit certificates outstanding as of the date hereof.
However, immediately after the Closing (as defined in the Credit Agreement)
these outstanding unit certificates will be cancelled (on account of being
lost) and subsequently reissued with replacement share certificates within the
time period required by Schedule 9.17 to the Credit Agreement. |
SUPPLEMENT NO. [_____], dated as of
[ ] (this “Supplement), to the Canadian Pledge
Agreement dated as of October 13, 2010 (the “Canadian Pledge Agreement”), by ASSOCIATED
MATERIALS CANADA LIMITED (“Associated”), an Ontario Corporation, GENTEK CANADA HOLDINGS
LIMITED (“Gentek”), an Ontario Corporation and GENTEK BUILDING PRODUCTS LIMITED
PARTNERSHIP, an Ontario limited partnership, by its general partner, Gentek (“LP”), each of
the subsidiaries listed on Schedule 1 thereto (each such subsidiary, individually, a “Canadian
Subsidiary Pledgor” and, collectively the “Canadian Subsidiary Pledgors”; and, together
with Associated, Gentek and LP, the “Canadian Pledgors”), and UBS AG CANADA BRANCH, as
Canadian Collateral Agent for the Secured Parties (as defined below) (in such capacity, together
with its successors in such capacity, the “Canadian Collateral Agent”).
A. Reference is made to (a) Revolving Credit Agreement, dated as of October 13, 2010 (the
“Credit Agreement”), among XXXXX INTERMEDIATE HOLDINGS CORP., a Delaware corporation, the
US Borrowers, the Canadian Borrowers, the bank, financial institutions and other institutional
lenders and investors (each individually a “Lender” and, collectively, the
“Lenders”), UBS AG, STAMFORD BRANCH, as US Administrative Agent, US Collateral Agent, and
a US Letter of Credit Issuer and a Canadian Letter of Credit Issuer, UBS AG CANADA BRANCH, as
Canadian Administrative Agent and Canadian Collateral Agent, XXXXX FARGO CAPITAL FINANCE, LLC, as
Co-Collateral Agent, DEUTSCHE BANK AG NEW YORK BRANCH, as a US Letter of Credit Issuer, DEUTSCHE
BANK AG CANADA BRANCH, as a Canadian Letter of Credit Issuer, XXXXX FARGO BANK, NATIONAL
ASSOCIATION as a US Letter of Credit Issuer and a Canadian Letter of Credit Issuer and UBS LOAN
FINANCE LLC, as Swingline Lender, and (b) the Canadian Guarantee, dated as of October 13, 2010 (the
“Canadian Guarantee”), among the Canadian guarantors party thereto and the Canadian
Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein (including in the preamble
and the recitals hereto) shall have the meanings assigned to such terms in the Canadian Pledge
Agreement. The rules of construction and the interpretive provisions specified in Section 1(b) of
the Canadian Pledge Agreement shall apply to this Supplement, including terms defined in the
preamble and recitals hereto.
C. The Canadian Pledgors have entered into the Canadian Pledge Agreement in order to induce
the Agents and the Canadian Lenders and the Canadian Letter of Credit Issuers to enter into the
Credit Agreement and to (a) induce the Canadian Lenders and the Canadian Letter of Credit Issuers
to make their respective Extensions of Credit to the Canadian Borrowers under the Credit Agreement,
(b) induce one or more Cash Management Banks to provide Cash Management Services pursuant to
Secured Cash Management Agreements to any Credit Party or a Restricted Subsidiary and (c) to induce
one or more Hedge Banks to enter into Secured Hedging Agreements with each Credit Party or a
Restricted Subsidiary.
A-1
D. The undersigned Canadian Pledgor (each, an “Additional Canadian Pledgor”) is (a)
the legal and beneficial owner of the Capital Stock described under Schedule 1
hereto and issued by the entities named therein (such pledged Capital Stock, together with all
other Capital Stock required to be pledged under the Pledge Agreement (the “After-acquired
Additional Pledged Shares”), referred to collectively herein as the “Additional Pledged
Shares”) and (b) the legal and beneficial owner of the promissory notes and instruments
evidencing Indebtedness owed to it (the “Additional Pledged Debt”) described under Schedule
1 hereto.
