Exhibit 10.1

EXECUTION VERSION

 

 

 

 

LOGO [g486203dsp1.jpg]  

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

by and among

  

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., AND CITIBANK, N.A.

as Joint Lead Arrangers,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., AND CITIBANK, N.A.

as Joint Book Runners,

THE LENDERS THAT ARE PARTIES HERETO

as the Lenders,

FORUM ENERGY TECHNOLOGIES, INC.,

as a US Borrower,

FORUM CANADA ULC,

as a Canadian Borrower

Dated as of October 30, 2017

 

 

 

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TABLE OF CONTENTS

 

     Page  

1. DEFINITIONS AND CONSTRUCTION

     1  

1.1 Definitions

     1  

1.2 Accounting Terms

     72  

1.3 Code; PPSA

     73  

1.4 Construction

     73  

1.5 Time References

     74  

1.6 Schedules and Exhibits

     74  

1.7 Currencies; Agreed Currencies; Change of Currency

     74  

1.8 Quebec Interpretation

     76  

2. LOANS AND TERMS OF PAYMENT

     77  

2.1 Revolving Loans

     77  

2.2 Borrowing Procedures and Settlements

     78  

2.3 Payments; Reductions of Commitments; Prepayments

     87  

2.4 Promise to Pay; Promissory Notes

     93  

2.5 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations

     93  

2.6 Crediting Payments

     95  

2.7 Designated Account

     96  

2.8 Maintenance of Loan Account; Statements of Obligations

     96  

2.9 Fees

     96  

2.10 Letters of Credit

     97  

2.11 Non-Base Rate Option

     116  

2.12 Capital Requirements

     118  

2.13 Incremental Facilities

     119  

2.14 Joint and Several Liability of US Borrowers

     121  

2.15 Joint and Several Liability of Canadian Borrowers

     124  

2.16 Currencies

     127  

2.17 Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest

     127  

3. CONDITIONS; TERM OF AGREEMENT

     128  

3.1 Conditions Precedent to the Initial Extension of Credit

     128  

3.2 Conditions Precedent to all Extensions of Credit

     128  

3.3 Maturity

     129  

3.4 Effect of Maturity

     129  

3.5 Early Termination by Borrowers

     129  

4. REPRESENTATIONS AND WARRANTIES

     129  

 

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TABLE OF CONTENTS

(continued)

 

     Page  

4.1 Due Organization and Qualification; Subsidiaries

     130  

4.2 Due Authorization; No Conflict

     130  

4.3 Governmental Consents

     131  

4.4 Binding Obligations; Perfected Liens

     131  

4.5 Title to Assets; No Encumbrances

     131  

4.6 Litigation

     131  

4.7 Compliance with Laws

     132  

4.8 No Material Adverse Effect

     132  

4.9 Solvency

     132  

4.10 Employee Benefits

     132  

4.11 Environmental Condition

     133  

4.12 Complete Disclosure

     133  

4.13 Patriot Act; Canadian AML and Anti-Terrorism Laws

     134  

4.14 Indebtedness

     134  

4.15 Payment of Taxes

     134  

4.16 Margin Stock

     134  

4.17 Governmental Regulation

     134  

4.18 OFAC; Sanctions; Procedures

     135  

4.19 Employee and Labor Matters

     135  

4.20 [Reserved.]

     135  

4.21 Leases

     135  

4.22 Eligible Accounts

     135  

4.23 Eligible Inventory

     136  

4.24 Eligible M&E

     136  

4.25 Location of Inventory and M&E

     136  

4.26 Inventory Records

     136  

4.27 Immaterial Subsidiaries

     136  

5. AFFIRMATIVE COVENANTS

     136  

5.1 Financial Statements, Reports, Certificates

     136  

5.2 Reporting

     136  

5.3 Existence

     137  

5.4 Maintenance of Properties

     137  

5.5 Taxes

     137  

 

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TABLE OF CONTENTS

(continued)

 

     Page  

5.6 Insurance

     137  

5.7 Inspection

     137  

5.8 Compliance with Laws

     138  

5.9 Environmental

     138  

5.10 Disclosure Updates

     139  

5.11 Formation of Subsidiaries; Designation

     139  

5.12 Further Assurances

     141  

5.13 Lender Meetings

     142  

5.14 Location of Inventory and M&E; Chief Executive Office

     142  

5.15 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws

     142  

5.16 Canadian Compliance

     142  

5.17 Compliance with ERISA and the IRC

     143  

6. NEGATIVE COVENANTS

     143  

6.1 Indebtedness

     143  

6.2 Liens

     143  

6.3 Restrictions on Fundamental Changes

     144  

6.4 Disposal of Assets

     144  

6.5 Nature of Business

     144  

6.6 Prepayments and Amendments

     144  

6.7 Restricted Payments

     145  

6.8 Accounting Methods

     146  

6.9 Investments

     146  

6.10 Transactions with Affiliates

     146  

6.11 Use of Proceeds

     146  

6.12 Limitation on Issuance of Equity Interests

     147  

6.13 Inventory or M&E with Bailees

     147  

6.14 Immaterial Subsidiaries

     147  

6.15 Employee Benefits

     147  

6.16 Canadian Employee Benefits

     148  

6.17 Controlled Accounts; Controlled Investments

     148  

7. FINANCIAL COVENANTS

     149  

8. EVENTS OF DEFAULT

     149  

8.1 Payments

     149  

 

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TABLE OF CONTENTS

(continued)

 

     Page  

8.2 Covenants

     149  

8.3 Judgments

     150  

8.4 Voluntary Bankruptcy, etc.

     150  

8.5 Involuntary Bankruptcy, etc.

     150  

8.6 Default Under Other Agreements

     150  

8.7 Representations, etc.

     150  

8.8 Guaranty

     151  

8.9 Security Documents

     151  

8.10 Loan Documents

     151  

8.11 Change of Control

     151  

8.12 ERISA

     151  

9. RIGHTS AND REMEDIES

     151  

9.1 Rights and Remedies

     151  

9.2 Remedies Cumulative

     152  

10. WAIVERS; INDEMNIFICATION

     152  

10.1 Demand; Protest; etc.

     152  

10.2 The Lender Group’s Liability for Collateral

     152  

10.3 Indemnification

     152  

11. NOTICES

     154  

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION

     155  

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

     156  

13.1 Assignments and Participations

     156  

13.2 Successors

     160  

13.3 Intercreditor Matters

     160  

14. AMENDMENTS; WAIVERS

     161  

14.1 Amendments and Waivers

     161  

14.2 Replacement of Certain Lenders

     163  

14.3 No Waivers; Cumulative Remedies

     164  

15. AGENT; THE LENDER GROUP

     164  

15.1 Appointment and Authorization of Agent

     164  

15.2 Delegation of Duties

     165  

15.3 Liability of Agent

     165  

 

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TABLE OF CONTENTS

(continued)

 

     Page  

15.4 Reliance by Agent

     165  

15.5 Notice of Default or Event of Default

     166  

15.6 Credit Decision

     166  

15.7 Costs and Expenses; Indemnification

     167  

15.8 Agent in Individual Capacity

     167  

15.9 Successor Agent

     168  

15.10 Lender in Individual Capacity

     168  

15.11 Collateral Matters

     168  

15.12 Restrictions on Actions by Lenders; Sharing of Payments

     170  

15.13 Agency for Perfection

     171  

15.14 Payments by Agent to the Lenders

     171  

15.15 Concerning the Collateral and Related Loan Documents

     171  

15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information

     171  

15.17 Several Obligations; No Liability

     172  

15.18 Joint Lead Arrangers, Joint Book Runners, Co-Syndication Agents, and
Co-Documentation Agents

     172  

15.19 Quebec Security

     172  

16. WITHHOLDING TAXES

     173  

16.1 Payments

     173  

16.2 Exemptions

     173  

16.3 Reductions

     175  

16.4 Refunds

     175  

17. GENERAL PROVISIONS

     175  

17.1 Effectiveness

     175  

17.2 Section Headings

     175  

17.3 Interpretation

     175  

17.4 Severability of Provisions

     175  

17.5 Bank Product Providers

     176  

17.6 Debtor-Creditor Relationship

     176  

17.7 Counterparts; Electronic Execution

     176  

17.8 Revival and Reinstatement of Obligations; Certain Waivers

     177  

17.9 Confidentiality

     177  

17.10 Survival

     179  

 

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TABLE OF CONTENTS

(continued)

 

     Page  

17.11 Patriot Act; Due Diligence

     179  

17.12 Integration

     179  

17.13 Parent as Agent for Borrowers

     179  

17.14 Judgment Currency

     180  

17.15 Amendment and Restatement

     180  

17.16 Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     181  

EXHIBITS AND SCHEDULES

 

Exhibit A-1     

Form of Assignment and Acceptance

Exhibit B-1     

Form of Borrowing Base Certificate

Exhibit B-2     

Form of Bank Product Provider Agreement

Exhibit C-1     

Form of Compliance Certificate

Exhibit J-1     

Form of Joinder

Exhibit N-1     

Form of Non-Base Rate Notice

Exhibit P-1     

Form of Perfection Certificate

Schedule A-1     

Agent’s Accounts

Schedule A-2     

Authorized Persons

Schedule C-1     

Commitments

Schedule D-1     

Canadian Designated Account(s)

Schedule D-2     

US Designated Account(s)

Schedule E-1     

Existing Letters of Credit

Schedule P-1     

Permitted Investments

Schedule P-2     

Permitted Liens

Schedule 3.1     

Conditions Precedent

Schedule 3.6     

Conditions Subsequent

Schedule 4.1(c)     

Capitalization of Borrowers’ Subsidiaries

Schedule 4.1(d)     

Subscriptions, Options, Warrants, Calls

Schedule 4.10     

Employee Benefits

Schedule 4.11     

Environmental Matters

Schedule 4.14     

Permitted Indebtedness

Schedule 4.25     

Location of Inventory

Schedule 5.1     

Financial Statements, Reports, Certificates

Schedule 5.2     

Collateral Reporting

Schedule 6.5     

Nature of Business

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, is entered into as of
October 30, 2017 by and among the lenders identified on the signature pages
hereof (each of such lenders, together with its successors and permitted
assigns, is referred to hereinafter as a “Lender”, as that term is hereinafter
further defined), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for each member of the Lender Group and the
Bank Product Providers (in such capacity, together with its successors and
assigns in such capacity, “Agent”), WELLS FARGO BANK, NATIONAL ASSOCIATION,
JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., and CITIBANK, N.A. as joint
lead arrangers (in such capacity, together with their successors and assigns in
such capacity, the “Joint Lead Arrangers”), WELLS FARGO BANK, NATIONAL
ASSOCIATION, JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., and CITIBANK,
N.A. as joint book runners (in such capacity, together with their successors and
assigns in such capacity, the “Joint Book Runners”), WELLS FARGO BANK, NATIONAL
ASSOCIATION, JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., and CITIBANK, N.A
as co-syndication agents (in such capacity, together with their successors and
assigns in such capacity, the “Co-Syndication Agents”), WELLS FARGO BANK,
NATIONAL ASSOCIATION, as documentation agent (in such capacity, together with
its successors and assigns in such capacity, the “Documentation Agent”), Forum
Energy Technologies, Inc., a Delaware corporation (“Parent”; and those
additional entities that hereafter become parties hereto as Borrowers in
accordance with the terms hereof by executing the form of Joinder attached
hereto as Exhibit J-1 (each, a “US Borrower” and individually and collectively,
jointly and severally, the “US Borrowers”)), Forum Canada ULC, an Alberta
unlimited liability corporation (“Forum Canada”; and those additional entities
that hereafter become parties hereto as Borrowers in accordance with the terms
hereof by executing the form of Joinder attached hereto as Exhibit J-1 (each, a
“Canadian Borrower” and individually and collectively, jointly and severally,
the “Canadian Borrowers”, and together with the US Borrowers, each a “Borrower”
and individually and collectively, jointly and severally, the “Borrowers”)).

