Exhibit 10.4

 

[EXECUTION FINAL]

 

LOAN AND SECURITY AGREEMENT

 

by and among

 

A.M. CASTLE & CO.

TRANSTAR METALS CORP.

ADVANCED FABRICATING TECHNOLOGY, LLC

OLIVER STEEL PLATE CO.

PARAMONT MACHINE COMPANY, LLC

TOTAL PLASTICS, INC.

and

TUBE SUPPLY, LLC

(as US Borrowers)

 

and

 

A.M. CASTLE & CO. (CANADA) INC.

and

TUBE SUPPLY CANADA ULC

(as Canadian Borrowers)

 

and

 

TRANSTAR INVENTORY CORP.

and

KEYSTONE TUBE COMPANY, LLC

(as US Guarantors)

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

(as a Lender and as Administrative Agent)

 

and

 

THE LENDERS FROM TIME TO TIME PARTY HERETO

(as Lenders)

 

and

 

JEFFERIES FINANCE LLC

and

WELLS FARGO CAPITAL FINANCE, LLC

(as Joint Lead Arrangers)

 

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

 

and

 

JEFFERIES FINANCE LLC

(as Syndication Agent and Bookrunner)

 

and

 

BANK OF AMERICA, N.A.

and

REGIONS BUSINESS CAPITAL, A DIVISION OF REGIONS BANK

(as Co-Documentation Agents)

 

December 15, 2011

 

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

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

DEFINITIONS

1

 

 

 

 

 

1.1

Accounting Terms

1

 

1.2

General Terms

1

 

1.3

Uniform Commercial Code Terms

53

 

1.4

Certain Matters of Construction

53

 

 

 

 

2.

ADVANCES, PAYMENTS

54

 

 

 

 

 

2.1

Revolving Advances

54

 

2.2

Procedure for Borrowing

55

 

2.3

Disbursement of Advance Proceeds

58

 

2.4

[Reserved.]

58

 

2.5

Repayment of Advances

59

 

2.6

Repayment of Excess Advances

60

 

2.7

Statement of Account

60

 

2.8

Letters of Credit

61

 

2.9

Issuance of Letters of Credit

62

 

2.10

Requirements for Issuance of Letters of Credit

63

 

2.11

Additional Payments/Protective Advances

65

 

2.12

Manner of Borrowing and Payment

66

 

2.13

Mandatory Prepayments

68

 

2.14

Use of Proceeds

70

 

2.15

Defaulting Lender/Impacted Lender

70

 

2.16

Joint and Several Liability of US Borrowers

71

 

2.17

Joint and Several Liability of Canadian Borrowers

74

 

2.18

Interrelated Businesses

76

 

2.19

Appointment of Administrative Borrower as Agent for Requesting Advances and
Letters of Credit and Receipts of Advances and Statements and Receipts and
Sending of Notices

76

 

2.20

Increase in Maximum Credit

77

 

2.21

Decrease in Maximum Credit

79

 

 

 

 

3.

INTEREST AND FEES

80

 

 

 

 

 

3.1

Interest

80

 

3.2

Letter of Credit Fees; Cash Collateral

80

 

3.3

Loan Fees

82

 

3.4

Computation of Interest and Fees

82

 

3.5

Maximum Charges

83

 

3.6

Increased Costs

84

 

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3.7

Basis For Determining Interest Rate Inadequate or Unfair

85

 

3.8

Capital Adequacy

86

 

3.9

Withholding Taxes

87

 

 

 

 

4.

GRANT OF SECURITY INTEREST; COLLATERAL COVENANTS

89

 

 

 

 

 

4.1

Security Interest in the Collateral

89

 

4.2

Perfection of Security Interest

89

 

4.3

Preservation of Collateral

90

 

4.4

Ownership and Location of Collateral

90

 

4.5

Defense of Agent’s and Lenders’ Interests

90

 

4.6

Books and Records

91

 

4.7

Financial Disclosure

91

 

4.8

Compliance with Laws

91

 

4.9

Inspection of Premises/Appraisals

92

 

4.10

Insurance

92

 

4.11

Failure to Pay Insurance

93

 

4.12

Payment of Taxes

93

 

4.13

Payment of Leasehold Obligations

94

 

4.14

Accounts and other Receivables

94

 

4.15

Inventory

97

 

4.16

Maintenance of Equipment

98

 

4.17

Exculpation of Liability

98

 

4.18

Environmental Matters

98

 

4.19

Financing Statements

100

 

4.20

Special Provisions Relating to Collateral

100

 

 

 

 

5.

REPRESENTATIONS AND WARRANTIES

100

 

 

 

 

 

5.1

Authority, Etc.

100

 

5.2

Formation and Qualification

101

 

5.3

Survival of Representations and Warranties

101

 

5.4

Tax Returns

102

 

5.5

Financial Statements

102

 

5.6

Corporate Name / Prior Name

103

 

5.7

O.S.H.A. and Environmental Compliance

103

 

5.8

Solvency; No Litigation, Violation of Law; No ERISA Issues

104

 

5.9

Intellectual Property

106

 

5.10

Licenses and Permits

106

 

5.11

No Contractual Default

107

 

5.12

No Liens

107

 

5.13

No Labor Disputes

107

 

5.14

Margin Regulations

107

 

5.15

Investment Company Act

107

 

5.16

Disclosure

107

 

5.17

Real Property

107

 

5.18

[Reserved]

108

 

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5.19

[Reserved]

108

 

5.20

Business and Property of Loan Parties

108

 

5.21

Material Contracts

108

 

5.22

Capital Structure

108

 

5.23

Bank Accounts, Security Accounts, Etc.

108

 

5.24

Related Agreements

109

 

5.25

Closing Date Acquisition

109

 

5.26

OFAC

110

 

 

 

 

6.

AFFIRMATIVE COVENANTS

111

 

 

 

 

 

6.1

Payment of Fees

111

 

6.2

Conduct of Business; Compliance with Laws and Maintenance of Existence and
Assets

111

 

6.3

Violations

111

 

6.4

Government Receivables

112

 

6.5

Execution of Supplemental Instruments; Further Assurances

112

 

6.6

Payment of Indebtedness

112

 

6.7

Standards of Financial Statements

113

 

6.8

Financial Covenants

113

 

 

 

 

7.

NEGATIVE COVENANTS

113

 

 

 

 

 

7.1

Merger, Consolidation, Acquisition and Sale of Assets

113

 

7.2

Creation of Liens

116

 

7.3

Guarantees

116

 

7.4

Investments

116

 

7.5

Loans

117

 

7.6

Capital Expenditures

118

 

7.7

Dividends and Distributions

118

 

7.8

Indebtedness

119

 

7.9

Nature of Business

121

 

7.10

Transactions with Affiliates

121

 

7.11

[Reserved.]

122

 

7.12

Subsidiaries

122

 

7.13

Fiscal Year and Accounting Changes

122

 

7.14

Pledge of Credit

122

 

7.15

Amendment of Organizational Documents and Related Agreements

122

 

7.16

Compliance with ERISA; Canadian Pension Standards Laws

123

 

7.17

[Reserved]

124

 

7.18

State/Province of Organization/Names/Locations

124

 

7.19

Foreign Assets Control Regulations, Etc.

124

 

7.20

Applications under Insolvency Statutes

124

 

 

 

 

8.

CONDITIONS PRECEDENT; POST-CLOSING DELIVERIES

125

 

 

 

 

 

8.1

Conditions to Initial Advances

125

 

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8.2

Conditions to Each Advance

129

 

8.3

Post-Closing Deliveries

130

 

 

 

 

9.

INFORMATION AS TO LOAN PARTIES

131

 

 

 

 

 

9.1

Disclosure of Material Matters Pertaining to Collateral

131

 

9.2

Collateral and Related Reports

131

 

9.3

[Reserved]

134

 

9.4

Litigation

134

 

9.5

Material Occurrences

134

 

9.6

Government Receivables

134

 

9.7

Annual Financial Statements

134

 

9.8

Quarterly Financial Statements

135

 

9.9

[Reserved.]

136

 

9.10

Notices re Equity Holders; Debt Financing Documents

136

 

9.11

Additional Information

136

 

9.12

Projected Operating Budget

136

 

9.13

Variances From Operating Budget

136

 

9.14

Notice of Governmental Body Items

136

 

9.15

ERISA Notices and Requests; Canadian Pension Notices and Requests

137

 

9.16

Notice of Change in Management, Etc.

138

 

9.17

Additional Documents

138

 

 

 

 

10.

EVENTS OF DEFAULT

138

 

 

 

 

11.

LENDERS’ RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT

140

 

 

 

 

 

11.1

Rights and Remedies

140

 

11.2

Waterfall

142

 

11.3

Agent’s Discretion

143

 

11.4

Setoff

143

 

11.5

Rights and Remedies not Exclusive

144

 

11.6

Collection Allocation Mechanism

144

 

11.7

Commercial Reasonableness

145

 

 

 

 

12.

WAIVERS AND JUDICIAL PROCEEDINGS

146

 

 

 

 

 

12.1

Waiver of Notice

146

 

12.2

Delay

146

 

12.3

Jury Waiver

146

 

12.4

Waiver of Counterclaims

147

 

 

 

 

13.

EFFECTIVE DATE AND TERMINATION

147

 

 

 

 

 

13.1

Term

147

 

13.2

Termination

147

 

 

 

 

14.

REGARDING AGENT

147

 

iv

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14.1

Appointment

147

 

14.2

Nature of Duties

148

 

14.3

Lack of Reliance on Agent and Resignation

149

 

14.4

Certain Rights of Agent

150

 

14.5

Reliance

150

 

14.6

Notice of Default

150

 

14.7

Indemnification

151

 

14.8

Agent in its Individual Capacity

151

 

14.9

Actions in Concert

151

 

14.10

Intercreditor Agreements/Subordination Agreements

151

 

 

 

 

15.

GUARANTEE OF US OBLIGATIONS

152

 

 

 

 

 

15.1

Guarantee; Contribution Rights

152

 

15.2

Waivers

152

 

15.3

No Defense

153

 

15.4

Guarantee of Payment

153

 

15.5

Liabilities Absolute

153

 

15.6

Waiver of Notice

154

 

15.7

Agent’s Discretion

154

 

15.8

Reinstatement

155

 

15.9

No Marshalling, Etc.

155

 

15.10

Action Upon Event of Default

156

 

15.11

Statute of Limitations

156

 

15.12

Interest

157

 

15.13

US Guarantor’s Investigation

157

 

15.14

Termination

157

 

15.15

Extension of Guarantee

157

 

15.16

Applicability to US Borrowers

157

 

 

 

 

16.

GUARANTEE OF CANADIAN OBLIGATIONS

157

 

 

 

 

 

16.1

Guarantee; Contribution Rights

157

 

16.2

Waivers

158

 

16.3

No Defense

158

 

16.4

Guarantee of Payment

158

 

16.5

Liabilities Absolute

159

 

16.6

Waiver of Notice

160

 

16.7

Agent’s Discretion

160

 

16.8

Reinstatement

160

 

16.9

No Marshalling, Etc.

161

 

16.10

Action Upon Event of Default

162

 

16.11

Statute of Limitations

162

 

16.12

Interest

163

 

16.13

Canadian Guarantor’s Investigation

163

 

16.14

Termination

163

 

16.15

Extension of Guarantee

163

 

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16.16

Applicability to Canadian Borrowers

163

 

 

 

 

17.

MISCELLANEOUS

163

 

 

 

 

 

17.1

Governing Law; Consent to Jurisdiction; Etc.

163

 

17.2

Entire Understanding; Amendments; Lender Replacements; Overadvances

164

 

17.3

Successors and Assigns; Participations; New Lenders; Taxes; Syndication

167

 

17.4

Application of Payments

170

 

17.5

Indemnity/Currency Indemnity

170

 

17.6

Notice

171

 

17.7

Survival

172

 

17.8

Postponement of Subrogation, Etc. Rights

172

 

17.9

Severability

172

 

17.10

Expenses

172

 

17.11

Injunctive Relief

173

 

17.12

Consequential Damages

173

 

17.13

Captions

174

 

17.14

Counterparts; Facsimile or Emailed Signatures

174

 

17.15

Construction

174

 

17.16

Confidentiality; Sharing Information

174

 

17.17

Publicity

175

 

17.18

USA Patriot Act; Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada)

175

 

17.19

Agent Titles

175

 

vi

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List of Exhibits and Schedules

 

Exhibits

 

Exhibit A

Form of Borrowing Base Certificate

Exhibit B

Form of Notice of Conversion

Exhibit C

Form of Notice of Advance Request

Exhibit D

Form of Line Decrease Notice

Exhibit E-1

Form of Revolving Credit Note for US Borrowers

Exhibit E-2

Form of Revolving Credit Note for Canadian Borrowers

Exhibit 9.7

Form of Compliance Certificate

Exhibit 17.3

Form of Commitment Transfer Supplement

 

Schedules

 

Schedule C-1

Commitments

Schedule R-1

Real Property

Schedule L-1

Existing Letters of Credit

Schedule 2.3

Payment Account; Disbursements of Advance Proceeds

Schedule 4.4

Equipment, Inventory and Books and Records Locations

Schedule 4.14(c)

Location of Chief Executive Offices

Schedule 5.2(a)

Jurisdictions of Qualification and Good Standing

Schedule 5.2(b)

Subsidiaries

Schedule 5.4

Federal Tax Identification Number

Schedule 5.6

Corporate Names / Prior Names

Schedule 5.8(b)

Litigation / Commercial Tort Claims / Money Borrowed

Schedule 5.8(d)

Plans

Schedule 5.8(e)

Canadian Pension and Employee Plans

Schedule 5.9

Intellectual Property, Source Code Escrow Agreements

Schedule 5.13

Labor Disputes

Schedule 5.21

Material Contracts

Schedule 5.22

Capital Structure

Schedule 5.23

Bank Accounts

Schedule 7.2

Existing Liens

Schedule 7.8

Existing Indebtedness

Schedule 8.3

Post-Closing Deliveries

Schedule 17.3

Competitors/Ineligible Transferees

 

i

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LOAN AND SECURITY AGREEMENT

 

This LOAN AND SECURITY AGREEMENT (this “Agreement”), dated December 15, 2011, is
entered into by and among A.M. CASTLE & CO., a corporation organized under the
laws of the state of Maryland (“Parent” as hereinafter further defined),
TRANSTAR METALS CORP., a corporation organized under the laws of the state of
Delaware (“Transtar Metals”), ADVANCED FABRICATING TECHNOLOGY, LLC, a limited
liability company organized under the laws of the state of Delaware (“AFT”),
OLIVER STEEL PLATE CO., a corporation organized under the laws of the state of
Delaware (“Oliver Steel”), PARAMONT MACHINE COMPANY, LLC, a limited liability
company organized under the laws of the state of Delaware (“Paramont”), TOTAL
PLASTICS, INC., a corporation organized under the laws of the state of Michigan
(“TPI”), TUBE SUPPLY, LLC, a limited liability company organized under the laws
of the state of Texas (“Tube Texas” as hereinafter further defined; and together
with Parent, Transtar Metals, AFT, Oliver Steel, Paramont, TPI and any other
Person that is organized or formed under the laws of the United States that at
any time after the date hereof becomes a US Borrower, each a “US Borrower” and
collectively, the “US Borrowers” as hereinafter further defined), A.M. CASTLE &
CO. (CANADA) INC., a corporation organized under the laws of the province of
Ontario, Canada (“Castle Canada” as hereinafter further defined), TUBE SUPPLY
CANADA ULC, an Alberta unlimited company organized under the laws of the
province of Alberta, Canada (“Tube Canada” as hereinafter further defined; and
together with Castle Canada and any other Person that is organized or formed
under the laws of Canada or any province thereof that at any time after the date
hereof becomes a Canadian Borrower, each a “Canadian Borrower” and collectively,
the “Canadian Borrowers” as hereinafter further defined; and together with the
US Borrowers, each a “Borrower” and collectively, the “Borrowers” as hereinafter
further defined), the other Loan Parties party hereto, the lenders which are now
or which hereafter become a party hereto (each a “Lender” and collectively, the
“Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association (in its individual capacity, “Wells Fargo” as hereinafter further
defined), in its capacity as administrative agent and collateral agent (Wells
Fargo, in such capacities, the “Agent” as hereinafter further defined) for
Secured Parties (as hereinafter defined).

 

IN CONSIDERATION of the mutual covenants and undertakings herein contained, Loan
Parties, Lenders and Agent hereby agree as follows:

 

1.                                      DEFINITIONS.

 

1.1                               Accounting Terms.

 

As used in this Agreement, the Note(s), any Other Document, or any certificate,
report or other document made or delivered pursuant to this Agreement,
accounting terms not defined in Section 1.2 or elsewhere in this Agreement and
accounting terms partly defined in Section 1.2 to the extent not defined, shall
have the respective meanings given to them under GAAP.

 

1.2                               General Terms.

 

For purposes of this Agreement the following terms shall have the following
meanings:

 

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

 

“Accountants” shall have the meaning set forth in Section 9.7.

 

“Accounts” shall mean and include as to each Loan Party, all of such Loan
Party’s “accounts” as defined in the UCC, whether now owned or hereafter
acquired including, without limitation all present and future rights of such
Loan Party to payment of a monetary obligation, whether or not earned by
performance, which is not evidenced by chattel paper or an instrument, (a) for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (b) for services rendered or to be rendered, (c) for a
secondary obligation incurred or to be incurred, or (d) arising out of the use
of a credit or charge card or information contained on or for use with any such
card.

 

“Acquired Company” shall mean, collectively, Tube Texas and Tube Canada.

 

“Acquisition Costs” shall mean all fees, costs and expenses, stamp, registration
and other Taxes incurred by the Loan Parties in connection with this Agreement,
the Other Documents and the Related Agreements.

 

“Acquisition Pro Forma” shall have the meaning set forth in the definition of
Permitted Acquisition.

 

“Administrative Borrower” shall mean Parent, in its capacity as Administrative
Borrower on behalf of itself and the other Borrowers pursuant to Section 2.19
hereof, and its successors and assigns in such capacity.

 

“Advances” shall mean the Revolving Advances (including without limitation the
Protective Advances) and Swingline Advances, or any of them as the context
implies.

 

“Advance Rates” shall mean the lending formula percentages set forth in the
definition of Borrowing Base.

 

“Affiliate” of any Person shall mean (a) any Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such Person, or (b) any Person who is a director, manager,
executive officer or member of the senior management (i) of such Person, (ii) of
any Subsidiary of such Person or (iii) of any Person described in clause (a)
above.  For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (A) to vote ten (10%) percent or more of the Equity
Interests having ordinary voting power for the election of directors or managers
(or other comparable body) of such Person, or (B) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

 

“Agent” shall have the meaning set forth in the preamble to this Agreement and
shall include its successors and assigns.

 

“Agreement” shall mean this Loan and Security Agreement, as amended, restated,
modified and supplemented from time to time.

 

“Applicable Margin” for each type of Advance and for the Applicable Unutilized
Commitment Fee shall mean, at any time:

 

2

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

 

(a)                                  subject to clause (b) below, the applicable
percentage (on a per annum basis) set forth in the chart below as to Base Rate
Loans and for LIBOR Rate Loans, respectively, and with respect to the Unutilized
Commitment Fee payable under Section 3.3(a) hereof, that will result, in
accordance with such chart, if the Quarterly Average Undrawn Availability for
the immediately preceding calendar quarter is in an amount within the range
indicated in the chart below for such percentage:

 

Tier

 

Quarterly Average
Undrawn Availability

 

Applicable Margin
for Base Rate
Loans

 

Applicable
Margin for
LIBOR Rate
Loans

 

Applicable
Unutilized
Commitment Fee
Margin

 

I

 

Less than or equal to 1/3 of the Maximum Credit

 

1.00

%

2.00

%

0.25

%

II

 

Greater than 1/3 of the Maximum Credit, but less than or equal to 2/3 of the
Maximum Credit

 

0.75

%

1.75

%

0.375

%

III

 

Greater than 2/3 of the Maximum Credit

 

0.50

%

1.50

%

0.50

%

 

(a)                                  For the period from and including the
Closing Date to but excluding the first Adjustment Date (as defined below), the
Applicable Margin shall be set at Level II in the table above.  Thereafter, the
Applicable Margin for each type of Advance and the Unutilized Commitment Fee
shall be (i) adjusted as of April 1, 2012 and the first (1st) day of each
calendar quarter thereafter (i.e., the first (1st) day of each of July,
September, January, and April), based upon the Borrowing Base Certificates
delivered to Agent, in accordance with Section 9.2(c), with respect to the
months comprising the immediately preceding calendar quarter (each an
“Adjustment Date”), commencing with the delivery by Administrative Borrower of
the Borrowing Base Certificates in each of the months comprising the calendar
quarter ending March 31, 2012, and (ii) based upon the calculation by Agent of
Quarterly Average Undrawn Availability for such calendar quarter.  In the event
that any Borrowing Base Certificate is not provided to the Agent in accordance
with Section 9.2(c), the Applicable Margin for each type of Advance and the
Unutilized Commitment Fee for the applicable calendar quarter shall be set at
the Applicable Margin for such type of Advance and for the Unutilized Commitment
Fee set forth in Level I above as of the first (1st) day of the calendar quarter
following the month in which such Borrowing Base Certificate was required to be
delivered and shall continue at Level I for such entire calendar quarter and
thereafter until the next Adjustment Date, if any.

 

In the event that at any time after the end of a calendar quarter, the Quarterly
Average Undrawn Availability for such calendar quarter used for the
determination of the Applicable Margin was less than the actual amount of the
Quarterly Average Undrawn Availability for such calendar quarter, the Applicable
Margin for such prior calendar quarter shall be adjusted to the applicable
percentage based on such actual Quarterly Average Undrawn Availability and any
additional interest and Unutilized Commitment Fee for the applicable period as a
result of such recalculation shall be promptly paid to Agent.  In the event that
the Quarterly Average Undrawn Availability for such

 

3

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

 

calendar quarter used for the determination of the Applicable Margin was greater
than the actual amount of the Quarterly Average Undrawn Availability, the
Applicable Margin for such prior calendar quarter shall be adjusted to the
applicable percentage based on such actual Quarterly Average Undrawn
Availability and any reduction in interest and Unutilized Commitment Fee for the
applicable period as a result of such recalculation shall be promptly credited
to the loan account of Borrowers.  The foregoing shall not be construed to limit
the rights of Agent or Lenders with respect to the amount of interest payable
after a Default or Event of Default, whether based on such recalculated
percentage or otherwise.

 

“Approved Fund” shall mean (a) any fund, trust or similar entity that invests in
commercial loans in the ordinary course of business and is advised or managed by
(i) a Lender, (ii) a Controlled Affiliate of a Lender, (iii) the same investment
advisor that manages a Lender or (iv) a Controlled Affiliate of an investment
advisor that manages a Lender or (b) any finance company, insurance company or
other financial institution which temporarily warehouses loans for any Lender or
any Person described in clause (a) above.

 

“Authority” shall have the meaning set forth in Section 4.18(d).

 

“BA Rate” shall mean (a) for a Lender that is a Schedule I chartered bank under
the Bank Act (Canada), the CDOR Rate, and (b) for any other Lender, the discount
rate at which such Lender is prepared to purchase bankers’ acceptances (such
rate not to exceed the CDOR Rate plus one-tenth of one (0.10%) percent).

 

“BA Rate Loan” shall mean an Advance that bears interest based on the BA Rate.

 

“Bank Product Agreement” shall mean any agreement for any service or facility
extended to any Loan Party or any of its Subsidiaries by a Bank Product Provider
including:  (a) credit cards, (b) debit cards, (c) purchase cards or stored
value cards, (d) credit card, debit card and purchase card processing services,
(e) treasury, cash management or related services (including the Automated
Clearing House processing of electronic funds transfers through the direct
Federal Reserve Fedline system) and the Large Value Transfer System operated by
the Canadian Payments Association for the processing of electronic funds), (f)
cash management, including controlled disbursement, accounts or services, (g)
return items, netting, overdraft and interstate depositary network services or
(h) Hedging Agreements.

 

“Bank Product Obligations” shall mean and include all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by any Loan Party
or any of its Subsidiaries to a Bank Product Provider pursuant to or evidenced
by the Bank Product Agreements and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all such amounts that any Loan
Party is obligated to reimburse to a Bank Product Provider as a result of such
Person purchasing participations or executing indemnities or reimbursement
obligations with respect to the Bank Products provided to any Loan Party or any
of its Subsidiaries pursuant to the Bank Product Agreements.

 

“Bank Product Provider” shall mean (a) Wells Fargo or any of its Affiliates, (b)
any Lender or any Affiliate of any Lender, or (c) any other financial
institution (which, in the case of any other

 

4

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financial institution in clause (c), to the extent approved by Agent in its
Permitted Discretion) that provides any Bank Products to any Loan Party.

 

“Bankruptcy Code” shall have the meaning set forth in Section 2.16(a).

 

“Base Rate” shall mean, for any day (or if such day is not a Business Day, the
immediately preceding Business Day), (a) for US Base Rate Loans, a rate per
annum (rounded upward, if necessary, to the next 1/100th of one (1%) percent)
equal to the greatest of (i) the rate of interest announced, from time to time,
within Wells Fargo at its principal office in San Francisco as its “prime rate”,
with the understanding that the “prime rate” is one of Wells Fargo’s base rates
(not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate, (ii) the Federal Funds
Effective Rate in effect on such day plus one-half of one (0.50%) percent, and
(iii) the LIBOR Rate for a LIBOR Loan with a three (3) month interest period
plus one (1%) percent (the greatest of clauses (a)(i), (a)(ii) and (a)(iii)
being referred to as the “US Base Rate”), and (b) for Canadian Base Rate Loans,
a rate per annum (rounded upward, if necessary, to the next 1/100th of one (1%)
percent) equal to the greater of (i) prime lending rate as quoted by a Schedule
I bank in Canada designated from time to time in writing by Agent (“Canadian
Prime Rate”) and (ii) the BA Rate (using a maturity of thirty (30) days) quoted
from time to time, plus one (1%) percent (the greater of clauses (b)(i) and
(b)(ii) being referred to as the “Canadian Base Rate”).  If the Agent shall have
determined in its reasonable discretion (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of the Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Base Rate shall be determined without regard to clause (a)(ii) of
this definition until the circumstances giving rise to such inability no longer
exist.  Any change in the Base Rate due to a change in the Prime Rate, the
Federal Funds Effective Rate, the LIBOR Rate, the Canadian Prime Rate or the BA
Rate shall be effective on the effective date of such change in the Prime Rate,
the Federal Funds Effective Rate, the LIBOR Rate, the Canadian Prime Rate or the
BA Rate, respectively.

 

“Base Rate Loans” shall mean (a) with respect to the US Borrowers, US Base Rate
Loans, and (b) with respect to Canadian Borrowers, Canadian Base Rate Loans.

 

“Benefited Lender” shall have the meaning set forth in Section 2.12(f).

 

“Blocked Accounts” shall have the meaning set forth in Section 4.14(h).

 

“Borrower” or “Borrowers” shall have the meanings set forth in the preamble to
this Agreement and shall extend to all permitted successors and assigns of such
Persons.

 

“Borrowers’ Account” shall mean, collectively, the US Borrowers’ Account and the
Canadian Borrowers’ Account.

 

“Borrowing Base” shall mean the sum of the US Borrowing Base and the Canadian
Borrowing Base.

 

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“Borrowing Base Certificate” shall mean a “daily collateral report” duly
executed by a Responsible Officer of Administrative Borrower appropriately
completed and in substantially the form of Exhibit A, as such form may from time
to time be modified by Agent (in consultation with Administrative Borrower) in a
manner consistent with the terms of this Agreement.

 

“Business Day” shall mean any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized or required to close under the laws of the
State of New York or, with respect to the Canadian Base Rate Loans only, the
Province of Ontario, Canada (or, in the case of Canadian Base Rate Loans bearing
interest at the CDOR Rate, in Toronto, Ontario), and shall include a day on
which Agent is open for the transaction of business; except, that, if a
determination of a Business Day shall relate to any LIBOR Rate Loans, the term
Business Day shall also exclude any day on which banks are closed for dealings
in dollar deposits in the London interbank market or other applicable LIBOR
market.

 

“CAM Exchange” shall have the meaning set forth in Section 11.6 of this
Agreement.

 

“CAM Exchange Date” shall have the meaning set forth in Section 11.6 of this
Agreement.

 

“CAM Percentage” shall have the meaning set forth in Section 11.6 of this
Agreement.

 

“Canadian Advances” shall mean Advances made to the Canadian Borrowers.

 

“Canadian Bank Product Obligations” shall mean and include all obligations,
liabilities, contingent reimbursement obligations, fees, and expenses owing by
any Canadian Loan Party (other than a Canadian Loan Party which is also a US
Loan Party) to a Bank Product Provider pursuant to or evidenced by the Bank
Product Agreements and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all such amounts that any such Canadian Loan
Party is obligated to reimburse to a Bank Product Provider as a result of such
Person purchasing participations or executing indemnities or reimbursement
obligations with respect to the Bank Products provided to any such Canadian Loan
Party pursuant to the Bank Product Agreements.

 

“Canadian Base Rate” shall have the meaning set forth in the definition of Base
Rate.

 

“Canadian Base Rate Loans” shall mean any Advances or portion thereof
denominated in Canadian Dollars and on which interest is payable based on the
Canadian Base Rate in accordance with the terms hereof.

 

“Canadian Borrower” or “Canadian Borrowers” shall have the meanings set forth in
the preamble to this Agreement and shall extend to all permitted successors and
assigns of such Persons.

 

“Canadian Borrowers’ Account” shall have the meaning set forth in Section 2.7.

 

“Canadian Borrowing Base” shall mean, at any time, as to Canadian Borrowers, the
amount equal to:

 

(a)                                  eighty-five (85%) percent of Eligible
Accounts of Canadian Borrowers, plus

 

6

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(b)                                 the amount equal to the lesser of (i)
seventy (70%) percent of the Value of the Eligible Inventory of Canadian
Borrowers and (ii) eighty-five (85%) percent of the Net Liquidation Percentage
multiplied by the Value of the Eligible Inventory of Canadian Borrowers, minus

 

(c)                                  Reserves.

 

“Canadian Cash Equivalents” shall mean any of the following (a) any evidence of
Indebtedness issued, guaranteed or insured by the government of Canada or any
province, and having terms to maturity of not more than one (1) year from the
date of acquisition, (b) certificates of deposit having maturities of not more
than one (1) year issued or guaranteed by any Canadian chartered bank and rated
A (or the then equivalent grade) or better by Dominion Bond Rating Service, (c)
Canadian Dollar denominated bankers acceptances of any Canadian chartered bank
and rated A (or the then equivalent grade) or better by Dominion Bond Rating
Service having terms to maturity of not more than one (1) year, (d) commercial
paper maturing no more than two hundred seventy (270) days from the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P 1 from Moody’s, (e) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the Government of Canada or any province or issued
by any governmental agency thereof maturing within one (1) year or less, and (f)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (a) through (e) above.

 

“Canadian Collateral” shall mean all Collateral of any Canadian Loan Party.

 

“Canadian Commitment” shall mean, at any time, as to each Lender, the principal
amount set forth next to such Lender’s name on Schedule C-1 hereto designated as
the Canadian Commitment of such Lender or on Schedule 1 to the Assignment and
Acceptance Agreement pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 13.7 hereof, as the same may be
adjusted from time to time in accordance with the terms hereof; sometimes being
collectively referred to herein as “Canadian Commitments”.  The Canadian
Commitment is a sublimit of the US Commitment.

 

“Canadian Credit Facility” shall mean the Advances and Letters of Credit
provided to or for the benefit of Canadian Borrowers pursuant to Sections 2.1
and 2.2 hereof.

 

“Canadian Dollar Loans” shall mean any Advances or portion thereof denominated
in Canadian Dollars.

 

“Canadian Dollars” and “C$” shall each mean the lawful currency of Canada.

 

“Canadian Employee” shall mean any employee or former employee of a Canadian
Loan Party.

 

“Canadian Employee Plan” shall mean any employee benefit, health, welfare,
supplemental unemployment benefit, bonus, pension, supplemental pension, profit
sharing, retiring allowance, severance, deferred compensation, stock
compensation, stock purchase, unit purchase, retirement, life, hospitalization
insurance, medical, dental, disability or other employee group or similar
benefit or employment plans or supplemental arrangements applicable to the
Canadian Employees.

 

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“Canadian Guarantors” shall mean, collectively, the following (together with
their respective successors and assigns): (a) US Borrowers, (b) US Guarantors
and (c) any Person that at any time after the date hereof becomes party to a
guarantee in favor of Agent or any Lender in respect of or otherwise liable on
or with respect to the Canadian Obligations (but not the US Obligations) or who
is the owner of any property which is security for the Canadian Obligations
(other than Canadian Borrowers); each sometimes referred to herein individually
as a “Canadian Guarantor”.

 

“Canadian Inventory Reserves” shall mean, as of any date of determination, such
amounts as Agent may from time to time establish and revise in its Permitted
Discretion to reflect:  (a) the estimated costs relating to unpaid freight
charges, warehousing or storage charges, taxes, duties, and other similar unpaid
costs associated with the acquisition of eligible in-transit Inventory by the
Canadian Loan Parties (other than any Inventory that is in-transit from one
Borrower or Guarantor to another Borrower or Guarantor in the ordinary course of
business so long as Agent shall receive, on a monthly basis, a report, in form
and substance reasonably satisfactory to Agent, regarding the amount of such
in-transit Inventory), and (b) the estimated reclamation claims of unpaid
suppliers of Inventory sold to Canadian Loan Parties (including, without
limitation, claims arising under the Bankruptcy and Insolvency Act (Canada)).

 

“Canadian Issuer” shall mean (a) Wells Fargo or any of its Affiliates, (b) any
Canadian Lender or (c) any other financial institution (which in the case of any
other financial institution in this clause (c), to the extent approved by Agent
and, so long as no Event of Default exists and is continuing, Administrative
Borrower (it being understood and agreed that The Toronto-Dominion Bank is
acceptable to Agent and Administrative Borrower), that shall issue a Letter of
Credit for the account of a Canadian Borrower and has agreed in a manner
reasonably satisfactory to Agent to be subject to the terms hereof as a Canadian
Issuer.

 

“Canadian Lender” shall mean, at any time, each Lender having a Canadian
Commitment or a Revolving Advance (or Canadian Letter of Credit Obligation) made
to Canadian Borrowers owing to it at such time; sometimes referred to herein
collectively as “Canadian Lenders.”

 

“Canadian Letter of Credit Limit” shall mean $2,000,000.

 

“Canadian Letter of Credit Obligations” shall mean at any time, the sum of (a)
the aggregate undrawn amount of all Letters of Credit issued for the account of
Canadian Borrowers outstanding at such time, plus (b) without duplication, the
aggregate amount of all drawings under Letters of Credit issued for the account
of Canadian Borrowers for which the Canadian Issuer has not at such time been
reimbursed, plus (c) without duplication, the aggregate amount of all payments
made by Canadian Lender to the Canadian Issuer with respect to such Canadian
Lender’s participation in Letters of Credit issued for the account of Canadian
Borrowers as provided in Section 2.2 for which Canadian Borrowers have not at
such time reimbursed the Canadian Lenders, whether by way of a Revolving Advance
or otherwise.

 

“Canadian Loan Parties” shall mean, collectively, Canadian Borrowers and each
Canadian Guarantor organized under the laws of Canada or any province thereof;
each sometimes being referred to individually as a “Canadian Loan Party.”

 

“Canadian Obligations” shall mean all Obligations of the Canadian Loan Parties.

 

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“Canadian Payment Account” shall mean the account of Wells Fargo Canada set
forth on Schedule 2.3 or such other account of Wells Fargo Canada, if any, which
Agent may designate by notice to Administrative Borrower and to each Lender to
be the Canadian Payment Account.

 

“Canadian Pension Plan” shall mean any plan, program or arrangement that is a
pension plan for the purposes of any applicable pension benefits legislation or
any tax laws of Canada or a province thereof, whether or not registered under
any such laws, which is maintained or contributed to by, or to which there is or
may be an obligation to contribute by, any Borrower or Guarantor in respect of
any current or former employees in Canada with such Borrower or Guarantor, but
does not include the Canada Pension Plan or the Québec Pension Plan as
maintained by the Government of Canada or the Province of Québec, respectively.

 

“Canadian Pension Plan Event” shall mean (a) either (i) the termination in whole
or in part of a Canadian Pension Plan or (ii) the cessation of participation of
the Borrower or Guarantor (or any affiliate or other related party thereto with
whom there is statutory joint and several liability under pension standards
legislation) in any Canadian Pension Plan, including a multi-employer pension
plan (within the meaning of applicable pension standards legislation), for any
reason and which event gives rise or might give rise to an obligation on such
entity to make contributions in respect of any past service unfunded liability
of such plan, (b) the issuance of a notice (or a notice of intent to issue such
a notice) to terminate in whole or in part any Canadian Pension Plan with a
defined benefit provision or the receipt of a notice of intent from a
Governmental Authority to require the termination in whole or in part of any
Canadian Pension Plan, revoking the registration of same or appointing a new
administrator of such a plan, (c) an event or condition which constitutes
grounds under applicable pension standards or tax legislation for the issuance
of an order, direction or other communication from any Governmental Authority or
a notice of an intent to issue such an order, direction or other communication
requiring the Borrower or any affiliate to take or refrain from taking any
action in respect of a Canadian Pension Plan, (d) the issuance of either any
order (including an order to remit delinquent contributions to the Pension
Benefits Guarantee Fund of Ontario (the “PBGF”)) or charges which may give rise
to the imposition of any fines or penalties to or in respect of any Canadian
Pension Plan or the issuance of such fines or penalties, (e) the receipt of any
notice from an administrator, a trustee or other funding agent or any other
person or entity that the Borrower or any of its affiliates have failed to remit
any contribution to a Canadian Pension Plan or a similar notice from a
Governmental Authority relating to a failure to pay any fees or other amounts
(including payments in respect of the PBGF).

 

“Canadian Reference Bank” shall mean The Toronto-Dominion Bank, or such other
bank listed in Schedule I of the Bank Act (Canada) as Agent may from time to
time designate.

 

“Canadian Revolving Loan Maximum Amount” shall mean $20,000,000 (subject to
adjustment as provided pursuant to the terms of Sections 2.20 and 2.21).

 

“Canadian Subsidiary” shall mean a Subsidiary organized, incorporated or
otherwise formed under the laws of Canada or any province or territory thereof.

 

“Canadian Undrawn Availability” shall mean, as to Canadian Borrowers, on any
date of determination, as determined by Agent in its Permitted Discretion,
calculated at any date, equal to:  (a) the lesser of: (i) the Canadian Borrowing
Base and (ii) the Canadian Revolving Loan Maximum

 

9

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Amount, minus (b) the sum of: (i) the amount of all then outstanding and unpaid
Canadian Obligations of Canadian Borrowers (but not including for this purpose
any outstanding Canadian Letter of Credit Obligations and unasserted contingent
indemnification Canadian Obligations), plus (ii) the amount of all Reserves then
established in respect of Canadian Letter of Credit Obligations.

 

“Capital Expenditures” shall mean, with respect to any Person, without
duplication, all expenditures (including deposits) made by such Person for, or
contracts for expenditures with respect to any fixed assets or improvements, or
for replacements, substitutions or additions thereto, which have a useful life
of more than one (1) year, including the direct or indirect acquisition of such
assets by way of increased product or service charges, offset items or
otherwise, as determined in accordance GAAP consistently applied and all other
expenditures which, in accordance with GAAP, would be required to be capitalized
and shown on the consolidated balance sheet of such Person.

 

“Capital Lease” shall mean any lease of any property (whether real, personal or
mixed) that, in conformity with GAAP consistently applied, should be accounted
for as a capital lease.

 

“Cash Dominion Event” shall mean either (a) an Event of Default shall have
occurred and be continuing or (b) Global Undrawn Availability is, on any date of
determination, less than the greater of (i) twelve and one-half (12.5%) percent
of the lesser of (A) the Maximum Credit and (B) the Borrowing Base at such time,
and (ii) $12,500,000; provided, that, any such Cash Dominion Event resulting
solely from this clause (b) shall cease to exist to the extent that Global
Undrawn Availability is greater than or equal to the greater of (A) twelve and
one-half (12.5%) percent of the lesser of (1) the Maximum Credit and (2) the
Borrowing Base at such time, and (B) $12,500,000 for sixty (60) consecutive days
during any applicable period after the occurrence of such Cash Dominion Event
and no other Cash Dominion Event has occurred during such sixty (60) consecutive
day period.

 

“Cash Equivalents” shall mean, collectively, Canadian Cash Equivalents and US
Cash Equivalents, as the case may be.

 

“Cash Interest Expense” shall mean, without duplication, for any period,
Interest Expense (excluding the following non-cash components of Interest
Expense:  (a) the amortization of fees and costs with respect to the
transactions contemplated by this Agreement which have been capitalized as
transaction costs, and (b) interest paid in kind).

 

“Cash Receipt Account” or “Cash Receipt Accounts” shall mean, individually or
collectively, all lockbox accounts, dominion accounts or other deposit accounts
established and maintained by Loan Parties for the purpose of collecting or
depositing cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, cash proceeds of asset sales, rental proceeds,
and tax refunds), and which are designated as such and listed on Schedule 5.23.

 

“Castle Canada” shall have the meaning set forth in the preamble to this
Agreement and shall extend to all permitted successors and assigns of such
Person.

 

“CDOR Rate” shall mean, on any day, the annual rate of interest which is the
rate equal to the average rate for thirty (30) day Canadian Dollar bankers’
acceptances issued on such day for a term equal or comparable for the purpose of
calculating the interest rate applicable as such rate appears on the “Reuters
Screen CDOR Page” (as defined in the International Swaps and Derivatives

 

10

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Association, Inc. 2000, definitions, as modified and amended from time to time)
rounded to the nearest 1/100th of 1% (with 0.005% being rounded up), as of 10:00
a.m. on such day, or if such day is not a Business Day, then on the immediately
preceding Business Day; provided, that, if such rate does not appear on the
Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any day shall be
the average of the rates applicable to thirty (30) day Canadian Dollar bankers’
acceptances quoted by the Schedule I Reference Banks as of 10:00 a.m. on such
day, or if such day is not a Business Day, then on the immediately preceding
Business Day.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

 

“CFC” shall mean a “controlled foreign corporation” as defined in Section 957 of
the Code.

 

“Change in Tax Law” shall mean a change in the treaty, law or regulation after
the date on which the applicable Agent or Lender becomes a party to this
Agreement (or, if such Lender is a non-U.S. intermediary or flow-through entity
for U.S. federal income tax purposes, after the relevant beneficiary or member
of such Lender became such a beneficiary or member, if later); provided,
however, such term does not include regulations or other guidance issued by the
IRS or U.S. Treasury implementing or interpreting laws already enacted, but not
yet effective.

 

“Change of Control” shall mean the occurrence of any event (whether in one or
more transactions) which results in:

 

(a)                                  any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding (i) any Person who is a direct or indirect shareholder of Parent as of
the date hereof and (ii) any employee benefit plan of such Person or its
subsidiaries, and any Person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except, that, a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time
(such right, an “option right”)), directly or indirectly, of a majority of the
voting power of the total outstanding Equity Interests of Parent entitled to
vote for members of the board of directors or equivalent governing body of
Parent on a fully-diluted basis (and taking into account all such Equity
Interests that such “person” or “group” has the right to acquire pursuant to any
option right); or

 

(b)                                 during any period of two (2) consecutive
years, a majority of the members of the board of directors or other equivalent
governing body of Parent cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first (1st) day of
such period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least sixty-six and
two-thirds (66 2/3%) percent of that board or equivalent governing body or (iii)
whose election or nomination to that board or other equivalent governing body
was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least sixty-six and
two-thirds (66 2/3%) percent of that board or equivalent governing body
(excluding, in the case of both clause (ii) and clause (iii), any individual
whose initial nomination for, or assumption of office as, a member of that board
or equivalent governing

 

11

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body occurs as a result of solicitation of proxies or consents for the election
or removal of one or more directors by any person or group by or on behalf of
the board of directors); or

 

(c)                                  any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall have entered into
a contract or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of Parent, or control over
the Equity Interests of Parent entitled to vote for members of the board of
directors or equivalent governing body of Parent on a fully-diluted basis (and
taking into account all such securities that such Person or Persons have the
right to acquire pursuant to any option right) representing a majority of the
combined voting power of such securities; or

 

(d)                                 a “Change of Control” or other similar event
under, and as defined in, the Second Lien Loan Documents or the Senior Unsecured
Notes Documents.

 

For purposes of this definition, “control of Loan Party” shall mean the power,
direct or indirect, (i) to vote fifty-one (51%) percent or more of the Equity
Interests having ordinary voting power for the election of directors (or
equivalent governing body) of any Loan Party and (ii) to direct or cause the
direction of the management and policies of any Loan Party by contract or
otherwise.

 

“Charges” shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation and property taxes,
custom duties, fees, assessments, Liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts, imposed by any taxing or other authority, domestic or
foreign (including, without limitation, the PBGC or any environmental agency or
superfund), upon the Collateral, any Loan Party or any Subsidiary of any Loan
Party.

 

“Closing Date” shall mean December 15, 2011.

 

“Closing Date Acquisition” shall mean Parent’s purchase and acquisition of all
of the issued and outstanding Equity Interests of the Acquired Company pursuant
to the Closing Date Acquisition Agreement.

 

“Closing Date Acquisition Agreement” shall mean the Stock Purchase Agreement,
dated as of November 9, 2011, executed by and among Paul Sorenson and Jerry
Willeford, as sellers, Parent, as purchaser, and the Acquired Company, as
amended or modified and in effect from time to time.

 

“Closing Date Acquisition Documents” shall mean, collectively, the Closing Date
Acquisition Agreement, along with all documents and agreements executed in
connection therewith.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated thereunder.

 

“Collateral” shall mean any and all collateral granted under this Agreement or
any Other Document to secure any and all of the Obligations, including without
limitation all tangible and intangible property of each Loan Party, all personal
and real property of each Loan Party, all

 

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movable and immovable property of each Loan Party, in each case whether now
owned or hereafter acquired and wherever located, including, but not limited to,
the following of each Loan Party:

 

(a)                                  all Accounts and other Receivables;

 

(b)                                 all certificated and uncertificated
securities;

 

(c)                                  all chattel paper, including electronic
chattel paper;

 

(d)                                 all Computer Hardware and Software and all
rights with respect thereto, including, any and all licenses, options,
warranties, service contracts, program services, test rights, maintenance
rights, supporting information, improvement rights, renewal rights and
indemnifications, and any substitutions, replacements, additions or model
conversions of any of the foregoing;

 

(e)                                  all Contract Rights;

 

(f)                                    all commercial tort claims, (including,
without limitation any commercial tort claims from time to time described on
Schedule 5.8(b) (as such Schedule 5.8(b) may from time to time be updated));

 

(g)                                 all deposit accounts;

 

(h)                                 all documents;

 

(i)                                     all financial assets;

 

(j)                                     all General Intangibles, including
payment intangibles and software;

 

(k)                                  all goods (including all Equipment and
Inventory), and all embedded software, accessions, additions, attachments,
improvements, substitutions and replacements thereto and therefor;

 

(l)                                     all instruments;

 

(m)                               all Intellectual Property;

 

(n)                                 all Investment Property;

 

(o)                                 all of the Equity Interests issued by each
Loan Party (other than Parent) and each of their Subsidiaries;

 

(p)                                 all leasehold interests;

 

(q)                                 all cash, cash equivalents or other money;

 

(r)                                    all letter of credit rights;

 

(s)                                  all security entitlements;

 

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(t)                                    all supporting obligations;

 

(u)                                 all of each Loan Party’s right, title and
interest in and to (i) all of its respective goods and other property including,
but not limited to, all merchandise returned or rejected by Customers, relating
to or securing any of the Receivables; (ii) all of each Loan Party’s rights as a
consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor,
including stoppage in transit, setoff, compensation, detinue, replevin,
reclamation and repurchase; (iii) all supporting obligations and all additional
amounts due to any Loan Party from any Customer relating to the Receivables;
(iv) all other property of any kind whatsoever of each Loan Party, including,
but not limited to, warranty claims, relating to any goods; (v) all of each Loan
Party’s Contract Rights, rights of payment which have been earned under a
Contract Right, letter of credit rights (whether or not the letter of credit is
evidenced by a writing), instruments (including promissory notes), documents,
chattel paper (whether tangible or electronic), warehouse receipts, deposit
accounts, money and securities; (vi) if and when obtained by any Loan Party, all
real, immovable, movable and personal property of third parties in which such
Loan Party has been granted a Lien; and (vii) any other goods, movable or
personal property or real or immovable property of any kind or description,
wherever located, now or hereafter owned or acquired by any Loan Party; and

 

(v)                                 all books, records, writings, data bases,
information and other property relating to, used or useful in connection with,
or evidencing, embodying, incorporating or referring to any of the foregoing,
and all proceeds, products, offspring, rents, issues, profits and returns of and
from any of the foregoing;

 

provided, however, that, no Excluded Assets shall be included in Collateral.

 

“Collateral Access Agreement” shall mean an agreement in writing, in form and
substance reasonably satisfactory to Agent, from any lessor of premises to any
Loan Party, or any other Person to whom any Collateral is consigned or who has
custody, control or possession of any such Collateral or is otherwise the owner
or operator of any premises on which any of such Collateral is located, duly
executed and delivered in favor of Agent with respect to the Collateral at such
premises or otherwise in the custody, control or possession of such lessor,
consignee or other Person.

 

“Collateral Field Examinations” shall have the meaning as set forth in Section
4.9.

 

“Commitment” shall mean, at any time, as to any Lender, the aggregate of such
Lender’s US Commitment and Canadian Commitment, or its Swingline Commitment, as
the context requires, set forth next to such Lender’s name on Schedule C-1
hereto as such Lender’s US Commitment and Canadian Commitment, or its Swingline
Commitment, as applicable; or in the Commitment Transfer Supplement pursuant to
which such Lender became a Lender hereunder, as such amounts may be reduced or
increased from time to time pursuant to assignments made in accordance with the
provisions of this Agreement (subject to adjustment as provided pursuant to the
terms of Section 2.13, Section 2.20 and Section 2.21), sometimes being
collectively referred to herein as “Commitments”; provided, that, the US Dollar
Equivalent of the aggregate Commitments of all Lenders shall not exceed the
Maximum Credit (it being understood that the Canadian Commitments are a sublimit
of the US Commitments of all Lenders).

 

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“Commitment Percentage” shall mean, with respect to a Lender’s obligation to
make Revolving Advances and participate in Letters of Credit and in the
Swingline Advances, and right to receive payments of principal, interest and
fees with respect thereto, (a) prior to the Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing (i) such
Lender’s Revolver Commitment, by (ii) the aggregate Revolver Commitments of all
Lenders, and (b) from and after the time that the Revolver Commitments have been
terminated or reduced to zero, the percentage obtained by dividing (i) the
outstanding principal amount of such Lender’s Advances and ratable portion in
Swingline Advances and in Letters of Credit by (ii) the outstanding principal
amount of all Advances made by the Lenders (inclusive of all Swingline Advances
made by Swingline Lender and all Letters of Credit).

 

“Commitment Transfer Supplement” shall mean a document in the form of Exhibit
17.3, properly completed, or otherwise in form and substance reasonably
satisfactory to Agent, and if applicable, to Administrative Borrower, by which a
Purchasing Lender purchases and assumes all or a portion of Advances made by a
Lender and/or all or a portion of the Commitments of a Lender.

 

“Compliance Certificate” shall mean the Compliance Certificate executed and
delivered by a Responsible Officer of Administrative Borrower’s pursuant to
Sections 9.7 and 9.8 in the form of Exhibit 9.7 appended hereto.

 

“Computer Hardware and Software” shall mean all of each Loan Party’s rights
(including rights as licensee and lessee) with respect to (a) computer and other
electronic data processing hardware, including all integrated computer systems,
central processing units, memory units, display terminals, printers, computer
elements, card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers, accessories,
peripheral devices and other related computer hardware; (b) all software and all
software programs designed for use on the computers and electronic data
processing hardware described in clause (a) above, including all operating
system software, utilities and application programs in whatsoever form (source
code and object code in magnetic tape, disk or hard copy format or any other
listings whatsoever); (c) any firmware associated with any of the foregoing; and
(d) any documentation for hardware, software and firmware described in clauses
(a), (b) and (c) above, including flow charts, logic diagrams, manuals,
specifications, training materials, charts and pseudo codes.

 

“Consents” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Loan Party’s
business or to permit the effectuation and performance of this Agreement, the
Other Documents and the Related Transactions, including, without limitation, any
Consents required under all applicable federal, state or other applicable law.

 

“Contra Claims” shall have the meaning set forth in subparagraph (l) of the
definition of Eligible Accounts.

 

“Contract Right” shall mean any right of each Loan Party to payment under a
contract for the sale or lease of goods or the rendering of services, which
right is at the time not yet earned by performance.

 

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“Control Notice” shall mean a written notice delivered by Agent pursuant to a
“control” or other agreements instructing the depository bank to comply with
instructions originated by Agent with respect to the Blocked Account that is
covered thereby without further consent of Loan Parties.

 

“Controlled Affiliate” of any Person shall mean any Person who, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person.  For purposes of this definition, control of a Person shall mean
the power, direct or indirect, to (a) vote fifty-one (51%) percent or more of
the Equity Interests having ordinary voting power for the election of directors
or managers (or other comparable body) of such Person, and (b) to direct or
cause the direction of the management and policies of such Person whether by
contract or otherwise.

 

“Controlled Group” shall mean all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with any Loan Party, are treated as a single employer under
Section 414 of the Code.

 

“Credit Facility” shall mean, collectively, the US Credit Facility and the
Canadian Credit Facility.

 

“Currency Due” shall have the meaning set forth in Section 17.5.

 

“Customer” shall mean and include the account debtor with respect to any
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or Contract Right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Loan Party,
pursuant to which such Loan Party is to deliver any personal property or perform
any services.

 

“Customs” shall mean the United States of America Customs and Border Protection
Agency of the United States Department of Homeland Security.

 

“Debt Financing Documents” shall mean, collectively, (a) the Second Lien Loan
Documents and (b) the Senior Unsecured Notes Documents.

 

“Default” shall mean an event which, with the giving of notice or passage of
time or both, would constitute an Event of Default.

 

“Default Rate” shall have the meaning set forth in Section 3.1.

 

“Defaulting Lender” shall have the meaning set forth in Section 2.15(a).

 

“Depository Accounts” shall have the meaning set forth in Section 4.14(h).

 

“Disposition” shall have the meaning set forth in Section 7.1; and “Dispose”
shall have the correlative meaning.

 

“EBITDA” shall mean for any period, without duplication, the total of the
following for Loan Parties and their Subsidiaries on a consolidated basis, each
calculated for such period in accordance with GAAP (to the extent applicable):

 

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(a)                                  Net Income; plus

 

(b)                                 (without duplication), to the extent
included in the calculation of Net Income, the sum of (i) income and franchise
taxes paid or accrued, (ii) Interest Expense, net of interest income, paid or
accrued, (iii) amortization and depreciation, (iv) Acquisition Costs incurred on
or before December 31, 2011 that are paid during such period in connection with
this Agreement, the Other Documents and the Related Documents, (v) the write-off
of deferred financing fees and any “make-whole” prepayment premium actually paid
in connection with the prepayment of existing Indebtedness of the Parent and its
Subsidiaries on the Closing Date or in connection with the Debt Financing
Documents, (vi) any non-cash expenses or charges incurred pursuant to any
management equity plan or stock option plan or any other management or employee
benefit plan or agreement or any stock subscription or shareholder agreement,
(vii) non-cash goodwill or other intangible asset impairment charges (determined
in accordance with Statement of Financial Accounting Standards No. 142), (viii)
unrealized non-cash Net Mark-to-Market Exposure under Hedging Agreements, (ix)
any transaction-related expenses or charges (to the extent not capitalized)
incurred by the Loan Parties in connection with the consummation of any
Permitted Acquisition subsequent to the date hereof, (x) extraordinary losses,
(xi) any non-cash charges in connection with purchase accounting adjustments and
(xii) other non-recurring, non-cash charges; less

 

(c)                                  (without duplication), to the extent
included in the calculation of Net Income, the sum of (i) the income of any
Person (other than a Loan Party or a Subsidiary of any Loan Party) in which any
Loan Party or a Subsidiary of any Loan Party has an ownership interest except to
the extent such income is received by any Loan Party or such Subsidiary in a
cash distribution during such period, (ii) gains or losses from sales or other
dispositions of assets (other than sales of Inventory in the normal course of
business), (iii) extraordinary gains, (iv) any non-cash gains in connection with
purchase accounting adjustments and (v) other non-recurring, non-cash gains.

 

“Edmonton Leasehold Mortgage” shall mean the fixed and floating charge demand
debenture executed by Tube Canada in favour of Wells Fargo Capital Finance
Corporation Canada on behalf the Agent with respect to the premises located at
2503-84 Avenue Sherwood Park, Edmonton, Alberta T6P 1K1, Canada.

 

“Eligible Accounts” shall mean and include each Account of a Borrower arising in
the ordinary course of such Borrower’s business; provided, that, in no event
shall an Account be an Eligible Account if:

 

(a)                                  it does not arise from the actual and bona
fide sale and delivery of goods or rendition of services by such Borrower in the
ordinary course of business of such Borrower, which transactions are completed
in accordance in all material respects with the terms and provisions contained
in any agreement binding on such Borrower or the other party or parties thereto;

 

(b)                                 it is due or unpaid more than the earlier of
(i) sixty (60) days after the original due date and (ii) ninety (90) days after
the original invoice date;

 

(c)                                  it is owed by a Customer who has Accounts
unpaid more than the earlier of (i) sixty (60) days after the original due date
and (ii) ninety (90) days after the original invoice date, which unpaid Accounts
constitute more than twenty-five (25%) percent of the total Accounts of such

 

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Customer (such percentage may, in Agent’s sole discretion, be increased or
decreased from time to time);

 

(d)                                 it is not subject to the first priority,
valid and perfected Lien of Agent (subject to Permitted Encumbrances; but
without limiting the right of Agent to establish any Reserves with respect to
Permitted Encumbrances);

 

(e)                                  any covenant, representation or warranty
contained in this Agreement with respect to such Account has been breached in
any material respect;

 

(f)                                    the Customer shall (i) apply for, suffer,
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, administrator or liquidator of itself or of all or a
substantial part of its property or call a meeting of its creditors, (ii) admit
in writing its inability, or be generally unable, to pay its debts as they
become due or cease operations of its business, (iii) make a general assignment
for the benefit of creditors, (iv) commence a voluntary case under any state,
federal, provincial, Canadian, or other bankruptcy or insolvency laws (as now or
hereafter in effect), or enter into discussions with its creditors existing at
any one time with respect to rescheduling any of its Indebtedness, (v) be
adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vii) acquiesce
to, or fail to have dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy or insolvency laws, or (viii) take any
action for the purpose of effecting any of the foregoing or which is indicative
of insolvency;

 

(g)                                 the sale is to (i) a Customer located or
incorporated (or other analogous term) outside the United States of America or
Canada (but excluding the provinces of the Northwest Territories and the
Territory of Nunavit) (collectively, “Foreign Customers”), except for a Foreign
Customer that (A) has an Investment Grade Rating or (B) is otherwise acceptable
in all respects to Agent in its Permitted Discretion (subject to such lending
formula with respect to Accounts of such Foreign Customers as Agent may
determine in its Permitted Discretion); provided, that, the maximum aggregate
amount of Eligible Accounts as to Foreign Customers which may be considered
eligible under this clause (g)(i) shall not exceed in the aggregate $20,000,000,
or (ii) a Foreign Customer that does not have an Investment Grade Rating,
unless, under this clause (g)(ii), in each case, the sale is on letter of
credit, guarantee or banker’s acceptance terms, in each case acceptable to Agent
in its Permitted Discretion, or such Foreign Customer is otherwise acceptable in
all respects to Agent in its Permitted Discretion (subject to such lending
formula with respect to Accounts of such Foreign Customers as Agent may
determine in its Permitted Discretion); or

 

(h)                                 the sale to the Customer is on a
bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase, return or contingent or conditional basis or is
evidenced by chattel paper (unless such chattel paper is delivered to Agent);

 

(i)                                     (i) the Customer is the United States of
America, any state or any department, agency or instrumentality of any of them,
unless the Borrower to whom such Account is owning has assigned its right to
payment of such Account to Agent pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section
15 et seq.), or (ii) if the account debtor is Her Majesty in right of Canada or
any provincial or local Governmental Body, or any Ministry thereof, the Borrower
to whom such Account is owing has assigned its rights

 

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to payment of such Account to Agent pursuant to, and in accordance with the
Financial Administration Act (Canada), as amended, or any similar applicable
provincial or local law regulation or requirement if applicable, has been
complied with in a manner reasonably satisfactory to Agent or has otherwise
complied with other applicable statutes or ordinances;

 

(j)                                     the goods giving rise to such Account
have not been shipped and delivered to and accepted by the Customer or the
services giving rise to such Account have not been performed by such Borrower
and accepted by the Customer (such as advanced billings) or the Account
otherwise does not represent a final sale;

 

(k)                                  [Reserved];

 

(l)                                     the Account is subject to any offset,
deduction, defense, dispute, or counterclaim, the Customer is also a creditor or
supplier of such Borrower or the Account is contingent in any respect or for any
reason (each such offset, deduction, defense, dispute, counterclaim or
contingency, a “Contra Claim”; provided, that, such Accounts shall only be
ineligible pursuant to this clause (l) to the extent of the aggregate amount of
such Contra Claims;

 

(m)                               such Borrower has made any agreement with any
Customer for any deduction therefrom, but only to the extent of such deductions,
except for discounts or allowances made in the ordinary course of business for
prompt payment, all of which discounts or allowances are reflected in the
calculation of the face value of each respective invoice related thereto;

 

(n)                                 any return, rejection or repossession of the
Inventory has occurred the sale of which gave rise to such Account or such
Account relates to a Customer whose obligation to pay is in any respect,
conditional or subject to any such right of return, rejection, repossession or
similar rights;

 

(o)                                 such Account is not payable to such
Borrower;

 

(p)                                 in the case of any single Customer and its
Affiliates, such Accounts constitute more than fifteen (15%) percent of all
otherwise Eligible Accounts (but the portion of the Accounts not in excess of
such percentage may be deemed Eligible Accounts);

 

(q)                                 such Account consists of progress billings
(such that the obligation of the Customer with respect to such Account is
conditioned upon such Borrower’s satisfactory completion of any further
performance under the agreement giving rise thereto), bill and hold invoices or
retainage invoices, except as to bill and hold invoices, if Agent shall have
received an agreement in writing from the Customer, in form and substance
reasonably satisfactory to Agent, confirming the unconditional obligation of the
Customer to take the goods related thereto and pay such invoice;

 

(r)                                    the Customer or any officer or employee
of the Customer with respect to such Account is an officer, employee, agent or
other Affiliate of any Loan Party or any Subsidiary of any Loan Party;

 

(s)                                  there are any proceedings or actions known
to such Borrower which are threatened or pending against the Customer with
respect to such Accounts which could reasonably be expected to result in any
material adverse change in any such account debtor’s financial condition

 

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(including, without limitation, any bankruptcy, dissolution, liquidation,
reorganization or similar proceeding);

 

(t)                                    the underlying sale and other
documentation governing such Account do not provide that such Account must be
paid by the Customer in US Dollars or Canadian Dollars; or

 

(u)                                 the underlying sale and other documentation
governing such Account are not governed by the laws of the United States of
America or, for Customers located or incorporated (or other analogous term) in
Canada, the laws of the United States or Canada.

 

The criteria for Eligible Accounts set forth above may only be changed and any
new criteria for Eligible Accounts may only be established by Agent in its
Permitted Discretion, and upon prompt notice to Administrative Borrower (which
notice may be given either before or after such change is made), based on
either:  (i) an event, condition or other circumstance arising after the date
hereof, or (ii) an event, condition or other circumstance existing on the date
hereof to the extent Agent has no written notice thereof from such Borrower
prior to the date hereof, in either case under clause (i) or (ii) which
materially and adversely affects or could reasonably be expected to materially
and adversely affect the Accounts as determined by Agent in its Permitted
Discretion.  Any Accounts which are not Eligible Accounts shall nevertheless be
part of the Collateral.  Agent shall provide Administrative Borrower with
contemporaneous notice of any change in such criteria or new criteria
established which changed or new criteria shall become effective no earlier than
the third (3rd) Business Day following delivery of such notice.

 

“Eligible Inventory” shall mean Inventory owned by a Borrower consisting of
finished goods held for resale in the ordinary course of the business of such
Borrower and raw materials for such finished goods, provided, that, in no event
shall Inventory be Eligible Inventory if such Inventory:

 

(a)                                  is work in process;

 

(b)                                 is spare parts for equipment;

 

(c)                                  is packaging and shipping materials;

 

(d)                                 is supplies used or consumed in such
Borrower’s business;

 

(e)                                  is not located at premises owned and
controlled by such Borrower; except, that, Inventory at premises leased and
controlled by such Borrower or Inventory at a warehouse owned and operated by a
third Person on behalf of such Borrower, in each case that otherwise satisfies
the criteria for Eligible Inventory, will be considered Eligible Inventory if
(i) Agent has received and accepted a Collateral Access Agreement from the owner
and lessor or operator of such premises, as the case may be, duly authorized,
executed and delivered by such owner and lessor or operator, or (ii) Agent shall
have established such Reserves in respect of amounts at any time due or to
become due to the owner and lessor or operator thereof as Agent shall determine
in its Permitted Discretion;

 

(f)                                    is not subject to the first priority,
valid and perfected Lien of Agent (other than Permitted Encumbrances; but
without limiting the right of Agent to establish any Reserves with respect to
Permitted Encumbrances);

 

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(g)                                 is not beneficially and legally owned solely
by such Borrower;

 

(h)                                 is bill and hold goods;

 

(i)                                     is unserviceable, obsolete or slow
moving Inventory or Inventory in a poor condition;

 

(j)                                     is damaged and/or defective Inventory;

 

(k)                                  is returned Inventory (other than undamaged
and non-defective Inventory returned in the ordinary course of business that is
held for resale in the ordinary course of business);

 

(l)                                     is purchased or sold on consignment; or

 

(m)                               is located outside the continental United
States of America or Canada.

 

The criteria for Eligible Inventory set forth above may only be changed and any
new criteria for Eligible Inventory may only be established by Agent in its
Permitted Discretion, and upon prompt notice to Administrative Borrower (which
notice may be given before or after such change is made), based on either:  (i)
an event, condition or other circumstance arising after the date hereof, or (2)
an event, condition or other circumstance existing on the date hereof to the
extent Agent has no written notice thereof from Administrative Borrower prior to
the date hereof, in either case under clause (i) or (ii) which materially and
adversely affects or could reasonably be expected to materially and adversely
affect the Inventory as determined by Agent in its Permitted Discretion.  Any
Inventory which is not Eligible Inventory shall nevertheless be part of the
Collateral.  Agent shall provide Administrative Borrower with contemporaneous
notice of any change in such criteria or new criteria established which changed
or new criteria shall become effective no earlier than the third (3rd) Business
Day following delivery of such notice.

 

“Environmental Complaint” shall have the meaning set forth in Section 4.18(d).

 

“Environmental Laws” shall mean all foreign, federal, state, provincial and
local laws (including common law), legislation, rules, codes, licenses, permits
(including any conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between any Borrower or
Guarantor and any Governmental Body, (a) relating to pollution and the
protection, preservation or restoration of the environment (including air, water
vapor, surface water, ground water, drinking water, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, (b) relating to the exposure to, or the
use, storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials, or (c) relating to all
laws with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials.  The term “Environmental Laws”
includes (i) the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act,
the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act,
the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, the Canadian

 

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Environmental Assessment Act, the Canadian Environmental Protection Act, the
Transportation of Dangerous Goods Act, 1992, the Fisheries Act, the Migratory
Birds Protection Act, 1994, the Species at Risk Act, the Hazardous Production
Act, the Canada Shipping Act and the Canada Wildlife Act, the Environmental
Assessment Act (Ontario), the Environmental Protection Act (Ontario), the
Environmental Protection Act (Manitoba) and the Dangerous Goods Handling and
Transportation Act (Manitoba), (ii) applicable state, provincial and local
counterparts to such laws and (iii) any common law that may impose liability or
obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Materials.

 

“Equipment” shall mean and include as to each Loan Party, all of such Loan
Party’s, whether now owned or hereafter acquired and wherever located equipment,
machinery, apparatus, motor vehicles, fittings, furniture, furnishings,
fixtures, parts, accessories, and all other goods (other than Inventory) and all
replacements and substitutions therefor or accessions thereto.

 

“Equity Interests” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person’s capital stock or partnership, limited liability company or other equity
interests at any time outstanding, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock or other interests (but
excluding any debt security that is exchangeable for or convertible into such
capital stock or other equity interests and/or cash based on the value of such
capital stock or other equity interest).

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and the rules and regulations promulgated thereunder.

 

“ERISA Affiliate” shall mean, with respect to any Loan Party, any trade or
business (whether or not incorporated) that, together with such Loan Party, are
treated as a single employer within the meaning of Sections 414(b), (c), (m) or
(o) of the Code.

 

“ERISA Event” shall mean, with respect to any Loan Party or any ERISA Affiliate,
(a) any event described in Section 4043(c) of ERISA with respect to a Title IV
Plan, other than events for which the thirty (30) day notice period has been
waived; (b) the withdrawal of any Loan Party or ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Loan Party or any ERISA Affiliate from any
Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA; (e) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (f) the failure by any Loan Party or ERISA
Affiliate to make when due required contributions to a Multiemployer Plan or
Title IV Plan unless such failure is cured within thirty (30) days; (g) the
imposition of a lien under Section 412 or 430 of the Code or Section 303 or 4068
of ERISA on any property (or rights to property, whether real or personal) of
any ERISA Affiliate; (h) a Title IV Plan is in “at risk status” within the
meaning of Code Section 430(i), (i) a Multiemployer Plan is in “endangered
status” or “critical status” within the meaning of Code Section 432(b); (j) an
ERISA Affiliate incurs a substantial cessation of operations within the meaning
of ERISA Section 4062(e), with respect to a Title IV Plan; (k) any other event
or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer

 

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Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA;
(l) the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (m) the termination of a Plan described in Section 4064 of ERISA.

 

“Event of Default” shall mean the occurrence of any of the events set forth in
Section 10.

 

“Excess Cash Flow” has the meaning as defined in the Second Lien Indenture as in
effect on the date hereof.

 

“Excess Cash Flow Line Reduction” has the meaning set forth in Section 2.21.

 

“Excess Cash Flow Line Reduction Certificate” has the meaning set forth in
Section 2.21.

 

“Exchange Rate” shall mean the prevailing spot rate of exchange of such bank as
Agent may reasonably select for the purpose of conversion of one currency to
another, at or around 12:00 p.m. Chicago time, on the date on which any such
conversion of currency is to be made under this Agreement.

 

“Excluded Assets” shall mean:

 

(a)                                  any Excluded Equity Interests;

 

(b)                                 each instrument, contract (including each
Intellectual Property-related contract and any Accounts and other Receivables
arising under such contract), chattel paper, license, permit, General
Intangible, and other agreement that is with, or issued by, a Person that is not
a Loan Party or Affiliate of any Loan Party, but only while, and only to the
extent that, the grant of a security interest therein pursuant to this Agreement
would result in a default or penalty under, or a breach or termination of, such
instrument, contract, chattel paper, license, permit, General Intangible, or
other agreement (any such provisions that would result in any of the foregoing
being referred to herein as a “Restriction”; and any such asset or property, or
interest thereon, that is at any time subject to a Restriction being referred to
herein as a “Restricted Asset”), except, in each case, to the extent that,
pursuant to the Code or other applicable law, the grant of a security interest
therein can be made without resulting in a default or penalty thereunder or
breach or termination thereof; provided, that, none of the foregoing assets and
properties, or interests therein, shall constitute Excluded Assets if (i) the
Restriction applicable thereto has been waived or such other Person has
otherwise consented to the creation hereunder of a security interest in such
Restricted Asset, or (ii) such Restriction would be rendered ineffective
pursuant to Section 9-406, 9-407, 9-408 or 9-409 of Article 9 of the UCC, as
applicable, and as then in effect in any relevant jurisdiction, or any other
applicable law (including the Bankruptcy Code) or principles of equity; provided
further, that, (A) immediately upon the ineffectiveness, lapse or termination of
any such Restriction with respect to a Restricted Asset (a “Non-Restricted
Asset”), such Loan Party shall be deemed to have automatically, without further
act by any Loan Party, Agent, Lenders or any other Person, granted a security
interest in, all its rights, title and interests in and to such Non-Restricted
Asset as if such Restriction had never been in effect; and (B) the foregoing
exclusion shall in no way be construed so as to limit, impair or otherwise
affect Agent’s unconditional continuing security interest in and to all rights,
title and interests of such Loan Party in or to any payment obligations or other
rights to receive monies due or to become

 

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due under any such Restricted Asset and in any such monies and other proceeds of
such Restricted Asset;

 

(c)                                  applications for any trademarks that have
been filed with the U.S. Patent and Trademark Office on the basis of an
“intent-to-use” with respect to such marks, unless and until a statement of use
or amendment to allege use is filed and accepted by the U.S. Patent and
Trademark Office or any other filing is made or circumstances otherwise change
so that the interests of a Loan Party in such marks is no longer on an
“intent-to-use” basis, at which time such marks shall automatically and without
further action by the parties be subject to the security interests and liens
granted by a Loan Party to Agent hereunder;

 

(d)                                 Real Property now or hereafter owned by Loan
Parties with a fair market value of less than $1,000,000 and, except for the
leasehold interests described in the Houston Leasehold Mortgage and the Edmonton
Leasehold Mortgage, all of Loan Parties’ leasehold interests in Real Property;

 

(e)                                  motor vehicles and other assets subject to
certificates of title to the extent that a Lien therein cannot be perfected by
the filing of a UCC-1 or PPSA financing statement;

 

(f)                                    any commercial tort claim held by a Loan
Party of less than $250,000;

 

(g)                                 other assets of any Loan Party not
specifically identified in this definition as to which the Administrative Agent
and the Parent agree in writing that the costs of obtaining Lien therein or
perfection thereof are excessive in relation to the value to the Lenders of the
security to be afforded thereby; and

 

(h)                                 any records specifically and exclusively
relating to any of the foregoing.