E. Section 9.11(a) of the Credit Agreement and Section 9(b) of the Canadian Pledge Agreement
provides that additional Subsidiaries of the [Company] Canadian Borrower may become Canadian
Subsidiary Pledgors under the Canadian Pledge Agreement by execution and delivery of an instrument
in the form of this Supplement. Each undersigned Additional Canadian Pledgor is executing this
Supplement in accordance with the requirements of Section 9(b) of the Canadian Pledge Agreement to
pledge to the Canadian Collateral Agent, for the benefit of the Secured Parties, the Additional
Pledged Shares and the Additional Pledged Debt [and to become a Canadian Subsidiary Pledgor under
the Canadian Pledge Agreement] in order to induce the Canadian Lenders and the [Canadian] Letter of
Credit Issuers to make additional extensions of credit to the Borrowers under the Credit Agreement,
to induce one or more Cash Management Banks to provide Cash Management Services pursuant to Secured
Cash Management Agreements to any Credit Party and to induce one or more Hedge Banks to enter into
Secured Hedging Agreements with any Credit Party and as consideration for extensions of credit
previously made, Cash Management Services previously provided, and Secured Hedging Agreements
previously entered into.
Accordingly, the Canadian Collateral Agent and each undersigned Additional Canadian Pledgor
agree as follows:
SECTION 1. In accordance with Section 9(b) of the Canadian Pledge Agreement, each Additional
Canadian Pledgor by its signature below hereby transfers, assigns and pledges to the Canadian
Collateral Agent, for the benefit of the Secured Parties, and hereby grants to the Canadian
Collateral Agent, for the benefit of the Secured Parties, a security interest in and to all of such
Additional Canadian Pledgor’s right, title and interest in the following, whether now owned or
anytime hereafter acquired or existing (collectively, the “Additional Collateral”):
(a) the Additional Pledged Shares held by such Additional Canadian Pledgor and the
certificates, if any, representing such Additional Pledged Shares and any interest of such
Additional Canadian Pledgor, including all interests documented in the entries on the books
of the issuer of the Additional Pledged Shares or any financial intermediary pertaining to
the Additional Pledged Shares and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Additional Pledged Shares;
provided that the Additional Pledged Shares under this Supplement shall not include
any Excluded Capital Stock;
(b) the Additional Pledged Debt and the instruments evidencing the Additional Pledged
Debt owed to such Additional Canadian Pledgor, and all payments of principal or interest,
cash, instruments and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such Additional Pledged
Debt;
A-2
(c) all other property that may be delivered to and held by the Canadian Collateral
Agent pursuant to the terms of this Section 1;
(d) subject to Section 8 of the Canadian Pledge Agreement, all rights and privileges of
such Canadian Pledgor with respect to the securities and other property referred to in
clauses (a), (b) and (c) above; and
(e) to the extent not covered by clauses (a), (b), (c) and (d) above, respectively,
all proceeds of any or all of the foregoing Additional Collateral. For purposes of this
Supplement, the term “proceeds” includes whatever is receivable or received when Additional
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes proceeds of any indemnity or guarantee
payable to any Additional Canadian Pledgor or the Canadian Collateral Agent from time to
time with respect to any of the Additional Collateral.
TO HAVE AND TO HOLD the Additional Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the Canadian Collateral
Agent, for the benefit of the Secured Parties, forever; subject, however, to the terms, covenants
and conditions hereinafter set forth.
For purposes of the Canadian Pledge Agreement, (x) the Collateral shall be deemed to include
the Additional Collateral and (y) the After-acquired Pledged Shares shall be deemed to include the
Additional After-acquired Pledge Shares.
[SECTION 2. Each Additional Canadian Pledgor by its signature below becomes a Canadian
Pledgor under the Canadian Pledge Agreement with the same force and effect as if originally named
therein as a Canadian Pledgor and each Additional Canadian Pledgor hereby agrees to all the terms
and provisions of the Canadian Pledge Agreement applicable to it as a Canadian Pledgor thereunder.