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

“ABL Collateral” means all of each and every Loan Party’s right, title, and
interest in and to the following types of property of such Loan Party, wherever
located and whether now owned by such Loan Party or hereafter acquired:

(a) all Accounts, credit card receivables and all amounts payable in respect of
the sale, lease, assignment, license or other disposition of Inventory or
services rendered or to be rendered (collectively, the “Receivables”);

(b) all Inventory;

(c) all Deposit Accounts and Securities Accounts into which any proceeds of
Receivables, Inventory and other ABL Collateral are deposited (including any
cash and other funds or other property held in or on deposit therein);

(d) to the extent related to, substituted or exchanged for, evidencing,
supporting or arising from any of the items referred to in the preceding clauses
(a)-(d), all chattel paper, documents, letter of credit rights, instruments and
rights to payment evidenced thereby, payment intangibles, supporting obligations
and books and records, including customer lists;

 

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(e) to the extent attributed or pertaining to any ABL Collateral, all commercial
tort claims;

(f) business interruption insurance proceeds; and

(g) all substitutions, replacements, accessions, products, or proceeds of any of
the foregoing, in any form, including insurance proceeds and all claims against
third parties for loss or damage to, or destruction of, or other involuntary
conversion (including claims in respect of condemnation or expropriation) of any
kind or nature of any or all of the foregoing.

“Acceptable Appraisal” means, with respect to an appraisal of Inventory, the
most recent appraisal of such property received by Agent (a) from an appraisal
company satisfactory to Agent, (b) the scope and methodology (including, to the
extent relevant, any sampling procedure employed by such appraisal company) of
which are satisfactory to Agent, and (c) the results of which are satisfactory
to Agent, in each case, in Agent’s Permitted Discretion.

“Account” means an account (as that term is defined in the Code or to the extent
applicable, the PPSA).

“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).

“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by a Loan Party or any of its Subsidiaries in a Permitted
Acquisition; provided, that such Indebtedness (a) is not recourse to any Loan
Party or any Restricted Subsidiary of any Loan Party prior to the date of such
Permitted Acquisition, (b) is not secured by a Lien on any ABL Collateral (other
than such Liens which rank junior to the Liens encumbering ABL Collateral that
secures the Obligations and which are subject to a customary intercreditor
agreement in form and substance reasonably acceptable to Agent and the
Administrative Borrower), (c) was in existence prior to the date of such
Permitted Acquisition, and (d) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition.

“Acquisition” means (a) the purchase or other acquisition by a Person or its
Restricted Subsidiaries of all or substantially all of the assets of (or any
division or business line of) any other Person, or (b) the purchase or other
acquisition (whether by means of a merger, consolidation, or otherwise) by a
Person or its Restricted Subsidiaries of all of the Equity Interests of any
other Person.

“Activation Instruction” has the meaning specified therefor in Section 6.17(b)
of this Agreement.

“Additional Documents” has the meaning specified therefor in Section 5.12 of
this Agreement.

 

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“Adjusted LIBOR Rate” means, with respect to any LIBOR Rate Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of one percent (1%)) equal to the LIBOR Rate for such Interest
Period multiplied by the Statutory Reserve Rate. The Adjusted LIBOR Rate will be
adjusted automatically as to all LIBOR Rate Borrowings then outstanding as of
the effective date for the change in the Statutory Reserve Rate.

“Administrative Borrower” has the meaning specified therefor in Section 17.13 of
this Agreement.

“Administrative Questionnaire” has the meaning specified therefor in
Section 13.1(a) of this Agreement.

“Affected Lender” has the meaning specified therefor in Section 2.12(b) of this
Agreement.

“Affiliate” means, as applied to any Person, any other Person who Controls, is
Controlled by, or is under common Control with, such Person; provided, that for
purposes of the definition of Specified Affiliate, US Eligible Accounts,
Canadian Eligible Accounts and Section 6.10 of this Agreement: (a) any Person
which owns directly or indirectly 10% or more of the Equity Interests having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed an Affiliate of such Person, (b) each director (or comparable manager) of
a Person shall be deemed to be an Affiliate of such Person, and (c) each
partnership in which a Person is a general partner shall be deemed an Affiliate
of such Person.

“Agent” has the meaning specified therefor in the preamble to this Agreement.

“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

“Agent’s Applicable Account” means Agent’s US Account and/or Agent’s Canadian
Account, as the context requires.

“Agent’s Canadian Account” means the Deposit Account of Agent identified on
Schedule A-1 to this Agreement as Agent’s Canadian Account (or such other
Deposit Account of Agent that has been designated as such, in writing, by Agent
to Administrative Borrower and the Lenders).

“Agent’s US Account” means the Deposit Account of Agent identified on Schedule
A-1 to this Agreement as Agent’s US Account (or such other Deposit Account of
Agent that has been designated as such, in writing, by Agent to Administrative
Borrower and the Lenders).

“Agent’s Liens” means the Liens granted by each Loan Party or its Restricted
Subsidiaries to Agent under the Loan Documents and securing the Obligations.

“Aggregate Borrowing Base Certificate” means a certificate consistent with the
US Borrowing Base Certificate and the Canadian Borrowing Base Certificate in the
form attached hereto as Exhibit B-1.

“Agreement” means this Third Amended and Restated Credit Agreement, as amended,
restated, amended and restated, supplemented or otherwise modified from time to
time.

 

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“Agreed Currency” means, subject to Section 1.7, (a) with respect to any US
Borrowing, US Dollars, (b) with respect to any Canadian Borrowing, US Dollars
and Canadian Dollars, (c) with respect to any Letter of Credit, (i) US Dollars,
(ii) British Pound Sterling, (iii) Canadian Dollars, (iv) Euros, (v) UAE Dirham,
(vi) Singapore Dollars, (vii) South African Rand (other than with respect to
Bank of America, N.A., as Issuing Bank if it is an Issuing Bank, unless it
otherwise consents) and (vii) any other Eligible Currency approved in accordance
with Section 1.7, and (d) with respect to all other Obligations (including US
Bank Product Obligations or the Canadian Bank Product Obligations), US Dollars
or Canadian Dollars, as applicable.

“Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended,
and all other applicable laws and regulations or ordinances concerning or
relating to bribery, money laundering or corruption in any jurisdiction in which
any Loan Party or any of its Subsidiaries or Affiliates is located or is doing
business.

“Anti-Money Laundering Laws” means the applicable laws or regulations in any
jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is
located or is doing business that relates to money laundering, any predicate
crime to money laundering, or any financial record keeping and reporting
requirements related thereto, including the Canadian Anti-Money Laundering &
Anti-Terrorism Legislation.

“Applicable Margin” means, as of any date of determination and with respect to
Base Rate Loans, LIBOR Rate Loans, or CDOR Rate Loans, as applicable, the
applicable margin set forth in Table A below that corresponds to the Average
Excess Availability of Borrowers for the most recently completed fiscal quarter;
provided, that (a) for the period from the Closing Date through and including
March 31, 2018, the Applicable Margin shall be set at the margin in the row
styled “Level III”,

 

TABLE A

Level

  

Average Excess Availability

  

“Base Rate Margin”

  

“LIBOR/CDOR Rate

Margin”

I

   ³ 66% of the Maximum Revolver Amount    0.75 percentage points    1.75
percentage points

II

   < 66% of the Maximum Revolver Amount and ³ 33% of the Maximum Revolver Amount
   1.00 percentage points    2.00 percentage points

III

   < 33% of the Maximum Revolver Amount    1.25 percentage points    2.25
percentage points

provided further, that from and after the first day of the calendar month
immediately following the receipt by the Agent of a Compliance Certificate
showing a certified calculation of a Total Net Leverage Ratio that is less than
or equal to 4.00 to 1.00 as of the last day of any fiscal quarter (with the
first such eligible fiscal quarter ending March 31, 2018), the Applicable Margin
shall be as set forth in Table B below that corresponds to the Average Excess
Availability of Borrowers for the most recently completed fiscal quarter:

 

TABLE B

Level

  

Average Excess Availability

  

“Base Rate Margin”

  

“LIBOR/CDOR Rate

Margin”

I

   > 66% of the Maximum Revolver Amount    0.50 percentage points    1.50
percentage points

II

   < 66% of the Maximum Revolver Amount and > 33% of the Maximum Revolver Amount
   0.75 percentage points    1.75 percentage points

III

   < 33% of the Maximum Revolver Amount    1.00 percentage points    2.00
percentage points

 

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The Applicable Margin shall be re-determined as of the first day of each fiscal
quarter other than the shift from Table A to Table B application which takes
effect on the first day of a calendar month as detailed above.

“Applicable Unused Line Fee Percentage” means, as of any date of determination,
the applicable percentage set forth in Table A below that corresponds to the
Average Revolver Usage of Borrowers for the most recently completed calendar
month as determined by Agent in its Permitted Discretion; provided, that, for
the period from the Closing Date through and including March 31, 2018, the
Applicable Unused Line Fee Percentage shall be set at the rate in the row styled
“Level II”:

 

TABLE A

Level

  

Average Revolver Usage

  

Applicable Unused Line Fee Percentage

I

   > 50% of the Maximum Revolver Amount    0.375 percentage points

II

   £ 50% of the Maximum Revolver Amount    0.50 percentage points

provided further that from and after the first day of the calendar month
immediately following the receipt by the Agent of a Compliance Certificate
showing a certified calculation of a Total Net Leverage Ratio that is less than
or equal to 4.00 to 1.00 as of the last day of any fiscal quarter (with the
first such eligible fiscal quarter ending March 31, 2018), the Applicable Unused
Line Fee Percentage shall be as set forth in Table B below that corresponds to
the Average Revolver Usage for the most recently completed calendar month:

 

TABLE B

Level

  

Average Revolver Usage

  

Applicable Unused Line Fee Percentage

I

   > 50% of the Maximum Revolver Amount    0.25 percentage points

II

   £ 50% of the Maximum Revolver Amount    0.375 percentage points

The Applicable Unused Line Fee Percentage shall be re-determined on the first
date of each month by Agent.