 

“Excluded Equity Interests” shall mean voting Equity Interests issued by a
Non-US Subsidiary that is a CFC representing in excess of sixty-five (65%)
percent of the voting Equity Interests of such Non-US Subsidiary.

 

“Excluded Tax” shall mean, with respect to any Lender (as defined in Section
3.6) any Tax imposed on (or measured by) such Lender’s gross revenues or net
income (however denominated) and any franchise tax (in each case imposed in lieu
of a net income tax) by any jurisdiction (or any political subdivision thereof)
under the laws of which the Lender is organized or in which its principal office
or its applicable lending office is located, and any branch profits taxes
imposed on the Lender by the United States or any similar tax imposed on the
Lender by a jurisdiction in which the Lender is resident for tax purposes.

 

“Existing Letters of Credit” shall mean, collectively, the Letters of Credit
that were issued by an Issuer prior to the Closing Date for the account of a
Borrower, or for which such Borrower is otherwise liable, and are listed on
Schedule L-1 hereto, as the same now exist or may hereafter be amended,
modified, supplemented, extended, or renewed.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code and any regulations or
official interpretations thereof (including any Revenue Ruling, Revenue
Procedure, Notice or similar

 

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guidance issued by the U.S. Internal Revenue Service thereunder as a
precondition to relief or exemption from taxes under such provisions).

 

“Federal Funds Effective Rate” shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not published for
any day that is a Business Day, the average of the quotations for such day on
such transactions received by Agent from three (3) federal funds brokers of
recognized standing selected by Agent.

 

“Fee Letter” shall mean the Fee Letter, dated as of the date hereof, by and
among the Borrowers and Agent, as amended, restated, modified and supplemented
from time to time.

 

“Financial Covenant Trigger Event” shall mean either (a) an Event of Default
shall have occurred and be continuing or (b) Global Undrawn Availability is, on
any date of determination, less than the greater of (i) ten (10%) percent of the
lesser of (A) the Maximum Credit and (B) the Borrowing Base at such time, and
(ii) $10,000,000; provided, that, any such Financial Covenant Trigger Event
resulting solely from this clause (b) shall cease to exist to the extent that
Global Undrawn Availability is greater than or equal to the greater of (A) ten
(10%) percent of the lesser of (1) the Maximum Credit and (2) the Borrowing Base
at such time, and (B) $10,000,000 for sixty (60) consecutive days during any
applicable period after the occurrence of such Financial Covenant Trigger Event
and no other Financial Covenant Trigger Event has occurred during such sixty
(60) consecutive day period.

 

“First Lien Intercreditor Borrowing Base” shall mean the First Lien Borrowing
Base, as such term is defined in the Intercreditor Agreement.

 

“Fixed Charge Coverage Ratio” shall mean, with respect to Loan Parties and their
Subsidiaries on a consolidated basis, for any applicable period, the ratio of
(a) EBITDA for such period minus an amount equal to the sum of (i) all cash
Capital Expenditures made during such period, plus (ii) all taxes paid during
such period in cash, plus (iii) all cash dividends or other cash distributions
made on account of Parent’s Equity Interests and all repurchases or redemptions
of Equity Interests (other than those made to a Loan Party) made during such
period, to (b) Fixed Charges for such period.

 

“Fixed Charges” shall mean, as to Loan Parties and their Subsidiaries determined
on a consolidated basis, with respect to any period, the sum of, without
duplication, (a) all Cash Interest Expense during such period, plus (b) all
regularly scheduled (as determined at the beginning of the respective period)
and mandatory principal payments of Money Borrowed, Indebtedness with respect to
earn-outs and similar obligations owing by Loan Parties in connection with the
Closing Date Acquisition and any Permitted Acquisition, and Indebtedness with
respect to Capital Leases, in each case made or required to be made during such
period (and without duplicating items in (a) and (b) of this definition, the
interest component with respect to Indebtedness under Capital Leases).

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America in effect from time to time, as may be amended from time to time by
the Financial

 

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Accounting Standards Board; provided, however, that, all calculations relative
to liabilities shall be made without giving effect to Statement of Financial
Accounting Standards No. 159; except, that, if there occurs after the date of
this Agreement any change in GAAP that affects in any respect the calculation of
any covenant contained in Section 6.8 hereof, Agent and the Borrowers shall
negotiate in good faith amendments to the provisions of this Agreement that
relate to the calculation of such covenants with the intent of having the
respective positions of Agent, Lenders and the Borrowers, after such change in
GAAP conform as nearly as possible to their respective positions as of the date
of this Agreement and, until any such amendments have been agreed upon, the
covenants in Section 6.8 hereof shall be calculated on the basis of such
principles in effect prior to such change and consistent with those used in the
preparation of the most recent audited financial statements delivered to Agent
prior to the date of such change.

 

“General Intangibles” shall mean and include as to each Loan Party all of such
Loan Party’s general intangibles (as such term is defined in the UCC), whether
now owned or hereafter acquired including, without limitation, all payment
intangibles, choses in action, commercial tort claims, causes of action,
corporate or other business records, inventions, designs, patents, patent
applications, equipment formulations, manufacturing procedures, quality control
procedures, trademarks, service marks, trade secrets, goodwill, copyrights,
design rights, registrations, licenses, franchises, customer lists, tax refunds,
tax refund claims, computer programs and computer software, all claims under
guaranties, Liens or other security held by or granted to such Loan Party to
secure payment of any of the Receivables by a Customer, all rights of
indemnification and all other intangible property of every kind and nature
(other than Receivables).

 

“Global Excess Availability” shall mean the amount, as determined by Agent in
its Permitted Discretion, calculated at any date, equal to:  (a) the lesser of:
(i) the Borrowing Base and (ii) the Maximum Revolving Advance Amount less
Maximum Revolving Advance Amount Reserves (in each case under (i) and (ii),
without duplication and without giving effect to Reserves in respect of
outstanding Letters of Credit), minus (b) the sum of: (i) the amount of all then
outstanding and unpaid Advances plus the amount of all then outstanding Letter
of Credit Obligations, plus (ii) the aggregate amount of all then outstanding
and unpaid trade payables and other obligations of Loan Parties which are either
(A) past due beyond the due date therefor by at least forty-five (45) days or
(B) have been invoiced and outstanding at least ninety (90) days past the
invoice date therefor as of the end of the immediately preceding month or, at
Agent’s option, as of a more recent date based on such reports as Agent may from
time to time specify (other than trade payables or other obligations being
contested or disputed by Loan Parties in good faith).

 

“Global Excess Liquidity” shall mean the amount, as determined by Agent in its
Permitted Discretion, calculated at any date, equal to the sum of: (a) Global
Undrawn Availability plus (b) Qualified Cash.

 

“Global Undrawn Availability” shall mean, on any date of determination, as
determined by Agent in its Permitted Discretion, calculated at any date, equal
to:  (a) the lesser of: (i) the Borrowing Base and (ii) the Maximum Revolving
Advance Amount less Maximum Revolving Advance Amount Reserves (in each case
under (i) and (ii), without duplication and without giving effect to Reserves in
respect of outstanding Letters of Credit), minus (b) the sum of: (i) the amount
of all then outstanding and unpaid Advances plus (ii) the amount of all then
outstanding Letter of Credit Obligations.

 

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“Governmental Body” shall mean any nation or government, any state or other
political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.

 

“Government Receivables” shall have the meaning set forth in Section 6.4.

 

“Guarantee” shall mean the guarantee set forth in Section 15 of this Agreement
and any other guarantee of the Obligations of the Borrowers now or hereafter
executed by a Guarantor in favor of Agent for its benefit and for the ratable
benefit of Lenders.

 

“Guarantors” shall mean, collectively, the US Guarantors and the Canadian
Guarantors; each sometimes referred to herein individually as a “Guarantor”.

 

“Hazardous Discharge” shall have the meaning set forth in Section 4.18(d).

 

“Hazardous Substance” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances as defined in CERCLA,
the Hazardous Substances Transportation Act, as amended (49 U.S.C. Sections
1801, et seq.), RCRA or any other applicable Environmental Law and in the
regulations adopted pursuant thereto.

 

“Hazardous Wastes” shall mean all waste materials subject to regulation under
CERCLA, RCRA or applicable state or other law, and any other applicable federal,
state or other laws now in force or hereafter enacted relating to hazardous
waste disposal.

 

“Hedging Agreements” shall mean an agreement between any Loan Party and any
financial institution that is a rate swap agreement, basis swap, forward rate
agreement, commodity swap, interest rate option, forward foreign exchange
agreement, spot foreign exchange agreement, rate cap agreement rate, floor
agreement, rate collar agreement, currency swap agreement, cross-currency rate
swap agreement, currency option, any other similar agreement (including any
option to enter into any of the foregoing or a master agreement for any of the
foregoing together with all supplements thereto) for the purpose of protecting
against fluctuations in or managing exposure with respect to interest or
exchange rates, currency valuations or commodity prices.

 

“Houston Leasehold Mortgage” shall mean the Leasehold Deed of Trust, Assignment
of Leases and Rents, Security Agreement and Fixture Filing given by Parent for
the benefit of Agent with respect to the premises located at 4669 Brittmoore
Road, Houston, Texas 77041.

 

“Immaterial Subsidiaries” shall mean, as of any date, each Subsidiary of Loan
Parties whose total assets, as of that date, are less than $1,000,000 and whose
total revenues for the most recent twelve (12) month period do not exceed
$1,000,000; provided, that, a Subsidiary of Loan Parties will not constitute an
Immaterial Subsidiary if such Subsidiary, directly or indirectly, guarantees or
otherwise provides direct credit support for any Indebtedness of Borrowers;
provided, further, that, the revenues and total assets of all such Subsidiaries
shall not exceed $2,500,000 in the aggregate; each sometimes referred to herein
individually as an “Immaterial Subsidiary”.

 

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“Impacted Lender” shall mean any Lender that (a) is an Impaired Lender or (b)
fails to promptly provide Agent, upon Agent’s written request, reasonably
satisfactory assurance that such Lender is not, and will not become, a
Defaulting Lender or an Impaired Lender.

 

“Impaired Lender” shall mean any Lender (a) that has given verbal or written
notice (and so long as such notice has not been retracted in writing) to any
Borrower, the Agent or any other Lender or has otherwise publicly announced (and
such announcement has not been retracted in writing) that such Lender believes
it will fail to fund all payments required to be made by it or fund all
purchases of participations required to be funded by it under this Agreement and
the Other Documents, (b) as to which the Agent has (and for so long as Agent
continues to have) a good faith belief that such Lender has defaulted in
fulfilling its obligations (as a lender, agent or letter of credit issuer) under
one or more other syndicated credit facilities and such obligations are not the
subject of a good faith dispute by such Lender, or (c) with respect to which one
or more Lender-Related Distress Events has occurred and are continuing with
respect to such Person or any Person that directly or indirectly controls such
Lender and Agent has determined that such Lender may become a Defaulting
Lender.  For purposes of this definition, control of a Person shall have the
same meaning as provided in the definition of Affiliate.

 

“Indebtedness” of a Person at a particular date shall mean (a) all indebtedness
for Money Borrowed of such Person whether direct or guaranteed; (b) that portion
of obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP consistently applied; (c)
notes payable and drafts accepted representing extensions of credit; (d) any
obligation owed for all or any part of the deferred purchase price of property
or services if the purchase price is due more than six (6) months from the date
the obligation is incurred or is evidenced by a note or similar written
instrument excluding trade payables in the ordinary course of business); (e) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is non-recourse to the credit of that Person;
provided, that, if such indebtedness is not assumed by personal obligation of
such Person then the amount of the indebtedness shall be the lesser of (i) the
amount of such indebtedness and (ii) the book value of the asset securing such
indebtedness; (f) any contractual obligation, contingent or otherwise, of such
Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness, obligation or liability or
any security therefor, or to provide funds for the payment or discharge thereof,
or to maintain solvency, assets, level of income, or other financial condition;
(g) all obligations evidenced by bonds, debentures, notes or similar
instruments; (h) all reimbursement obligations and other liabilities of such
Person with respect to surety bonds (whether bid, performance or otherwise),
letters of credit, banker’s acceptances, drafts or similar documents or
instruments issued for such Person’s account; (i) all obligations, liabilities
and indebtedness of such Person (Net Marked-to-Market Exposure) arising under
Hedging Agreements; and (j) the principal and interest portions of all rental
obligations of such Person under any synthetic lease or similar off-balance
sheet financing where such transaction is considered to be borrowed money for
tax purposes but is classified as an operating lease in accordance with GAAP
consistently applied, in each case whether such liabilities are present or
future, actual or contingent and whether owned jointly or severally.

 

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“Intellectual Property” shall mean, as to each Borrower and Guarantor, such
Borrower’s and Guarantor’s now owned and hereafter arising or acquired: patents,
patent rights, patent applications, copyrights, works which are the subject
matter of copyrights, copyright applications, copyright registrations,
trademarks, service marks, trade names, trade styles, trademark and service mark
applications and designs, and licenses and rights to use any of the foregoing
and all applications, registrations and recordings relating to any of the
foregoing as may be filed in the United States Copyright Office, the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof, any political subdivision thereof or in any
other country or jurisdiction, together with all rights and privileges arising
under applicable law with respect to any Borrower’s or Guarantor’s use of any of
the foregoing; all extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing; all rights to sue for past,
present and future infringement of any of the foregoing; inventions, trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports, manuals, and operating standards; goodwill (including any goodwill
associated with any trademark or service mark, or the license of any trademark
or service mark); customer and other lists in whatever form maintained; trade
secret rights, copyright rights, rights in works of authorship, domain names and
domain name registrations; software and contract rights relating to computer
software programs, in whatever form created or maintained.

 

“Interest Expense” shall mean, for any period, as to any Person, as determined
in accordance with GAAP consistently applied, the total interest expense of such
Person, whether paid or accrued during such period but without duplication
(including the interest component of Capital Leases for such period). 
Notwithstanding the foregoing, during the first year of this Agreement only, the
Interest Expense for the first three (3) quarters shall be calculated as
follows:  (a) for the first quarter during the first year of this Agreement, the
Interest Expense shall be the total interest expense of such Person, whether
paid or accrued during such quarter but without duplication (including the
interest component of Capital Leases for such period) multiplied by four (4),
(b) for the second quarter during the first year of this Agreement, the Interest
Expense shall be the total interest expense of such Person, whether paid or
accrued during the first and second quarter but without duplication (including
the interest component of Capital Leases for such period) multiplied by two (2),
and (c) for the third quarter during the first year of this Agreement, the
Interest Expense shall be the total interest expense of such Person, whether
paid or accrued during the first, second and third quarters but without
duplication (including the interest component of Capital Leases for such period)
multiplied by one and one-third (1 1/3rd).

 

“Interest Period” shall mean the period provided for any LIBOR Rate Loan or BA
Rate Loan pursuant to Section 2.2(b).

 

“Interest Rate” shall mean the Revolving Interest Rate.

 

“Inventory” shall mean and include as to each Loan Party, all of such Loan
Party’s now owned or hereafter acquired inventory (as such term is defined in
the UCC), goods, merchandise and other personal property, wherever located, to
be furnished under any contract of service or held for sale or lease, all raw
materials, work in process, finished goods and materials and supplies of any
kind, nature or description which are or might be used or consumed in such Loan
Party’s or business or used in selling or furnishing such goods, merchandise and
other personal property, all other inventory of such Loan Party, and all
documents of title or other documents representing them.

 

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“Investment Conditions Precedent” shall mean (a) immediately prior to and after
giving effect to any investment permitted under Section 7.4, no Event of Default
shall exist or have occurred and be continuing, (b) Global Undrawn Availability
for the thirty (30) consecutive days prior to any Permitted Acquisition, shall
not be less than the greater of (i) twenty (20%) percent of the lesser of (A)
the Maximum Credit and (B) the Borrowing Base at such time, and (ii)
$20,000,000, (c) as of the date of and after giving effect to any such
investment, Global Undrawn Availability shall not be less than the greater of
(i) twenty (20%) percent of the lesser of (A) the Maximum Credit and (B) the
Borrowing Base at such time, and (ii) $20,000,000, (d) Loan Parties and their
Subsidiaries, on a consolidated basis, shall have a Fixed Charge Coverage Ratio
(calculated as provided in Section 6.8) of 1.1:1.0 on the date of and on a pro
forma basis for the trailing twelve (12) month period after giving effect to
such proposed investment.

 

“Investment Grade Rating” shall mean a rating equal to or higher than Baa3 (or
the equivalent) by Moody’s Investors Service, Inc. and/or BBB- (or the
equivalent) by Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc. (or such other comparable rating agency acceptable to Agent in
its Permitted Discretion).

 

“Investment Property” shall mean any “investment property” as such term is
defined in Section 9-102 of the UCC now owned or hereafter acquired by any Loan
Party, wherever located, including (a) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (b) all securities entitlements of any Loan Party, including
the rights of any Loan Party to any securities account and the financial assets
held by a securities intermediary in such securities account and any free credit
balance or other money owing by any securities intermediary with respect to that
account; (c) all securities accounts of any Loan Party; iv) all commodity
contracts of any Loan Party; and (d) all commodity accounts held by any Loan
Party.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Issuer” shall mean Canadian Issuer or US Issuer, as the case may be.

 

“Judgment Currency” shall have the meaning set forth in Section 17.5.

 

“Lead Arrangers” shall mean Wells Fargo Capital Finance, LLC and Jefferies
Finance LLC, in their capacities as joint lead arrangers.

 

“Lender” and “Lenders” shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.

 

“Lender Default” shall have the meaning set forth in Section 2.15(a).

 

“Lender-Related Distress Event” shall mean, with respect to any Lender or any
Person that directly or indirectly controls such Lender (each a “Distressed
Person”), a voluntary or involuntary case with respect to such Distressed Person
under the Bankruptcy Code or any similar bankruptcy or insolvency laws of its
jurisdiction of formation, or a custodian, conservator, receiver or similar
official is appointed for such Distressed Person or any substantial part of such
Distressed Person’s assets, or such Distressed Person or any Person that
directly or indirectly controls such Distressed

 

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Person is subject to a forced liquidation, merger, sale or other change of
control supported in whole or in party by guaranties or other support
(including, without limitation, the nationalization or assumption of ownership
or operating control by) the U.S. government or other Governmental Body, or such
Distressed Person makes a general assignment for the benefit of creditors or is
otherwise adjudicated as, or determined by any Governmental Body having
regulatory authority over such Distressed Person or its assets to be, insolvent,
bankrupt, or deficient in meeting any capital adequacy or liquidity standard of
any such Governmental Body.  For purposes of this definition, control of a
Person shall have the same meaning as provided in the definition of Affiliate.

 

“Letter of Credit Application” shall have the meaning set forth in Section
2.9(a).

 

“Letter of Credit Fees” shall have the meaning set forth in Section 3.2(a).

 

“Letter of Credit Obligations” shall mean, collectively, the US Letter of Credit
Obligations and the Canadian Letter of Credit Obligations.

 

“Letters of Credit” shall mean, collectively, all letters of credit denominated
in US Dollars or Canadian Dollars (whether documentary or stand-by and whether
for the purchase of inventory, equipment or otherwise) issued by an Issuer for
the account of any Borrower pursuant to this Agreement, and all amendments,
renewals, extensions or replacements thereof, and shall include the Existing
Letters of Credit for all purposes of this Agreement.

 

“LIBOR” shall mean, for any Interest Period with respect to a LIBOR Rate Loan, a
per annum rate of interest (rounded upward, if necessary, to the nearest
one-eighth of one (1/8th of 1%) percent), equal to the British Bankers’
Association Interest Settlement Rate for the duration of the applicable Interest
Period denominated in the relevant currency, taken at or about 1:00 p.m. (London
time) on the date which is two (2) Business Days prior to the commencement of
such Interest Period, as determined by Agent from time to time for purposes of
providing quotations of interest rates applicable to deposits in the relevant
currency in the London interbank market.  In the event that such rate is not
available at such time for any reason, then “LIBOR” with respect to such LIBOR
Rate Loan for such Interest Period shall be the rate at which deposits in the
relevant currency of $5,000,000 (or the US Dollar Equivalent thereof) and for a
maturity comparable to such Interest Period are offered by the principal London
office of Agent in immediately available funds in the London interbank market at
approximately 1:00 p.m. (London time) on the day which is two (2) Business Days
prior to the commencement of such Interest Period.  If the Board of Governors
imposes a Statutory Reserve with respect to LIBOR deposits and the applicable
rate is determined by reference to the foregoing, then LIBOR shall be (a) the
foregoing rate, divided by (b) the sum of one (1) minus the Statutory Reserve.

 

“LIBOR Rate Loan” shall mean an Advance that bears interest based on LIBOR.

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the UCC, PPSA or

 

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comparable law of any jurisdiction.  Any reference to the Lien of Agent shall be
construed in the broadest sense possible and shall in each case include a
security interest and other Lien as the context implies.

 

“Line Decrease Notice” shall mean a written notice delivered by Administrative
Borrower to Agent, pursuant to Section 2.21 of this Agreement, in the form
attached as Exhibit D hereto.

 

“Loan Parties” shall mean, collectively, the US Loan Parties and the Canadian
Loan Parties; each sometimes referred to herein individually as a “Loan Party”.

 

“Material Adverse Effect” shall mean any event, change, condition, occurrence or
circumstance which, either, individually or in the aggregate, has had, or could
reasonably be expected to have, a material adverse effect on (a) the financial
condition, operations, assets , or business of Loan Parties and their
Subsidiaries taken as a whole, (b) any Loan Party’s ability to pay the
Obligations or to comply with this Agreement or any Other Document in accordance
with the terms hereof or thereof, (c) the value of a material portion of the
Collateral, or Agent’s Liens on a material portion of the Collateral or the
priority of any such Lien or (d) Agent’s ability to realize on a material
portion of the Collateral or otherwise enforce the terms of this Agreement or
any of the Other Documents.

 

“Material Contracts” shall mean any contract or other agreement (other than this
Agreement or the Other Documents), whether written or oral, to which any Loan
Party is a party as to which the breach, nonperformance, cancellation or failure
to renew by any party thereto would have a Material Adverse Effect.

 

“Maximum Credit” shall mean $100,000,000 (subject to adjustment as provided
pursuant to the terms of Section 2.13, Section 2.20 and Section 2.21).

 

“Maximum Credit Increase Effective Date” shall have the meaning set forth in
Section 2.20(c).

 

“Maximum Revolving Advance Amount” shall mean the US Revolving Loan Maximum
Amount.

 

“Maximum Revolving Advance Amount Reserves” shall mean Reserves to the extent
that such Reserves are in respect of amounts that may be payable to third
parties and for which Agent elects from time to time in its Permitted Discretion
to institute such Reserves against the Maximum Credit, in addition to
instituting such Reserves against the Borrowing Base.

 

“Maximum Swingline Advance Amount” shall mean $10,000,000.

 

“Money Borrowed” shall mean (a) Indebtedness for borrowed money arising from the
lending of money by any Person to any Loan Party or any of their respective
Subsidiaries, (b) Indebtedness, whether or not in any such case arising from the
lending by any Person of money to any Loan Party or any of their respective
Subsidiaries, (i) which is represented by notes payable or drafts accepted that
evidence extensions of credit, (ii) which constitutes obligations evidenced by
bonds, debentures, notes or similar instruments, or (iii) upon which interest
charges are customarily paid (other than accounts payable) or that was issued or
assumed as full or partial payment for

 

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property, (c) reimbursement obligations with respect to letters of credit or
guaranties of letters of credit, and (d) Indebtedness of any Loan Party or any
of their respective Subsidiaries under any guarantee of obligations that would
constitute Indebtedness for Money Borrowed under clauses (a), (b) or (c) hereof,
if owed directly by any Loan Party or any of their respective Subsidiaries.

 

“Mortgage” shall mean each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Loan Party to Agent on behalf of
itself and Lenders with respect to the Real Property, all in form and substance
reasonably satisfactory to Agent.

 

“Mortgaged Real Property” shall mean the Real Property of Loan Parties that is
subject to a Mortgage.

 

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections
3(37) and 4001(a)(3) of ERISA.

 

“Net Income” shall mean, for any period, the aggregate income (or loss) of Loan
Parties and their Subsidiaries for such period, all computed and calculated in
accordance with GAAP consistently applied on a consolidated basis; provided,
however, that, amounts in any such period in respect of (a) any non-cash charges
associated with the sale or discontinuance of assets, businesses or product
lines and (b) the cumulative effect of accounting changes shall be added,
without duplication, to Net Income for such period.

 

“Net Liquidation Percentage” shall mean the percentage of the book value of
Eligible Inventory that is estimated to be recoverable in an orderly liquidation
of such Eligible Inventory, net of all associated costs and expenses of such
liquidation, such percentage to be as determined from time to time by the most
recent appraisal received by Agent, which appraisal shall (a) be reasonably
satisfactory to Agent, (b) prepared by an appraisal company reasonably
acceptable to Agent and (c) expressly provide that Agent is permitted to rely
thereon.

 

“Net Marked-to-Market Exposure” of a Person shall mean, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Hedging Agreements. “Unrealized losses”
means the fair market value of the cost to such Person of replacing such Hedging
Agreement as of the date of determination (assuming the Hedging Agreement were
to be terminated as of that date), and “unrealized profits” means the fair
market value of the gain to such Person of replacing such Hedging Agreement as
of the date of determination (assuming such Hedging Agreement were to be
terminated as of that date).

 

“Non-Restricted Asset” shall have the meaning as set forth in the definition of
Excluded Assets.

 

“Non-US Loan Party” shall mean a Loan Party other than a US Loan Party.

 

“Non-US Subsidiary” shall mean any Subsidiary other than a US Subsidiary.

 

“Note” or “Notes” shall mean, individually or collectively, each Revolving
Credit Note and the Swingline Note.

 

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“Notice of Conversion” shall mean a notice duly executed by a Responsible
Officer of Administrative Borrower appropriately completed and in substantially
the form of Exhibit B.

 

“Obligations” shall mean and include (a) any and all of each Loan Party’s
Indebtedness and/or liabilities pursuant to or evidenced by this Agreement or
any Other Documents to Agent, Lenders or any Issuer of every kind, nature and
description, direct or indirect, secured or unsecured, joint, several, joint and
several, absolute or contingent, due or to become due, now existing or hereafter
arising, contractual or tortious, liquidated or unliquidated, regardless of how
such indebtedness or liabilities arise (including all interest, fees and charges
accruing after the commencement of any case or proceeding under the Bankruptcy
Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors
Arrangement Act (Canada) or any similar statute whether or not enforceable in
such case or proceeding) and all obligations of any Loan Party to Agent, Lenders
or any Issuer to perform acts or refrain from taking any action under this
Agreement or any Other Documents, and (b) Bank Product Obligations solely for
purposes of (i) Section 4.1 (and other Lien grants made by Loan Parties in the
Other Documents to secure any and all of the Obligations), (ii) Sections 15 and
16, and (iii) defining “Senior Indebtedness,” “First Lien Indebtedness”, “First
Lien Debt” or words of similar meaning in any subordination agreement or
intercreditor agreement, in each case subject to the priority in right of
payment set forth in Section 11.2; provided, that, as to any such Bank Product
Obligations, the same shall only be included within the Obligations if (A) the
applicable Bank Product Provider, other than Agent and its Affiliates, and the
applicable Loan Party shall have delivered prompt written notice to Agent (but
in no event later than ten (10) Business Days) that (1) such Bank Product
Provider has entered into a transaction to provide Bank Products to such Loan
Party, (2) the maximum dollar amount of Obligations arising thereunder to be
included as a Reserve (the “Bank Product Amount”), together with the methodology
used by such parties in determining the Bank Product Amount, subject in all
events, however, to Agent’s right, in its Permitted Discretion, to establish
such Reserve as Agent shall at any time determine in its Permitted Discretion is
appropriate to reflect the reasonably anticipated liabilities and obligations of
Loan Parties with respect to such Bank Product then provided or outstanding, and
(3) express agreement has been obtained from such Bank Product Provider and such
Borrower or such other Loan Party that the Bank Product Obligations arising
pursuant to such Bank Products provided to such Borrower or such other Loan
Party constitute Obligations entitled to the benefits of the Liens of Agent
granted hereunder, and Agent shall have acknowledged receipt of such notice in
writing, (B) in no event shall any Bank Product Provider acting in such capacity
to whom such Bank Product Obligations are owing be deemed a Lender for purposes
hereof, except with respect to the Lien granted in favor of Agent, for itself
and on behalf of each Secured Party, and in no event shall the approval of any
such Person in its capacity as Bank Product Provider be required in connection
with the release or termination of any security interest or other Lien of Agent
or with respect to any other matter governed by this Agreement or any Other
Document, and (C) Agent may terminate this Agreement and the Other Documents,
along with any Liens granted under this Agreement and the Other Documents,
without any notice to or consent by any Bank Product Provider, in its capacity
as such, regardless of whether or not any Bank Product Obligations are
outstanding.  The Bank Product Amount may be changed from time to time upon
written notice to Agent by a Bank Product Provider and any Loan Party owing Bank
Product Obligations to such Bank Product Provider.  No Bank Product Amount may
be established or increased at any time that an Event of Default exists, or if a
Reserve in such amount would cause Borrowing Availability to be less than zero
(0).

 

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

 

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“Operating Account” or “Operating Accounts” shall mean, individually or
collectively, the operating accounts established and maintained by Loan Parties
and which are designated as such and listed on Schedule 5.23.

 

“Other Documents” shall mean any Note, the Pledge Agreements, the Questionnaire,
any Guarantee, any Collateral Access Agreement, the Second Lien Intercreditor
Agreement, and any and all other agreements, instruments and documents,
including, without limitation, guaranties, pledges, security agreements,
hypothecs, mortgages, deeds of trust, debentures, control agreements, other
collateral documents, subordination agreements, intercreditor agreements, powers
of attorney, consents, and all other writings heretofore, now or hereafter
executed and/or delivered by any Loan Party to Agent or any Lender in respect of
the transactions contemplated by this Agreement, in each case, as such
agreements, instruments and documents are amended, restated, modified or
supplemented from time to time.

 

“Parent” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all permitted successors and assigns of such Person.

 

“Parent Closing Material Adverse Effect” shall mean any event, change,
condition, occurrence or circumstance which, either, individually or in the
aggregate, has had, or could reasonably be expected to have, a material adverse
effect on the business, assets, properties, liabilities, condition (financial or
otherwise) or results of operations of the Parent and its Subsidiaries, taken as
a whole; provided, that, in no event shall any of the following events, effects,
occurrences, developments, changes or circumstances, either alone or in
combination, be deemed to constitute, or be taken into account in determining or
whether there has been or will be, a Parent Closing Material Adverse Effect: 
(a) changes in the Parent’s common stock price or trading volume, in and of
itself (provided, that, the facts and circumstances giving rise to such changes
may be taken into account in determining whether there has occurred a Parent
Closing Material Adverse Effect), (b) any failure by the Parent to meet
published revenue or earnings projections, in and of itself (provided, that, the
facts and circumstances giving rise to such changes may be taken into account in
determining whether there has occurred a Parent Closing Material Adverse
Effect), (c) changes in general economic conditions in the United States or any
other country or region in the world, or changes in conditions in the global
economy generally (to the extent such changes in each case do not
disproportionately affect the Parent or any of its Subsidiaries relative to
other companies in their industry), (d) changes in conditions in the financial
markets, credit markets or capital markets in the United States or any other
country or region in the world, including (i) changes in interest rates in the
United States or any other country and changes in exchange rates for the
currencies of any countries and (ii) any suspension of trading in securities
(whether equity, debt, derivative or hybrid securities) generally on any
securities exchange or over-the-counter market operating in the United States or
any other country or region in the world (to the extent that such changes in
each case do not disproportionately affect the Parent or any of its Subsidiaries
relative to other companies in their industry), (e) changes in political
conditions in the United States or any other country or region in the world (to
the extent such changes in each case do not disproportionately affect the Parent
or any of its Subsidiaries relative to other companies in their industry),
(f) acts of war, sabotage or terrorism (including any escalation or general
worsening of any such acts of war, sabotage or terrorism) in the United States
or any other country or region in the world (to the extent such events in each
case do not disproportionately affect the Parent or any of its Subsidiaries
relative to other companies in their industry), (g) changes directly
attributable to the announcement of the Closing Date Acquisition

 

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Agreement and related financing or the pendency or consummation of the
transactions contemplated thereby, (h) changes in law, regulation or other legal
or regulatory conditions (or the interpretation thereof) (to the extent such
changes do not disproportionately affect the Parent or any of its Subsidiaries
relative to other companies in their industry), or (i) changes in GAAP or other
accounting standards (or the interpretation thereof).

 

“Participant” shall mean each Person who shall be granted the right by any
Lender to participate in any of the Advances or Commitments of such Lender and
who shall have entered into a participation agreement in form and substance
reasonably satisfactory to such Lender.

 

“Payment Accounts” shall mean, collectively, the US Payment Account and the
Canadian Payment Account; sometimes individually referred to as a “Payment
Account”.

 

“Payment in Full” or “Paid in Full” shall mean (a) all Commitments have been
terminated or expired and (b) all of the Obligations have been paid in full in
cash (or with respect to this clause (b), (i) in the case of outstanding Letters
of Credit, Borrowers have furnished to Agent either, (A) the original Letter of
Credit from the beneficiary thereof for immediate and complete termination or
(B) as selected by Agent, either (1) cash collateral in an amount not less than
one hundred and five (105%) percent of the aggregate undrawn amount of all
Letters of Credit (pursuant to cash collateral arrangements to be in form and
substance reasonably satisfactory to Agent) or (2) back-up letters of credit in
form and substance reasonably satisfactory to Agent, and from an issuer
reasonably acceptable to Agent, in an amount not less than one hundred and five
(105%) percent of the aggregate undrawn amount of all Letters of Credit and
(ii) in the case of any other contingent Obligations (including without
limitation Bank Product Obligations, except to the extent not required by
Agent), each Loan Party shall have furnished Agent and Lenders with cash
collateral or an indemnification from a Person, and pursuant to terms and
conditions, in each case which are satisfactory to Agent in all respects).

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

 

“Permitted Acquisition” shall mean the purchase by a Borrower or wholly-owned
Subsidiary of Borrower that is a Loan Party after the date hereof of all or
substantially all of the assets or property or all of the Equity Interests of
any Person or any business unit or division of such Person (such assets or
Person being referred to herein as the “Target”), or the merger with a Target by
a Borrower or wholly-owned Subsidiary of a Borrower that is a Loan Party,
subject to the satisfaction of each of the following conditions:

 

(a)           Agent shall receive at least thirty (30) days’ prior written
notice of such proposed Permitted Acquisition, which notice shall include a
reasonably detailed description of such proposed Permitted Acquisition;

 

(b)           the Target’s assets shall only comprise a business of the type
engaged in by Loan Parties as of the date hereof or ancillary businesses
reasonably related to the business engaged in by Loan Parties as of the date
hereof, and which business would not subject Agent or any Lender to regulatory
or third party approvals in connection with the exercise of its rights and
remedies under this Agreement or any Other Documents other than approvals
applicable to the exercise of such rights and remedies with respect to Loan
Parties prior to such proposed Permitted Acquisition;

 

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(c)           the total cash and non-cash consideration paid by Loan Parties and
their Subsidiaries (including, without limitation, assumption or incurrence of
all Indebtedness (including without limitation earn-outs and deferred purchase
price obligations) for (i) all Permitted Acquisitions shall not exceed
$150,000,000 in the aggregate during the Term or (ii) any Permitted Acquisition
shall not exceed $60,000,000 during any twelve (12) consecutive month period;

 

(d)           (i) immediately prior to and after giving effect to any Permitted
Acquisition, no Event of Default shall exist or have occurred and be continuing
(ii) Global Undrawn Availability for the sixty (60) consecutive days prior to
any Permitted Acquisition, shall not be less than the greater of (A) seventeen
and one-half (17.5%) percent of the lesser of (1) the Maximum Credit and (2) the
Borrowing Base at such time, and (B) $17,500,000; and (iii) as of the date of
and after giving effect to any Permitted Acquisition, Global Undrawn
Availability shall not be less than the greater of (A) seventeen and one-half
(17.5%) percent of the lesser of (1) the Maximum Credit and (2) the Borrowing
Base at such time, and (B) $17,500,000;

 

(e)           Loan Parties and their Subsidiaries (including the Target), on a
consolidated basis, shall have a Fixed Charge Coverage Ratio (calculated as
provided in Section 6.8) of 1.1:1.0 on the date of and on a pro forma basis for
the trailing twelve (12) month period after giving effect to such proposed
Permitted Acquisition;

 

(f)            Target must have had a positive EBITDA on a cumulative basis for
the immediately preceding four (4) fiscal quarters and no more than one (1)
fiscal quarter during such four fiscal quarter period may have a negative
EBITDA;

 

(g)           at or prior to the closing of such proposed Permitted Acquisition,
(i) if the Target will be a US Subsidiary of Parent, Agent, for the ratable
benefit of each Secured Party, will be granted a first priority perfected Lien
(subject to Permitted Encumbrances) in all Collateral to be acquired in
connection therewith and each Person acquired in connection therewith shall have
joined this Agreement as a Guarantor and each Loan Party and each Person
acquired in connection therewith shall have executed (or caused to be executed)
such documents and taken such actions as may be required by Agent in its
Permitted Discretion in connection therewith and (ii) if the Target will be a
first-tier Non-US Subsidiary of Parent, Agent, for the ratable benefit of each
Secured Party, will be granted a first priority perfected Lien upon the Equity
Interests of the Target to the extent that such Equity Interests are not
Excluded Equity Interests;

 

(h)           such proposed Permitted Acquisition shall not be hostile and,
prior to its closing, shall have been approved by the board of directors (or
other similar body) and/or the stockholders or other equity holders of the
Target;

 

(i)            all material consents necessary for such proposed Permitted
Acquisition have been acquired and such proposed Permitted Acquisition is
consummated in accordance with the applicable acquisition documents (as amended
or modified) and applicable law;

 

(j)            each of the representations and warranties made by any Loan Party
in or pursuant to this Agreement and any Other Document to which it is a party,
and each of the representations and warranties contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or any Other Document shall be

 

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true and correct in all material respects (without duplication of any
materiality qualifiers already set forth therein) on and as of such date such
proposed Permitted Acquisition is consummated both before and after giving
effect thereto as if made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects (without duplication of any materiality qualifiers
already set forth therein) on and as of such earlier date);

 

(k)           Administrative Borrower shall have delivered to Agent, in form and
substance reasonably satisfactory to Agent:

 

(i)            a pro forma consolidated balance sheet, income statement and cash
flow statement of Parent and its Subsidiaries (the “Acquisition Pro Forma”),
based on recent financial statements, which shall be complete and shall fairly
present in all material respects the assets, liabilities, financial condition
and results of operations of Parent and its Subsidiaries in accordance with GAAP
consistently applied, but taking into account such proposed Permitted
Acquisition and the funding of all Advances in connection therewith, and such
Acquisition Pro Forma shall reflect that (A) Global Excess Availability criteria
set forth above has been satisfied, and (B) on a pro forma basis, no Default or
Event of Default has occurred and is continuing or would result after giving
effect to such proposed Permitted Acquisition and Borrowers would have been in
compliance with the financial covenants set forth in Section 6.8 for the four
(4) quarter period reflected in the Compliance Certificate most recently
delivered to Agent pursuant to Section 9.7 prior to the consummation of such
proposed Permitted Acquisition (after giving effect to such proposed Permitted
Acquisition and all Advances funded in connection therewith as if made on the
first (1st) day of such period);

 

(ii)           updated versions of the most recently delivered projections
delivered pursuant to Section 5.5(b) covering the one (1) year period commencing
on the date of such proposed Permitted Acquisition and otherwise prepared in
accordance with such projections (the “Acquisition Projections”) and based upon
historical financial data of a recent date reasonably satisfactory to Agent,
taking into account such proposed Permitted Acquisition; and

 

(iii)          a certificate of the chief financial officer of Parent and each
Borrower to the effect that:  (A) each Loan Party (after taking into
consideration all rights of contribution and indemnity such Loan Party has
against each other Loan Party) will be Solvent upon the consummation of such
proposed Permitted Acquisition; (B) the Acquisition Pro Forma fairly presents in
all material respects the financial condition of Loan Parties and their
Subsidiaries (on a consolidated basis) as of the date thereof after giving
effect to such proposed Permitted Acquisition; and (C) the Acquisition
Projections are reasonable estimates based on the then available information of
the future financial performance of Loan Parties and their Subsidiaries
subsequent to the date thereof based upon the historical performance of Loan
Parties, their Subsidiaries and the Target and show that Loan Parties and their
Subsidiaries shall continue to be in compliance with the financial covenants set
forth in Section 6.8 for the remainder of the period set forth in such
projections based on the then available information;

 

(l)            on or prior to the date of such proposed Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement (which shall allow collateral
assignments of Loan Parties rights thereunder in favor of the

 

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Agent and the Lenders) or merger agreement, as applicable, and all related
agreements and instruments, and all opinions, certificates, lien search results
and other documents reasonably requested by Agent; and

 

(m)          concurrently with consummation of such proposed Permitted
Acquisition, Administrative Borrower Representative shall have delivered to
Agent a certificate stating that the foregoing conditions have been satisfied.

 

Notwithstanding anything to the contrary contained in this definition, if
Administrative Borrower requests that any assets acquired pursuant to any
Permitted Acquisition be included in the Borrowing Base, Agent shall initiate,
within thirty (30) days of such request, an appraisal, field examination or
collateral audit (as the case may be) with respect to the business and assets of
the Target in accordance with Agent’s customary procedures and practices and as
otherwise required by the nature and circumstances of the business of the
Target, the scope and results of which shall be reasonably satisfactory to
Agent, and which shall have been completed, before such assets may be included
in the Borrowing Base.  Any Accounts or Inventory of the Target shall only be
Eligible Accounts or Eligible Inventory to the extent that (i) the Target (if
its Equity Interests have been acquired in such Permitted Acquisition) or the
Subsidiary of Loan Parties which has acquired the Target’s assets and properties
shall have become a Borrower under this Agreement in accordance with
Section 17.2, (ii) Agent has so completed such appraisal, field examination or
collateral audit (as the case may be) with respect thereto and (iii) the
criteria for Eligible Accounts or Eligible Inventory (as applicable) set forth
herein are satisfied with respect thereto in accordance with this Agreement.

 

“Permitted Discretion” shall mean a determination made by the Agent in the
exercise of reasonable (from the perspective of an asset-based secured lender)
business judgment.

 

“Permitted Encumbrances” shall mean:

 

(a)           Liens in favor of Agent for the benefit of each Secured Party,
which, in each case, secure Obligations;

 

(b)           Liens for taxes, assessments or other governmental charges (“Tax
Lien”) not delinquent or being contested in good faith and by appropriate
proceedings by the applicable Loan Party or Subsidiary of a Loan Party and with
respect to which proper reserves have been taken by Loan Parties and the
Subsidiaries; provided, that, the Tax Lien shall have no effect on the priority
of the Liens in favor of Agent or the value of the Collateral in which Agent has
such a Lien and a stay of enforcement of any such Tax Lien shall be in effect;

 

(c)           deposits or pledges to secure obligations under worker’s
compensation, social security or similar laws, or under unemployment insurance,
in each case made in the ordinary course of business and excluding deposits,
liens or pledges under ERISA;

 

(d)           deposits or pledges of cash to secure bids, tenders, contracts
(other than contracts for the repayment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of the applicable Loan Party’s or Subsidiary’s
business;

 

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(e)           mechanics’, workers’, materialmen’s, carriers’, warehousemen’s,
landlords or other like Liens arising in the ordinary course of the applicable
Loan Party’s or Subsidiary’s business with respect to obligations which are not
incurred in connection with the borrowing of money that in the aggregate do not
materially interfere with the conduct of the business of the applicable Loan
Party or any Subsidiary or materially impair the value of the property or assets
subject to such Liens; provided, that, such Lien shall have no effect on the
priority of the Liens in favor of Agent on Collateral included in the Borrowing
Base;

 

(f)            Liens placed upon fixed assets hereafter acquired by any Loan
Party or any Subsidiary to secure a portion of the purchase price thereof;
provided, that, (i) any such Lien shall not encumber any other property of Loan
Parties or their Subsidiaries and (ii) the aggregate amount secured by such
Liens shall not exceed the applicable amount provided for in Section 7.8(b);

 

(g)           Liens in existence on the date hereof that are disclosed on
Schedule 7.2;

 

(h)           Liens on amounts deposited as security for surety or appeal bonds
in connection with obtaining such bonds in the ordinary course of business;

 

(i)            with respect to any Real Property, Liens consisting of easements,
rights of way, licenses, covenants, zoning restrictions and other restrictions
affecting the use of Real Property that do not materially impair the use or
operation thereof;

 

(j)            Liens and customary rights of setoff on Depository Accounts
granted or arising in the ordinary course of business in favor of depositary
banks maintaining such Depository Accounts solely to the extent they secure
customary account fees and charges payable in respect of such Depository
Accounts;

 

(k)           non-consensual statutory Liens (other than Liens securing the
payment of taxes or matters relating to ERISA or Canadian Pension Plans) arising
in the ordinary course of a Loan Party or Subsidiary’s business; provided, that,
the execution of such Liens is effectively stayed, such Liens are being
contested in good faith by appropriate proceedings and the applicable Loan Party
has established adequate reserves therefor on its books in accordance with GAAP;

 

(l)            Liens arising from (i) operating leases with respect to assets
which are not owned by any Loan Party or any Subsidiary and the precautionary
UCC financing statement and PPSA financing statement filings in respect thereof
and (ii) equipment or other materials which are not owned by any Loan Party or
Subsidiary located on the premises of such Loan Party or Subsidiary (but not in
connection with, or as part of, the financing thereof) from time to time in the
ordinary course of business and consistent with current practices of Loan
Parties and their Subsidiaries and the precautionary UCC financing statement and
PPSA financing statement filings in respect thereof;

 

(m)          judgments and other similar Liens arising in connection with court
proceedings that do not constitute an Event of Default;

 

(n)           Liens of a collection bank arising under Section 4-210 of the UCC
on items in the course of collection;

 

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(o)           Liens in favor of customs and revenue authorities arising as a
matter of law to secure custom duties which are not past due in connection with
the importation of goods by Loan Parties or their Subsidiaries in the ordinary
course of business;

 

(p)           Liens on specific fixed assets (as opposed to any blanket lien on
any asset type) acquired pursuant to a Permitted Acquisition in existence at the
time such assets are acquired pursuant to such Permitted Acquisition and not
created in contemplation thereof; provided, that, such Liens do not encumber any
Accounts, Inventory or other assets included in the Borrowing Base, and such
Liens do not attach to any assets other than the assets acquired pursuant to
such Permitted Acquisition;

 

(q)           receipt of deposits and advances from customers in the ordinary
course of business which may create an interest in the Inventory to be sold to
such customers, but which do not constitute contractual Liens granted by a Loan
Party or any Subsidiary; and

 

(r)            Liens securing Indebtedness of a Subsidiary to a Borrower;

 

(s)           Liens attaching solely to the property and assets of any Non-US
Subsidiary which is not a Loan Party securing Indebtedness for borrowed money of
any such Non-US Subsidiary of not more than $25,000,000 in the aggregate at any
time outstanding for all such Non-US Subsidiaries as permitted under
Section 7.8(l); and

 

(t)            Liens in the Collateral securing Indebtedness of any Loan Party
under the Second Lien Loan Documents.

 

“Person” shall mean any individual, sole proprietorship, partnership,
corporation, company, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).

 

“Plan” shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA, maintained for employees of Loan Parties or any member of
the Controlled Group or any such Plan to which any Loan Party or any member of
the Controlled Group is required to contribute on behalf of any of its
employees.

 

“Pledge Agreements” shall mean the Pledge and Security Agreements, each dated as
of the Closing Date, executed by Parent and each of its US Subsidiaries that has
Subsidiaries in favor of Agent, pledging and granting to Agent, for the benefit
of Secured Parties, as security for the US Obligations, a Lien in all Equity
Interests owned by Parent and such US Subsidiaries in their respective US
Subsidiaries and sixty-five (65%) percent of the Equity Interests owned by
Parent and such US Subsidiaries in their respective non-US Subsidiaries, as the
same may hereafter be amended, modified, supplemented, renewed, restated or
replaced.

 

“PPSA” shall mean the Personal Property Security Act (Ontario), the Personal
Property Security Act (Manitoba), the Civil Code of Quebec or any other
applicable Canadian federal or provincial 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,

 

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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.

 

“Prior Defaulting/Impacted Lender” shall mean, as of any date, a Lender that is
not then a Defaulting Lender or an Impacted Lender but was a Defaulting Lender
or an Impacted Lender at any time during the past three hundred sixty-five (365)
days.

 

“Priority Payables” shall mean, as to any Borrower or Guarantor at any time,
(a) the full amount of the liabilities of such Borrower or Guarantor at such
time which (i) have a trust imposed to provide for payment or a security
interest, pledge, lien, hypothec or charge ranking or capable of ranking senior
to or pari passu with security interests, liens, hypothecs or charges securing
the Obligations under federal, state, provincial, county, district, municipal,
or local law in Canada or (ii) have a right imposed to provide for payment
ranking or capable of ranking senior to or pari passu with the Obligations under
local, provincial or national law, regulation or directive, including, but not
limited to, claims for unremitted and/or accelerated rents, taxes, wages,
withholding taxes, VAT and other amounts payable to an insolvency administrator,
employee withholdings or deductions and vacation pay, workers’ compensation
obligations, government royalties or pension fund obligations in each case to
the extent such trust, or security interest, lien or charge has been or may be
imposed and (b) the amount equal to the percentage applicable to Inventory in
the calculation of the Canadian Borrowing Base multiplied by the aggregate Value
of the Eligible Inventory which Agent, in its Permitted Discretion, considers is
or may be subject to retention of title by a supplier or a right of a supplier
to recover possession thereof, where such supplier’s right has priority over the
security interests, liens or charges securing the Obligations, including,
without limitation, Eligible Inventory subject to a right of a supplier to
repossess goods pursuant to Section 81.1 of the Bankruptcy and Insolvency Act
(Canada) or any applicable laws granting revendication or similar rights to
unpaid suppliers or any similar laws of Canada or any other applicable
jurisdiction (provided, that, to the extent such Inventory has been identified
and has been excluded from Eligible Inventory, the amount owing to the supplier
shall not be considered a Priority Payable).

 

“Pro Forma Balance Sheet” shall have the meaning set forth in Section 5.5(a).

 

“Protective Advances” shall have the meaning set forth in Section 2.11.

 

“Purchasing Lender” shall have the meaning set forth in Section 17.3(c).

 

“Qualified Assignee” shall mean (a) any Lender (other than a Defaulting Lender,
an Impacted Lender or a Prior Defaulting/Impacted Lender), any Controlled
Affiliate of any Lender (other than a Defaulting Lender, an Impacted Lender or a
Prior Defaulting/Impacted Lender) and any Approved Fund (other than with respect
to a Defaulting Lender, an Impacted Lender or a Prior Defaulting/Impacted
Lender); and (b) any other Person consented to by (i) Agent, which consent of
Agent shall not be unreasonably withheld, conditioned or delayed, and (ii) so
long as no Event of Default has occurred and is continuing and such assignment
is not being made in connection with an assignment, sale or transfer of a
portfolio of loans by the assigning, selling or transferring Lender, by
Administrative Borrower, which consent of Administrative Borrower shall not be
unreasonably withheld, conditioned or delayed (except, that, Administrative
Borrower, for itself and on behalf of Borrowers, shall be deemed to have
consented to any such assignment unless Administrative Borrower shall have
objected thereto by written notice to Agent within five (5) Business Days after

 

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having received notice thereof); provided, that, (A) no Person (or Affiliate of
such Person) proposed to become a Lender after the Closing Date that holds any
(1) Indebtedness that is contractually subordinated to any or all of the
Obligations, (2) secured Indebtedness that is subject to any contractual Lien
subordination to the Liens securing any or all of the Obligations or (3) Equity
Interests issued by any Loan Party shall be a Qualified Assignee unless
consented to by Agent in its sole discretion, (B) no Person proposed to become a
Lender after the Closing Date and determined by Agent to be acting in the
capacity of a vulture fund or distressed debt purchaser shall be a Qualified
Assignee, (C) no Person that is designated as a competitor of Borrowers as set
forth on Schedule 17.3 hereto (which Schedule may be updated in writing at any
time and from time to time by Administrative Borrower), and (D) no Loan Party
shall be a Qualified Assignee; except, that, Qualified Assignee may include a
competitor of Borrowers as set forth on Schedule 17.3 hereto if (1) Borrowers
shall have approved in writing an assignment to such competitor, (b) an Event of
Default exists under Sections 10.6 hereof, or (2) after the receipt by
Administrative Borrower from Agent of written notice of the occurrence of an
Event(s) of Default (other than under Sections 10.6 hereof), which Event(s) of
Default remain uncured, unremedied or unwaived for a period of ninety (90) days,
the assigning Lender shall provide Administrative Borrower and Agent with ten
(10) Business Days’ prior written notice of its intended assignment to a
competitor, at which time such assignment may be made to such competitor unless
Borrowers shall have paid and satisfied in full in immediately available funds
all of the Obligations and terminated this Agreement and the other Financing
Agreements in accordance with Section 13.1 hereof.

 

“Qualified Cash” shall mean, as of any date determined by Agent, the aggregate
amount of unrestricted cash and Cash Equivalents of Borrowers that is subject to
a perfected first priority security interest and lien in favor of Agent.

 

“Quarterly Average Undrawn Availability” shall mean, for any calendar quarter,
the average of the aggregate amount of Global Undrawn Availability for such
calendar quarter.

 

“Questionnaire” shall mean the Collateral Certificate dated as of the date
hereof executed by each Loan Party in favor of the Agent.

 

“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., as same may be amended from time to time.

 

“Real Property” shall mean all of each Loan Party right, title and interest in
and to its owned and leased premises.

 

“Receivables” shall mean and include, as to each Loan Party, all of such Loan
Party’s Accounts, Contract Rights, instruments (including promissory notes and
instruments evidencing indebtedness owed to Loan Parties by their Affiliates),
documents, chattel paper (whether tangible or electronic), general intangibles
(including, without limitation, payment intangibles) relating to Accounts,
drafts and acceptances, proceeds of such Loan Party’s business interruption
insurance and all other forms of obligations owing to such Loan Party arising
out of or in connection with the sale, lease or other disposition of Inventory
or the rendition of services, all guarantees and other security therefor,
whether secured or unsecured, now existing or hereafter created, and whether or
not specifically sold or assigned to Agent hereunder.

 

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“Related Agreements” shall mean the Second Lien Loan Documents, the Senior
Unsecured Notes Documents, and the Closing Date Acquisition Documents.

 

“Related Transactions” shall mean the transactions contemplated by the Related
Agreements.

 

“Release” shall have the meaning set forth in Section 5.7(c).

 

“Reportable Event” shall mean a reportable event described in Section 4043(b) of
ERISA or the regulations promulgated thereunder.

 

“Required Lenders” shall mean (a) if there are three (3) or more Lenders, at
least two (2) or more Lenders having Commitment Percentages the aggregate amount
of which exceeds fifty (50%) percent, and (b) if there are either one (1) or two
(2) Lenders, all Lenders.

 

“Reserves” shall mean such reserves as Agent may from time to time establish in
its Permitted Discretion, including, without limitation, reserves for
(a) matters that could adversely affect the Collateral, its value or the amount
that Agent and the Lenders might receive from the sale or other disposition
thereof or the ability of Agent to realize thereon, (b) sums that Loan Parties
or any of their Subsidiaries are required to pay under any provision of this
Agreement or any Other Document or otherwise (such as taxes, assessments,
payroll, insurance premiums, amounts owing to customs brokers, or, in the case
of leased assets, rents or other amounts payable under such leases or, in the
case of license agreements, royalties or other amounts payable under such
license agreements), (c) amounts owing by any Loan Party to any Person to the
extent secured by a Lien on, or trust over, any of the Collateral or over any
assets or properties of any Customer of any Loan Party (such as Liens or trusts
in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers,
or suppliers, or Liens or trusts for ad valorem, income, payroll, excise, sales,
pension plan obligations or other taxes), including without limitation any
Permitted Encumbrance and Priority Payables, (d) amounts believed by the Agent
to be necessary to provide for possible inaccuracies, in any report or in any
information provided to the Agent pursuant to this Agreement, (e) dilution with
respect to Accounts of the Borrowers (based on the ratio of the aggregate amount
of non-cash reductions in Accounts of the Borrowers for any period to the
aggregate dollar amount of sales of the Borrowers for such period) calculated by
Agent for any period that is or is reasonably anticipated to be greater than
five (5%) percent, (f) the Canadian Inventory Reserve, and (g) Bank Product
Obligations to the extent that such Bank Product Obligations constitute
Obligations as such term is defined herein or otherwise receive the benefit of
the security interest of Agent in any Collateral.  The amount of any Reserve
established by Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such reserve as determined by
Agent in its Permitted Discretion and to the extent that such Reserve is in
respect of amounts that may be payable to third parties, Agent may, at its
option, deduct such Reserve from the US Revolving Loan Borrowing Limit or
Canadian Revolving Loan Maximum Amount, as applicable, at any time that such
limit is less than the amount of the Canadian Borrowing Base with respect to the
Canadian Borrowers and the US Borrowing Base with respect to the US Borrowers,
as applicable.

 

“Responsible Officer” shall mean with respect to any Person, such Person’s chief
executive officer, president, chief operating officer, chief financial officer
or other officer having substantially the same authority and responsibility with
respect to the matters at hand (or having substantially the same knowledge of
the contents of the certificate, document or other document being delivered).

 

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“Restricted Accounts” shall mean deposit accounts or other accounts
(a) established and used (and at all times will be used) solely for the purpose
of paying current payroll obligations of Loan Parties (and which do not (and
will not at any time) contain any deposits other than those necessary to fund
current payroll), in each case in the ordinary course of business,
(b) maintained (and at all times will be maintained) solely in connection with
an employee benefit plan, but solely to the extent that all funds on deposit
therein are solely held for the benefit of, and owned by, employees (and will
continue to be so held and owned) pursuant to such plan, and (c) used in the
ordinary course of business for petty cash, the balance of which shall not
exceed $500,000 in the aggregate at any time; provided, that, without limiting
the foregoing, in order for any such deposit account or other account to
constitute a “Restricted Account”, such deposit or other account must be
expressly designated as a “Restricted Account” on Schedule 5.23 (as such
schedule may from time to time be updated in accordance with Section 5.23),
which designation shall constitute a representation and warranty by each Loan
Party that such deposit account or other account satisfies the criteria set
forth in this definition to constitute a “Restricted Account”.

 

“Restricted Asset” shall have the meaning as set forth in the definition of
Excluded Assets.

 

“Restriction” shall have the meaning as set forth in the definition of Excluded
Assets.

 

“Revolver Commitment” shall mean, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, and
without duplication, the commitment of each Lender to purchase a participation
in the Swingline Advances pursuant to Section 2.1(d), in each case in the
aggregate amounts set forth beside such Lender’s name under the applicable
heading on Schedule C-1 or in the Commitment Transfer Supplement pursuant to
which such Lender became a Lender hereunder, as such amounts may be reduced or
increased from time to time pursuant to assignments made in accordance with the
provisions of this Agreement (subject to adjustment as provided pursuant to the
terms of Section 2.13, Section 2.20 and Section 2.21).

 

“Revolving Advances” shall mean Advances made pursuant to Section 2.1 (and shall
also include Protective Advances and Swingline Advances to the extent the
context implies such).

 

“Revolving Credit Note” shall have the meaning set forth in Section 2.1(a).

 

“Revolving Interest Rate” shall mean an interest rate per annum equal to (a) as
to US Base Rate Loans, a rate equal to the US Base Rate plus the Applicable
Margin for Base Rate Loans, (b) as to Canadian Base Rate Loans, a rate equal to
the Canadian Base Rate plus the Applicable Margin for Base Rate Loans, and
(c) as to LIBOR Rate Loans, a rate equal to the LIBOR Rate plus the Applicable
Margin for LIBOR Rate Loans (in each case, based on the LIBOR Rate applicable
for the Interest Period selected by Borrowers (or Administrative Borrower on
behalf of Borrowers) as in effect two (2) Business Days prior to the
commencement of the Interest Period, whether such rate is higher or lower than
any rate previously quoted to Borrowers (or Administrative Borrower on behalf of
Borrowers)).

 

“Sanctioned Entity” shall mean (a) an agency of the government of, (b) an
organization directly or indirectly controlled by, or (c) a person resident in,
a country that is subject to a sanctions program identified on the list
maintained and published by OFAC and available at

 

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http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise
published from time to time as such program may be applicable to such agency,
organization or person.

 

“Sanctioned Person” shall mean a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html or as otherwise
published from time to time.

 

“Schedule I Reference Banks” shall mean The Toronto-Dominion Bank, Royal Bank of
Canada, The Bank of Nova Scotia and such other Schedule I Canadian chartered
banks as may be selected by the Agent.

 

“Second Lien Agent” shall mean U.S. Bank National Association, and its
successors and assigns, in its capacity as trustee and collateral agent under
the Second Lien Loan Documents.

 

“Second Lien Indenture” shall mean that certain Indenture, dated as of the date
hereof, by and among the Second Lien Agent, the holders of the Second Lien Notes
from time to time party thereto, Parent, and the other Loan Parties party
thereto.

 

“Second Lien Intercreditor Agreement” shall mean that certain Intercreditor
Agreement, dated as of the date hereof, by and among Agent, the Second Lien
Agent, and Loan Parties, as the same may hereafter be amended, modified,
supplemented, renewed, restated or replaced.

 

“Second Lien Loan Documents” shall mean the Second Lien Indenture and any and
all other agreements, instruments and documents executed and delivered in
connection with the Second Lien Indenture, as the same may hereafter be amended
or modified from time to time to the extent permitted under Section 7.15.

 

“Second Lien Maximum Debt” shall mean the sum of (a) $225,000,000 plus (b) the
amount of any additional Indebtedness under the Indenture after the date hereof,
so long as, as of the date of the incurrence of any such Indebtedness, each of
the following conditions are satisfied: (i) immediately prior to and after
giving effect to the incurrence of any such Indebtedness, no Event of Default
shall exist or have occurred and be continuing (ii) Global Undrawn Availability
for the thirty (30) consecutive day period prior to the incurrence of any such
Indebtedness, shall not be less than the greater of (A) seventeen and one-half
(17.5%) percent of the lesser of (1) the Maximum Credit and (2) the Borrowing
Base at such time, and (B) $17,500,000; and (iii) as of the date of and after
giving effect to any incurrence of any such Indebtedness, Global Undrawn
Availability shall not be less than the greater of (A) seventeen and one-half
(17.5%) percent of the lesser of (1) the Maximum Credit and (2) the Borrowing
Base at such time, and (B) $17,500,000.

 

“Second Lien Note Prepayment Conditions” shall mean:

 

(a)           as of the date Parent delivers a notice to make an offer to
repurchase the Second Lien Notes with Excess Cash Flow, each of the following
conditions shall have been satisfied on such date:  (i) no Event of Default
shall exist and be continuing, (ii) Global Excess Liquidity for the thirty (30)
consecutive days prior to, and on the date of, delivery of notice of any such
offer shall not be less than the greater of (A) seventeen and one-half (17.5%)
percent of the lesser of (1) the Maximum Credit and (2) the Borrowing Base at
such time, and (B) $17,500,000, (iii) as of the end of the immediately preceding
quarter, the Loan Parties, on a consolidated basis,

 

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shall have had a Fixed Charge Coverage Ratio of not less than 1.10:1.00, and
(iv) Agent shall have received a certificate from Parent, executed by a
Responsible Officer of Parent, certifying to Agent as to whether the Maximum
Credit has been or will be reduced by the amount of such offer (or a portion
thereof) and shall set forth the amount of the concurrent corresponding
permanent reduction in the Maximum Credit which has been included in clause
(E) in the calculation of Excess Cash Flow; or

 

(b)           as of the date Parent makes an optional redemption of any Second
Lien Notes, each of the following conditions shall have been satisfied on such
date:  (i) no Event of Default shall exist and be continuing, (ii) Global Excess
Liquidity for the thirty (30) consecutive days prior to, and on the date of, any
such redemption shall not be less than the greater of (A) seventeen and one-half
(17.5%) percent of the lesser of (1) the Maximum Credit and (2) the Borrowing
Base at such time, and (B) $17,500,000, and (iii) as of the end of the
immediately preceding quarter, the Loan Parties, on a consolidated basis, shall
have had a Fixed Charge Coverage Ratio of not less than 1.10:1.00; or

 

(c)           as of the date Parent makes an open market purchase of any Second
Lien Notes, each of the following conditions shall have been satisfied on such
date:  (i) no Event of Default shall exist and be continuing, (ii) Global Excess
Liquidity for the thirty (30) consecutive days prior to, and on the date of, any
such open market purchase shall not be less than the greater of (A) seventeen
and one-half (17.5%) percent of the lesser of (1) the Maximum Credit and (2) the
Borrowing Base at such time and (B) $17,500,000, and (iii) as of the end of the
immediately preceding quarter, the Loan Parties, on a consolidated basis, shall
have had a Fixed Charge Coverage Ratio of not less than 1.10:1.00.

 

“Second Lien Notes” shall mean, collectively, Parent’s Senior Secured Notes
issued pursuant to the Second Lien Indenture in the aggregate original principal
amount of $225,000,000.

 

“Secured Party” shall mean Agent, the Lenders, Issuer and Bank Products
Provider; sometimes hereinafter collectively referred to as “Secured Parties”.

 

“Senior Unsecured Notes” shall mean, collectively, Parent’s Senior Unsecured
Notes issued pursuant to the Senior Unsecured Notes Agreement in the aggregate
original principal amount of $50,000,000, subject to increase upon the “Initial
Purchasers’” exercise of the “Overallotment Option” (as such quoted terms are
defined in the Senior Unsecured Notes Agreement).

 

“Senior Unsecured Notes Agreement” shall mean that certain Indenture, dated as
of the date hereof, by and among Parent and Jefferies Finance LLC, as the
initial purchaser, and the other Loan Parties party thereto, as amended or
modified from time to time to the extent permitted by Section 7.15.

 

“Senior Unsecured Notes Documents” shall mean the Senior Unsecured Notes
Agreement, the Senior Unsecured Notes and any and all other agreements,
instruments and documents executed and delivered in connection with the Senior
Unsecured Notes Agreement.

 

“Settlement Date” shall mean the Closing Date and thereafter every Business Day
designated by Agent as a “Settlement Date” by notice from Agent to each Lender,
but not less frequently than weekly.

 

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“Solvent” shall mean, at any time with respect to any Person, that at such time
such Person  (a) is able to pay its debts as they mature and has (and has a
reasonable basis to believe it will continue to have) sufficient capital (and
not unreasonably small capital) to carry on its business consistent with its
practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such Person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).

 

“Statutory Reserves” shall mean for any Interest Period for any LIBOR Rate Loan,
the average maximum rate at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained during such Interest Period
under Regulation D by member banks of the United States Federal Reserve System
in New York City with deposits exceeding one billion US Dollars against
“Eurocurrency liabilities” (as such term is used in Regulation D).  LIBOR Rate
Loans shall be deemed to constitute LIBOR liabilities and to be subject to such
reserve requirements without benefit of or credit for proration, exceptions or
offsets which may be available from time to time to any Lender under Regulation
D.

 

“Subsidiary” shall mean, with respect to any Person, a corporation, partnership,
limited liability company or other entity of which such Person owns, directly or
indirectly, such number of outstanding shares or other equity interests as to
have more than fifty (50%) percent of the ordinary voting power for the election
of directors or other managers of such corporation, partnership, limited
liability company or other entity.  Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to Subsidiaries of
Borrowers.

 

“Supermajority Lenders” (a) if there are three (3) or more Lenders, at least two
(2) or more Lenders having Commitment Percentages the aggregate amount of which
exceeds sixty-six and two-thirds (66 2/3%) percent, and (b) if there are either
one (1) or two (2) Lenders, all Lenders

 

“Swingline Lender” shall mean (a) Wells Fargo with respect to any Swingline
Advances made to US Borrowers, (b) Wells Fargo Canada with respect to any
Swingline Advances made to Canadian Borrowers, or (c) any other Lender that, at
the request of Borrowers and with the consent of Agent, agrees, in such Lender’s
sole discretion, to become a Swingline Lender to US Borrowers and/or to Canadian
Borrowers under Section 2.1(d).

 

“Swingline Advances” shall mean each Revolving Advance converted by Agent to a
Swingline Advance pursuant to Section 2.1(d).

 

“Swingline Commitment” shall mean, with respect to Wells Fargo, its Swingline
Commitment as set forth besides its name under the applicable heading on
Schedule C-1.

 

“Swingline Interest Rate” shall mean an interest rate per annum equal to the
Revolving Interest Rate applicable to US Base Rate Loans or Canadian Base Rate
Loans, as applicable.

 

“Swingline Note” shall have the meaning set forth in Section 2.1(d).

 

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“Target” shall have the meaning as set forth in the definition of Permitted
Acquisition.

 

“Tax” or “Taxes” shall mean any tax, fee, premium, charge, duty, escheat or
other amount imposed by a Governmental Body and any interest, penalty, or
addition to tax imposed with respect thereto or any applicable law, treaty,
regulation or directive.

 

“Tax Lien” shall have the meaning as set forth in the definition of Permitted
Encumbrances.

 

“Term” shall mean the period commencing on the Closing Date and ending on the
Termination Date.

 

“Termination Date” shall have the meaning set forth in Section 13.1.

 

“Title IV Plan” shall mean a Plan (other than a Multiemployer Plan), that is
covered by Title IV of ERISA, and that any Loan Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.

 

“Toxic Substance” shall mean and include any material present on the Real
Property or the leasehold interests which has been shown to have significant
adverse effect on human health or which is subject to regulation under the Toxic
Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state or
other law, or any other applicable federal, state or other laws now in force or
hereafter enacted relating to toxic substances.  “Toxic Substance” includes but
is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based
paints.

 

“Transferee” shall have the meaning set forth in Section 17.3(b).

 

“Tube Canada” shall have the meaning set forth in the preamble to this Agreement
and shall extend to all permitted successors and assigns of such Person.

 

“Tube Texas” shall have the meaning set forth in the preamble to this Agreement
and shall extend to all permitted successors and assigns of such Person.

 

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New
York, and any successor statute, as in effect from time to time (except, that
terms used herein which are defined in the Uniform Commercial Code as in effect
in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute except as
Agent may otherwise determine in its Permitted Discretion); provided, that, any
term defined by reference to the “UCC” shall also have any extended, alternative
or analogous meaning given to such term in applicable Canadian personal property
security and other laws (including, without limitation, the Personal Property
Security Act of each applicable province of Canada, the Civil Code of Quebec,
the Bills of Exchange Act (Canada) and the Depository Bills and Notes Act
(Canada), in all cases for the extension, preservation or betterment of the
security and rights of Agent and Secured Parties.

 

“Unfunded Pension Liability” shall mean, at any time, the aggregate amount, if
any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such

 

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Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five (5) years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Loan Party or any ERISA Affiliate as a result of such transaction.

 

“Unutilized Commitment Fee” shall mean the fee payable by Borrowers to Agent,
for the ratable benefit of Lenders, under Section 3.3(a).

 

“US Advances” shall mean Advances made to the US Borrowers.

 

“US Base Rate” shall have the meaning set forth in the definition of Base Rate.

 

“US Base Rate Loans” shall mean any Advances or portion thereof denominated in
US Dollars and on which interest is payable based on the US Base Rate in
accordance with the terms hereof.

 

“US Borrower” or “US Borrowers” shall have the meanings set forth in the
preamble to this Agreement and shall extend to all permitted successors and
assigns of such Persons.

 

“US Borrowers’ Account” shall have the meaning set forth in Section 2.7.

 

“US Borrowing Base” shall mean, at any time, as to US Borrowers, the amount
equal to:

 

(a)           eighty-five (85%) percent of Eligible Accounts of US Borrowers,
plus

 

(b)           the amount equal to the lesser of (i) seventy (70%) percent of the
Value of the Eligible Inventory of US Borrowers and (ii) eighty-five (85%)
percent of the Net Liquidation Percentage multiplied by the Value of the
Eligible Inventory of US Borrowers, minus

 

(c)           Reserves.