Each reference to a “Canadian Subsidiary Pledgor” or a “Canadian Pledgor” in the Canadian Pledge
Agreement shall be deemed to include each Additional Canadian Pledgor. The Canadian Pledge
Agreement is hereby incorporated herein by reference.] 2
SECTION [2][3]. Each Additional Canadian Pledgor represents and warrants as follows:
(a) Schedule 1 hereto (i) correctly represents as of the date hereof (A) the issuer,
the certificate number, if any, the Additional Canadian Pledgor and the record and
beneficial owner, the number and class and the percentage of the issued and outstanding
Capital Stock of such class of all Additional Pledged Shares and (B) the issuer, the initial
principal amount, the Additional Canadian Pledgor and holder, date of issuance and
maturity date of all Additional Pledged Debt and (ii) together with Schedule 2 to the
Canadian Pledge Agreement and the comparable schedules to each other Supplement to the
Canadian Pledge Agreement, includes all Capital Stock, debt securities and promissory notes
required to be pledged pursuant to Section 9.11 of the Credit Agreement and Section 9(b) of
the Canadian Pledge Agreement. Except as set forth on Schedule 1 and except for Excluded
Capital Stock, the Additional Pledged Shares represent all of the issued and outstanding
Capital Stock of each class of Capital Stock in the issuer on the date hereof.
2 | Include only for Additional Pledgors that are not
already signatories to the Canadian Pledge Agreement. |
A-3
(b) Such Additional Canadian Pledgor is the legal and beneficial owner of the
Additional Collateral pledged or assigned by such Additional Canadian Pledgor hereunder free
and clear of any Lien, except for the Liens created by this Supplement to the Canadian
Pledge Agreement and Liens created by the Canadian Pledge Agreement.
(c) As of the date of this Supplement, the Additional Pledged Shares pledged by such
Additional Canadian Pledgor hereunder have been duly authorized and validly issued and, in
the case of Additional Pledged Shares issued by a corporation, are fully paid and
non-assessable.
(d) Except for restrictions and limitations imposed by the Credit Documents or
securities laws generally, and except as disclosed on Schedule 1, the Additional Collateral
is freely transferable and assignable, and none of the Additional Collateral is subject to
any option, right of first refusal, shareholders agreement, charter or by-law provisions or
contractual restriction of any nature that might prohibit, impair, delay or otherwise affect
the pledge of such Additional Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Canadian Collateral Agent of rights and remedies hereunder.
(e) No consent or approval of any Governmental Authority, any securities exchange or
any other Person was or is necessary to the validity of the pledge effected hereby (other
than such as have been obtained and are in full force and effect).
(f) The execution and delivery by such Additional Canadian Pledgor of this Supplement
and the pledge of the Additional Collateral pledged by such Additional Canadian Pledgor
hereunder pursuant hereto create a valid and enforceable security interest in such
Collateral (in the case of the Capital Stock of Foreign Subsidiaries other than a Subsidiary
that is organized under the Applicable Laws of a jurisdiction in Canada, to the extent the
creation of such security interest in the Capital Stock of Foreign Subsidiaries is governed
by the PPSA) and (i) in the case of certificates or instruments representing or evidencing
the Additional Collateral, upon the earlier of (x) delivery of such Additional Collateral
and any necessary endorsements to the extent necessary to the Canadian Collateral Agent (or
its non-fiduciary agent or designee) in accordance with this Supplement and the Canadian
Pledge Agreement and (y) the filing of financing statements naming each Additional US
Pledgor as “debtor” and the Canadian Collateral Agent as “secured party” and describing the
Additional Collateral in the applicable filing offices, and (ii) in the case of all other
Additional Collateral which is capable of being perfected by the filing of financing
statements, upon the
A-4
filing of financing statements
naming each Canadian Pledgor as “debtor” and the Canadian Collateral Agent as “secured
party” and describing the Additional Collateral in the applicable filing offices, shall
create a perfected security interest in such Additional Collateral (in the case of the
Capital Stock of Foreign Subsidiaries other than a Subsidiary that is organized under the
Applicable Laws of a jurisdiction in Canada is governed by the PPSA, to the extent the
creation of such security interest in the Capital Stock of Foreign Subsidiaries other than a
Subsidiary that is organized under the Applicable Laws of a jurisdiction in Canada is
governed by the PPSA), securing the payment of the Canadian Obligations, in favor of the
Canadian Collateral Agent, for the benefit of the Secured Parties, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws
relating to or affecting creditors rights generally and general principles of equity
(whether considered in a proceeding in equity or law).