“Application Event” means the occurrence of (a) a failure by Borrowers to repay
all of the Obligations in full on the Maturity Date, or (b) an Event of Default
and the election by Agent or the Required Lenders to require that payments and
proceeds of Collateral be applied pursuant to Section 2.3(b)(iii) of this
Agreement.

“Assignee” has the meaning specified therefor in Section 13.1(a) of this
Agreement.

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1 to this Agreement.

 

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“Authorized Person” means any one of the individuals identified as an officer of
a Borrower on Schedule A-2 to this Agreement, or any other individual identified
by Administrative Borrower as an authorized person and authenticated through
Agent’s electronic platform or portal in accordance with its procedures for such
authentication.

“Available Revolver Increase Amount” means, as of any date of determination, an
amount equal to the result of (a) $100,000,000 minus (b) the aggregate principal
amount of Increases to the Revolver Commitments previously made pursuant to
Section 2.13 of this Agreement.

“Average Excess Availability” means, with respect to any period, the sum of the
aggregate amount of Excess Availability for each day in such period (as
calculated by Agent as of the end of each respective day) divided by the number
of days in such period.

“Average Canadian Revolver Usage” means, with respect to any period, the sum of
the aggregate amount of Canadian Revolver Usage for each day in such period
(calculated as of the end of each respective day) divided by the number of days
in such period.

“Average Revolver Usage” means, with respect to any period, the sum of the
aggregate amount of Revolver Usage for each day in such period (calculated as of
the end of each respective day) divided by the number of days in such period.

“Average US Revolver Usage” means, with respect to any period, the sum of the
aggregate amount of US Revolver Usage for each day in such period (calculated as
of the end of each respective day) divided by the number of days in such period.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Product Agreements” means the US Bank Product Agreements and/or the
Canadian Bank Product Agreements, as the context requires.

“Bank Product Collateralization” means, with respect to the US Bank Product
Obligations or the Canadian Bank Product Obligations, as applicable, providing
cash collateral (pursuant to documentation reasonably satisfactory to Agent) in
the Agreed Currency to be held by Agent for the benefit of the applicable Bank
Product Providers (other than the Hedge Providers) in an amount determined by
Agent as sufficient to satisfy the reasonably estimated credit exposure with
respect to the applicable then existing Bank Product Obligations (other than
Hedge Obligations).

“Bank Product Obligations” means the US Bank Product Obligations and/or the
Canadian Bank Product Obligations, as the context requires.

“Bank Product Provider” means any Lender or any of its Affiliates, including
each of the foregoing in its capacity, if applicable, as a Hedge Provider;
provided, that no such Person (other than Wells Fargo or its Affiliates) shall
constitute a Bank Product Provider with respect to a Bank Product unless and
until Agent receives a Bank Product Provider Agreement from such Person (a) on
or prior to the Closing Date (or such later date as Agent shall agree to in
writing in its sole discretion) with respect to

 

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Bank Products provided on or prior to the Closing Date, or (b) on or prior to
the date that is 10 days after the provision of such Bank Product to a Loan
Party or its Restricted Subsidiaries that are Loan Parties (or such later date
as Agent shall agree to in writing in its sole discretion) with respect to Bank
Products provided after the Closing Date; provided further, that if, at any
time, a Lender ceases to be a Lender under this Agreement (prior to the payment
in full of the Obligations), then, from and after the date on which it so ceases
to be a Lender thereunder, neither it nor any of its Affiliates shall constitute
Bank Product Providers (other than in their respective capacities as Hedge
Providers, if applicable) and the obligations with respect to Bank Products
provided by such former Lender or any of its Affiliates (other than Hedge
Obligations, if any) shall no longer constitute Bank Product Obligations.

“Bank Product Provider Agreement” means an agreement in substantially the form
attached hereto as Exhibit B-2 to this Agreement, in form and substance
satisfactory to Agent, duly executed by the applicable Bank Product Provider,
Loan Parties, and Agent.

“Bank Product Reserves” means the US Bank Product Reserves and/or the Canadian
Bank Product Reserves, as the context requires.

“Bank Products” means US Bank Products and/or Canadian Bank Products, as the
context requires.

“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.

“Base Rate” means (a) a US Base Rate with respect to Obligations denominated in
US Dollars, and (b) otherwise, Canadian Base Rate.

“Base Rate Loan” means each portion of the Revolving Loans that bears interest
at a rate determined by reference to the Base Rate.

“Base Rate Margin” has the meaning set forth in the definition of Applicable
Margin.

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA).

“Board of Directors” means, as to any Person, the board of directors (or
comparable managers) of such Person, or any committee thereof duly authorized to
act on behalf of the board of directors (or comparable managers).

“Board of Governors” means the Board of Governors of the Federal Reserve System
of the United States (or any successor).

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to this Agreement.

“Borrower Materials” means materials or information provided by or on behalf of
Borrowers to Agent or its Affiliates.

“Borrowing” means a Canadian Borrowing or a US Borrowing, as the context
requires.

“Borrowing Base” means the Canadian Borrowing Base or the US Borrowing Base, as
the context requires.

 

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“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1 to
this Agreement reflecting the Canadian Borrowing Base and the US Borrowing Base.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the State of New York, except
that, if a determination of a Business Day shall relate to (a) a LIBOR Rate
Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in US Dollar deposits in the London interbank market; and
(b) a Canadian Revolving Loan, the term “Business Day” also shall exclude any
day on which banks are authorized or required to close in the Province of
Ontario, Canada and Province of Alberta, Canada.

“CAM Exchange” has the meaning specified therefor in Section 13.4.

“CAM Exchange Date” has the meaning specified therefor in Section 13.4.

“CAM Percentage” has the meaning specified therefor in Section 13.4.

“Canadian Anti-Money Laundering & Anti-Terrorism Legislation” means Part II.1 of
the Criminal Code, (Canada), The Proceeds of Crime (Money Laundering) and
Terrorist Financing Act, (Canada) and the United Nations Act, (Canada), together
with all rules, regulations and interpretations thereunder or related thereto
including, without limitation, the Regulations Implementing the United Nations
Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and
Taliban Regulations promulgated under the United Nations Act (Canada) and any
similar Canadian legislation in effect from time to time.

“Canadian Availability” means, as of any time of determination, the US Dollar
Equivalent amount that Canadian Borrowers are entitled to borrow as Canadian
Revolving Loans under Section 2.1 of this Agreement (after giving effect to the
then outstanding Canadian Revolver Usage).

“Canadian Bank Product” means any one or more of the following financial
products or accommodations extended to a Canadian Loan Party by a Bank Product
Provider: (a) credit cards (including commercial credit cards (including
so-called “purchase cards”, “procurement cards” or “P-cards”)), (b) credit card
processing services, (c) debit cards, (d) stored value cards, (e) Cash
Management Services, or (f) transactions under Hedge Agreements.

“Canadian Bank Product Agreements” means those agreements entered into from time
to time by a Canadian Loan Party with a Bank Product Provider in connection with
the obtaining of any of the Canadian Bank Products.

“Canadian Bank Product Obligations” means (a) all obligations, liabilities,
reimbursement obligations, fees, or expenses owing by any Canadian Loan Party to
any Bank Product Provider pursuant to or evidenced by a Canadian Bank Product
Agreement 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, (b) all Canadian Hedge Obligations, and (c) all amounts that
Agent or any Lender is obligated to pay to a Bank Product Provider as a result
of Agent or such Lender purchasing participations from, or executing guarantees
or indemnities or reimbursement obligations to, a Bank Product Provider with
respect to the Canadian Bank Products provided by such Bank Product Provider to
any Canadian Loan Party; provided, in order for any item described in clauses
(a), (b), or (c) above, as applicable, to constitute “Canadian Bank Product
Obligations”, if the applicable Bank Product Provider is any Person other than
Wells Fargo or its Affiliates, then the applicable Canadian Bank Product must
have been (i) provided on or prior to the Closing Date (or such later date as
Agent shall agree to in writing in its sole discretion), or (ii) provided after
the Closing Date and Agent shall have received a Bank Product Provider Agreement
within 10 days after the date of the provision of the applicable Canadian Bank
Product to a Canadian Loan Party (or such later date as Agent shall agree to in
writing in its sole discretion).

 

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“Canadian Bank Product Reserves” means, as of any date of determination, those
reserves that Agent has established (based upon the applicable Bank Product
Provider’s reasonable and good faith determination of its credit exposure to the
Canadian Loan Parties in respect of Canadian Bank Product Obligations) in
respect of Canadian Bank Products then provided or outstanding.

“Canadian Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the CDOR Rate existing on such day (which rate shall be calculated based
upon an Interest Period of 1 month), plus 1 percentage point, and (b) the “prime
rate” for Canadian Dollar commercial loans made in Canada as reported by Thomson
Reuters under Reuters Instrument Code <CAPRIME=> on the “CA Prime Rate (Domestic
Interest Rate) – Composite Display” page to the extent such page is available
(or any successor page or such other commercially available service or source
(including the Canadian Dollar “prime rate” announced by a Schedule I bank under
the Bank Act (Canada)) as the Agent may designate from time to time and, if any
such reported rate is below zero, then the rate determined pursuant to this
clause (b) shall be deemed to be zero. Each determination of the Canadian Base
Rate shall be made by Agent and shall be conclusive in the absence of manifest
error.

“Canadian Borrower” and “Canadian Borrowers” have the respective meanings
specified therefor in the preamble to this Agreement.

“Canadian Borrowing” means a borrowing consisting of Canadian Revolving Loans
made on the same day by the Revolving Lenders with Canadian Revolver Commitments
(or Agent on behalf thereof), or by Canadian Swing Line Lender in the case of a
Canadian Swing Loan, or by Agent in the case of a Canadian Extraordinary
Advance.