 

“US Cash Equivalents” shall mean, at any time, (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year from the date of acquisition thereof,
(b) marketable direct obligations issued or fully guaranteed by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof maturing within one (1) year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or
Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no
more than two hundred seventy (270) days from the date of creation thereof and,
at the time of acquisition, having a rating of at least A-1 from S&P or at least
P 1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank
deposits or bankers’ acceptances maturing within one (1) year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States or any state thereof or the District of Columbia or any United States
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $250,000,000, (e) Deposit Accounts
maintained with (i) any bank that satisfies the criteria described in clause
(d) above, or (ii) any other bank organized under the laws of the United States
or any state thereof so long as the full amount maintained with any such other
bank is insured by the Federal Deposit

 

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Insurance Corporation, (f) repurchase obligations of any commercial bank
satisfying the requirements of clause (d) of this definition or recognized
securities dealer having combined capital and surplus of not less than
$250,000,000, having a term of not more than seven (7) days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt
securities with maturities of six (6) months or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the criteria described in clause (d) above, and (h) Investments in
money market funds substantially all of whose assets are invested in the types
of assets described in clauses (a) through (g) above.

 

“US Collateral” shall mean all Collateral of any US Loan Party.

 

“US Commitment” shall mean, at any time, as to each Lender, the principal amount
set forth next to such Lender’s name on Schedule C-1 hereto designated as the US
Commitment of such Lender or on Schedule 1 to the Assignment and Acceptance
Agreement pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 13.7 hereof, as the same may be adjusted from
time to time in accordance with the terms hereof; sometimes being collectively
referred to herein as “US Commitments”.

 

“US Credit Facility” shall mean the Advances and Letters of Credit provided to
or for the benefit of US Borrowers pursuant to Sections 2.1 and 2.2 hereof.

 

“US Dollar Equivalent” shall mean at any time (a) as to any amount denominated
in US Dollars, the amount thereof at such time, and (b) as to any amount
denominated in any other currency, the equivalent amount in US Dollars
calculated by Agent in its Permitted Discretion at such time using the Exchange
Rate in effect on the Business Day of determination.

 

“US Dollar Loans” shall mean any Advances or portion thereof which are
denominated in US Dollars.

 

“US Dollars”, “US$”, “Dollars” and “$” shall each mean lawful currency of the
United States of America.

 

“US Guarantors” shall mean, collectively, (a) Transtar Inventory Corp., a
corporation organized under the laws of the state of Delaware, (b) Keystone Tube
Company, LLC, a limited liability company organized under the laws of the state
of Delaware, and (c) any other Person that at any time after the date hereof
becomes party to a guarantee in favor of Agent or any Lender or otherwise liable
on or with respect to the US Obligations or who is the owner of any property
which is security for the US Obligations (other than Borrowers); each sometimes
referred to herein individually as a “US Guarantor”.

 

“US Issuer” shall mean (a) Wells Fargo or any of its Affiliates, (b) any US
Lender or (c) any other financial institution (which in the case of any other
financial institution in this clause (c), to the extent approved by Agent and,
so long as no Event of Default exists and is continuing, Administrative Borrower
(it being understood and agreed that The Toronto-Dominion Bank is acceptable to
Agent and Administrative Borrower), that shall issue a Letter of Credit for the
account of a US Borrower and has agreed in a manner reasonably satisfactory to
Agent to be subject to the terms hereof as a US Issuer.

 

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“US Lender” shall mean, at any time, each Lender having a US Commitment or an
Advance made to US Borrowers owing to it at such time; sometimes being referred
to herein collectively as “US Lenders”.

 

“US Letter of Credit Limit” shall mean, on any date of determination,
$20,000,000, minus the amount of all then outstanding Canadian Letter of Credit
Obligations.

 

“US Letter of Credit Obligations” shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit issued for the account of a US
Borrower outstanding at such time, plus (b) the aggregate amount of all drawings
under Letters of Credit for a US Borrower for which Issuer has not at such time
been reimbursed, plus (c) without duplication, the aggregate amount of all
payments made by each Lender to the US Issuer with respect to such Lender’s
participation in Letters of Credit issued for the account of a US Borrower as
provided in Section 2.2 for which US Borrowers have not at such time reimbursed
the Lenders, whether by way of a Revolving Advance or otherwise.

 

“US Loan Parties” shall mean, collectively, Borrowers and Guarantors, in each
case, other than the Canadian Loan Parties; each sometimes being referred to
individually as a “US Loan Party”.

 

“US Obligations” shall mean all Obligations of the US Loan Parties.

 

“US Payment Account” shall mean Agent’s account set forth on Schedule 2.3 or
such other account of Agent, if any, which Agent may designate by notice to
Administrative Borrower and to each Lender to be the US Payment Account.

 

“US Revolving Loan Borrowing Limit” shall mean, as to US Borrowers at any time,
the amount equal to the US Revolving Loan Maximum Amount minus the US Dollar
Equivalent of Advances and US Letters of Credit Obligations outstanding to the
US Borrowers.

 

“US Revolving Loan Maximum Amount” shall mean, at any given time, the lesser of
(a) the Maximum Credit and (b) an amount equal to thirty-five (35%) of the First
Lien Intercreditor Borrowing Base.

 

“US Subsidiary” shall mean a Subsidiary organized, incorporated or otherwise
formed under the laws of the United States or any state thereof or the District
of Columbia.

 

“US Undrawn Availability” shall mean, as to US Borrowers, on any date of
determination, as determined by Agent in its Permitted Discretion, calculated at
any date, equal to:  (a) the lesser of: (i) the US Borrowing Base and (ii) the
US Revolving Loan Borrowing Limit, minus (b) the sum of: (i) the amount of all
then outstanding and unpaid US Obligations of US Borrowers (but not including
for this purpose any outstanding US Letter of Credit Obligations and unasserted
contingent indemnification US Obligations), plus (ii) the amount of all Reserves
then established in respect of US Letter of Credit Obligations.

 

“Value” shall mean, the US Dollar Equivalent, as determined by Agent in its
Permitted Discretion, with respect to Inventory, of the lower of (a) cost
computed on a first-in first-out basis in accordance with GAAP consistently
applied or (b) market value; provided, that, for purposes of the calculation of
the Borrowing Base, (i) the Value of the Inventory shall not include: (A) the
portion of

 

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the value of Inventory equal to the profit earned by any Affiliate on the sale
thereof to any Borrower or (B) write-ups or write-downs in value with respect to
currency exchange rates and (ii) notwithstanding anything to the contrary
contained herein, the cost of the Inventory shall be computed in the same manner
and consistent with the most recent appraisal of the Inventory received and
accepted by Agent for the purposes of this Agreement (which appraisal must be
performed by an appraisal company selected by Agent using assumptions and
appraisal methods acceptable to Agent, pursuant to an appraisal report
acceptable to Agent on which Agent is expressly permitted to rely).

 

“VAT” shall mean value added tax imposed in Canada or any other jurisdiction and
any equivalent tax applicable in any jurisdiction (including goods and services
tax, harmonized sales tax and Québec sales tax).

 

“Waterfall Event” shall mean the occurrence of (a) failure by Borrowers to repay
all of the Obligations as of the end of the Term or after the Obligations have
been accelerated, or (b) an Event of Default and the election by the Agent or
the Required Lenders to require that payments and proceeds of Collateral be
applied pursuant to Section 11.2(b).

 

“Week” shall mean the time period commencing with the opening of business on a
Monday and ending on the end of business the following Sunday.

 

“Wells Fargo” shall mean Wells Fargo Bank, National Association, a national
banking association.

 

“Wells Fargo Canada” shall mean Wells Fargo Capital Finance Corporation Canada,
an Ontario corporation.

 

1.3          Uniform Commercial Code Terms.

 

All terms used herein and defined in the UCC, including, the terms accessions,
account debtor, certificated security, chattel paper, commercial tort claim,
deposit account, document, electronic chattel paper, equipment, financial asset,
fixtures, goods, health-care-insurance receivable, inventory, instrument,
investment property, letter-of-credit rights, payment intangibles, proceeds,
securities accounts, security, security entitlement, software, supporting
obligations and uncertificated security, shall have the meaning given therein
unless otherwise defined herein or unless the context provides otherwise.

 

1.4          Certain Matters of Construction.

 

The terms “herein”, “hereof” and “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular section, paragraph
or subdivision. Each reference to a Section, an Exhibit or a Schedule shall be
deemed to refer to a Section, an Exhibit or a Schedule, as applicable, of this
Agreement unless otherwise specified.  The terms “including” and other words of
similar import refer to “including, but not limited” unless otherwise specified.
Any pronoun used shall be deemed to cover all genders.  Wherever appropriate in
the context, terms used herein in the singular also include the plural and vice
versa.  All references to statutes (including the UCC) and related regulations
shall include any amendments of same and any successor statutes and
regulations.  Unless otherwise provided, all references to any instruments or
agreements, including, without limitation, references to this Agreement or any
of the Other Documents, shall include any and all

 

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modifications or amendments thereto and any and all extensions or renewals
thereof to the extent not prohibited by this Agreement or any Other Document. 
The amount outstanding under any Letter of Credit shall mean, at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under any and all circumstances, plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.  Unless
otherwise provided, US Dollar ($) baskets set forth in the representations and
warranty, covenants and event of default provisions of this Agreement (and other
similar baskets) are calculated as of each date of measurement by the US Dollar
Equivalents thereof as of such date of measurement.

 

2.             ADVANCES, PAYMENTS.

 

2.1          Revolving Advances.

 

(a)           Subject to and upon the terms and conditions contained herein,

 

(i)            each US Lender severally (and not jointly) agrees to make its
Commitment Percentage of Revolving Advances in US Dollars (which Revolving
Advances shall be repayable in US Dollars) to US Borrowers from time to time in
amounts requested by Administrative Borrower on behalf of US Borrowers up to the
aggregate amount outstanding for all US Lenders at any time equal to the lesser
of:  (A) the US Borrowing Base at such time or (B) the amount equal to (1) the
US Revolving Loan Maximum Amount minus (2) the sum of (x) the US Dollar
Equivalent of the aggregate amount of Revolving Advances outstanding to Canadian
Borrowers at such time, and (y) the US Dollar Equivalent of the Canadian Letter
of Credit Obligations at such time, and

 

(ii)           each Canadian Lender severally (and not jointly) agrees to make
its Commitment Percentage of Revolving Advances in Canadian Dollars or US
Dollars to Canadian Borrowers (which Revolving Advances shall be repayable in
the currency in which such Revolving Advance was made) from time to time in
amounts requested by Administrative Borrower on behalf of Canadian Borrowers up
to the aggregate amount thereof outstanding for all Canadian Lenders at any time
equal to the lesser of:  (A) the US Dollar Equivalent of the Canadian Borrowing
Base at such time or (B) an amount equal to the Canadian Revolving Loan Maximum
Amount, or (C) the amount equal to (1) the US Revolving Loan Maximum Amount
minus (2) the sum of (x) the aggregate amount of Revolving Advances outstanding
to US Borrowers at such time, and (y) the US Letter of Credit Obligations at
such time.

 

Notwithstanding the foregoing, the aggregate amount of Advances and Letters of
Credit which shall be made available to Borrowers on the Closing Date shall not
exceed $40,000,000 in the aggregate. All Advances made by US Lenders to US
Borrowers shall be US Dollar Loans and all Advances made by Canadian Lenders to
Canadian Borrowers shall be Canadian Dollar Loans or US Dollar Loans.  US Dollar
Loans shall be available by way of US Base Rate Loans and LIBOR Rate Loans; and
Canadian Dollar Loans shall be available by way of Canadian Base Rate Loans and
BA Rate Loans.  To the extent required by a Lender, the Revolving Advances made
by such Lender shall be evidenced by a promissory note in the form attached as
Exhibit E-1 and/or Exhibit E-2, as applicable (each, a “Revolving Credit Note”;
it being understood that no such promissory note shall include a grant of a Lien
in favor of any individual Lender).

 

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(b)           Except with the consent of Agent and all Lenders, or as otherwise
provided herein, (i) the US Dollar Equivalent of the aggregate principal amount
of the Revolving Advances and the Letter of Credit Obligations outstanding at
any time shall not exceed the Maximum Credit, (ii) the US Dollar Equivalent of
the aggregate principal amount of the Revolving Advances and US Letters of
Credit Obligations of US Borrowers outstanding at any time shall not exceed the
lesser of (A) the US Borrowing Base or (B) the US Revolving Loan Borrowing
Limit, and (iii) the US Dollar Equivalent of the aggregate principal amount of
the Revolving Advances and Canadian Letter of Credit Obligations of Canadian
Borrowers outstanding at any time shall not exceed the lesser of (A) the
Canadian Borrowing Base or (B) the US Dollar Equivalent of the Canadian
Revolving Loan Maximum Amount.

 

(c)           In the event that any of the limits referred to in
Section 2.1(b) above are exceeded, such event shall not limit, waive or
otherwise affect any rights of Agent or Lenders in such circumstances or on any
future occasions and Borrowers shall, upon demand by Agent (which demand shall
be made if directed by the Required Lenders), which may be made at any time or
from time to time, promptly repay to Agent the entire amount of any such
excess(es) for which payment is demanded; provided, that, if such excess is as a
direct result of the establishment of a Reserve and not as a result of any other
factor, such excess shall be paid within five (5) days.

 

(d)           Swingline Advances.  Agent may convert any request by the
Borrowers for a Revolving Advance into a request for a Swingline Advance from
the Swingline Lender.  The Swingline Advance shall bear interest at the
Swingline Interest Rate and the US Dollar Equivalent of the aggregate amount of
all Swingline Advances shall not exceed at any time outstanding the Maximum
Swingline Advance Amount.  To the extent required by the Swingline Lender, the
Swingline Advances made by the Swingline Lender shall be evidenced by a
promissory note in a form acceptable to Agent and the Swingline Lender (each, a
“Swingline Note”).  Upon the making of a Swingline Advance (whether before or
after the occurrence of a Default or Event of Default), without further action
by any party hereto, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Swingline Lender or Agent,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Commitment Percentage in such Swingline Advance.  To the
extent that there is no settlement in accordance with Section 2.12(c) below, the
Swingline Lender or Agent, as the case may be, may at any time, require the
Lenders to fund their participations.  From and after the date, if any, on which
any Lender is required to fund its participation in any Swingline Advance, Agent
shall promptly distribute to such Lender, such Lender’s Commitment Percentage of
all payments of principal and interest received by Agent in respect of such
Swingline Advance.

 

2.2          Procedure for Borrowing.

 

(a)           Administrative Borrower shall notify Agent of the request by any
applicable Borrower(s) to incur a Revolving Advance hereunder.  Such notice
shall be in the form of the Notice of Advance Request attached hereto as
Exhibit C and shall be required to be delivered by Administrative Borrower to
Agent on or prior to 1:00 p.m. (Chicago time) (i) on the Business Day of the
date of such requested borrowing with respect to Base Rate Loans, and (ii) three
(3) Business Days prior to the date of such requested borrowing with respect to
LIBOR Rate Loans or BA Rate Loans.  Each such notice shall include (A) an
indication of which Borrower is requesting such Revolving Advance, (B) the
amount of such proposed borrowing (which amount with respect to (1)

 

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LIBOR Rate Loans shall be in a minimum amount of $500,000 and in integral
multiples of $100,000 in excess thereof, (2) BA Rate Loans shall be in a minimum
amount of Cdn$500,000 and in integral multiples of Cdn$100,000 in excess
thereof, and (3) with respect to Base Rate Loans shall be in a minimum amount of
$10,000), (C) the date of such proposed borrowing (which must be a Business
Day), (D) if the requested borrowing is on behalf of a US Borrower, (E) if the
requested borrowing is on behalf of a Canadian Borrower, whether such borrowing
is a US Dollar Loan or a Canadian Dollar Loan, and (F) whether such borrowing is
to be initially either a LIBOR Rate Loan or a BA Rate Loan (and if so, the
duration of the first (1st) Interest Period therefor) or a Base Rate Loan. 
Additionally, any amount required to be paid as interest, fees, charges or other
Obligations under this Agreement or any Other Document, at the election of
Agent, shall be deemed a request by Borrowers for a Revolving Advance as of the
date such payment is due, in the amount required to pay in full or in part such
interest, fee, charge or other Obligation under this Agreement or any Other
Document and such deemed request shall be irrevocable.

 

(b)           Interest Periods for LIBOR Rate Loans and BA Rate Loans shall be
for one (1), two (2), three (3) or six (6) months.  At the election of Agent or
Required Lenders, no LIBOR Rate Loan or BA Rate Loan shall be made available to
the Borrowers during the continuance of a Default or an Event of Default.  After
giving effect to each LIBOR Rate Loan and each BA Rate Loan (or any conversion
to a LIBOR Rate Loan or BA Rate Loan), there shall not be outstanding more than
six (6) LIBOR Rate Loans and BA Rate Loans in the aggregate.

 

(c)           Each Interest Period of a LIBOR Rate Loan or BA Rate Loan shall
commence on the date such LIBOR Rate Loan or BA Rate Loan is made and shall end
on such date as Administrative Borrower may elect as set forth in clause (E) of
Section 2.2(a); provided, that, in the case of LIBOR Rate Loans, the exact
length of each Interest Period shall be determined in accordance with the
practice of the interbank market for offshore Dollar deposits and no Interest
Period for either LIBOR Rate Loans or BA Rate Loans shall end after the
Termination Date (and in no event shall an Interest Period for any such LIBOR
Rate Loan or BA Rate Loan pertain to amounts that are greater than the amounts
of such LIBOR Rate Loan or BA Rate Loan that are permitted to be outstanding
during such Interest Period).

 

(d)           Administrative Borrower shall elect the initial Interest Period
applicable to a LIBOR Rate Loan or BA Rate Loan by its notice of borrowing given
to Agent pursuant to Section 2.2(a) or by its Notice of Conversion given to
Agent pursuant to Section 2.2(e), as the case may be.  Administrative Borrower
shall elect the duration of each succeeding Interest Period by giving
irrevocable written notice to Agent of such duration not less than three
(3) Business Days prior to the last day of the then current Interest Period
applicable to such LIBOR Rate Loan or BA Rate Loan; provided, that, at the
election of Agent or Required Lenders, no loan shall be converted to a LIBOR
Rate Loan or BA Rate Loan, as applicable, if an Event of Default shall have
occurred and be continuing.  If Agent does not receive timely notice of the
Interest Period elected by Administrative Borrower, Administrative Borrower
shall be deemed to have elected to convert to a US Base Rate Loan or Canadian
Base Rate Loan, as applicable, subject to Section 2.2(e).

 

(e)           Administrative Borrower may, on the last Business Day of the then
current Interest Period applicable to any outstanding LIBOR Rate Loan or BA Rate
Loan, or on any Business Day with respect to Base Rate Loans, convert any such
loan into a loan of another type in the same aggregate principal amount;
provided, that, any conversion of a LIBOR Rate Loan or BA

 

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Rate Loan shall be made only on the last Business Day of the then current
Interest Period applicable to such LIBOR Rate Loan or BA Rate Loan; provided
further, that, at the election of Agent or Required Lenders, no loan shall be
converted to a LIBOR Rate Loan or BA Rate Loan if an Event of Default shall have
occurred and be continuing.  If the US Borrowers desire to convert US Base Rate
Loans to a LIBOR Rate Loan or convert a LIBOR Rate Loan to a US Base Rate Loan,
or the Canadian Borrowers desire to convert Canadian Base Rate Loans to a BA
Rate Loan or convert a BA Rate Loan to a Canadian Base Rate Loan, Administrative
Borrower shall give Agent a Notice of Conversion not less than three
(3) Business Days’ prior to such conversion, specifying the date of such
conversion, the Advances to be converted and if the conversion is from a US Base
Rate Loan to a LIBOR Rate Loan or a Canadian Base Rate Loan to a BA Rate Loan
the duration of the first (1st) Interest Period therefor.  After giving effect
to each such conversion, there shall not be outstanding more than the number of
LIBOR Rate Loans and BA Rate Loans permitted by Section 2.2(b).  Any LIBOR Rate
Loans shall automatically convert to US Base Rate Loans, and any BA Rate Loans
shall automatically convert to Canadian Base Rate Loans, upon the last day of
the applicable Interest Period, unless Agent has received and approved a request
to continue such LIBOR Rate Loan or BA Rate Loan at least three (3) Business
Days prior to such last day in accordance with the terms hereof.  Any LIBOR Rate
Loans or BA Rate Loan shall, at Agent’s option, upon notice by Agent to
Administrative Borrower, be subsequently converted to US Base Rate Loans or
Canadian Base Rate Loans, as applicable, in the event that this Agreement shall
terminate or not be renewed.  Notwithstanding anything to the contrary contained
herein, Agent and Lenders shall not be required to purchase United States Dollar
deposits in the London interbank market or other applicable LIBOR Rate market to
fund any LIBOR Rate Loans, but the provisions hereof relating to LIBOR Rate
Loans shall be deemed to apply as if Agent and Lenders had purchased such
deposits to fund the LIBOR Rate Loans.

 

(f)            At the option of the Borrowers and upon three (3) Business Days’
prior written notice, the Borrowers may prepay the LIBOR Rate Loans or BA Rate
Loans in whole at any time or in part from time to time, without premium or
penalty (except as otherwise expressly provided in Section 2.2(g)), but with
accrued interest on the principal being prepaid to the date of such repayment. 
Administrative Borrower shall specify the date of prepayment of Advances which
are LIBOR Rate Loans or BA Rate Loans and the amount of such prepayment.  In the
event that any prepayment of a LIBOR Rate Loan or a BA Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, the applicable Borrower and each other
Loan Party shall indemnify Agent and Lenders therefor in accordance with
Section 2.2(g).

 

(g)           Each Loan Party shall indemnify Agent and Lenders and hold Agent
and Lenders harmless from and against any and all losses or expenses that Agent
and Lenders may sustain or incur as a consequence of any prepayment, conversion
of or any default by the Borrowers in the payment of the principal of or
interest on any LIBOR Rate Loan or BA Rate Loan or failure by the Borrowers to
complete a borrowing of, a prepayment of or conversion of or to a LIBOR Rate
Loan or BA Rate Loan after notice thereof has been given, including, but not
limited to, Agent’s and Lenders’ standard charges with respect to the foregoing
and any interest payable by Agent or Lenders to lenders of funds obtained by any
of them in order to make or maintain their respective LIBOR Rate Loans or BA
Rate Loans hereunder.  Notwithstanding the foregoing, Canadian Loan Parties
shall have no obligation to indemnify Agent and Lenders for any such loss or
expense arising in connection with any US Advances.  A certificate as to any
additional amounts payable pursuant to

 

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the foregoing sentence submitted by Agent (or the applicable Lenders) to
Administrative Borrower and Agent shall be conclusive absent manifest error;
provided, that, no such certificate shall be required in the case of Agent’s and
Lenders’ standard charges with respect to the events indemnified in this
Section 2.2(g)).

 

(h)           Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall after the Closing Date make it unlawful for any
Lender (for purposes of this Section 2.2(h), the term “Lender” shall include any
Lender and the office or branch where any Lender or any corporation or bank
controlling such Lender makes or maintains any LIBOR Rate Loans or BA Rate
Loans) to make or maintain its LIBOR Rate Loans or BA Rate Loans, such Lender
shall notify the Agent and Administrative Borrower, and upon such notification,
the obligation of such Lender to make such LIBOR Rate Loans or BA Rate Loans
hereunder shall forthwith be cancelled and the Borrowers shall, if any affected
LIBOR Rate Loans or BA Rate Loans are then outstanding, promptly upon notice
from Agent, either pay all such affected LIBOR Rate Loans or BA Rate Loans or
convert such affected LIBOR Rate Loans into US Base Rate Loans or convert such
affected BA Rate Loans into Canadian Base Rate Loans (and following such
notification any request for LIBOR Rate Loans or BA Rate Loans from such Lender
shall be deemed to be a request for US Base Rate Loans or Canadian Base Rate
Loans, as applicable).  If any such payment or conversion of any LIBOR Rate Loan
or BA Rate Loan is made on a day that is not the last day of the Interest Period
applicable to such LIBOR Rate Loan or BA Rate Loan, the Borrowers shall pay
Agent, upon Agent’s notice, such amount or amounts as may be necessary to
compensate such Lender for any loss or expense sustained or incurred by such
Lender in respect of such LIBOR Rate Loan or BA Rate Loan as a result of such
payment or conversion, including (but not limited to) any interest or other
amounts payable by such Lender to lenders of funds obtained by such Lender in
order to make or maintain such LIBOR Rate Loan or BA Rate Loan.  A certificate
as to any additional amounts payable pursuant to the foregoing sentence
submitted by Agent (or the applicable Lenders) to Administrative Borrower and
Agent shall be conclusive absent manifest error.

 

2.3          Disbursement of Advance Proceeds.

 

All Advances shall be disbursed from whichever office or other place Agent or
Lenders, as applicable, may designate from time to time.  During the Term, the
Borrowers may request, repay and reborrow Revolving Advances, all in accordance
with the terms and conditions of this Agreement.  The proceeds of each Revolving
Advance requested by Administrative Borrower on behalf of the Borrowers or
deemed to have been requested by the Borrowers (or Administrative Borrower on
behalf of the Borrowers) under Section 2.2(a) shall, subject to the terms and
conditions of this Agreement with respect to requested Revolving Advances, be
made available to the Borrowers on the Business Day so requested by way of
credit to the applicable Borrowers’ operating account as set forth on Schedule
2.3 in immediately available federal funds or other immediately available funds
or, with respect to Revolving Advances deemed to have been requested by the
Borrowers (or Administrative Borrower on behalf of the Borrowers), be disbursed
to Agent to be applied to the outstanding Obligations giving rise to such deemed
request.

 

2.4          [Reserved.]

 

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2.5          Repayment of Advances.

 

(a)           The Revolving Advances shall be due and payable in full on the
Termination Date subject to earlier prepayment as herein provided.

 

(b)           The Borrowers recognize that the amounts evidenced by checks,
notes, drafts or any other items of payment relating to and/or proceeds of
Collateral may not be collectible by Agent on the date received.  In
consideration of Agent’s consideration (subject to the last sentence of this
clause (b)) to conditionally credit the Borrowers’ Account as of the Business
Day on which Agent receives those items of payment, the Borrowers agree that, in
computing the charges under this Agreement, all items of payment shall be deemed
applied by Agent on account of the applicable Obligations on the date of
confirmation to Agent by the Blocked Account bank or Depository Account bank, as
provided for in Section 4.14(h), that such items of payment have been collected
in good funds and finally credited to Agent’s account; provided, that, this
sentence shall only be applicable upon the occurrence and during the continuance
of a Cash Dominion Event.  Without limiting the above provisions of this clause
(b), Agent is not, however, required to credit the Borrowers’ Account for the
amount of any item of payment which is unsatisfactory to Agent and Agent may
charge the Borrowers’ Account for the amount of any item of payment which is
returned to Agent unpaid.

 

(c)           All Obligations of US Borrowers and US Guarantors shall be payable
to the US Payment Account and all Obligations of Canadian Borrowers, Canadian
Guarantors and the US Guarantors in respect of the Canadian Obligations shall be
payable to the Canadian Payment Account not later than 2:00 p.m. (Chicago time)
on the due date therefor (or, if such due date is not a Business Day, on the
next Business Day) in lawful money of the United States of America or Canada, as
applicable, in funds immediately available to Agent.  Any payment received by
Agent subsequent to 2:00 p.m. (Chicago time) on any Business Day (regardless of
whether such payment is due on such Business Day) shall be deemed received by
Agent, and shall be applied to the applicable Obligations intended to be paid
thereby, on the next Business Day.  Agent shall have the right to effectuate
payment on any and all Obligations due and owing hereunder by charging the
Borrowers’ Account or by making Revolving Advances as provided in Section 2.2.

 

(d)           The Borrowers shall pay principal, interest, and all other amounts
payable hereunder and under each Other Document without any deduction
whatsoever, including, but not limited to, any deduction for any setoff or
counterclaim.

 

(e)           If, notwithstanding the terms of this Agreement or any Other
Document, Agent or any Lender receives any payment from or on behalf of any
Borrower or any other Loan Party in a currency other than the Currency Due,
Agent or such Lender may convert the payment (including the monetary proceeds of
realization upon any Collateral and any funds then held in a cash collateral
account and any payments received from a Blocked Account after a Cash Dominion
Event) into the Currency Due at an exchange rate selected by Agent or such
Lender in the manner contemplated by Section 17.5 and Borrowers shall reimburse
Agent and Lenders on demand for all costs they incur with respect thereto (or
Agent may, at its option, charge such costs to the loan account of any Borrower
maintained by such Agent).  To the extent permitted by law, the obligation shall
be satisfied only to the extent of the amount actually received by Agent upon
such conversion.

 

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(f)            Notwithstanding anything to the contrary set forth in any of the
Other Documents, (i) all payments by or on behalf of Canadian Borrowers and
Canadian Guarantors shall be applied only to the Canadian Obligations, and
(ii) all payments in respect of the Canadian Obligations shall be applied to
Canadian Obligations denominated in the same currency as the payments received;
provided, that, with respect to this clause (ii), (A) payments and collections
received in any currency other than the Currency Due will be accepted and/or
applied at the discretion of the Agent, and (B) in the event that Agent elects
to accept and apply such amounts when there are no Obligations (other than
Obligations in respect of Letter of Credit or other contingent Obligations) then
outstanding in the same currency, Agent may, at its option (but is not obligated
to), convert such currency received into the Currency Due at the Exchange Rate
selected by Agent or such Lender in the manner contemplated by Section 17.5 and
Borrowers shall reimburse Agent and Lenders on demand for all costs they incur
with respect thereto (or Agent may, at its option, charge such costs to the loan
account of any Borrower maintained by such Agent).

 

(g)           Unless stated otherwise, all calculations, comparisons,
measurements or determinations under this Agreement shall be made in US
Dollars.  For the purpose of such calculations, comparisons, measurements or
determinations, amounts denominated in other currencies shall be converted to
the US Dollar Equivalent thereof on the date of calculation, comparison,
measurement or determination.  In particular, unless expressly provided
otherwise, where a reference is made to a US Dollar amount, the amount is to be
considered as the amount in US Dollars and, therefore, each other currency shall
be converted into the US Dollar Equivalent thereof.

 

2.6          Repayment of Excess Advances.

 

If for any reason US Undrawn Availability or Canadian Undrawn Availability is at
any time less than $0 or the balance of any or all of the outstanding US
Advances and US Letters of Credit or Canadian Advances and Canadian Letters of
Credit is at any time otherwise in excess of any applicable limitation set forth
in this Agreement (subject to Section 17.2(d) with respect to overadvances),
such excess amount shall be immediately due and payable, without the necessity
of any demand, at the US Payment Account or the Canadian Payment Account (as
applicable), it being understood and agreed that it shall be an Event of Default
if at any time US Undrawn Availability or Canadian Undrawn Availability is less
than $0, provided, that, if US Undrawn Availability or Canadian Undrawn
Availability is less than $0 solely as a result of Agent’s implementation of a
Reserve and not as a result of any other factors, then no Event of Default shall
be deemed to have occurred hereunder unless US Undrawn Availability or Canadian
Undrawn Availability continues to be less than $0 for at least five (5) days.

 

2.7          Statement of Account.

 

Agent shall maintain, in accordance with its customary procedures, a loan
account in the name of the US Borrowers (the “US Borrowers’ Account”) in which
shall be recorded the date and amount of each Advance made by US Lenders and the
date and amount of each payment in respect thereof and a loan account in the
name of the Canadian Borrowers (the “Canadian Borrowers’ Account”) in which
shall be recorded the date and amount of each Advance made by Canadian Lenders
and the date and amount of each payment in respect thereof; provided, however,
that, the failure by Agent to record the date or amount of any Advance or any
other item shall not adversely

 

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affect Agent or any Lender under this Agreement or any Other Document or
diminish any obligation of any Loan Party under this Agreement or any Other
Document.  Each month, Agent shall send to Administrative Borrower a statement
showing the accounting for the Advances made, payments made or credited in
respect thereof, and certain other transactions between Lenders and the
Borrowers, during such month.  The monthly statements shall be deemed correct
and binding upon the Borrowers in the absence of manifest error and shall
constitute an account stated between Lenders and the Borrowers unless Agent
receives a written statement of the Borrowers’ specific exceptions thereto
within thirty (30) days after such statement is received by Administrative
Borrower.  The records of Agent with respect to each Borrowers’ Account shall be
conclusive evidence absent manifest error of the amounts of Advances and other
charges thereto and of payments applicable thereto.

 

2.8          Letters of Credit.

 

(a)           Subject to and upon the terms and conditions contained herein and
in the Letter of Credit Documents, (i) at the request of Administrative Borrower
on behalf of a US Borrower, Agent agrees to cause a US Issuer to issue, and US
Issuer agrees to issue, for the account of such US Borrower one or more Letters
of Credit, for the ratable risk of each US Lender according to its Commitment
Percentage, containing terms and conditions acceptable to Agent and US Issuer
and (ii) at the request of Administrative Borrower on behalf of a Canadian
Borrowers, Agent agrees to cause a Canadian Issuer to issue, and Canadian Issuer
agrees to issue, for the account of Canadian Borrowers one or more Letters of
Credit denominated in US Dollars or Canadian Dollars, for the ratable risk of
each Canadian Lender according to its Commitment Percentage, containing terms
and conditions acceptable to Agent and applicable Issuer; provided, however,
that, Agent will not be required to issue or cause to be issued any Letters of
Credit to the extent that the face amount of such Letters of Credit would cause
US Undrawn Availability (in the case of a request from Administrative Borrower
on behalf of a US Borrower) or Canadian Undrawn Availability (in the case of a
request from Administrative Borrower on behalf of a Canadian Borrower)to be less
than $0.  The maximum aggregate US Dollar Equivalent amount of outstanding
Letters of Credit shall not exceed $20,000,000 at any time.  All outstanding
reimbursement obligations and disbursements or payments related to Letters of
Credit shall be deemed to be Base Rate Loans consisting of Revolving Advances
and shall bear interest at the Revolving Interest Rate for Base Rate Loans. 
Notwithstanding anything to the contrary contained in this Agreement, in the
event that there is a Defaulting Lender, an Impacted Lender or Prior
Defaulting/Impacted Lender, Issuing Bank shall not be required to (and, in any
event, shall not if directed by Agent) issue any Letter of Credit, or increase
or extend or otherwise amend any Letter of Credit, unless the Borrowers provide
cash collateral to Issuing Bank with respect thereto to hold, on terms and
conditions satisfactory to Issuing Bank and Agent, in an amount equal to such
Defaulting Lender’s, Impacted Lender’s or Prior Defaulting/Impacted Lender’s
Commitment Percentage of all obligations in respect of Letters of Credit and in
any such event, the Defaulting or Impacted Lender or Prior Defaulting or
Impacted Lender shall not be entitled to any commitment fee or Letter of Credit
Fees.

 

(b)           In addition to being subject to the satisfaction of the applicable
conditions precedent with respect to Letters of Credit contained in Sections
2.3, 2.9 and 2.10 hereof and the other terms and conditions contained herein, no
Letter of Credit shall be available to Canadian Borrowers unless each of the
following conditions precedent have been satisfied as determined by Agent in its
Permitted Discretion: (i) as of the date of issuance, no order of any court,
arbitrator or

 

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other Governmental Body shall purport by its terms to enjoin or restrain money
center banks generally from issuing letters of credit of the type and in the
amount of the proposed Letter of Credit, and no law, rule or regulation
applicable to money center banks generally and no request or directive (whether
or not having the force of law) from any Governmental Body with jurisdiction
over money center banks generally shall prohibit, or request that Canadian
Issuer refrain from, the issuance of letters of credit generally or the issuance
of such Letter of Credit, (ii) after giving effect to the issuance of such
Letter of Credit, the Canadian Letter of Credit Obligations shall not exceed the
Canadian Letter of Credit Limit, and (iii) in the case of a Letter of Credit
issued for the account of a Canadian Borrower, (A) prior to giving effect to any
Reserves with respect to such Letter of Credit, the Canadian Undrawn
Availability, on the date of the proposed issuance of any Letter of Credit,
shall be equal to or greater than an amount equal to one hundred (100%) percent
of the Letter of Credit Obligations with respect thereto, and (B) after giving
effect to the issuance of such Letter of Credit, the aggregate amount of Letters
of Credit outstanding to the Borrowers shall not exceed $20,000,000.

 

(c)           Except with the consent of Agent and all Lenders, (i) the amount
of all outstanding US Letter of Credit Obligations shall not at any time exceed
the US Letter of Credit Limit and (ii) the amount of all outstanding Canadian
Letter of Credit Obligations shall not at any time exceed the Canadian Letter of
Credit Limit.

 

2.9          Issuance of Letters of Credit.

 

(a)           Administrative Borrower may request Agent to issue or cause the
issuance of a Letter of Credit by delivering to Agent US Issuer’s or Canadian
Issuer’s (as applicable) standard form of letter of credit application, if
requested, letter of credit security agreement, and such other related documents
as may be reasonably required pursuant to the terms thereof (collectively, the
“Letter of Credit Application”) and any draft, if applicable, completed to the
satisfaction of Agent, together with such other certificates, documents and
other papers and information as Agent or Issuer may reasonably request.

 

(b)           Each Letter of Credit shall, among other things, (i) provide for
the payment of sight drafts or acceptances of issuance drafts when presented for
honor thereunder in accordance with the terms thereof and when accompanied by
the documents described therein, (ii) be denominated in Dollars, and (iii) have
an expiry date not later than one (1) year after such Letter of Credit’s date of
issuance, and in no event having an expiry date later than five (5) Business
Days prior to the Termination Date unless Loan Parties provide cash collateral
equal to not less than one hundred five (105%) percent of the face amount
thereof to be held by Agent pursuant to a cash collateral agreement in form and
substance reasonably satisfactory to Agent; provided, that, any Letter of Credit
with a one (1) year term may provide for the renewal thereof for additional one
(1) year periods (which shall in no event extend beyond the date referred to in
clause (iii) above).

 

(c)           Agent shall use its reasonable efforts to notify Lenders of the
request by Administrative Borrower for a Letter of Credit hereunder, but any
failure to so notify Lenders shall not reduce any liability or any obligation of
the Lenders hereunder or any rights of Agent hereunder.

 

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2.10        Requirements for Issuance of Letters of Credit.

 

(a)           In connection with the issuance of any Letter of Credit, each US
Borrower shall indemnify, save and hold Agent, each US Lender and each US Issuer
harmless from any loss, cost, expense or liability, including, without
limitation, payments made by Agent, any US Lender or any US Issuer and expenses
and reasonable attorneys’ fees incurred by Agent, any US Lender or any US Issuer
arising out of, or in connection with, any Letter of Credit.  The US Borrowers
shall be bound by Agent’s or US Issuer’s regulations and good faith
interpretations of any Letter of Credit, although this interpretation may be
different from US Borrowers’ own interpretation; and, neither Agent, nor any US
Lender, nor any US Issuer shall be liable for any error, negligence, or
mistakes, whether of omission or commission, in following any US Borrower’s (or
Administrative Borrower’s) instructions or those contained in any Letter of
Credit or of any modifications, amendments or supplements thereto or in issuing
or paying any Letter of Credit except for Agent’s, any US Lender’s, or any US
Issuer’s gross (not mere) negligence or willful misconduct, as determined
pursuant to a final, non-appealable order of a court of competent jurisdiction.

 

(b)           In connection with the issuance of any Letter of Credit, each
Canadian Borrower shall indemnify, save and hold Agent, each Canadian Lender and
each Canadian Issuer harmless from any loss, cost, expense or liability,
including, without limitation, payments made by Agent, any Canadian Lender or
any Canadian Issuer and expenses and reasonable attorneys’ fees incurred by
Agent, any Canadian Lender or any Canadian Issuer arising out of, or in
connection with, any Letter of Credit.  The Canadian Borrowers shall be bound by
Agent’s or Canadian Issuer’s regulations and good faith interpretations of any
Letter of Credit, although this interpretation may be different from Canadian
Borrowers’ own interpretation; and, neither Agent, nor any Canadian Lender, nor
any Canadian Issuer shall be liable for any error, negligence, or mistakes,
whether of omission or commission, in following any Canadian Borrower’s (or
Administrative Borrower’s) instructions or those contained in any Letter of
Credit or of any modifications, amendments or supplements thereto or in issuing
or paying any Letter of Credit except for Agent’s, any Canadian Lender’s, or any
Canadian Issuer’s gross (not mere) negligence or willful misconduct, as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction.

 

(c)           The Borrowers shall authorize and direct any Issuer of a Letter of
Credit to deliver to Agent all related payment/acceptance advices, to deliver to
Agent all instruments, documents, and other writings and property received by
the Issuer pursuant to the Letter of Credit and to accept and rely upon Agent’s
instructions and agreements with respect to all matters arising in connection
with the Letter of Credit or the application therefor.

 

(d)           In connection with all Letters of Credit issued or caused to be
issued by Agent under this Agreement, each Borrower hereby appoints Agent, or
its designee, as its attorney, with full power and authority: (i) to sign and/or
endorse each Borrower’s name upon any warehouse or other receipts, Letter of
Credit Applications and acceptances; (ii) to sign each Borrower’s name on bills
of lading; (iii) to clear Inventory through Customs in the name of each Borrower
or Agent or Agent’s designee, and to sign and deliver to Customs officials
powers of attorney in the name of each Borrower for such purpose; and (iv) to
complete in each Borrower’s name or Agent’s, or in the name of Agent’s designee,
any order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof.  Neither Agent nor its attorneys
will be liable for any acts or omissions nor for any error of judgment or
mistakes of fact or law, except for Agent’s

 

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or its attorney’s gross (not mere) negligence or willful misconduct, as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction.  This power, being coupled with an interest, is irrevocable as
long as any Letters of Credit remain outstanding.

 

(e)           Each US Borrower shall immediately reimburse US Issuer for any
draw under any Letter of Credit issued for the account of such US Borrower and
pay US Issuer the amount of all other charges and fees payable to US Issuer in
connection with any Letter of Credit issued for the account of such US Borrower
immediately when due, irrespective of any claim, setoff, defense or other right
which such US Borrower may have at any time against Issuer or any other Person. 
Each drawing under any Letter of Credit issued for the account of a US Borrower
or other amount payable in connection therewith when due shall constitute a
request by such US Borrower to Agent for a US Base Rate Loan in the amount of
such drawing or other amount then due, and shall be made by Agent on behalf of
US Lenders as a Revolving Advance (or on behalf of Swingline Lender as a
Swingline Advance, as the case may be).  The date of such Advance shall be the
date of the drawing or, as to other amounts, the due date therefor.  Any
payments made by or on behalf of Agent or any US Lender to US Issuer and/or
related parties in connection with any Letter of Credit shall constitute
additional Revolving Advances to such US Borrower pursuant to Section 2.1 (or
Swingline Advance, as the case may be).

 

(f)            Canadian Borrowers shall immediately reimburse Canadian Issuer
for any draw under any Letter of Credit issued for the account of Canadian
Borrowers and pay Canadian Issuer the amount of all other charges and fees
payable to Canadian Issuer in connection with any Letter of Credit issued for
the account of Canadian Borrowers immediately when due, irrespective of any
claim, setoff, defense or other right which Canadian Borrowers may have at any
time against Canadian Issuer or any other Person.  Each drawing under any Letter
of Credit issued for the account of Canadian Borrowers or other amount payable
in connection therewith when due shall constitute a request by Canadian
Borrowers to Agent for a US Base Rate Loan in respect of drawings in US Dollars
and Canadian Base Rate Loans for drawings in Canadian Dollars, in the amount of
such drawing or other amount then due, and shall be made by Canadian Lenders as
Revolving Advances according to their respective Commitment Percentages.  The
date of such Advance shall be the date of the drawing or, as to other amounts,
the due date therefor.  Any payments made by or on behalf of Agent or any
Canadian Lender to Canadian Issuer and/or related parties in connection with any
Letter of Credit shall constitute additional Revolving Advances to Canadian
Borrowers pursuant to this Section 2 (or Special Agent Loans as the case may
be).

 

(g)           Immediately upon the issuance or amendment of any Letter of Credit
issued for the account of a US Borrower, each US Lender shall be deemed to have
irrevocably and unconditionally purchased and received, without recourse or
warranty, an undivided interest and participation to the extent of such US
Lender’s Commitment Percentage of the liability with respect to such Letter of
Credit and the obligations of US Borrowers with respect thereto (including all
US Letter of Credit Obligations with respect thereto).  Each US Lender shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to US Issuer therefor and discharge when due,
its Commitment Percentage of all of such obligations arising under such Letter
of Credit.  Without limiting the scope and nature of each US Lender’s
participation in any such Letter of Credit, to the extent that US Issuer has not
been reimbursed or otherwise paid as reasonably required hereunder with respect
to any such Letter of Credit or under any such Letter of Credit, each such US
Lender shall pay to US Issuer its Commitment Percentage of such

 

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unreimbursed drawing or other amounts then due to US Issuer in connection
therewith.  Upon receipt by Agent of a repayment from US Borrowers of any amount
disbursed by Agent for which Agent had already been reimbursed by US Lenders,
Agent shall deliver to each US Lender its Commitment Percentage of such
repayment.

 

(h)           Immediately upon the issuance or amendment of any Letter of Credit
issued for the account of a Canadian Borrower, each Canadian Lender shall be
deemed to have irrevocably and unconditionally purchased and received, without
recourse or warranty, an undivided interest and participation to the extent of
such Canadian Lender’s Commitment Percentage in the liability with respect to
such Letter of Credit and the obligations of Canadian Borrowers with respect
thereto (including all Canadian Letter of Credit Obligations with respect
thereto).  Each Canadian Lender shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to
pay to Canadian Issuer therefor and discharge when due, its Commitment
Percentage of all of such obligations arising under such Letter of Credit. 
Without limiting the scope and nature of each Canadian Lender’s participation in
any such Letter of Credit, to the extent that Canadian Issuer or other issuer
has not been reimbursed or otherwise paid as required hereunder or under any
such Letter of Credit, each Canadian Lender shall pay to Canadian Issuer its
Commitment Percentage of such unreimbursed drawing or other amounts then due to
Canadian Issuer in connection therewith.  Upon receipt by Agent of a repayment
from Canadian Borrowers of any amount disbursed by Agent for which Agent had
already been reimbursed by Canadian Lenders, Agent shall deliver to each
Canadian Lender its Commitment Percentage of such repayment.

 

(i)            The Existing Letters of Credit have heretofore been issued, or
caused to be issued, by an Issuer for the account of Borrowers, or with respect
to which an Issuer has indemnified the issuer of any Existing Letters of Credit
or guaranteed to the issuer of any Existing Letters of Credit the performance by
such Borrower of its obligations to such issuer, and the Existing Letters of
Credit shall be deemed Letters of Credit issued by such Issuer hereunder and
subject to all of the terms and conditions of this Agreement applicable to
Letters of Credit.

 

2.11        Additional Payments/Protective Advances.

 

Any sums expended (a) by Agent or any Lender due to any Loan Party’s failure to
perform or comply with its Obligations under this Agreement or any Other
Document, or (b) by Agent to protect the Collateral or enhance the likelihood of
repayment of the Obligations or any portion thereof (as determined by Agent in
its Permitted Discretion) may, in Agent’s Permitted Discretion, be charged to
the US Borrowers’ Account, or in the case of such failure by a Canadian Loan
Party, the Canadian Borrowers’ Account as a Revolving Advance (regardless of
whether or not the conditions specified in this Agreement for the making of a
Revolving Advance have been satisfied, including, without limitation, Sections
2.1 or 8.2) and added to the US Obligations or Canadian Obligations, as
applicable, and each Lender shall be obligated in connection therewith as if
such conditions had been satisfied (including, without limitation, to fund its
Commitment Percentage of such Revolving Advances).  Such sums charged to the
Borrowers’ Account as a Revolving Advance (collectively, “Protective Advances”),
plus the amount of intentional overadvances made pursuant to Section 17.2(d),
shall not exceed an amount outstanding equal to ten (10%)percent of the Maximum
Credit without the consent of each of the Lenders.  Notwithstanding anything
contained in this Section 2.11 to the contrary, any proposed Protective Advance
shall be subject to the limitations set forth in Section 2.1(b)(i).

 

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2.12        Manner of Borrowing and Payment.

 

(a)           Each borrowing of Advances shall be advanced according to the
applicable Commitment Percentages of Lenders.

 

(b)           All proceeds of Collateral, together with each payment (including
each prepayment) by the Borrowers on account of the principal of the Advances,
shall be applied to the Advances pro rata according to the applicable Commitment
Percentages of Lenders.  Except as expressly provided herein, all payments
(including prepayments) to be made by the Borrowers on account of principal,
interest and fees shall be made in the Dollars without setoff or counterclaim
and shall be made to Agent on behalf of the Agent and the Lenders to the
applicable Payment Account, in each case on or prior to the time specified in
Section 2.17(c) in immediately available funds.

 

(c)           Notwithstanding anything to the contrary contained in Sections
2.13(a) and 2.13(b) or any other provision of this Agreement, commencing with
the first (1st) Business Day following the Closing Date, each or any borrowing
of Advances may, at Agent’s election, be converted to a request for and funded
as a Swingline Advance in accordance with, and subject to the provisions of,
Section 2.1(d) (on behalf of the US Lenders or Canadian Lenders, as applicable)
and each payment by US Borrowers on account of Swingline Advances constituting
US Advances shall be applied first to those US Advances advanced by Swingline
Lender, and each payment by Borrowers on account of Swingline Advances
constituting Canadian Advances shall be applied first to those Canadian Advances
advanced by Swingline Lender.  Alternatively, Agent may request that each US
Lender and each Canadian Lender (and each such Lender shall) on or before
1:00 p.m. (Chicago time) on the requested borrowing date, transfer in
immediately available funds to Agent such US Lender’s or Canadian Lender’s (as
applicable) Commitment Percentage of such requested borrowing.  On each
Settlement Date commencing with the first (1st) Settlement Date following the
Closing Date, Agent and Lenders shall make certain payments as follows:  (A) if
a US Lender’s or Canadian Lender’s balance of the US Advances or Canadian
Advances (in each case, including Protective Advances and Swingline Advances)
exceeds such Lender’s Commitment Percentage of the US Advances or Canadian
Advances (in each case, including Protective Advances and Swingline Advances) as
of a Settlement Date, then Agent shall transfer in immediately available funds
to a deposit account of such Lender (as such Lender may designate in writing to
Agent) an amount such that each such Lender shall, upon receipt of such amount,
have as of the Settlement Date, its Commitment Percentage of the Advances
(including Protective Advances and Swingline Advances) and (B) if a US Lender’s
or Canadian Lender’s balance of the US Advances or Canadian Advances (in each
case, including Protective Advances and Swingline Advances) is less than such
Lender’s Commitment Percentage of the US Advances or Canadian Advances (in each
case, including Protective Advances and Swingline Advances) as of a Settlement
Date, such Lender shall transfer in immediately available funds to the Agent,
not later than 2:00 p.m. (Chicago time), an amount such that each such Lender
shall, upon transfer of such amount, have as of the Settlement Date, its
Commitment Percentage of the US Advances or Canadian Advances (in each case,
including Protective Advances and Swingline Advances).

 

(d)           A Lender shall be entitled to earn interest at the applicable
Interest Rate on outstanding Advances which such Lender has funded for the
periods in which such Advance was so funded by such Lender.  Agent shall be
entitled to earn interest at the applicable Interest Rate on outstanding
Advances (including Protective Advances) which Agent has funded for the periods
in

 

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which such Advance (including Protective Advances) was so funded by Agent. 
Swingline Lender shall be entitled to earn interest at the applicable Interest
Rate on outstanding Swingline Advances which Swingline Lender has funded for the
periods in which such Swingline Advances was so funded by Swingline Lender.

 

(e)           Promptly following each Settlement Date, Agent shall submit to
each Lender a certificate with respect to payments received and US Advances and
Canadian Advances made during the Week immediately preceding such Settlement
Date.  Such certificate of Agent shall be conclusive in the absence of manifest
error.

 

(f)            If any US Lender, any Canadian Lender or any Participant (a
“Benefited Lender”) shall at any time receive any payment of all or part of its
Advances, or interest thereon, or receive any Collateral in respect thereof, in
the case of any US Lender or any Canadian Lender, or receive any Canadian
Collateral, in the case of any Canadian Lender (in each case, whether
voluntarily or involuntarily or by set-off) in a greater proportion than any
such payment to and US Collateral or Canadian Collateral (as applicable)
received by any other Lender, if any, in respect of such other Lender’s
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such Benefited Lender shall
purchase for cash from the other US Lenders or Canadian Lenders (as applicable)
a participation in such portion of each such other US Lenders’ or Canadian
Lenders’ (as applicable) Advances, or shall provide such other Lender US Lenders
or Canadian Lenders (as applicable) with the benefits of any such US Collateral
or Canadian Collateral (as applicable), or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such US Collateral or Canadian Collateral (as applicable) or proceeds ratably
with each of the other US Lenders or Canadian Lenders (as applicable) according
to their Commitment Percentages thereof; provided, however, that, if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.  Each
Lender so purchasing a portion of another Lender’s Advances may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.

 

(g)           Unless Agent shall have been notified in writing, prior to the
making of any Advance, by any Lender that such Lender will not make available to
Agent the amount which would constitute its applicable Commitment Percentage of
the US Advances, in the case of US Lenders, or Canadian Advances, in the case of
Canadian Lenders, Agent may (but shall not be obligated to) assume that such
Lender shall make (and such Lender unconditionally shall be obligated to make)
such amount available to Agent on or prior to the next Settlement Date and, in
reliance upon such assumption, make available to Administrative Borrower (on
behalf of the applicable US Borrower or Canadian Borrower) a corresponding
amount.  Agent will promptly notify Administrative Borrower of its receipt of
any such notice from a Lender.  If such amount is made available to Agent on a
date after such next Settlement Date, such Lender shall pay to Agent on demand
an amount equal to the product of (i) the daily average Federal Funds Effective
Rate (computed on the basis of a year of three hundred sixty (360) days) for
amounts in US Dollars and the daily average Bank of Canada rate for overnight
deposits (computed on the basis of a year of three hundred sixty five (365)
days) for amounts due in Canadian Dollars during such period as quoted by Agent,
times (ii) such amount, times (iii) the number of days from and including such
Settlement Date to the date on which such

 

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amount becomes immediately available to Agent.  A certificate of Agent submitted
to any Lender with respect to any amounts owing under this paragraph (g) shall
be conclusive, in the absence of manifest error.  If such amount is not in fact
made available to Agent by such Lender within three (3) Business Days after such
Settlement Date, Agent shall be entitled to recover such an amount, with
interest thereon at the rate per annum then applicable to such Advance
hereunder, on demand from the Borrowers, in the case of a Canadian Advance, or
from the US Borrowers, in the case of a US Advance; provided, however, that,
Agent’s right to such recovery shall not prejudice or otherwise adversely affect
the Borrowers’ rights (if any) against such Lender.

 

2.13        Mandatory Prepayments.

 

Notwithstanding the following, during a Waterfall Event, the order of
application to the Obligations shall be made pursuant to Section 11.2 rather
than as is provided in this Section 2.13:

 

(a)           When any US Loan Party or any of its Subsidiaries Disposes of any
US Collateral or other assets (other than sales of Inventory in the ordinary
course of business and provided such Disposition is permitted by Section 7.1(c))
or receives proceeds of property or casualty insurance or any condemnation of US
Collateral or other assets by any Governmental Body, within three (3) Business
Days thereof, US Loan Parties shall repay the US Advances in an amount equal to
one hundred (100%) percent of the net cash proceeds of such sale (i.e., gross
cash proceeds less the reasonable out-of-pocket costs and expenses in respect of
such Dispositions (including any taxes and similar amounts and the payment of
any Indebtedness secured by such assets and required to be paid)) in excess of
$5,000,000 in the aggregate in any fiscal year or all of the cash proceeds of
such insurance or condemnation, as applicable, such repayments to be made
promptly but in no event more than three (3) Business Days following receipt of
such proceeds, and until the date of payment, such proceeds shall be held in
trust for Agent.  Such repayments shall be applied (i) first, to the outstanding
Swingline Advances to the US Borrowers until paid in full, (ii) second, to the
other outstanding US Revolving Advances in such order as Agent may determine
until paid in full, subject to the US Borrowers’ ability to reborrow US
Revolving Advances in accordance with the terms hereof, (iii) third, to the
outstanding Swingline Advances made to Canadian Borrowers until paid in full,
and (iv) fourth, to the outstanding Canadian Revolving Advances in such order as
Agent may determine until paid in full, subject to the Canadian Borrowers’
ability to reborrow Canadian Revolving Advances in accordance with the terms
hereof.  Notwithstanding the foregoing, unless and until an Event of Default has
occurred and is continuing or would result therefrom, such proceeds from
Dispositions and insurance and condemnation payments may be retained by US Loan
Parties solely to acquire replacement assets without making a mandatory
prepayment hereunder, so long as (A) the fair market value of the acquired
assets is equal to or greater than the fair market value of the assets which
were Disposed or subject to the insurance or condemnation payment, as
applicable, (B) the acquired assets are purchased by the applicable US Loan
Party within two hundred seventy (270) days of the Disposal of the assets or
receipt of the insurance payment, as applicable, (C) the acquired assets are
acceptable to Agent in its Permitted Discretion, and (D) if the assets that were
Disposed or that were the subject of the insurance or condemnation payment, as
applicable, were US Collateral, the acquired assets must all be US Collateral
and shall be subject to Agent’s first priority Lien created hereunder (subject
to Permitted Encumbrances).  Such cash collateral shall be released by Agent
only in connection with the making of a US Revolving Advance to be used by the
US Borrowers solely for the purposes of funding the acquisition of replacement
assets pursuant to the terms of this Section 2.13(a); provided, however, that,
nothing contained

 

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herein shall waive or modify any conditions to the making of Revolving Advances
or any other provisions of this Agreement.  If a US Loan Party fails to meet the
conditions set forth above, US Loan Parties hereby authorize Agent and Lenders
to apply the proceeds held by Agent as a prepayment of the Advances in the
manner set forth above.  Any such prepayment must be accompanied by the payment
of any LIBOR Rate Loans funding breakage costs in accordance with
Section 2.2(g).  The provisions of this Section 2.13(a) shall not be deemed to
be an implied consent to any such Disposition otherwise prohibited by the terms
and conditions of this Agreement or any Other Document; and

 

(b)           When any Canadian Loan Party or any of its Subsidiaries Disposes
of any Canadian Collateral or other assets (other than sales of Inventory in the
ordinary course of business and provided such Disposition is permitted by
Section 7.1(c)) or receives proceeds of property or casualty insurance or any
condemnation of Canadian Collateral or other assets by any Governmental Body,
within three (3) Business Days thereof, Canadian Loan Parties shall repay the
Canadian Advances in an amount equal to one hundred (100%) percent of the net
cash proceeds of such sale (i.e., gross cash proceeds less the reasonable
out-of-pocket costs and expenses in respect of such Dispositions (including any
taxes and similar amounts and the payment of any Indebtedness secured by such
assets and required to be paid)) in excess of $5,000,000 in the aggregate in any
fiscal year or all of the cash proceeds of such insurance or condemnation, as
applicable, such repayments to be made promptly but in no event more than three
(3) Business Days following receipt of such proceeds, and until the date of
payment, such proceeds shall be held in trust for Agent.  Such repayments shall
be applied (i) first, to the outstanding Swingline Advances made to Canadian
Borrowers until paid in full, and (ii) second, to the other outstanding Canadian
Revolving Advances in such order as Agent may determine until paid in full,
subject to the Canadian Borrowers’ ability to reborrow Canadian Revolving
Advances in accordance with the terms hereof.  Notwithstanding the foregoing,
unless and until an Event of Default has occurred and is continuing or would
result therefrom, such proceeds from Dispositions and insurance and condemnation
payments may be retained by Canadian Loan Parties solely to acquire replacement
assets without making a mandatory prepayment hereunder, so long as (A) the fair
market value of the acquired assets is equal to or greater than the fair market
value of the assets which were Disposed or subject to the insurance or
condemnation payment, as applicable, (B) the acquired assets are purchased by
the applicable Canadian Loan Party within two hundred seventy (270) days of the
Disposal of the assets or receipt of the insurance payment, as applicable,
(C) the acquired assets are acceptable to Agent in its Permitted Discretion, and
(D) if the assets that were Disposed or that were the subject of the insurance
or condemnation payment, as applicable, were Canadian Collateral, the acquired
assets must all be Canadian Collateral and shall be subject to Agent’s first
priority Lien created hereunder (subject to Permitted Encumbrances).  Such cash
collateral shall be released by Agent only in connection with the making of a
Canadian Revolving Advance to be used by the Canadian Borrowers solely for the
purposes of funding the acquisition of replacement assets pursuant to the terms
of this Section 2.13(b); provided, however, that, nothing contained herein shall
waive or modify any conditions to the making of Revolving Advances or any other
provisions of this Agreement.  If a Canadian Loan Party fails to meet the
conditions set forth above, Canadian Loan Parties hereby authorize Agent and
Lenders to apply the proceeds held by Agent as a prepayment of the Canadian
Advances in the manner set forth above.  Any such prepayment of LIBOR Rate Loans
or BA Rate Loans must be accompanied by the payment of any funding breakage
costs in accordance with Section 2.2(g).  The provisions of this
Section 2.13(b) shall not be deemed to be an

 

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implied consent to any such Disposition otherwise prohibited by the terms and
conditions of this Agreement or any Other Document.

 

2.14        Use of Proceeds.

 

The Borrowers shall use the initial proceeds of the Advances and Letters of
Credit hereunder on the Closing Date only for:  (a) payments on the Closing Date
to each of the Persons listed in the disbursement direction letter furnished by
the Borrowers to Agent on or about the Closing Date and (b) costs, expenses and
fees incurred on or prior to the Closing Date in connection with the
preparation, negotiation, execution and delivery of this Agreement and the Other
Documents.  All other Advances made or Letters of Credit provided to or for the
benefit of the Borrowers pursuant to the provisions hereof shall be used by the
Borrowers only for general operating, working capital and other general
corporate purposes of the Borrowers not otherwise prohibited by the terms
hereof.  Further, none of the proceeds will be used, directly or indirectly, for
the purpose of purchasing or carrying any margin security or for the purposes of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause any of
the Advances to be considered a “purpose credit” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as
amended.

 

2.15        Defaulting Lender/Impacted Lender.

 

(a)           Notwithstanding anything to the contrary contained herein, in the
event any Lender (i) has refused (if the refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available its portion of
any Advance, (ii) notifies either Agent or Administrative Borrower that it does
not intend to make available its portion of any Advance (if the actual refusal
would constitute a breach by such Lender of its obligations under this
Agreement), or (iii) failed to fund any payments required to be made by it under
this Agreement or any Other Document (each, a “Lender Default”), all rights and
obligations hereunder of such Lender (a “Defaulting Lender”) as to which a
Lender Default is in effect and of the other parties hereto shall be modified to
the extent of the express provisions of this Section 2.15 while such Lender
Default remains in effect.  Notwithstanding the foregoing, no Lender Default
shall be deemed to occur with respect to a Lender, and such Lender shall not
constitute a Defaulting Lender hereunder, if such Lender notifies Agent and
Borrowers in writing that such Lender’s refusal or failure to fund any Advance
or any such payments required to be made by it hereunder is the result of such
Lender’s good faith determination that one or more conditions precedent to
funding as set forth in this Agreement (each of which conditions precedent,
together with any applicable Default or Event of Default, shall be specifically
identified in writing) has not been satisfied.

 

(b)           The obligations of each Lender to make Advances shall continue to
be based on their respective Commitment Percentages, and no Commitment
Percentage of any Lender or any Commitment Percentage of any Advances required
to be advanced by any Lender shall be increased as a result of a Lender
Default.  Amounts received in respect of the Obligations owing to the Lenders
shall be applied to reduce the applicable Obligations owing to each Lender that
is not a Defaulting Lender prior to any such amounts being applied to reduce the
Obligations owing to such Defaulting Lender to the extent that the aggregate
amount of outstanding Obligations owing to such Defaulting Lender is less than
what it would have been if such Lender Default did not occur.

 

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(c)           Notwithstanding anything set forth herein to the contrary, a
Defaulting Lender shall not have any voting or consent rights, or be permitted
to direct the Agent, under or with respect to any Loan Document or constitute a
“Lender” (or be included in the calculation of “Required Lenders” hereunder) for
any voting or consent rights, or in directing the Agent, under or with respect
to any Loan Document; provided, that, the foregoing shall not permit (i) an
increase in the principal amount of such Defaulting Lender’s Commitment,
(ii) the reduction of the principal of, rate of interest on (other than the
waiver of any default rate) or fees payable with respect to any Loan or Letter
of Credit of such Defaulting Lender or (iii) unless all other Lenders affected
thereby are treated similarly, the extension of any scheduled (as opposed to
mandatory prepayment) payment date or final maturity date of the principal among
of any Loan of such Defaulting Lender.

 

(d)           Other than as expressly set forth in this Section 2.15, the rights
and obligations of a Defaulting Lender (including the obligation to indemnify
Agent; provided, that, to the extent that a Defaulting Lender fails to timely
indemnify Agent or any Issuer pursuant to the terms and conditions of this
Agreement or any Other Document, the other Lenders shall contribute to such
shortfall in such indemnification according to their Commitment Percentages
thereof) and the other parties hereto shall remain unchanged.  Nothing in this
Section 2.15 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which the Borrowers, Agent or any
Lender may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder.  At the option of Agent, any amount payable to a
Defaulting Lender hereunder (whether on account of principal, interest, fees or
otherwise) shall, in lieu of being distributed to such Defaulting Lender, be
retained by Agent as cash collateral for future funding obligations of the
Defaulting Lender in respect of any Advance or existing or future participating
interest in any Swingline Advance or Letter of Credit (including the obligation
to indemnify Agent pursuant to Section 14.7).  The Defaulting Lender’s
decision-making and participation rights and rights to payments hereunder shall
be restored only upon the payment by the Defaulting Lender of its Commitment
Percentage of any Obligations, any participation obligation, or expenses as to
which it is delinquent, together with interest thereon at the rate set forth in
Section 2.13(g) hereof from the date when originally due until the date upon
which any such amounts are actually paid.

 

(e)           In the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a Defaulting
Lender, then, from and after the date on which such cure has been so effected,
such Defaulting Lender shall no longer be a Defaulting Lender and shall be
treated as a Lender that is not a Defaulting Lender under this Agreement.

 

(f)            Agent may replace a Defaulting Lender or an Impacted Lender in
accordance with Section 17.2(c) and Administrative Borrower, upon written notice
to Agent, may replace a Defaulting Lender in accordance with Sections 3.8 and
17.2(c).

 

2.16        Joint and Several Liability of US Borrowers.

 

(a)           Notwithstanding anything in this Agreement or any of the Other
Documents to the contrary, each US Borrower, jointly and severally, in
consideration of the financial accommodations to be provided by Agent and
Lenders under this Agreement and the Other

 

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Documents, for the mutual benefit, directly and indirectly, of each US Borrower
and in consideration of the undertakings of the other US Borrowers to accept
joint and several liability for the Obligations, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other US Borrowers, with respect to the payment
and performance of all of the Obligations, it being the intention of the parties
hereto that all of the Obligations shall be the joint and several obligations of
each US Borrower without preferences or distinction among them.  US Borrowers
shall be liable for all amounts due to Agent and Lenders under this Agreement,
regardless of which US Borrower actually receives the Advances or Letter of
Credit Obligations hereunder or the amount of such Revolving Advances received
or the manner in which Agent or any Lender accounts for such Advances, Letter of
Credit Obligations or other extensions of credit on its books and records.  The
Obligations of US Borrowers with respect to Revolving Advances made to one of
them, and the Obligations arising as a result of the joint and several liability
of one of the US Borrowers hereunder with respect to Revolving Advances made to
the other of the US Borrowers hereunder, shall be separate and distinct
obligations, but all such other Obligations shall be primary obligations of all
US Borrowers.

 

(b)           If and to the extent that any US Borrower shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such
event, the other US Borrowers will make such payment with respect to, or
perform, such Obligation.

 

(c)           Except as otherwise expressly provided herein, to the extent
permitted by law, each US Borrower (in its capacity as a joint and several
obligor in respect of the obligations of the other US Borrowers) hereby waives
notice of acceptance of its joint and several liability, notice of occurrence of
any Event of Default (except to the extent notice is expressly required to be
given pursuant to the terms of this Agreement), or of any demand for any payment
under this Agreement or the Other Documents (except to the extent notice is
expressly required to be given pursuant to the terms hereof or thereof,
respectively), notice of any action at any time taken or omitted by Agent or any
Lender under or in respect of any of the obligations hereunder, any requirement
of diligence and, generally, all demands, notices and other formalities of every
kind in connection with this Agreement and the Other Documents. Each US Borrower
hereby assents to, and waives notice of, any extension or postponement of the
time for the payment of any of the Obligations, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by Agent or
any Lender at any time or times in respect of any default by the other US
Borrowers in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by Agent
or any Lender in respect of any of the obligations hereunder, and the taking,
addition, substitution or release, in whole or in part, at any time or times, of
any security for any of such obligations or the addition, substitution or
release, in whole or in part, of the other US Borrowers. Without limiting the
generality of the foregoing, each US Borrower (in its capacity as a joint and
several obligor in respect of the obligations of the other US Borrowers) assents
to any other action or delay in acting or any failure to act on the part of
Agent or any Lender, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder which might, but for the provisions of
this Section 2.16, afford grounds for terminating, discharging or relieving such
US Borrower, in whole or in part, from any of its obligations under this
Section 2.16, it being the intention of each US Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the obligations of such US
Borrower under this Section 2.16 shall not be discharged except by performance
and then

 

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only to the extent of such performance.  The obligations of each US Borrower
under this Section 2.16 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any US Borrower.  The joint and several liability of
the US Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any US
Borrower or any of the Lenders.

 

(d)           The provisions of this Section 2.16 are made for the benefit of
the Agent and Lenders and their successors and assigns, and may be enforced by
Agent from time to time against any US Borrower as often as occasion therefor
may arise and without requirement on the part of Agent or any Lender first to
marshal any of its claims or to exercise any of its rights against the other US
Borrowers or to exhaust any remedies available to it against the other US
Borrowers or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy. The provisions of
this Section 2.16 shall remain in effect until all the Obligations shall have
been Paid in Full or otherwise fully satisfied (other than indemnities and
contingent Obligations which have not yet accrued). If at any time, any payment,
or any part thereof, made in respect of any of the Obligations is rescinded or
must otherwise be restored or returned by Agent or any Lender upon the
insolvency, bankruptcy or reorganization of any US Borrower, or otherwise, the
provisions of this Section 2.16 will forthwith be reinstated and in effect as
though such payment had not been made.

 

(e)           Notwithstanding any provision to the contrary contained herein or
in any of the Other Documents, to the extent the obligations of a US Borrower
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such US Borrower
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal, state or provincial and including, without
limitation, the Bankruptcy Code, the Companies’ Creditors Arrangement Act
(Canada) or Bankruptcy and Insolvency Act (Canada)).

 

(f)            With respect to the Obligations arising as a result of the joint
and several liability of US Borrowers hereunder with respect to Advances, Letter
of Credit Obligations or other extensions of credit made to the other US
Borrowers hereunder, each US Borrower waives, until the Obligations shall have
been Paid in Full (other than indemnities and contingent Obligations which have
not yet accrued) and this Agreement shall have been terminated, any right to
enforce any right of subrogation or any remedy which Agent or any Lender now has
or may hereafter have against any US Borrower, any endorser or any guarantor of
all or any part of the Obligations, and any benefit of, and any right to
participate in, any security or collateral given to Agent or any Lender.  Any
claim which any US Borrower may have against any other US Borrower with respect
to any payments to Agent or Lenders hereunder or under any of the Other
Documents are hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations.  Upon the
occurrence of any Event of Default and for so long as the same is continuing,
Agent and Lenders may proceed directly and at once, without notice (to the
extent notice is waivable under applicable law), against (i) with respect to
Obligations of US Borrowers, any or all of them or (ii) with respect to
Obligations of any US Borrower, to collect and recover the full amount, or any
portion of the applicable Obligations, without first proceeding against the
other applicable US Borrowers or any other Person, or against any security or
collateral for the Obligations.  Each US Borrower consents

 

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and agrees that Agent and Lenders shall be under no obligation to marshal any
assets in favor of US Borrower(s) or against or in payment of any or all of the
Obligations.

 

2.17        Joint and Several Liability of Canadian Borrowers.

 

(a)           Notwithstanding anything in this Agreement or any of the Other
Documents to the contrary, each Canadian Borrower, jointly and severally, in
consideration of the financial accommodations to be provided by Agent and
Lenders under this Agreement and the Other Documents, for the mutual benefit,
directly and indirectly, of each Canadian Borrower and in consideration of the
undertakings of the other Canadian Borrowers to accept joint and several
liability for the Canadian Obligations, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Canadian Borrowers, with respect to the payment and
performance of all of the Canadian Obligations, it being the intention of the
parties hereto that all of the Canadian Obligations shall be the joint and
several Canadian Obligations of each Canadian Borrower without preferences or
distinction among them.  Canadian Borrowers shall be liable for all amounts due
to Agent and Lenders under this Agreement in respect of the Canadian Credit
Facility, regardless of which Canadian Borrower actually receives the Advances,
or Canadian Letter of Credit Obligations hereunder or the amount of such
Revolving Advances received or the manner in which Agent or any Lender accounts
for such Advances, Canadian Letter of Credit Obligations or other extensions of
credit on its books and records.  The Canadian Obligations of Canadian Borrowers
with respect to Revolving Advances made to one of them, and the Canadian
Obligations arising as a result of the joint and several liability of one of the
Canadian Borrowers hereunder, with respect to Revolving Advances made to the
other of the Canadian Borrowers hereunder, shall be separate and distinct
Canadian Obligations, but all such other Canadian Obligations shall be primary
Canadian Obligations of all Canadian Borrowers.