(g) The pledge effected hereby is effective to vest in the Canadian Collateral Agent,
for the benefit of the Secured Parties, the rights of the Canadian Collateral Agent in the
Additional Collateral as set forth herein.
(h) Such Additional Canadian Pledgor has full power, authority and legal right to
pledge all the Additional Collateral pledged by such Additional Canadian Pledgor pursuant to
this Supplement and this Supplement constitutes a legal, valid and binding obligation of
each Additional Canadian Pledgor (in the case of the Capital Stock of Foreign Subsidiaries
other than a Subsidiary that is organized under the Applicable Laws of a jurisdiction in
Canada, to the extent the creation of such security interest in the Capital Stock of Foreign
Subsidiaries is governed by the PPSA or STA), enforceable in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors rights generally and general
principles of equity (whether considered in a proceeding in equity or law).
SECTION [3][4]. This Supplement may be executed by one or more of the parties to this
Supplement on any number of separate counterparts (including by facsimile or other electronic
transmission (i.e., a “pdf” or “tif”)), and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this Supplement signed by all
the parties shall be lodged with the Canadian Collateral Agent and the Company. This Supplement
shall become effective as to each Additional Canadian Pledgor when the Canadian Collateral Agent
shall have received counterparts of this Supplement that, when taken together, bear the signatures
of such Additional Canadian Pledgor and the Canadian Collateral Agent.
SECTION [4][5]. Except as expressly supplemented hereby, the Canadian Pledge Agreement shall
remain in full force and effect.
SECTION [5][6]. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF
ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
A-5
SECTION [6][7]. Any provision of this Supplement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and in the Canadian Pledge
Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of the invalid, illegal
or unenforceable provisions.
SECTION [7][8]. All notices, requests and demands pursuant hereto shall be made in accordance
with Section 16 of the Canadian Pledge Agreement. All communications and notices hereunder to each
Additional Canadian Pledgor shall be given to it in care of the Company at the Company’s address
set forth in Section 13.2 of the Credit Agreement.
SECTION [8][9]. Subject to Section 13.5 of the Credit Agreement, each Additional Canadian
Pledgor agrees to reimburse the Canadian Collateral Agent for its reasonable and documented
out-of-pocket expenses in connection with this Supplement, including the reasonable and documented
fees, other charges and disbursements of counsel for the Canadian Collateral Agent.
A-6
IN WITNESS WHEREOF, each Additional Pledgor and the Canadian Collateral Agent have duly
executed this Supplement to the Canadian Pledge Agreement as of the day and year first above
written.
[NAME OF ADDITIONAL CANADIAN PLEDGOR(S)], |
||||
By: | ||||
Name: | ||||
Title: | ||||
UBS AG CANADIAN BRANCH, as Canadian Collateral Agent, |
||||
By: | ||||
Name: | ||||
Title: |
A-7
SCHEDULE 1
TO SUPPLEMENT NO. [__]
TO THE
CANADIAN PLEDGE AGREEMENT
TO SUPPLEMENT NO. [__]
TO THE
CANADIAN PLEDGE AGREEMENT
PLEDGED SHARES AND PLEDGED DEBT
Pledged Shares
Issuer’s | Percentage of | |||||||||||
jurisdiction | Issued and | |||||||||||
of | Class of Equity | Certificate | Number of | Outstanding | ||||||||
Pledgor | Issuer | formation | Interest | No(s), if any | Units | Units | ||||||
Pledged Debt
Issuer’s | ||||||||||
jurisdiction of | Initial | |||||||||
Pledgor | Issuer | formation | Principal Amount | Date of Issuance | Maturity Date | |||||