“Canadian Borrowing Base” means, as of any date of determination, the result of:

(a) 85% of the amount of Canadian Eligible Accounts, less the amount, if any, of
the Canadian Dilution Reserve; provided that, (i) the amount of Canadian
Eligible Accounts from Specified 10% Affiliates to be included in the Canadian
Borrowing Base shall not exceed $5,000,000, and (ii) the amount of Accounts that
are Eligible Canadian Accounts as a result of being covered by credit insurance
and which are to be included in the Canadian Borrowing Base shall not exceed
$5,000,000 plus

(b) the lesser of (i) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of Canadian Eligible Finished Goods Inventory, at such
time, and (ii) the product of 85% multiplied by the Net Recovery Percentage
identified in the most recent Acceptable Appraisal of Inventory, multiplied by
the value (calculated at the lower of cost or market on a basis consistent with
Borrowers’ historical accounting practices) of Canadian Eligible Finished Goods
Inventory (such determination may be made as to different categories of Canadian
Eligible Finished Goods Inventory based upon the Net Recovery Percentage
applicable to such categories) at such time, plus

(c) the lesser of (i) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of Canadian Eligible In-Transit Inventory at such time,
and (ii) the product of 85% multiplied by the Net Recovery Percentage identified
in the most recent Acceptable Appraisal of Inventory, multiplied by the value
(calculated at the lower of cost or market on a basis consistent with Canadian
Loan Parties’ historical accounting practices) of Canadian Eligible In-Transit
Inventory (such determination may be made as to

 

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different categories of finished goods, raw materials or work-in-process
Inventory based upon the Net Recovery Percentage applicable to such categories)
at such time; provided that, (A) until the completion of an Acceptable Appraisal
of such Canadian Eligible In-Transit Inventory and the completion of a field
examination, with respect to such Inventory that is satisfactory to Agent in its
Permitted Discretion, the amount determined under this clause (c) shall be equal
to $0, and (B) the amount determined under this clause (c), when aggregated with
the amount determined under clause (c) of the definition of “US Borrowing Base”,
shall not exceed $5,000,000, plus

(d) the lesser of (i) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of Canadian Eligible Raw Materials Inventory at such time,
and (ii) the product of 85% multiplied by the Net Recovery Percentage identified
in the most recent Acceptable Appraisal of Inventory, multiplied by the value
(calculated at the lower of cost or market on a basis consistent with Borrowers’
historical accounting practices) of Canadian Eligible Raw Materials Inventory
(such determination may be made as to different categories of Canadian Eligible
Raw Materials Inventory based upon the Net Recovery Percentage applicable to
such categories) at such time, plus

(e) the lesser of

(i) $1,000,000, and

(ii) the lesser of (A) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of Canadian Eligible Work-In-Process Inventory at such
time, and (B) the product of 85% multiplied by the Net Recovery Percentage
identified in the most recent Acceptable Appraisal of Inventory, multiplied by
the value (calculated at the lower of cost or market on a basis consistent with
Borrowers’ historical accounting practices) of Canadian Eligible Work-In-Process
Inventory (such determination may be made as to different categories of Canadian
Eligible Work-In-Process Inventory based upon the Net Recovery Percentage
applicable to such categories) at such time, minus

(f) the aggregate amount of Reserves, if any, established by Agent from time to
time under Section 2.1(d) of this Agreement.

“Canadian Borrowing Base Certificate” means a certificate in the form of Exhibit
B-1, containing the calculation of the Canadian Borrowing Base.

“Canadian Defined Benefit Plan” means any Canadian Pension Plan which contains a
“defined benefit provision” as defined in subsection 147.1(1) of the Income Tax
Act (Canada).

“Canadian Designated Account” means the Deposit Account(s) of Canadian Borrowers
identified on Schedule D-1 to this Agreement (or such other Deposit Account of
Canadian Borrower located at Canadian Designated Account Bank that has been
designated as such, in writing, by Administrative Borrower to Agent).

“Canadian Designated Account Bank” has the meaning specified therefor in
Schedule D-1 to this Agreement (or such other bank that is located within Canada
that has been designated as such, in writing, by Administrative Borrower to
Agent).

“Canadian Dilution” means, as of any date of determination, a percentage, based
upon the experience of the immediately prior twelve months, that is the result
of dividing the US Dollar Equivalent amount of (a) bad debt write-downs,
discounts, advertising allowances, credits, or other dilutive items with respect
to Canadian Loan Parties’ Accounts during such period, by (b) Canadian Loan
Parties’ billings with respect to such Accounts during such period.

 

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“Canadian Dilution Reserve” means, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts of Canadian Loan
Parties by 1 percentage point for each percentage point by which Canadian
Dilution is in excess of 5%.

“Canadian Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Canadian Dollars, such amount, and (b) with respect to any amount
denominated in another currency, the equivalent amount thereof in Canadian
Dollars as determined by Agent, at such time, on the basis of the Spot Rate
(determined in respect of the most recent Revaluation Date or such other date
determined by Agent) for the purchase of Canadian Dollars with such currency.
Calculations of each Borrowing Base with respect to items included therein that
are not denominated in Canadian Dollars may be adjusted by Agent pursuant to
this definition from time to time and references herein to such Borrowing Base
(including references based upon the most recent applicable Borrowing Base
Certificate delivered by the applicable Borrowers to Agent) may reflect such
adjustments.

“Canadian Dollars” or “Cdn $” means the lawful currency of Canada, as in effect
from time to time.

“Canadian Eligible Accounts” means those Accounts created by a Canadian Loan
Party that is a Wholly-Owned Restricted Subsidiary and created in the ordinary
course of its business, that arise out of such Loan Party’s sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Canadian Eligible Accounts made in the Loan Documents, and
that are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, that such criteria may be revised from time
to time by Agent in Agent’s Permitted Discretion to address the results of any
information with respect to the Canadian Borrowers’ business or assets of which
Agent becomes aware after the Closing Date, including any field examination
performed by (or on behalf of) Agent from time to time after the Closing Date.
In determining the amount to be included, Canadian Eligible Accounts shall be
calculated net of customer deposits, unapplied cash, Taxes, finance charges,
service charges, discounts, credits, allowances, and rebates. Canadian Eligible
Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 90 days of
original invoice date or 60 days of due date; provided that any Account unpaid
for more than 90 days of original invoice date but not more than 120 days from
the date of the relevant invoice shall not be excluded under this clause (a) so
long as (i) the aggregate amount of such Accounts under this clause (a) does not
exceed $3,000,000 (prior to the inclusion of such Accounts therein), (ii) the
Account Debtor in respect of such Account is a Specified Account Debtor, and
(iii) such Account is not unpaid more than 60 days past its due date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of
all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,

(c) Accounts with respect to which the Account Debtor is a Specified Affiliate
except that up to $5,000,000 in the aggregate of such Accounts (when also
aggregated with the US Eligible Accounts owing by one or more Specified
Affiliate), may be included in Canadian Eligible Account unless the Agent
otherwise determines, from time to time, in its sole discretion that a lower
amount (including $0) shall apply,

 

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(d) (i) Accounts with respect to which the Account Debtor is an Affiliate of any
Loan Party or an employee or agent of any Loan Party or any Affiliate of any
Loan Party, in any case, other than a Specified Affiliate or a Specified 10%
Affiliate, and (ii) Accounts with respect to which the Account Debtor is a
Specified 10% Affiliate of any Loan Party unless such Accounts were on an arms’
length basis, for fair market value and in the ordinary course of business,

(e) Accounts (i) arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional, or (ii) with respect to which the
payment terms are “C.O.D.”, cash on delivery or other similar terms,

(f) Accounts that are not payable in US Dollars or Canadian Dollars,

(g) Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States or Canada, or (ii) is
not organized under the laws of the United States any state thereof, or under
the laws of Canada or any territory or province thereof, or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof (unless (A) the
Account is supported by an irrevocable letter of credit reasonably satisfactory
to Agent (as to form, substance and issuer or domestic confirming bank) that has
been delivered to Agent and, if requested by Agent, is directly drawable by
Agent or (B) with the consent of Agent which may be exercised in its sole
discretion and exercised from time to time as to any particular Account, the
Account is covered by credit insurance in form, substance and amount, and by an
insurer, acceptable to Agent in its sole discretion), except that, as to
Accounts with respect to which the Account Debtor maintains its chief executive
office in any of the five islands previously known as the “Netherlands Antilles”
or Switzerland or is organized under the laws of any such island or Switzerland
or any state, territory or province thereof; up to $1,000,000 of such Accounts
may be included in Canadian Eligible Account,

(h) Accounts with respect to which the Account Debtor is either (i) the United
States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which Borrowers have complied,
to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31
USC §3727), or (ii) any state of the United States or any other Governmental
Authority and applicable law of such state or other Governmental Authority
restricts or does not allow (A) an assignment of Accounts owing by such Account
Debtor or (B) the exercise of rights or remedies of a secured party with respect
to Accounts owing by such Account Debtor,

(i) Accounts with respect to which the Account Debtor is a creditor of a Loan
Party, has or has asserted a right of recoupment or setoff, or has disputed its
obligation to pay all or any portion of the Account, to the extent of such
claim, right of recoupment or setoff, or dispute,

(j) (i) Accounts with respect to an Account Debtor (other than Concentration
Account Debtors and Investment Grade Account Debtors) whose Canadian Eligible
Accounts owing to Canadian Loan Parties exceed 15% (such percentage, as applied
to a particular Account Debtor, being subject to reduction by Agent in its
Permitted Discretion if the creditworthiness of such Account Debtor
deteriorates) of all Canadian Eligible Accounts, (ii) Accounts with respect to
Investment Grade Account Debtors whose Canadian Eligible Accounts owing to
Canadian Loan Parties exceed 25% (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor deteriorates) of all Canadian
Eligible Accounts, and (iii) Accounts with respect to a Concentration Account
Debtor whose Canadian Eligible Accounts owing to Canadian Loan Parties exceed
30% (such percentage, as applied to a particular Account Debtor, being subject
to reduction by Agent in its Permitted Discretion if the creditworthiness of
such Account Debtor deteriorates) of all Canadian Eligible Accounts, in each of
the foregoing, to the extent of the

 

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obligations owing by such Account Debtor in excess of such percentage; provided,
that in each case under the preceding clause (i), (ii) and (iii), the amount of
Canadian Eligible Accounts that are excluded because they exceed the applicable
foregoing percentages shall be determined by Agent based on all of the otherwise
Canadian Eligible Accounts prior to giving effect to any eliminations based upon
the foregoing concentration limits,

(k) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
any Loan Party has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor, in each
case unless the Account from such Account Debtor arises subsequent to a decree
or order for relief with respect to such Account Debtor under the federal
bankruptcy laws, as now or hereafter in effect, and Agent shall have determined
in its sole discretion that the timely payment and collection of such Account
will not be impaired,

(l) Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful, including by reason of the Account Debtor’s financial
condition,

(m) Accounts that are not subject to a valid and perfected first priority
Agent’s Lien,

(n) Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor,

(o) Accounts with respect to which the Account Debtor is a Sanctioned Person or
Sanctioned Entity,

(p) Accounts (i) that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by the
applicable Loan Party of the subject contract for goods or services, or
(ii) that represent credit card sales, or

(q) Accounts owned by a target acquired in connection with a Permitted
Acquisition or Permitted Investment, or Accounts owned by a Person that is
joined to this Agreement as a Canadian Loan Party pursuant to the provisions of
this Agreement, until the completion of a field examination with respect to such
Accounts, in each case, satisfactory to Agent in its Permitted Discretion (which
examination may be conducted prior to the closing of such Permitted Acquisition,
Permitted Investment or joinder); provided that (i) until the completion of such
field examination, such Accounts may be included in Canadian Eligible Account
for a period of up to 45 days after the date of consummation of the Permitted
Acquisition or Permitted Investment or joinder so long as such Accounts
otherwise qualify as Canadian Eligible Accounts and (ii) the aggregate amount of
such Accounts which are Canadian Eligible Accounts, together with the aggregate
amount of Canadian Eligible Inventory related to Permitted Acquisitions,
Permitted Investments, and joinders that are not subject to an acceptable field
examination and an Acceptable Appraisal, do not constitute more than 10% of the
Canadian Borrowing Base.