 

(b)           If and to the extent that any Canadian Borrower shall fail to make
any payment with respect to any of the Canadian Obligations as and when due or
to perform any of the Canadian Obligations in accordance with the terms thereof,
then in each such event, the other Canadian Borrowers will make such payment
with respect to, or perform, such Canadian Obligation.

 

(c)           Except as otherwise expressly provided herein, to the extent
permitted by law, each Canadian Borrower (in its capacity as a joint and several
obligor in respect of the Canadian Obligations of the other Canadian Borrowers)
hereby waives notice of acceptance of its joint and several liability, notice of
occurrence of any Event of Default (except to the extent notice is expressly
required to be given pursuant to the terms of this Agreement), or of any demand
for any payment under this Agreement or the Other Documents (except to the
extent demand is expressly required to be made pursuant to the terms of this
Agreement or the Other Documents), notice of any action at any time taken or
omitted by Agent or any Lender under or in respect of any of the Canadian
Obligations hereunder, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with this Agreement
and the Other Documents except as required hereunder or under any Other
Document. Each Canadian Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Canadian
Obligations, the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by Agent or any Lender at any time or times in
respect of any default by the other Canadian Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or any Lender in

 

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respect of any of the Canadian Obligations hereunder, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of such Canadian Obligations or the addition, substitution or
release, in whole or in part, of the other Canadian Borrowers.  Without limiting
the generality of the foregoing, each Canadian Borrower (in its capacity as a
joint and several obligor in respect of the Canadian Obligations of the other
Canadian Borrowers) assents to any other action or delay in acting or any
failure to act on the part of Agent or any Lender, including, without
limitation, any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations thereunder
which might, but for the provisions of this Section 2.17, afford grounds for
terminating, discharging or relieving such Canadian Borrower, in whole or in
part, from any of its Canadian Obligations under this Section 2.17, it being the
intention of each Canadian Borrower that, so long as any of the Canadian
Obligations hereunder remain unsatisfied, the Canadian Obligations of such
Canadian Borrower under this Section 2.17 shall not be discharged except by
performance and then only to the extent of such performance.  The Canadian
Obligations of each Canadian Borrower under this Section 2.17 shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any Canadian Borrower.  The joint and several liability of Canadian Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Canadian Borrower or any
of the Lenders.

 

(d)           The provisions of this Section 2.17 are made for the benefit of
Agent and Lenders and their successors and assigns and may be enforced by Agent
from time to time against any Canadian Borrower as often as occasion therefor
may arise and without requirement on the part of Agent or any Lender first to
marshal any of its claims or to exercise any of its rights against the other
Canadian Borrowers or to exhaust any remedies available to it against the other
Canadian Borrowers or to resort to any other source or means of obtaining
payment of any of the Canadian Obligations hereunder or to elect any other
remedy. The provisions of this Section 2.17 shall remain in effect until all the
Canadian Obligations shall have been Paid in Full or otherwise fully satisfied
(other than indemnities and contingent Canadian Obligations which have not yet
accrued). If at any time, any payment, or any part thereof, made in respect of
any of the Canadian Obligations is rescinded or must otherwise be restored or
returned by Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any Canadian Borrower, or otherwise, the provisions of this
Section 2.17 hereof will forthwith be reinstated and in effect as though such
payment had not been made.

 

(e)           Notwithstanding any provision to the contrary contained herein or
in any of the Other Documents, to the extent the Canadian Obligations of a
Canadian Borrower shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable provincial or
federal law relating to fraudulent conveyances or transfers) then the Canadian
Obligations of such Canadian Borrower hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal, provincial or
state and including, without limitation, the Bankruptcy Code of the United
States, and the Companies’ Creditors Arrangement Act (Canada) and the Bankruptcy
and Insolvency Act (Canada)).

 

(f)            With respect to the Canadian Obligations arising as a result of
the joint and several liability of Canadian Borrowers hereunder with respect to
Canadian Advances, Canadian Letter of Credit Obligations or other extensions of
credit made to the other Canadian Borrowers hereunder, each Canadian Borrower
waives, until the Canadian Obligations shall have been Paid in

 

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Full (other than indemnities and contingent Canadian Obligations which have not
yet accrued) and this Agreement shall have been terminated, any right to enforce
any right of subrogation or any remedy which Agent or any Lender now has or may
hereafter have against any Canadian Borrower, any endorser or any guarantor of
all or any part of the Canadian Obligations, and any benefit of, and any right
to participate in, any security or collateral given to Agent or any Lender.  Any
claim which any Canadian Borrower may have against any other Canadian Borrower
with respect to any payments to Agent or Lenders hereunder or under any of the
Other Documents are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Canadian Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Canadian Obligations.  Upon the occurrence of any Event of Default and for so
long as the same is continuing, Agent and Lenders may proceed directly and at
once, without notice (to the extent notice is waivable under applicable law),
against (i) with respect to Canadian Obligations of Canadian Borrowers, either
or both of them or (ii) with respect to Canadian Obligations of any Canadian
Borrower, to collect and recover the full amount, or any portion of the
applicable Canadian Obligations, without first proceeding against the other
applicable Canadian Borrowers or any other Person, or against any security or
collateral for the Canadian Obligations.  Each Canadian Borrower consents and
agrees that Agent and Lenders shall be under no obligation to marshal any assets
in favor of Canadian Borrowers or against or in payment of any or all of the
Canadian Obligations.

 

2.18        Interrelated Businesses.

 

Loan Parties hereby represent and warrant to Agent and Lenders that (a) Loan
Parties and their respective Subsidiaries make up a related organization of
various entities constituting a single economic and business enterprise so that
Loan Parties and their respective Subsidiaries share an identity of interests
such that any benefit received by any Loan Party or any Subsidiary of any Loan
Party benefits each other Loan Party and each other Subsidiary of Loan Parties;
(b) certain of Loan Parties and their respective Subsidiaries render services to
or for the benefit of other Loan Parties and Subsidiaries, as the case may be,
purchase or sell and supply goods to or from or for the benefit of the others,
make loans, advances and provide other financial accommodations to or for the
benefit of the other Loan Parties and Subsidiaries (including, inter alia, the
payment by Loan Parties and Subsidiaries of creditors of the other Loan Parties
and Subsidiaries and guarantees by Loan Parties and Subsidiaries of indebtedness
of the other Loan Parties and Subsidiaries and provide administrative,
marketing, payroll and management services to or for the benefit of the other
Loan Parties and Subsidiaries), and (c) Loan Parties and their Subsidiaries have
centralized accounting and legal service, common officers and directors and are
identified to creditors as a single economic and business enterprise.

 

2.19        Appointment of Administrative Borrower as Agent for Requesting
Advances and Letters of Credit and Receipts of Advances and Statements and
Receipts and Sending of Notices.

 

(a)           Each Borrower hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to request and receive Advances and Letters
of Credit pursuant to this Agreement and the Other Documents from Agent or any
Lender in the name or on behalf of such Borrower.  Agent and Lenders may
disburse the Advances to such bank account of Administrative Borrower or a
Borrower or otherwise make such Loans to a Borrower, and provide such Letters of
Credit for the account of a Borrower, in each case as Administrative Borrower
may designate or

 

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direct, without notice to any other Borrower or Loan Party.  Notwithstanding
anything to the contrary contained herein, Agent may at any time and from time
to time require that Advances (including without limitation Protective Advances)
be disbursed directly to an operating account of a Borrower or to any other
Person.

 

(b)           Each Loan Party hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to receive statements on account and all
other notices from Agent and Lenders with respect to the Obligations or
otherwise under or in connection with this Agreement and the Other Documents.

 

(c)           Any notice, election, representation, warranty, agreement or
undertaking by or on behalf of any Loan Party by Administrative Borrower shall
be deemed for all purposes to have been made by such Loan Party and shall be
binding upon and enforceable against such Loan Party to the same extent as if
made directly by such Loan Party.

 

(d)           Administrative Borrower hereby accepts the appointment by each
Loan Party to act as the agent of the Borrowers pursuant to this Section 2.19. 
Administrative Borrower shall ensure that the disbursement of any Advances to
each Borrower requested by or paid to or for the account of the Borrowers, or
the issuance of any Letters of Credit for the account of a Borrower hereunder,
shall be paid to or issued for the account of such Borrower.

 

(e)           No purported termination of the appointment of Administrative
Borrower as agent as aforesaid shall be effective, except after ten (10) days’
prior written notice to Agent.

 

2.20        Increase in Maximum Credit.

 

(a)           From and after the earlier of (i) the date which is ninety (90)
days from the Closing Date and (ii) the date that a Successful Syndication (as
defined in the Fee Letter) has been achieved, Administrative Borrower may, at
any time, deliver a written request to Agent to increase the Maximum Credit;
provided, that, (A) any such increase shall be subject to the consent of Agent
and satisfaction of each of the conditions set forth in Section 2.20(c) below,
(B) any such written request shall specify the amount of the increase in the
Maximum Credit that Administrative Borrower is requesting; (C) the aggregate
amount of any and all such increases in the Maximum Credit shall not exceed
$50,000,000 or cause the Maximum Credit to exceed $150,000,000, (D) the amount
of each increase in the Maximum Credit shall not be less than $25,000,000,
(E) such requests may not be made more than two (2) times during the Term,
(F) any such request shall be irrevocable, and (G) in connection with any such
increases in the Maximum Credit, with the Agent’s consent, the Borrowers may
increase the Canadian Revolving Loan Maximum Amount by an amount of up to
$10,000,000 in the aggregate for all such increases.

 

(b)           Upon the receipt by Agent of any such written request, Agent shall
notify each of the Lenders of such request and each Lender (other than
Defaulting Lenders, Impacted Lenders and Prior Defaulting/Impacted Lender) shall
have the option (but not the obligation) to increase the amount of its Revolver
Commitment by an amount approved by Agent in its sole discretion of the amount
of the increase in the Maximum Credit requested by Administrative Borrower as
set forth in the notice from Agent to such Lender.  Each Lender shall notify
Agent within ten (10) days after the receipt of such notice from Agent whether
it is willing to so increase its Revolver Commitment, and

 

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if so, the amount of such increase; provided, that, no Lender shall be obligated
to provide such increase in its Revolver Commitment and the determination to
increase the Revolver Commitment of a Lender shall be within the sole and
absolute discretion of such Lender.  If the aggregate amount of the increases in
the Revolver Commitments received from the Lenders does not equal or exceed the
amount of the increase in the Maximum Revolving Advances Amount requested by
Administrative Borrower, Agent or Administrative Borrower may seek additional
increases from Lenders (other than Defaulting Lenders, Impacted Lenders or Prior
Defaulting/Impacted Lender) or Revolver Commitments from such Qualified
Assignees as it may determine, after, in the case of Administrative Borrower,
consultation with Agent.  In the event Lenders (or Lenders and any such
Qualified Assignees, as the case may be) have committed in writing to provide
increases in their Revolver Commitments or new Revolver Commitments in an
aggregate amount in excess of the increase in the Maximum Credit requested by
Administrative Borrower or permitted hereunder, Agent shall then have the right
to allocate such commitments, first to Lenders and then to Qualified Assignees,
in such amounts and manner as Agent may determine, after consultation with
Administrative Borrower.

 

(c)           The Maximum Credit shall be increased by the amount of the
increase in Revolver Commitments from Lenders or new Commitments from Qualified
Assignees, in each case selected in accordance with Section 2.20(b) above, for
which Agent has received written confirmation in from and substance satisfactory
to Agent from such Lenders or Qualified Assignees, as applicable, on the date
requested by Administrative Borrower for the increase or such other date as
Agent and Administrative Borrower may agree (but subject to the satisfaction of
the conditions set forth below), whether or not the aggregate amount of the
increase in Revolver Commitments and new Revolver Commitments, as the case may
be, equal or exceed the amount of the increase in the Maximum Credit requested
by Administrative Borrower in accordance with the terms hereof (but in no event
shall the Maximum Revolver Amount be increased above the amounts described in
Section 2.20(a)), effective on the date that Agent notifies Administrative
Borrower that each of the following conditions have been satisfied (such date
being the “Maximum Credit Increase Effective Date”):

 

(i)            Agent shall have received from each Lender or Qualified Assignee
that is providing an additional Revolver Commitment as part of the increase in
the Maximum Credit, a written confirmation described above duly executed by such
Lender or Qualified Assignee, Agent and Administrative Borrower;

 

(ii)           the conditions precedent to the making of Advances set forth in
Sections 8.2(b) and (c) shall be satisfied as of the date of the increase in the
Maximum Credit, both before and after giving effect to such increase whether or
not an Advance is then being made;

 

(iii)          Upon the request of Agent, Agent shall have received an opinion
of counsel to Loan Parties in form and substance and from counsel reasonably
satisfactory to Agent addressing such matters as Agent may reasonably request
(including an opinion that such increase shall not violate Material Contracts of
Loan Parties), amendments to Mortgages and any other documents and agreements
reasonably required by Agent with respect thereto;

 

(iv)          such increase in the Maximum Credit on the date of the
effectiveness thereof shall not violate any term or provisions of any applicable
law, regulation or order or decree

 

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of any court or other Governmental Body and shall not be enjoined, temporarily,
preliminarily or permanently; and

 

(v)           there shall have been paid to each Lender and Qualified Assignee,
in each case, providing an additional Revolver Commitment in connection with
such increase in the Maximum Credit all fees and expenses due and payable to
such Person on or before the effectiveness of such increase, including, without
limitation, all such fees payable pursuant to the Fee Letter.

 

(d)           There shall have been paid to Agent, for the account of the Agent
and Lenders (in accordance with any agreement among them) all fees and expenses
(including reasonable fees and expenses of counsel) due and payable pursuant to
any of the Other Documents on or before the effectiveness of such increase to
the extent relating to such increase.

 

(e)           As of a Maximum Credit Increase Effective Date, each reference to
the term Maximum Credit herein and in any of the Other Documents shall be deemed
amended to mean the amount of the Maximum Credit specified in the written notice
from Agent to Administrative Borrower of the increase in the Maximum Credit.

 

2.21        Decrease in Maximum Credit.

 

Borrowers (a) may at any time and from time to time permanently reduce the
Maximum Credit by Administrative Borrower delivering to Agent a Line Decrease
Notice and (b) shall be obligated to permanently reduce the Maximum Credit if
and to the extent required by clause (a)(iv) of the definition of Second Lien
Note Prepayment Conditions by Administrative Borrower delivering to Agent the
certificate (an “Excess Cash Flow Line Reduction Certificate”) required by such
clause (a)(iv) of the definition of Second Lien Note Prepayment Conditions (the
“Excess Cash Flow Line Reduction”), provided that, (i) each Line Decrease Notice
shall provide for concurrent reductions in the Maximum Credit in a minimum
amount of $5,000,000 and incremental amounts of $1,000,000 in excess thereof,
each Excess Cash Flow Line Reduction Certificate shall provide for concurrent
reductions in the Maximum Credit in the amount of the Excess Cash Flow Line
Reduction (as applicable), and the Canadian Revolving Loan Maximum Amount shall
in each case be reduced by a pro rata amount, based on the percentage decrease
in the Maximum Credit then occurring (collectively, a “Line Decrease”), (ii) in
no event shall the Maximum Credit be reduced to less than $75,000,000, and
(iii) if the aggregate amount of the US Advances and US Letter of Credit
Obligations then outstanding on the effective date of Line Decrease exceeds the
Maximum Credit and the US Revolving Loan Maximum Amount or the aggregate amount
of the Canadian Advances and Canadian Letter of Credit Obligations then
outstanding exceeds the Canadian Revolving Loan Maximum Amount, in either case
as so reduced, then US Borrowers shall, concurrently with the delivery of the
Line Decrease Notice or Excess Cash Flow Line Reduction Certificate (as
applicable), make a mandatory prepayment of the US Advances and Borrowers shall
make a mandatory prepayment of the Canadian Advances (as applicable) in an
amount equal to such excess(es).  Any Line Decrease Notice or Excess Cash Flow
Line Reduction Certificate delivered to Agent shall be irrevocable and any Line
Decrease pursuant to such Line Decrease Notice or Excess Cash Flow Line
Reduction Certificate (as applicable) shall be effective on the date which is
five (5) Business Days after receipt by Agent of the Line Decrease Notice or
Excess Cash Flow Line Reduction Certificate (as applicable).  Any such
prepayment must be accompanied by the payment of any LIBOR Rate Loans or BA Rate
Loans funding breakage costs, if applicable, in accordance

 

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with Section 2.2(g).  If a Line Decrease occurs in accordance with the terms of
this Section 2.21, then the Maximum Credit may not be thereafter increased
except in accordance with Section 2.20.  Upon the effective date of a Line
Decrease in accordance with this Section 2.21, each reference to the term
Maximum Credit herein and in any of the Other Documents shall be deemed amended
to mean the US Dollar amount resulting after giving effect to the Line Decrease
as set forth in the applicable Line Decrease Notice or Excess Cash Flow Line
Reduction Notice (as applicable).

 

3.             INTEREST AND FEES.

 

3.1          Interest.

 

(a)           US Borrowers shall pay to Agent, for the benefit of Lenders,
interest on the outstanding principal amount of the US Dollar Loans made to US
Borrowers (including, without limitation, Swingline Advances) at the Interest
Rate.  Canadian Borrowers shall pay to Agent, for the benefit of Canadian
Lenders, interest on the outstanding principal amount of the US Dollar Loans and
Canadian Dollar Loans made to Canadian Borrowers (including, without limitation,
Swingline Advances) at the Interest Rate.

 

(b)           Interest on Advances (including, without limitation, Swingline
Advances) shall be payable to Agent for the benefit of Lenders in arrears on the
first (1st) day of each calendar quarter with respect to Base Rate Loans
(commencing April 1, 2012) and, with respect to LIBOR Rate Loans and BA Rate
Loans, in arrears at the end of each Interest Period or, for LIBOR Rate Loans
and BA Rate Loans with an Interest Period in excess of three (3) months, at the
earlier of each date that is three (3) months following date of the commencement
of such Interest Period and at the end of such Interest Period.  Interest
charges shall be computed on the actual principal amount of Advances outstanding
at a rate per annum equal to the applicable Interest Rate.  Concurrent with any
increase or decrease in the Base Rate, the Interest Rate for Base Rate Loans
shall be similarly changed without notice or demand of any kind by an amount
equal to the amount of such change in the Base Rate.  At the election of Agent
or the Required Lenders, upon and after the occurrence of an Event of Default,
and during the continuation thereof, the outstanding Advances and all other
Obligations shall bear interest at the applicable Interest Rate plus two
(2) percentage points per annum (as applicable, the “Default Rate”).  At the
election of Agent or the Required Lenders, such Default Rate shall be applied
retroactively to commence on the date of the first (1st) occurrence of the event
giving rise to such Event of Default.  All interest accruing hereunder on and
after the date of any Event of Default or termination hereof shall be payable on
demand.

 

3.2          Letter of Credit Fees; Cash Collateral.

 

(a)           (i) US Borrowers shall pay (A) to Agent, for the benefit of US
Lenders according to their applicable Commitment Percentages, fees for each US
Letter of Credit for the period from and excluding the date of issuance of same
to and including the date of expiration or termination, equal to the average
daily face amount of each outstanding US Letter of Credit multiplied by the
Applicable Margin for LIBOR Rate Loans, such fees to be calculated on the basis
of a three hundred sixty (360) day year for the actual number of days elapsed
and to be payable quarterly in arrears on the first (1st) day of each calendar
quarter, commencing January 1, 2012, and for so long as any US Letter of Credit
remains outstanding, and (B) to Agent for the benefit of the US Issuer, (1) a
fronting fee for each US Letter of Credit for the period from and excluding the
date

 

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of issuance of same to and including the date of expiration or termination,
equal to the average daily face amount of each outstanding Letter of Credit
multiplied by one-eighth of one (0.125%) percent per annum and (2) any and all
fees and expenses as agreed upon by the US Issuer and the US Borrowers in
connection with any US Letter of Credit, including, without limitation, in
connection with the opening, amendment or renewal of any such US Letter of
Credit and shall reimburse Agent for any and all fees and expenses, if any, paid
by Agent to the US Issuer; and (ii) Canadian Borrowers shall pay (A) to Agent,
for the benefit of Canadian Lenders according to their applicable Commitment
Percentages, fees for each Canadian Letter of Credit for the period from and
excluding the date of issuance of same to and including the date of expiration
or termination, equal to the average daily face amount of each outstanding
Canadian Letter of Credit multiplied by the Applicable Margin for LIBOR Rate
Loans, such fees to be calculated on the basis of a three hundred sixty-five
(365) or three hundred sixty-six (366) day year, as applicable, as to Letters of
Credit denominated in Canadian Dollars and a three hundred sixty (360) day year
as to Letters of Credit denominated in US Dollars, and in each case, actual days
elapsed and to be payable quarterly in arrears on the first (1st) day of each
calendar quarter, commencing January 1, 2012, and for so long as any US Letter
of Credit remains outstanding, and (B) to Agent for the benefit of the Canadian
Issuer, (1) a fronting fee for each Canadian Letter of Credit for the period
from and excluding the date of issuance of same to and including the date of
expiration or termination, equal to the average daily face amount of each
outstanding Letter of Credit multiplied by one-eighth of one (0.125%) percent
per annum and (2) any and all fees and expenses as agreed upon by the Canadian
Issuer and the Canadian Borrowers in connection with any Canadian Letter of
Credit, including, without limitation, in connection with the opening, amendment
or renewal of any such Canadian Letter of Credit and shall reimburse Agent for
any and all fees and expenses, if any, paid by Agent to the Canadian Issuer (all
of the foregoing fees described in clauses (i) and (ii) above, the “Letter of
Credit Fees”).  Any such charge in effect at the time of a particular
transaction shall be the charge for that transaction, notwithstanding any
subsequent change in the Issuer’s prevailing charges for that type of
transaction.  At the election of Agent or the Required Lenders, upon the
occurrence of an Event of Default, and during the continuation thereof, Agent
may, and at the direction of the Required Lenders Agent shall, increase the
Letter of Credit Fees by two (2) percentage points per annum.  At the election
of Agent or the Required Lenders, such increased Letter of Credit Fee shall be
applied retroactively to commence on the first (1st) date of the occurrence of
the event giving rise to such Event of Default.  All Letter of Credit Fees
payable hereunder shall be deemed earned in full on the date when the same are
due and payable hereunder and shall not be subject to rebate or proration upon
the termination of this Agreement for any reason.

 

(b)           (i)  At the election of Agent or the Required Lenders, at any time
when a Default or an Event of Default has occurred and is continuing and (ii) on
the Termination Date, the Borrowers will cause cash to be deposited and
maintained in a non-interest bearing account with Agent, as cash collateral, in
an amount equal to one hundred five (105%) percent of the outstanding Letters of
Credit and, if requested by Agent, Bank Product Obligations, and the Borrowers
hereby irrevocably authorize Agent, in its discretion, on the Borrowers’ behalf
and in the Borrowers’ or Agent’s name, to open such an account and to make and
maintain deposits therein, or in an account opened by the Borrowers, in the
amounts required to be made by the Borrowers, out of the proceeds of Receivables
or other Collateral or out of any other funds of the Borrowers coming into Agent
or any Lender’s possession at any time.  Notwithstanding the foregoing, the
Canadian Borrowers shall only by obligated to make the foregoing deposits in
respect of Canadian Letters of Credit and

 

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Canadian Bank Product Obligations.  The Borrowers may not withdraw amounts
credited to any such account except upon Payment in Full of all of the
Obligations.

 

3.3          Loan Fees.

 

(a)           Unutilized Commitment Fee.

 

(i)            US Borrowers shall pay to Agent, for the account of US Lenders
(other than a Defaulting Lender), quarterly an Unutilized Commitment Fee at a
rate equal to the Applicable Margin for Unutilized Commitment Fee multiplied by
the amount by which the Maximum Credit exceeds the average principal balance of
the outstanding Revolving Advances (excluding Swingline Advances) to US
Borrowers and US Letter of Credit Obligations during the immediately preceding
quarter (or part thereof) while this Agreement is in effect and for so long
thereafter as any of the Obligations are outstanding, which fee shall be payable
in arrears on the first (1st) day of each calendar quarter, commencing
January 1, 2012.

 

(ii)           Canadian Borrowers shall pay to Agent, for the account of
Canadian Lenders, quarterly an Unutilized Commitment Fee at a rate equal to the
Applicable Margin for Unutilized Commitment Fee multiplied by the amount by
which the Canadian Revolving Loan Maximum Amount exceeds the average principal
balance of the outstanding Revolving Advances (excluding Swingline Advances) to
Canadian Borrowers and Canadian Letter of Credit Obligations during the
immediately preceding quarter (or part thereof) while this Agreement is in
effect and for so long thereafter as any of the Obligations are outstanding,
which fee shall be payable in arrears on the first (1st) day of each calendar
quarter, commencing January 1, 2012.

 

(b)           Other Fees.  The Borrowers shall pay to Agent, for Agent’s own
account (and not for the account of any Lender), the other fees and amounts set
forth in the Fee Letter in the amounts and at the times specified therein.

 

3.4          Computation of Interest and Fees.

 

(a)           Interest and all fees payable hereunder shall be computed on the
basis of a year of three hundred sixty (360) days and for the actual number of
days elapsed; except, that, interest on Base Rate Loans and BA Rate Loans shall
be computed on the basis of a year of three hundred sixty-five (365) or three
hundred sixty-six (366) days, as applicable, and for the actual number of days
elapsed.  If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the applicable
Interest Rate for Base Rate Loans during such extension.

 

(b)           If (i) any Other Document creates a mortgage on real property or a
hypothec on immovables, or (ii) the Interest Rate provided for in subsection
(b) of the definition of Interest Rate is otherwise determined to be
unenforceable, then, in either case, an Advance to a Canadian Borrower shall
bear interest at a rate per annum equal to the rate otherwise applicable to such
Advance or, in the case of any Canadian Obligations not constituting principal
or interest on such Advance, at a rate equal to the rate otherwise applicable
to, such Canadian Obligations; provided, that, without limiting the effect of
subsection (e)(ii) above, nothing in subsection (e)(i) above shall preclude the
operation of subsection (b) of the definition of Interest Rate where (A) any
Other

 

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Document that creates a mortgage on real property or a hypothec on immovables
also creates a lien on other property and assets or (B) the principal of or
interest on any Advance to a Canadian Borrower or any fee or other amount
payable by a Canadian Borrower hereunder is also secured by a lien other than a
mortgage on real property or a hypothec on immovables.  This Section 3.4(b) only
applies to the Canadian Obligations and to the Canadian Borrowers and Canadian
Guarantors.

 

(c)           For purposes of disclosure under the Interest Act (Canada), where
interest is calculated pursuant thereto at a rate based upon a year of 360, 365
or 366 days, as the case may be (the “First Rate”), the rate or percentage of
interest on a yearly basis is equivalent to such First Rate multiplied by the
actual number of days in the year divided by 360, 365 or 366, as the case may
be.

 

(d)           If any provision of this Agreement or any of the Other Documents
would obligate a Canadian Borrower or Canadian Guarantor to make any payment of
interest or other amount payable to Agent or a Lender in an amount or calculated
at a rate which would be prohibited by law or would result in a receipt by Agent
or such Lender of interest at a criminal rate (as construed under the Criminal
Code (Canada)), then notwithstanding that provision, that amount or rate shall
be deemed to have been adjusted with retroactive effect to the maximum amount or
rate of interest, as the case may be, as would not be so prohibited by law or
result in a receipt by Agent or such Lender of interest at a criminal rate, the
adjustment to be effected, to the extent necessary, as follows:

 

(i)            first, by reducing the amount or rate of interest required to be
paid to Agent or applicable Lender under this Section 3.1; and thereafter, by
reducing any fees, commissions, premiums and other amounts required to be paid
to Agent or the applicable Lender which would constitute interest for purposes
of the Criminal Code (Canada).

 

(ii)           Notwithstanding this Section 3.1, and after giving effect to all
adjustments contemplated hereby, if Agent or any Lender shall have received an
amount in excess of the maximum permitted by the Criminal Code (Canada), then
the Canadian Borrowers or Canadian Guarantors, as applicable, shall be entitled,
by notice in writing to Agent or the affected Lender, as the case may be, to
obtain reimbursement from Agent or such Lender, as the case may be, in an amount
equal to the excess, and pending reimbursement, the amount of the excess shall
be deemed to be an amount payable by Agent or such Lender, as the case may be,
to the Canadian Borrowers.

 

(iii)          Any amount or rate of interest referred to in this
Section 3.4(d) shall be determined in accordance with generally accepted
actuarial practices and principles as an effective annual rate of interest over
the term that any Obligation remains outstanding on the assumption that any
charges, fees or expenses that fall within the meaning of “interest” (as defined
in the Criminal Code (Canada)) shall, if they relate to a specific period of
time, be pro-rated over that period of time and otherwise be pro-rated over the
period from the date of the incurrence of the Obligation to its relevant
maturity date and, in the event of a dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Agent shall be conclusive for the
purposes of that determination.

 

3.5          Maximum Charges.

 

In no event whatsoever shall interest and other charges charged hereunder exceed
the highest rate permissible under law.  In the event interest and other charges
as computed hereunder would

 

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otherwise exceed the highest rate permitted under law, such excess amount shall
be first applied to any unpaid principal balance owed by the Borrowers, and if
the then remaining excess amount is greater than the previously unpaid principal
balance, Lenders shall promptly refund such excess amount to the Borrowers and
the provisions hereof shall be deemed amended to provide for such permissible
rate.

 

3.6          Increased Costs.

 

In the event that any applicable law, treaty or governmental regulation, or any
change therein or in the interpretation or application thereof is effected after
the Closing Date (provided, however, that, notwithstanding anything herein to
the contrary, this Section 3.6 shall be deemed to apply to the Dodd-Frank Wall
Street Reform and Consumer Protection Act and to The Basel III Accord published
by The Basel Committee on Banking Supervision, and to all requests, rules,
regulations, guidelines or directives under either of the foregoing or issued in
connection therewith, regardless of the date enacted, adopted or issued, even if
enacted, adopted or issued before the Closing Date), or compliance by any Lender
(for purposes of this Section 3.6, the term “Lender” shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender or any
Subsidiary of Agent or any Lender) and the office or branch where any Lender
makes or maintains any LIBOR Rate Loans with any request or directive (whether
or not having the force of law) from any central bank or other financial,
monetary or other authority, in each case adopted after the Closing Date, shall:

 

(a)           subject any Lender to any tax (other than any Excluded Tax) of any
kind whatsoever, as a result of a Change in Tax Law, with respect to this
Agreement or any Other Document or change the basis of taxation of payments to
any Lender of principal, fees, interest or any other amount payable in respect
thereof (except for changes in any Excluded Tax);

 

(b)           impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by, any office of
any Lender, including (without limitation) pursuant to Regulation D of the Board
of Governors of the Federal Reserve System; or

 

(c)           impose on any Lender any other condition with respect to this
Agreement or any Other Document;

 

and the result of any of the foregoing is to increase the cost to any Lender of
making, renewing or maintaining its Advances hereunder or to reduce the amount
of any payment (whether of principal, interest or otherwise) in respect of any
of the Advances or the Lender’s overall capital, then, in any case the Borrowers
shall promptly pay such Lender, upon its demand, such additional amount as will
compensate such Lender for such additional cost or such reduction, as the case
may be.  Such Lender shall certify in reasonable detail the amount of such
additional cost or reduced amount to Administrative Borrower and Agent, and such
certification shall be conclusive absent manifest error.   Notwithstanding
anything to the contrary in this Section 3.6, Loan Parties shall not be required
to compensate a Lender pursuant to this Section 3.6 for any amounts incurred
more than one hundred eighty (180) days prior to the date that such Lender
notifies Administrative Borrower of such Lender’s intention to claim
compensation therefor; provided, that, if the circumstances giving rise to

 

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such claim have a retroactive effect, then such one hundred eighty (180) day
period shall be extended to include the period of such retroactive effect.

 

3.7          Basis For Determining Interest Rate Inadequate or Unfair.

 

In the event that Agent or any Lender shall have determined that:

 

(a)           reasonable means do not exist for ascertaining LIBOR or the BA
Rate applicable pursuant to Section 2.2 for any Interest Period; or

 

(b)           Dollar deposits in the relevant amount and for the relevant
maturity are not available to Agent or such Lender in the London interbank
market, with respect to an outstanding LIBOR Rate Loan or BA Rate Loan, a
proposed LIBOR Rate Loan or BA Rate Loans, or a proposed conversion of a Base
Rate Loan into a LIBOR Rate Loan or BA Rate Loan; or

 

(c)           the LIBOR or BA Rate for any requested Interest Period with
respect to a proposed LIBOR Rate Loan or BA Rate Loan does not adequately and
fairly reflect the cost to Agent or any Lender of funding such LIBOR Rate Loan
or BA Rate Loan,

 

then Agent, on behalf of itself or at the direction of such Lender, shall give
Administrative Borrower prompt written, telephonic or telegraphic notice of such
determination.  If such notice is given, (i) any such requested LIBOR Rate Loan
shall be made as US Base Rate Loans in the case of US Borrowers or Canadian Base
Rate Loans in the case of Canadian Borrowers and any such requested BA Rate Loan
shall be made as Canadian Base Rate Loans in the case of Canadian Borrowers,
unless Administrative Borrower shall notify Agent no later than 10:00 a.m.
(Chicago time) two (2) Business Days prior to the date of such proposed
borrowing, that its request for such borrowing (A) shall be cancelled, (B) shall
be made as a LIBOR Rate Loan or BA Rate Loan, as applicable, with a different
Interest Period for which LIBOR or the BA Rate can be ascertained (if such
notice is given solely with respect to clause (a) above), (C) shall be made as a
LIBOR Rate Loan with a different Interest Period which is available in the
London interbank market to Agent or such Lender (if such notice is given solely
with respect to clause (b) above) or (D) shall be made as a LIBOR Rate Loan or
BA Rate Loan with a different Interest Period which does adequately and fairly
reflect the cost to Agent or such Lender (if such notice is given solely with
respect to clause (c) above), and (ii) any Base Rate Loan or LIBOR Rate Loan or
BA Rate Loan which was to have been continued as or converted to an affected
type of LIBOR Rate Loan or BA Rate Loan shall be continued as or converted to or
continued as US Base Rate Loans or Canadian Base Rate Loans (as applicable) in
the case of LIBOR Rate Loans, and Canadian Base Rate Loans in the case of BA
Rate Loans, or, if Administrative Borrower shall notify Agent, no later than
10:00 a.m. (Chicago time) two (2) Business Days prior to the proposed
conversion, such Base Rate Loan, LIBOR Rate Loan or BA Rate Loan (A) shall be
continued or converted as a LIBOR Rate Loan or BA Rate Loan, with a different
Interest Period for which LIBOR or the BA Rate can be ascertained (if such
notice is given solely with respect to clause (a) above), (B) shall be continued
or converted as a LIBOR Rate Loan with a different Interest Period which is
available in the London interbank market to Agent or such Lender (if such notice
is given solely with respect to clause (b) above) or (C) shall be continued or
converted as a LIBOR Rate Loan or BA Rate Loan with a different Interest Period
which does adequately and fairly reflect the cost to Agent or such Lender (if
such notice is given solely with respect to clause (c) above), and (iii) any
outstanding affected LIBOR Rate Loans or BA Rate Loans

 

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shall be converted, on the last day of the then-current Interest Period thereof,
to US Base Rate Loans or Canadian Base Rate Loans (as applicable), in the case
of LIBOR Rate Loans, and to Canadian Base Rate Loans in the case of BA Rate
Loans, or, if Administrative Borrower shall notify Agent, no later than
10:00 a.m. (Chicago time) two (2) Business Days prior to the last Business Day
of the then current Interest Period applicable to such affected LIBOR Rate Loan,
BA Rate Loan, shall be converted into (A) a LIBOR Rate Loan or BA Rate Loan with
a different Interest Period for which LIBOR or the BA Rate can be ascertained
(if such notice is given solely with respect to clause (a) above), (B) a LIBOR
Rate Loan with a different Interest Period which is available in the London
interbank market to Agent or such Lender (if such notice is given solely with
respect to clause (b) above) or (C) a LIBOR Rate Loan or BA Rate Loan with a
different Interest Period which does adequately and fairly reflect the cost to
Agent or such Lender (if such notice is given solely with respect to clause
(c) above).  Until such notice has been withdrawn, Lenders shall have no
obligation to make an affected type of LIBOR Rate Loan or BA Rate Loan or
maintain outstanding affected LIBOR Rate Loans or BA Rate Loans and
Administrative Borrower, on behalf of Borrowers, shall have no right to convert
a Base Rate Loan or an unaffected type of LIBOR Rate Loan or BA Rate Loan into
an affected type of LIBOR Rate Loan or BA Rate Loan.

 

3.8          Capital Adequacy.

 

(a)           In the event that any Lender (for purposes of this Section 3.8,
the term “Lender” shall include Agent or any Lender and any corporation or bank
controlling Agent or any Lender) shall have determined that any applicable law,
rule, regulation or guideline regarding capital adequacy in effect on the
Closing Date, or any change therein effected after the Closing Date, or any
change in the interpretation or administration thereof by any Governmental Body,
central bank or other financial, monetary or other authority, in each case
adopted after the Closing Date, charged with the interpretation or
administration thereof, or compliance by any Lender and the office or branch
where any Lender (as so defined) makes or maintains any LIBOR Rate Loans with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on any Lender’s capital as
a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration each Lender’s policies with respect to capital adequacy),
then, from time to time, the Borrowers shall pay upon demand to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
provided, however, that, notwithstanding anything herein to the contrary, this
Section 3.8 shall be deemed to apply to the Dodd-Frank Wall Street Reform and
Consumer Protection Act and to The Basel III Accord published by The Basel
Committee on Banking Supervision, and to all requests, rules, regulations,
guidelines or directives under either of the foregoing or issued in connection
therewith, regardless of the date enacted, adopted or issued, even if enacted,
adopted or issued before the Closing Date.  In determining such amount or
amounts, such Lender may use any reasonable averaging or attribution methods. 
Such Lender shall certify the amount of such reduction and provide a reasonably
detailed calculation thereof to Administrative Borrower and Agent.  The
protection of this Section 3.8 shall be available to each Lender regardless of
any possible contention of invalidity or inapplicability with respect to the
applicable law, regulation or condition.

 

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(b)           A certificate of such Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender with respect to
Section 3.8(a) when delivered to Administrative Borrower and Agent shall be
conclusive absent manifest error.

 

(c)           If any Lender requests compensation under Sections 3.6, 3.7 or
3.8, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking such Lender’s Advances or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates if, in the judgment of Agent, such designation or assignment
(1) would eliminate or reduce amounts payable pursuant to such Sections in the
future, and (2) in each case, would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be materially disadvantageous to such
Lender.  Borrowers hereby agree to pay all documented and reasonable
out-of-pocket costs and expenses incurred by Agent or such Lender in connection
with any such designation or assignment.

 

(d)           Administrative Borrower may obtain, at Borrowers’ expense, a
replacement Lender (“Replacement Lender”) for a Lender, other than Agent,
seeking payment or compensation under Sections 3.6, 3.7 or 3.8 of this Agreement
or that is a Defaulting Lender (any such Lender, an “Affected Lender”), which
Replacement Lender shall be reasonably satisfactory to Agent and the Issuers. 
In the event Administrative Borrower obtains a Replacement Lender that will
purchase all outstanding Obligations owed to such Affected Lender and assume its
Revolver Commitment hereunder within ninety (90) days following notice to Agent
and the Affected Lender of Administrative Borrower’s intention to do so (the
“Replacement Notice”), the Affected Lender shall sell and assign its Advances
and Revolver Commitment, without recourse, to such Replacement Lender in
accordance with the provisions of Section 17.2; provided, that, (i) the Lender
that Administrative Borrower proposes to replace must be an Affected Lender at
the time of delivery of the Replacement Notice to Agent, (ii) Administrative
Borrower and Issuers shall have consented thereto in writing, (iii) such
assignment will in fact result in a reduction in such compensation and payment
then payable to the Affected Lender, (iv) such assignment does not conflict with
applicable laws or regulations, (v)(A) Borrowers or the Replacement Lender have
reimbursed such Affected Lender for any administrative fee payable by such
Affected Lender to Agent pursuant to Section 17.2 and (B) in any case where such
replacement occurs as the result of a demand for payment of pursuant to Sections
3.6, 3.7 or 3.8, Borrowers have paid all increased costs and taxes to which such
Affected Lender is entitled under such Sections 3.6, 3.7 or 3.8 through the date
of such sale and assignment; provided, further, that, each Replacement Lender
shall be a Qualified Assignee.  Nothing in this Section 3.8 shall limit or
impair (1) any rights that any Borrower or Agent may have against any Lender
that is a Defaulting Lender or (2) Agent’s rights to replace a Lender in
accordance with this Agreement.

 

3.9          Withholding Taxes.

 

(a)           Except as otherwise required by law and subject to Section 17.3,
each payment by the Borrowers or the Guarantors under this Agreement or the
Other Documents shall be made without withholding or deduction for or on account
of any present or future Taxes or Charges (other than Excluded Taxes).  If any
such withholding or deduction for Taxes or Charges is so required, the Borrowers
or Guarantors, as applicable, shall promptly upon becoming aware that such
withholding or deduction is necessary, notify the Agent and shall make the
withholding or deduction, pay the amount withheld to the appropriate
Governmental Body before penalties attach

 

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thereto or interest accrues thereon and except with respect to Excluded Taxes
forthwith pay such additional amount as may be necessary to ensure that the net
amount actually received by Agent and each Lender free and clear of such taxes
(including such taxes on such additional amount) is equal to the amount which
that Agent or such Lender (as the case may be) would have received had such
withholding or deduction not been made.  Within thirty (30) days of paying any
amount withheld or deducted on account of tax, Administrative Borrower shall, or
shall procure that the other relevant Borrower shall, deliver to the Agent
evidence (reasonably satisfactory to the Agent) that the appropriate payment has
been paid to the relevant tax authority.  If the Agent or any Lender pays any
amount in respect of any such Taxes (other than Excluded Taxes), the Borrowers
and Guarantors shall reimburse the Agent or such Lender for that payment on
demand in the currency in which such payment was made.  If the Borrowers or
Guarantors pay any such Taxes, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Agent or Lender on whose account
such withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth (30th) day after payment.

 

(b)           Any Lender claiming any additional amounts payable pursuant to
this Section 3.9 shall use its commercially reasonable efforts to change the
jurisdiction of its lending office if such a change would reduce any such
additional amounts (or any similar amount that may thereafter accrue) and would
not, in the sole determination of such Lender, be materially disadvantageous to
such Lender.

 

(c)           If a Lender determines, in its reasonable discretion, that it has
received a refund of or any credit for any Taxes as to which it has been
indemnified by the Borrowers or with respect to which the Borrowers or the
Guarantors have paid additional amounts pursuant to this Section 3.9, such
Lender shall to the extent it can do so without prejudice to the retention of
the amount of such refund or credit and provided no Event of Default then
exists, pay over such refund or credit to the Borrowers or the Guarantors (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrowers or the Guarantors under this Section 3.9 with respect to the Taxes
giving rise to such refund or credit), net of all out-of-pocket expenses of the
relevant Lender and without interest (other than any interest paid by the
relevant Governmental Body with respect to such refund or credit); provided,
that, the Borrowers and the Guarantors, upon the request of the relevant Lender,
agree to repay the amount paid over to the Borrowers or the Guarantors (plus any
penalties, interest or other charges imposed by the relevant Governmental Body)
to the relevant Lender in the event such Lender is required to repay such refund
or credit to such Governmental Body.  Notwithstanding anything to the contrary
in this Section 3.9(c), in no event will a Lender be required to pay any amount
to an indemnifying party pursuant to this Section 3.9(c) the payment of which
would place the Lender in a less favorable net after-Tax position than the
Lender would have been in if the indemnification payments or additional amounts
giving rise to such refund had never been paid.  This subsection shall not be
construed to require any Lender to (i) conduct its business or to arrange or
alter in any respect its tax or financial affairs so that it is entitled to
receive such refund or credit, other than performing any mistrial acts necessary
to be entitled to receive such refund or credit or (ii) make available its Tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrowers.

 

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4.             GRANT OF SECURITY INTEREST; COLLATERAL COVENANTS.

 

4.1          Security Interest in the Collateral.

 

To secure the prompt payment and performance of all of the Obligations to each
Secured Party, each US Loan Party and each Canadian Loan Party, to the extent
applicable and subject to Section 4.20 hereof, hereby collaterally assigns,
pledges and grants to Agent, for the ratable benefit of each Secured Party, a
continuing Lien in and to all of its Collateral, whether now owned or existing
or hereafter acquired or arising and wheresoever located.  Each Loan Party shall
mark its books and records as may be necessary or appropriate to evidence,
protect and perfect Agent’s Lien and shall cause its financial statements, where
applicable, to reflect such Lien.

 

4.2          Perfection of Security Interest.

 

(a)           Each Loan Party shall take all action that may be necessary or
desirable, or that Agent may request in its Permitted Discretion, so as at all
times to maintain the validity, perfection, enforceability and priority of
Agent’s Lien in the Collateral to the extent required by this Agreement or any
Other Documents.

 

(b)           Agent may, and each Loan Party hereby authorizes Agent to, at any
time and from time to time file in accordance with Section 9-509 of the UCC and
the PPSA, financing statements and amendments thereto that describe the
Collateral as “all assets” or similar language of the applicable Loan Party
(other than Excluded Assets) and which contain any other information required by
the UCC or the PPSA, as applicable, for the sufficiency or filing office
acceptance of any financing statements, continuation statements or amendments. 
Each Loan Party agrees to furnish any such information to Agent promptly upon
request.

 

(c)           Each Loan Party shall, at any time and from time to time, take
such steps as Agent may request in its Permitted Discretion to (i) obtain an
acknowledgment, in form and substance reasonably satisfactory to Agent, of any
bailee having possession of any of the Collateral, stating that the bailee holds
such Collateral for Agent, (ii) obtain “control” of any letter-of-credit rights,
deposit accounts (other than Restricted Accounts) or electronic chattel paper
(as such terms are defined in the UCC with corresponding provisions thereof
defining what constitutes “control” for such items of Collateral), with any
agreements establishing control to be in form and substance reasonably
satisfactory to Agent, and (iii) otherwise insure the continued perfection and
priority of Agent’s Liens in any of the Collateral for the benefit of the
Lenders and of its rights therein.  If any Loan Party shall at any time, acquire
a “commercial tort claim” (as such term is defined in the UCC) in excess of
$250,000, such Loan Party shall promptly notify Agent thereof in writing (which
notice shall be deemed to be an update of Schedule 5.8(b)), therein providing a
reasonable description and summary thereof, and upon delivery thereof to Agent,
such Loan Party shall be deemed to thereby have granted to Agent, for the
ratable benefit of each Secured Party (and each Loan Party hereby grants to
Agent, for the ratable benefit of each Secured Party) a Lien in and to each such
commercial tort claim and all proceeds thereof, all upon the terms of and
governed by this Agreement to secure the prompt payment and performance of all
of the Obligations.

 

(d)           Each Loan Party hereby confirms and ratifies all UCC financing
statements filed by Agent with respect to such Loan Party on or prior to the
date of the Agreement.

 

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(e)           All charges, expenses and fees Agent may incur in doing any of the
foregoing, and any taxes relating thereto, shall be paid by Loan Parties to
Agent promptly upon demand or, at Agent’s option, and without the necessity for
demand, shall be charged to the Borrowers’ Account as a Revolving Advance and
added to the Obligations (subject to the terms of Section 17.10 hereof).

 

4.3          Preservation of Collateral.

 

Following the occurrence and during the continuance of an Event of Default, in
addition to the rights and remedies set forth in Section 11.1, Agent:  (a) may
at any time take such steps as Agent deems necessary or appropriate to protect
Agent’s Lien in and to preserve the Collateral, including, without limitation,
the hiring of such security guards or the placing of other security protection
measures as Agent may deem appropriate; (b) may employ and maintain at any Loan
Party’s premises a custodian who shall have full authority to do all acts
necessary to protect Agent’s interests in the Collateral; (c) may lease
warehouse facilities to which Agent may move all or part of the Collateral;
(d) may use any Loan Party’s owned or leased lifts, hoists, trucks and other
facilities or equipment for handling or removing the Collateral; (e) shall have,
and is hereby granted, a right of ingress and egress to the places where the
Collateral is located, and may proceed over and through any Loan Party’s owned
or leased property; and (f) shall have a non-exclusive, royalty-free, license to
use each Loan Party’s Intellectual Property for the purposes of the completion,
processing and sale of such Loan Party’s Inventory and other assets.  At such
time, each Loan Party shall cooperate fully with all of Agent’s commercially
reasonable efforts to preserve the Collateral and will take such actions to
preserve the Collateral as Agent may direct in connection therewith.  All of
Agent’s expenses of preserving the Collateral, including, without limitation,
any expenses relating to any actions by Agent described in this Section 4.3,
shall be paid by Loan Parties to Agent promptly upon demand or, at Agent’s
option, and without the necessity for demand, shall be charged to the Borrowers’
Account as a Revolving Advance and added to the Obligations (subject to the
terms of Section 17.10 hereof).

 

4.4          Ownership and Location of Collateral.

 

(a)           At the time the Collateral becomes subject to Agent’s Lien, each
Loan Party shall be the sole owner of and fully authorized and able to sell,
transfer, pledge and/or grant a first priority Lien (subject to Permitted
Encumbrances) in each and every item of its respective Collateral to Agent; and,
except for Permitted Encumbrances, the Collateral shall be free and clear of all
Liens and encumbrances whatsoever.

 

(b)           Each Loan Party’s books and records, Equipment, Inventory and all
other assets (other than (i) motor vehicles and (ii) Equipment out for repair in
the ordinary course of business) shall be located at one of the locations set
forth on Schedule 4.4 (as such Schedule may from time to time be updated in
accordance with Section 7.18) and shall not be removed from such
location(s) without the prior written consent of Agent, unless such Loan Party
has complied with Section 7.18.

 

4.5          Defense of Agent’s and Lenders’ Interests.

 

Until all of the Obligations have been Paid in Full, Agent’s Liens in the
Collateral shall continue in full force and effect.  For so long as Agent’s
Liens in the Collateral continue in full force

 

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and effect, no Loan Party shall, without Agent’s prior written consent, pledge,
assign, transfer, create, charge or suffer to exist a Lien upon any part of the
Collateral, except for Permitted Encumbrances.  Each Loan Party shall defend
Agent’s Liens in the Collateral against any and all Persons whatsoever.  At any
time following demand by Agent for payment of all Obligations in accordance with
Section 11.1, in addition to and not in limitation of Agent’s rights and
remedies set forth in Section 11.1, (a) Agent shall have the right to take
possession of the indicia of the Collateral and the Collateral, (b) Loan Parties
shall, upon Agent’s demand, assemble the Collateral in the best manner possible
and make it available to Agent at a place reasonably convenient to Agent, and
(c) upon demand by Agent each Loan Party shall, and Agent may, at its option,
instruct all suppliers, carriers, forwarders, warehouses or others receiving or
holding cash, checks, Inventory, documents or instruments of such Loan Party to
deliver same to Agent (or any Person designated by Agent) and/or subject to
Agent’s order and if they shall come into any Loan Party’s possession, all such
Collateral shall be held by such Loan Party in trust as Agent’s trustee, and
such Loan Party will immediately deliver such Collateral to Agent (or any Person
designated by Agent) in their original form, together with any necessary
endorsement.

 

4.6          Books and Records.

 

Each Loan Party shall, and shall cause each of its Subsidiaries to, (a) keep
proper books of record and account in which full, true and correct entries in
all material respects will be made of all material dealings or transactions of
or in relation to its business and affairs; (b) set up on its books accruals
with respect to all taxes, assessments, charges, levies and claims; and (c) on a
reasonably current basis set up on its books, from its earnings, allowances
against doubtful Receivables, advances and investments and all other proper
accruals (including without limitation by reason of enumeration, accruals for
premiums, if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties), which should be set aside from
such earnings in connection with its business.  All determinations pursuant to
this subsection shall be made in accordance with, or as required by, GAAP
consistently applied.

 

4.7          Financial Disclosure.

 

Each Loan Party hereby irrevocably authorizes and directs all Accountants and
auditors employed by such Loan Party at any time during the Term to exhibit and
deliver to Agent copies of any of such Loan Party’s and each of its
Subsidiaries’ financial statements, trial balances or other accounting records
of any sort in the Accountant’s or auditor’s possession, and to disclose to
Agent any information such Accountants may have concerning such Loan Party’s and
each of its Subsidiaries’ financial status and business operations.  Each Loan
Party hereby authorizes all federal, state and municipal authorities to furnish
to Agent copies of reports or examinations relating to such Loan Party or to any
of its Subsidiaries, whether made by such Loan Party or otherwise. 
Notwithstanding the foregoing authorization, so long as no Event if Default is
in existence, Agent will attempt to obtain such information or materials
directly from such Loan Party prior to obtaining such information or materials
from such Accountants, auditors or such authorities.

 

4.8          Compliance with Laws.

 

Each Loan Party shall, and shall cause each of its Subsidiaries to, comply in
all respects with all acts, rules, regulations and orders of any Governmental
Body applicable to its respective

 

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Collateral or any part thereof or to the operation of such Person’s business the
non-compliance with which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.  Each Loan Party
may, however, contest or dispute any acts, rules, regulations, orders and
directions of those bodies or officials in any reasonable manner; provided,
that, if as a result of such contest or dispute commenced at the option of any
Loan Party, any related Lien is inchoate or stayed and, at Agent’s option,
sufficient Reserves shall be established to the satisfaction of Agent to protect
Agent’s Lien in the Collateral. The Collateral at all times shall be maintained
in accordance in all material respects with the requirements of all insurance
carriers which provide insurance with respect to the Collateral so that such
insurance shall remain in full force and effect.

 

4.9          Inspection of Premises/Appraisals.

 

(a)           Agent shall have the right (i) to audit, check, inspect and make
abstracts and copies from each Loan Party’s books, records, audits,
correspondence and all other papers relating to the Collateral and the operation
of each Loan Party’s business and (ii) to enter, or to have their agents enter,
upon any Loan Party’s premises at any time during business hours for the purpose
of inspecting the Collateral (and/or with respect to Agent (and Persons
designated by Agent) appraising the Collateral) and any and all records
pertaining thereto and the operation of such Loan Party’s business (all such
audits and inspections described in the immediately preceding clauses (i) and
(ii) being collectively referred to herein as “Collateral Field Examinations”);
provided, that, (A) Collateral Field Examinations shall be conducted at
Borrowers’ expense on no more than two (2) occasions during each twelve (12)
month period following the Closing Date and on a third (3rd) occasion at
Borrowers’ expense during any such twelve (12) month period if a Cash Dominion
Event has occurred and is continuing, and (B) upon the occurrence and during the
continuance of an Event of Default, Agent may conduct, at Borrowers’ expense,
all such additional Collateral Field Examinations as Agent shall deem necessary
in its Permitted Discretion.

 

(b)           (i)  Agent shall have the right to conduct Inventory appraisals
(or have other Persons selected by Agent conduct appraisals); provided, that,
such appraisals of Inventory shall be conducted at Borrowers’ expense on no more
than (A) two (2) occasions during the first year after the Closing Date and on a
third (3rd) occasion at Borrowers’ expense if a Cash Dominion Event occurs at
any time during such year, and (B) one (1) occasion during each year after the
first anniversary of the Closing Date and on a second (2nd) occasion at
Borrowers’ expense during any such year if a Cash Dominion Event occurs at any
time during such year, and (ii) upon the occurrence and during the continuance
of an Event of Default, Agent may conduct, at Borrowers’ expense, additional
Inventory appraisals or appraisals of Equipment, Real Property and other
Collateral as Agent shall deem necessary in its Permitted Discretion.

 

4.10        Insurance.

 

Each Loan Party shall bear the full risk of any loss of any nature whatsoever
with respect to the Collateral.  At each Loan Party’s own cost and expense, each
Loan Party shall, and shall cause each of its Subsidiaries to, maintain
insurance in amounts, types and with carriers in each case acceptable to Agent. 
Without limiting the foregoing, each Loan Party shall, and shall cause each of
its Subsidiaries to, (a) keep all its insurable properties insured against the
hazards of fire, flood, those hazards covered by extended coverage insurance and
such other hazards, and for such amounts, not less than as is customary in the
case of companies engaged in businesses similar to such Loan

 

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Party’s business, including, without limitation, business interruption
insurance; (b) maintain liability insurance against claims for personal injury,
death or property damage suffered by others; and (c) maintain all such worker’s
compensation or similar insurance as may be required under the laws of any state
or jurisdiction in which Loan Party is engaged in business.  Each Loan Party
shall (i) furnish Agent with copies of all policies and evidence of the
maintenance of such policies required hereby upon the request of Agent and
(ii) cause all such policies to include appropriate loss payable endorsements,
and/or additional insured endorsements, in form and substance reasonably
satisfactory to Agent, providing with respect to loss payable endorsements that
(A) all proceeds thereunder shall be payable to Agent, (B) no such insurance
shall be affected by any act or neglect of the insured or owner of the property
described in such policy, and (C) that such policy and loss payable clauses may
not be cancelled, amended or terminated unless at least thirty (30) days’ prior
written notice is given to Agent (or with respect to non-payment only, ten
(10) days’ prior written notice is given to Agent).  If any insurance losses are
paid by check, draft or other instrument payable to any Loan Party and Agent
jointly, Agent may endorse such Loan Party’s name thereon and do such other
things as Agent may deem advisable to reduce the same to cash and apply the same
in accordance with this Agreement.

 

4.11        Failure to Pay Insurance.

 

If any Loan Party fails to obtain insurance as hereinabove provided, or to keep
the same in force, Agent, at its option, may obtain such insurance and pay the
premium therefor for the Borrowers’ Account, and charge the Borrowers’ Account
therefor and such expenses so paid shall be part of the Obligations.

 

4.12        Payment of Taxes.

 

Each Loan Party shall, and shall cause each of its Subsidiaries to, pay, when
due, all federal, state and other material Taxes and other Charges lawfully
levied or assessed upon such Person or any of the Collateral, except for those
Taxes and Charges that are being contested in good faith by appropriate
proceedings diligently pursued and available to such Loan Party, which
proceedings (or orders entered in connection with such proceedings) stay the
forfeiture or sale of, or other enforcement against, the property subject to any
such taxes, assessments, fees and other governmental charges and with respect to
which adequate reserves have been set aside on the books of such Loan Party in
accordance with GAAP consistently applied.  If any Tax or other Charges remain
unpaid after the date fixed for their payment, or if any claim shall be made
which, in Agent’s opinion, could reasonably be expected to create a valid Lien
on the Collateral (which is not otherwise a Permitted Encumbrance), Agent may
without notice to Loan Parties pay such Taxes or other Charges and each Loan
Party hereby indemnifies and holds Agent and each Lender harmless in respect
thereof.  The amount of any payment by Agent under this Section 4.12 may, at the
election of Agent, be charged to the Borrowers’ Account and added to the
Obligations and, until Loan Parties shall furnish Agent with an indemnity
therefor (or supply Agent with evidence satisfactory to Agent that due provision
for the payment thereof has been made), Agent may hold without interest any
balance standing to Loan Parties’ credit and Agent shall retain its Lien in any
and all Collateral held by Agent.

 

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4.13        Payment of Leasehold Obligations.

 

Each Loan Party shall, and shall cause each of its Subsidiaries to, at all times
pay, when and as due, its rental obligations under all leases under which it is
a tenant, and shall otherwise comply, in all material respects, with all other
terms of such leases and keep them in full force and effect and, at Agent’s
request will provide evidence of having done so, except, in each case, where the
failure to do so could not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.

 

4.14        Accounts and other Receivables.

 

(a)           Nature of Accounts.  Each of the Accounts that Administrative
Borrower or any Borrower reports as being an Eligible Account or requests be
treated as an Eligible Account shall (i) be a bona fide and valid Account
representing a bona fide Indebtedness incurred by the Customer therein named,
for a fixed sum as set forth in the invoice relating thereto (provided
immaterial or unintentional invoice errors shall not be deemed to be a breach
hereof) with respect to an absolute sale or lease and delivery of Inventory upon
stated terms of a Borrower, or work, labor or services theretofore rendered by a
Borrower as of the date each Account is created, (ii) be due and owing in
accordance with the invoice (excepting immaterial invoice errors) evidencing
such Accounts without dispute, setoff or counterclaim, except as may be stated
on the Accounts schedules delivered by Loan Parties to Agent (provided, that,
immaterial errors in the Accounts schedules shall not be deemed to be a breach
hereof), and (iii) satisfy each of the criteria set forth in the definition of
“Eligible Accounts” set forth in this Agreement to qualify as an Eligible
Account.

 

(b)           Solvency of Customers.  Each Customer, to the best of each Loan
Party’s knowledge, as of the date each Account (that Administrative Borrower or
any Borrower reports as being an Eligible Account or requests be treated as an
Eligible Account) is created, is and will be Solvent and able to pay all
Accounts on which the Customer is obligated in full when due or with respect to
such Customers of any Loan Party who are not Solvent such Loan Party has set up
on its books and in its financial records bad debt reserves adequate to cover
such Accounts.

 

(c)           Locations of Chief Executive Office.  Each Loan Party’s chief
executive office is located at the addresses set forth on Schedule 4.14(c)) (as
such schedule may from time to time be updated in accordance with
Section 7.18).  Until written notice is given to Agent by Administrative
Borrower of any other office at which any Loan Party keeps its records
pertaining to Accounts and the other Receivables, all such records shall be kept
at such executive office or otherwise as set forth on Schedule 4.14(c).

 

(d)           Collection of Accounts and other Receivables.  Until any Loan
Party’s authority to do so is terminated by Agent (which notice of termination
Agent may give at any time following the occurrence and during the continuance
of an Event of Default), each Loan Party will, at such Loan Party’s sole cost
and expense, collect all amounts received on Accounts and other Receivables. 
From and after the occurrence and during the continuance of an Event of Default,
upon Agent’s demand, each Loan Party shall deliver to Agent, in original form
and on the date of receipt thereof, all checks, drafts, notes, money orders,
acceptances, cash and other evidences of Indebtedness at any time received by
Loan Parties.

 

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(e)           Notification of Assignment of Accounts and other Receivables;
Verification.  Agent shall have the right (i) upon the occurrence and during the
continuance of an Event of Default, to send notice of the assignment of, and
Agent’s Lien in, the Accounts and other Receivables of each Loan Party to any
and all Customers, any other Person obligated on such Accounts and other
Receivables or any third party holding or otherwise concerned with any of the
Collateral (which notice may include a direction by Agent to make all payments
thereon to an account designated by Agent) and (ii) at any time, in the name of
Agent, any designee of Agent or any Borrower or any other Loan Party, to verify
the validity, amount or any other matter relating to any Accounts and other
Receivables of any Loan Party by mail, telephone or otherwise.  Without in any
way limiting the foregoing, so long as no Default or Event of Default exists,
Agent agrees to provide notice to Administrative Borrower prior to Agent
conducting any verification of Accounts or other Receivables in accordance with
this Section 4.14(e) (it being understood and agreed that such notice shall only
advise Administrative Borrower that Agent will be conducting such verification
of Accounts or other Receivables and shall not include the identification of any
specific Accounts, Receivables or Customers related thereto).  Each Loan Party
shall cooperate fully with Agent in an effort to facilitate and promptly
conclude any such verification process.  Following the occurrence and during the
continuance of any Event of Default, at its option, Agent shall have the
exclusive right to collect the Accounts and other Receivables of each Loan
Party, take possession of the Collateral, or both.  In such case, Agent’s actual
collection expenses, including, but not limited to, stationery and postage,
telephone and facsimile, secretarial and clerical expenses and the salaries of
any collection personnel used for collection, may be charged to the Borrowers’
Account and added to the Obligations.

 

(f)            Power of Agent to Act on Loan Parties’ Behalf.  Each Loan Party
hereby constitutes Agent or Agent’s designee as such Loan Party’s attorney with
power (i) upon the occurrence and during the continuance of an Event of Default,
to endorse such Loan Party’s name upon any notes, acceptances, checks, drafts,
money orders or other evidences of payment or Collateral; (ii) upon the
occurrence and during the continuance of an Event of Default, to sign such Loan
Party’s name on any invoice or bill of lading relating to any of the Accounts
and other Receivables of each such Loan Party, drafts against Customers,
assignments and verifications of Accounts and other Receivables of each such
Loan Party; (iii) at any time (subject to the terms of Section 4.14(e) above),
to send verifications of Accounts and other Receivables of each such Loan Party
to any Customer or Person; (iv) at any time, to sign such Loan Party’s name on
all financing statements or any other documents or instruments deemed necessary
or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the
Collateral and to file same; (v) after the occurrence and during the continuance
of an Event of Default, to demand payment of the Accounts and other Receivables
of each such Loan Party; (vi) after the occurrence and during the continuance of
an Event of Default, to enforce payment of the Accounts and other Receivables of
each such Loan Party by legal proceedings or otherwise; (vii) after the
occurrence and during the continuance of an Event of Default, to exercise all of
Loan Parties’ rights and remedies with respect to the collection of the
Accounts, Receivables and any other Collateral; (viii) after the occurrence and
during the continuance of an Event of Default, to settle, adjust, compromise,
extend or renew the Accounts and other Receivables of each such Loan Party;
(ix) after the occurrence and during the continuance of an Event of Default, to
settle, adjust or compromise any legal proceedings brought to collect Accounts
and other Receivables of each such Loan Party; (x) after the occurrence and
during the continuance of an Event of Default, to prepare, file and sign such
Loan Party’s name on a proof of claim in bankruptcy or similar document against
any Customer or any other Person obligated with

 

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respect to an Account or other Receivable of each such Loan Party; (xi) to
prepare, file and sign such Loan Party’s name on any notice of Lien, assignment
or satisfaction of Lien or similar document in connection with the Accounts and
other Receivables of each such Loan Party; and (xii) after the occurrence and
during the continuance of an Event of Default, to do all other acts and things
necessary to carry out this Agreement.  All acts of said attorney or designee
are hereby ratified and approved, and said attorney or designee shall not be
liable for any acts of omission or commission nor for any error of judgment or
mistake of fact or of law, unless done maliciously or with gross (not mere)
negligence or willful misconduct, as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction; this power being
coupled with an interest is irrevocable at all times until all of the
Obligations have been Paid in Full.  Agent shall have the right at any time
following the occurrence and during the continuance of an Event of Default, to
change the address for delivery of mail addressed to any Loan Party to such
address as Agent may designate and to receive, open and dispose of all mail
addressed to any Loan Party.

 

(g)           No Liability.  Neither Agent nor any Lender shall, under any
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Accounts, other Receivables or any instrument received in payment
thereof, or for any damage resulting therefrom other than in connection with its
gross (not mere) negligence or willful misconduct as determined pursuant to a
final, non-appealable order of a court of competent jurisdiction.  Following the
occurrence and at any time during the continuance of an Event of Default, Agent
may, without notice or consent from any Loan Party, sue upon or otherwise
collect, extend the time of payment of, compromise or settle for cash, credit or
upon any terms any of the Accounts, other Receivables or any other securities,
instruments or insurance applicable thereto and/or release any obligor thereof. 
Agent is authorized and empowered to accept following the occurrence and during
the continuance of an Event of Default the return of the goods represented by
any of the Accounts and other Receivables, without notice to or consent by any
Loan Party, all without discharging or in any way affecting any Loan Party’s
liability hereunder.

 

(h)           Establishment of a Lockbox Account, Dominion Account; Cash
Dominion.  On or before the applicable dates set forth in Schedule 8.3 and at
all times thereafter, each Loan Party shall establish and maintain a lockbox
account, dominion account or such other “blocked account” (together with the
Cash Receipt Accounts and the Operating Accounts, collectively, the “Blocked
Accounts”) with Wells Fargo or, with Agent’s prior written consent, such banks
as may be selected by each such Loan Party and reasonably acceptable to Agent
(it being understood that each Lender is acceptable for this purpose) with
respect to all of its deposit and other accounts (other than Restricted
Accounts).  As of the Closing Date and at all times prior to the establishment
of the Blocked Accounts in accordance with Schedule 8.3, all proceeds of
Collateral and all other cash and Cash Equivalents of each such Loan Party
(other than amounts properly on deposit in Restricted Accounts) shall at all
times be deposited by each Loan Party in any of the Cash Receipt Accounts set
forth on Schedule 5.23 with respect to which Loan Parties shall establish the
Blocked Accounts in accordance with Schedule 8.3.  From and after the applicable
dates set forth in Schedule 8.3 for establishment of the Blocked Accounts at all
times thereafter, all proceeds of Collateral and all other cash and Cash
Equivalents of each such Loan Party (other than amounts properly on deposit in
Restricted Accounts) shall at all times be deposited by each Loan Party in the
Blocked Accounts.  Loan Parties shall (as agent and trustee for the Agent)
instruct each of their Customers and all other applicable Persons to at all
times send payments on all Accounts and other Receivables of Loan Parties into
such Cash Receipt Accounts (i.e., prior to establishment of the Blocked Accounts
in

 

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accordance with Schedule 8.3) and into the Blocked Accounts, after establishment
thereof in accordance with Schedule 8.3.  If, for any reason any Customer makes
payments on any Account or other Receivable directly to any Loan Party, such
Loan Party shall collect (as agent and trustee for the Agent) all such amounts
and immediately pay all such amounts into a Cash Receipt Account or a Blocked
Account, as applicable, in accordance with the immediately preceding sentence;
provided, however, that, until such payment into a Cash Receipt Account or a
Blocked Account, as applicable, all moneys so received will be held upon trust
for and promptly remitted to the Agent.  All of the Blocked Accounts (but not
the Restricted Accounts) shall be governed by “control” or other agreements in
form and substance acceptable to Agent satisfactory to, among other things,
establish Agent’s perfection and rights in such Blocked Accounts or other
accounts under the UCC and other applicable law.  All invoices for sales of
Inventory or services by Loan Parties shall contain the address of such Cash
Receipt Accounts (i.e., prior to establishment of the Blocked Accounts in
accordance with Schedule 8.3) and the Blocked Accounts, after establishment
thereof in accordance with Schedule 8.3, as the address for remittance of
payment.  The “control” agreements covering the Blocked Accounts (other than
Cash Receipt Accounts and Restricted Accounts) shall provide that (i) after
delivery of a Control Notice (which may be delivered by Agent upon the
occurrence and during the continuance of a Cash Dominion Event), (A) such bank
or other institution shall comply with the instructions given by Agent with
respect to such Blocked Accounts and funds therein without further consent by
Loan Parties and (B) all amounts in such Blocked Accounts shall be transferred
on a daily basis by such bank or other institution to the applicable Payment
Account or such other account as may be designated by Agent, and (ii) such bank
or other institution shall waive any offset rights against the funds so
deposited into such Blocked Accounts (other than Restricted Accounts), subject
to exceptions to such waiver of offset rights as shall be acceptable to Agent. 
The “control” agreements covering the Blocked Accounts constituting Cash Receipt
Accounts shall provide that all amounts in such Cash Receipt Accounts shall be
transferred on a daily basis by such bank or other institution to an Operating
Account subject to a “control” agreement or, during any Cash Dominion Event, to
the applicable Payment Account or such other account as may be designated by
Agent.  Neither Agent nor any Lender assumes any responsibility for any Blocked
Account arrangement, including without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.  Alternatively, upon the occurrence and during the continuance of a
Cash Dominion Event, Agent may establish depository accounts (collectively, the
“Depository Accounts”) in the name of Agent at a bank or banks for the deposit
of such funds and Loan Parties shall deposit all proceeds of Collateral or cause
same to be deposited, in kind, in such Depository Accounts of Agent in lieu of
depositing same to the Blocked Accounts.

 

(i)            Adjustments.  No Loan Party will, without Agent’s consent (which
consent shall not be unreasonably withheld, delayed or conditioned prior to the
occurrence and continuance of an Event of Default), compromise or adjust any
Accounts or other Receivables (or extend the time for payment thereof) of any
such Loan Party or accept any returns of merchandise or grant any additional
discounts, allowances or credits thereon except for those compromises,
adjustments, returns, discounts, credits and allowances in the ordinary course
of business of such Loan Party.

 

4.15        Inventory.

 

All Inventory held for sale or lease by any Loan Party, has been and will be
produced by such Loan Party in accordance with the Federal Fair Labor Standards
Act of 1938, as amended, and all rules, regulations and orders thereunder in all
material respects.

 

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4.16        Maintenance of Equipment.

 

All material Equipment used or useful in the conduct of any Loan Party’s
business shall be maintained in good operating condition and repair (reasonable
wear and tear excepted) and all necessary replacements of and repairs thereto
shall be made so that the value and operating efficiency of such Equipment shall
be maintained and preserved (reasonable wear and tear excepted).  Each Loan
Party shall use or operate any Equipment in compliance with Section 4.8.  No
Loan Party shall sell or otherwise Dispose of any of its Equipment, except to
the extent permitted by under Section 7.1.

 

4.17        Exculpation of Liability.

 

Nothing herein contained shall be construed to constitute Agent or any Lender as
any Loan Party’s agent for any purpose whatsoever, nor shall Agent or any Lender
be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof, except with respect to Agent’s or such Lender’s
gross (not mere) negligence or willful misconduct as determined by a final and
non-appealable order of a court of competent jurisdiction.  Neither Agent nor
any Lender, whether by anything herein or in any assignment or otherwise,
assumes any of Loan Party’s obligations under any contract or agreement to which
it is a party, and neither Agent nor any Lender shall be responsible in any way
for the performance by Loan Party of any of the terms and conditions thereof.