“Canadian Eligible Finished Goods Inventory” means Inventory that qualifies as
Canadian Eligible Inventory and consists of first quality finished goods held
for sale in the ordinary course of Canadian Loan Parties’ business.

“Canadian Eligible In-Transit Inventory” means those items of Inventory that do
not qualify as Eligible Inventory solely because they are not in a location set
forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended
from time to time with prior notice to Agent) or in transit among such locations
and a Canadian Loan Party that is a Wholly-Owned Restricted Subsidiary does not
have actual and exclusive possession thereof, but as to which,

 

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(a) such Inventory currently is in transit (by vessel or land) from a location
outside of the continental United States or Canada to a location set forth on
Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended from time
to time with prior notice to Agent) to the extent that such Inventory is the
subject of a negotiable bill of lading governed by the laws of a province or
territory within Canada or a state within the United States that is (x) that is
consigned to Agent or one of its Customs Brokers (either directly or by means of
endorsements), (y) that was issued by the carrier (including a non-vessel
operating common carrier) in possession of the Inventory that is subject to such
bill of lading, and (z) that either is in the possession of Agent or a Customs
Broker (in each case in Canada),

(b) title to such Inventory has passed to a Canadian Loan Party that is a
Wholly-Owned Restricted Subsidiary and Agent shall have received such evidence
thereof as it may from time to time require,

(c) such Inventory is insured against types of loss, damage, hazards, and risks,
and in amounts, satisfactory to Agent in its Permitted Discretion, and Agent
shall have received a copy of the certificate of marine cargo insurance in
connection therewith in which it has been named as an additional insured and
loss payee in a manner acceptable to Agent,

(d) such Inventory is the subject of a negotiable bill of lading governed by the
laws of a province or territory within Canada or a state within the United
States (x) that is consigned to Agent or one of its Customs Brokers (either
directly or by means of endorsements), (y) that was issued by the carrier
(including a non-vessel operating common carrier) in possession of the Inventory
that is subject to such bill of lading, and (z) that either is in the possession
of Agent or a Customs Broker (in each case in Canada),

(e) such Inventory is in the possession of a common carrier (including on behalf
of any non-vessel operating common carrier) that has issued the bill of lading
or other document of title with respect thereto or the Customs Broker handling
the importing, shipping and delivery of such Inventory;

(f) the documents of title related thereto are subject to the valid and
perfected first priority Lien of Agent;

(g) Agent determines that such Inventory is not subject to (i) any Person’s
right of reclamation, repudiation, stoppage in transit or diversion or (ii) any
other right or claim of any other Person which is (or is capable of being)
senior to, or pari passu with, the Lien of Agent, or Agent determines that any
Person’s right or claim impairs, or interferes with, directly or indirectly, the
ability of Agent to realize on, or reduces the amount that Agent may realize
from the sale or other disposition of such Inventory;

(h) Administrative Borrower has provided, upon Agent’s request, a copy of the
invoice, packing slip and manifest with respect thereto,

(i) such Inventory shall not have been in transit for more than sixty (60) days,
and

(k) with respect to Inventory transferred from a Person that is not a Loan
Party, upon Agent’s request, the Agent shall have received such other agreements
or documents in form and substance satisfactory to the Agent executed by such
Person related to such Person’s right or claim to such Inventory or to any Loan
Party.

 

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“Canadian Eligible Inventory” means Inventory of a Canadian Loan Party that is a
Wholly-Owned Restricted Subsidiary, that complies with each of the
representations and warranties respecting Canadian Eligible Inventory made in
the Loan Documents, and that is not excluded as ineligible by virtue of one or
more of the excluding criteria set forth below; provided, that such criteria may
be revised from time to time by Agent in Agent’s Permitted Discretion to address
the results of any information with respect to the Canadian Borrowers’ business
or assets of which Agent becomes aware after the Closing Date, including any
field examination or appraisal performed or received by Agent from time to time
after the Closing Date. In determining the amount to be so included, Inventory
shall be valued at the lower of cost or market on a basis consistent with
Canadian Borrowers’ historical accounting practices. An item of Inventory shall
not be included in Canadian Eligible Inventory if:

(a) a Canadian Loan Party does not have good, valid, and marketable title
thereto,

(b) a Canadian Loan Party does not have actual and exclusive possession thereof
(either directly or through a bailee or agent of such Loan Party),

(c) it is not located at one of the locations in Canada set forth on Schedule
4.25 to this Agreement (as such Schedule 4.25 may be amended from time to time
with the prior written consent of Agent) (or in-transit from one such location
to another such location),

(d) it is stored at locations holding less than $100,000 of the aggregate value
of any Canadian Loan Party’s Inventory,

(e) it is in-transit to or from a location of a Canadian Loan Party (other than
in-transit from one location set forth on Schedule 4.25 to this Agreement to
another location set forth on Schedule 4.25 to this Agreement (as such Schedule
4.25 may be amended from time to time with the prior written consent of Agent)),

(f) it is located on real property leased by a Canadian Loan Party or in a
contract warehouse or with a bailee, in each case, unless either (i) it is
subject to a Collateral Access Agreement executed by the lessor or warehouseman,
as the case may be, and it is segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises, or (ii) Agent has
established a Landlord Reserve with respect to such location; provided that,
until the 90th day after the Closing Date, such Inventory that is located at a
location not covered by a Collateral Access Agreement or a Landlord Reserve may
be Canadian Eligible Inventory if it otherwise qualifies as a Canadian Eligible
Inventory,

(g) it is the subject of a bill of lading or other document of title,

(h) it is not subject to a valid and perfected first priority Agent’s Lien,

(i) it consists of goods returned or rejected by a Canadian Loan Party’s
customers, unless such Inventory is undamaged and able to be resold in the
ordinary course of business to a readily available market without any
modification,

(j) it consists of goods that are obsolete, slow moving, spoiled or are
otherwise past the stated expiration, “sell-by” or “use by” date applicable
thereto, restrictive or custom items, or goods that constitute spare parts that
are consumed or consumable by any Loan Party or Restricted Subsidiary, packaging
and shipping materials, supplies used or consumed in a Canadian Loan Party’s
business, bill and hold goods, defective goods, “seconds,” or Inventory acquired
on consignment,

(k) it is subject to third party intellectual property, licensing or other
proprietary rights, unless Agent is satisfied that such Inventory can be freely
sold by Agent on and after the occurrence of an Event of a Default despite such
third party rights, or

 

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(l) it was acquired in connection with a Permitted Acquisition or Permitted
Investment, or such Inventory is owned by a Person that is joined to this
Agreement as a Canadian Loan Party pursuant to the provisions of this Agreement,
until the completion of an Acceptable Appraisal of such Inventory and the
completion of a field examination with respect to such Inventory that is
satisfactory to Agent in its Permitted Discretion (which examination may be
conducted prior to the closing of such Permitted Acquisition, Permitted
Investment or joinder); provided that (i) until the completion of such field
examination and Acceptable Appraisal, such Inventory may be included in Canadian
Eligible Inventory for a period of up to 45 days after the date of consummation
of the Permitted Acquisition or Permitted Investment or joinder so long as such
Inventory otherwise qualify as Canadian Eligible Inventory and (ii) the
aggregate amount of such Inventory which are Canadian Eligible Inventory,
together with the aggregate amount of Canadian Eligible Accounts related to
Permitted Acquisitions, Permitted Investments, and joinders that are not subject
to a satisfactory field examination, do not constitute more than 10% of the
Canadian Borrowing Base.

“Canadian Eligible Raw Materials Inventory” means Inventory that qualifies as
Canadian Eligible Inventory and consists of goods that are first quality raw
materials and that are not located in open pallets or containers.

“Canadian Eligible Work-in-Process Inventory” means Inventory that qualifies as
Canadian Eligible Inventory and consists of goods that are first quality
work-in-process; provided, that anything to the contrary contained herein
notwithstanding, the value of such Inventory shall not include the value of any
labor or other services rendered to produce such Inventory.

“Canadian Extraordinary Advance” has the meaning specified therefor in
Section 2.2(d)(iii) of this Agreement.

“Canadian Hedge Obligations” means any and all obligations or liabilities,
whether absolute or contingent, due or to become due, now existing or hereafter
arising, of any Canadian Loan Party arising under, owing pursuant to, or
existing in respect of Hedge Agreements entered into with one or more of the
Hedge Providers; provided that, as to such obligations or liabilities owing to a
former Lender or an Affiliate of a former Lender, such obligations and
liabilities shall constitute Canadian Hedge Obligations only as to the
individual Hedge Agreements (and not Master ISDA Agreements) entered into prior
to such Lender ceasing to be a Lender hereunder and without giving effect to any
extension or renewal thereof.

“Canadian Issuing Bank” means WF Canada or any other Lender that, at the request
of Administrative Borrower and with the consent of Agent (not to be unreasonably
withheld, conditioned or delayed), agrees, in such Lender’s sole discretion, to
become a Canadian Issuing Bank for the purpose of issuing Canadian Letters of
Credit or, if WF Canada is the Canadian Issuing Bank, shall include WF Canada,
to the extent applicable, represented by or acting for, through or on behalf of
a Canadian Underlying Issuer in its capacity as an issuer of Letters of Credit
hereunder. For avoidance of doubt, no Canadian Issuing Bank other than WF Canada
may issue a Canadian Reimbursement Undertaking without Agent’s prior written
consent.

“Canadian Letter of Credit” means a letter of credit (as that term is defined in
the Code) issued by Canadian Issuing Bank or Canadian Underlying Issuer for the
account of the Parent or any Restricted Subsidiary.

“Canadian Letter of Credit Disbursement” means a payment made by Canadian
Issuing Bank pursuant to a Canadian Letter of Credit or a Canadian Reimbursement
Undertaking.

 

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“Canadian Letter of Credit Exposure” means, as of any time of determination with
respect to any Lender, such Lender’s Pro Rata Share of the Canadian Letter of
Credit Usage on such date (including such Lender’s Pro Rata Share of Canadian
Reimbursement Undertakings on such date).

“Canadian Letter of Credit Fees” has the meaning specified therefor in
Section 2.5(b) of this Agreement.

“Canadian Letter of Credit Obligations” means the obligation of each Canadian
Loan Party to reimburse Canadian Issuing Bank for amounts paid pursuant to
Canadian Letters of Credit.

“Canadian Letter of Credit Sublimit” means $3,000,000.

“Canadian Letter of Credit Usage” means, as of any time of determination, the
US Dollar Equivalent of the sum of (a) the aggregate undrawn amount of all
outstanding Canadian Letters of Credit plus (b) the aggregate amount of
outstanding reimbursement obligations with respect to Canadian Letters of Credit
which remain unreimbursed or which have not been paid through a Revolving Loan.

“Canadian Loan Account” has the meaning specified therefor in Section 2.8 of
this Agreement.

“Canadian Loan Party” means the Canadian Borrowers and the Guarantors that are
Subsidiaries of the Parent organized or domiciled under the laws of Canada or
any territory or province thereof.

“Canadian Multi-Employer Plan” means a “multi-employer pension plan”, as such
term is defined under the Pension Benefits Act (Ontario), under which a Canadian
Loan Party is required to contribute pursuant to a collective bargaining
agreement and under which (i) the sole obligation of the Canadian Loan Party is
to make the contributions specified in the applicable collective bargaining
agreement, and (ii) the Canadian Loan Party has no liability relating to any
past or future withdrawals from the plan.

“Canadian Obligations” means (a) all loans (including the Canadian Revolving
Loans (inclusive of Canadian Extraordinary Advances and Canadian Swing Loans)),
debts, principal, interest (including any interest that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
reimbursement or indemnification obligations with respect to Canadian Letters of
Credit (irrespective of whether contingent), premiums, liabilities (including
all amounts charged to the Canadian Loan Account pursuant to this Agreement),
obligations (including indemnification obligations) of any Canadian Loan Party,
fees (including the fees Schedule 1.1 provided for in the Fee Letter) of any
Canadian Loan Party, Lender Group Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding) of any Canadian Loan Party, guaranties of any Canadian Loan Party,
and all covenants and duties of any other kind and description owing by any
Canadian Loan Party arising out of, under, pursuant to, in connection with, or
evidenced by this Agreement or any of the other Loan Documents 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 interest not paid when due and all other expenses or other amounts
that any Canadian Loan Party is required to pay or reimburse by the Loan
Documents or by law or otherwise in connection with the Loan Documents, (b) all
debts, liabilities, or obligations (including reimbursement obligations,
irrespective of whether contingent) owing by Canadian Borrower or any other
Canadian Loan Party to Canadian Issuing Bank now or hereafter arising from or in
respect of a Canadian Letters of Credit, and (c) all Canadian Bank Product

 

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Obligations; provided, that Canadian Obligations shall not include Excluded Swap
Obligations. Without limiting the generality of the foregoing, the Canadian
Obligations under the Loan Documents include the obligation to pay (i) the
principal of the Canadian Revolving Loans, (ii) the interest accrued on the
Canadian Revolving Loans, (iii) the amount necessary to reimburse Canadian
Issuing Bank for amounts paid or payable pursuant to Canadian Letters of Credit,
(iv) letter of credit commissions, charges, expenses, and fees, in each case in
respect of Canadian Letters of Credit (v) Lender Group Expenses of any Canadian
Loan Party, (vi) fees payable by any Canadian Loan Party under this Agreement or
any of the other Loan Documents, and (vii) indemnities and other amounts payable
by any Canadian Loan Party under any Loan Document (excluding Excluded Swap
Obligations). Any reference in this Agreement or in the Loan Documents to the
Canadian Obligations shall include all or any portion thereof and any
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.

“Canadian Overadvance” means, as of any time of determination, that the Canadian
Revolver Usage is greater than any of the limitations set forth in Section 2.1
or Section 2.10B.

“Canadian Pension Plans” means each pension plan required to be registered under
Canadian federal or provincial law that is maintained or contributed to, or to
which there is or may be an obligation to contribute by a Loan Party or a
Restricted Subsidiary thereof, for its employees or former employees, but does
not include the Canada Pension Plan or the Quebec Pension Plan as maintained by
the Government of Canada or the Province of Quebec, respectively.

“Canadian Priority Payables Reserves” means reserves (determined from time to
time by Agent in its Permitted Discretion and subject to Section 2.1(d)) for:
(a) the amount past due and owing by any Canadian Loan Party, or the accrued
amount for which such Canadian Loan Party has an obligation to remit, to a
Governmental Authority or other Person pursuant to any applicable law, rule or
regulation, in respect of (i) goods and services taxes, harmonized sales taxes,
other sales taxes, employee income taxes, municipal taxes and other taxes
payable or to be remitted or withheld; (ii) workers’ compensation or employment
insurance; (iii) federal Canada Pension Plan and other statutory Pension Plan
contributions; (iv) vacation or holiday pay; and (v) other like charges and
demands, in each case, to the extent that any Governmental Authority or other
Person may claim a Lien, trust, deemed trust or other claim ranking or capable
of ranking in priority to or pari passu with one or more of the Liens granted in
the Loan Documents; and (b) the aggregate amount of any other liabilities of any
Canadian Loan Party (i) in respect of which a Lien, trust or deemed trust has
been or may be imposed on any Collateral to provide for payment, or (ii) in
respect of unpaid or unremitted pension plan contributions, including normal
cost contributions, special payments and, without duplication, amounts
representing any unfunded liability, solvency deficiency or wind-up deficiency
whether or not due with respect to a Canadian Pension Plan, or (iii) which are
secured by a Lien, charge, right or claim on any Collateral (other than
Permitted Liens that do not have priority over Agent’s Liens); in each case,
pursuant to any applicable law, rule or regulation and which such lien, trust,
deemed trust, pledge, charge, right or claim ranks or in the Permitted
Discretion of Agent, is capable of ranking in priority to or pari passu with one
or more of the Liens granted in the Loan Documents (such as certain claims by
employees for unpaid wages and other amounts payable under the Wage Earner
Protection Program Act (Canada)); in each case net of the aggregate amount of
all restricted cash held or set aside for the payment of such obligations.

“Canadian Protective Advances” has the meaning specified therefor in
Section 2.2(d)(i) of this Agreement.

“Canadian Reimbursement Undertaking” has the meaning specified therefor in
Section 2.10B(a) of this Agreement and refers to the US Dollar Equivalent
thereof.

 

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“Canadian Revolver Commitment” means, with respect to each Revolving Lender, its
Canadian Revolver Commitment, and, with respect to all Revolving Lenders, their
Canadian Revolver Commitments, in each case as such US Dollar amounts are set
forth beside such Revolving Lender’s name under the applicable heading on
Schedule C-1 to this Agreement or in the Assignment and Acceptance or Increase
Joinder pursuant to which such Revolving Lender became a Revolving Lender under
this Agreement, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1
of this Agreement, and as such amounts may be decreased by the amount of
reductions in the Canadian Revolver Commitments made in accordance with
Section 2.3(c) hereof.

“Canadian Revolver Usage” means, as of any time of determination, the US Dollar
Equivalent of the sum of (a) the amount of outstanding Canadian Revolving Loans
(inclusive of Canadian Swing Loans and Canadian Protective Advances), plus
(b) the amount of the Canadian Letter of Credit Usage.

“Canadian Revolving Lender” means a Lender that has Canadian Revolving Loan
Exposure or Canadian Letter of Credit Exposure.

“Canadian Revolving Loan Exposure” means, with respect to any Lender, as of any
time of determination (a) prior to the termination of the Canadian Revolver
Commitments, the amount of such Lender’s Canadian Revolver Commitment, and
(b) after the termination of the Canadian Revolver Commitments, the US Dollar
Equivalent of the aggregate outstanding principal amount of the Canadian
Revolving Loans of such Lender plus such Lender’s Canadian Letter of Credit
Exposure.

“Canadian Revolving Loans” has the meaning specified therefor in Section 2.1(b)
of this Agreement.

“Canadian Swing Line Lender” means WF Canada or any other Lender that, at the
request of Canadian Borrower and with the consent of Agent (not to be
unreasonably withheld, delayed or conditioned) agrees, in such Lender’s sole
discretion, to become the Canadian Swing Line Lender under Section 2.2(b) of
this Agreement.

“Canadian Swing Loan” has the meaning specified therefor in Section 2.2(b) of
this Agreement.

“Canadian Swing Loan Exposure” means, as of any time of determination with
respect to any Lender, such Lender’s Pro Rata Share of the US Dollar Equivalent
of the principal amount of outstanding Canadian Swing Loans on such date.

“Canadian Underlying Issuer” means The Toronto-Dominion Bank or one of its
Affiliates or such other Person that is acceptable to Agent.

“Capital Expenditures” means, with respect to any Person for any period, the
amount of all expenditures by such Person and its Restricted Subsidiaries during
such period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed, but excluding, without
duplication (a) with respect to the purchase price of assets that are purchased
substantially contemporaneously with the trade-in of existing assets during such
period, the amount that the gross amount of such purchase price is reduced by
the credit granted by the seller of such assets for the assets being traded in
at such time, (b) expenditures made during such period to consummate one or more
Permitted Acquisitions, and (c) expenditures during such period that, pursuant
to a written agreement, are reimbursed by a third Person (excluding any Loan
Party or any of its Affiliates).

 

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“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.

“Capital Lease” means, subject to Section 1.2, a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.

“Cash Equivalents” means the following, whether denominated in Canadian Dollars
or US Dollars: (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 or by, or unconditionally
guaranteed by, the government of Canada or issued by any agency thereof and
backed by the full faith and credit of Canada, in each case maturing within 1
year from the date of acquisition thereof (b) marketable direct obligations
issued or fully guaranteed by any state of the United States or province of
Canada or any political subdivision of any such state, territory or province or
any public instrumentality thereof maturing within 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 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 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 a bank organized under the laws of
Canada, or any United States or Canadian branch of a foreign bank, in each case
having at the date of acquisition thereof combined capital and surplus of not
less $1,000,000,000, (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 or the laws
of Canada so long as the full amount maintained with any such other bank is
insured by the Federal Deposit Insurance Corporation or the Canadian Deposit
Insurance Corporation, (f) repurchase obligations of any commercial bank
satisfying the requirements of clause (d) of this definition or of any
recognized securities dealer having combined capital and surplus of not less
than $1,000,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt
securities with maturities of six 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.

“Cash Dominion Event” means the occurrence of any of the following: (A) the
occurrence and continuance of any Event of Default, or (B) Excess Availability
is less than the greater of (i) 10.0% of the Line Cap and (ii) $20,000,000 at
any time.

“Cash Dominion Period” means the period commencing after the occurrence of a
Cash Dominion Event and continuing until the date when (A) no Event of Default
shall exist and be continuing, and (B) Excess Availability exceeds the greater
of (i) 10.0% of the Line Cap and (ii) $20,000,000, in any event, for at least 30
consecutive days.

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other customary cash
management arrangements.