 

4.18        Environmental Matters.

 

(a)           Loan Parties shall ensure any Real Property remains in compliance
with all Environmental Laws and they shall not place or permit to be placed any
Hazardous Substances on any such Real Property, except as not prohibited by
applicable law or appropriate Governmental Body and except where any such
noncompliance or placement could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

(b)           Loan Parties shall assure and monitor continued compliance with
all applicable Environmental Laws, except where any failure to comply could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

(c)           Loan Parties shall (i) employ in connection with the use of any
Real Property appropriate technology necessary to maintain compliance with any
applicable Environmental Laws, except where any such noncompliance could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect and (ii) dispose of any and all Hazardous Waste
generated at such Real Property only at facilities and with carriers that
maintain valid permits under RCRA and any other applicable Environmental Laws,
except where the failure to do so could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.  Loan
Parties shall use commercially reasonable efforts to obtain certificates of
disposal, such as hazardous waste manifest receipts, from all treatment,
transport, storage or disposal facilities or operators employed by Loan Parties
in connection with the transport or disposal of any Hazardous Waste generated at
such Real Property, except where the failure to do so could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

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(d)           In the event any Loan Party obtains, gives or receives notice of
any Release or threat of Release of a reportable quantity of any Hazardous
Substances at any Real Property (any such event being hereinafter referred to as
a “Hazardous Discharge”) or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at such Real Property, demand letter or
complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting such Real Property or any
Loan Party’s interest therein, any of which could reasonably be expected to have
a Material Adverse Effect (any of the foregoing is referred to herein as an
“Environmental Complaint”) from any Person, including any state agency
responsible in whole or in part for environmental matters in the state in which
such Real Property is located or the United States Environmental Protection
Agency (any such Person hereinafter the “Authority”), then the Borrowers shall
promptly (but in any case within five (5) Business Days) give written notice of
same to Agent detailing facts and circumstances of which any Loan Party is aware
giving rise to the Hazardous Discharge or Environmental Complaint.  Such
information is to be provided to allow Agent to protect its Lien in such Real
Property and is not intended to create nor shall it create any obligation upon
Agent or any Lender with respect thereto.

 

(e)           Loan Parties shall respond promptly to any Hazardous Discharge or
Environmental Complaint and take all necessary action to comply with applicable
Environmental Laws and to avoid subjecting the Collateral or any Real Property
to any Lien, except where the failure to do so could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.

 

(f)            During the continuation of an Event of Default, promptly upon the
written request of Agent, Loan Parties shall provide Agent, at Loan Parties’
expense, with an environmental site assessment or environmental audit report
prepared by an environmental engineering firm acceptable in the reasonable
opinion of Agent, to assess with a reasonable degree of certainty the existence
of a Hazardous Discharge and the potential costs in connection with abatement,
cleanup and removal of any Hazardous Substances found on, under, at or within
any Real Property.

 

(g)           Loan Parties shall defend and indemnify Agent and Lenders and hold
Agent, Lenders and their respective employees, agents, directors and officers
harmless from and against all loss, liability, damage and expense, claims,
costs, fines and penalties, including attorney’s fees, suffered or incurred by
Agent or Lenders under or on account of any Environmental Laws, including,
without limitation, the assertion of any Lien thereunder, with respect to any
Hazardous Discharge, the presence of any Hazardous Substances affecting any Real
Property, whether or not the same originates or emerges from such Real Property
or any contiguous real estate, except to the extent such loss, liability, damage
and expense is attributable to any Hazardous Discharge resulting from actions on
the part of Agent or any Lender caused by their gross (not mere) negligence or
willful misconduct, as determined pursuant to a final, non-appealable order of a
court of competent jurisdiction, and except to the extent any Hazardous
Substances are first Released on the Real Property after termination of this
Agreement.  Loan Parties’ obligations under this Section 4.18 shall arise upon
the discovery of the presence of any Hazardous Substances at Real Property,
whether or not any federal, state, or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Substances.  Loan Parties’ obligation and the indemnifications hereunder shall
survive the termination of this Agreement.

 

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(h)           For purposes of Sections 4.18 and 5.7, all references to any Real
Property shall be deemed to include all of Loan Parties’ and their respective
Subsidiaries’ right, title and interest in and to their respective owned and
leased premises.

 

4.19        Financing Statements.

 

As of the Closing Date, except for the UCC financing statements and PPSA
financing statements filed by Agent and the other financing statements
evidencing Liens with respect to Permitted Encumbrances, no UCC financing
statements or PPSA financing statements covering any of the Collateral or any
proceeds thereof is on file in any public office.

 

4.20        Special Provisions Relating to Collateral.

 

(a)           The grant of a security interest in the Collateral of each
Canadian Loan Party in favor of Agent under the laws of Canada and the provinces
thereof is further evidenced by Other Documents and subject to the terms of such
Other Documents.

 

(b)           Notwithstanding anything to the contrary contained in this
Agreement or the Other Documents to the contrary, (i) Canadian Borrowers and
Canadian Guarantors (whether as guarantor or otherwise) shall not be liable in
respect of any US Obligations, (ii) no security interest granted by any Canadian
Borrower or Canadian Loan Party under any of the Other Documents shall secure
any US Obligations, (iii) all amounts received by Agent or any Lender on account
of the Canadian Obligations by any Canadian Borrower or Canadian Guarantor shall
be applied or credited solely to the Canadian Obligations, and (iv) the
liability or obligation of any Canadian Loan Party with respect to the
Obligations shall not exceed that portion of the Obligations which is
attributable only to the Canadian Borrowers, the Canadian Obligations, the
Canadian Collateral, the Canadian Dollar Loans, the Canadian Commitments or the
Canadian Letter of Credit Obligations (as the case may be).

 

(c)           The Canadian Loan Parties and the Agent hereby acknowledge that
value has been given by the Agent and Lenders to each Canadian Loan Party for
the granting of each afore-mentioned security interest and that the parties have
not agreed to postpone the time for attachment of such security interests.

 

5.             REPRESENTATIONS AND WARRANTIES.

 

Each Loan Party represents and warrants as follows:

 

5.1          Authority, Etc.

 

Each Loan Party has the requisite limited liability company or corporate power
and authority and legal right to enter into this Agreement and the Other
Documents and to perform all its respective Obligations hereunder and
thereunder.  The execution, delivery and performance of this Agreement, the
Other Documents and the Related Agreements (a) are within such Loan Party’s
limited liability company, partnership or corporate powers, as applicable, have
been duly authorized, are not in contravention of law or the terms of such Loan
Party’s certificate of formation, limited liability company agreement,
certificate of incorporation, by-laws, partnership agreement or other applicable
documents relating to such Loan Party’s formation and governance or to the
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such Loan Party’s business or of any material agreement or undertaking to which
such Loan Party is a party or by which such Loan Party is bound, and (b) will
not conflict with nor result in any breach in any of the provisions of or
constitute a default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of such Loan Party under the provisions of
any material agreement or instrument to which such Loan Party or its property is
a party or by which it may be bound. The execution, delivery, and performance by
each Loan Party of this Agreement, the Other Documents and the Related
Agreements to which such Loan Party is a party and the consummation of the
transactions contemplated by this Agreement, the Other Documents and the Related
Agreements do not and will not require any registration with, Consent, or
approval of, or notice to, or other action with or by, any Government Body,
other than Consents or approvals that have been obtained or waived and that are
still in force and effect or complied with, except for filings and recordings
with respect to the Collateral to be made, or otherwise delivered to the Agent
for filing or recordation, as of the Closing Date. This Agreement, the Other
Documents and the Related Agreements have been duly executed and delivered by
each Loan Party that is a party thereto and is a legally valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors’ rights generally.

 

5.2          Formation and Qualification.

 

(a)           Each Loan Party is duly formed or incorporated and in good
standing under the laws of its respective state, province or other jurisdiction
of organization or incorporation listed on Schedule 5.2(a) (as such schedule may
from time to time be updated in accordance with Section 7.18) and each Loan
Party is qualified to do business and is in good standing in the states and
other jurisdictions listed with respect to that Loan Party on
Schedule 5.2(a) (as such schedule may from time to time be updated in accordance
with Section 7.18), which constitute all states and other jurisdictions in which
qualification and good standing are necessary for such Loan Party to conduct its
business and own its property and where the failure to so qualify could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.  The organizational number of each Loan Party is set
forth on Schedule 5.2(a) (as such schedule may from time to time be updated in
accordance with Section 7.18).  Each Loan Party has delivered to Agent true and
complete copies of its certificate of formation, limited liability company
agreement, certificate of incorporation, by-laws, partnership agreement or other
applicable documents relating to such Loan Party’s formation and governance, as
the case may be.

 

(b)           All of the Subsidiaries of each Loan Party are listed on
Schedule 5.2(b) (as such schedule may from time to time be updated in accordance
with Section 7.12(a)).

 

5.3          Survival of Representations and Warranties.

 

All representations and warranties of such Loan Party contained in this
Agreement and the Other Documents shall be true at the time of such Loan Party’s
execution of this Agreement and the Other Documents, and shall survive the
execution, delivery and acceptance thereof by the parties thereto and the
closing of the transactions described therein or related thereto.

 

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5.4          Tax Returns.

 

Each Loan Party’s federal tax identification number is set forth on
Schedule 5.4.  Except as otherwise expressly permitted by this Agreement, each
Loan Party and each of its Subsidiaries has (a) filed all federal and all
material state, provincial, local and other tax returns, reports and statements,
including information returns, it is required by law to file, (b) paid all Taxes
that are due and payable with respect thereto or otherwise owing, except to the
extent being Properly Contested, and (c) has remitted and, where applicable,
withheld and remitted all required amounts within the prescribed periods to the
appropriate Governmental Bodies, and in particular has deducted, remitted and
paid all Canadian Pension Plan contributions, provincial pension plan
contributions, workers compensation assessments, employment insurance premiums,
employer health premiums, municipal real estate taxes and other taxes payable
under applicable law by them, and furthermore, have withheld from each payment
made to any of its present or former employees, officers and directors, and to
all persons who are non-residents of Canada for the purposes of the Income Tax
Act (Canada) all material amounts required by law to be withheld, including
without limitation all payroll deductions required to be withheld and has
remitted such amounts to the proper Governmental Body within the time required
under applicable law.  No federal, state, local or other income tax return of
any Loan Party or Subsidiary that has been filed is known by any Loan Party to
be under examination as of the Closing Date.  All income tax returns have been
timely filed as of the Closing Date.  The provisions for Taxes on the books of
each Loan Party and each of its Subsidiaries are adequate in all material
respects for all years not closed by applicable statutes, and for its current
fiscal year, and no Loan Party nor any of its Subsidiaries has any knowledge of
any material deficiency or additional assessment in connection therewith not
provided for on its books.

 

5.5          Financial Statements.

 

(a)           The pro forma balance sheet of Loan Parties and their Subsidiaries
on a consolidated basis (the “Pro Forma Balance Sheet”) furnished to Agent on
the Closing Date reflects the consummation of the transactions contemplated
under this Agreement and the Related Transactions and is accurate, complete and
correct in all material respects and fairly reflects the financial condition of
Loan Parties and their Subsidiaries on a consolidated basis as of the Closing
Date after giving effect to the transactions under this Agreement and the
Related Transactions, and has been prepared in accordance with GAAP,
consistently applied.

 

(b)           The twelve (12) month cash flow projections of Loan Parties and
their Subsidiaries on a consolidated basis and their projected balance sheets as
of the Closing Date were prepared by a Responsible Officer of Administrative
Borrower, are based on underlying assumptions which Loan Parties believe provide
a reasonable basis for the projections contained therein in light of conditions
and facts known to Loan Parties at the time such projections were made and
reflect Loan Parties’ good faith judgment (it being understood that actual
results may differ from those set forth in such projections).

 

(c)           The consolidated balance sheets of (i) Parent and its Subsidiaries
(exclusive of Tube Texas and its Subsidiaries) and such other Persons described
therein as of December 31, 2010, and (ii) Tube Texas and its Subsidiaries and
such other Persons described therein as of October 31, 2010, and, in each case,
the related statements of income, changes in stockholders’ equity, and changes
in cash flow for the period ended on such date, all accompanied by reports
thereon

 

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containing opinions without qualification by independent certified public
accountants, copies of which have been delivered to Agent, have been prepared in
accordance with GAAP consistently applied (except for changes in application in
which such accountants concur and present fairly the financial position of Loan
Parties and their Subsidiaries at such date and the results of their operations
and changes in stockholders’ equity and cash flow for such period) and fairly
reflects the financial condition of Loan Parties, their Subsidiaries and such
other Persons on a consolidated basis as of the date thereof.

 

(d)           The consolidated balance sheets of (i) Parent and its Subsidiaries
(exclusive of Tube Texas and its Subsidiaries) and such other Persons described
therein as of September 30, 2011, and (ii) Tube Texas and its Subsidiaries and
such other Persons described therein as of July 31, 2011, and, in each case, the
related statements of income, changes in stockholders’ equity, and changes in
cash flow for the period ended on such date, copies of which have been delivered
to Agent, have been prepared in accordance with GAAP, consistently applied and
such balance sheet presents fairly the financial condition of Loan Parties,
their Subsidiaries and such other Persons on a consolidated basis as of such
date, subject to normal year-end audit adjustments and absence of footnotes, the
statement of cash flows and the statement of changes in shareholders’ equity.

 

(e)           Since (i) December 31, 2010, in the case of Loan Parties, prior to
giving effect to the consummation of the Closing Date Acquisition, there shall
not have occurred any event, condition or state of facts which could reasonably
be expected to have, either individually or in the aggregate, a Parent Closing
Material Adverse Effect; and (ii) October 31, 2010, in the case of the Acquired
Company, there shall not have occurred any event, condition or state of facts
which will or would reasonably be expected to have, either individually or in
the aggregate, a “Company Material Adverse Effect” (as defined in the Closing
Date Acquisition Agreement as in effect on the date hereof).

 

5.6          Corporate Name / Prior Name.

 

The exact legal name of each Loan Party is set forth in the first paragraph to
this Agreement (or, if such Loan Party is not listed in such first paragraph,
such exact legal name is set forth on Schedule 5.6 (as such schedule may from
time to time be updated in accordance with Section 7.18)).  No Loan Party has
been known by any other corporate, limited liability company or partnership name
in the past five (5) years and no Loan Party sells Inventory or has submitted
tax returns under any other name except as set forth on Schedule 5.6 (as such
schedule may from time to time be updated in accordance with Section 7.18), nor
has any Loan Party been the surviving corporation of a merger or consolidation
or acquired all or substantially all of the assets of any Person or has acquired
any assets of any Person outside the ordinary course of business during the
preceding five (5) years except as set forth on Schedule 5.6 (as such schedule
may from time to time be updated in accordance with Section 7.18).

 

5.7          O.S.H.A. and Environmental Compliance.

 

(a)           Each Loan Party and each of their Subsidiaries, and each of their
facilities, businesses, assets, properties and leaseholds are in compliance with
the provisions of the Federal Occupational Safety and Health Act, RCRA and all
other Environmental Laws; there have been no outstanding citations, notices or
orders of non-compliance issued to any Loan Party or any of their

 

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Subsidiaries or relating to its business, assets, property or leaseholds under
any such laws, rules or regulations, except, in each case, as could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

(b)           Each Loan Party and each of their Subsidiaries has been issued all
required federal, state and local licenses, certificates or permits relating to
all applicable Environmental Laws, except as could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

 

(c)           (i) There are no visible signs of releases, spills, discharges,
leaks or disposal (each, a “Release”) of Hazardous Substances at, upon, under or
within any Real Property or any premises leased by any Loan Party or any of
their Subsidiaries; (ii) neither the Real Property nor any premises leased by
any Loan Party or any of their Subsidiaries has ever been used by any Loan
Party, or, to any Loan Party’s knowledge, any other Person as a RCRA Subpart C
treatment, storage or disposal facility of Hazardous Waste; and (iii) no
Hazardous Substances are present on the Real Property or any premises leased by
any Loan Party or any of their Subsidiaries, except naturally occurring
Hazardous Substances or except such quantities as are handled in accordance with
Environmental Laws, in each case except as could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

 

5.8          Solvency; No Litigation, Violation of Law; No ERISA Issues.

 

(a)           After giving effect to the transactions contemplated by this
Agreement and the Related Transactions, Loan Parties and their Subsidiaries
taken as a whole are Solvent.

 

(b)           No Loan Party nor any of their Subsidiaries has (i) except as
disclosed in Schedule 5.8(b), any pending (or, to the knowledge of any Loan
Party, threatened in writing) litigation, arbitration, actions or proceedings
which involve the possibility of having a Material Adverse Effect, (ii) except
as disclosed in Schedule 5.8(b) (as such schedule may from time to time be
updated by Administrative Borrower providing written notice to Agent of any new
commercial tort claims reasonably estimated to exceed $50,000), any commercial
tort claims, and (iii) except as disclosed in Schedule 5.8(b), as of the Closing
Date, any Money Borrowed other than the Obligations.

 

(c)           No Loan Party nor any of their Subsidiaries is in violation of any
applicable statute, regulation or ordinance in any respect which could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, nor is any Loan Party or any of their Subsidiaries in
violation of any order of any court or Governmental Body which could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

(d)           Except with respect to Multiemployer Plans, each plan that is
intended to qualify under Section 401 of the Code has been determined by the IRS
to qualify under Section 401 of the Code, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of the
Code, and nothing has occurred that would cause the loss of such qualification
or tax exempt status.  Each Plan is in compliance with the applicable provisions
of ERISA and the Code, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse

 

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Effect.  Neither any Loan Party nor ERISA Affiliate has failed to make any
material contribution or pay any material amount due as required by either
Section 412 of the Code or Section 302 of ERISA or the terms of any such Plan. 
Neither any Loan Party nor ERISA Affiliate has engaged in a “prohibited
transaction,” as defined in Section 406 of ERISA and Section 4975 of the Code,
in connection with any Plan, that would subject any Loan Party to a tax on
prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of
the Code that could reasonably be expected to have a Material Adverse Effect. 
Except as set forth in Schedule 5.8(d) or as could not reasonably to have a
Material Adverse Effect:  (i) no Title IV Plan has any Unfunded Pension
Liability; (ii) no ERISA Event with respect to any Title IV Plan has occurred or
is reasonably expected to occur; (iii) there are no pending, or to the knowledge
of any Loan Party, threatened claims (other than claims for benefits in the
normal course), sanctions, actions or lawsuits, asserted or instituted against
any Title IV Plan or any Person as fiduciary or sponsor of any Title IV Plan;
(iv) no Loan Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; and (v) within the last five (5) years no Title IV Plan of
any Loan Party or ERISA Affiliate has been terminated, whether or not in a
“standard termination” as that term is used in Section 4041(b)(1) of ERISA.

 

(e)           Schedule 5.8(e) lists all Canadian Pension Plans and Canadian
Employee Plans applicable to employees working in Canada which are maintained or
sponsored by any Borrower or Guarantor or to which any Borrower or Guarantor
contributes or has an obligation to contribute, except for greater certainty,
any statutory plans to which each Canadian Loan Party is obligated to
contribute.  Except as set forth on Schedule 5.8(e), and except to the extent
that any of the following could not reasonably be expected to have a Material
Adverse Effect:  (i) the Canadian Pension Plans and the Canadian Employee Plans,
as applicable, are duly registered under all applicable federal and provincial
pension benefits and tax related legislation, (ii) all material or statutory
obligations of any Borrower or Guarantor required to be performed in connection
with the Canadian Pension Plans and the Canadian Employee Plans or the funding
agreements therefor have been performed in a timely fashion and there are no
outstanding disputes concerning the assets held pursuant to any such funding
agreement (including, for greater certainty, the improper withdrawal on
application thereof), (iii) all contributions or premiums required to be made by
any Borrower or Guarantor to the Canadian Pension Plans and the Canadian
Employee Plans have been made in a timely fashion in accordance with the terms
of the Canadian Pension Plans, the Canadian Employee Plans and applicable laws
and regulations, (iv) all employee contributions to the Canadian Pension Plans
and the Canadian Employee Plans required to be made by way of authorized payroll
deduction or otherwise have been properly withheld by any Borrower or Guarantor
and fully paid into the Canadian Pension Plans and the Canadian Employee Plans
in a timely fashion, (v) all reports and disclosures relating to the Canadian
Pension Plans and the Canadian Employee Plans required by any applicable laws or
regulations have been filed or distributed in a timely fashion, (vi) no amount
is owing by any of the Canadian Pension Plans or the Canadian Employee Plans and
there are no outstanding defaults or violations by any Person party to the
Canadian Pension Plans or the Canadian Employee Plans under the Income Tax Act
(Canada) or any provincial taxation statute, (vii) the Canadian Pension Plans
and the Canadian Employee Plans are fully funded, both on an ongoing basis and
on a solvency basis (using actuarial assumptions and methods which are
consistent with the valuations last filed with the applicable Governmental
Bodies and which are consistent with generally accepted actuarial principles),
(viii) none of the Canadian Pension Plans or the Canadian Employee Plans are the
subject of an investigation, proceeding, action or claim and there exists no
state of facts which after notice or lapse of time or both could reasonably be
expected

 

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to give rise to any such proceeding, action or claim and to the best knowledge
of each Borrower and Guarantor, no fact or circumstance exists that could
adversely affect the tax-exempt status of any Canadian Pension Plan or Canadian
Employee Plan and (ix) no improvements to any Canadian Pension Plan or Canadian
Employee Plan have been promised and no amendments or improvements to a Canadian
Pension Plan or Canadian Employee Plan will be made or promised by any Borrower
or Guarantor before the Closing Date, (x) no Canadian Pension Plan is a
multi-employer pension plan within the meaning of applicable pension standards
laws, and (xi) no Canadian Pension Plan is a benefit pension plan.

 

(f)            Except as set forth on Schedule 5.8(e), no Canadian Loan Party
has or is subject to any present or future obligation or liability under any
Canadian Employee Plan and any overtime pay, vacation pay, premiums for
unemployment insurance, premiums for health and welfare insurance, accrued
wages, salaries, commissions, severance pay and other payments payable to any
employees of any Borrower or Guarantor are fully paid on a current basis.

 

(g)           Except as set forth on Schedule 5.8(e), no Canadian Loan Party
provides benefits to retired Canadian Employees or to beneficiaries or
dependents of retired Canadian Employees.

 

5.9          Intellectual Property.

 

All Intellectual Property is set forth on Schedule 5.9 (as such schedule may
from time to time be updated by Administrative Borrower providing written notice
to Agent of any newly acquired Intellectual Property rights, so long as Loan
Parties have taken (or caused to be taken) all steps required by Agent to
perfect Agent’s Lien therein), are valid and have been duly registered or filed
with all appropriate Governmental Body and constitute all of the Intellectual
Property rights which are necessary for the operation of its business; there is
no objection to or pending challenge to the validity of any such Intellectual
Property and no Loan Party nor any Subsidiary of any Loan Party is aware of any
grounds for any challenge.  All Intellectual Property shall be preserved so long
as it is in active use by any Loan Party or any of their Subsidiaries.  With
respect to all software subject to patent or copyright protection and owned,
authored and used by any Loan Party, such Loan Party is in possession of all
source and object codes related to each piece of software or is the beneficiary
of a source code escrow agreement, each such source code escrow agreement being
listed on Schedule 5.9 (as such schedule may from time to time be updated by
Administrative Borrower providing written notice to Agent of any newly acquired
Intellectual Property rights, so long as Loan Parties have taken (or caused to
be taken) all steps required by Agent with respect thereto).

 

5.10        Licenses and Permits.

 

Each Loan Party and each Subsidiary of each Loan Party (a) is in compliance with
and (b) has procured and is now in possession of, all material licenses or
permits required by any applicable federal, state, local or other law or
regulation for the operation of its business in each jurisdiction wherein it is
now conducting business and where the failure to procure such licenses or
permits could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

 

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5.11        No Contractual Default.

 

No Loan Party is in default in the payment or performance of any of its
contractual obligations with respect to which a default thereunder could be
reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect.

 

5.12        No Liens.

 

No Loan Party nor any Subsidiary of any Loan Party has agreed or consented to
cause or permit in the future (upon the happening of a contingency or otherwise)
any of its property, whether now owned or hereafter acquired, to be subject to a
Lien which is not a Permitted Encumbrance.

 

5.13        No Labor Disputes.

 

No Loan Party nor any Subsidiary of any Loan Party is involved in any labor
dispute; there are no strikes or walkouts or union organization of any Loan
Party’s or any of such Subsidiary’s employees in existence or threatened in
writing, in each case, other than as could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.

 

5.14        Margin Regulations.

 

No Loan Party nor any Subsidiary of any Loan Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” within the meaning of the quoted term under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect.  No part of the proceeds of any Advance will be used for “purchasing”
or “carrying” “margin stock” as defined in Regulation U of such Board of
Governors.

 

5.15        Investment Company Act.

 

No Loan Party nor any Subsidiary of any Loan Party is an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.

 

5.16        Disclosure.

 

No representation or warranty made by or on behalf of any Loan Party or any
Subsidiary of any Loan Party in this Agreement, any Other Document or in any
financial statement, report, certificate or any other document furnished in
connection herewith contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements herein or therein
(taken as a whole) not materially misleading on the date when made.

 

5.17        Real Property.

 

Each Loan Party and each of its Subsidiaries owns record title in fee simple or
the leasehold interest to the Real Property described on Schedule R-1 (as such
Schedule may from time to time be updated by written notice from Administrative
Borrower to Agent, so long as Loan Parties have taken (or caused to be taken)
all steps reasonably required by Agent with respect thereto), free and

 

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clear of all Liens, except Permitted Encumbrances.  The Real Property described
on Schedule R-1 (as such Schedule may from time to time be updated by written
notice from Administrative Borrower to Agent, so long as Loan Parties have taken
(or caused to be taken) all steps reasonably required by Agent with respect
thereto) constitutes all of the Real Property of Loan Parties.

 

5.18        [Reserved].

 

5.19        [Reserved].

 

5.20        Business and Property of Loan Parties.

 

Each Loan Party and each Subsidiary of a Loan Party owns or leases all the
property and possesses all of the rights and consents necessary for the conduct
of the business of such Loan Party and such Subsidiary except as could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.  The revenues and total assets of all Immaterial
Subsidiaries do not exceed $2,500,000 in the aggregate.

 

5.21        Material Contracts.

 

Schedule 5.21 sets forth all Material Contracts to which any Loan Party is a
party or is bound as of the date hereof.  Loan Parties have delivered true,
correct and complete copies of such Material Contracts to Agent on or before the
date hereof.  Except as disclosed to Agent in writing, Loan Parties are not in
breach or in default in any material respect of or under any Material Contract.

 

5.22        Capital Structure.

 

Schedule 5.22 sets forth the authorized Equity Interests, and owner thereof, of
each of Loan Parties and each of their Subsidiaries as of the Closing Date.  All
of the Equity Interests of each of Loan Parties (other than Parent) and each of
their Subsidiaries are owned directly or indirectly by one of the Borrowers. 
All issued and outstanding Equity Interests of each of Loan Parties and each of
their Subsidiaries are duly authorized and validly issued, fully paid and
non-assessable, and such Equity Interests were issued in compliance with all
applicable laws.  All issued and outstanding Equity Interests of each Loan Party
(other than Parent) and each of their Subsidiaries is free and clear of all
Liens other than Permitted Encumbrances and the Lien in favor of Agent for the
benefit of Agent and Lenders.  The identity of the holders of the Equity
Interests of each of the Loan Parties and each of their Subsidiaries and the
percentage of their fully diluted ownership of the Equity Interests of each of
Loan Parties and each of their Subsidiaries as of the Closing Date is set forth
on Schedule 5.22.  No shares of the Equity Interests of any Loan Party or any of
their Subsidiaries, other than those described above, are issued and outstanding
as of the Closing Date.  As of the Closing Date there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings for the purchase or acquisition from any Loan Party or any of
their Subsidiaries of any Equity Interests of any such entity.

 

5.23        Bank Accounts, Security Accounts, Etc.

 

No Loan Party has any bank accounts, deposit accounts, investments accounts,
securities accounts or any other similar accounts other than the accounts set
forth on Schedule 5.23 (as such Schedule may from time to time be updated by
Administrative Borrower delivering a written update

 

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thereto to Agent, so long as Loan Parties take all action required by
Section 4.14(h) with respect thereto).  The purpose and type of each such
account is specified on Schedule 5.23.

 

5.24        Related Agreements.

 

Administrative Borrower has furnished Agent a true and correct copy of each the
Related Agreements, along with all agreements, side letters and other documents
executed by any Loan Party, Subsidiary or Affiliate thereof in connection
therewith.  Each of Loan Parties and their respective Subsidiaries and, to Loan
Party’s knowledge, each other party to the Related Agreements, has duly taken
all necessary organizational action to authorize the execution, delivery and
performance of the Related Agreements and the consummation of transactions
contemplated thereby.  As of the Closing Date, the Related Transactions have
been consummated (or are being consummated substantially contemporaneously with
the initial credit extension hereunder) in accordance with the terms of the
Related Agreements.  The Related Transactions will comply in all material
respects with all applicable legal requirements, and all necessary Consents
required to be obtained by a Loan Party or a Subsidiary thereof and, to each
Loan Party’s knowledge, each other party to the Related Agreements in connection
with the Related Transactions will be, prior to consummation of the Related
Transactions, duly obtained and will be in full force and effect.  As of the
date of the Related Agreements, all applicable waiting periods with respect to
the Related Transactions will have expired without any action being taken by any
competent Governmental Body which restrains, prevents or imposes material
adverse conditions upon the consummation of the Related Transactions.  The
execution and delivery of the Related Agreements did not, and the consummation
of the Related Transactions will not, violate any statute or regulation of the
United States (including any securities law) or of any state or other applicable
jurisdiction, or any order, judgment or decree of any court or Governmental Body
binding on any Loan Party or Subsidiary or, to each Loan Party’s knowledge, any
other party to the Related Agreements, or result in a breach of, or constitute a
default under, any material agreement, indenture, instrument or other document,
or any judgment, order or decree, to which any Loan Party or Subsidiary is a
party or by which any Loan Party or Subsidiary is bound or, to each Loan Party’s
knowledge, to which any other party to the Related Agreements is a party or by
which any such party is bound.  No statement or representation made in the
Related Agreements by any Loan Party or Subsidiary or, to Loan Party’s
knowledge, any other Person, contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements made therein (taken as a whole) not materially
misleading as of the time that such statement or representation is made.  As of
the Closing Date, (a) each of the representations and warranties contained in
the Related Agreements made by a Loan Party or any Subsidiary is true and
correct in all material respects and (b) to each Loan Party’s knowledge, each of
the representations and warranties contained in the Related Agreements made by
any Person other than a Loan Party is true and correct in all material respects.

 

5.25        Closing Date Acquisition.

 

(a)           (i) The Closing Date Acquisition has occurred in accordance with
the Closing Date Acquisition Documents and all conditions precedent to the
effectiveness thereof have been fulfilled, or validly waived (but not including
conditions consisting of the effectiveness of this Agreement), and (ii) no
motion, action or proceeding is pending or filed by any Person which could

 

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adversely affect the consummation of the Closing Date Acquisition, the business
or operations of Borrowers or the transactions contemplated by this Agreement
and the Other Documents.

 

(b)           The Closing Date Acquisition Documents and the transactions
contemplated thereunder have been duly executed, delivered and performed in
accordance with their terms by the respective parties thereto in all respects,
including the fulfillment or valid waiver (but not including waivers of
conditions consisting of the effectiveness of this Agreement, except as may be
disclosed to Agent and consented to in writing by Agent) of all conditions
precedent set forth therein, and giving effect to the terms of the Closing Date
Acquisition Documents and the assignments to be executed and delivered by the
seller(s) of the Equity Interests of Acquisition Company thereunder, Parent
acquired and has good and marketable title to the Equity Interests of
Acquisition Company, free and clear of all claims, liens, pledges and
encumbrances of any kind, except as permitted hereunder.

 

(c)           All actions and proceedings, required by the Closing Date
Acquisition Agreement, applicable law or regulation (including, but not limited
to, compliance with the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976,
as amended) have been taken and the transactions required thereunder have been
duly and validly taken and consummated.

 

(d)           No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the Closing Date Acquisition Documents and no
governmental or other action or proceeding has been threatened or commenced,
seeking any injunction, restraining order or other order which seeks to void or
otherwise modify the transactions described in the Closing Date Acquisition
Documents.

 

5.26        OFAC.

 

None of Borrower, any Subsidiary of Borrower or any Affiliate of Borrower:
(a) is a Sanctioned Person, (b) has more than ten (10%) percent of its assets in
Sanctioned Entities or (c) derives more than ten (10%) percent of its operating
income from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities.  The proceeds of any Loan will not be used and have not
been used to fund any operations in, finance any investments or activities in,
or make any payments to, a Sanctioned Person or a Sanctioned Entity.

 

Each Loan Party and each Subsidiary of each Loan Party is and will remain in
compliance with all applicable economic sanctions laws and all applicable
anti-money laundering and counter-terrorism financing laws, including the
provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada), the Criminal Code (Canada), the United Nations Act (Canada), and
any other enabling legislation or executive order relating thereto, and other
federal, provincial, territorial, local or foreign laws relating to “know your
customer” and anti-money laundering rules and regulations.  No Loan Party and no
Subsidiary or Affiliate of a Loan Party (i) is a Person designated by the
Canadian government on any list set out in the United Nations Al-Qaida and
Taliban Regulations, the Regulations Implementing the United Nations Resolutions
on the Suppression of Terrorism or the Criminal Code (collectively, the
“Terrorist Lists”) with which a Canadian Person cannot deal with or otherwise
engage in business transactions, (ii) is a Person who is otherwise the target of
Canadian economic sanctions laws such that a Canadian Person cannot deal or
otherwise engage in business transactions with such Person or (iii) is
controlled by (including

 

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without limitation by virtue of such person being a director or owning voting
shares or interests), or acts, directly or indirectly, for or on behalf of, any
person or entity on any Terrorist List or a foreign government that is the
target of Canadian economic sanctions prohibitions such that the entry into, or
performance under, this Agreement or any other Loan Document would be prohibited
under Canadian law.  No part of the proceeds of any Loan will be used directly
or indirectly for any payments to any government official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of any applicable laws.

 

6.             AFFIRMATIVE COVENANTS.

 

Each Loan Party shall at all times until all of the Obligations have been Paid
in Full:

 

6.1          Payment of Fees.

 

Promptly following demand, pay to Agent all usual and customary fees and
expenses which Agent incurs in connection with (a) the forwarding of Advance
proceeds and (b) the establishment and maintenance of any Blocked Accounts or
Depository Accounts as provided for in Section 4.14(h).  Agent may charge the
Borrowers’ Account for all such fees and expenses (subject to the terms of
Section 17.10 hereof).

 

6.2          Conduct of Business; Compliance with Laws and Maintenance of
Existence and Assets.

 

Conduct, and cause each Subsidiary of each Loan Party to conduct, continuously
and operate actively its business according to business practices and maintain,
and cause each Subsidiary of each Loan Party to maintain, all of its properties
useful or necessary in its business in good working order and condition, except,
in each case, where the failure to do so could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.  Each
Loan Party shall, and shall cause each Subsidiary of each Loan Party to,
(a) keep in full force and effect its existence and its material rights and
franchises, (b) comply in all material respects with the laws and regulations
governing the conduct of its business, except, in each case, where the failure
to do so could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect; provided, that, the Immaterial
Subsidiaries may dissolve or merge into a Loan Party and Loan Parties shall
provide written notice thereof to Agent not less than three (3) Business Days
after the occurrence thereof, accompanied by the relevant merger agreement and
certificates of merger filed with the applicable Governmental Bodies, and
(c) except as expressly permitted hereunder, make all such reports and pay all
such franchise and other taxes and license fees and do all such other acts and
things as may be lawfully required to maintain its rights, licenses, leases,
powers and franchises under the laws of the United States or any of its
political subdivisions or, based on commercially reasonable efforts, to do so in
any applicable foreign jurisdiction or any political subdivision of any of such
foreign jurisdictions.

 

6.3          Violations.

 

Promptly after becoming aware of the same, notify Agent in writing of any
violation of any law, statute, regulation or ordinance of any Governmental Body,
or of any agency thereof, applicable

 

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to any Loan Party or any of their Subsidiaries which could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

6.4          Government Receivables.

 

(a)           If Administrative Borrower or any Borrower reports as being an
Eligible Account or requests be treated as an Eligible Account any Accounts
owing by the United States, any state or any department, agency or
instrumentality of any of them (collectively, “US Government Receivables”) with
a value in excess of $500,000 in the aggregate, take all steps necessary to
protect Agent’s interest in such US Government Receivables under the Federal
Assignment of Claims Act or other applicable state or local statutes or
ordinances and deliver to Agent appropriately endorsed, any instrument or
chattel paper connected with any US Government Receivables.

 

(b)           If Administrative Borrower or any Borrower reports as being an
Eligible Account or requests be treated as an Eligible Account any Accounts
owing by Canada, any province or any department, agency or instrumentality of
any of them (collectively, “Canadian Government Receivables”) with a value in
excess of $500,000 in the aggregate, take all steps necessary to protect Agent’s
interest in such Canadian Government Receivables under the Financial
Administration Act (Canada) or other applicable provincial or local statutes or
ordinances and deliver to Agent appropriately endorsed, any instrument or
chattel paper connected with any Canadian Government Receivables.

 

6.5          Execution of Supplemental Instruments; Further Assurances.

 

Promptly upon request by Agent, each Loan Party shall take such additional
actions (including, without limitation, execution and delivery of such
supplemental agreements or instruments, statements, assignments and transfers,
or instructions or documents relating to the Collateral) as Agent may require in
its Permitted Discretion from time to time in order (a) to carry out more
effectively the purposes of this Agreement or any Other Document, (b) to subject
all of the existing or hereinafter acquired personal and real property (other
than Excluded Assets) of each Loan Party to first-priority perfected Liens
(subject only to Permitted Encumbrances) in favor of Agent to secure the
Obligations, and (c) to perfect and maintain the validity, effectiveness and
priority of any of the Liens created, or intended to be created thereby, by this
Agreement or any Other Document to the extent required herein or therein. 
Without limiting the generality of the foregoing, each Loan Party shall (and
shall cause each other Loan Party to) guarantee (to the extent not already
directly obligated with respect thereto) all of the Obligations and to grant to
Agent, for the benefit of Agent, Lenders, Bank Product Provider and Issuer, a
Lien in all of such Loan Party’s existing or hereinafter acquired personal and
real property (other than Excluded Assets) to secure all of the Obligations;
provided, that, no such guarantee or grant shall be required by a Non-US
Subsidiary that is a CFC to the extent such guarantee or grant would result in
material adverse tax consequences to Loan Parties under Treas. Reg.
Section 1.956-2.

 

6.6          Payment of Indebtedness.

 

Each Loan Party shall, and shall cause each Subsidiary of each Loan Party to,
subject at all times to any applicable subordination or intercreditor
arrangement in favor of Agent and/or Lenders, pay, discharge or otherwise
satisfy at or before maturity (subject, where applicable, to specified

 

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grace periods and, in the case of the trade payables, to normal payment
practices) all its Indebtedness of whatever nature, except when the failure to
do so could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect or when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and each Loan
Party and each of their Subsidiaries shall have provided for such reserves as
Agent may reasonably deem proper and necessary.

 

6.7          Standards of Financial Statements.

 

Each Loan Party shall, and shall cause each Subsidiary of each Loan Party to,
cause all financial statements referred to in Sections 9.7, 9.8 and 9.12 as to
which GAAP is applicable to be true and correct in all material respects
(subject, in the case of interim financial statements, to normal year-end audit
adjustments and absence of footnotes) and to be prepared in reasonable detail,
and in accordance with GAAP consistently applied throughout the periods
reflected therein (except as concurred in by such reporting accountants or
officer, as the case may be, and disclosed therein).

 

6.8          Financial Covenants.

 

Fixed Charge Coverage.  Upon the occurrence and during the continuance of a
Financial Covenant Trigger Event, Loan Parties shall maintain at the end of each
calendar month, commencing with the calendar month immediately preceding the
date on which the Financial Covenant Trigger Event occurred and for each month
thereafter during the continuance thereof, a Fixed Charge Coverage Ratio, for
the trailing twelve (12) month period then ended, of not less than 1.1:1.0.

 

7.             NEGATIVE COVENANTS.

 

No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries to,
at any time prior to the Payment in Full of all of the Obligations:

 

7.1          Merger, Consolidation, Acquisition and Sale of Assets.

 

(a)           Consummate any merger, consolidation, amalgamation or other
reorganization with or into any other Person or acquire all or a substantial
portion of the assets or Equity Interests of any Person or permit any other
Person to consolidate with or merge with it; except, that, (i) any Loan Party or
any Subsidiary may enter into a Permitted Acquisition; (ii) a Loan Party may
merge, amalgamate or consolidate into another Loan Party so long as (A) no Event
of Default shall have occurred and be continuing, (B) if a Borrower is a party
to such merger, consolidation or amalgamation a Borrower shall be the surviving
entity, (C) no Loan Party shall merge, consolidate or amalgamate with a Loan
Party that exists under the laws of a country different than the country in
which such Loan Party exists and (D) prior to such merger, consolidation or
amalgamation Loan Parties have taken (or caused to be taken) all steps required
by Agent to maintain Agent’s Lien on the Collateral granted by such Loan
Parties, as well as the priority and effectiveness of such Lien; and (iii) a
Subsidiary of the Borrowers that is not a Loan Party may merge, consolidate or
amalgamate into another Subsidiary of the Borrowers so long as (A) no Event of
Default shall have occurred and be continuing, and (B) if a Loan Party is the
surviving entity, prior to such merger, consolidation or amalgamation Loan
Parties have taken (or caused to be taken) all steps required by Agent to
maintain Agent’s Lien on the Collateral granted by such Loan Parties, as well as
the priority and effectiveness of such Lien.

 

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(b)           Acquire all or a substantial portion of the assets or Equity
Interests of any Person except for investments permitted by Section 7.4.

 

(c)           Directly or indirectly, sell, assign, lease, transfer, abandon or
otherwise dispose of any of its assets or properties (including, without
limitation, the Collateral) to any other Person (each, a “Disposition”), except
for:

 

(i)            the sale of Inventory in the ordinary course of business,

 

(ii)           provided no Default or Event of Default shall have occurred and
be continuing or result therefrom, the Disposition of assets (other than equity
interests of any of its Subsidiaries, except as provided in clause (xiv) below)
having a net book value not to exceed $5,000,000 in the aggregate in any fiscal
year; provided that any Loan Party or a Subsidiary may make a Disposition and
the assets subject to such Disposition shall not be subject to or included in
the foregoing limitation and computation contained in this clause (ii) to the
extent that the net proceeds from such Disposition are (A) reinvested in
productive assets of any Loan Party or a Subsidiary of at least equivalent value
within two hundred seventy (270) days of the date of such Disposition, or
(B) subject to the provisions of Section 2.13, applied to the payment or
prepayment of the Obligations;

 

(iii)          the sale, lease, transfer or other Disposition of property by a
Loan Party or a Subsidiary of a Loan Party to any other Loan Party or Subsidiary
of a Loan Party; provided, that, (A) if a Borrower or any of its assets is
subject to a Disposition, all parties acquiring assets pursuant to such
Disposition must be Borrowers, (B) if a Loan Party or any of its assets is
subject to a Disposition, all parties acquiring assets pursuant to such
Disposition must be Loan Parties, (C) if a US Loan Party or any of its assets is
subject to a Disposition, all parties acquiring assets pursuant to such
Disposition must be US Loan Parties, (D) to the extent such transaction
constitutes an investment, such transaction must be permitted under Section 7.4
and (E) any Lien in favor of Agent on such property shall continue in all
respects and shall not be deemed released or terminated as a result of such
sale, lease, transfer or other Disposition and Loan Parties shall execute and
deliver such agreements, documents and instruments as Agent may reasonably
request with respect thereto;

 

(iv)          the sale, lease, transfer or Disposition of used, worn-out or
obsolete machinery and equipment and machinery and equipment no longer used or
useful in the conduct of business of Loan Parties or any of their Subsidiaries
having a net book value not to exceed $5,000,000 in the aggregate in any fiscal
year;

 

(v)           the grant in the ordinary course of business by any Loan Party or
any of their Subsidiaries after the date hereof of a non-exclusive license of
any Intellectual Property; provided, that, the rights of the licensee shall be
subject to the rights of Agent, and shall not adversely affect, limit or
restrict in any material respect the rights of Agent to use such Intellectual
Property or adversely affect, limit or restrict the rights of Agent to sell or
otherwise dispose of any Inventory or other Collateral in connection with the
exercise by Agent of any rights or remedies hereunder or under any of the Other
Documents, or otherwise adversely limit or interfere in any material respect
with the use of any such Intellectual Property by Agent in connection with the

 

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exercise of its rights or remedies hereunder or under any of the Other Documents
or by any Loan Party or Subsidiary;

 

(vi)          the issuance of Equity Interests by Loan Parties; provided, that,
(A) no Loan Party or Subsidiary shall be required to pay any cash dividends,
distributions or repurchase or redeem such Equity Interests or make any other
payments in respect thereof, except as otherwise expressly permitted in
Section 7.7 and (B) none of the Borrowers or their Subsidiaries shall issue any
Equity Interests other than to a Loan Party or, if the Equity Interests of any
Subsidiary are not then held by a Loan Party, then to another Subsidiary;

 

(vii)         the issuance of Equity Interests by Parent;

 

(viii)        the abandonment or other disposition of Intellectual Property that
is not material and is no longer used or useful in any material respect in the
business of any Loan Party or any of its Subsidiaries and does not appear on or
is otherwise not affixed to or incorporated in any Inventory or Equipment or
have any material value;

 

(ix)           involuntary Dispositions occurring by reason of casualty or
condemnation;

 

(x)            the leasing, occupancy agreements or sub-leasing of Real Property
or Equipment that would not materially interfere with the required use of such
Real Property or Equipment by any Loan Party or any of its Subsidiaries;

 

(xi)           transfers of condemned real property as a result of the exercise
of “eminent domain” or other similar policies to the respective governmental
authority or agency that has condemned the same (whether by deed in lieu of
condemnation or otherwise), and transfers of properties that have been subject
to a casualty to the respective insurer of such real property as part of an
insurance settlement;

 

(xii)          any Disposition of property or assets, or issuance of Equity
Interests, that is permitted under Sections 7.1(a) and 7.7;

 

(xiii)         the sale or transfer by any Loan Party or any Subsidiary of any
Loan Party of the Equity Interests of any Subsidiary so long as
(A) simultaneously therewith all investments in such Subsidiary owned by any
Loan Party or any Subsidiary are disposed of in their entirety, (B) such
Subsidiary does not have any continuing investment in any Loan Party or any
other Subsidiary not being simultaneously disposed of and (C) such sale or
transfer is permitted by clause (ii) above; and

 

(xiv)        in addition to, and not in limitation of, (x) any Disposition of
property or assets otherwise permitted in Sections 7.1(c)(i) through and
including 7.1(c)(xiii) above and (y) the issuance of Equity Interests permitted
under Sections 7.1(a) and 7.7, so long as no Event of Default has occurred and
is continuing, any other Disposition of property or assets, or issuance of
Equity Interests by any Loan Party or any Subsidiary of any Loan Party, to the
extent that as of the date of and after giving effect to any such Disposition or
issuance, Global Undrawn Availability shall not be less than the greater of
(A) twenty-five (25%) percent of the lesser of (1) the Maximum Credit and
(2) the Borrowing Base at such time, and (B) $25,000,000.

 

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7.2          Creation of Liens.

 

Create or suffer to exist any Lien or transfer upon or against any of its
property or assets now owned or hereafter acquired, except Permitted
Encumbrances.

 

7.3          Guarantees.

 

Become liable upon the obligations of any Person by assumption, endorsement or
guarantee thereof or otherwise (other than with respect to the Obligations),
except:

 

(a)           for the endorsement of checks in the ordinary course of business;

 

(b)           that (i) Loan Parties and their Subsidiaries may guarantee
Indebtedness or other obligations of Borrowers and their US Subsidiaries that
are Loan Parties and (ii) a Non-US Subsidiary may guarantee Indebtedness or
other obligations of another Non-US Subsidiary (provided if the Non-US
Subsidiary that is providing such guarantee is a Loan Party, then such other
Non-US Subsidiary must also be a Loan Party);

 

(c)           that Loan Parties and their Subsidiaries may guarantee
Indebtedness of Non-US Subsidiaries; provided, that, the Indebtedness permitted
to be guaranteed shall be permitted Indebtedness under Section 7.8(l) and the
maximum amount of Indebtedness permitted to be guaranteed shall not exceed the
amount of Indebtedness permitted under Section 7.8(l); and

 

(d)           that Loan Parties and their Subsidiaries may guarantee
Indebtedness under the Debt Financing Documents.

 

7.4          Investments.

 

Purchase or acquire Indebtedness or Equity Interests of, or any other interest
in, any Person, except:

 

(a)           cash or Cash Equivalents;

 

(b)           as expressly permitted pursuant to Section 7.1, Section 7.5,
Section 7.7 and Section 7.8;

 

(c)           the endorsement of instruments for collection or deposit in the
ordinary course of business;

 

(d)           obligations under Hedging Agreements permitted under
Section 7.8(e);

 

(e)           Equity Interests or other obligations issued to Loan Parties by
any Person (or the representative of such Person) in compromise or settlement of
Indebtedness of such Person owing to Loan Parties (whether or not in connection
with the insolvency, bankruptcy, receivership or reorganization of such a Person
or a composition or readjustment of the debts of such Person) or upon the
foreclosure, perfection or enforcement of any Lien in favor of a Loan Party
securing any such obligations;

 

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(f)            obligations of account debtors to Loan Parties and their
Subsidiaries arising from Accounts which are evidenced by a promissory note made
by such account debtor payable to the applicable Loan Party or Subsidiary;
provided, that, promptly upon the receipt of the original of any such promissory
note issued to any Loan Party from any account debtor in excess of $500,000 in
the aggregate (or regardless of the amount after an Event of Default exists or
has occurred and is continuing, at the request of Agent), such promissory
note(s) shall, upon the request of Agent, be endorsed to the order of Agent by
Loan Parties and promptly delivered to Agent as so endorsed;

 

(g)           investments by Loan Parties and their Subsidiaries in the form of
Equity Interests received as part or all of the consideration for the sale of
assets pursuant to a Disposition by any such Loan Party of Subsidiary to the
extent permitted under Section 7.1(c);

 

(h)           the existing investments of any Loan Party or Subsidiary thereof
as of the date hereof in their respective Subsidiaries;

 

(i)            investments made after the date hereof by (i) Parent in another
Loan Party, (ii) a Borrower in another Borrower, (iii) a US Subsidiary of a
Borrower in a US Subsidiary thereof and (iv) a Non-US Subsidiary of a Borrower
in a Non-US Subsidiary thereof, (v) a Loan Party in a Non-US Subsidiary of a
Loan Party; provided, that, the aggregate amount of investments under this
Section 7.4(i)(v) and advances, loans or other extensions of credit under
Section 7.5(d)(iv) shall not exceed $25,000,000 at any time outstanding, and
(vi) additional investments by a Loan Party in their respective Subsidiaries or
in a partnership or joint venture which is not a Permitted Acquisition so long
as, with respect to each such investment, the Investment Conditions Precedent
shall be satisfied and the aggregate amount of all such investment permitted
under this Section 7.4(i)(v) shall not exceed $25,000,000 in the aggregate;

 

(j)            Permitted Acquisitions;

 

(k)           loans or advances to employees, officers and directors to the
extent permitted in Section 7.5(c); and

 

(l)            extensions of trade credit or other advances to customers on
commercially reasonable terms in accordance with normal trade practice or
otherwise in the ordinary course of business.

 

7.5          Loans.

 

Make advances, loans or other extensions of credit to any Person, including,
without limitation, any Subsidiary or Affiliate, except with respect to:

 

(a)           the extension of commercial trade credit in connection with the
sale of Inventory or the provision of services, each in the ordinary course of
its business;

 

(b)           deposits of cash for leases, utilities, worker’s compensation and
similar matters in the ordinary course of business;

 

(c)           advances or loans by a Loan Party or any Subsidiary of a Loan
Party to its employees, officers or directors in the ordinary course of business
in an aggregate amount not to

 

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exceed $1,000,000 at any time outstanding for:  (i) reasonable and necessary
work-related travel or other ordinary business expenses to be incurred by such
employee, officer or director in connection with their work for such Loan Party
or Subsidiary and (ii) reasonable and necessary relocation expenses of such
employees, officers and directors (including home mortgage financing for
relocated employees, officers and directors); and

 

(d)           advances, loans or extensions of credit made by (i) Parent to
another Loan Party, (ii) a Loan Party (other than Parent) to another Loan Party,
(iii) a Non-US Subsidiary of a Borrower to a Non-US Subsidiary of a Borrower;
and (iv) so long as no Event of Default has occurred and is continuing, a Loan
Party to a Loan Party’s Non-US Subsidiary that is not a Loan Party; provided
that, the aggregate amount of investments under subclause (v) of
Section 7.4(i) and advances, loans or other extensions of credit under subclause
(iv) of this Section 7.5(d) shall not exceed $25,000,000 at any time
outstanding; and

 

(e)           advances, loans and extensions of credit permitted by Section 7.4.

 

7.6          Capital Expenditures.

 

Commencing with fiscal year 2012, contract for, purchase or make any Capital
Expenditures during any fiscal year in an aggregate amount in excess of
$20,000,000.  If the amount of Capital Expenditures permitted to be made in any
fiscal year does not exceed $20,000,000, fifty (50%) percent of the difference
between $20,000,000 and the amount of Capital Expenditures actually made during
such fiscal year may be carried forward by Loan Parties (on a combined basis) to
the immediately following fiscal year.

 

7.7          Dividends and Distributions.

 

Declare, pay or make any dividend or distribution or payment with respect to any
shares of the Equity Interests of any Loan Party or any of their Subsidiaries
(other than dividends or distributions payable in its Equity Interests) or apply
any of its funds, property or assets to the purchase, redemption or other
retirement of any such Equity Interests; except, that,

 

(a)           Loan Parties and their Subsidiaries may make payments to their
former employees, officers or directors in connection with the redemption or
repurchase of Equity Interests issued by the Parent to such former employees,
officers or directors upon their termination of employment with Loan Parties and
their Subsidiaries or their death or disability, so long as such payments do not
to exceed $250,000 in the aggregate in any fiscal year;

 

(b)           In lieu of making tax payments directly, Loan Parties and their
Subsidiaries may make dividends and distributions to Parent from time to time
for the sole purpose of allowing Parent to, and Parent shall promptly upon
receipt thereof use the proceeds thereof solely to, pay federal and state income
taxes and franchise taxes solely arising out of the consolidated operations of
Parent, Borrowers and their Subsidiaries, after taking into account all
available credits and deductions (provided, that, no Borrower or Subsidiary
thereof shall make any distribution to Parent in any amount greater than the
share of such taxes arising out of Borrowers’ and their Subsidiaries’
consolidated net income),

 

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(c)           Loan Parties and their Subsidiaries may make dividends and
distributions to other Loan Parties and their Subsidiaries; provided, that, no
such dividends and distributions shall be made (A) to a Non-US Subsidiary from a
US Loan Party, or (B) to a Person that is not a Loan Party from a Loan Party;
and

 

(d)           Loan Parties and their Subsidiaries may make distributions or pay
dividends in cash in respect of any of its Equity Interests; provided, that, as
to any payment of such dividend or distribution, each of the following
conditions is satisfied:

 

(i)            payment shall be made with funds legally available therefore;

 

(ii)           such dividend or distribution shall not violate any law or
regulation or the terms of any indenture, agreement or undertaking to which any
Loan Party or any Subsidiary is a party or by which any Loan Party or Subsidiary
or its properties are bound;

 

(iii)          as of the date of the payment of such dividend or distribution
and after giving effect thereto, no Event of Default shall exist; and

 

(iv)          as of the date of the payment of such dividend or distribution and
after giving effect thereto, Global Undrawn Availability shall not be less than
the greater of (A) twenty (20%) percent of the lesser of (1) the Maximum Credit
and (2) the Borrowing Base at such time, and (B) $20,000,000.

 

7.8          Indebtedness.

 

Create, incur, assume or suffer to exist any Indebtedness (exclusive of trade
payables incurred in the ordinary course of business consistent with past
practices outstanding no more than sixty (60) days past its due date) except in
respect of:

 

(a)           the Obligations;

 

(b)           Indebtedness (other than the Obligations) to the extent incurred
after the Closing Date to finance Capital Expenditures in an aggregate amount
not to exceed $5,000,000 at any one time outstanding;

 

(c)           Indebtedness existing on the Closing Date as set forth on
Schedule 7.8 and any refinancings, refundings, renewals or extensions thereof
(without shortening the maturity thereof or increasing the principal amount
thereof (excluding accrued interest, fees, discounts, premiums and expenses));

 

(d)           Indebtedness expressly permitted by Section 7.5;

 

(e)           Indebtedness arising under Hedging Agreements which are not
entered into for speculative purposes;

 

(f)            Indebtedness in respect of netting services, overdraft
protections, employee credit card programs and otherwise in connection with
deposit accounts and Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument

 

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inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, that, such
Indebtedness is extinguished within five (5) Business Days of incurrence;

 

(g)           Indebtedness in respect of bid, performance and surety bonds,
including guarantees or obligations of Loan Parties with respect to letters of
credit supporting such bid, performance and surety bonds or other forms of
credit enhancement supporting performance obligations under services contracts,
workers’ compensation claims, self-insurance obligations, unemployment
insurance, health, disability and other employee benefits or property, casualty
or liability insurance in each case incurred in the ordinary course of business;
provided, that, upon Agent’s request, Agent shall have received true, correct
and complete copies of all material agreements, documents or instruments
evidencing or otherwise related to such Indebtedness, as duly authorized,
executed and delivered by the parties thereto;

 

(h)           unsecured Indebtedness arising from agreements to provide for
customary indemnification, adjustment of purchase price or similar obligations,
earn-outs or other similar obligations, in each case, incurred in connection
with a Permitted Acquisition or Disposition permitted hereunder and in the case
of earn-outs or other similar obligations so long as they have been subordinated
to the Obligations pursuant to a subordination agreement in favor of Agent on
terms and conditions reasonably satisfactory to Agent;

 

(i)            Indebtedness arising pursuant to financing of insurance premiums
payable on insurance policies maintained by or for the benefit of Loan Parties
or any of their Subsidiaries; provided, that, upon Agent’s request, Agent shall
have received true, correct and complete copies of all material agreements,
documents and instruments evidencing or otherwise related to such Indebtedness;

 

(j)            unsecured subordinated Indebtedness of Loan Parties and their
Subsidiaries arising after the date hereof to any third person not otherwise
permitted in this Section 7.8, and any refinancings, refundings, renewals or
extensions thereof (without shortening the maturity thereof or increasing the
principal amount thereof (excluding accrued interest, fees, discounts, premiums
and expenses)); provided, that, (i) as of the date of incurring such
Indebtedness and after giving effect thereto, no Default or Event of Default
shall exist or have occurred and be continuing, and (ii) such third person shall
have entered into a subordination agreement with Agent on terms and conditions
reasonably satisfactory to Agent;

 

(k)           unsecured Indebtedness of any Loan Party in respect of deferred
working capital adjustment payments under the Closing Date Acquisition
Agreement;

 

(l)            Indebtedness of Non-US Subsidiaries that are not Loan Parties in
an aggregate amount not to exceed $25,000,000 at any one time outstanding;

 

(m)          subject to the terms and conditions of the Second Lien
Intercreditor Agreement, Indebtedness of any Loan Party under the Second Lien
Loan Documents, in an aggregate principal amount not to exceed the Second Lien
Maximum Debt; provided, that, (i) the Loan Parties may make payments of
principal and interest in respect of the Second Lien Notes in accordance with
the terms of the Second Lien Loan Documents as in effect on the date hereof;

 

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provided, that in the event that Parent is required to make any prepayment with
Excess Cash Flow or Parent elects to make an optional redemption or tender for
the Second Lien Notes or to make an open market purchase of any Second Lien
Notes, Parent shall be permitted to consummate the same if, in each instance,
the Second Lien Note Prepayment Conditions with respect to such transaction is
satisfied, and (ii) the Loan Parties shall not amend, modify, alter or change
(A) the repayment terms of the Second Lien Notes as in effect on the date hereof
if the effect of such amendment, change or modification will change to earlier
dates any scheduled dates for the payment of principal or interest of the Second
Lien Notes or (B) any other provision of the Second Lien Loan Documents not
related to the repayment terms of the amount Second Lien Notes or any agreement,
document or instrument related thereto as in effect on the date hereof except to
the extent permitted in the Second Lien Intercreditor Agreement; and

 

(n)           unsecured Indebtedness of any Loan Party under the Senior
Unsecured Notes Documents in an aggregate principal amount not to exceed
$60,000,000.

 

7.9          Nature of Business.

 

(a)           Engage in any business if, as a result thereof, the business then
to be conducted by Loan Parties and their Subsidiaries, taken as a whole, would
be substantially changed from the business conducted on the Closing Date or
similar, related or complimentary businesses.

 

(b)           Permit any Immaterial Subsidiary to engage in any business,
operations or activity, or hold any property or incur any obligations, other
than (i) paying taxes, (ii) holding directors’ and shareholders’ meetings,
preparing corporate and similar records and other activities required to
maintain its separate corporate or other legal structure, (iii) preparing
reports to, and preparing and making notices to and filings with, Governmental
Bodies and to its holders of Equity Interests, (iv) business operations and
activities to the extent that revenues and total assets of all Immaterial
Subsidiaries do not exceed, at any time, $2,500,000 in the aggregate, and
(v) activities required by this Agreement and the Other Documents.

 

7.10        Transactions with Affiliates.

 

Directly or indirectly, purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or otherwise deal with, any Affiliate, except
for:

 

(a)           transactions, arrangements and other business activities entered
into in the ordinary course of business, on an arm’s-length basis on terms no
less favorable than terms which would have been obtainable from a Person other
than an Affiliate;

 

(b)           any employment or compensation arrangement or agreement, employee
benefit plan or arrangement, officer or director indemnification agreement or
any similar arrangement or other compensation arrangement approved by the Board
of Directors of such Loan Party; and

 

(c)           transactions among Loan Parties and their Subsidiaries expressly
permitted by Section 7.1(c), Section 7.3(b), Section 7.4(i), Section 7.5(c),
Section 7.5(d), Section 7.7 and otherwise in this Agreement.

 

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7.11        [Reserved.]

 

7.12        Subsidiaries.

 

(a)           Form any Subsidiary unless (i) if such Subsidiary is either a US
Subsidiary or Canadian Subsidiary, such Subsidiary, prior to acquiring any
assets or conducting any business, expressly joins in this Agreement as a Loan
Party, becomes jointly and severally liable (in accordance with Section 2.16, in
the case of a US Subsidiary, and Section 2.17, in the case of a Canadian
Subsidiary) for, or otherwise guaranties, all of the Obligations (in the case of
a US Subsidiary) or all of the Canadian Obligations (in the case of a Canadian
Subsidiary) and grants a Lien on all of its Collateral to secure all of the
Obligations or Canadian Obligations (as applicable) and consents to the pledge
of its Equity Interests to secure all of the Obligations in form and substance
reasonably satisfactory to Agent (in each case, except (A) to the extent that
such assets constitute Excluded Assets and (B) no such guarantee or grant shall
be required by a Non-US Subsidiary that is a CFC to the extent such guarantee or
grant would result in material adverse tax consequences to Loan Parties under
Treas. Reg. Section 1.956-2), (ii) Agent is provided with a pledge of all of the
outstanding Equity Interests of such Subsidiary to secure all of the Obligations
in form and substance reasonably satisfactory to Agent (except to the extent
that such Equity Interests constitutes Excluded Assets), and (iii) Agent shall
have received fifteen (15) days prior written notice thereof (along with an
update of Schedule 5.2(b)) and all documents, including collateral documents,
guaranties, corporate authority documents and legal opinions, as Agent may
require in its Permitted Discretion in connection therewith, all in form and
substance reasonably satisfactory to Agent; provided, that, investments in any
Subsidiary which Loan Parties may form in accordance with this
Section 7.12(a) may only be made to the extent permitted by Section 7.4.

 

(b)           Enter into any partnership, joint venture or similar arrangement
other than an investment permitted under Section 7.4(i)(vi).

 

7.13        Fiscal Year and Accounting Changes.

 

Change its fiscal year-end from December 31, or make any change (a) in
accounting treatment and reporting practices except as required by GAAP
consistently applied or (b) in tax reporting treatment except as required by
law.

 

7.14        Pledge of Credit.

 

Now or hereafter pledge Agent’s or any Lender’s credit on any purchases or for
any purpose.

 

7.15        Amendment of Organizational Documents and Related Agreements.

 

(a)           Amend, modify or waive any term or provision of its certificate of
formation, limited liability company agreement, certificate of incorporation,
articles of incorporation, by-laws, partnership agreement or other applicable
documents relating to such Loan Party’s or Subsidiary’s formation or governance,
or any shareholders agreement, unless such amendment, modification or waiver is
not materially adverse to Agent and the Lenders.

 

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(b)           Amend, modify or waive any term or provision of any Second Lien
Loan Documents, unless such amendment, modification or waiver is permitted by
the Second Lien Intercreditor Agreement.

 

(c)           Amend, modify or waive any term or provision of any Senior
Unsecured Notes Documents, unless such amendment, modification or waiver amends,
modifies, alters or changes the terms thereof so as to extend the maturity
thereof, or defer the timing of any payments in respect thereof, or to forgive
or cancel any portion of such Indebtedness (other than pursuant to payments
thereof), or to reduce the interest rate or any fees in connection therewith.

 

(d)           Amend, modify or waive any term or provision of any of any Closing
Date Acquisition Document, unless such amendment, modification or waiver is not
materially adverse, taken as a whole, in any respect to Agent and the Lenders.

 

7.16        Compliance with ERISA; Canadian Pension Standards Laws.

 

(a)           Except as could not reasonably be expected to have a Material
Adverse Effect, (i) maintain, or permit any member of the Controlled Group to
maintain, or become obligated to contribute, or permit any member of the
Controlled Group to become obligated to contribute, to any Title IV Plan, other
than those Title IV Plans disclosed on Schedule 5.8(d), (ii) engage, or permit
any member of the Controlled Group to engage, in any non-exempt “prohibited
transaction”, as that term is defined in Section 406 of ERISA and Section 4975
of the Code, (iii) incur, or permit any member of the Controlled Group to fail
the applicable “minimum funding standard”, as that term is defined in
Section 302 of ERISA or Section 412 of the Code, (iv) terminate, or permit any
member of the Controlled Group to terminate, any Title IV Plan where such event
could result in any liability of any Loan Party or any member of the Controlled
Group or the imposition of a Lien on the property of any Loan Party or any
member of the Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or
permit any member of the Controlled Group to assume, any obligation to
contribute to any Multiemployer Plan not disclosed on Schedule 5.8(d),
(vi) incur, or permit any member of the Controlled Group to incur, any
withdrawal liability to any Multiemployer Plan, except to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, (vii) fail to comply, or permit a member of the Controlled Group to fail
to comply, with the requirements of ERISA or the Code or other applicable laws
in respect of any Plan, or (viii) fail to meet, or permit any member of the
Controlled Group to fail to meet, all minimum funding requirements under ERISA
or the Code or postpone or delay or allow any member of the Controlled Group to
postpone or delay any funding requirement with respect of any Title IV Plan.

 

(b)           Except as could not reasonably be expected to have a Material
Adverse Effect, (i) maintain, or permit any Canadian Borrower or Guarantor to
maintain, or become obligated to contribute, or permit any Canadian Borrower or
Guarantor to become obligated to contribute, to any Canadian Pension Plan, other
than those Canadian Pension Plans disclosed on Schedule 5.8(e), (ii) engage, or
permit any Canadian Borrower or Guarantor to engage in any “prohibited
transaction”, within the meaning of Section 16 of Schedule III to the Pension
Benefits Standards Regulation, 1985 or such other comparable pension standards
legislation as may apply from time to time to such plan, (iii) terminate, or
permit any Canadian Borrower or Guarantor to terminate, any Canadian Pension
Plan where such event could result in any liability of any Canadian Borrower or
Guarantor or the

 

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imposition of a Lien on the property of any Canadian Borrower or Guarantor
pursuant to applicable pension standards legislation, (iv) assume, or permit any
Canadian Borrower or Guarantor to assume, any obligation to contribute to any
multi-employer pension plan (as defined under applicable pension standards
legislation) or to any defined benefit plan, (v) fail promptly to notify Agent
of the occurrence of any Canadian Pension Plan Event, (vi) fail to comply, or
permit a Canadian Borrower or Guarantor to fail to comply, with the requirements
of applicable pension standards legislation or the Income Tax Act (Canada) or
other applicable legislation in respect of any Canadian Pension Plan, or
(vii) fail to meet, or permit any member of the Controlled Group to fail to
meet, all minimum funding requirements under applicable pension standards
legislation or the Income Tax Act (Canada) or postpone or delay or allow a
Canadian Borrower or Guarantor to postpone or delay any funding requirement in
respect of any Canadian Pension Plan.

 

7.17        [Reserved].

 

7.18        State/Province of Organization/Names/Locations.

 

Change the jurisdiction in which it is incorporated or otherwise organized, or
change its legal name (or use a different name), location of chief executive
office or location of any of the Collateral, unless Administrative Borrower has
given Agent not less than twenty (20) days prior written notice thereof (along
with an update of Schedule 4.4, Schedule 4.14(c), Schedule 5.2(a) and
Schedule 5.6, as applicable) and Loan Parties have taken (or caused to be taken)
all steps required by Agent to maintain Agent’s Lien on such Collateral, as well
as the priority and effectiveness of such Lien); provided, that, no Loan Party
shall change its jurisdiction of incorporation or organization or location of
any of its Collateral to a jurisdiction or location from (a) with respect to
each US Loan Party, the continental United States to outside of the continental
United States or (b) with respect to each Canadian Loan Party which is not a US
Loan Party, Canada to outside of Canada.

 

7.19        Foreign Assets Control Regulations, Etc.

 

None of the requesting or borrowing of the Advances or the requesting or
issuance, extension or renewal of any Letters of Credit or the use of the
proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C.
§1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the foreign
assets control regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or
any enabling legislation or executive order relating thereto (including, but not
limited to (a) Executive order 13224 of September 21, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56).  No Loan Party
is or will become a Sanctioned Entity or Sanctioned Person as described in the
Executive Order, the Trading with the Enemy Act or the Foreign Assets Control
Regulations or engages or will engage in any dealings or transactions, or be
otherwise associated, with any such Sanctioned Entity or Sanctioned Person.

 

7.20        Applications under Insolvency Statutes.

 

Each Loan Party acknowledges that its business and financial relationships with
Agent and Lenders are unique from its relationship with any other of its
creditors, and agrees that it shall not

 

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file any plan of arrangement under the Companies’ Creditors Arrangement Act
(Canada) or make any proposal under the Bankruptcy and Insolvency Act (Canada)
which provides for, or would permit directly or indirectly, Agent or any Lender
to be classified with any other creditor as an “affected” creditor for purposes
of such plan or proposal or otherwise.

 

8.             CONDITIONS PRECEDENT; POST-CLOSING DELIVERIES.

 

8.1          Conditions to Initial Advances.

 

The agreement of Lenders to make the initial Advances and Letters of Credit
requested to be made on the Closing Date is subject to the satisfaction, or
waiver by Lenders, immediately prior to or concurrently with the making of such
Advances and Letters of Credit, of the following conditions precedent, all in
form and substance acceptable to Agent:

 

(a)           Agreement.  Agent shall have received this Agreement duly executed
and delivered by an authorized officer of each of the parties hereto;

 

(b)           Notes.  Agent, to the extent required by Lenders, shall have
received the Notes duly executed and delivered by an authorized officer of the
Borrowers in favor of such Lenders;

 

(c)           Filings, Registrations, Recordings and Searches.  Each document
(including, without limitation, any UCC financing statement, PPSA financing
statement and filings with the United States Patent and Trademark Office and
United States Copyright Office, as applicable) required by this Agreement, any
Other Document or under law or reasonably requested by Agent to be filed,
registered or recorded in order to create, in favor of Agent, a perfected Lien
upon the Collateral shall have been properly filed, registered or recorded in
each jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto, except as otherwise provided in clause (u) below
with respect to the Mortgages.  Agent shall also have received UCC, PPSA, tax,
judgment and other Lien searches with respect to each Loan Party in such
jurisdictions as Agent shall require, and the results of such searches shall be
satisfactory to Agent;

 

(d)           Payoff Letters; Releases.  Fully executed payoff letters (or other
evidence of repayment) from all creditors being repaid (in whole or in part) in
connection with the making of the initial Advances, along with appropriate Lien
releases;

 

(e)           Corporate Proceedings of Loan Parties.  Agent shall have received
a copy of the resolutions of the board of directors (or equivalent authority) of
each Loan Party authorizing (i) the execution, delivery and performance of this
Agreement and the Other Documents to which it is a party, and (ii) the granting
by each Loan Party of the Liens upon the Collateral in each case certified by
the Secretary or an Assistant Secretary of each Loan Party as of the Closing
Date; and, such certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded as of the date of such
certificate;

 

(f)            Incumbency Certificates of Loan Parties.  Agent shall have
received a certificate of the Secretary or an Assistant Secretary of each Loan
Party, dated as of the Closing

 

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Date, as to the incumbency and signature of the officers of each Loan Party
executing this Agreement, any certificate or Other Documents to be delivered by
it pursuant hereto, together with evidence of the incumbency of such Secretary
or Assistant Secretary;

 

(g)           Certificates.  Agent shall have received a copy of the certificate
of formation, limited liability company agreement, certificate of incorporation,
by-laws, partnership agreement or other applicable documents relating to each
Loan Party’s formation and governance, and all amendments thereto, certified in
the case of formation documents filed with a Governmental Body by the Secretary
of State or other appropriate official of its jurisdiction of incorporation or
formation and certified in the case of other formation and governance documents
as accurate and complete by the Secretary or Assistant Secretary of each Loan
Party;

 

(h)           Good Standing Certificates.  Agent shall have received good
standing certificates for each Loan Party dated not more than thirty (30) days
prior to the Closing Date, issued by the Secretary of State or other appropriate
official of each such Loan Party’s jurisdiction of incorporation or formation;

 

(i)            Legal Opinion.  Agent shall have received the executed legal
opinions of Loan Parties’ legal counsel, which shall cover such matters incident
to the transactions contemplated by this Agreement and the Other Documents as
Agent may reasonably require and each Loan Party hereby authorizes and directs
such counsel to deliver such opinions to Agent and Lenders;

 

(j)            No Litigation.  (i) No litigation, investigation or proceeding
before or by any arbitrator or Governmental Body shall be continuing or
threatened in writing against any Loan Party or against the officers or
directors of any Loan Party in connection with this Agreement and/or the Other
Documents or any of the transactions contemplated thereby and which, in the
reasonable opinion of Agent, is deemed material and (ii) no injunction, writ,
restraining order or other order of any nature materially adverse to any Loan
Party or the conduct of its business or inconsistent with the due consummation
of the transactions contemplated by this Agreement or any of the other Related
Transactions shall have been issued by any Governmental Body;

 

(k)           Collateral Examination.  Agent shall have completed and received,
at least five (5) Business Days prior to the Closing Date, (i) Collateral Field
Examinations of the Receivables and Inventory of each Loan Party and all books
and records in connection therewith, in each case as of September 30, 2011, with
rollforwards through October 31, 2011, and (ii) appraisals of the Inventory of
each Loan Party, the results of which shall in all cases be satisfactory in form
and substance to Agent (it being acknowledged that Agent has received such
rollforwards through October 31, 2011, which are satisfactory to Agent);

 

(l)            Fees and Expenses.  Agent shall have received all fees payable to
Agent and Lenders on or prior to the Closing Date pursuant to Section 3.3 and
the Fee Letter and all reimbursable expenses of Agent invoiced to date in
accordance with this Agreement;

 

(m)          Financial Information; Financial Performance.  Agent shall have
received and be reasonably satisfied with (i) audited consolidated balance
sheets and related statements of income, stockholders’ equity and cash flows of
each of the Parent and the Acquired Company for the last three full fiscal years
ended at least ninety (90) days prior to the Closing Date, (ii) unaudited

 

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consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of each of the Parent and the Acquired Business for each
subsequent interim quarterly period ended at least forty-five (45) days prior to
the Closing Date (and the corresponding period for the prior fiscal year),
(iii) interim consolidated financial statements of each of the Parent and the
Acquired Company for each month ended after the date of the last available
quarterly financial statements and at least thirty (30) days prior to the
Closing Date, (iv) a pro forma consolidated balance sheet and related pro forma
consolidated statement of income of the Parent (after giving effect to the
Closing Date Acquisition and the Related Transactions) as of and for the
twelve-month period ending on the last day of the most recently completed four
fiscal quarter period ended at least forty-five (45) days prior to the Closing
Date (or ninety (90) days in the case of a fiscal quarter that is also a fiscal
year end); provided, that, for this purpose, the consolidated financial
information that will be used for (A) the Parent will be in respect of the four
fiscal quarter period ended September 30, 2011 and (B) the Acquired Company will
be in respect of the four fiscal quarter period ended July 31, 2011), prepared
after giving effect to the Closing Date Acquisition and other Related
Transactions as if the Related Transactions had occurred as of such date (in the
case of such balance sheet) or at the beginning of such period (in the case of
the statement of income); and (v) satisfactory projections (including the
assumptions on which such projections are based) for Parent and its Subsidiaries
for fiscal years 2012 through and including 2017; provided, that, each such pro
forma financial statement shall be prepared in good faith by the Parent (it
being understood that the projections received by the Lead Arrangers from the
Parent on November 7, 2011 are satisfactory to the Agent).  Such financial
statements referred to in clause (iv) above shall show pro forma total leverage
of the Parent and its consolidated Subsidiaries after giving effect to the
Related Transactions (calculated in a manner which Agent deems appropriate) for
(A) the twelve-month period ended on the last day of the most recently completed
four fiscal quarter period of not greater than (1) 2.90:1:00 (excluding, for
this purpose, the Senior Unsecured Notes) and (2) 3.50:1.00 (including, for this
purpose, the Senior Unsecured Notes) and (B) the latest twelve month period for
which financial statements are available of not greater than (1) 2.90:1.00
(excluding, for this purpose, the Senior Unsecured Notes) and (2) 3.50:1.00
(including, for this purpose, the Senior Unsecured Notes);

 

(n)           Other Documents.  Agent shall have received fully executed copies
of all Other Documents to the extent required to be executed on the Closing
Date;

 

(o)           Insurance.  Agent shall have received insurance certificates
naming Agent as loss payee or additional insured, as applicable, with respect to
Loan Parties’ property and liability insurance policies, and such policies and
the limits to coverage set forth therein shall be satisfactory to Agent in its
Permitted Discretion;

 

(p)           Payment Instructions.  Agent shall have received written
instructions from Administrative Borrower directing the application of proceeds
of the initial Advances made pursuant to this Agreement;

 

(q)           Consents.  Agent shall have received any and all Consents
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Related Transactions; and, Agent shall have received such
Consents and waivers of such third parties as might assert claims with respect
to the Collateral, as Agent and its counsel shall deem necessary;

 

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(r)            No Adverse Material Change.  (i) Since December 31, 2010, in the
case of Loan Parties, prior to giving effect to the consummation of the Closing
Date Acquisition, there shall not have occurred any event, condition or state of
facts which could reasonably be expected to have, either individually or in the
aggregate, a Parent Closing Material Adverse Effect; and (ii) since October 31,
2010, in the case of the Acquired Company, there shall not have occurred any
event, condition or state of facts which will or would reasonably be expected to
have, either individually or in the aggregate, a “Company Material Adverse
Effect” (as defined in the Closing Date Acquisition Agreement as in effect on
the date hereof);

 

(s)           [Reserved];

 

(t)            Equity Interests Pledge.  Agent shall have received the Pledge
Agreements, executed by each applicable Loan Party in favor of Agent, pursuant
to which such Loan Party shall pledge to Agent and grant to Agent a Lien upon
all of the outstanding Equity Interests of each Subsidiary (other than Equity
Interests constituting Excluded Assets) of such Loan Party, together with share
powers duly executed in blank and originals of any related share, membership or
other similar certificates;

 

(u)           Second Lien Loan Documents and Senior Unsecured Notes Documents. 
Agent shall have received (i) executed copies of the Second Lien Intercreditor
Agreement and all of the Second Lien Loan Documents and evidence that Loan
Parties have received $217,125,000 in gross proceeds in the aggregate from
advances made on or about the date hereof as proceeds of the Second Lien Notes
(as applicable), and (ii) executed copies of the Senior Unsecured Notes
Documents and evidence that Loan Parties have received $50,000,000 gross
proceeds in the aggregate from advances made on or about the date hereof as
proceeds thereof;

 

(v)           Closing Date Acquisition.  Loan Parties and their Subsidiaries
shall have completed (or concurrently with the initial credit extension
hereunder will complete) the Closing Date Acquisition in accordance with the
terms of the Closing Date Acquisition Documents, without any amendment thereto
or waiver thereunder, in each case in any manner adverse in any material respect
to the interest of the Agent, Lenders and the Lead Arrangers in their respective
capacities as such without the consent of Agent (provided, that, any
(A) decrease in the purchase price in the Closing Date Acquisition Agreement of
five (5%) percent or more of the total Closing Date Acquisition consideration
paid shall be deemed to be adverse to the interest of the Agent, Lenders and the
Lead Arrangers in a material respect, (B) any decrease in the purchase price in
the Closing Date Acquisition Agreement of less than five (5%) percent of the
total Closing Date Acquisition consideration paid shall be deemed not to be
adverse to the interest of the Agent, Lenders and the Lead Arrangers in a
material respect so long as such decrease is allocated to reduce the maximum
amount permitted to drawn hereunder and the amount of the Second Lien Notes on
the Closing Date, (C) change to the definition of “Company Material Adverse
Effect” set forth in the Closing Date Acquisition Agreement or any similar
definition shall be deemed to be adverse to the interest of the Agent, Lenders
and the Lead Arrangers in a material respect and (D) any modifications to any of
the provisions relating to the Agent’s, the Lead Arrangers’ or any Lender’s
liability, jurisdiction or status as a third party beneficiary under the Closing
Date Acquisition Agreement shall be deemed to be adverse to the interest of the
Agent, Lenders and the Lead Arrangers in a material respect).  Agent shall have
received copies of the Closing Date Acquisition Documents (including a consent
to the collateral assignment of rights and indemnities under the appropriate
Closing Date Acquisition

 

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Documents in favor of Agent, for the benefit of Lenders) certified by
Administrative Borrower’s secretary or an assistant secretary (or similar
officer) as being in true, accurate and complete;

 

(w)          Borrowing Base.  Agent shall have received a duly executed
Borrowing Base Certificate at least two (2) Business Days prior to the Closing
Date which shall (i) be completed as of October 31, 2011, so long as the Closing
Date occurs on or prior to December 20, 2011, and (ii) indicate that the
aggregate amount of Eligible Accounts and Eligible Inventory is sufficient in
value and amount to support Revolving Advances and Letters of Credit in the
amount requested by the Borrowers on the Closing Date;

 

(x)            Global Excess Availability.  After giving effect to the initial
Advances and Letters of Credit and all fees and expenses pertaining to the
closing of this Agreement and the Related Transactions, the Borrowers shall have
Global Excess Availability of at least $35,000,000;

 

(y)           Due Diligence.  Agent and its counsel shall have completed its
business and legal due diligence with results satisfactory to Agent and its
counsel, including without limitation (i) pre-funding field examination of the
business and collateral of each Loan Party in accordance with Agent’s customary
procedures and practices and as otherwise required by the nature and
circumstances of the businesses of each Loan Party, (ii) favorable trade and
customer references and (iii) background checks with respect to such individuals
as Agent determines issued by investigatory firms satisfactory to Agent; and
Agent shall be satisfied with the corporate and capital structure and management
of each Loan Party’s license agreements and with all legal, tax, accounting and
other matters relating to each Loan Party; and

 

(z)            Other.  All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Related Transactions shall be
satisfactory in form and substance to Agent and its counsel.

 

8.2          Conditions to Each Advance.

 

The agreement of Lenders to make or to issue or to cause to be issued any
Advance or Letter of Credit requested to be made or issued on any date
(excluding the initial Advance(s) or Letter(s) of Credit solely with respect to
clause (b) below), is subject to the satisfaction of the following conditions
precedent as of the date such Advance or Letter of Credit is made or issued:

 

(a)           Representations and Warranties.  Except as set forth below, each
of the representations and warranties made by any Loan Party in or pursuant to
this Agreement and any Other Document to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any Other Document shall be true and correct in all material
respects (without duplication of any materiality qualifiers already set forth
therein; or in all respects with respect to representations and warranties made
on the Closing Date) on and as of such date as if made on and as of such date,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects (without duplication
of any materiality qualifiers already set forth therein) on and as of such
earlier date); provided, however, that, each Lender, in its sole discretion, may
(and at the direction of Agent and Required Lenders, shall) continue to make

 

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Advances and participate in Letters of Credit notwithstanding the failure to
make such representations and warranties and that any Advances so made and
Letters of Credit so issued shall not be deemed a waiver of any applicable
Default or Event of Default; and provided, further, however, that, solely with
respect to the initial Advance(s) or Letter(s) of Credit, the only
representations and warranties that shall be required to be true and correct in
all material respects with respect to the Acquired Company are Sections 5.1,
5.2(a), 5.14, 5.15, 5.16 and 5.26 solely as they relate to this Agreement and
the Other Documents and those representations and warranties under the Closing
Date Acquisition Agreement that are material to the interests of the Lenders,
but only to the extent that the Parent has (or its Affiliates have) the right
(determined without regard to any notice requirement) to terminate the Parent’s
obligations (or refuse to consummate the Closing Date Acquisition) under the
Closing Date Acquisition Documents as a result of a breach of such
representations in the Closing Date Acquisition Documents;

 

(b)           No Default.  No Event of Default or Default shall have occurred
and be continuing on such date, or would exist after giving effect to the
Advances requested to be made, on such date; provided, however, that, (i) each
Lender, in its sole discretion, may (and at the direction of Agent and Required
Lenders, shall) continue to make Advances and participate in Letters of Credit
notwithstanding the existence of a Default or Event of Default and that any
Advances so made and Letters of Credit so issued shall not be deemed a waiver of
any such Default or Event of Default, and (ii) each Lender shall be deemed to
have elected to continue to make Advances and participate in Letters of Credit
pursuant to the immediately preceding clause (i) unless such Lender shall have
expressly notified Agent in writing promptly (and no later than one (1) Business
Day following the Advances requested to be made) that such Lender has elected
not to make Advances and participate in Letters of Credit, subject, however, to
such Lender’s obligation to make Advances and participate in Letters of Credit
if so directed by Agent and Required Lenders in accordance with the immediately
preceding clause (i); and

 

(c)           Maximum Revolving Advances/Letters of Credit.  The limits set
forth in Section 2.1(b) are not exceeded after giving effect to such Advances or
Letters or Credit, as applicable.

 

Each request for an Advance or Letter of Credit by Administrative Borrower (on
behalf of the Borrowers) hereunder shall constitute a representation and
warranty by the Borrowers as of the date of such Advance or Letter of Credit
that the conditions contained in this subsection shall have been satisfied.

 

8.3          Post-Closing Deliveries.

 

Without limiting any other obligation of Loan Parties set forth herein or in any
of the Other Documents, Loan Parties shall deliver or cause to be delivered to
Agent, in form and substance reasonably satisfactory to Agent, as promptly as
possible following the Closing Date but on or before the date applicable thereto
(or such later date as Agent shall agree in writing in its Permitted
Discretion), the post-closing deliveries set forth on Schedule 8.3 hereto (the
failure by Loan Parties to so deliver or cause to be delivered such post-closing
deliveries as and when required by the terms hereof, shall constitute an
immediate Event of Default).

 

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9.             INFORMATION AS TO LOAN PARTIES.

 

Until all of the Obligations are Paid in Full, each Loan Party shall:

 

9.1          Disclosure of Material Matters Pertaining to Collateral.

 

Promptly upon learning thereof, report to Agent all matters materially affecting
the value, enforceability or collectability of any material portion of the
Collateral that would reasonably be expected to have a Material Adverse Effect.

 

9.2          Collateral and Related Reports.

 

(a)           Deliver to Agent on or before the twentieth (20th) day of each
month, current as of the end of the immediately preceding month, and following
the occurrence and during the continuance of a Cash Dominion Event, on a weekly
basis on or before the third (3rd) Business Day of each week (or more frequently
as Agent may request upon the occurrence and during the continuance of an Event
of Default), which shall be current as of the close of business on the last
Business Day of the month (or week, as applicable) immediately prior to such
date:

 

(i)            with respect to each Borrower, an Accounts receivable rollforward
report, which shall separately identify (A) the Accounts receivable aging
balance as of the first (1st) day of such immediately preceding calendar month
(or week, as applicable), (B) gross billings, cash receipts, credit memos and
other adjustments issued (recorded directly to the Accounts receivable aging),
write-offs, other debit and credit adjustments on a cumulative basis for such
calendar month (or week, as applicable) (together with an explanation for all
such adjustments that individually exceed $25,000) during such immediately
preceding calendar month (or week, as applicable), and (C) Accounts receivable
aging balance as of the last day of such immediately preceding calendar month
(or week, as applicable), supported by the following information for such
immediately preceding calendar month (or week, as applicable):

 

(1)           Accounts receivable aging summary totals;

 

(2)           total amount of sales and invoices issued;

 

(3)           total amount of cash receipts; and

 

(4)           total amount of credits and adjustments (including credit memos
issued, write-offs, returns, discounts and other credit adjustments);

 

(ii)           a perpetual Inventory summary report as of the end of the
immediately preceding period;

 

(iii)          with respect to each Borrower, a summary Accounts receivable
aging by Customer, along with a listing of reserves implemented by each such
Borrower related Contra Claims known to such Borrower;

 

(iv)          (A) a reconciliation of the Accounts receivable aging balance,
together with a copy of Borrowers’ detailed trial balance, as of the last day of
such immediately preceding

 

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calendar month (or week, as applicable) to each of the following for such
calendar month (or week, as applicable):  (1) Accounts receivable balance
delivered to Agent, (2) each Borrower’s general ledger (tied to corresponding
trial balance accounts), and (3) each Borrower’s balance sheet, together with
supporting documentation for any reconciling items, and (B) notice of all
claims, offsets, or disputes or any reserves implemented by any Borrower related
to Contra Claims asserted by Customers with respect to any Borrower’s Accounts
receivable;

 

(v)           for each of the Borrowers’ ten (10) largest Customers, the payment
terms of such Customer’s Accounts receivable, its address, an aging for such
Customers’ Accounts receivable balances as set forth in the accounts receivable
aging most recently delivered to Agent and if known to Borrower, each such
Customer’s credit rating;

 

(vi)          with respect to each Borrower, a perpetual Inventory report,
current as of the close of business on the last Business Day of the immediately
preceding calendar month (or week, as applicable), and reconciliation to each
Borrower’s general ledger and balance sheet and Inventory reporting for the same
calendar month (or week, as applicable);

 

(vii)         with respect to each Borrower, an Inventory report by location,
category and component (i.e., raw materials, work in process and finished
goods), including Inventory aging report (and including the amounts of Inventory
and the value thereof at any leased locations and at premises of warehouses,
processors or other third parties);

 

(viii)        with respect to each Loan Party’s accounts payable and expenses
for the immediately preceding calendar month (or week, as applicable), a report
including an accounts payable aging, accrued expenses, and listing of checks
held, together with a reconciliation to each Loan Party’s general ledger and
balance sheet for such calendar month (or week, as applicable);

 

(ix)           (A) a detailed report of accrued and other liabilities of Loan
Parties as of the end of such immediately preceding calendar month (or week, as
applicable) reconciled to the balance sheet for such calendar month (or week, as
applicable); (B) listing of (1) past due amounts owing to owners and lessors of
leased premises, warehouses, processors and other third parties from time to
time in possession of any Collateral of Loan Parties, (2) monthly rent, lease,
warehouse and other amounts payable to the Persons referred to in the foregoing
clause (1), and (3) cost of all Inventory and other Collateral then located at
each of the locations referred to in the foregoing clause (1); and
(C) confirmation that all sales, personal property and payroll and other taxes
of Loan Parties are currently paid;

 

(x)            (A) a reconciliation of outstanding Advances and undrawn Letters
of Credit as of the end of such immediately preceding calendar month (or week,
as applicable) to each Borrower’s general ledger and balance sheet for such
calendar month (or week, as applicable); and (B) a detailed list of Letters of
Credit outstanding, including for each Letter of Credit the undrawn principal
amount thereof, beneficiary name, issuer name, and expiration date; and

 

(xi)           notice of termination or breach of any Material Contract of a
Loan Party or any of their Subsidiaries which could reasonably be expected to
result in a Material Adverse Effect;

 

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(b)           Deliver to Agent on or before the twentieth (20th) day of each
month, current as of the end of the immediately preceding month, and following
the occurrence and during the continuance of a Cash Dominion Event, on a weekly
basis on or before the third (3rd) Business Day of each week (or more frequently
as Agent may request upon the occurrence and during the continuance of an Event
of Default), a report, in form and substance reasonably satisfactory to Agent,
detailing the amount on deposit in all Restricted Accounts;

 

(c)           Deliver to Agent on or before the twentieth (20th) day of each
month, current as of the end of the immediately preceding month, and following
the occurrence and during the continuance of a Cash Dominion Event, on a weekly
basis on or before the third (3rd) Business Day of each week (or more frequently
as Agent may request upon the occurrence and during the continuance of an Event
of Default), a Borrowing Base Certificate substantially in the form attached
hereto as Exhibit A executed by a Responsible Officer of Administrative Borrower
(on behalf of the Borrowers), which shall be calculated as of the last day of
the immediately preceding month (which shall not be binding upon Agent or
restrictive of Agent’s rights under this Agreement, and which shall not restrict
the rights of Agent to recalculate the US Borrowing Base, the Canadian Borrowing
Base or any of the related components thereof), setting forth an updated
calculation of all components of the US Borrowing Base and the Canadian
Borrowing including without limitation Reserves that Administrative Borrower is
aware of (it being understood that Agent may institute additional Reserves), the
US Borrowing Base and US Undrawn Availability, if any, and the Canadian
Borrowing and Canadian Undrawn Availability, if any, and supported by schedules
showing the derivation thereof and containing such detail and such other
information as Agent may request from time to time;

 

(d)           Deliver to Agent on or before the sixtieth (60th) day after the
end of each the Borrowers’ fiscal years:

 

(i)            current certificates of insurance and loss payee endorsements for
all insurance policies which Loan Parties and their Subsidiaries are required to
maintain pursuant to Section 4.10; and

 

(ii)           a list of all Customers of Loan Parties owing Accounts receivable
as of the end of such fiscal year, including such Customers’ respective name,
address, phone number, and e-mail address;

 

(e)           Promptly, upon the request of Agent in its Permitted Discretion,
in each case to the extent available, (i) copies of customer statements,
customer purchase orders, customer sales invoices, credit memos, remittance
advices and reports, and copies of deposit slips and bank statements,
(ii) copies of customer purchase orders, invoices and delivery documents for
Accounts or other Receivables created by any Loan Party, (iii) copies of
shipping and delivery documents for Inventory and Equipment acquired by any Loan
Party, and (iv) test verifications;

 

(f)            Promptly, deliver to Agent (i) current certificates of insurance
and loss payee endorsements for all insurance policies which Loan Parties and
their Subsidiaries are required to maintain pursuant to Section 4.10,
immediately following the renewal of each such policy and any amendments
thereto; and (ii) such other reports and information as to the Collateral, Loan
Parties or their Subsidiaries as Agent shall request from time to time in its
Permitted Discretion; and

 

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(g)           Promptly upon the occurrence thereof, deliver to Agent notice of
termination or breach of any Material Contract of a Loan Party or any of their
Subsidiaries which could reasonably be expected to result in a Material Adverse
Effect;

 

(h)           Each Loan Party agrees to use commercially reasonable efforts in
cooperation with Agent to facilitate and establish a system of electronic
collateral reporting in order to provide electronic reporting of each of the
items set forth in this Section 9.2.  All such reports are solely for Agent’s
convenience in maintaining records of the Collateral, and any Loan Party’s
failure to deliver any of such reports to Agent shall not affect, terminate,
modify or otherwise limit Agent’s Lien with respect to the Collateral.  Agent
shall have the right to confirm and verify all Receivables by any manner and
through any medium it considers advisable and do whatever it may deem reasonably
necessary to protect its interests hereunder.

 

9.3          [Reserved].

 

9.4          Litigation.

 

Promptly (but in any event within five (5) Business Days thereafter) notify
Agent in writing of (or of any judgment or settlement) any litigation, suit or
administrative proceeding affecting any Loan Party or any Subsidiary, whether or
not the claim is covered by insurance, and of (or of any material development
in) any suit or administrative proceeding, which in any such matter could
reasonably be expected to have a Material Adverse Effect.

 

9.5          Material Occurrences.

 

Promptly (but in any event within five (5) Business Days thereafter) notify
Agent in writing upon the occurrence of (a) any Event of Default or Default; (b)
any event, development or circumstance whereby any financial statements or other
reports furnished to Agent fail in any material respect to present fairly, in
accordance with GAAP consistently applied, the financial condition or operating
results of any Loan Party or any Subsidiary of any Loan Party as of the date of
such statements; (c) any accumulated retirement plan funding deficiency which,
if such deficiency continued for two (2) plan years and was not corrected as
provided in Section 4971 of the Code, could subject any Loan Party or any
Subsidiary of any Loan Party to a tax in excess of $1,000,000 imposed by Section
4971 of the Code; and (d) each and every default by any Loan Party or any
Subsidiary of any Loan Party which could reasonably be expected to result in the
acceleration of the maturity of any Indebtedness in excess of $3,000,000,
including the names and addresses of the holders of such Indebtedness with
respect to which there is a default existing or with respect to which the
maturity has been or could be accelerated, and the amount of such Indebtedness.

 

9.6          Government Receivables.

 

Notify Agent promptly of any Government Receivables in excess of $500,000 in any
one case, to the extent such Government Receivables are included in the
Borrowing Base.

 

9.7          Annual Financial Statements.

 

Furnish Agent and each Lender within ninety (90) days after the end of each
fiscal year of Loan Parties, financial statements of Loan Parties and their
Subsidiaries on a consolidated basis,

 

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including, but not limited to, statements of income and stockholders’ equity and
cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and reported upon without qualification by
an independent certified public accounting firm selected by Loan Parties and
satisfactory to Agent (the “Accountants”).  The report of the Accountants shall
be accompanied by (a) copies of all management letters, exception reports or
similar letters or reports received by Loan Parties or their Subsidiaries from
the Accountants, and (b) a statement of the Accountants certifying that (i) they
have caused this Agreement to be reviewed, and (ii) in making the examination
upon which such report was based, either no information came to their attention
which to their knowledge constituted an Event of Default or a Default under this
Agreement or any related agreement or, if such information came to their
attention, specifying any such Default or Event of Default, its nature, when it
occurred and whether it is continuing, and such report shall contain or have
appended thereto calculations which set forth Loan Parties’ compliance with the
requirements or restrictions imposed by Sections 6.8 and 7.6.  In addition, the
reports shall be accompanied by a Compliance Certificate of a Responsible
Officer of Administrative Borrower which shall state that, based on an
examination sufficient to permit such Responsible Officer to make an informed
statement, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Loan Parties with respect
to such event, and such Compliance Certificate shall have appended thereto
calculations which set forth Loan Parties’ compliance with the requirements or
restrictions imposed by Sections 6.8 and 7.6.  The Compliance Certificate shall
also set forth a calculation of Quarterly Average Undrawn Availability for the
purposes of determining the Applicable Margin with respect to the then current
calculation period.

 

9.8          Quarterly Financial Statements.

 

Furnish Agent and each Lender within forty-five (45) days after the end of each
of the first three (3) fiscal quarters of each fiscal year, and within ninety
(90) days after the end of the last fiscal quarter of each fiscal year, an
unaudited balance sheet of Loan Parties and their Subsidiaries on a consolidated
basis and unaudited statements of income and stockholders’ equity and cash flow
of Loan Parties and their Subsidiaries on a consolidated basis reflecting
results of operations from the beginning of the fiscal year to the end of such
quarter and for such quarter, prepared on a basis consistent with prior
practices and complete and correct in all material respects, subject to normal
and recurring year end adjustments that individually and in the aggregate are
not material to the business of Loan Parties or their Subsidiaries.  Each such
balance sheet, statement of income and stockholders’ equity and statement of
cash flow shall set forth a comparison of the figures for (a) the current fiscal
period and the current year-to-date with the figures for the same fiscal period
and year-to-date period of the immediately preceding fiscal year and (b) the
projections for such fiscal period and year-to-date period delivered pursuant to
Section 5.5(b) or Section 9.12, as applicable and shall be accompanied by an
analysis and discussion of results prepared by senior management of Loan Parties
with respect thereto, satisfactory to Agent.  The financial statements shall be
accompanied by a Compliance Certificate signed by a Responsible Officer of
Administrative Borrower, which shall state that, based on an examination
sufficient to permit such Responsible Officer to make an informed statement, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by Loan Parties with respect to the events
giving risk to such Default or Event of Default and,

 

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such Compliance Certificate shall have appended thereto calculations which set
forth Loan Parties’ compliance with the requirements or restrictions imposed by
Sections 6.8 and 7.6.  The Compliance Certificate shall also set forth a
calculation of Quarterly Average Undrawn Availability for the purposes of
determining the Applicable Margin with respect to the then current calculation
period.

 

9.9          [Reserved.]

 

9.10        Notices re Equity Holders; Debt Financing Documents.

 

Furnish promptly to Agent (a) with copies of such financial statements, reports
and returns as each Loan Party and their Subsidiaries shall send to its equity
holders generally, as a group, and (b) copies of all notices or reports sent or
received by any Loan Party or any Subsidiary in connection with, along with all
amendments, modifications and new documents with respect to Debt Financing
Documents (subject to the terms hereof and the Second Lien Intercreditor
Agreement, in the case of the Second Lien Notes.

 

9.11        Additional Information.

 

Furnish promptly to Agent or any requesting Lender with such additional
information as Agent or such Lender shall reasonably request in order to enable
Agent or such Lender to determine whether Loan Parties are in compliance with
the terms, covenants, provisions and conditions of this Agreement and the Other
Documents.

 

9.12        Projected Operating Budget.

 

Furnish Agent, no later than thirty (30) days after the beginning of each Loan
Party’s fiscal years, commencing with Loan Party’s fiscal year ending December
31, 2011, a month by month projected operating budget and cash flow of Loan
Parties and their Subsidiaries on a consolidated basis for such fiscal year
(including an income statement for each month and a balance sheet as at the end
of the last month in each fiscal quarter), such projections to be accompanied by
a certificate signed by a Responsible Officer of Administrative Borrower to the
effect that such projections have been prepared in good faith on the basis of
sound financial planning practice consistent with past budgets and financial
statements and that such Responsible Officer has no reason to question the
reasonableness of any material assumptions on which such projections were
prepared.

 

9.13        Variances From Operating Budget.

 

Furnish Agent and each Lender, concurrently with the delivery of the financial
statements referred to in Section 9.7 and Section 9.8, or more frequently if
reasonably requested by Agent, a written report summarizing all material
variances from budgets submitted by Loan Parties pursuant to Section 9.12 and a
discussion and analysis by management with respect to such variances.

 

9.14        Notice of Governmental Body Items.

 

Furnish Agent with prompt (and, in any event, not more than five (5) Business
Days) notice of (a) any lapse or other termination of any Consent issued to any
Loan Party or any Subsidiary of any Loan Party by any Governmental Body or any
other Person that is material to the operation of any Loan Party’s or such
Subsidiaries’ business, (b) any refusal by any Governmental Body or any

 

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other Person to renew or extend any such Consent; and (c) copies of any periodic
or special reports filed by any Loan Party or any Subsidiary of any Loan Party
with any Governmental Body or Person, if such reports indicate any material
change in the business, operations, affairs or condition of any Loan Party or
any such Subsidiary, or if copies thereof are requested by Agent or any Lender,
(d) copies of any material notices and other communications from any
Governmental Body or Person which specifically relate to any Loan Party or any
Subsidiary of any Loan Party and (e) any federal, state, local or other income
tax return of any Loan Party or Subsidiary that has been filed becoming the
subject of an audit.

 

9.15        ERISA Notices and Requests; Canadian Pension Notices and Requests.

 

Furnish Agent with immediate written notice in the event that (a) any Loan
Party, any Subsidiary of any Loan Party or any member of the Controlled Group
knows or has reason to know that a Canadian Pension Event has occurred, together
with a written statement describing such Canadian Pension Event and the action,
if any, which such Loan Party, such Subsidiary of any Loan Party or member of
the Controlled Group has taken, is taking, or proposes to take with respect
thereto and, when known, any action taken or threatened by the IRS, Department
of Labor, PBGC or Canadian Governmental Authority, as applicable, with respect
thereto, (b) any Loan Party, any Subsidiary of any Loan Party or any member of
the Controlled Group knows or has reason to know that a prohibited transaction
(as defined in Sections 406 of ERISA and 4975 of the Code or section 16 of
Schedule III to the Pension Benefits Standards Regulation, 1985 (Canada) or
equivalent applicable Canadian Pension Standards legislation) has occurred,
together with a written statement describing such transaction and the action
which such Loan Party, such Subsidiary of any Loan Party or any member of the
Controlled Group has taken, is taking or proposes to take with respect thereto,
(c) a funding waiver request has been filed with respect to any Title IV Plan or
Canadian Pension Plan together with all communications received by any Loan
Party, any Subsidiary of any Loan Party or any member of the Controlled Group
with respect to such request, (d) any increase in the benefits of any existing
Title IV Plan or Canadian Pension Plan or the establishment of any new Title IV
Plan or Canadian Pension Plan or the commencement of contributions to any Title
IV Plan or Canadian Pension Plan to which any Loan Party, any Subsidiary of any
Loan Party or any member of the Controlled Group was not previously contributing
shall occur, (e) any Loan Party, any Subsidiary of any Loan Party or any member
of the Controlled Group shall receive from the PBGC (or, in the case of Canadian
Pension Plan, the applicable Governmental Authority) a notice of intention to
terminate a Title IV Plan or Canadian Pension Plan or to have a trustee or
administrator, as applicable, appointed to administer a Title IV Plan or
Canadian Pension Plan, together with copies of each such notice, (f) any Loan
Party, any Subsidiary of any Loan Party or any member of the Controlled Group
shall receive a notice regarding the imposition of withdrawal liability,
together with copies of each such notice; (g) any Loan Party, any Subsidiary of
any Loan Party or any member of the Controlled Group shall fail to make a
required installment or any other required payment under Section 412 of the Code
or applicable pension benefits standards legislation on or before the due date
for such installment or payment, or (h) any Loan Party, any Subsidiary of any
Loan Party or any member of the Controlled Group knows that a (i) Multiemployer
Plan has been terminated, (ii) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (iii) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.

 

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9.16        Notice of Change in Management, Etc.

 

Furnish Agent with prompt (and, in any event, not more than five (5) Business
Days) notice of any person becoming after the date hereof an officer, director
or member of the senior management of any Loan Party.

 

9.17        Additional Documents.

 

Execute and deliver to Agent, upon request, such documents and agreements as
Agent may, from time to time, request in its Permitted Discretion from any Loan
Party to carry out the purposes, terms or conditions of this Agreement and the
Other Documents.

 

10.          EVENTS OF DEFAULT.

 

The occurrence of any one or more of the following events shall constitute an
“Event of Default”:

 

10.1         Failure by any Loan Party to pay (a) any principal payment in
respect of any Advances or any Letters of Credit when due and payable, and (b)
any other Obligations within three (3) Business Days of when such Obligations
are due and payable, in each case, whether at maturity or by reason of
acceleration pursuant to the terms of this Agreement or any Other Document;

 

10.2         Failure by Loan Parties to perform, keep or observe:

 

(a)           any provision of Sections 4.9, 4.10, 4.14(h), 6.8, 7, 9.2(a),
9.2(b), 9.2(c), 9.5(a), 9.7 or 9.8;

 

(b)           any provision of Sections 4.2, 9.2 (other than Sections specified
in the foregoing clause (a)), 9.4, 9.5, 9.12 or 9.13, which is not cured within
five (5) Business Days after the date thereof; provided, that, such five (5)
Business Day period shall not apply in the case of any failure to observe any
such provision which is not capable of being cured at all; or

 

(c)           any other provision of this Agreement or any provision of any
Other Document (to the extent such breach is not otherwise embodied in any other
provision of this Section 10 for which a different grace or cure period is
specified or which constitute an immediate Event of Default under this Agreement
or the Other Documents), which is not cured within thirty (30) days after the
date thereof; provided, that, such thirty (30) day period shall not apply in the
case of any failure to observe any such provision which is not capable of being
cured at all;

 

10.3         Any representation or warranty made or deemed made by any Loan
Party in this Agreement or any Other Document or in any certificate, document or
financial or other statement furnished at any time in connection herewith or
therewith shall prove to have been misleading in any material respect (without
duplication of any materiality qualifiers already set forth herein) on the date
when made or deemed to have been made;

 

10.4         Except for Permitted Encumbrances, issuance of a notice of Lien,
levy, assessment, injunction or attachment against a material portion of any
Loan Party’s or any Subsidiary of any Loan Party’s property which is not stayed
or bonded pending appeal or lifted within thirty (30) days;

 

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10.5         Any judgment or judgments for payment of money are rendered or
judgment Liens for payment of money filed against one or more Loan Parties for
an amount, individually or in the aggregate, in excess of $2,000,000 (to the
extent not covered by insurance where the insurer has assumed responsibility in
writing for such judgment), which within thirty (30) days of such rendering or
filing is not either satisfied, stayed or discharged of record; or any action is
taken to enforce any Lien over the assets of any Loan Party (or any analogous
procedure or step is taken in any jurisdiction) for an amount, individually or
in the aggregate, in excess of $2,000,000.

 

10.6         Any Loan Party shall (a) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property, (b) admit in writing its inability, or be generally unable, to pay its
debts as they become due or cease operations of its present business, (c) make a
general assignment for the benefit of creditors, (d) commence a voluntary case
under any state, federal or other bankruptcy laws (as now or hereafter in
effect), or file an application or commence a proceeding under any bankruptcy or
insolvency laws of Canada (including the Bankruptcy and Insolvency Act (Canada),
the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and
Restructuring Act (Canada) each as now and hereafter in effect), (e) be
adjudicated a bankrupt or insolvent, (f) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (g) acquiesce
to, or fail to have dismissed, within sixty (60) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or (h) take any
action for the purpose of effecting any of the foregoing;

 

10.7         [Reserved];

 

10.8         Any default under (a) any of the Debt Financing Documents, which
default continues for more than the applicable cure period, if any, with respect
thereto, or (b) any other documents, instruments or agreements to which any Loan
Party or any Subsidiary of any Loan Party is a party or by which any of its
properties is bound, relating to any Indebtedness (other than the Obligations
and the Debt Financing Documents) individually or in aggregate in excess of
$2,500,000, which default continues for more than the applicable cure period, if
any, with respect thereto;

 

10.9         Any of the Obligations shall cease to be permitted debt under the
Debt Financing Documents;

 

10.10       Any Change of Control shall occur;

 

10.11       Any material provision hereof or of any of the Other Documents shall
for any reason cease to be valid, binding and enforceable with respect to any
party hereto or thereto in accordance with its terms, or any such party (other
than Agent and Lenders) shall challenge the enforceability hereof or thereof, or
shall assert in writing, or take any action or fail to take any action based on
the assertion that any material provision hereof or of any of the Other
Documents has ceased to be or is otherwise not valid, binding or enforceable in
accordance with its terms, or any Lien provided for herein or in any of the
Other Documents shall cease to be a valid and perfected first priority Lien
(except for Permitted Encumbrances) in any of the Collateral purported to be
subject thereto (except as otherwise permitted herein or therein);

 

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10.12       The indictment by any Governmental Body of any Loan Party of which
any Loan Party or Agent receives notice, which if adversely determined could
reasonably be expected to have a Material Adverse Effect;

 

10.13       Any Collateral having a value in excess of $1,000,000 shall be
seized or taken by a Governmental Body, or any Loan Party or the title and
rights of any Loan Party in and to any material portion of the Collateral shall
have become the subject matter of litigation which could reasonably be expected
to, in the opinion of Agent, upon final determination, result in impairment or
loss of the security provided by this Agreement or the Other Documents;

 

10.14       The operations of any Loan Party’s facilities is interrupted in any
material respect by virtue of any determination, ruling, decision, decree or
order of any court or Governmental Body of competent jurisdiction, and such
interruption could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect;

 

10.15       [Reserved]; or

 

10.16       A requirement from the Minister of National Revenue for payment
pursuant to Section 224, or any successor section, of the Income Tax Act
(Canada) or Section 317, or any successor section, of the Excise Tax Act
(Canada), or any comparable provisions of similar legislation shall have been
received by Agent or any Lender or any other Person in respect of any Borrower
or is otherwise issued in respect of any Borrower involving an amount in excess
of the US Dollar Equivalent of $1,000,000.

 

11.          LENDERS’ RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT.

 

11.1        Rights and Remedies.

 

(a)           Upon the occurrence and during the continuance of (i) an Event of
Default pursuant to Section 10.6, all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated, (ii) any of the other Events of Default and at any time
thereafter, Agent may (and at the direction of Required Lenders, shall) declare
that all or any portion of the Obligations shall be immediately due and payable
and Agent or Required Lenders shall have the right to terminate this Agreement
and to terminate or limit the obligation of Lenders to make Advances (including,
without limitation, reducing the lending formulas or amounts of Revolving
Advances and Letters of Credit available to the Borrowers), and (iii) a filing
of a petition against any Loan Party in any involuntary case under any state,
federal or other bankruptcy laws, the obligation of Lenders to make Advances
hereunder shall be terminated other than as may be required by an appropriate
order of the bankruptcy court having jurisdiction over any Loan Party.  Upon the
occurrence and during the continuance of any Event of Default, Agent shall have
the right to exercise any and all other rights and remedies provided for herein,
under the UCC, PPSA and at law or equity generally, including, without
limitation, the right to foreclose the Liens granted herein and in the Other
Documents and to realize upon any Collateral by any available judicial procedure
and/or to take possession of and sell any or all of the Collateral with or
without judicial process.  Subject to the terms of any Collateral Access
Agreement, Agent may enter any Loan Party’s premises or other premises without
legal process and without incurring liability to any Loan Party therefor, and
Agent may thereupon, or at any time thereafter, in its

 

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discretion, without notice or demand, take the Collateral and remove the same to
such place as Agent may deem advisable and Agent may require Loan Parties to
make the Collateral available to Agent at a convenient place.  With or without
having the Collateral at the time or place of sale, Agent may sell the
Collateral, or any part thereof, at public or private sale, at any time or
place, in one or more sales, at such price or prices, and upon such terms,
either for cash, credit or future delivery, as Agent may elect.  Except as to
that part of the Collateral which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Agent shall
give Loan Parties reasonable notification of such sale or sales, it being agreed
that in all events written notice mailed to Loan Parties at least ten (10) days
prior to such sale or sales is reasonable notification.  At any public sale
Agent or any Lender may bid for and become the purchaser, and Agent, any Lender
or any other purchaser at any such sale thereafter shall hold the Collateral
sold absolutely free from any claim or right of whatsoever kind, including any
equity of redemption and such right and equity are hereby expressly waived and
released by each Loan Party.  Agent may specifically disclaim any warranties of
title or the like at any sale of Collateral.  In connection with the exercise of
the foregoing remedies, Agent shall have the right to use all of each Loan
Party’s Intellectual Property and other proprietary rights (subject to any
licenses and other usage rights therein granted in favor of other Persons) which
are used in connection with (A) Inventory for the purpose of disposing of such
Inventory and (B) Equipment for the purpose of completing the manufacture of
unfinished goods, in each case without any obligation to compensate any Loan
Party therefor.

 

(b)           Agent may seek the appointment of a receiver, a manager, a
receiver-manager or a receiver and manager (a “Receiver”) under the laws of
Canada or any province thereof to take possession of all or any portion of the
Canadian Collateral 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 Canadian Loan Parties and
not Agent and the Lenders, and Agent and the Lenders 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.  Subject to the provisions of the
instrument appointing him/her, any such Receiver shall have power to take
possession of Canadian Collateral of a Canadian Loan Party, to preserve Canadian
Collateral or its value, to carry on or concur in carrying on all or any part of
the business of a Canadian Loan Party and to sell, lease, license or otherwise
dispose of or concur in selling, leasing, licensing or otherwise disposing of
Canadian Collateral.  To facilitate the foregoing powers, any such Receiver may,
to the exclusion of all others, including a Canadian Loan Party, enter upon, use
and occupy all premises owned or occupied by a Canadian Borrower wherein
Canadian Collateral may be situated, maintain Canadian Collateral upon such
premises, borrow money on a secured or unsecured basis and use Canadian
Collateral directly in carrying on a Canadian Loan Party’s business or as
security for loans or advances to enable the Receiver to carry on a Canadian
Loan Party’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 Agent, be vested with all or any of the rights and powers of Agent
and the Canadian Lenders.  Agent may, either directly or through its nominees,
exercise any or all powers and rights given to a Receiver by virtue of the
foregoing provisions of this paragraph.

 

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11.2        Waterfall.

 

(a)           So long as no Waterfall Event has occurred and is continuing and
except as otherwise provided with respect to Defaulting Lenders, all principal
and interest payments in respect of US Obligations shall be apportioned ratably
among the US Lenders (according to their Commitment Percentages thereof), all
principal and interest payments in respect of Canadian Obligations shall be
apportioned ratably among the Canadian Lenders (according to their Commitment
Percentages thereof), and all payments of fees, costs and expenses (other than
fees, costs or expenses that are for Agent’s or any Lender’s separate account)
shall be apportioned ratably among the Lenders according to their Commitment
Percentages thereof (it being understood that all costs and expenses due and
owing to Agent, and all principal and interest of Advances (including Protective
Advances) made by Agent and not reimbursed by Lenders, shall first be paid in
full before any such payments are made to any of the Lenders).  Payments for the
purposes of this clause (a) shall include proceeds of Collateral received by
Agent.

 

(b)           At any time that a Waterfall Event has occurred and is continuing
and except as otherwise provided with respect to Defaulting Lenders:

 

(i)            all payments remitted to Agent and all proceeds of US Collateral
received by Agent shall be applied to the Obligations as follows (it being
understood that in the event that any Lender, as opposed to Agent, receives such
payment or proceeds from any source other than Agent, such Lender shall remit
such payment or proceeds, as applicable to Agent for application to the
Obligations as provided in this Agreement):  first, to the US Obligations
consisting of costs and expenses (including attorneys’ fees and expenses)
incurred by Agent in connection with this Agreement or any Other Document and to
the principal and interest of US Advances (including Protective Advances and
Swingline Advances in respect of US Borrowers and/or US Collateral) made by
Agent and not reimbursed by Lenders until paid in full; second, pro rata to
interest due to US Lenders upon any of the US Advances and to the US Obligations
consisting of costs and expenses (including attorneys’ fees and expenses)
incurred by Lenders in connection with (and to the extent payable or
reimbursable to US Lenders under) this Agreement or any Other Document according
to their respective Commitment Percentages thereof until paid in full; third,
pro rata to fees due to Agent and the US Lenders in connection with this
Agreement or any Other Document according to their respective Commitment
Percentages thereof until paid in full; fourth, to the principal of the
Swingline Advances to US Borrowers made by the Swingline Lender; fifth, pro rata
to the principal of the US Advances made by each US Lender according to their
respective Commitment Percentages thereof and, after an Event of Default
pursuant to Section 10.6 or if requested by Agent or Required Lenders after the
occurrence of any other Event of Default, on a pro rata basis, to furnish to
Agent cash collateral in an amount not less than one hundred five (105%) percent
of the aggregate undrawn amount of all Letters of Credit, such cash collateral
arrangements to be in form and substance reasonably satisfactory to Agent until
paid in full; sixth, to pay any of the Canadian Obligations; seventh, pro rata
to any other Obligations (other than Bank Product Obligations) until paid in
full; eighth, pro rata to any Bank Product Obligations until paid in full; and
ninth, any remaining amounts to the Administrative Borrower on behalf of the
Borrowers.

 

(ii)           all payments remitted to Agent and all proceeds of Canadian
Collateral received by Agent shall be applied to the Canadian Obligations as
follows (it being understood that in the event that any Lender, as opposed to
Agent, receives such payment or proceeds from any

 

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source other than Agent, such Lender shall remit such payment or proceeds, as
applicable to Agent for application to the Canadian Obligations as provided in
this Agreement): first, to the Canadian Obligations consisting of costs and
expenses (including attorneys’ fees and expenses) incurred by Agent in
connection with this Agreement or any Other Document and to the principal and
interest of Canadian Advances (including Protective Advances and Swingline
Advances in respect of Canadian Borrowers and/or Canadian Collateral) made by
Agent and not reimbursed by Lenders until paid in full; second, pro rata to
interest due to Canadian Lenders upon any of the Canadian Advances and to the
Canadian Obligations consisting of costs and expenses (including attorneys’ fees
and expenses) incurred by Lenders in connection with (and to the extent payable
or reimbursable to Canadian Lenders under) this Agreement or any Other Document
according to their respective Commitment Percentages thereof until paid in full;
third, pro rata to fees due to Agent and the Canadian Lenders in connection with
this Agreement or any Other Document according to their respective Commitment
Percentages thereof until paid in full; fourth, to the principal of the
Swingline Advances to Canadian Borrowers made by the Swingline Lender; fifth,
pro rata to the principal of the Canadian Advances made by each Canadian Lender
according to their respective Commitment Percentages thereof and, after an Event
of Default pursuant to Section 10.6 or if requested by Agent or Required Lenders
after the occurrence of any other Event of Default, on a pro rata basis, to
furnish to Agent cash collateral in an amount not less than one hundred five
(105%) percent of the aggregate undrawn amount of all Letters of Credit, such
cash collateral arrangements to be in form and substance reasonably satisfactory
to Agent until paid in full; sixth, pro rata to any other Canadian Obligations
(other than Canadian Bank Product Obligations) until paid in full; seventh, pro
rata to any Canadian Bank Product Obligations until paid in full; and eighth,
any remaining amounts to the Administrative Borrower on behalf of the Borrowers.

 

(c)           If any deficiency shall arise, Loan Parties shall remain liable to
Agent and Lenders therefor.  If it is determined by an authority of competent
jurisdiction that a disposition by Agent did not occur in a commercially
reasonably manner, Agent may obtain a deficiency judgment for the difference
between the amount of the Obligation and the amount that a commercially
reasonable sale would have yielded.  Agent will not be considered to have
offered to retain the Collateral in satisfaction of the Obligations unless Agent
has entered into a written agreement with Loan Party to that effect.

 

11.3        Agent’s Discretion.

 

Upon the occurrence and during the continuance of an Event of Default hereunder,
Agent shall have the right in its Permitted Discretion to determine which
rights, Liens or remedies Agent may at any time pursue, relinquish, subordinate,
or modify or to take any other action with respect thereto and such
determination will not in any way modify or affect any of Agent’s or Lenders’
rights hereunder.

 

11.4        Setoff.

 

In addition to any other rights and remedies which Agent, any Lender or any
Issuer may have under applicable law, this Agreement or any Other Document, upon
the occurrence and during the continuance of an Event of Default hereunder,
Agent, such Lender, such Issuer and their Affiliates shall have a right to
setoff and apply any Loan Party’s property held by Agent, such Lender, such

 

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Issuer or such Affiliate to reduce the Obligations, all without notice to Loan
Parties.  No Lender, Issuer or Affiliate shall setoff or apply such property
without the prior written consent of Agent.

 

11.5        Rights and Remedies not Exclusive.

 

The enumeration of the foregoing rights and remedies is not intended to be
exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other right or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative.

 

11.6        Collection Allocation Mechanism.

 

(a)           On the first date after the Closing Date on which there shall
occur an Event of Default under Section 10.6 or the acceleration of Obligations
pursuant to Section 11.1(a) (the “CAM Exchange Date”), (i) each Lender shall
immediately be deemed to have acquired (and shall promptly make payment therefor
to the Agent in accordance with Section 2.1(d)) participations in the Swingline
Advances, in an amount equal to such Lender’s Commitment Percentage of each
Swingline Advance outstanding on such date, (ii) each Lender shall immediately
be deemed to have acquired (and shall promptly make payment therefor to the
Agent in accordance with Section 2.9(g) (in the case of a US Lender) or
Section 2.9(h) (in the case of a Canadian Lender) participations in the
Obligations with respect to each Letter of Credit in an amount equal to such
Lender’s Commitment Percentage of the aggregate amount available to be drawn
under such Letter of Credit, and (iii) the Lenders shall automatically and
without further act be deemed to have exchanged interests in the Advances and
participations in the Swingline Advances and Letters of Credit, such that in
lieu of the interest of each Lender in each Advance and the Obligations with
respect to each Swingline Advance and each Letter of Credit in which it shall
participate immediately prior to the CAM Exchange Date (including such Lender’s
interest in the Obligations, Guarantees and Collateral of each Loan Party in
respect thereof), such Lender shall hold an interest in every one of the
Advances and a participation in all of the Obligations in respect of Swingline
Advances and Letters of Credit (including the Obligations, Guarantees and
Collateral of each Loan Party in respect thereof), whether or not such Lender
shall previously have participated therein, equal to such Lender’s CAM
Percentage thereof (the foregoing exchange being referred to as the “CAM
Exchange”).  Each Lender and each Loan Party hereby consents and agrees to the
CAM Exchange, and each Lender agrees that the CAM Exchange shall be binding upon
its successors and assigns and any Person that acquires a participation in its
interests in any Advance or any participation in any Swingline Advance or Letter
of Credit.  Each Loan Party agrees from time to time to execute and deliver to
the Agent all such promissory notes and other instruments and documents as the
Agent shall reasonably request to evidence and confirm the respective interests
of the Lenders after giving effect to the CAM Exchange, and each Lender agrees
to surrender to the Agent any promissory notes originally received by it in
connection with its Advances hereunder against delivery of any promissory notes
evidencing its interests in the Advances so executed and delivered pursuant to
this Section 11.6(a); provided, however, that the failure of any Loan Party to
execute or deliver or of any Lender to accept any such promissory note,
instrument or document shall not affect the validity or effectiveness of the CAM
Exchange.

 

(b)           As a result of the CAM Exchange, upon and after the CAM Exchange
Date, each payment received by Agent pursuant to this Agreement or any Other
Document in respect of any of

 

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the Obligations related to the Advances, the Letters of Credit and the Swingline
Advances, and all fees, costs and expenses arising out of or related to any of
the foregoing, in each case as provided in this Agreement and the Other
Documents, and each distribution made by the Agent in respect of such
Obligations, shall be distributed to the Lenders pro rata in accordance with
their respective CAM Percentages.  Any direct payment received by a Lender upon
or after the CAM Exchange Date, including by way of setoff, in respect of an
Obligation shall be paid over to the Agent for distribution to the Lenders in
accordance herewith.

 

(c)           The provisions of this Section 11.6 are solely an agreement among
the Lenders and Agent for the purpose of allocating risk and the Loan Parties
have no additional obligations or rights with respect thereto.

 

(d)           For purposes of this Section 11.6, “CAM Percentage” means, as to
each Lender, a fraction, expressed as a decimal, of which (i) the numerator
shall be the sum, without duplication, of (A) the Canadian Commitment, if any,
of such Lender, (B) the US Commitment, if any, of such Lender, and (C) the
aggregate amount of any Obligations otherwise owed to such Lender pursuant to
this Agreement and the Other Documents in respect of Advances, Letters of Credit
and Swingline Advances, and fees, costs and expenses with respect to any of the
foregoing, in each case immediately prior to the CAM Exchange Date, and (ii) the
denominator shall be the sum of (A) the aggregate US Commitments of all the
Lenders, (B) the aggregate Canadian Commitments of all Lenders, and (C) the
aggregate amount of any Obligations otherwise owed to Lenders pursuant to this
Agreement and the Other Documents in respect of Advances, Letters of Credit and
Swingline Advances, and fees, costs and expenses with respect to any of the
foregoing.

 

11.7        Commercial Reasonableness.

 

To the extent that applicable law imposes duties on Agent or any Lender to
exercise remedies in a commercially reasonable manner (which duties cannot be
waived under such law), each Loan Party acknowledges and agrees that it is not
commercially unreasonable for Agent or any Lender (a) to fail to incur expenses
reasonably deemed necessary or appropriate by Agent or any Lender to prepare
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition, (b) to
fail to obtain third party consents for access to Collateral to be disposed of,
or to obtain or, if not required by other law, to fail to obtain consents of any
Governmental Body or other third party for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors, secondary obligors or other Persons obligated
on Collateral or to remove Liens or encumbrances on or any adverse claims
against Collateral, (d) to exercise collection remedies against account debtors
and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (e) except in connection
with an Article 9 UCC Sale or any comparable provision under the PPSA to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other Persons, whether or not in the same business as any Loan Party,
for expressions of interest in acquiring all or any portion of the Collateral,
(g) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (h) to
dispose of Collateral by utilizing Internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets, (i) to
dispose of assets in wholesale rather than retail markets, (j) to disclaim

 

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disposition warranties, (k) to purchase insurance or credit enhancements to
insure Agent or Lenders against risks of loss, collection or disposition of
Collateral or to provide to Agent or Lenders a guaranteed return from the
collection or disposition of Collateral, or (l) to the extent deemed appropriate
by Agent, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Agent in the collection or
disposition of any of the Collateral. Each Loan Party acknowledges that the
purpose of this Section is to provide non-exhaustive indications of what actions
or omissions by Agent or any Lender would not be commercially unreasonable in
the exercise by Agent or any Lender of remedies against the Collateral and that
other actions or omissions by Agent or any Lender shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section. Without limitation of the foregoing, nothing contained in this
Section shall be construed to grant any rights to any Loan Party or to impose
any duties on Agent or Lenders that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this Section.

 

12.          WAIVERS AND JUDICIAL PROCEEDINGS.

 

12.1        Waiver of Notice.

 

Each Loan Party hereby waives notice of non-payment of any of the Receivables,
demand, presentment, protest and notice thereof with respect to any and all
instruments, notice of acceptance hereof, notice of loans or advances made,
credit extended, Collateral received or delivered, or any other action taken in
reliance hereon, and all other demands and notices of any description, except
such as are expressly provided for herein or as otherwise by law.

 

12.2        Delay.

 

No delay or omission on Agent’s or any Lender’s part in exercising any right,
remedy or option shall operate as a waiver of such or any other right, remedy or
option or of any Default or Event of Default.

 

12.3        Jury Waiver.

 

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT
OR ANY OTHER DOCUMENT, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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12.4        Waiver of Counterclaims.

 

Each Loan Party waives all rights to interpose any claims, deductions, setoffs
or counterclaims of any nature (other then compulsory counterclaims) in any
action or proceeding with respect to this Agreement, the Obligations, the
Collateral or any matter arising therefrom or relating hereto or thereto.

 

13.          EFFECTIVE DATE AND TERMINATION.

 

13.1        Term.

 

This Agreement, which shall inure to the benefit of and shall be binding upon
the respective successors and permitted assigns of each Loan Party, Agent and
each Lender, shall become effective on the date hereof and shall continue in
full force and effect until the earliest of (a) December 15, 2015, (b) the
acceleration of all Obligations pursuant to the terms of this Agreement or
(c) the date on which this Agreement shall be terminated in accordance with the
provisions hereof or by operation of law (the “Termination Date”).  Loan Parties
may terminate this Agreement at any time upon ten (10) Business Days’ prior
written notice upon Payment in Full of all of the Obligations.

 

13.2        Termination.

 

The termination of the Agreement shall not affect any Loan Party’s, Agent’s or
any Lender’s rights, or any of the Obligations arising or incurred prior to the
effective date of such termination, and each of the provisions of this Agreement
and of the Other Documents shall continue to be fully operative until all of the
Obligations have been Paid in Full.  The Liens and rights granted to Agent and
Lenders hereunder and the UCC financing statements and PPSA financing statements
filed hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that the Borrowers’ Account may from
time to time be temporarily in a zero or credit position, until all of the
Obligations have been Paid in Full.  Accordingly, each Loan Party waives any
rights which it may have under Section 9-513 of the UCC or under the PPSA to
demand the filing of termination statements with respect to the Collateral, and
Agent shall not be required to send such termination statements to each Loan
Party, or to file them with any filing office, until all of the Obligations have
been Paid in Full.  All representations, warranties, covenants, waivers and
agreements contained herein and in the Other Documents shall survive termination
hereof until all of the Obligations have been Paid in Full.

 

14.          REGARDING AGENT.

 

14.1        Appointment.

 

(a)           Each Lender hereby designates Wells Fargo to act as Agent for such
Lender under this Agreement and the Other Documents.  Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto.  Agent may perform any of its
duties hereunder by or through its agents or employees.  As to any matters not
expressly provided for by this Agreement (including without limitation,
collection of the Notes) Agent shall not be required to exercise any discretion
or

 

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take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding;
provided, however, that, Agent shall not be required to take any action which
exposes Agent to liability or which is contrary to this Agreement or the Other
Documents or applicable law unless Agent agrees to do so in its Permitted
Discretion and is furnished with an indemnification satisfactory to Agent in its
Permitted Discretion with respect thereto.

 

(b)           Without prejudice to Section 14.1(a), each of the Secured Parties
hereby irrevocably designates and appoints Agent, as the person holding the
power of attorney (fondé de pouvoir) of Secured Parties as contemplated under
Article 2692 of the Civil Code of Québec, to enter into, to take and to hold on
their behalf, and for their benefit, any hypothec to be executed by any Borrower
or Guarantor of any Obligations granting security in the Province of Québec and
to exercise such powers and duties which are conferred thereupon under such
hypothec.  Each of the Secured Parties hereby additionally irrevocably
designates and appoints Agent, as agent, mandatary, custodian and depositary for
and on behalf of Secured Parties (i) to hold and to be the sole registered
holder of any title of indebtedness issued under any deed of hypothec, the whole
notwithstanding Section 32 of the Act respecting the Special Powers of Legal
Persons (Québec) or any other applicable law, and (ii) to enter into, to take
and to hold on their behalf, and for their benefit, a pledge agreement to be
executed by such Borrower or Guarantor pursuant to the applicable law of the
Province of Québec and creating a pledge on the titles of indebtedness as
security for the payment and performance of, inter alia, the Obligations.  In
this respect, each of the Secured Parties will be entitled to the benefits of
the security on any property or assets charged under any deed of hypothec or
pledge agreement and will participate in the proceeds of realization of any such
property or assets.  Agent, in such aforesaid capacities shall (A) have the sole
and exclusive right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies given to
Agent with respect to the property or assets charged under any deed of hypothec
or pledge agreement, any other applicable law or otherwise, and (B) benefit from
and be subject to all provisions hereof with respect to Agent mutatis mutandis,
including, without limitation, all such provisions with respect to the liability
or responsibility to and indemnification by Secured Parties, Borrowers or
Guarantors.  The execution prior to the date hereof by Agent of any deed of
hypothec, pledge agreement or other security documents made in the Province of
Québec is hereby ratified and confirmed.  The constitution of Agent as the
Person holding the power of attorney (fondé de pouvoir), and of Agent as agent,
mandatary, custodian and depositary with respect to any title of indebtedness
that may be issued and pledged from time to time to Agent for the benefit of
Secured Parties, shall be deemed to have been ratified and confirmed by each
Person accepting an assignment of, a participation in or an arrangement in
respect of, all or any portion of the Obligations by the execution of an
assignment, including an Assignment and Acceptance or other agreement pursuant
to which it becomes such assignee or participant, and by each successor Agent by
the execution of an Assignment Agreement or other agreement, or by the
compliance with other formalities, as the case may be, pursuant to which it
becomes a successor Agent under this Agreement.

 

14.2        Nature of Duties.

 

Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and the Other Documents.  None of Agent, any Lender, or any
Issuer nor any of their respective officers, directors, employees or agents
shall be (a) liable for any action taken or omitted by them as such under this
Agreement or any Other Document or in connection herewith or

 

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therewith, unless caused by their gross (not mere) negligence or willful
misconduct, as determined pursuant to a final, non-appealable order of a court
of competent jurisdiction, or (b) responsible in any manner for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any of the
Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of Loan Party to perform its obligations hereunder.  Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the Other Documents, or to inspect or
appraise the properties, books or records of any Loan Party or any other
Person.  The duties of Agent in respect of the Advances shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement or
any Other Document a fiduciary relationship in respect of any Secured Party, nor
shall the Agent constitute a trustee in respect of any Secured Party; and
nothing in this Agreement or any Other Document, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement or any Other Document except as expressly set forth
herein or therein.

 

14.3        Lack of Reliance on Agent and Resignation.

 

(a)           Independently and without reliance upon Agent, any Issuer or any
other Lender, each Lender has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of each Loan
Party and each other Person in connection with the making and the continuance of
the Advances hereunder and the taking or not taking of any action in connection
with this Agreement or any Other Document, and (ii) its own appraisal of the
creditworthiness of each Loan Party and each other Person.  Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before making of the Advances or at any time or times
thereafter except to the extent, if any, expressly required in this Agreement. 
Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any agreement, document,
certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, perfection, priority,
collectability or sufficiency of this Agreement or any Other Document, the
Collateral, or of the financial condition of any Loan Party or any other Person,
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, the
Note, the Other Documents, the Collateral, or the financial condition of any
Loan Party or any other Person, or the existence of any Event of Default or any
Default.

 

(b)           Agent may resign on thirty (30) days’ written notice to each of
Lenders and Administrative Borrower and upon such resignation, the Required
Lenders will promptly designate a successor Agent with the consent to
Administrative Borrower, which consent of Administrative Borrower shall not be
unreasonably withheld, conditioned or delayed (provided, that, if an Event of
Default has occurred and is continuing, no such consent of Administrative
Borrower shall be required).  If no such successor Agent is appointed at the end
of such thirty (30) day period, Agent may designate one of the Lenders as a
successor Agent, and shall give Administrative Borrower

 

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prompt notice of such appointment.  If no Lender accepts such designation,
Required Lenders shall serve as the successor Agent, and Agent shall remain
entitled to so resign.

 

(c)           Any such successor Agent shall succeed to the rights, powers and
duties of Agent, and the term “Agent” shall mean such successor agent effective
upon its appointment, and the former Agent’s powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent.  After any Agent’s resignation as Agent, the provisions of this
Section 14, Section 17.5 and Section 17.10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.

 

14.4        Certain Rights of Agent.

 

If Agent shall request instructions from Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any Other
Document, Agent shall be entitled to refrain from such act or taking such action
unless and until Agent shall have received instructions from the Required
Lenders; and Agent shall not incur liability to any Person by reason of so
refraining.  Without limiting the foregoing, Lenders shall not have any right of
action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.

 

14.5        Reliance.

 

Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or facsimile message, cablegram, email, order or other document or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person, and, with respect to all legal matters pertaining
to this Agreement and the Other Documents and its duties hereunder, upon advice
of counsel selected by it.  Agent may employ agents and attorneys-in-fact and
shall not be liable for the default or misconduct of any such agents or
attorneys-in-fact selected by Agent with reasonable care.

 

14.6        Notice of Default.

 

Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder or under the Other Documents, unless Agent
has received notice from a Lender or Administrative Borrower referring to this
Agreement or the Other Documents, describing such Default or Event of Default
and stating that such notice is a “notice of default”.  In the event that Agent
receives such a notice, Agent shall give notice thereof to Lenders.  Subject to
Section 14.1, Agent shall take such action with respect to such Default or Event
of Default (including, without limitation, the institution of the Default Rate
pursuant to Section 3.1) as shall be reasonably directed by the Required
Lenders; provided, that, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default (including, without limitation, the institution of the Default Rate
pursuant to Section 3.1) as it shall deem advisable in the best interests of
Lenders.

 

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14.7        Indemnification.

 

To the extent Agent and/or Issuer, as applicable, is not timely reimbursed and
indemnified by Loan Parties, each Lender promptly will reimburse and indemnify
Agent and each Issuer and each of their respective officers, directors,
Affiliates, employees, representatives and agents in proportion to its
respective Commitment Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) arising from any action,
litigation, proceeding, dispute or investigation which may be imposed on,
incurred by, or asserted against Agent or such Issuer in any litigation,
proceeding, dispute or investigation instituted or conducted by any Governmental
Body or any other Person with respect to any aspect of, or any transaction
contemplated by, or referred to in, or any matter related to, this Agreement or
the Other Documents, on in connection with performing any of its duties,
functions or activities under this Agreement or under any Other Document, or in
any way relating to or arising out of this Agreement or any Other Document
whether or not Agent or any Issuer is a party thereto, except to the extent that
any of the foregoing arises out of the gross (not mere) negligence or willful
misconduct of Agent or such Issuer, as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction.  Nothing contained in
this Section 14.7 shall in any manner limit, impair, waive or otherwise affect
Loan Parties’ reimbursement and indemnification Obligations at any time owing to
Agent.

 

14.8        Agent in its Individual Capacity.

 

With respect any Advances made by Agent, except as otherwise provided in this
Agreement, the Advances made by Agent shall have the same rights and powers
hereunder as any other Lender and as if it were not performing the duties as
Agent specified herein.  Agent may engage in business with any Loan Party as if
it were not performing the duties specified herein, and may accept fees and
other consideration from any Loan Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.

 

14.9        Actions in Concert.

 

Anything in this Agreement to the contrary notwithstanding, each Lender hereby
agrees with each other Lender and Agent that (a) Agent shall have the exclusive
right to enforce and exercise all rights and remedies of Agent and Lenders
hereunder and under the Other Documents at all times following the occurrence
and during the continuance of an Event of Default, on behalf of Agent and all
Lenders, subject to the direction of Required Lenders as provided for herein,
and (b) no Lender shall take any action to protect or enforce its rights arising
out of this Agreement or the Other Documents (including exercising any rights of
setoff or compensation) without first obtaining the prior written consent of
Agent or Required Lenders, it being the intent of Lenders that any such action
to protect or enforce rights under this Agreement and the Notes shall be taken
in concert and at the direction or with the consent of Agent or Required
Lenders.

 

14.10      Intercreditor Agreements/Subordination Agreements.

 

Each Lender hereby irrevocably appoints, designates and authorizes Agent to
enter into, on its behalf, the Second Lien Intercreditor Agreement and any other
subordination or intercreditor

 

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agreement pertaining to any other secured and/or subordinated Indebtedness now
or hereafter permitted under this Agreement, and to take such action on its
behalf under the provisions of the Second Lien Intercreditor Agreement and any
other such subordination or intercreditor agreement.  Each Lender further agrees
to be bound by the terms and conditions of the Second Lien Intercreditor
Agreement and any other such subordination or intercreditor agreement.

 

15.          GUARANTEE OF US OBLIGATIONS.

 

15.1        Guarantee; Contribution Rights.

 

Each US Guarantor hereby unconditionally guarantees, as a primary obligor and
not merely as a surety, jointly and severally with each other US Guarantor when
and as due, whether at maturity, by acceleration, by notice of prepayment or
otherwise, the due (whether at the stated maturity, by acceleration or
otherwise) and punctual performance of all US Obligations.  Each payment made by
any US Guarantor pursuant to this Guarantee shall be made in lawful money of the
United States in immediately available funds without offset, counterclaim or
deduction of any kind.

 

Anything herein this Section 15 to the contrary notwithstanding, the maximum
liability of each US Guarantor under this Section 15 shall in no event exceed
the amount which can be guaranteed by such US Guarantor under applicable federal
and state laws relating to the insolvency of debtors (after giving effect to the
right of contribution established in the following paragraph). it being
understood that no amendments or other modifications to this Agreement or any of
the Other Documents need to be made to implement the provisions of this
paragraph and instead the implementation of the provisions of this paragraph
shall occur automatically.

 

Each US Guarantor hereby agrees that to the extent that a US Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such
US Guarantor shall be entitled to seek and receive contribution from and against
any other US Guarantor hereunder which has not paid its proportionate share of
such payment.  Each US Guarantor’s right of contribution shall be subject to the
terms and conditions of Section 15.9(d).  The provisions of this paragraph shall
in no respect limit the US Obligations and liabilities of any US Guarantor to
Agent and Lenders, and each US Guarantor shall remain liable to Agent and
Lenders for the full amount guaranteed by such US Guarantor hereunder.

 

15.2        Waivers.

 

Each US Guarantor hereby absolutely, unconditionally and irrevocably waives
(a) promptness, diligence, notice of acceptance, notice of presentment of
payment and any other notice hereunder, (b) demand of payment, protest, notice
of dishonor or nonpayment, notice of the present and future amount of the US
Obligations and any other notice with respect to the US Obligations, (c) any
requirement that Agent or any Lender protect, secure, perfect or insure any Lien
or any property subject thereto or exhaust any right or take any action against
any other US Loan Party, or any Person or any Collateral, (d) any other action,
event or precondition to the enforcement hereof or the performance by each such
US Guarantor of the US Obligations, (e) any defense arising by any lack of
capacity or authority or any other defense of any US Loan Party or any notice,
demand or defense by reason of cessation from any cause of US Obligations other
than Payment in Full of all of the US

 

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Obligations, (f) any defense that any other guarantee or security was or was to
be obtained by Agent or any Lender, and (g) any other defense.

 

15.3        No Defense.

 

No invalidity, irregularity, voidableness, voidness or unenforceability of this
Agreement or any Other Document or any other agreement or instrument relating
thereto, or of all or any part of the US Obligations or of any collateral
security therefor shall affect, impair or be a defense hereunder.

 

15.4        Guarantee of Payment.

 

The Guarantee hereunder is one of payment and performance, not collection, and
the US Obligations of each US Guarantor hereunder are independent of the US
Obligations of the other US Loan Parties, and a separate action or actions may
be brought and prosecuted against any US Guarantor to enforce the terms and
conditions of this Section 15, irrespective of whether any action is brought
against any other US Loan Party or other Persons or whether any other US Loan
Party or other Persons are joined in any such action or actions.  Each US
Guarantor waives any right to require that any resort be had by Agent or any
Lender to any security held for payment of the US Obligations or to any balance
of any deposit account or credit on the books of Agent or any Lender in favor of
any US Loan Party or any other Person.  No election to proceed in one form of
action or proceedings, or against any Person, or on any US Obligations, shall
constitute a waiver of Agent’s right to proceed in any other form of action or
proceeding or against any other Person unless Agent has expressed any such right
in writing.  Without limiting the generality of the foregoing, no action or
proceeding by Agent against any US Loan Party under any document evidencing or
securing Indebtedness of any US Loan Party to Agent shall diminish the liability
of any US Guarantor hereunder, except to the extent Agent receives actual
payment on account of US Obligations by such action or proceeding,
notwithstanding the effect of any such election, action or proceeding upon the
right of subrogation of any US Guarantor in respect of any US Loan Party and/or
otherwise.