 

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“CDOR Rate” means the average rate per annum as reported on the Reuters Screen
CDOR Page (or any successor page or such other page or commercially available
service displaying Canadian interbank bid rates for Canadian Dollar bankers’
acceptances as the Agent may designate from time to time, or if no such
substitute service is available, the rate quoted by a Schedule I bank under the
Bank Act (Canada) selected by the Agent at which such bank is offering to
purchase Canadian Dollar bankers’ acceptances) as of 10:00 a.m. Eastern
(Toronto) time on the date of commencement of the requested Interest Period, for
a term, and in an amount, comparable to the Interest Period and the amount of
the CDOR Rate Loan requested (whether as an initial CDOR Rate Loan or as a
continuation of a CDOR Rate Loan or as a conversion of a Base Rate Loan to a
CDOR Rate Loan) by Borrowers in accordance with this Agreement (and, if any such
reported rate is below zero, then the rate determined pursuant to this clause
(b) shall be deemed to be zero). Each determination of the CDOR Rate shall be
made by the Agent and shall be conclusive in the absence of manifest error.

“CDOR Rate Loan” means each portion of the Canadian Revolving Loans that bears
interest at a rate determined by reference to the CDOR Rate.

“CFC” means a controlled foreign corporation (as that term is defined in the
IRC) in which any Loan Party is a “United States shareholder” within the meaning
of Section 951(b) of the IRC.

“Change in Control” means the occurrence of any of the following events:

(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 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)
other than the Permitted Holder 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 (such right, an “option
right”), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 35% or more of the equity securities of the
Parent entitled to vote for members of the board of directors or equivalent
governing body of the Parent on a fully-diluted basis (and taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right),

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the Parent cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first 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 a majority 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 a
majority of that board or equivalent governing body;

(c) the occurrence of any “change of control” or “change in control”, however
defined, under Other Debt Documents evidencing Indebtedness in an aggregate
outstanding principal amount equal to or greater than $25,000,000; or

(d) any Borrower (other than the Parent) ceases to be a Restricted Subsidiary of
the Parent.

 

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“Change in Law” means the occurrence after the date of this Agreement of:
(a) the adoption or effectiveness of any law, rule, regulation, judicial ruling,
judgment or treaty, (b) any change in any law, rule, regulation, judicial
ruling, judgment or treaty or in the administration, interpretation,
implementation or application by any Governmental Authority of any law, rule,
regulation, guideline or treaty, or (c) the making or issuance by any
Governmental Authority of any request, rule, guideline or directive, whether or
not having the force of law; provided, that notwithstanding anything in this
Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith, and (ii) all requests, rules, guidelines or
directives concerning capital adequacy promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law,” regardless of the date enacted, adopted or issued.

“Closing Date” means the date of the making of the initial Revolving Loan (or
other extension of credit) under this Agreement.

“Co-Syndication Agents” has the meaning set forth in the preamble to this
Agreement.

“Code” means the New York Uniform Commercial Code, as in effect from time to
time.

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by any Loan Party or its Restricted Subsidiaries in
or upon which a Lien is granted by such Person in favor of Agent or the Lenders
under any of the Loan Documents.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Loan Party’s or its Restricted Subsidiaries’ books and records,
Equipment, or Inventory, in each case, in form and substance reasonably
satisfactory to Agent.

“Collections” means, all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, cash proceeds of asset sales, rental
proceeds and Tax refunds).

“Commitment” means, with respect to each Lender, its US Revolver Commitment or
its Canadian Revolver Commitment, as the context requires, and, with respect to
all Lenders, their US Revolver Commitments or their Canadian Revolver
Commitments, as the context requires, in each case as such US Dollar amounts are
set forth beside such Lender’s name under the applicable heading on Schedule C-1
to this Agreement or in the Assignment and Acceptance pursuant to which such
Lender became a Lender under this Agreement, as such amounts may be reduced or
increased from time to time pursuant to assignments made in accordance with the
provisions of Section 13.1 of this Agreement.    For the avoidance of doubt,
each Lender’s (or its Affiliate’s) Canadian Revolver Commitment, if any, is a
subset of such Lender’s US Revolver Commitment and, in no event shall any
Revolving Lender or any its Affiliate be obligated to have a US Revolving Loan
Exposure in excess of its US Revolver Commitment.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 to this Agreement delivered by the chief financial officer or
treasurer of Parent to Agent.

 

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“Concentration Account Debtors” means the following Persons to the extent they
are Account Debtors (a) Patterson-UTI Energy, Inc. and each wholly-owned
Subsidiary thereof, and (b) MRC Global, Inc.

“Confidential Information” has the meaning specified therefor in Section 17.9(a)
of this Agreement.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership, by contract, or otherwise, and the terms “Controlled by” or
“under common Control with” shall have the correlative meanings.

“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by a Loan Party or one of its
Restricted Subsidiaries, Agent, and the applicable securities intermediary (with
respect to a Securities Account) or bank (with respect to a Deposit Account).

“Controlled Account” has the has the meaning specified therefor in
Section 6.17(a) of this Agreement.

“Controlled Account Bank” has the meaning specified therefor in Section 6.17(a)
of this Agreement.

“Covenant Testing Period” means a period (a) commencing on the last day of the
fiscal quarter of Parent most recently ended prior to a Covenant Trigger Event
for which Borrowers are required to deliver to Agent quarterly or annual
financial statements pursuant to Schedule 5.1 to this Agreement, and
(b) continuing through and including the first day after such Covenant Trigger
Event that Excess Availability has exceeded the greater of (i) 10% of the Line
Cap and (ii) $20,000,000, in any event, for 60 consecutive days.

“Covenant Trigger Event” means if Excess Availability is less than the greater
of (i) 10.0% of the Line Cap and (ii) $20,000,000.

“Customs Brokers” shall mean the persons listed on Schedule C-2 hereto or such
other person or persons as may be selected by Administrative Borrower after the
date hereof and after written notice by Administrative Borrower to Agent who are
reasonably acceptable to Agent in its Permitted Discretion to handle the receipt
of Inventory within the United States or Canada or to clear Inventory through
the Bureau of Customs and Border Protection or other domestic or foreign export
control authorities or otherwise perform port of entry services to process
Inventory imported by a Borrower from outside the United States or Canada, as
applicable (such persons sometimes being referred to herein individually as a
“Customs Broker”), provided, that, as to each such person, (a) Agent shall have
received a customs broker agreement by such person in favor of Agent (in form
and substance reasonably satisfactory to Agent) duly authorized, executed and
delivered by such person, (b) such agreement shall be in full force and effect
and (c) such person shall be in compliance in all material respects with the
terms thereof.

“Criminal Code Section” has the meaning specified therefor in Section 2.17(b) of
this Agreement.

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

 

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“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two Business Days of the date such Loans were
required to be funded hereunder unless such Lender notifies Agent and
Administrative Borrower in writing that such failure is the result of such
Lender’s determination that one or more conditions precedent to funding (each of
which conditions precedent, together with any applicable Default or Event of
Default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to Agent, Issuing Bank, or any other Lender any other
amount required to be paid by it hereunder (including in respect of its
participation in Letters of Credit) within two Business Days of the date when
due, (b) has notified any Borrower, Agent or Issuing Bank in writing that it
does not intend to comply with its funding obligations hereunder or generally
under other agreements in which it commits to extend credit, or has made a
public statement to that effect (unless such writing or public statement relates
to such Lender’s obligation to fund a Loan hereunder and states that such
position is based on such Lender’s determination that a condition precedent to
funding (which condition precedent, together with any applicable Default or
Event of Default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three Business Days
after written request by Agent or Administrative Borrower, to confirm in writing
to Agent and Administrative Borrower that it will comply with its prospective
funding obligations hereunder (provided, that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon receipt of such written
confirmation by Agent and Administrative Borrower), or (d) has, or has a direct
or indirect parent company that has, (i) become the subject of any Insolvency
Proceeding, (ii) had appointed for it a receiver, custodian, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or assets, including
the Federal Deposit Insurance Corporation or any other state or federal
regulatory authority acting in such a capacity, or (iii) become the subject of a
Bail-in Action; provided, that a Lender shall not be a Defaulting Lender solely
by virtue of the ownership or acquisition of any equity interest in that Lender
or any direct or indirect parent company thereof by a Governmental Authority so
long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States or from the
enforcement of judgments or writs of attachment on its assets or permit such
Lender (or such Governmental Authority) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such Lender. Any determination
by Agent that a Lender is a Defaulting Lender under any one or more of clauses
(a) through (d) above shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender upon delivery of written
notice of such determination to Administrative Borrower, Issuing Bank, and each
Lender.

“Defaulting Lender Rate” means (a) for the first three days from and after the
date the relevant payment is due, the Base Rate, and (b) thereafter, the
interest rate then applicable to Revolving Loans that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).

“Deposit Account” means any deposit account (as that term is defined in the Code
or, to the extent applicable, the PPSA).

“Designated Account” means US Designated Account and/or Canadian Designated
Account, as the context requires.

“Disqualified Equity Interests” means any Equity Interests that, by their terms
(or by the terms of any security or other Equity Interests into which they are
convertible or for which they are exchangeable), or upon the happening of any
event or condition (a) matures or are mandatorily redeemable (other than solely
for Qualified Equity Interests), pursuant to a sinking fund obligation or
otherwise (except as a result of a change of control or asset sale so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale event shall be subject to the prior repayment in full of the Loans
and all other Obligations that are accrued and payable and the termination of
the Commitments), (b) are redeemable at the option of the holder thereof (other
than solely for

 

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Qualified Equity Interests), in whole or in part, (c) provide for the scheduled
payments of dividends in cash, or (d) are or become convertible into or
exchangeable for Indebtedness or any other Equity Interests that would
constitute Disqualified Equity Interests, in each case, prior to the date that
is 91 days after the later of (x) the Maturity Date and (y) the fifth
anniversary of the Closing Date; provided that if any such Equity Interest is
issued pursuant to a plan for the benefit of the employees, directors, officers,
managers or consultants of any Borrower or any Restricted Subsidiary or by any
such plan to such Persons, such Equity Interest shall not be regarded as an
Equity Interest constituting a Disqualified Equity Interest solely because it
may be required to be repurchased by Parent, any Borrower, or its Restricted
Subsidiaries in order to satisfy applicable employment or regulatory
obligations.

“Documentation Agent” has the meaning set forth in the preamble to this
Agreement.

“Domestic Cash” means cash deposited in a deposit account of a Loan Party that
is (a) maintained by a member of the Lender Group, as depository bank,
(b) located in the United States, and (c) subject to a Control Agreement, but
not including cash used for Letter of Credit Collateralization or Bank Product
Collateralization.

“Domestic Subsidiary” means any Subsidiary of any Loan Party that is not a
Foreign Subsidiary.

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit, including by electronic
transmission such as SWIFT, electronic mail, facsimile or computer generated
communication.

“Earn-Outs” means unsecured liabilities of a Loan Party arising under an
agreement to make any deferred payment as a part of the Purchase Price for a
Permitted Acquisition, including performance bonuses or consulting payments in
any related services, employment or similar agreement, in an amount that is
subject to or contingent upon the revenues, income, cash flow or profits (or the
like) of the target of such Permitted Acquisition.