 

15.5        Liabilities Absolute.

 

The liability of each US Guarantor hereunder shall be absolute, unlimited and
unconditional and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any claim, defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of any
Obligation or otherwise.  Without limiting the generality of the foregoing, the
US Obligations of each US Guarantor shall not be discharged or impaired,
released, limited or otherwise affected by:

 

(a)           any change in the manner, place or terms of payment or
performance, and/or any change or extension of the time of payment or
performance of, release, renewal or alteration of, or any new agreements
relating to any Obligation, any security therefor, or any liability incurred
directly or indirectly in respect thereof, or any rescission of, or amendment,
waiver or other modification of, or any consent to departure from, this
Agreement or any Other Document, including any increase in the US Obligations
resulting from the extension of additional credit to the US Borrowers or
otherwise;

 

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(b)           any sale, exchange, release, surrender, loss, abandonment,
realization upon any property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, all or any of the US Obligations, and/or any
offset there against, or failure to perfect, or continue the perfection of, any
Lien in any such property, or delay in the perfection of any such Lien, or any
amendment or waiver of or consent to departure from any other guarantee for all
or any of the US Obligations;

 

(c)           the failure of Agent or any Lender to assert any claim or demand
or to enforce any right or remedy against the US Borrowers or any other US Loan
Party or any other Person under the provisions of this Agreement or any Other
Document or any other document or instrument executed and delivered in
connection herewith or therewith;

 

(d)           any settlement or compromise of any Obligation, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and any subordination of the payment
of all or any part thereof to the payment of any obligation (whether due or not)
of any US Loan Party to creditors of any US Loan Party other than any other US
Loan Party;

 

(e)           any manner of application of Collateral, or proceeds thereof, to
all or any of the US Obligations, or any manner of sale or other disposition of
any Collateral for all or any of the US Obligations or any other assets of any
US Loan Party; and

 

(f)            any other agreements or circumstance of any nature whatsoever
that may or might in any manner or to any extent vary the risk of any US
Guarantor, or that might otherwise at law or in equity constitute a defense
available to, or a discharge of, the Guarantee hereunder and/or the US
Obligations of any US Guarantor, or a defense to, or discharge of, any US Loan
Party or any other Person or party hereto or the US Obligations or otherwise
with respect to the Advances, Letters of Credit or other financial
accommodations to the US Borrowers pursuant to this Agreement and/or the Other
Documents or otherwise.

 

15.6        Waiver of Notice.

 

Except as otherwise contemplated hereunder, Agent shall have the right to do any
of the above without notice to or the consent of any US Guarantor and each US
Guarantor expressly waives any right to notice of, consent to, knowledge of and
participation in any agreements relating to any of the above or any other
present or future event relating to US Obligations whether under this Agreement
or otherwise or any right to challenge or question any of the above and waives
any defenses of such US Guarantor which might arise as a result of such actions.

 

15.7        Agent’s Discretion.

 

Agent may at any time and from time to time (whether prior to or after the
revocation or termination of this Agreement) without the consent of, or notice
to, any US Guarantor, and without incurring responsibility to any US Guarantor
or impairing or releasing the US Obligations, apply any sums by whomsoever paid
or howsoever realized to any US Obligations regardless of what US Obligations
remain unpaid.

 

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15.8        Reinstatement.

 

The Guarantee provisions herein contained shall continue to be effective or be
reinstated, as the case may be, if claim is ever made upon Agent or any Lender
for repayment or recovery of any amount or amounts received by Agent or such
Lender in payment or on account of any of the US Obligations and Agent or such
Lender repays all or part of said amount for any reason whatsoever, including,
without limitation, by reason of any judgment, decree or order of any court or
administrative body having jurisdiction over Agent or such Lender or the
respective property of each, or any settlement or compromise of any claim
effected by Agent or such Lender with any such claimant (including any US Loan
Party); and in such event each US Guarantor hereby agrees that any such
judgment, decree, order, settlement or compromise or other circumstances shall
be binding upon such US Guarantor, notwithstanding any revocation hereof or the
cancellation of any note or other instrument evidencing any Obligation, and each
US Guarantor shall be and remain liable to Agent and/or Lenders for the amount
so repaid or recovered to the same extent as if such amount had never originally
been received by Agent or such Lenders.

 

15.9        No Marshalling, Etc.

 

(a)           Agent shall not be required to marshal any assets in favor of any
US Guarantor, or against or in payment of US Obligations.

 

(b)           No US Guarantor shall be entitled to claim against any present or
future security held by Agent or any Lender from any Person for US Obligations
in priority to or equally with any claim of Agent or any Lender, or assert any
claim for any liability of any US Loan Party to any US Guarantor in priority to
or equally with claims of Agent or any Lender for US Obligations, and no US
Guarantor shall be entitled to compete with Agent or any Lender with respect to,
or to advance any equal or prior claim to any security held by Agent or any
Lender for US Obligations.

 

(c)           If any US Loan Party makes any payment to Agent or any Lender,
which payment is wholly or partly subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to any Person
under any federal or provincial or other statute or at common law or under
equitable principles, then to the extent of such payment, the Obligation
intended to be paid shall be revived and continued in full force and effect as
if the payment had not been made, and the resulting revived Obligation shall
continue to be guaranteed, uninterrupted, by each US Guarantor hereunder.

 

(d)           All present and future monies payable by any US Loan Party or any
other US Guarantor to any US Guarantor, whether arising out of a right of
subrogation, contribution or otherwise, are assigned to Agent for its benefit
and for the ratable benefit of Lenders as security for such US Guarantor’s
liability to Agent and Lenders hereunder and are postponed and subordinated to
Agent’s and Lenders’ prior right to Payment in Full of all of the US
Obligations.  Except to the extent prohibited otherwise by this Agreement, all
monies received by any US Guarantor from any US Loan Party shall be held by such
US Guarantor as agent and trustee for Agent and Lenders.  This assignment,
postponement and subordination shall only terminate when all of the US
Obligations are Paid in Full.

 

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(e)           Each US Loan Party acknowledges this assignment, postponement and
subordination and, except as otherwise set forth herein, agrees to make no
payments to any US Guarantor without the prior written consent of Agent.  Each
US Loan Party agrees to give full effect to the provisions hereof.

 

15.10      Action Upon Event of Default.

 

Upon the occurrence and during the continuance of any Event of Default, Agent
may and upon written request of the Required Lenders shall, without notice to or
demand upon any US Loan Party, any US Guarantor or any other Person, declare all
or any portion of the US Obligations of such US Guarantor hereunder immediately
due and payable, and shall be entitled to enforce the US Obligations of each US
Guarantor.  Upon such declaration by Agent, Agent, Lenders and any of their
Affiliates are hereby authorized at any time and from time to time to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other Indebtedness at any time owing by Agent or
Lenders to or for the credit or the account of any US Guarantor against any and
all of the US Obligations of each US Guarantor now or hereafter existing
hereunder in accordance with the terms of this Agreement, whether or not Agent
or Lenders shall have made any demand hereunder against any other US Loan Party
and although such US Obligations may be contingent and unmatured.  The rights of
Agent and Lenders hereunder are in addition to other rights and remedies
(including other rights of set-off) which Agent and Lenders may have.  Upon such
declaration by Agent, with respect to any claims (other than those claims
referred to in the immediately preceding paragraph) of any US Guarantor against
any US Loan Party (the “Claims”), Agent shall have the full right on the part of
Agent in its own name or in the name of such US Guarantor to collect and enforce
such Claims by legal action, proof of debt in bankruptcy or other liquidation
proceedings, vote in any proceeding for the arrangement of debts at any time
proposed, or otherwise, Agent and each of its officers being hereby irrevocably
constituted attorneys-in-fact for each US Guarantor for the purpose of such
enforcement and for the purpose of endorsing in the name of each US Guarantor
any instrument for the payment of money.  Each US Guarantor will receive as
trustee for Agent and will pay to Agent forthwith upon receipt thereof any
amounts which such US Guarantor may receive from any US Loan Party on account of
the Claims.  Each US Guarantor agrees that at no time hereafter will any of the
Claims be represented by any notes or other negotiable instruments or writings,
except and in such event they shall either be made payable to Agent, or if
payable to any US Guarantor, shall forthwith be endorsed by such US Guarantor to
Agent.  Each US Guarantor agrees that no payment on account of the Claims or any
Lien therein shall be created, received, accepted or retained during the
continuance of any Event of Default nor shall any UCC financing statements or
PPSA financing statements be filed with respect thereto by any US Guarantor.

 

15.11      Statute of Limitations.

 

Any acknowledgment or new promise, whether by payment of principal or interest
or otherwise and whether by any US Loan Party or others (including any Lenders)
with respect to any of the US Obligations shall, if the statute of limitations
in favor of any US Guarantor against Agent or Lenders shall have commenced to
run, toll the running of such statute of limitations and, if the period of such
statute of limitations shall have expired, prevent the operation of such statute
of limitations.

 

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15.12      Interest.

 

All amounts due, owing and unpaid from time to time by any US Guarantor
hereunder shall bear interest at the interest rate per annum then chargeable
with respect to Base Rate Loans constituting Revolving Advances.

 

15.13      US Guarantor’s Investigation.

 

Each US Guarantor acknowledges receipt of a copy of each of this Agreement and
the Other Documents.  Each US Guarantor has made an independent investigation of
US Loan Parties and of the financial condition of US Loan Parties.  Neither
Agent nor any Lender has made, Agent and Lenders do not hereby make, any
representations or warranties as to the income, expense, operation, finances or
any other matter or thing affecting any US Loan Party nor has Agent or any
Lender made any representations or warranties as to the amount or nature of the
US Obligations of any US Loan Party to which this Section 15 applies as
specifically herein set forth, nor has Agent or any Lender or any officer, agent
or employee of Agent or any Lender or any representative thereof, made any other
oral representations, agreements or commitments of any kind or nature, and each
US Guarantor hereby expressly acknowledges that no such representations or
warranties have been made and such US Guarantor expressly disclaims reliance on
any such representations or warranties.

 

15.14      Termination.

 

Subject to reinstatement as provided in Section 15.8, the provisions of this
Section 15 shall remain in effect until all of US Obligations have been Paid in
Full.

 

15.15      Extension of Guarantee.

 

Without prejudice to the generality of this Section 15, each US Guarantor
expressly confirms that it intends that the guarantee provided in this
Section 15 shall extend from time to time to any (however fundamental)
variation, increase, extension or addition of or to any of the provisions of
this Agreement or any Other Document and/or any facility or amount made
available hereunder or thereunder.

 

15.16      Applicability to US Borrowers.

 

Without limiting any of any US Borrower’s US Obligations under this Agreement or
any Other Document, each US Borrower shall also be considered a US Guarantor for
purposes of this Section 15 to the extent such US Borrower is not directly and
primarily obligated with respect to the US Obligations.

 

16.          GUARANTEE OF CANADIAN OBLIGATIONS.

 

16.1        Guarantee; Contribution Rights.

 

Each Canadian Guarantor hereby unconditionally guarantees, as a primary obligor
and not merely as a surety, jointly and severally with each other Canadian
Guarantor when and as due, whether at maturity, by acceleration, by notice of
prepayment or otherwise, the due (whether at the stated maturity, by
acceleration or otherwise) and punctual performance of all Canadian Obligations.

 

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Each payment made by any Canadian Guarantor pursuant to this Guarantee shall be
made in lawful money of the United States in immediately available funds without
offset, counterclaim or deduction of any kind.

 

Anything herein this Section 16 to the contrary notwithstanding, the maximum
liability of each Canadian Guarantor under this Section 16 shall in no event
exceed the amount which can be guaranteed by such Canadian Guarantor under
applicable federal, state or provincial laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in the
following paragraph). it being understood that no amendments or other
modifications to this Agreement or any of the Other Documents need to be made to
implement the provisions of this paragraph and instead the implementation of the
provisions of this paragraph shall occur automatically.

 

Each Canadian Guarantor hereby agrees that to the extent that a Canadian
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Canadian Guarantor shall be entitled to seek and receive
contribution from and against any other Canadian Guarantor hereunder which has
not paid its proportionate share of such payment.  Each Canadian Guarantor’s
right of contribution shall be subject to the terms and conditions of Section 16
.9(d).  The provisions of this paragraph shall in no respect limit the Canadian
Obligations and liabilities of any Canadian Guarantor to Agent and Lenders, and
each Canadian Guarantor shall remain liable to Agent and Lenders for the full
amount guaranteed by such Canadian Guarantor hereunder.

 

16.2        Waivers.

 

Each Canadian Guarantor hereby absolutely, unconditionally and irrevocably
waives (a) promptness, diligence, notice of acceptance, notice of presentment of
payment and any other notice hereunder, (b) demand of payment, protest, notice
of dishonor or nonpayment, notice of the present and future amount of the
Canadian Obligations and any other notice with respect to the Canadian
Obligations, (c) any requirement that Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any other Canadian Guarantor or any Canadian Loan
Party, or any Person or any Collateral, (d) any other action, event or
precondition to the enforcement hereof or the performance by each such Canadian
Guarantor of the Canadian Obligations, (e) any defense arising by any lack of
capacity or authority or any other defense of any Canadian Guarantor or any
Canadian Loan Party or any notice, demand or defense by reason of cessation from
any cause of Canadian Obligations other than Payment in Full of all of the
Canadian Obligations, (f) any defense that any other guarantee or security was
or was to be obtained by Agent or any Lender, and (g) any other defense.

 

16.3        No Defense.

 

No invalidity, irregularity, voidableness, voidness or unenforceability of this
Agreement or any Other Document or any other agreement or instrument relating
thereto, or of all or any part of the Canadian Obligations or of any collateral
security therefor shall affect, impair or be a defense hereunder.

 

16.4        Guarantee of Payment.

 

The Guarantee hereunder is one of payment and performance, not collection, and
the Canadian Obligations of each Canadian Guarantor hereunder are independent of
the Canadian

 

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Obligations of the other Canadian Guarantors or any of the other Canadian Loan
Parties, and a separate action or actions may be brought and prosecuted against
any Canadian Guarantor to enforce the terms and conditions of this Section 16 ,
irrespective of whether any action is brought against any other Canadian
Guarantor or any Canadian Loan Party or other Persons or whether any other
Canadian Guarantor or any Canadian Loan Party or other Persons are joined in any
such action or actions.  Each Canadian Guarantor waives any right to require
that any resort be had by Agent or any Lender to any security held for payment
of the Canadian Obligations or to any balance of any deposit account or credit
on the books of Agent or any Lender in favor of any Canadian Guarantor or any
Canadian Loan Party or any other Person.  No election to proceed in one form of
action or proceedings, or against any Person, or on any Canadian Obligations,
shall constitute a waiver of Agent’s right to proceed in any other form of
action or proceeding or against any other Person unless Agent has expressed any
such right in writing.  Without limiting the generality of the foregoing, no
action or proceeding by Agent against any Canadian Guarantor or any Canadian
Loan Party under any document evidencing or securing Indebtedness of any
Canadian Guarantor or any Canadian Loan Party to Agent shall diminish the
liability of any Canadian Guarantor hereunder, except to the extent Agent
receives actual payment on account of Canadian Obligations by such action or
proceeding, notwithstanding the effect of any such election, action or
proceeding upon the right of subrogation of any Canadian Guarantor in respect of
any Canadian Guarantor or any Canadian Loan Party and/or otherwise.

 

16.5        Liabilities Absolute.

 

The liability of each Canadian Guarantor hereunder shall be absolute, unlimited
and unconditional and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason, including, without
limitation, any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any claim, defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of any Obligation or otherwise.  Without limiting the
generality of the foregoing, the Canadian Obligations of each Canadian Guarantor
shall not be discharged or impaired, released, limited or otherwise affected by:

 

(a)           any change in the manner, place or terms of payment or
performance, and/or any change or extension of the time of payment or
performance of, release, renewal or alteration of, or any new agreements
relating to any Obligation, any security therefor, or any liability incurred
directly or indirectly in respect thereof, or any rescission of, or amendment,
waiver or other modification of, or any consent to departure from, this
Agreement or any Other Document, including any increase in the Canadian
Obligations resulting from the extension of additional credit to the Canadian
Borrowers or otherwise;

 

(b)           any sale, exchange, release, surrender, loss, abandonment,
realization upon any property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, all or any of the Canadian Obligations, and/or
any offset there against, or failure to perfect, or continue the perfection of,
any Lien in any such property, or delay in the perfection of any such Lien, or
any amendment or waiver of or consent to departure from any other guarantee for
all or any of the Canadian Obligations;

 

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(c)           the failure of Agent or any Lender to assert any claim or demand
or to enforce any right or remedy against the Canadian Borrowers or any Canadian
Guarantor or any Canadian Loan Party or any other Person under the provisions of
this Agreement or any Other Document or any other document or instrument
executed and delivered in connection herewith or therewith;

 

(d)           any settlement or compromise of any Obligation, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and any subordination of the payment
of all or any part thereof to the payment of any obligation (whether due or not)
of any Canadian Guarantor or any Canadian Loan Party to creditors of any
Canadian Guarantor or any Canadian Loan Party other than any other Canadian
Guarantor or Canadian Loan Party;

 

(e)           any manner of application of Collateral, or proceeds thereof, to
all or any of the Canadian Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Canadian Obligations or any
other assets of any Canadian Guarantor or any Canadian Loan Party; and

 

(f)            any other agreements or circumstance of any nature whatsoever
that may or might in any manner or to any extent vary the risk of any Canadian
Guarantor, or that might otherwise at law or in equity constitute a defense
available to, or a discharge of, the Guarantee hereunder and/or the Canadian
Obligations of any Canadian Guarantor, or a defense to, or discharge of, any
Canadian Guarantor or any Canadian Loan Party or any other Person or party
hereto or the Canadian Obligations or otherwise with respect to the Advances,
Letters of Credit or other financial accommodations to the Canadian Borrowers
pursuant to this Agreement and/or the Other Documents or otherwise.

 

16.6        Waiver of Notice.

 

Except as otherwise contemplated hereunder, Agent shall have the right to do any
of the above without notice to or the consent of any Canadian Guarantor and each
Canadian Guarantor expressly waives any right to notice of, consent to,
knowledge of and participation in any agreements relating to any of the above or
any other present or future event relating to Canadian Obligations whether under
this Agreement or otherwise or any right to challenge or question any of the
above and waives any defenses of such Canadian Guarantor which might arise as a
result of such actions.

 

16.7        Agent’s Discretion.

 

Agent may at any time and from time to time (whether prior to or after the
revocation or termination of this Agreement) without the consent of, or notice
to, any Canadian Guarantor, and without incurring responsibility to any Canadian
Guarantor or impairing or releasing the Canadian Obligations, apply any sums by
whomsoever paid or howsoever realized to any Canadian Obligations regardless of
what Canadian Obligations remain unpaid.

 

16.8        Reinstatement.

 

The Guarantee provisions herein contained shall continue to be effective or be
reinstated, as the case may be, if claim is ever made upon Agent or any Lender
for repayment or recovery of any amount or amounts received by Agent or such
Lender in payment or on account of any of the

 

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Canadian Obligations and Agent or such Lender repays all or part of said amount
for any reason whatsoever, including, without limitation, by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over Agent or such Lender or the respective property of each, or
any settlement or compromise of any claim effected by Agent or such Lender with
any such claimant (including any Canadian Guarantor or Canadian Loan Party); and
in such event each Canadian Guarantor hereby agrees that any such judgment,
decree, order, settlement or compromise or other circumstances shall be binding
upon such Canadian Guarantor, notwithstanding any revocation hereof or the
cancellation of any note or other instrument evidencing any Obligation, and each
Canadian Guarantor shall be and remain liable to Agent and/or Lenders for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by Agent or such Lenders.

 

16.9        No Marshalling, Etc.

 

(a)           Agent shall not be required to marshal any assets in favor of any
Canadian Guarantor, or against or in payment of Canadian Obligations.

 

(b)           No Canadian Guarantor shall be entitled to claim against any
present or future security held by Agent or any Lender from any Person for
Canadian Obligations in priority to or equally with any claim of Agent or any
Lender, or assert any claim for any liability of any Canadian Guarantor or any
Canadian Loan Party to any Canadian Guarantor in priority to or equally with
claims of Agent or any Lender for Canadian Obligations, and no Canadian
Guarantor shall be entitled to compete with Agent or any Lender with respect to,
or to advance any equal or prior claim to any security held by Agent or any
Lender for Canadian Obligations.

 

(c)           If any Canadian Guarantor or any Canadian Loan Party makes any
payment to Agent or any Lender, which payment is wholly or partly subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to any Person under any federal or provincial or other statute or at
common law or under equitable principles, then to the extent of such payment,
the Obligation intended to be paid shall be revived and continued in full force
and effect as if the payment had not been made, and the resulting revived
Obligation shall continue to be guaranteed, uninterrupted, by each Canadian
Guarantor hereunder.

 

(d)           All present and future monies payable by any Canadian Loan Party
or any other Canadian Guarantor to any Canadian Guarantor, whether arising out
of a right of subrogation, contribution or otherwise, are assigned to Agent for
its benefit and for the ratable benefit of Lenders as security for such Canadian
Guarantor’s liability to Agent and Lenders hereunder and are postponed and
subordinated to Agent’s and Lenders’ prior right to Payment in Full of all of
the Canadian Obligations.  Except to the extent prohibited otherwise by this
Agreement, all monies received by any Canadian Guarantor from any other Canadian
Guarantor or Canadian Loan Party shall be held by such Canadian Guarantor as
agent and trustee for Agent and Lenders.  This assignment, postponement and
subordination shall only terminate when all of the Canadian Obligations are Paid
in Full.

 

(e)           Each Canadian Guarantor and Canadian Loan Party acknowledges this
assignment, postponement and subordination and, except as otherwise set forth
herein, agrees to

 

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make no payments to any Canadian Guarantor without the prior written consent of
Agent.  Each Canadian Guarantor and Canadian Loan Party agrees to give full
effect to the provisions hereof.

 

16.10      Action Upon Event of Default.

 

Upon the occurrence and during the continuance of any Event of Default, Agent
may and upon written request of the Required Lenders shall, without notice to or
demand upon any Canadian Loan Party, any Canadian Guarantor or any other Person,
declare all or any portion of the Canadian Obligations of such Canadian
Guarantor hereunder immediately due and payable, and shall be entitled to
enforce the Canadian Obligations of each Canadian Guarantor.  Upon such
declaration by Agent, Agent, Lenders and any of their Affiliates are hereby
authorized at any time and from time to time to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other Indebtedness at any time owing by Agent or Lenders to or for the
credit or the account of any Canadian Guarantor against any and all of the
Canadian Obligations of each Canadian Guarantor now or hereafter existing
hereunder in accordance with the terms of this Agreement, whether or not Agent
or Lenders shall have made any demand hereunder against any other Canadian
Guarantor or any Canadian Loan Party and although such Canadian Obligations may
be contingent and unmatured.  The rights of Agent and Lenders hereunder are in
addition to other rights and remedies (including other rights of set-off) which
Agent and Lenders may have.  Upon such declaration by Agent, with respect to any
claims (other than those claims referred to in the immediately preceding
paragraph) of any Canadian Guarantor against any Canadian Loan Party (the
“Claims”), Agent shall have the full right on the part of Agent in its own name
or in the name of such Canadian Guarantor to collect and enforce such Claims by
legal action, proof of debt in bankruptcy or other liquidation proceedings, vote
in any proceeding for the arrangement of debts at any time proposed, or
otherwise, Agent and each of its officers being hereby irrevocably constituted
attorneys-in-fact for each Canadian Guarantor for the purpose of such
enforcement and for the purpose of endorsing in the name of each Canadian
Guarantor any instrument for the payment of money.  Each Canadian Guarantor will
receive as trustee for Agent and will pay to Agent forthwith upon receipt
thereof any amounts which such Canadian Guarantor may receive from any Canadian
Loan Party on account of the Claims.  Each Canadian Guarantor agrees that at no
time hereafter will any of the Claims be represented by any notes or other
negotiable instruments or writings, except and in such event they shall either
be made payable to Agent, or if payable to any Canadian Guarantor, shall
forthwith be endorsed by such Canadian Guarantor to Agent.  Each Canadian
Guarantor agrees that no payment on account of the Claims or any Lien therein
shall be created, received, accepted or retained during the continuance of any
Event of Default nor shall any UCC financing statements or PPSA financing
statements be filed with respect thereto by any Canadian Guarantor.

 

16.11      Statute of Limitations.

 

Any acknowledgment or new promise, whether by payment of principal or interest
or otherwise and whether by any Canadian Guarantor or others (including any
Lenders) with respect to any of the Canadian Obligations shall, if the statute
of limitations in favor of any Canadian Guarantor against Agent or Lenders shall
have commenced to run, toll the running of such statute of limitations and, if
the period of such statute of limitations shall have expired, prevent the
operation of such statute of limitations.

 

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16.12      Interest.

 

All amounts due, owing and unpaid from time to time by any Canadian Guarantor
hereunder shall bear interest at the interest rate per annum then chargeable
with respect to Base Rate Loans constituting Revolving Advances in Canadian
Dollars or US Dollars, as applicable.

 

16.13      Canadian Guarantor’s Investigation.

 

Each Canadian Guarantor acknowledges receipt of a copy of each of this Agreement
and the Other Documents.  Each Canadian Guarantor has made an independent
investigation of Canadian Loan Parties and of the financial condition of
Canadian Loan Parties.  Neither Agent nor any Lender has made, Agent and Lenders
do not hereby make, any representations or warranties as to the income, expense,
operation, finances or any other matter or thing affecting any Canadian Loan
Party nor has Agent or any Lender made any representations or warranties as to
the amount or nature of the Canadian Obligations of any Canadian Loan Party to
which this Section 16 applies as specifically herein set forth, nor has Agent or
any Lender or any officer, agent or employee of Agent or any Lender or any
representative thereof, made any other oral representations, agreements or
commitments of any kind or nature, and each Canadian Guarantor hereby expressly
acknowledges that no such representations or warranties have been made and such
Canadian Guarantor expressly disclaims reliance on any such representations or
warranties.

 

16.14      Termination.

 

Subject to reinstatement as provided in Section 16 .8, the provisions of this
Section 16 shall remain in effect until all of Canadian Obligations have been
Paid in Full.

 

16.15      Extension of Guarantee.

 

Without prejudice to the generality of this Section 16 , each Canadian Guarantor
expressly confirms that it intends that the guarantee provided in this
Section 16 shall extend from time to time to any (however fundamental)
variation, increase, extension or addition of or to any of the provisions of
this Agreement or any Other Document and/or any facility or amount made
available hereunder or thereunder.

 

16.16      Applicability to Canadian Borrowers.

 

Without limiting any of any Canadian Borrower’s Canadian Obligations under this
Agreement or any Other Document, each Canadian Borrower shall also be considered
a Canadian Guarantor for purposes of this Section 16 to the extent such Canadian
Borrower is not directly and primarily obligated with respect to the Canadian
Obligations.

 

17.          MISCELLANEOUS.

 

17.1        Governing Law; Consent to Jurisdiction; Etc.

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applied to contracts to be performed wholly within the
State of New York, without regard to conflicts of laws principles.  Any judicial
proceeding brought by or against any Loan Party

 

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with respect to any of the Obligations, this Agreement or any Other Document may
be brought in any court of competent jurisdiction located in the County and
State of New York, United States of America, and, by execution and delivery of
this Agreement, each Loan Party accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.  Each Loan Party hereby waives
personal service of any and all process upon it and consents that all such
service of process may be made by registered mail (return receipt requested)
directed to Administrative Borrower (on behalf of the Borrowers) at its address
set forth in Section 17.6 and service so made shall be deemed completed five
(5) days after the same shall have been so deposited in the mails of the United
States of America, or, at Agent’s and/or any Lender’s option, by service upon
Administrative Borrower (on behalf of the Borrowers) which each Loan Party
irrevocably appoints as such Loan Party’s agent for the purpose of accepting
service within the State of New York.  Nothing herein shall affect the right to
serve process in any manner permitted by law or shall limit the right of Agent
or any Lender to bring proceedings against any Loan Party in the courts of any
other jurisdiction.  Each Loan Party waives any objection to jurisdiction and
venue of any action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens.  Any
judicial proceeding by any Loan Party against Agent or any Lender involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any Other Document (except to the extent,
if any, expressly provided otherwise in any Other Document), shall be brought
only in a federal or state court located in the City of New York, State of New
York.

 

17.2        Entire Understanding; Amendments; Lender Replacements; Overadvances.

 

(a)           This Agreement and the Other Documents executed concurrently
herewith or on or after the Closing Date contain the entire understanding
between each Loan Party, Agent and each Lender and supersedes all prior
agreements and understandings, if any, relating to the subject matter hereof or
thereof.  Any promises, representations, warranties or guarantees of Agent or
any Lender to any Loan Party not herein contained or not contained in any Other
Document executed on or after the Closing Date shall have no force and effect. 
Neither this Agreement nor any portion or provisions hereof may be changed,
modified, amended, waived, supplemented, discharged, cancelled or terminated
orally or by any course of dealing, or in any manner other than by an agreement
in writing pursuant to clause (b) below.  Any Default or Event of Default that
occurs hereunder shall continue unless and until expressly waived in writing
pursuant to clause (b) below.  Each Loan Party acknowledges that it has been
advised by counsel in connection with the execution of this Agreement and Other
Documents and is not relying upon oral representations or statements
inconsistent with the terms and provisions of this Agreement.

 

(b)           Agent and the Required Lenders (or Agent with the consent in
writing of the Required Lenders), and the Borrowers may, subject to the
provisions of this Section 17.2(b), from time to time enter into written
amendments and supplemental agreements to this Agreement or the Other Documents
executed by the Borrowers, for the purpose of adding or deleting any provisions
or otherwise changing, varying or waiving in any manner the rights of Lenders,
Agent or Loan Parties hereunder or thereunder or the conditions, provisions or
terms hereof or thereof or waiving any Default or Event of Default hereunder or
thereunder, but only to the extent specified in such written agreements;
provided, however, that, no such amendment or supplemental agreement shall:

 

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(i)            increase the Commitment of any Lender without the consent of
Agent and the affected Lender;

 

(ii)           increase the Maximum Credit or the Canadian Revolving Loan
Maximum Amount without the consent of Agent and all Lenders (provided, that, the
increase in the Maximum Credit or the Canadian Revolving Loan Maximum Amount
provided for in Section 2.20 shall not be deemed an increase requiring the
consent of any Lender other than the Lenders providing such increase);

 

(iii)          extend the Term or the final scheduled maturity of any Advance or
the due date for any amount payable hereunder, or decrease the rate of interest
(other than the waiver of any default rate), reduce the principal amount of any
outstanding Advances, or reduce any scheduled (as opposed to mandatory
prepayment) principal payment (if any) or fee payable by the Borrowers to Agent
or a Lender pursuant to this Agreement or any Other Document, without the
consent of Agent and each such Lender directly affected thereby;

 

(iv)          alter the definition of the term Required Lenders, Supermajority
Lenders or alter, amend or modify this Section 17.2(b) without the consent of
Agent and all Lenders;

 

(v)           release any Collateral during any calendar year (other than in
accordance with the provisions of this Agreement, including any Disposition
thereof permitted by this Agreement) having an aggregate value in excess of
$5,000,000 without the consent of Agent and all Lenders;

 

(vi)          change the rights and duties of Agent without the consent of
Agent; or

 

(vii)         increase the Advance Rates above the Advance Rates in effect on
the Closing Date without the consent of Agent and all Lenders;

 

(viii)        (A) amend in any material respect the Second Lien Intercreditor
Agreement or (B) alter the definition of the terms Borrowing Base, US Borrowing
Base, Canadian Borrowing Base, Eligible Accounts or Eligible Inventory in any
manner which would have the effect of increasing availability of Advances, in
each case without the consent of Agent and the Supermajority Lenders;

 

(ix)           release of any Loan Party from its Obligations hereunder, except
in accordance with the terms of this Agreement;

 

(x)            subordinate the priority of the Liens in the Collateral in favor
of Agent, for the benefit of Secured Parties, to any Liens therein held by any
other Person;

 

(xi)           alter the priority of allocation of payments and proceeds of
Collateral provided for in Section 11.2(b); or

 

(xii)          amend in any material respect the provisions of
Section 17.3(b) (with respect to the rights of Lenders to sell participating
interests in the Advances to other Persons) or Section 17.3(c) (with respect to
the rights of Lenders to sell, assign or transfer all or any part of their
Advances and Commitments to a Purchasing Lender) without the consent of Agent
and all Lenders.

 

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Any such amendment or supplemental agreement shall apply equally to each Lender
and shall be binding upon Loan Parties, Lenders and Agent and all future holders
of the Obligations.  In the case of any waiver of a Default or Event of Default
pursuant to a waiver provided in accordance with the above provisions of this
Section 17.2(b), Loan Parties, Agent and Lenders shall be restored to their
former positions and rights, and any Default or Event of Default waived shall be
deemed to be cured and not continuing, but no waiver of a specific Default or
Event of Default shall extend to any other Default or Event of Default or any
subsequent Default or Event of Default (whether or not the subsequent Default or
Event of Default is the same as the Default or Event of Default which was
waived), or impair any right consequent thereon.

 

(c)           In the event that (i) Agent requests the consent of a Lender
pursuant to this Section 17.2 and such consent is denied, (ii) a Lender is a
Defaulting Lender, (iii) a Lender is an Impacted Lender or (iv) a Lender is a
Prior Defaulting/Impacted Lender, then, in each case, Agent  may, at its option,
or, so long as no Event of Default exists and is continuing, Administrative
Borrower may, at its option and upon notice to Agent, require such Lender to
assign its Advances and Commitments to Agent or to another Lender or to any
other Person designated by Agent (a “Designated Lender”), for a price equal to
the then outstanding principal amount of all Advances held by such Lender plus
accrued and unpaid interest and fees owing to such Lender, which interest and
fees shall be paid when, and if, collected from the Borrowers.  In the event
Agent or, so long as no Event of Default exists and is continuing,
Administrative Borrower, elects to require any Lender to assign such Lender’s
Advances and Commitments to Agent or to a Designated Lender, Agent or
Administrative Borrower (as applicable) will so notify such Lender in writing
within one hundred eighty (180) days following such Lender’s denial (or with
respect to clauses (ii), (iii) or (iv)) above, during the time that such Lender
is a Defaulting Lender, an Impacted Lender or a Prior Defaulting/Impacted
Lender, as applicable, or within one hundred eighty (180) days thereafter), and
such Lender will assign its interest to Agent or the Designated Lender no later
than five (5) days following receipt of such notice pursuant to a Commitment
Transfer Supplement executed by such Lender (or Agent on behalf of such Lender
if such Lender refuses to execute such Commitment Transfer Supplement within
such time period; and each Lender hereby irrevocable authorizes Agent to so
execute such a Commitment Transfer Supplement on its behalf), Agent or the
Designated Lender, as appropriate, and Agent (if Agent is not the Designated
Lender).

 

(d)           Notwithstanding the foregoing (and in addition to the Agent’s
rights to make Protective Advances hereunder), Agent may at its discretion and
without the consent of the Required Lenders, voluntarily permit the outstanding
Revolving Advances and Letters of Credit at any time to exceed the Borrowing
Base (but not to exceed the Maximum Revolving Advance Amount) by up to ten (10%)
percent of the Borrowing Base for up to thirty (30) consecutive Business Days;
provided, that, (i) the amount of such overadvances plus the amount of
Protective Advances made pursuant to Section 2.11 shall not exceed an amount
outstanding equal to ten (10%) percent of the Maximum Credit without the consent
of each of the Lenders, and (ii) any such overadvance shall still constitute an
Event of Default as of the first (1st) day of such overadvance regardless of the
reason for or amount of such overadvance.  For purposes of the preceding
sentence, the discretion granted to Agent hereunder shall not preclude
involuntary overadvances that may result from time to time due to the fact that
the Borrowing Base was unintentionally exceeded for any reason, including, but
not limited to, Collateral previously deemed to be eligible for inclusion in the
Borrowing Base, becomes ineligible, collections of Receivables applied to reduce
outstanding Advances are thereafter returned for insufficient funds or
overadvances are made to protect or preserve the Collateral; provided, that,

 

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any such overadvance shall still constitute an Event of Default as of the first
(1st) day of such overadvance regardless of the reason for or amount of such
overadvance.  In the event Agent involuntarily permits the outstanding Revolving
Advances and Letters of Credit to exceed the Borrowing Base by more than ten
(10%) percent of the Borrowing Base, Borrowers shall decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reason for such excess; provided, that, any Event of
Default resulting therefrom shall remain in existence, subject to the terms of
this Agreement.  Revolving Advances made or Letters of Credit issued after Agent
has determined the existence of involuntary overadvances shall be deemed to be
involuntary overadvances and shall be decreased in accordance with the preceding
sentence, and in all events shall constitute an Event of Default.

 

17.3        Successors and Assigns; Participations; New Lenders; Taxes;
Syndication.

 

(a)           This Agreement and the Other Documents shall be binding upon and
inure to the benefit of each Loan Party, Agent, each Lender, all future holders
of the Obligations and their respective successors and assigns; except, that, no
Loan Party may assign or transfer any of its rights or obligations under this
Agreement or any Other Document (other than pursuant to a merger or
consolidation of Loan Parties permitted hereunder) without the prior written
consent of Agent and each Lender.

 

(b)           Each Loan Party acknowledges that one or more Lenders may at any
time and from time to time sell participating interests in the Advances to other
Persons with the prior written consent of Agent, which consent of Agent shall
not be unreasonably withheld, conditioned or delayed (each such transferee or
purchaser of a participating interest, a “Transferee”); provided, that, no
participating interest may be sold to a Person (i) that would not constitute a
Qualified Assignee if such Person were a Purchasing Lender under
Section 17.3(c) below or (ii) that is organized under the laws of a jurisdiction
outside the United States that cannot make the certifications required by
Section 17.3(f).  Each Transferee may exercise all rights of payment (including
without limitation rights of set-off) with respect to the portion of such
Advances held by it or other Obligations payable hereunder as fully as if such
Transferee were the direct holder thereof; provided, that, Loan Parties shall
not be required to pay to any Transferee more than the amount which it would
have been required to pay to the Lender which granted an interest in its
Advances or other Obligations payable hereunder to such Transferee, had such
Lender retained such interest in the Advances hereunder or other Obligations
payable hereunder, and in no event shall Loan Parties be required to pay any
such amount arising from the same circumstances and with respect to the same
Advances or other Obligations payable hereunder to both such Lender and such
Transferee.  Transferee’s rights under Section 17.2 shall be limited to those
items in Section 17.2(b) which require consent of each Lender or each directly
affected Lender, as applicable.  Each Loan Party hereby grants to Agent, for the
ratable benefit of each Secured Party, a continuing Lien in any deposits, moneys
or other property actually or constructively held by such Transferee as security
for the Transferee’s interest in the Advances.  Neither Agent nor any Lender
(other than the Lender selling a participation) shall have any duty to any
Participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.

 

(c)           Any Lender may sell, assign or transfer all or any part of its
Advances and Commitments (and related rights and obligations under this
Agreement and the Other Documents) to Qualified Assignees (each a “Purchasing
Lender”), in minimum amounts of not less than $5,000,000

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(except such minimum amount shall not apply to (i) a sale, assignment or
transfer by any Lender to an Affiliate of such Lender or to a group of new
Lenders, each of which is an Affiliate of each other to the extent that the
aggregate amount to be assigned to all such new Lenders is at least $5,000,000
or (ii) a sale, assignment or transfer by any Lender of all of its Commitments
and all of its Advances), pursuant to a Commitment Transfer Supplement, executed
by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent
for recording.  Upon such execution, delivery, acceptance and recording, from
and after the transfer effective date determined pursuant to such Commitment
Transfer Supplement, (A) Purchasing Lender thereunder shall be a party to this
Agreement and the Other Documents as a Lender and, to the extent transferred
pursuant to such Commitment Transfer Supplement, have Commitments and
outstanding Advances, and (B) the transferor Lender thereunder shall, to the
extent its Advances and Commitments have been transferred pursuant to such
Commitment Transfer Supplement, be released from its obligations under this
Agreement and the Other Documents.  Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing Lender as a Lender and the resulting
adjustment of the Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the Advances and Commitments of such
transferor Lender under this Agreement and the Other Documents.  Loan Parties
hereby consent to the addition of such Purchasing Lender as a Lender and the
resulting adjustment of the Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the Advances and Commitments of
such transferor Lender.  Loan Parties shall execute and deliver such further
documents and do such further acts and things in order to effectuate the
foregoing. Notwithstanding the foregoing, any Lender may assign all or any
portion of the Advances or Notes held by it to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank; provided, that, any payment in respect of
such assigned Advances or Notes made by the Borrowers to or for the account of
the assigning or pledging Lender in accordance with the terms of this Agreement
shall satisfy the Borrowers’ obligations hereunder in respect to such assigned
Advances or Notes to the extent of such payment.  No such assignment described
in the immediately preceding sentence shall release the assigning Lender from
its obligations hereunder.

 

(d)           Agent, acting solely in this situation as a non-fiduciary agent of
the Borrower, shall maintain at its address a copy of each Commitment Transfer
Supplement delivered to it and a register (the “Register”) for the recordation
of the names and addresses of the Advances owing to each Lender from time to
time.  The entries in the Register shall be conclusive, in the absence of
manifest error, and Loan Parties, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advance recorded therein
for the purposes of this Agreement.  The Register shall be available for
inspection by Loan Parties or any Lender at any reasonable time and from time to
time upon reasonable prior notice.  Agent shall receive a fee in the amount of
$3,500 payable by the applicable Purchasing Lender upon the effective date of
each transfer or assignment to such Purchasing Lender.

 

(e)           Loan Parties authorize each Lender, the Arranger and the
Syndication Agent to disclose to any Transferee or Purchasing Lender and any
prospective Transferee or Purchasing Lender (who agrees in writing or through
electronic media to treat the information as confidential and use it solely in
connection with a proposed transfer under this Section 17.3) any and all
financial and other information in such Lender’s possession concerning Loan
Parties which has been delivered

 

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to Agent or such Lender by or on behalf of Loan Parties pursuant to this
Agreement or in connection with Agent’s or such Lender’s credit evaluation of
Loan Parties.

 

(f)            Each Lender shall deliver to the Borrowers and to the Agent, at
the time or times prescribed by applicable laws or when reasonably requested by
the Borrowers or the Agent, such properly completed and executed documentation
prescribed by applicable laws or by the taxing authorities of any jurisdiction
and such other reasonably requested information as will permit the Borrowers or
the Agent, as the case may be, to determine (i) whether or not payments made
hereunder are subject to Taxes, (ii) if applicable, the required rate of
withholding or deduction, and (iii) such Lender’s entitlement to any available
exemption from, or reduction of, applicable Taxes in respect of all payments to
be made to such Lender by the Borrowers pursuant to this Agreement or otherwise
to establish such Lender’s status for withholding tax purposes in the applicable
jurisdiction.  Notwithstanding anything to the contrary in the preceding
sentence, the completion, execution and submission of such documentation (other
than such documentation set forth in Section 17.3(f)((i) — (iv) below) shall not
be required if, in the Lender’s reasonable judgment, such completion, execution
or submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.  Without limiting the foregoing:

 

(i)            Each Lender or Participant organized under the laws of a
jurisdiction outside the United States, and from time to time thereafter if
either requested by the Borrowers (or Administrative Borrower on behalf of the
Borrowers) or Agent or upon the obsolescence or expiration of any previously
delivered form, shall provide Agent and Administrative Borrower (on behalf of
the Borrowers) with (A) two (2) original executed copies of a correct and
completed IRS Form W-8BEN, W-8ECI, or W-8IMY (with appropriate attachments), as
appropriate, or any successor or other form prescribed by the IRS and, to the
extent applicable, any forms evidencing compliance under FATCA (or any
subsequent replacement or substitute form therefor), certifying that payments to
such Lender or Participant are not subject to United States federal withholding
tax under the Code because such payment is either effectively connected with the
conduct by such Lender or Participant of a trade or business in the United
States or totally exempt from United States federal withholding tax by reason of
the application of an income tax treaty to which the United States is a party or
such Lender is otherwise exempt, (B) or to the extent permitted by law, each
such Lender or Participant may provide Administrative Borrower (on behalf of the
Borrowers) and Agent with two original executed copies of IRS Form W-8BEN, or
any successor form prescribed by the IRS, certifying that such Lender is exempt
from United States federal withholding tax pursuant to Section 871(h) or
881(c) of the Code, together with an annual certificate stating that such Lender
or Participant is not a “person” described in Section 871(h)(3) or 881(c)(3) of
the Code and (C) a duly completed and executed IRS Form W-8BEN or W 9, as
appropriate, or any successor or other form establishing an exemption from
United States federal backup withholding tax.  Each such Lender further agrees
to complete and deliver to Administrative Borrower (on behalf of the Borrowers),
upon its request, such other forms or other documentation as may be appropriate
to minimize any withholding tax on payments pursuant to this Agreement under the
laws of any other jurisdiction unless such completion and delivery may in any
event be disadvantageous for such Lender.  For purposes of this subsection (f),
the term “United States” shall have the meaning specified in Section 7701 of the
Code.  Each Lender that is a United States person, shall provide the Agent and
Administrative Borrower with two original executed IRS Form W-9s, certifying as
to status for United States federal back up withholding tax purposes.

 

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(ii)           Each US Lender shall (A) on or prior to the date such US Lender
becomes a “US Lender” hereunder, (B) on or prior to the date on which any such
form or certification expires or becomes obsolete, (C) after the occurrence of
any event requiring a change in the most recent form or certification previously
delivered by it pursuant to this Section 17.3(f)(ii) and (D) from time to time
if requested by the Borrowers, provide Agent and the Borrowers with two
completed originals of Form W-9 (certifying that such US Lender is entitled to
an exemption from U.S. backup withholding tax) or any successor form.

 

(iii)          If a payment made to a non-US Lender would be subject to United
States federal withholding tax imposed by FATCA if such non-US Lender fails to
comply with the applicable reporting requirements of FATCA, such non-US Lender
shall deliver to Agent and Borrowers any documentation under any requirement of
law or reasonably requested by Agent or Borrowers sufficient for Agent or
Borrowers to comply with their obligations under FATCA and to determine that
such non-US Lender has complied with such applicable reporting requirements.

 

(g)           At the request of Agent from time to time both before and after
the Closing Date, Loan Parties will assist Agent in the syndication of the
Credit Facility provided pursuant to this Agreement and the Other Documents. 
Such assistance shall include, but not be limited to (i) prompt assistance in
the preparation of an information memorandum and the verification of the
completeness and accuracy of the information and the reasonableness of the
projections contained therein, (ii) preparation of offering materials and
financial projections by Loan Parties and their advisors, (iii) providing Agent
with all information reasonably deemed necessary by Agent to successfully
complete the syndication, (iv) confirmation as to the accuracy and completeness
of such offering materials and information and confirmation that management’s
projections are based on assumptions believed by Loan Parties to be reasonable
at the time made, and (v) participation of Loan Parties’ senior management in
meetings and conference calls with potential lenders at such times and places as
Agent may reasonably request.

 

17.4        Application of Payments.

 

Agent shall have the continuing and exclusive right to apply or reverse and
re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations.  To the extent that any Loan Party makes a payment or Agent or
any Lender receives any payment or proceeds of the Collateral for any Loan
Party’s benefit, which are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by Agent or such Lender.

 

17.5        Indemnity/Currency Indemnity.

 

(a)           Each Loan Party shall indemnify Agent, each Issuer, each Lender
and each of their respective officers, directors, Affiliates, employees,
representatives and agents (each, an “Indemnitee”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) arising from any action,
litigation, proceeding, dispute or investigation which may be imposed on,
incurred by, or asserted against

 

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Agent, such Issuer or any Lender in any litigation, proceeding, dispute or
investigation instituted or conducted by any Governmental Body or any other
Person with respect to any aspect of, or any transaction contemplated by, or
referred to in, or any matter related to, this Agreement or the Other Documents,
whether or not Agent, any Issuer or any Lender is a party thereto; except, that,
no Indemnitee shall be entitled to indemnification hereunder to the extent that
any of the foregoing arises out of the gross (not mere) negligence or willful
misconduct of such Indemnitee as determined pursuant to a final, non-appealable
order of a court of competent jurisdiction.  Upon learning of any matter
described above for which any Indemnitee may want to seek indemnity from any
Loan Party, such Indemnitee shall promptly notify Administrative Borrower of
such matter; provided, that, the failure to do so shall not in any manner limit,
impair or affect Loan Parties’ indemnification obligations hereunder.  Nothing
contained herein or in any Other Document shall prohibit any Loan Party from
seeking contribution or indemnity from any Person other than Agent or a Lender.

 

(b)           If for the purposes of obtaining or enforcing judgment in any
court in any jurisdiction with respect to this Agreement or any Other Document,
it becomes necessary to convert into the currency of such jurisdiction (the
“Judgment Currency”) any amount due under this Agreement or under any Other
Document in any currency other than the Judgment Currency (the “Currency Due”)
(including any Currency Due for the purposes of Section 2.17) then, to the
extent permitted by law, conversion shall be made at the exchange rate selected
by Agent on the Business Day before the day on which judgment is given (or for
the purposes of Section 2.17 on the Business Day on which the payment was
received by the Agent).  In the event that there is a change in such exchange
rate between the Business Day before the day on which the judgment is given and
the date of receipt by the Agent of the amount due, Borrowers shall to the
extent permitted by law, on the date of receipt by Agent, pay such additional
amounts, if any, or be entitled to receive reimbursement of such amount, if any,
as may be necessary to ensure that the amount received by Agent on such date is
the amount in the Judgment Currency which (when converted at such exchange rate
on the date of receipt by Agent in accordance with normal banking procedures in
the relevant jurisdiction) is the amount then due under this Agreement or such
Other Document in the Currency Due.  If the amount of the Currency Due
(including any Currency Due for purposes of Section 2.17) which the Agent is so
able to purchase is less than the amount of the Currency Due (including any
Currency Due for purposes of Section 2.17) originally due to it, Borrowers shall
to the extent permitted by law jointly and severally indemnify and save Agent
and Lenders harmless from and against loss or damage arising as a result of such
deficiency.

 

17.6        Notice.

 

Any notice or request required to be given hereunder to any Loan Party or to
Agent or any Lender shall be in writing (except as expressly provided herein) at
their respective addresses set forth below or at such other address as may
hereafter be specified in a notice designated as a notice of change of address
under this Section 17.6.  Any notice or request required to be given hereunder
shall be given by (a) hand delivery, (b) overnight courier, (c) registered or
certified mail, return receipt requested, or (d) facsimile to the number set out
below (or such other number as may hereafter be specified in a notice designated
as a notice of change of address) with electronic confirmation of its receipt. 
Any notice or request required to be given hereunder shall be deemed given on
the earlier of (i) actual receipt thereof, and (ii) (A) one (1) Business Day
following posting thereof by a recognized overnight courier, (B) three (3) days
following posting thereof by registered or certified mail, return receipt
requested, or (C) upon the sending thereof when sent by facsimile

 

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with electronic confirmation of its receipt, in each case addressed to each
party at its address set forth below or at such other address as has been
furnished in writing by a party to the other by like notice:

 

If to Agent or to Wells Fargo as Lender at:

Wells Fargo Bank, National Association

 

150 South Wacker Drive

 

Chicago, Illinois 60606

 

Attention:

Portfolio Manager - A.M. Castle

 

Telephone:

312-332-0420

 

Facsimile:

312-332-0424

 

If to a Lender other than Wells Fargo, as specified on the signature
pages hereof or in the applicable Commitment Transfer Supplement.

 

If to any Borrower or any Loan Party:

A.M. Castle & Co.

 

1420 Kensington Road, Suite 220

 

Oak Brook, Illinois 60523

 

Attention: Chief Financial Officer

 

Telephone:

847-349-2577

 

Facsimile:

847-241-8204

 

17.7        Survival.

 

The obligations of Loan Parties under Sections 2.2(g), 3.6, 3.9, 4.19(h), 14.7,
17.5 and 17.10 shall survive termination of this Agreement and the Other
Documents and Payment in Full of the Obligations.

 

17.8        Postponement of Subrogation, Etc. Rights.

 

Each Loan Party expressly agrees not to exercise, until Payment in Full of all
of the Obligations, any and all rights of subrogation, reimbursement, indemnity,
exoneration, contribution of any other claim which such Loan Party may now or
hereafter have against the other Loan Parties or other Person directly or
contingently liable for the Obligations hereunder, or against or with respect to
the other Loan Parties’ property (including, without limitation, any property
which is Collateral for the Obligations), arising from the existence or
performance of this Agreement.

 

17.9        Severability.

 

If any part of this Agreement is contrary to, prohibited by, or deemed invalid
under applicable laws or regulations, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given effect so
far as possible.

 

17.10      Expenses.

 

The Borrowers shall reimburse Agent upon demand (and, with respect to clause
(a) below, Lenders) for all costs and expenses (including without limitation,
travel expenses and out-of-pocket costs and expenses incurred by Agent in the
disbursement of funds to Borrowers by wire transfer or

 

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otherwise) paid or incurred by Agent (and, with respect to clause (a) below,
Lenders) in connection with this Agreement and the Other Documents, including,
without limitation:

 

(a)           reasonable and documented attorneys’ fees and disbursements
incurred by Agent and, during the continuance of a Default or Event of Default,
by Lenders (i) in all efforts made to enforce payment of any Obligations or
collection of or other realization upon any Collateral, (ii) in defending or
prosecuting any actions or proceedings arising out of or relating to this
Agreement and the Other Documents, (iii) in connection with the enforcement of
this Agreement or any Other Document, and (iv) in enforcing Agent’s security
interest in or Lien on any of the Collateral, whether through judicial
proceedings or otherwise;

 

(b)           reasonable and documented attorneys’ fees and expenses, fees and
expenses of financial accountants, advisors, consultants, appraisers and other
professionals incurred by Agent and other costs and expenses incurred by Agent
(i) in connection with the preparing, negotiating, entering into, performing or
syndicating this Agreement and/or the Other Documents, any amendment, waiver,
consent or other modification with respect thereto and the administration,
work-out or enforcement of this Agreement and the Other Documents, (ii) in
instituting, maintaining, preserving and foreclosing on Liens on any of the
Collateral, whether through judicial proceedings or otherwise, (iii) in
connection with any advice given to Agent with respect to its rights and
obligations under this Agreement and all Other Documents or (iv) that Agent
reasonably deems necessary or appropriate for the performance and fulfillment of
its functions, powers, and obligations pursuant to this Agreement and the Other
Documents; and

 

(c)           subject to Section 4.9, reasonable fees and disbursements incurred
by Agent in connection with any appraisals of Inventory, Equipment or other
Collateral, field examinations, collateral analysis or monitoring or other
business analysis conducted by outside Persons in connection with this Agreement
and the Other Documents.

 

Agent may charge the Borrowers’ Account for all fees and expenses payable under
this Section 17.10.  So long as no Cash Dominion Event exists, Agent agrees to
provide notice to Administrative Borrower two (2) days’ prior to charging
Borrowers’ Account for any such fees and expenses, which notice shall include a
reasonably detained listing of such fees and expenses.

 

17.11      Injunctive Relief.

 

Each Loan Party recognizes that, in the event any Loan Party fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
any remedy at law may prove to be inadequate relief to Agent and the Lenders;
therefore, Agent, if Agent so requests, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
that actual damages are not an adequate remedy.

 

17.12      Consequential Damages.

 

None of Agent, any Issuer, any Lender, nor any agent or attorney for any of
them, shall be liable to any Loan Party for special, punitive, exemplary,
indirect or consequential damages arising from any breach of contract, tort or
other wrong relating to the establishment, administration or collection of the
Obligations.

 

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17.13      Captions.

 

The captions at various places in this Agreement are intended for convenience
only and do not constitute and shall not be interpreted as part of this
Agreement.

 

17.14      Counterparts; Facsimile or Emailed Signatures.

 

This Agreement may be executed in any number of and by different parties hereto
on separate counterparts, all of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same
agreement.  Any signature delivered by a party by facsimile or email
transmission shall be deemed to be an original signature hereto.

 

17.15      Construction.

 

The parties acknowledge that each party and its counsel have reviewed this
Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.

 

17.16      Confidentiality; Sharing Information.

 

(a)           Agent, each Lender and each Transferee shall hold all non-public
information designated as confidential and obtained by Agent, such Lender or
such Transferee pursuant to the requirements of this Agreement in accordance
with Agent’s, such Lender’s and such Transferee’s customary procedures for
handling confidential information of this nature; provided, however, that,
Agent, each Lender and each Transferee may disclose such confidential
information (i) to its examiners, affiliates, outside auditors, counsel and
other professional advisors, (ii) to Agent, any Lender or to any prospective
Transferees and Purchasing Lenders (who agrees in writing or through electronic
media to treat the information as confidential and use it solely in connection
with a proposed transfer under Section 17.3), (iii) that ceases to be non-public
information through no fault of Agent or any Lender, and (iv) as required or
requested by any Governmental Body or representative thereof or pursuant to
legal process; provided, further, that, (A) unless specifically prohibited by
applicable law or court order, Agent, each Lender and each Transferee shall use
reasonable efforts prior to disclosure thereof, to notify Administrative
Borrower (on behalf of the Borrowers) of the applicable request for disclosure
of such non-public information (1) by a Governmental Body or representative
thereof (other than any such request in connection with an examination of the
financial condition of Agent, a Lender or a Transferee by such Governmental
Body) or (2) pursuant to legal process, and (B) in no event shall Agent, any
Lender or any Transferee be obligated to return any materials furnished by any
Loan Party other than those documents and instruments in possession of Agent or
any Lender constituting possessory Collateral once all of the Obligations have
been Paid in Full.

 

(b)           Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
such Loan Party or one or more of its Affiliates (in connection with this
Agreement or otherwise) by Agent, any Lender or by one or more Subsidiaries or
Affiliates of Agent or such Lender and each Loan Party hereby authorizes Agent
and each Lender to share any information delivered to Agent or such Lender by
such Loan Party and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of Agent or such Lender to enter into this
Agreement, to any such Subsidiary or Affiliate of Agent or

 

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such Lender, it being understood that any such Subsidiary or Affiliate of Agent
or any Lender receiving such information shall be bound by the provision of this
Section 17.16 as if it were a Lender hereunder.  Such authorization shall
survive the repayment of the Obligations and the termination of this Agreement.

 

17.17      Publicity.

 

Each Loan Party hereby authorizes Agent to make appropriate announcements of the
financial arrangement entered into among Loan Parties, Agent and Lenders,
including, without limitation, announcements which are commonly known as
tombstones, in such publications and to such selected parties as Agent shall in
its sole and absolute discretion deem appropriate.  In addition, each Loan Party
authorizes Agent to include each Loan Party’s name and logo in select
transaction profiles and client testimonials prepared by Agent for use in
publications, company brochures and other marketing materials of Agent.

 

17.18      USA Patriot Act; Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada).

 

Each Lender subject to the USA PATRIOT Act (Title III of Pub.L. 107-56 (signed
into law October 26, 2001), the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada) and any other applicable anti-money laundering,
anti-terrorist financing government sanction and “know your client” laws
(collectively, the “Acts”) hereby notifies Borrowers and Guarantors that
pursuant to the requirements of the Acts, it is required to obtain, verify and
record information that identifies each person or corporation who opens an
account and/or enters into a business relationship with it, which information
includes the name and address of Borrowers and Guarantors and other information
that will allow such Lender to identify such person in accordance with the Acts
and any other applicable law.  Borrowers and Guarantors are hereby advised that
any Advances or Letters of Credit hereunder are subject to satisfactory results
of such verification.

 

17.19      Agent Titles.

 

Each Lender or other Person that is designated (in the preamble of this
Agreement or otherwise) as “Arranger”, “Bookrunner” or any title of any similar
type shall not have any right, power, responsibility or duty under this
Agreement or any of the Other Documents, other than those applicable to all
Lenders (in the case of a Lender), and shall in no event be deemed to have any
fiduciary relationship with any other Lender.

 

[SIGNATURE PAGES FOLLOW]

 

175

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

 

Each of the parties has signed this Agreement as of the day and year first above
written.

 

 

BORROWERS:

 

 

 

A.M. CASTLE & CO.

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Vice President & Chief Financial Officer

 

 

 

 

 

 

 

TRANSTAR METALS CORP.

 

PARAMONT MACHINE COMPANY, LLC

 

TOTAL PLASTICS, INC.

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Vice President

 

 

 

 

ADVANCED FABRICATING TECHNOLOGY, LLC

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Vice President & Treasurer

 

 

 

 

OLIVER STEEL PLATE CO.

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Director & Treasurer

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

US BORROWER:

 

 

 

TUBE SUPPLY, LLC

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Director & Treasurer

 

 

 

 

CANADIAN BORROWERS:

 

 

 

 

A.M. CASTLE & CO. (CANADA) INC.

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Vice President-Finance, CFO & Treasurer

 

 

 

 

 

 

 

TUBE SUPPLY CANADA ULC

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Director and Treasurer

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

US GUARANTORS:

 

 

 

 

TRANSTAR INVENTORY CORP.

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Vice President

 

 

 

 

KEYSTONE TUBE COMPANY, LLC

 

 

 

 

By:

/s/ Scott F. Stephens

 

Name:

Scott F. Stephens

 

Title:

Treasurer

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

AGENT AND LENDER:

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Agent, Swingline Lender and a Lender

 

 

 

 

 

By:

/s/ Thomas Blackman

 

Name:

Thomas Blackman

 

Title:

Vice President

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

LENDERS:

 

 

 

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,

 

an Ontario corporation,

 

as a Lender

 

 

 

 

 

By:

/s/ Domenic Cosentino

 

Name:

Domenic Cosention

 

Title:

Vice President

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

BANK OF AMERICA, N.A.,

 

as a Lender

 

 

 

 

 

By:

/s/ Brian J. Wright

 

Name:

Brian J. Wright

 

Title:

Senior Vice President

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

BANK OF AMERICA, N.A.

 

(acting through its Canada Branch),

 

as a Lender

 

 

 

 

 

By:

/s/ Medina Sales De Andrade

 

Name:

Medina Sales De Andrade

 

Title:

Vice President

 

 

 

Address:

181 Bay Street

 

 

Toronto, Ontario

 

 

M5J 2V8

 

 

 

 

Facsimile:

(312) 453-4041

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

REGIONS BANK,

 

as a Lender

 

 

 

 

 

By:

/s/ Richard A. Gere

 

Name:

Richard A. Gere

 

Title:

Attorney in Fact

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

US BANK, NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

 

 

By:

/s/ Lynn Gosselin

 

Name:

Lynn Gosselin

 

Title:

Vice President

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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

 

 

US BANK NATIONAL ASSOCIATION,
CANADA BRANCH,

 

as a Lender

 

 

 

 

 

By:

/s/ Joseph Rauhala

 

Name:

Joseph Rauhala

 

Title:

Principal Officer

 

[Signature Page to Loan and Security Agreement - A.M. Castle]

 

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

 

Exhibit A

to

Loan and Security Agreement

 

Form of Borrowing Base Certificate

 

[On file with Agent]

 

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

 

Exhibit B

to

Loan and Security Agreement

 

Form of Notice of Conversion

 

, 20  

 

To:

Wells Fargo Bank, National Association, as Agent

 

150 South Wacker Drive

 

Chicago, Illinois 60606

 

Attention: Portfolio Manager - A.M. Castle

 

 

 

Re:  A.M. Castle & Co., et al.

 

Ladies and Gentlemen:

 

Reference is made to the Loan and Security Agreement, dated as of December  15,
2011, by and among A.M. CASTLE & CO., a corporation organized under the laws of
the state of Maryland (“Parent” or “Administrative Borrower”), TRANSTAR METALS
CORP., a corporation organized under the laws of the state of Delaware
(“Transtar Metals”), ADVANCED FABRICATING TECHNOLOGY, LLC, a limited liability
company organized under the laws of the state of Delaware (“AFT”), OLIVER STEEL
PLATE CO., a corporation organized under the laws of the state of Delaware
(“Oliver Steel”), PARAMONT MACHINE COMPANY, LLC, a limited liability company
organized under the laws of the state of Delaware (“Paramont”), TOTAL
PLASTICS, INC., a corporation organized under the laws of the state of Michigan
(“TPI”), TUBE SUPPLY, LLC, a limited liability company organized under the laws
of the state of Texas (“Tube Texas”; and together with Parent, Transtar Metals,
AFT, Oliver Steel, Paramont, TPI and any other Person that is organized or
formed under the laws of any of the United States that at any time becomes a US
Borrower, each a “US Borrower” and collectively, the “US Borrowers”), A.M.
CASTLE & CO. (CANADA) INC., a corporation organized under the laws of the
province of Ontario, Canada (“Castle Canada”), TUBE SUPPLY CANADA ULC, an
Alberta unlimited company organized under the laws of the province of Alberta,
Canada (“Tube Canada”; and together with Castle Canada and any other Person that
is organized or formed under the laws of Canada or any province thereof that at
any time becomes a Canadian Borrower, each a “Canadian Borrower” and
collectively, the “Canadian Borrowers”; and together with US Borrowers, each a
“Borrower” and collectively, the “Borrowers”), certain affiliates of Borrowers
party thereto as Guarantors, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, in its capacity as agent (in such capacity, “Agent”)
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the Secured Parties (as defined in the Loan Agreement), and the financial
institutions from time to time party to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”) (as such Loan and
Security Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”). 
Capitalized terms used and not defined herein shall have the meaning ascribed to
them in the Loan Agreement.

 

Administrative Borrower hereby gives irrevocable notice, pursuant to
Section 2.2(e) of the Loan Agreement, of its request to, on [INSERT DATE],
convert a [US/Canadian] Base Rate Loan in the amount

 

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

 

of [Cdn] $                     to a [XX] day [LIBOR/BA] Rate Loan in the amount
of [Cdn] $                    ][a [XX] day [LIBOR/BA] Rate Loan in the amount of
[Cdn]$                     to a [US/Canadian] Base Rate Loan in the amount of
[Cdn]$                    ].

 

Administrative Borrower hereby (a) represents and warrants that all of the
conditions contained in Section 8.2 of the Loan Agreement have been satisfied on
and as of the date hereof, and will continue to be satisfied on and as of the
date of the conversion requested hereby, before and after giving effect thereto;
(b) represents and warrants that Section 2.2(b) of the Loan Agreement shall have
been satisfied on and as of the date hereof, and will continue to be satisfied
on and as of the date of the conversion requested hereby, before and after
giving effect thereto; and (c) reaffirms the continuation of Agent’s Liens, on
behalf of itself and Lenders, pursuant to the Loan Agreement.

 

 

 

Very truly yours,

 

 

 

A.M. CASTLE & CO.,

 

as Administrative Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

Exhibit C

to

Loan and Security Agreement

 

Form of Notice of Advance Request

 

, 20  

 

To:

Wells Fargo Bank, National Association, as Agent

 

150 South Wacker Drive

 

Chicago, Illinois 60606

 

Attention: Portfolio Manager - A.M. Castle

 

 

 

Re:  A.M. Castle & Co., et al.

 

Ladies and Gentlemen:

 

Reference is made to the Loan and Security Agreement, dated as of December 15,
2011, by and among A.M. CASTLE & CO., a corporation organized under the laws of
the state of Maryland (“Parent” or “Administrative Borrower”), TRANSTAR METALS
CORP., a corporation organized under the laws of the state of Delaware
(“Transtar Metals”), ADVANCED FABRICATING TECHNOLOGY, LLC, a limited liability
company organized under the laws of the state of Delaware (“AFT”), OLIVER STEEL
PLATE CO., a corporation organized under the laws of the state of Delaware
(“Oliver Steel”), PARAMONT MACHINE COMPANY, LLC, a limited liability company
organized under the laws of the state of Delaware (“Paramont”), TOTAL
PLASTICS, INC., a corporation organized under the laws of the state of Michigan
(“TPI”), TUBE SUPPLY, LLC, a limited liability company organized under the laws
of the state of Texas (“Tube Texas”; and together with Parent, Transtar Metals,
AFT, Oliver Steel, Paramont, TPI and any other Person that is organized or
formed under the laws of any of the United States that at any time becomes a US
Borrower, each a “US Borrower” and collectively, the “US Borrowers”), A.M.
CASTLE & CO. (CANADA) INC., a corporation organized under the laws of the
province of Ontario, Canada (“Castle Canada”), TUBE SUPPLY CANADA ULC, an
Alberta unlimited company organized under the laws of the province of Alberta,
Canada (“Tube Canada”; and together with Castle Canada and any other Person that
is organized or formed under the laws of Canada or any province thereof that at
any time becomes a Canadian Borrower, each a “Canadian Borrower” and
collectively, the “Canadian Borrowers”; and together with US Borrowers, each a
“Borrower” and collectively, the “Borrowers”), certain affiliates of Borrowers
party thereto as Guarantors, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, in its capacity as agent (in such capacity, “Agent”)
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the Secured Parties (as defined in the Loan Agreement), and the financial
institutions from time to time party to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”) (as such Loan and
Security Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”). 
Capitalized terms used and not defined herein shall have the meaning ascribed to
them in the Loan Agreement.

 

Administrative Borrower hereby gives irrevocable notice, pursuant to
Section 2.2(a) of the Loan Agreement, that it requests a Revolving Advance under
the Loan Agreement, and that in connection therewith, sets forth below the terms
on which such Revolving Advance is requested to be made:

 

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

 

(A)

Principal amount of Advance:

 

 

 

 

(B)

Date of Advance

 

 

(which is a Business Day):

 

 

 

 

(C)

Type of Advance:

[[US/Canadian] Base Rate Loan][[LIBOR/BA]]

 

 

 

(D)

Interest Period and the last day thereof:(1)

 

 

 

 

(E)

Name of Borrower on whose behalf such request is made:

 

 

Administrative Borrower hereby (a) represents and warrants that all of the
conditions contained in Section 8.2 of the Loan Agreement have been satisfied on
and as of the date hereof, and after giving effect to the Advance requested
hereby; (b) represents and warrants that Section 2.2 of the Loan Agreement shall
have been satisfied on and as of the date hereof, and after giving effect to the
Advance requested hereby; and (c) reaffirms the continuation of Agent’s Liens,
on behalf of itself and Lenders, pursuant to the Loan Agreement.

 

 

 

Very truly yours,

 

 

 

A.M. CASTLE & CO.,

 

as Administrative Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

(1)           To be inserted if a LIBOR Rate Loan or BA Rate Loan and shall be
subject to the definition of “Interest Period” in the Loan Agreement.

 

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

 

Exhibit D

to

Loan and Security Agreement

 

Form of Line Decrease Notice

 

, 20  

 

To:

Wells Fargo Bank, National Association, as Agent

 

150 South Wacker Drive

 

Chicago, Illinois 60606

 

Attention: Portfolio Manager - A.M. Castle

 

 

 

Re:  A.M. Castle & Co., et al.

 

Ladies and Gentlemen:

 

Reference is made to the Loan and Security Agreement, dated as of December 15,
2011, by and among A.M. CASTLE & CO., a corporation organized under the laws of
the state of Maryland (“Parent” or “Administrative Borrower”), TRANSTAR METALS
CORP., a corporation organized under the laws of the state of Delaware
(“Transtar Metals”), ADVANCED FABRICATING TECHNOLOGY, LLC, a limited liability
company organized under the laws of the state of Delaware (“AFT”), OLIVER STEEL
PLATE CO., a corporation organized under the laws of the state of Delaware
(“Oliver Steel”), PARAMONT MACHINE COMPANY, LLC, a limited liability company
organized under the laws of the state of Delaware (“Paramont”), TOTAL
PLASTICS, INC., a corporation organized under the laws of the state of Michigan
(“TPI”), TUBE SUPPLY, LLC, a limited liability company organized under the laws
of the state of Texas (“Tube Texas”; and together with Parent, Transtar Metals,
AFT, Oliver Steel, Paramont, TPI and any other Person that is organized or
formed under the laws of any of the United States that at any time becomes a US
Borrower, each a “US Borrower” and collectively, the “US Borrowers”), A.M.
CASTLE & CO. (CANADA) INC., a corporation organized under the laws of the
province of Ontario, Canada (“Castle Canada”), TUBE SUPPLY CANADA ULC, an
Alberta unlimited company organized under the laws of the province of Alberta,
Canada (“Tube Canada”; and together with Castle Canada and any other Person that
is organized or formed under the laws of Canada or any province thereof that at
any time becomes a Canadian Borrower, each a “Canadian Borrower” and
collectively, the “Canadian Borrowers”; and together with US Borrowers, each a
“Borrower” and collectively, the “Borrowers”), certain affiliates of Borrowers
party thereto as Guarantors, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, in its capacity as agent (in such capacity, “Agent”)
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the Secured Parties (as defined in the Loan Agreement), and the financial
institutions from time to time party to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”) (as such Loan and
Security Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”). 
Capitalized terms used and not defined herein shall have the meaning ascribed to
them in the Loan Agreement.

 

This letter constitutes the Line Decrease Notice and is delivered in accordance
with Section 2.21 of the Loan Agreement, and by delivery hereof, Administrative
Borrower hereby exercises its right pursuant to Section 2.21 of the Loan
Agreement to irrevocably decrease the Maximum Credit to $      and irrevocably

 

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

 

decrease the Canadian Revolving Loan Maximum Amount to $          , subject to
all of the terms and conditions of Section 2.21 of the Loan Agreement.

 

 

Very truly yours,

 

 

 

A.M. CASTLE & CO.,

 

as Administrative Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

Exhibit E-1

to

Loan and Security Agreement

 

Form of Revolving Credit Note for US Borrowers

 

[NAME OF LENDER]

 

REVOLVING CREDIT NOTE FOR US BORROWERS

 

$

New York, New York

 

, 2011

 

FOR VALUE RECEIVED, the undersigned (the “US Borrowers”), HEREBY PROMISES TO PAY
to the order of [NAME OF LENDER] (“Lender”), at the offices of WELLS FARGO BANK,
NATIONAL ASSOCIATION, in its capacity as agent (in such capacity, together with
its successors and assigns, “Agent”) pursuant to the Loan Agreement (as defined
below) acting for and on behalf of the Secured Parties (as defined in the Loan
Agreement), at its address at 150 South Wacker Drive, Chicago, Illinois 60606,
or at such other place as Agent may designate from time to time in writing, in
lawful money of the United States of America and in immediately available funds,
the amount of            DOLLARS AND NO CENTS ($          ) or, if less, the
aggregate unpaid amount of all Revolving Advances (as defined in the Loan
Agreement) made to the undersigned under the Loan Agreement.  All capitalized
terms used but not otherwise defined herein have the meanings given to them in
the Loan Agreement.

 

This Revolving Credit Note is a Note issued pursuant to that certain Loan and
Security Agreement, dated of even date herewith, by and among the US Borrowers,
certain affiliates of the US Borrowers, Agent, Lender and the other financial
institutions party thereto as Lenders (including all annexes, exhibits and
schedules thereto, and as from time to time amended, modified, supplemented,
extended, renewed, restated, refinanced, restructured or replaced, the “Loan
Agreement”), and is entitled to the benefit and security of the Loan Agreement
and all of the Other Documents referred to therein.  Reference is hereby made to
the Loan Agreement for a statement of all of the terms and conditions under
which the Revolving Advances evidenced hereby are made and are to be repaid. 
The date and amount of each Revolving Advance made by Lender to the US
Borrowers, the rates of interest applicable thereto and each payment made on
account of the principal thereof, shall be recorded by Agent on its books;
provided, that, the failure of Agent to make any such recordation shall not
affect the obligations of the US Borrowers to make a payment when due of any
amount owing under the Loan Agreement or this Revolving Credit Note in respect
of the Revolving Advances made by Lender to the US Borrowers.

 

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Loan Agreement, the terms of which
are hereby incorporated herein by reference.  Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times, and pursuant to such calculations, as are specified in the Loan
Agreement.  In no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum amount of interest which, in accordance with
the laws of the State of New York, may be contracted for, or received on this
Note.  The indebtedness evidenced hereby and all other amounts payable hereunder
shall be the joint and several obligations of the US Borrowers.

 

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

 

If any payment on this Revolving Credit Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

 

Upon and after the occurrence of any Event of Default, this Revolving Credit
Note may, in accordance with the Loan Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.

 

Time is of the essence of this Revolving Credit Note.  Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by the US
Borrowers.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

THIS REVOLVING CREDIT NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TERMS OF THE LOAN AGREEMENT.  TRANSFERS OF THIS REVOLVING CREDIT NOTE MUST BE
RECORDED IN THE REGISTER MAINTAINED BY AGENT PURSUANT TO THE TERMS OF THE LOAN
AGREEMENT.

 

THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.

 

 

A.M. CASTLE & CO.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

TRANSTAR METALS CORP.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ADVANCED FABRICATING TECHNOLOGY, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

OLIVER STEEL PLATE CO.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

PARAMONT MACHINE COMPANY, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

[Signature Page to Revolving Credit Note for US Borrowers - FORM]

 

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

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

TOTAL PLASTICS, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

TUBE SUPPLY, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

Exhibit E-2

to

Loan and Security Agreement

 

Form of Revolving Credit Note for Canadian Borrowers

 

[NAME OF LENDER]

 

REVOLVING CREDIT NOTE FOR CANADIAN BORROWERS

 

$

New York, New York

 

, 2011

 

FOR VALUE RECEIVED, the undersigned (the “Canadian Borrowers”), HEREBY PROMISES
TO PAY to the order of [NAME OF LENDER] (“Lender”), at the offices of WELLS
FARGO BANK, NATIONAL ASSOCIATION, in its capacity as agent (in such capacity,
together with its successors and assigns, “Agent”) pursuant to the Loan
Agreement (as defined below) acting for and on behalf of the Secured Parties (as
defined in the Loan Agreement), at its address at 150 South Wacker Drive,
Chicago, Illinois 60606, or at such other place as Agent may designate from time
to time in writing, in lawful money of the United States of America or Canada,
as applicable, and in immediately available funds, the amount of the US Dollar
Equivalent of $           DOLLARS AND NO CENTS ($          ) or, if less, the
aggregate unpaid amount of all Revolving Advances (as defined in the Loan
Agreement) made to the undersigned under the Loan Agreement.  All capitalized
terms used but not otherwise defined herein have the meanings given to them in
the Loan Agreement.

 

This Revolving Credit Note is a Note issued pursuant to that certain Loan and
Security Agreement, dated of even date herewith, by and among the Canadian
Borrowers, certain affiliates of the Canadian Borrowers, Agent, Lender and the
other financial institutions party thereto as Lenders (including all annexes,
exhibits and schedules thereto, and as from time to time amended, modified,
supplemented, extended, renewed, restated, refinanced, restructured or replaced,
the “Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement and all of the Other Documents referred to therein.  Reference is
hereby made to the Loan Agreement for a statement of all of the terms and
conditions under which the Revolving Advances to Canadian Borrowers evidenced
hereby are made and are to be repaid.  The date and amount of each Revolving
Advance made by Lender to the Canadian Borrowers, the rates of interest
applicable thereto and each payment made on account of the principal thereof,
shall be recorded by Agent on its books; provided, that, the failure of Agent to
make any such recordation shall not affect the obligations of the Canadian
Borrowers to make a payment when due of any amount owing under the Loan
Agreement or this Revolving Credit Note in respect of the Revolving Advances
made by Lender to the Canadian Borrowers.

 

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Loan Agreement, the terms of which
are hereby incorporated herein by reference.  Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times, and pursuant to such calculations, as are specified in the Loan
Agreement.  In no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum amount of interest which, in accordance with
the laws of the State of New York, may be contracted for, or received on this
Note.  The

 

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

 

indebtedness evidenced hereby and all other amounts payable hereunder shall be
the joint and several obligations of the Canadian Borrowers.

 

If any payment on this Revolving Credit Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

 

Upon and after the occurrence of any Event of Default, this Revolving Credit
Note may, in accordance with the Loan Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.

 

Time is of the essence of this Revolving Credit Note.  Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by the Canadian
Borrowers.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

THIS REVOLVING CREDIT NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TERMS OF THE LOAN AGREEMENT.  TRANSFERS OF THIS REVOLVING CREDIT NOTE MUST BE
RECORDED IN THE REGISTER MAINTAINED BY AGENT PURSUANT TO THE TERMS OF THE LOAN
AGREEMENT.

 

THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.

 

 

 

A.M. CASTLE & CO. (CANADA) INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

TUBE SUPPLY CANADA ULC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

Exhibit 9.7

to

Loan and Security Agreement

 

Form of Compliance Certificate

 

, 20  

 

To:

Wells Fargo Bank, National Association, as Agent

 

150 South Wacker Drive

 

Chicago, Illinois 60606

 

Attention:  Portfolio Manager - A.M. Castle

 

Ladies and Gentlemen:

 

I hereby certify to you pursuant to Section [9.7][9.8] of the Loan Agreement (as
defined below) as follows:

 

1.             I am the duly elected Chief Financial Officer of A.M. CASTLE &
CO., a corporation organized under the laws of the state of Maryland
(“Administrative Borrower”).  Capitalized terms used herein without definition
shall have the meanings given to such terms in the Loan and Security Agreement,
dated as of December 15, 2011, by and among Administrative Borrower, TRANSTAR
METALS CORP., a corporation organized under the laws of the state of Delaware
(“Transtar Metals”), ADVANCED FABRICATING TECHNOLOGY, LLC, a limited liability
company organized under the laws of the state of Delaware (“AFT”), OLIVER STEEL
PLATE CO., a corporation organized under the laws of the state of Delaware
(“Oliver Steel”), PARAMONT MACHINE COMPANY, LLC, a limited liability company
organized under the laws of the state of Delaware (“Paramont”), TOTAL
PLASTICS, INC., a corporation organized under the laws of the state of Michigan
(“TPI”), TUBE SUPPLY, LLC, a limited liability company organized under the laws
of the state of Texas (“Tube Texas”; and together with Parent, Transtar Metals,
AFT, Oliver Steel, Paramont, TPI and any other Person that is organized or
formed under the laws of any of the United States that at any time becomes a US
Borrower, each a “US Borrower” and collectively, the “US Borrowers”), A.M.
CASTLE & CO. (CANADA) INC., a corporation organized under the laws of the
province of Ontario, Canada (“Castle Canada”), TUBE SUPPLY CANADA ULC, an
Alberta unlimited company organized under the laws of the province of Alberta,
Canada (“Tube Canada”; and together with Castle Canada and any other Person that
is organized or formed under the laws of Canada or any province thereof that at
any time becomes a Canadian Borrower, each a “Canadian Borrower” and
collectively, the “Canadian Borrowers”; and together with US Borrowers, each a
“Borrower” and collectively, the “Borrowers”), certain affiliates of Borrowers
party thereto as Guarantors, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, in its capacity as agent (in such capacity, “Agent”)
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the Secured Parties (as defined in the Loan Agreement), and the financial
institutions from time to time party to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”) (as such Loan and
Security Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan

 

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

 

Agreement”).  Capitalized terms used and not defined herein shall have the
meaning ascribed to them in the Loan Agreement.

 

2.             On behalf of Loan Parties, I have reviewed the terms of the Loan
Agreement, and have made, or have caused to be made under my supervision, a
review in reasonable detail of the transactions and the financial condition of
Loan Parties and their Subsidiaries during the immediately preceding fiscal
[quarter][year].

 

3.             The review described in Section 2 above did not disclose the
existence during or at the end of such fiscal [quarter][year], and I have no
knowledge of the existence and continuance on the date hereof, of any condition
or event which constitutes a Default or an Event of Default, except as set forth
on Schedule I attached hereto.  Described on Schedule I attached hereto are the
exceptions, if any, to this Section 3 listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
any Loan Party has taken, is taking, or proposes to take with respect to such
condition or event.

 

4.             On behalf of Loan Parties, I further certify that, based on the
review described in Section 2 above, no Loan Party nor any of its Subsidiaries
has at any time during or at the end of such fiscal [quarter][year], except as
specifically described on Schedule II attached hereto or as permitted by the
Loan Agreement, done any of the following:

 

(a)           Changed its respective corporate name, or transacted business
under any trade name, style, or fictitious name, other than those previously
described to you and set forth in the Loan Agreement or the Other Documents.

 

(b)           Changed the location of its chief executive office, changed its
jurisdiction of incorporation, changed its type of organization or changed the
location of or disposed of any of its properties or assets or established any
new asset locations except as permitted under the Loan Agreement.

 

(c)           Permitted or suffered to exist any security interest in or liens
on any of its properties, whether real or personal, other than a Permitted
Encumbrance.

 

5.             Attached hereto as Schedule III are the calculations used in
determining, as of the end of such period whether Loan Parties are in compliance
with the covenants set forth in Sections 6.8 (if applicable) and 7.6 of the Loan
Agreement for such period.

 

6.             Attached hereto as Schedule IV are the calculations used in
determining, as of the end of such period, the Quarterly Average Undrawn
Availability for such period.

 

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

 

The foregoing certifications are made and delivered this          day of
                      , 20    .

 

 

 

Very truly yours,

 

 

 

A.M. CASTLE & CO.,

 

as Administrative Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

Schedule C-1

to

Loan and Security Agreement

 

Commitments

 

Lenders

 

US Commitment

 

Canadian
Commitment (*)

 

Swingline
Commitment

 

Wells Fargo Bank, National Association

 

$

30,000,000

 

$

0

 

$

10,000,000

 

Wells Fargo Finance Corporation Canada

 

$

0

 

$

11,000,000

 

$

0

 

Bank of America, N.A.

 

$

25,000,000

 

$

0

 

$

0

 

Bank Of America, N.A. (acting through its Canada Branch)

 

$

0

 

$

5,000,000

 

 

 

Regions Bank

 

$

25,000,000

 

$

0

 

$

0

 

US Bank, National Association

 

$

20,000,000

 

$

0

 

$

0

 

U.S. Bank National Association, Canada Branch

 

$

0

 

$

4,000,000

 

 

 

Total:

 

$

100,000,000

 

$

20,000,000

 

$

10,000,000

 

 

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

(*)  The Canadian Commitment is a sublimit of the US Commitment.

 

1

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

 

Schedule R-1

to

Loan and Security Agreement

 

Real Property

 

Owned Real Property

 

Owner

 

Property Address

A. M. Castle & Co.

 

3900 Pinson Valley Parkway, Birmingham, AL 35217

Keystone Tube Company, LLC

 

3400 N. Wolf Road, Franklin Park, IL 60131

A. M. Castle & Co.

 

70 Quinsigamond Avenue, Worcester, MA 01610

A. M. Castle & Co.

 

3100 82nd Lane N.E., Blaine, MN 55449

A. M. Castle & Co.

 

11125 Metromont Parkway, Charlotte, NC 28269

A. M. Castle & Co.

 

26800 Miles Road, Bedford Heights, OH 44146

A. M. Castle & Co.

 

299 Canal Road, Fairless, PA 19030

A. M. Castle & Co.

 

2602 Pinewood Drive, Grand Prairie, TX 75051

A. M. Castle & Co.

 

6501 Bingle Road, Houston, TX 77092

Total Plastics, Inc.

 

1652 Gezon Parkway, Grand Rapids, MI 49509

A. M. Castle & Co. (Canada) Inc.

 

520 Mercy Street, Selkirk Manitoba, R1A 0A2

 

Leased Real Property

 

Lessee

 

Address

A. M. Castle & Co.

 

2302 E. Magnolia Street, Suite A, Phoenix, AZ 85034

A. M. Castle & Co.

 

14001 Orange Avenue, Paramount, CA 90723

A. M. Castle & Co.

 

1625 Tillie Lewis Drive, Stockton, CA 95206

A. M. Castle & Co.

 

1420 Kensington Road, Suite 220, Oak Brook, IL 60523

A. M. Castle & Co.

 

4527 Columbia Ave., Hammond, IN 46327

A. M. Castle & Co.

 

3050 S. Hydraulic, Wichita, KS 67216

A. M. Castle & Co.

 

128 Thru-Way Parkway, Broussard, LA 70508

A. M. Castle & Co.

 

136 Dwight Rd., Longmeadow, MA

A. M. Castle & Co.

 

6100 Stilwell Street, Kansas City, MO 64120

A. M. Castle & Co.

 

4412 Dixie Highway, Fairfield, OH 45014

A. M. Castle & Co.

 

1134-A N. Garnett Road, Tulsa, OK 74116

A. M. Castle & Co.

 

19500 Texas State Hwy 249 Ste 260, Houston, TX 77092

A. M. Castle & Co.

 

20826 68th Avenue South, Kent, WA 98032

A. M. Castle & Co.

 

5323 N. 118th Court, Milwaukee, WI 53225

A. M. Castle & Co.

 

2150 Argentia Road, Mississauga, Ontario, L5N 2K7

A. M. Castle & Co. (Canada) Inc.

 

3635 Thatcher Avenue, Saskatoon, SK

A. M. Castle & Co. (Canada) Inc.

 

835 Selkirk Avenue, Pointe Claire, Quebec

A. M. Castle & Co. (Canada) Inc.

 

5515 - 42 Street, Edmonton, Alberta T6B 3P2

Advanced Fabricating Technology, LLC

 

687 Byrne Industrial Drive, Rockford, MI 49341

Oliver Steel Plate Co.

 

7851 Bavaria Road, Twinsburg, OH 44087

Paramont Machine Company, LLC

 

963 Commercial Ave., SE, New Philadelphia, OH 44663

Total Plastics, Inc.

 

203-F Kelsey Lane, Tampa, FL 33619

Total Plastics, Inc.

 

505 Busse Road, Elk Grove Village, IL 60007

 

2

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

 

Total Plastics, Inc.

 

7508 Honeywell Drive Fort Wayne, IN 46825

Total Plastics, Inc.

 

3316 Pogosa Court., Indianapolis, IN 46226

Total Plastics, Inc.

 

5242 Pulaski Highway, Baltimore, MD 21205

Total Plastics, Inc.

 

2810 North Burdick St., Kalamazoo, MI 49004

Total Plastics, Inc.

 

1661 Northfield Dr., Rochester Hills, MI 48309

Total Plastics, Inc.

 

1313 Old Kings Hwy, Maple Shade, NJ 08691

Total Plastics, Inc.

 

590 Franklin Avenue, Mt. Vernon, NY 10550

Total Plastics, Inc.

 

17851 Englewood Dr., Middleburg Heights, OH 44130

Total Plastics, Inc.

 

7561 B Derry St, Harrisburg, PA 17111

Total Plastics, Inc.

 

1800 Columbus Avenue, Pittsburgh, PA 15233

Total Plastics, Inc.

 

1518 Pontiac Avenue, Cranston, RI

Total Plastics, Inc.

 

3311 N. Park Blvd 10, Suite A, Alcoa, TN 37701

Transtar Metals Corp.

 

14400 South Figueroa St., Gardena, CA 92048

Transtar Metals Corp.

 

12 Cascade Blvd., Orange, CT 06477

Transtar Metals Corp.

 

15 Executive Boulevard, Orange, CT 06477

Transtar Metals Corp.

 

3745 Cherokee Street, Suite 202, Kennesaw, GA 30144

Transtar Metals Corp.

 

2950 All Hallows, Wichita, KS

Transtar Metals Corp.

 

4611 East 31st Street South, Wichita, KS

Transtar Metals Corp.

 

2100 Design Road Suite 120, Arlington, TX

Tube Supply, LLC

 

5169 Ashley Court, Houston, Texas 77041

Tube Supply, LLC

 

4669 Brittmoore Road, Houston, Texas 77041

Tube Supply, LLC

 

11441 Brittmoore Park Dr., Houston, Texas 77041

Tube Supply, LLC

 

5500 Crawford, Houston, Texas 77041

Tube Supply Canada ULC

 

2503-84 Avenue Sherwood Park, Edmonton, Alberta, Canada T6P 1K1

 

3

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

 

Schedule L-1

to

Loan and Security Agreement

 

Existing Letters of Credit

 

 

Loan Party

 

Beneficiary

 

L/C Number

 

L/C
Amount

 

Expiration
Date

 

A. M. Castle & Co.

 

Div Oak Brook Property

 

60056039

 

$

500,000

 

Jan. 7, 2012

 

A. M. Castle & Co.

 

Merrill Lynch Commodities

 

68059700

 

$

3,000,000

 

Dec 2, 2012

 

A. M. Castle & Co.

 

Royal Bank of Canada

 

68045784

 

$

859,659

 

March 1, 2012

 

A. M. Castle & Co.

 

Royal Bank of Scotland

 

68022461

 

$

650,000

 

May 31, 2012

 

A. M. Castle & Co.

 

Sentry Insurance

 

7273987

 

$

900,000

 

July 1, 2012

 

 

4

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

 

Schedule 2.3

to

Loan and Security Agreement

 

Payment Account; Disbursement of Advance Proceeds

 

[Provided to Agent pursuant to separate side letter.]

 

5

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

 

Schedule 4.4

to

Loan and Security Agreement

 

Equipment and Inventory Locations

 

Address

3900 Pinson Valley Parkway, Birmingham, AL 35217

3400 N. Wolf Road, Franklin Park, IL 60131

70 Quinsigamond Avenue, Worcester, MA 01610

3100 82nd Lane N.E., Blaine, MN 55449

11125 Metromont Parkway, Charlotte, NC 28269

26800 Miles Road, Bedford Heights, OH 44146

299 Canal Road, Fairless, PA 19030

2602 Pinewood Drive, Grand Prairie, TX 75051

6501 Bingle Road, Houston, TX 77092

1652 Gezon Parkway, Grand Rapids, MI 49509

2302 E. Magnolia Street, Suite A, Phoenix, AZ 85034

14001 Orange Avenue, Paramount, CA 90723

1625 Tillie Lewis Drive, Stockton, CA 95206

1420 Kensington Road, Suite 220, Oak Brook, IL 60523

4527 Columbia Ave., Hammond, IN 46327

3050 S. Hydraulic, Wichita, KS 67216

128 Thru-Way Parkway, Broussard, LA 70508

136 Dwight Rd., Longmeadow, MA

6100 Stilwell Street, Kansas City, MO 64120

4412 Dixie Highway, Fairfield, OH 45014

1134-A N. Garnett Road, Tulsa, OK 74116

19500 Texas State Hwy 249 Ste 260, Houston, TX 77092

20826 68th Avenue South, Kent, WA 98032

5323 N. 118th Court, Milwaukee, WI 53225

2150 Argentia Road, Mississauga, Ontario, L5N 2K7

3635 Thatcher Avenue, Saskatoon, SK

835 Selkirk Avenue, Pointe Claire, Quebec

5515 - 42 Street, Edmonton, Alberta T6B 3P2

687 Byrne Industrial Drive, Rockford, MI 49341

7851 Bavaria Road, Twinsburg, OH 44087

963 Commercial Ave., SE, New Philadelphia, OH 44663

203-F Kelsey Lane, Tampa, FL 33619

505 Busse Road, Elk Grove Village, IL 60007

7508 Honeywell Drive Fort Wayne, IN 46825

3316 Pogosa Court., Indianapolis, IN 46226

5242 Pulaski Highway, Baltimore, MD 21205

2810 North Burdick St., Kalamazoo, MI 49004

1661 Northfield Dr., Rochester Hills, MI 48309

1313 Old Kings Hwy, Maple Shade, NJ 08691

590 Franklin Avenue, Mt. Vernon, NY 10550

 

6

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

 

Address

17851 Englewood Dr., Middleburg Heights, OH 44130

7561 B Derry St, Harrisburg, PA 17111

1800 Columbus Avenue, Pittsburgh, PA 15233

1518 Pontiac Avenue, Cranston, RI

3311 N. Park Blvd 10, Suite A, Alcoa, TN 37701

14400 South Figueroa St., Gardena, CA 92048

12 Cascade Blvd., Orange, CT 06477

15 Executive Boulevard, Orange, CT 06477

3745 Cherokee Street, Suite 202, Kennesaw, GA 30144

2950 All Hallows, Wichita, KS

4611 East 31st Street South, Wichita, KS

2100 Design Road Suite 120, Arlington, TX

5169 Ashley Court, Houston, Texas 77041

4669 Brittmoore Road, Houston, Texas 77041

11441 Brittmoore Park Dr., Houston, Texas 77041

5500 Crawford, Houston, Texas 77041

2503-84 Avenue Sherwood Park, Edmonton, Alberta, Canada T6P 1K1

8411 Irvington Blvd, Houston, 77022

1018 Rankin Road, Houston, TX

2186 Grand Caillou Road, Houma, LA 70363

301 Redmond Rd., Houma, LA 70363

 

7

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

 

Schedule 4.14(c)

to

Loan and Security Agreement

 

Location of Chief Executive Offices

 

Loan Party

 

Chief Executive Office

 

Location of Books and Records If
Maintained At Location Other Than
Chief Executive Office

A. M. Castle & Co.

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

 

n/a

A. M. Castle & Co. (Canada) Inc.

 

2150 Argentia Road

Mississauga, Ontario L5N 2K7

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

Advanced Fabricating Technology, LLC

 

687 Byrne Industrial Drive

Rockford, MI 49341

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

Keystone Tube Company, LLC

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

 

n/a

Oliver Steel Plate Co.

 

7851 Bavaria Road

Twinsburg, OH 44087

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

Paramont Machine Company, LLC

 

963 Commercial Ave., SE

New Philadelphia, OH 44663

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

Total Plastics, Inc.

 

2810 N. Burdick St.

Kalamazoo, MI 49004

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

Transtar Inventory Corp.

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

 

n/a

Transtar Metals Corp.

 

1420 Kensington Road–Suite 220

Oak Brook, IL 60523

 

n/a

Tube Supply, LLC

 

5169 Ashley Court

Houston, Texas 77041

 

n/a

Tube Supply Canada ULC

 

2503-84 Avenue Sherwood Park, Edmonton, Alberta, Canada T6P 1K1

 

5169 Ashley Court

Houston, Texas 77041

 

8

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

 

Schedule 5.2(a)

to

Loan and Security Agreement

 

Jurisdictions of Qualification and Good Standing

 

Name

 

Jurisdiction of
Organization/
Formation

 

Organizational
Number

 

Jurisdiction(s) of Qualification

A. M. Castle & Co.

 

Maryland

 

D06269054

 

Alabama, Arizona, California, Connecticut, Georgia, Illinois, Indiana, Iowa,
Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New
York, North Carolina, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia,
Washington, Wisconsin

A. M. Castle & Co. (Canada) Inc.

 

Ontario

 

1059457

 

British Columbia, Alberta, Manitoba

Advanced Fabricating Technology, LLC

 

Delaware

 

3204135

 

Michigan

Keystone Tube Company, LLC

 

Delaware

 

3282878

 

Illinois

Oliver Steel Plate Co.

 

Delaware

 

2909138

 

Ohio

Paramont Machine Company, LLC

 

Delaware

 

2997764

 

Ohio

Total Plastics, Inc.

 

Michigan

 

104600

 

Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Michigan, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee

Transtar Inventory Corp.

 

Delaware

 

3602970

 

California

Transtar Metals Corp.

 

Delaware

 

3600075

 

Arkansas, California, Connecticut, Delaware, Georgia, Kansas, Louisiana, New
York, Texas, Virginia, Washington

Tube Supply, LLC

 

Texas

 

801519984

 

None

Tube Supply Canada ULC

 

Alberta

 

2014350983

 

None

 

9

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

 

Schedule 5.2(b)

to

Loan and Security Agreement

 

Subsidiaries

 

Parent

 

Subsidiary

A. M. Castle Metals UK, Limited

 

Aerospace Metals Europe Limited

A. M. Castle Metals UK, Limited

 

Aerospace Metals Europe, S.A.

A. M. Castle Metals UK, Limited

 

AMESA Limited

A. M. Castle Metals UK, Limited

 

Castle Metals UK Limited

A. M. Castle Metals UK, Limited

 

K.K.S. (Stainless Steel) Co. Limited

A. M. Castle Metals UK, Limited

 

Metals Group Limited

A. M. Castle Metals UK, Limited

 

Metals UK Group Limited

A. M. Castle & Co.

 

A. M. Castle Metals UK, Limited

A. M. Castle & Co.

 

A. M. Castle & Co. (Canada) Inc.

A. M. Castle & Co.

 

A. M. Castle & Co. (Singapore) Pte. Ltd.

A. M. Castle & Co.

 

A. M. Castle Metal Materials (Shanghai) Co., Ltd.

A. M. Castle & Co.

 

Castle Metals de Mexico, S.A. de C.V.

A. M. Castle & Co.

 

Datamet, Inc.

A. M. Castle & Co.

 

Depot Metal, LLC

A. M. Castle & Co.

 

HY-Alloy Steels Company

A. M. Castle & Co.

 

Keystone Service, Inc.

A. M. Castle & Co.

 

Keystone Tube Company, LLC

A. M. Castle & Co.

 

KSI, LLC

A. M. Castle & Co.

 

Oliver Steel Plate Co.

A. M. Castle & Co.

 

Pacific Metals Company

A. M. Castle & Co.

 

Total Plastics, Inc.

A. M. Castle & Co.

 

Transtar Metals Corp.

A. M. Castle & Co.

 

Tube Supply, LLC

A. M. Castle & Co. (Canada) Inc.

 

Tube Supply Canada ULC

Castle Metals UK Limited

 

Aerospace Metals Europe, S.A.

Castle Metals UK Limited

 

Metals Group Inc.

Depot Metal, LLC

 

Kreher Steel Company, LLC

Kreher Steel Company, LLC

 

Kreher Wire Processing, Inc.

Kreher Steel Company, LLC

 

Special Metals, Inc.

Metals UK Group Limited

 

E. Harding & Sons Limited

Metals UK Group Limited

 

LOKS Plasma Services Limited

Total Plastics, Inc.

 

Advanced Fabricating Technology, LLC

Total Plastics, Inc.

 

Paramont Machine Company, LLC

Transtar Metals Corp.

 

Transtar Inventory Corp.

Transtar Metals Corp.

 

Transtar Marine Corp.

Transtar Metals Corp.

 

Transtar Metals Limited

Transtar Metals Limited

 

Transtar Metals (France)

 

10

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

 

Schedule 5.4

to

Loan and Security Agreement

 

Federal Tax Identification Number

 

Loan Party

 

FEIN

A. M. Castle & Co.

 

360879160

A. M. Castle & Co. (Canada) Inc.

 

n/a

Advanced Fabricating Technology, LLC

 

38-3526125

Keystone Tube Company, LLC

 

36-4388746

Oliver Steel Plate Co.

 

38-4238992

Paramont Machine Company, LLC

 

34-1890456

Total Plastics, Inc.

 

38-2203149

Transtar Inventory Corp.

 

43-2009648

Transtar Metals Corp.

 

82-0575906

Tube Supply, LLC

 

76-0184113

Tube Supply Canada ULC

 

n/a

 

11

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

 

Schedule 5.6

to

Loan and Security Agreement

 

Corporate Names / Prior Names

 

Former Names

 

Loan Party

 

Former Name

 

Date of Change

Tube Supply Canada ULC

 

Tube Supply Canada Limited

 

Nov 6, 2008

Tube Supply, LLC

 

Tube Supply, Inc.

 

Closing Date

 

Acquisitions in Past 5 Years

 

1.                                       Merger of Transtar Metals
Holdings, Inc. into Transtar Metals Corp., with Transtar Metals Corp. as the
surviving entity, dated as of July 24, 2007.

 

2.                                       Merger of Transtar Intermediate
Holdings #2, Inc. into Transtar Metals Corp., with Transtar Metals Corp. as the
surviving entity, dated as of July 24, 2007.

 

3.                                       Merger of Castle SPFD, LLC into A. M.
Castle & Co., as the surviving entity, dated as of December 3, 2007.

 

4.                                       Merger of Castle IND MGR, Inc. into A.
M. Castle & Co., as the surviving entity, dated as of December 3, 2007.

 

5.                                       Acquisition of Tube Supply, Inc. and
Tube Supply Canada ULC by A. M. Castle & Co. as of the Closing Date.

 

12

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

 

Schedule 5.8(b)

to

Loan and Security Agreement

 

Litigation / Commercial Tort Claims / Money Borrowed

 

1.               Note issued by Transtar Metals Limited in favor of A. M.
Castle & Co in the amount of $352,387.00.

 

2.               Note issued by A. M. Castle & Co. (Canada) Inc. in favor of A.
M. Castle & Co in the amount of $26,500,000.

 

3.               Note issued by A. M. Castle Metals UK, Limited in favor of A.
M. Castle & Co in the amount of $26,370,581.71

 

4.               Notes issued by Castle Metals de Mexico, S.A. de C.V. for the
benefit of Bank of America, N.A. and its affiliates including Bank of America
Mexico, S.A. Institución de Banca Múltiple, Grupo Financiero Bank of America,
with an outstanding balance of $500,000, guaranteed by A. M. Castle & Co.

 

13

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

 

Schedule 5.8(d)

to

Loan and Security Agreement

 

Plans

 

None.

 

14

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

 

Schedule 5.8(e)

to

Loan and Security Agreement

 

Canadian Pension and Employee Plans

 

None.

 

15

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

 

Schedule 5.9

to

Loan and Security Agreement

 

Intellectual Property, Source Code Escrow Agreements

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

Castle Metals Quik Guide Alloy Steel Bars

 

Copyright

 

A 816722

 

1/12/1977

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals-Stock Catalogue

 

Copyright

 

A 875677

 

7/18/1977

 

N/A

 

USA

A. M. Castle & Co.

 

Starweld Tubing

 

Copyright

 

A 911815

 

11/14/1977

 

N/A

 

USA

A. M. Castle & Co.

 

Outside Sales Representative Training Program - Steel Plate Products

 

Copyright

 

TX 0-625-908

 

6/18/1980

 

N/A

 

USA

A. M. Castle & Co.

 

Outside Sales Representative Training Program - Steel Plate Products Territory
Plan Book

 

Copyright

 

TX 0-625-909

 

6/18/1980

 

N/A

 

USA

A. M. Castle & Co.

 

Inside Sales Representative Training Program - Steel Plate Products Workbook

 

Copyright

 

TX 0-625-910

 

6/18/1980

 

N/A

 

USA

A. M. Castle & Co.

 

Inside Sales Representative Training Program - Steel Plate Products

 

Copyright

 

TX 0-625-911

 

6/18/1980

 

N/A

 

USA

A. M. Castle & Co.

 

Outside Sales Representative Training Program - Steel Plate Products
Administrator’s Manual

 

Copyright

 

TX 0-625-912

 

6/18/1980

 

N/A

 

USA

A. M. Castle & Co.

 

Inside Sales Representatives Training Program - Steel Plate Products
Administrators’ Manual

 

Copyright

 

TX 0-662-011

 

6/18/1980

 

N/A

 

USA

A. M. Castle & Co.

 

Outside & Inside Sales Representative Training Program - Stainless Steel Bar
Products Administrator’s Manual

 

Copyright

 

TX 0-987-081

 

10/7/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Inside Sales Representative Training Program - Stainless Steel Bar Products
Workbook

 

Copyright

 

TX 0-987-082

 

10/7/1982

 

N/A

 

USA

 

16

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

Inside sales representative training program, stainless steel bar products:
prework assignment

 

Copyright

 

TX 0-987-083

 

10/7/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Outside Sales Representative Training Program - Stainless Steel Bar Update
Prework Assignment

 

Copyright

 

TX 1-001-811

 

10/7/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Outside Sales Representative Training Program - Stainless Steel Bar Updates
Territory Plan Book

 

Copyright

 

TX 1-001-812

 

10/7/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Alloy Catalogue

 

Copyright

 

TX 1-075-354

 

6/11/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Inside Sales Representative Training Program - Nickel Alloy
Products Prework Assignment

 

Copyright

 

TX 1-075-355

 

12/10/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Outside Sales Representative Training Program - Nickel Alloy
Products Territory Plan Book

 

Copyright

 

TX 1-075-356

 

12/10/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Outside Sales Representative Training Program - Nickel Alloy
Products Prework Assignment

 

Copyright

 

TX 1-075-357

 

12/10/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Inside Sales Representative Training Program - Nickel Alloy
Products Workbook

 

Copyright

 

TX 1-075-358

 

12/10/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Outside & Inside Sales Representative Training Program - Nickel
Alloy Products Administrator’s Manual

 

Copyright

 

TX 1-075-359

 

12/10/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Hy-Alloys Steels Company Catalogue

 

Copyright

 

TX 1-109-429

 

10/4/1982

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Tube-Pipe Catalog

 

Copyright

 

TX 2-116-469

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Alloy Catalog

 

Copyright

 

TX 2-118-500

 

7/22/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle for Tubing. Especially Dom.

 

Copyright

 

TX 2-118-959

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle For Stainless Steel Bars

 

Copyright

 

TX 2-118-960

 

7/20/9187

 

N/A

 

USA

 

17

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

Call Castle For Metals, Especially to Better Your Bottom Line

 

Copyright

 

TX 2-118-961

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Doesn’t Make Steel Plate, But We’re The One to Call to Make If You
Make It With Steel Plate.

 

Copyright

 

TX 2-118-962

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle for Alloy Bars

 

Copyright

 

TX 2-120-564

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Nickel Alloys

 

Copyright

 

TX 2-120-585

 

7/23/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Titanium

 

Copyright

 

TX 2-121-356

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Copper Brass & Bronze

 

Copyright

 

TX 2-121-357

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Stainless Steel Bars

 

Copyright

 

TX 2-121-358

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle For Metals. Especially to Better Your Bottom Line

 

Copyright

 

TX 2-121-359

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle for Tubing. Especially D O M.

 

Copyright

 

TX 2-121-360

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Hy-Alloy Steels Co. Catalog

 

Copyright

 

TX 2-121-364

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Stainless Steel Bars

 

Copyright

 

TX 2-124-131

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Cold Finished Carbon Steel Bars

 

Copyright

 

TX 2-124-132

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Alloy Steel Bars

 

Copyright

 

TX 2-124-133

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Alloy For Aerospace

 

Copyright

 

TX 2-124-134

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Carbon & Alloy Rough Turned Steel Bars

 

Copyright

 

TX 2-124-135

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Metaline Electronic Order Entry

 

Copyright

 

TX 2-124-162

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Nickel Alloys

 

Copyright

 

TX 2-126-049

 

7/23/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Alloy Catalog

 

Copyright

 

TX 2-127-934

 

8/5/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle for Alloy Bars

 

Copyright

 

TX 2-139-138

 

7/20/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Catalog

 

Copyright

 

TX 2-150-475

 

9/3/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Policy Learning Guide

 

Copyright

 

TX 2-157-596

 

9/24/1987

 

N/A

 

USA

 

18

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

Castle Metals Quik Guide Aluminum Cold Finished Rod & Bar

 

Copyright

 

TX 2-181-733

 

3/24/1986

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle For Stainless Steel Bars

 

Copyright

 

TX 2-181-739

 

12/24/1984

 

N/A

 

USA

A. M. Castle & Co.

 

Call Castle For High Nickel Alloys

 

Copyright

 

TX 2-187-532

 

12/15/1984

 

N/A

 

USA

A. M. Castle & Co.

 

What’s New?...

 

Copyright

 

TX 2-207-916

 

10/30/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Hydra Brite Hydraulic Line Tubing

 

Copyright

 

TX 2-278-736

 

3/21/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Giants

 

Copyright

 

TX 2-294-263

 

12/30/1987

 

N/A

 

USA

A. M. Castle & Co.

 

Quik Guide Carbon & Alloy Tubing

 

Copyright

 

TX 2-294-297

 

2/19/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Cut-Off Lathe

 

Copyright

 

TX 2-328-646

 

3/1/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Plate Facility to Serve the Great Southwest

 

Copyright

 

TX 2-328-982

 

7/29/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Alloy Steel Bars

 

Copyright

 

TX 2-402-998

 

9/14/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Your Alloy Advantage Castle Metals

 

Copyright

 

TX 2-413-785

 

9/6/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Alloy A-286 Alloys for Aerospace

 

Copyright

 

TX 2-431-668

 

10/6/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Announcing A New Castle Metals Location

 

Copyright

 

TX 2-448-591

 

11/2/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Aluminum Plate

 

Copyright

 

TX 2-467-693

 

12/2/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Aluminum Plate & Extruded Rod & Bar

 

Copyright

 

TX 2-483-544

 

12/12/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Garbon & Alloy Plate

 

Copyright

 

TX 2-506-545

 

2/13/1984

 

N/A

 

USA

A. M. Castle & Co.

 

Your Alloy Advantage - Machinability

 

Copyright

 

TX 2-507-331

 

2/2/1989

 

N/A

 

USA

A. M. Castle & Co.

 

We’re First Again Supercut 150

 

Copyright

 

TX 2-512-452

 

8/25/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Supercut 150 Specifications

 

Copyright

 

TX 2-512-453

 

9/14/1988

 

N/A

 

USA

A. M. Castle & Co.

 

Turn to Castle for Great Savings

 

Copyright

 

TX 2-524-505

 

3/9/1989

 

NA

 

USA

A. M. Castle & Co.

 

Alloys For Aerospace

 

Copyright

 

TX 2-528-481

 

3/8/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Great In Stainless Plate

 

Copyright

 

TX 2-555-608

 

4/11/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Copper Brass & Bronze

 

Copyright

 

TX 2-555-858

 

4/11/1989

 

N/A

 

USA

A. M. Castle & Co.

 

New Dimensions In Flats!

 

Copyright

 

TX 2-574-503

 

1/18/1990

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Giants - Some Very Big Reasons Why Castle Metals Is Great In Plate

 

Copyright

 

TX 2-576-414

 

4/26/1989

 

N/A

 

USA

 

19

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

Castle Metals Quik Guide - Alloy Steel Bars

 

Copyright

 

TX 2-577-729

 

5/10/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide - Titanium

 

Copyright

 

TX 2-577-730

 

5/15/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Alloy Steel

 

Copyright

 

TX 2-612-114

 

7/10/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Quik Guide Processing

 

Copyright

 

TX 2-616-173

 

7/12/1989

 

N/A

 

USA

A. M. Castle & Co.

 

EDI - The Wave Of The Future

 

Copyright

 

TX 2-633-254

 

8/9/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Quik Guide Products

 

Copyright

 

TX 2-747-823

 

12/27/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Cal-Al

 

Copyright

 

TX 2-747-831

 

1/11/1990

 

N/A

 

USA

A. M. Castle & Co.

 

One Hundred Years Ago, We Supplied Metals To People Breaking New Frontiers

 

Copyright

 

TX 2-747-909

 

11/8/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Quik Guide - Stainless Steel Bars

 

Copyright

 

TX 2-747-910

 

12/27/1989

 

N/A

 

USA

A. M. Castle & Co.

 

Only From The Alloy Professionals

 

Copyright

 

TX 2-748-240

 

11/27/1989

 

N/A

 

USA

A. M. Castle & Co.

 

New Dimensions In Flats!

 

Copyright

 

TX 2-754-503

 

1/30/1990

 

N/A

 

USA

A. M. Castle & Co.

 

Alloys For Aerospace

 

Copyright

 

TX 2-789-914

 

2/13/1990

 

N/A

 

USA

A. M. Castle & Co.

 

Telcut

 

Copyright

 

TX 2-792-501

 

3/13/1990

 

N/A

 

USA

A. M. Castle & Co.

 

The Electronic Castle Metals

 

Copyright

 

TX 2-805-862

 

2/13/1990

 

N/A

 

USA

A. M. Castle & Co.

 

Quik Guide Cold Finished Carbon Steel Bars

 

Copyright

 

TX 2-838-507

 

8/2/1990

 

N/A

 

USA

A. M. Castle & Co.

 

Castle Metals Financial Management Training Program Unit 1 Financial Management
Concepts *Revised

 

Copyright

 

TX 3-408-701

 

2/1/1983

 

N/A

 

USA

HY-Alloy Steels Co.

 

hA Block Design B/W

 

Trademark

 

1,128,438

 

12/25/1979

 

42

 

USA

A. M. Castle & Co.

 

The One Call To Make If You Make It With Metal

 

Servicemark

 

1,218,678

 

11/30/1982

 

42

 

USA

A. M. Castle & Co.

 

(ROOK) Castle Metals The One Call to Make if you Make it with Metal.

 

Servicemark

 

1,218,679

 

11/30/1982

 

42

 

USA

A. M. Castle & Co.

 

HY-ALLOY (BLOCK hA) STEELS

 

Servicemark

 

1,272,222

 

3/27/1984

 

42

 

USA

A. M. Castle & Co.

 

ROOK DESIGN IN CIRCLE

 

Servicemark

 

1,297,178

 

9/18/1984

 

42

 

USA

A. M. Castle & Co.

 

CASTLE METALS

 

Servicemark

 

1,336,048

 

5/14/1985

 

42

 

USA

A. M. Castle & Co.

 

hA [BLOCK]

 

Servicemark

 

1,336,058

 

5/14/1985

 

42

 

USA

A. M. Castle & Co.

 

Metalink

 

Servicemark

 

1,494,616

 

6/28/1988

 

42

 

USA

A. M. Castle & Co.

 

Processed With Pride

 

Servicemark

 

1,868,639

 

12/20/1994

 

40

 

USA

A. M. Castle & Co.

 

HA Industries (BLOCK)

 

Servicemark

 

2,053,333

 

4/15/1997

 

40

 

USA

A. M. Castle & Co.

 

Quik Buy

 

Servicemark

 

2,093,452

 

9/2/1997

 

42

 

USA

 

20

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

Total Plastics, Inc.

 

Total Plastics, Inc.

 

Servicemark

 

2,112,867

 

11/11/1997

 

42

 

USA

Total Plastics, Inc.

 

TPI

 

Servicemark

 

2,120,410

 

12/9/1997

 

42

 

USA

A. M. Castle & Co.

 

Castle Advanced Materials SPG

 

Servicemark

 

2,130,876

 

1/20/1998

 

42

 

USA

A. M. Castle & Co.

 

StressFree

 

Servicemark

 

2,248,378

 

5/25/1999

 

35

 

USA

A. M. Castle & Co.

 

STRESSFree [BOLD]

 

Servicemark

 

2,248,387

 

5/25/1999

 

35

 

USA

A. M. Castle & Co.

 

WE MAKE A GOOD PLATE GREAT

 

Servicemark

 

2,672,116

 

1/7/2003

 

40

 

USA

A. M. Castle & Co.

 

STRESSFREE with Smoke Design

 

Servicemark

 

2,534,390

 

1/29/2002

 

35

 

USA

A. M. Castle & Co.

 

CMQ

 

Servicemark

 

2,314,848

 

2/1/2000

 

35

 

USA

A. M. Castle & Co.

 

The Bar Professionals

 

Servicemark

 

2,920,641

 

1/25/2005

 

35

 

USA

Total Plastics, Inc.

 

The Plastics Store

 

Servicemark

 

3,080,973

 

4/11/2006

 

35

 

USA

Total Plastics, Inc.

 

The Plastics store (red and black)

 

Servicemark

 

3,088,906

 

5/2/2006

 

34

 

USA

A. M. Castle & Co.

 

#1 Your First Choice in… Plate (BLOCK)

 

Servicemark

 

3,314,426

 

10/16/2007

 

35

 

USA

A. M. Castle & Co.

 

#1 Your First Choice in Plate

 

Servicemark

 

3,321,166

 

10/23/2007

 

35

 

USA

A. M. Castle & Co.

 

Oliver

 

Servicemark

 

3,477,543

 

7/29/2008

 

40

 

USA

A. M. Castle & Co.

 

Oliver Steel Plate

 

Servicemark

 

3,473,178

 

7/22/2008

 

40

 

USA

A. M. Castle & Co.

 

Castle Design

 

Servicemark

 

3,466,370

 

7/15/2008

 

40

 

USA

A. M. Castle & Co.

 

CASTLE METALS

 

Servicemark

 

3,466,369

 

7/15/2008

 

40

 

USA

A. M. Castle & Co.

 

CASTLE METALS PLUS

 

Servicemark

 

3,896,853

 

12/28/2010

 

42

 

USA

A. M. Castle & Co.

 

Supercut 150

 

Trademark

 

3,297,988

 

9/25/2007

 

6

 

USA

A. M. Castle & Co.

 

(ROOK) Castle Metals

 

Trademark

 

1,009,462

 

4/29/1975

 

6

 

USA

A. M. Castle & Co.

 

Procut

 

Trademark

 

2,482,989

 

8/28/2001

 

6

 

USA

A. M. Castle & Co.

 

Truhard

 

Trademark

 

1,841,174

 

6/21/1994

 

6

 

USA

A. M. Castle & Co.

 

Ultra-Tuff

 

Trademark

 

1,796,753

 

10/5/1993

 

6

 

USA

A. M. Castle & Co.

 

ROOK BLACK & WHITE CIRCLE IN SQUARE

 

Trademark

 

1,338,782

 

6/4/1985

 

6

 

USA

A. M. Castle & Co.

 

ROOK BLACK & WHITE - CIRCLE

 

Trademark

 

1,295,685

 

9/18/1984

 

6

 

USA

A. M. Castle & Co.

 

PURECUT

 

Trademark

 

1,681,773

 

4/7/1992

 

6

 

USA

A. M. Castle & Co.

 

Purecut 40

 

Trademark

 

1,658,801

 

10/1/1991

 

6

 

USA

A. M. Castle & Co.

 

Purecut 20

 

Trademark

 

1,655,225

 

9/3/1991

 

6

 

USA

A. M. Castle & Co.

 

TELCUT

 

Trademark

 

1,932,161

 

10/31/1995

 

6

 

USA

A. M. Castle & Co.

 

Telcut 40

 

Trademark

 

1,654,717

 

8/27/1991

 

6

 

USA

A. M. Castle & Co.

 

CPR-H

 

Trademark

 

2,373,599

 

8/1/2000

 

6

 

USA

A. M. Castle & Co.

 

CPR

 

Trademark

 

2,373,598

 

8/1/2000

 

6

 

USA

 

21

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

Formable 400F

 

Trademark

 

2,385,887

 

9/12/2000

 

6

 

USA

A. M. Castle & Co.

 

SUPERCUT 150 and DESIGN

 

Trademark

 

1,544,169

 

6/20/1989

 

6

 

USA

A. M. Castle & Co.

 

OLIVER STEEL PLATE & Design

 

Trademark

 

3,576,860

 

2/17/2009

 

6

 

USA

A. M. Castle & Co.

 

OLIVER

 

Trademark

 

3,573,220

 

2/10/2009

 

6

 

USA

A. M. Castle & Co.

 

Q and DESIGN

 

Servicemark

 

1,509,629

 

10/18/1988

 

6

 

USA

A. M. Castle & Co.

 

METAL EXPRESS

 

Servicemark

 

2,091,773

 

8/26/1997

 

42

 

USA

A. M. Castle & Co.

 

HA Design [SHADED H] (Canada)

 

Trademark

 

355,830

 

5/12/1989

 

46

 

Canada

A. M. Castle & Co.

 

HA DESIGN [SHADED A] (Canada)

 

Trademark

 

355,839

 

5/12/1989

 

46

 

Canada

A. M. Castle & Co.

 

ROOK IN CIRCLE (Canada)

 

Trademark

 

358,007

 

6/30/1989

 

46

 

Canada

A. M. Castle & Co.

 

Metaline (Canada)

 

Trademark

 

357,679

 

6/30/1989

 

46

 

Canada

A. M. Castle & Co.

 

Q & ROOK Design (Canada)

 

Trademark

 

360,429

 

9/15/1989

 

46

 

Canada

A. M. Castle & Co.

 

HY-ALLOY [HA DESIGN] STEELS (Canada)

 

Trademark

 

349,591

 

12/23/1988

 

46

 

Canada

A. M. Castle & Co.

 

[ROOK IN CIRCLE] CASTLE METALS (Canada)

 

Trademark

 

357,849

 

6/30/1989

 

46

 

Canada

A. M. Castle & Co.

 

The One to Call if You Make it With Metal (Canada)

 

Trademark

 

344,674

 

9/9/1988

 

46

 

Canada

A. M. Castle & Co.

 

Castle Metals (Canada)

 

Trademark

 

344,673

 

9/9/1988

 

46

 

Canada

A. M. Castle & Co.

 

ROOK IN CIRCLE DESIGN (Canada)

 

Trademark

 

346,095

 

10/7/1988

 

46

 

Canada

A. M. Castle & Co.

 

[ROOK IN CIRCLE] CASTLE METALS - The one call to make if you make it with metal
(Canada)

 

Trademark

 

346,195

 

10/14/1988

 

46

 

Canada

A. M. Castle & Co.

 

INNOVATIVE SUPPLY-CHAIN SOLUTION FOR YOUR SPECIALTY METALS NEEDS (Canada)

 

Trademark

 

1,517,749

 

3/4/2011

 

 

 

Canada

A. M. Castle & Co.

 

CASTLE METALS (China)

 

Trademark

 

6,553,994

 

8/7/2010

 

40

 

China

A. M. Castle & Co.

 

Castle Design (China)

 

Trademark

 

6,553,656

 

3/28/2010

 

40

 

China

A. M. Castle & Co.

 

CASTLE METALS (China)

 

Trademark Application

 

6,553,997

 

9/28/2010

 

35

 

China

A. M. Castle & Co.

 

Castle Design (China)

 

Trademark Application

 

6,553,996

 

9/28/2010

 

35

 

China

A. M. Castle & Co.

 

CASTLE METALS (China)

 

Trademark Application

 

6,553,998

 

2/15/2008

 

6

 

China

A. M. Castle & Co.

 

Castle Design (China)

 

Trademark

 

6,553,995

 

3/28/2010

 

6

 

China

A. M. Castle & Co.

 

CASTLE METALS (European Community)

 

Trademark

 

6,561,121

 

1/8/2008

 

6-40-42

 

European Community

 

22

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

 

Owner

 

Description

 

Intellectual Property
Type

 

Registration #

 

Registration
Date

 

Class

 

Country

A. M. Castle & Co.

 

CASTLE DESIGN (European Community)

 

Trademark

 

6,583,926

 

1/16/2008

 

6-40-42

 

European Community

A. M. Castle & Co.

 

INNOVATIVE SUPPLY-CHAIN SOLUTION FOR YOUR SPECIALTY METALS NEEDS (European
Community)

 

Trademark

 

009788415

 

3/4/2011

 

 

 

European Community

A. M. Castle & Co.

 

CASTLE METALS (Mexico)

 

Trademark

 

504,223

 

11/1/2004

 

42

 

Mexico

A. M. Castle & Co.

 

CASTLE (Mexico)

 

Trademark

 

497,189

 

1/12/2005

 

6

 

Mexico

A. M. Castle & Co.

 

Castle Design (Mexico)

 

Trademark

 

514,648

 

1/12/2005

 

6

 

Mexico

A. M. Castle & Co.

 

PURECUT (Mexico)

 

Trademark

 

496,128

 

1/12/2005

 

6

 

Mexico

A. M. Castle & Co.

 

TRUHARD (Mexico)

 

Trademark

 

496,129

 

1/12/2005

 

6

 

Mexico

A. M. Castle & Co.

 

ULTRA-TUFF (Mexico)

 

Trademark

 

196,127

 

1/12/2005

 

6

 

Mexico

A. M. Castle & Co.

 

B&W Castle Design w/o denomination (MEXICO)

 

Trademark

 

654,120

 

11/16/2004

 

42

 

Mexico

A. M. Castle & Co.

 

INNOVATIVE SUPPLY-CHAIN SOLUTION FOR YOUR SPECIALTY METALS NEEDS (Mexico)

 

Trademark

 

1,160,485

 

App.3/4/11

 

35

 

Mexico

 

Domain Names

 

amcastle.co.uk

amcastle.com

amcastle.com.mx

amcastle.de

amcastle.net

Ame-sa.com

castledirect.com

castle-direct.com

castlemetals.co.uk

castlemetals.com

castlemetalsaerospace.com

 

23

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

 

castlemetalsdirect.com

castlemetalsuk.co.uk

castlemetalsuk.com

castlemetalsuk.de

castlemetalsuk.fr

castlesystem.com

cutterprecision.com

devamcastle.com

e-castlemetals.com

eharding.co.uk

Ehardings.com

haindustries.com

hyalloy.com

kksstainless.co.uk

KKSStainless.com

lean-duplex.co.uk

Loksplasma.co.uk

loksprofiles.co.uk

loks-profiles.co.uk

loks-profiles.com

metalsgroupinc.com

metalsgroupindia.com

MetalsUK.com

oliversteel.com

pioneeraluminum.com

themetalsgroup.com

tiernay.com

transtarmetals.com

tubesupply.ca

tubesupply.com

tubesupply.net

tubesupply.org

tubesupply.us

 

24

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

 

aftechintl.com

aftech-intl.com

paramontmachinecompany.com

plasticsdistributor.com

pmcplastic.com

sfsgonline.biz

sfsgonline.com

storefixturesolutionsgroup.com

theplasticsstore.com

totalplastics.biz

totalplastics.com

totalplastics.org

totalplastics.us

 

Trade Names

 

1.                                       Castle Metals

2.                                       Castle Metals Aerospace

3.                                       Castle Metals Oil & Gas

4.                                       Castle Metals Plate

5.                                       Store Fixture Solutions Group

6.                                       Pontiac Plastics & Supply Co., Inc.

7.                                       Plastic Depot, Inc.

 

Intellectual Property Licenses

 

None.

 

25

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

 

Schedule 5.13

to

Loan and Security Agreement

 

Labor Disputes

 

None.

 

26

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

 

Schedule 5.21

to

Loan and Security Agreement

 

Material Contracts

 

None.

 

27

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

 

Schedule 5.22

to

Loan and Security Agreement

 

Capital Structure

 

Parent

 

Subsidiary

 

Jurisdiction of
Formation

 

Class of Shares

 

Shares
Outstanding

 

%
Owned

 

A. M. Castle Metals UK, Limited

 

Aerospace Metals Europe Limited

 

United Kingdom

 

Ordinary Shares

 

1

 

100

%

A. M. Castle Metals UK, Limited

 

Aerospace Metals Europe, S.A.

 

Spain - Bilbao

 

Ordinary Shares

 

15,000

 

10

%

A. M. Castle Metals UK, Limited

 

AMESA Limited

 

United Kingdom

 

Common Stock

 

1

 

100

%

A. M. Castle Metals UK, Limited

 

Castle Metals UK Limited

 

United Kingdom

 

Percentage Ownership Interest

 

100

 

100

%

A. M. Castle Metals UK, Limited

 

K.K.S. (Stainless Steel) Co. Limited

 

United Kingdom

 

Percentage Ownership Interest

 

100

 

100

%

A. M. Castle Metals UK, Limited

 

Metals Group Limited

 

United Kingdom

 

Common Stock

 

1,000

 

100

%

A. M. Castle Metals UK, Limited

 

Metals UK Group Limited

 

United Kingdom

 

Common Stock

 

1,000

 

100

%

A. M. Castle & Co.

 

A. M. Castle Metals UK, Limited

 

United Kingdom

 

Common Stock

 

1

 

100

%

A. M. Castle & Co.

 

A. M. Castle & Co. (Canada) Inc.

 

Ontario

 

Common Stock

 

100

 

100

%

A. M. Castle & Co.

 

A. M. Castle & Co. (Singapore) Pte. Ltd.

 

Singapore

 

Common Stock

 

1

 

100

%

A. M. Castle & Co.

 

A. M. Castle Metal Materials (Shanghai) Co., Ltd.

 

Shanghai

 

Percentage Ownership Interest

 

100

 

100

%

A. M. Castle & Co.

 

Castle Metals de Mexico, S.A. de C.V.

 

Mexico

 

Percentage Ownership Interest

 

100

 

100

%

A. M. Castle & Co.

 

Datamet, Inc.

 

Illinois

 

Common Stock

 

1,000

 

100

%

A. M. Castle & Co.

 

Depot Metal, LLC

 

Delaware

 

Percentage Ownership Interest

 

100

 

50

%

A. M. Castle & Co.

 

HY-Alloy Steels Company

 

Delaware

 

Common Stock

 

10

 

100

%

A. M. Castle & Co.

 

Keystone Service, Inc.

 

Indiana

 

Common Stock

 

10,000

 

100

%

A. M. Castle & Co.

 

Keystone Tube Company, LLC

 

Delaware

 

Percentage Ownership Interest

 

100

 

100

%

A. M. Castle & Co.

 

KSI, LLC

 

Indiana

 

Common Stock

 

10,000

 

100

%

A. M. Castle & Co.

 

Oliver Steel Plate Co.

 

Delaware

 

Common Stock

 

1,000

 

100

%

A. M. Castle & Co.

 

Pacific Metals Company

 

California

 

Common Stock

 

1,000

 

100

%

 

28

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

 

 

A. M. Castle & Co.

 

Total Plastics, Inc.

 

Michigan

 

Common Stock

 

510

 

100

%

A. M. Castle & Co.

 

Transtar Metals Corp.

 

Delaware

 

Common Stock

 

1,000

 

100

%

A. M. Castle & Co.

 

Tube Supply, LLC

 

Texas

 

Membership Interests

 

n/a

 

100

%

A. M. Castle & Co. (Canada) Inc.

 

Tube Supply Canada ULC

 

Alberta

 

Class “A” Common shares

 

1,120

 

100

%

Castle Metals UK Limited

 

Aerospace Metals Europe, S.A.

 

Spain - Bilbao

 

Ordinary Shares

 

15,000

 

90

%

Castle Metals UK Limited

 

Metals Group Inc.

 

Texas

 

Common Stock

 

100,000

 

100

%

Depot Metal, LLC

 

Kreher Steel Company, LLC

 

Delaware

 

Percentage Ownership Interest

 

100

 

100

%

Kreher Steel Company, LLC

 

Kreher Wire Processing, Inc.

 

Delaware

 

Percentage Ownership Interest

 

100

 

100

%

Kreher Steel Company, LLC

 

Special Metals, Inc.

 

Oklahoma

 

Common Shares

 

25,000

 

100

%

Metals UK Group Limited

 

E. Harding & Sons Limited

 

United Kingdom

 

Percentage Ownership Interest

 

100

 

100

%

Metals UK Group Limited

 

LOKS Plasma Services Limited

 

United Kingdom

 

Common Stock

 

1,000

 

100

%

Total Plastics, Inc.

 

Advanced Fabricating Technology, LLC

 

Delaware

 

Membership Units

 

1,000

 

100

%

Total Plastics, Inc.

 

Paramont Machine Company, LLC

 

Delaware

 

Percentage Ownership Interest

 

100

 

100

%

Transtar Metals Corp.

 

Transtar Inventory Corp.

 

Delaware

 

Common Stock

 

1,000

 

100

%

Transtar Metals Corp.

 

Transtar Marine Corp.

 

Delaware

 

Common Stock

 

1,000

 

100

%

Transtar Metals Corp.

 

Transtar Metals Limited

 

United Kingdom

 

Cumulative Redeemable Preference Shares

 

3,528,160

 

100

%

Transtar Metals Corp.

 

Transtar Metals Limited

 

United Kingdom

 

Ordinary Shares

 

5,497,491

 

100

%

Transtar Metals Corp.

 

Transtar Metals Limited

 

United Kingdom

 

Redeemable Preference Shares

 

500,000

 

100

%

Transtar Metals Limited

 

Transtar Metals (France)

 

France

 

Percentage Ownership Interest

 

100

 

100

%

 

29

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

 

 

Schedule 5.23

to

Loan and Security Agreement

 

Bank Accounts

 

[Provided to Agent pursuant to separate side letter.]

 

30

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

 

Schedule 7.2

to

Loan and Security Agreement

 

Existing Liens

 

Debtor

 

Secured Party

 

Lien
Type

 

Jurisdiction/State

 

Original File Date/ File
Number

 

Collateral

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

AT&T Capital Services, Inc.

 

UCC

 

Delaware SOS

 

4/25/2003

#31067142

Continuation filed 2/29/08

Amendment filed 4/1/08

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Ameritech Credit Corporation

 

UCC

 

Delaware SOS

 

11/17/2003

#33009159

Continuation filed 9/3/08

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Ameritech Credit Corporation

 

UCC

 

Delaware SOS

 

3/15/2004

#40722621

Continuation filed 12/3/08

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Ameritech Credit Corporation

 

UCC

 

Delaware SOS

 

7/11/2005

#52121698

Continuation filed 4/6/10

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Ameritech Credit Corporation

 

UCC

 

Delaware SOS

 

9/13/2005

#52825496

Continuation filed 8/4/10

 

Equipment Lease

 

31

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

 

Debtor

 

Secured Party

 

Lien
Type

 

Jurisdiction/State

 

Original File Date/ File
Number

 

Collateral

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Ameritech Credit Corporation

 

UCC

 

Delaware SOS

 

9/13/2005

#52825561

Continuation filed 7/9/10

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Ameritech Credit Corporation

 

UCC

 

Delaware SOS

 

10/28/2005

#53369353

Continuation filed 7/9/10

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

General Electric Capital Corporation

 

UCC

 

Delaware SOS

 

12/21/2005

#53972966

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

AT&T Capital Services, Inc.

 

UCC

 

Delaware SOS

 

3/13/2006

#60844514

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

AT&T Capital Services, Inc.

 

UCC

 

Delaware SOS

 

7/11/2006

#62389278

Amendment filed 11/28/06

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

General Electric Capital Corporation

 

UCC

 

Delaware SOS

 

7/14/2009

#92260112

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

AT&T Capital Services, Inc.

 

UCC

 

Delaware SOS

 

9/11/2009

#92919907

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

TW Metals, Inc.

 

UCC

 

Maryland SOS

 

10/28/2002

#0000000181134390

Continuation filed 8/6/07

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

General Electric Capital Corporation

 

UCC

 

Maryland SOS

 

4/1/2004

#0000000181185644

Continuation filed 1/20/09

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Sysix Financial, LLC

 

UCC

 

Maryland SOS

 

6/4/2008

#0000000181344205

 

Goods & Equipment

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Citicorp Leasing, Inc.

 

UCC

 

Maryland SOS

 

9/18/2008

#0000000181353302

 

Equipment Lien

 

32

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

 

Debtor

 

Secured Party

 

Lien
Type

 

Jurisdiction/State

 

Original File Date/ File
Number

 

Collateral

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Sysix Financial, LLC

 

UCC

 

Maryland SOS

 

2/3/2009

#0000000181363180

 

Goods & Equipment

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Cisco Systems Capital Corporation

 

UCC

 

Maryland SOS

 

1/22/2010

#0000000181387413

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

Lease Corporation of America

 

UCC

 

Maryland SOS

 

1/31/2011

#0000000181413170

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

A. M. Castle & Co.

 

General Electric Capital Corporation

 

UCC

 

Maryland SOS

 

5/16/2011

#0000000181420588

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Total Plastics, Inc.

 

IOS Capital

 

UCC

 

Michigan SOS

 

5/20/2007

#2007080285-4

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

Total Plastics, Inc.

 

IOS Capital

 

UCC

 

Michigan SOS

 

5/22/2007

#2007082716-1

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

Total Plastics, Inc.

 

IKON Financial SVCS

 

UCC

 

Michigan SOS

 

9/23/2007

#2007148800-9

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Total Plastics, Inc.

 

Crown Credit Company

 

UCC

 

Michigan SOS

 

4/11/2008

#2008056423-0

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Total Plastics, Inc.

 

TMI Compressed Air Systems, Inc.

 

UCC

 

Michigan SOS

 

1/22/2010

#2010010389-7

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Transtar Metals Corp.

 

General Electric Capital Corporation

 

UCC

 

Delaware SOS

 

6/22/2006

#62152338

Amendment filed 8/7/06

Continuation filed 3/24/11

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

Transtar Metals Corp.

 

Greater Bay Bank N.A.

 

UCC

 

Delaware SOS

 

12/8/2006

#64293437

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Transtar Metals Corp.

 

Greater Bay Bank N.A.

 

UCC

 

Delaware SOS

 

8/9/2007

#2007 3032595

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Transtar Metals Corp.

 

NMHG Financial Services, Inc.

 

UCC

 

Delaware SOS

 

9/4/2007

#2007 3350237

 

Equipment Lease

 

33

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

 

Debtor

 

Secured Party

 

Lien
Type

 

Jurisdiction/State

 

Original File Date/ File
Number

 

Collateral

 

 

 

 

 

 

 

 

 

 

 

Transtar Metals Corp.

 

Citicorp Leasing, Inc.

 

UCC

 

Delaware SOS

 

11/30/2007

#2007 4531447

 

Equipment Lien

 

 

 

 

 

 

 

 

 

 

 

Transtar Metals Corp.

 

Greater Bay Bank N.A.

 

UCC

 

Delaware SOS

 

2/4/2008

#2008 0411668

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

Tube Supply, Inc.

 

NMHG Financial Services, Inc.

 

UCC

 

Texas SOS

 

2/15/2005

#050004879225

Continuation filed 8/25/09

Amendment filed 8/25/09

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

Tube Supply, Inc.

 

NMHG Financial Services, Inc.

 

UCC

 

Texas SOS

 

4/18/2005

#050011967847

Continuation filed 2/18/10

 

Equipment Lease

 

 

 

 

 

 

 

 

 

 

 

Tube Supply, Inc.

 

Dell Financial Services, L.P.

 

UCC

 

Texas SOS

 

10/31/2005

#050033752297

Continuation filed 10/14/10

 

Equipment Lien

 

34

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Schedule 7.8

to

Loan and Security Agreement

 

Existing Indebtedness

 

1.               Note issued by Transtar Metals Limited in favor of A. M.
Castle & Co in the amount of $352,387.00.

 

2.               Note issued by A. M. Castle & Co. (Canada) Inc. in favor of A.
M. Castle & Co in the amount of $26,500,000.

 

3.               Note issued by A. M. Castle Metals UK, Limited in favor of A.
M. Castle & Co in the amount of $26,370,581.71

 

4.               Notes issued by Castle Metals de Mexico, S.A. de C.V. for the
benefit of Bank of America, N.A. and its affiliates including Bank of America
Mexico, S.A. Institución de Banca Múltiple, Grupo Financiero Bank of America,
with an outstanding balance of $500,000, guaranteed by A. M. Castle & Co.

 

35

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Schedule 8.3

to

Loan and Security Agreement

 

Post-Closing Deliveries

 

Loan Parties shall deliver or cause to be delivered to Agent, or shall have
taken or caused to have been taken, in form and substance reasonably
satisfactory to Agent, as promptly as possible following the date hereof, but in
any event no later than the dates referred to below with respect to each such
item (or such later date as Agent shall agree in writing subject to the terms of
Section 5.19), the items or actions set forth below:

 

1.             on or before December 20, 2011, deliver to Agent a filed
acknowledgment copy of the Statement of Event or Fact filed with the Secretary
of State of the State of Texas with respect to the conversion on the Closing
Date of Tube Supply, Inc., a Texas corporation, into Tube Supply, LLC, a Texas
limited liability company, pursuant to Chapter 10 of the Texas Business
Organization Code (the “Conversion”), acknowledging that the conditions to
effectiveness of the Conversion have been fully satisfied;

 

2.             on or before December 20, 2011, deliver, or cause to be
delivered, to Agent, a Certificate of Liability Insurance and an Additional
Insured Endorsement with respect to Canadian Borrowers, which adds both Agent
and Wells Fargo Canada as additional insureds under the insurance policy;

 

3.             on or before January 15, 2012, deliver, or cause to be delivered,
to Agent lenders loss payable endorsements with respect to each of the property
insurance policies issued to Loan Parties and issued for the benefit of Agent on
behalf of the Secured Parties;

 

4.             on or before January 15, 2012, after the Closing Date, exercise
commercially reasonable efforts to deliver, or cause to be delivered, to Agent
duly executed Collateral Access Agreements with respect to the following leased
premises of Loan Parties:

 

Loan Party

 

Property Location

A. M. Castle & Co.

 

1420 Kensington Road, Suite 220, Oak Brook, IL 60523

Tube Supply, LLC

 

5169 Ashley Court, Houston, Texas 77041

 

5.             deliver, or cause to be delivered, to Agent duly executed control
agreements relating to Loan Parties’ Blocked Accounts with financial
institutions granting to Agent a Lien therein, which control agreements shall be
consistent with the requirements of Section 4.14(h) and shall be otherwise in
form and substance satisfactory to Agent (a) with respect to Blocked Accounts
located at any Lender, on or before January 15, 2012, and (b) with respect to
Blocked Accounts located at any bank that is not a Lender, on or before
February 1, 2012;

 

36

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6.             on or before January 15, 2012, deliver, or cause to be delivered,
to Agent all qualifications to do business as a foreign corporation or limited
liability company (as applicable) for each Loan Party, issued by the Secretary
of State (or other appropriate governmental official) of each of the
jurisdictions set forth below next to each such Loan Party’s name, in each case,
indicating that each such Loan Party is a foreign corporation or limited
liability company (as applicable), duly qualified to conduct business and in
good standing in each such jurisdiction:

 

Loan Party

 

Jurisdiction of Qualification

Total Plastics, Inc.

 

Illinois

 

7.             on or before February 15, 2012, deliver, or cause to be
delivered, to Agent the Houston Leasehold Mortgage and the Edmonton Leasehold
Mortgage, duly authorized, executed and delivered the parties thereto, together
with an acknowledgment of the Edmonton Leasehold Mortgage by the landlord under
such lease;

 

8.             on or before February 15, 2012, deliver, or cause to be
delivered, to Agent the fee Mortgages securing the Obligations with respect to
the following Real Property of Loan Parties:

 

Property Address

 

City, State

 

County

70 Quinsigamond Avenue

 

Worcester, MA

 

Worcester

1652 Gezon Parkway

 

Wyoming, MI

 

Kent

3100 82nd Lane NE

 

Blaine, MN

 

Anoka

11125 Metromont Parkway

 

Charlotte, NC

 

Mecklenburg

26800 Miles Road

 

Bedford Heights, OH

 

Cuyahoga

299 Canal Road

 

Fairless Hills, PA

 

Bucks

2602 Pinewood Drive

 

Grand Prairie, TX

 

Tarrant

6501 Bingle Road

 

Houston, TX

 

Harris

3900 Pinson Valley Parkway

 

Birmingham, AL

 

Jefferson

 

9.             on or before February 15, 2012, deliver, or cause to be
delivered, to Agent all environmental studies and reports prepared by
independent environmental engineering firms with respect to the Mortgaged Real
Property; and

 

10.           on or before February 15, 2012, deliver, or cause to be delivered,
to Agent (a) a valid and effective title insurance policy issued by a company
and agent acceptable to Agent: (i) insuring the priority, amount and sufficiency
of any Mortgage with respect to the Mortgaged Real Property, (ii) insuring
against matters that would be disclosed by surveys and (iii) containing any
legally available endorsements, assurances or affirmative coverage requested by
Agent for protection of its interests, and (b) real property surveys with
respect to each parcel of such Real Property, the scope of such surveys and the
results thereof shall be reasonably acceptable to Agent.

 

37

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Schedule 17.3

to

Loan and Security Agreement

 

Competitors/Ineligible Transferees

 

[Provided to Agent pursuant to separate side letter.]

 

38

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