“EBITDA” means, for any period and for the Parent and its consolidated
Restricted Subsidiaries, without duplication, (a) the Parent’s consolidated Net
Income for such period (it being understood that no amounts of the Unrestricted
Subsidiaries’ or any Joint Ventures’ Net Income shall be taken into account in
calculating EBITDA other than to the extent provided in clause (c) below), plus
(b) to the extent deducted in determining consolidated Net Income for such
period, Interest Expense, taxes, depreciation, amortization, depletion, and
other non-cash charges for such period (including any provision for the
reduction in the carrying value of assets recorded in accordance with GAAP and
including non-cash charges resulting from the requirements of ASC 410, 718 and
815) for such period, plus (c) Net Income of Unrestricted Subsidiaries and Joint
Ventures but to the extent and only to the extent the amount thereof is
distributed as cash dividends to the Restricted Entities during such period,
plus (d) to the extent deducted in determining consolidated Net Income for such
period, non-recurring restructuring expenses incurred during such period
consisting of severance costs, costs associated with office or plant closings
and consolidation or relocation fees for such period; provided that the
aggregate amount of such expenses shall not exceed $7,500,000 in the aggregate
for any four-fiscal quarter period, plus (e) to the extent deducted in
determining consolidated Net Income for such period, any non-recurring charges
incurred during such period in connection with Permitted Acquisitions consisting
of excess compensation of prior officers of the acquired Person; provided that
the aggregate amount of such charges may not exceed $2,500,000 for any
four-fiscal quarter period unless otherwise agreed to by the Agent, plus (f) to
the extent deducted in determining consolidated Net Income for such period,
other reasonable non-recurring cash charges and expenses incurred in connection
with Permitted Acquisitions during such period in an amount not to exceed such
amount as agreed to between the Agent and the Parent (except

 

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that such amount shall not exceed $7,500,000, not including transaction
expenses) for any four-fiscal quarter period, minus (g) all non-cash items of
income which were included in determining such consolidated Net Income
(including non-cash income resulting from the requirements of ASC 410, 718 and
815); provided that such EBITDA shall be subject to pro forma adjustments for
Acquisitions and non-ordinary course sale, transfer, or other disposition of
assets, in any event, assuming that such transactions had occurred on the first
day of the determination period, which adjustments shall be determined on a
basis consistent with Article 11 of Regulation S-X promulgated under the
Securities Act and as interpreted by the staff of the SEC or in a manner
otherwise reasonably acceptable to the Agent. In addition, notwithstanding the
foregoing, (a) EBITDA for the quarter ended December 31, 2016 shall be
$9,289,000, (b) EBITDA for the quarter ended March 31, 2017 shall be deemed to
be $4,797,000, (c) EBITDA for the quarter ended June 30, 2017 shall be deemed to
be $16,112,000, and (d) EBITDA for the quarter ended September 30, 2017 shall be
deemed to be $18,562,000.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Eligible Accounts” means the US Eligible Accounts and/or the Canadian Eligible
Accounts, as the context requires.

“Eligible Currency” means any Foreign Currency provided that: (a) quotes for
loans in such currency are available in the London interbank deposit market;
(b) such currency is freely transferable and convertible into US Dollars in the
London foreign exchange market, (c) no approval of a Governmental Authority in
the country of issue of such currency is required to permit use of such currency
by any applicable Lender or applicable Issuing Bank for making loans or issuing
letters of credit, or honoring drafts presented under letters of credit in such
currency, and (d) there is no restriction or prohibition under any applicable
law or regulation against the use of such currency for such purposes.

“Employee Benefit Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA, (a) that is or within
the preceding six (6) years has been sponsored, maintained or contributed to by
any Loan Party or ERISA Affiliate or (b) to which any Loan Party or ERISA
Affiliate has, or has had at any time within the preceding six (6) years, any
liability, contingent or otherwise.

“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower, any Restricted Subsidiary of any Borrower, or any of
their predecessors in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Hazardous Materials generated by
any Borrower, any Restricted Subsidiary of any Borrower, or any of their
predecessors in interest.

 

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“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on any
Loan Party or its Restricted Subsidiaries, relating to the environment, the
effect of the environment on employee health, or Hazardous Materials, in each
case as amended from time to time.

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.

“Equipment” means equipment (as that term is defined in the Code or, to the
extent applicable, the PPSA).

“Equity Interests” means, with respect to a Person, all of the shares, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in such Person, whether voting or nonvoting, including capital
stock (or other ownership or profit interests or units), preferred stock, or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of any Loan Party or
its Restricted Subsidiaries under IRC Section 414(b), (b) any trade or business
subject to ERISA whose employees are treated as employed by the same employer as
the employees of any Loan Party or its Restricted Subsidiaries under IRC
Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which any Loan Party or any of its Restricted Subsidiaries is a
member under IRC Section 414(m), or (d) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to
an arrangement with any Loan Party or any of its Restricted Subsidiaries and
whose employees are aggregated with the employees of such Loan Party or its
Restricted Subsidiaries under IRC Section 414(o).

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Event of Default” has the meaning specified therefor in Section 8 of this
Agreement.

“Excess Availability” means, as of any time of determination, the amount equal
to (a) the Line Cap minus (b) the sum of (i) the US Revolver Usage and (ii) the
Canadian Revolver Usage.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

“Excluded Accounts” means deposit or securities accounts that are designated
solely as accounts for, and are used solely for, payroll funding, employee
compensation, employee benefits or taxes.

“Excluded Subsidiary (Canadian)” means (a) Immaterial Subsidiaries, (b) any
Foreign Subsidiary that is not domiciled in Canada or any province or territory
thereof, (c) any Restricted Subsidiary of a Canadian Loan Party to the extent
that the burden or cost (including any potential Tax liability) of obtaining a
guarantee outweighs the benefit afforded thereby as reasonably determined by
Borrowers and Agent, (d) any Subsidiary of a Loan Party that is not
Wholly-Owned, and (e) any Unrestricted Subsidiary; provided, that no Person
which has guaranteed or is otherwise liable for any Other Debt shall be an
Excluded Subsidiary (Canadian).

“Excluded Subsidiary (US)” means (a) Immaterial Subsidiaries, (b) any Restricted
Subsidiary of a US Loan Party to the extent that the burden or cost (including
any potential Tax liability) of obtaining a guarantee outweighs the benefit
afforded thereby as reasonably determined by Borrowers and Agent, (c) any
Foreign Subsidiary of a Loan Party that is a CFC, (d) any Subsidiary of a Loan
Party that is a direct or indirect subsidiary of a Foreign Subsidiary that is a
CFC, (e) any Subsidiary of a Loan Party that is not Wholly-Owned, and (f) any
Unrestricted Subsidiary; provided, that no Person which has guaranteed or is
otherwise liable for any Other Debt shall be an Excluded Subsidiary (US).

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap
Obligation if, and to the extent that, all or a portion of the guaranty of such
Loan Party of (including by virtue of the joint and several liability provisions
of Section 2.14 or Section 2.15), or the grant by such Loan Party of a security
interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Loan Party’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time the guaranty
of such Loan Party or the grant of such security interest becomes effective with
respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
guaranty or security interest is or becomes illegal.

“Excluded Taxes” means (a) any Tax imposed on the net or overall gross income or
net or overall gross profits of any Lender (including any branch profits,
capital, franchise or similar Taxes), in each case (i) imposed by the
jurisdiction (or by any political subdivision or taxing authority thereof) in
which such Lender is organized or the jurisdiction (or by any political
subdivision or taxing authority thereof) in which such Lender’s principal office
is located in or (ii) that are Other Connection Taxes, (b) United States federal
withholding Taxes that would not have been imposed but for a Lender’s failure to
comply with the requirements of Section 16.2 of this Agreement, (c) any United
States federal or Canadian withholding Taxes that would be imposed on amounts
payable to a Lender based upon the applicable withholding rate in effect at the
time such Lender becomes a party to this Agreement (or designates a new lending
office, other than a designation made at the request of a Loan Party), except
that Excluded Taxes shall not include (A) any amount that such Lender (or its
assignor, if any) was previously entitled to receive pursuant to Section 16.1 of
this Agreement, if any, with respect to such withholding Tax at the time such
Lender becomes a party to this Agreement (or designates a new lending office),
and (B) additional United States federal withholding Taxes that may be imposed
after the time such Lender becomes a party to this Agreement (or designates a
new lending office), as a result of a change in law, rule, regulation, treaty,
order or other decision or other Change in Law with respect to any of the
foregoing by any Governmental Authority, and (d) any United States federal
withholding Taxes imposed under FATCA.

 

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“Existing Credit Facility” means the facility evidenced by that certain Second
Amended and Restated Credit Agreement dated as of November 26, 2013 among the
Parent, Wells Fargo as administrative agent, swing line lender, and issuing
lender, the other issuing lenders thereunder and the lenders party thereto, as
heretofore amended.

“Existing Letters of Credit” means those letters of credit described on Schedule
E-1 to this Agreement.

“Exiting Lender” has the meaning specified therefor in Section 17.15 of this
Agreement.

“Extraordinary Advances” means the US Extraordinary Advances and/or the Canadian
Extraordinary Advances, as the context requires.

“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and (a) any current or future
regulations or official interpretations thereof, (b) any agreements entered into
pursuant to Section 1471(b)(1) of the IRC, and (c) any intergovernmental
agreement entered into by the United States (or any fiscal or regulatory
legislation, rules, or official practices adopted pursuant to any such
intergovernmental agreement entered into in connection therewith).

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Fee Letter” means that certain fee letter, dated as of even date with this
Agreement, among Borrowers and Agent, in form and substance reasonably
satisfactory to Agent.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by it (and, if any such rate is below zero, then the rate
determined pursuant to this definition shall be deemed to be zero).

“First Tier Foreign Subsidiary” means any Foreign Subsidiary the Equity
Interests of which are held directly by any US Loan Party or a Domestic
Subsidiary.

“Fixed Charges” means, with respect to any fiscal period and with respect to
Parent and its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP, the sum, without duplication, of (a) Interest Expense paid
(other than interest paid-in-kind, amortization of financing fees, and other
non-cash Interest Expense) during such period, (b) scheduled principal payments
in respect of Indebtedness that are required to be paid during such period
(other than Earn-Outs), and (c) all Restricted Payments paid in cash during such
period. In addition, notwithstanding the foregoing, (a) Fixed Charges for the
quarter ended December 31, 2016 shall be deemed to be $6,307,000, (b) Fixed
Charges for the quarter ended March 31, 2017 shall be deemed to be $6,153,000,
(c) Fixed Charges for the quarter ended June 30, 2017 shall be deemed to be
$5,958,000, and (d) Fixed Charges for the quarter ended September 30, 2017 shall
be deemed to be $5,940,000.

 

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“Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with
respect to Parent and its Restricted Subsidiaries determined on a consolidated
basis in accordance with GAAP, the ratio of (a) EBITDA for such period minus all
federal, state, provincial and local income Taxes required to be paid during
such period minus Unfinanced Capital Expenditures made (to the extent not
already incurred in a prior period) or incurred during such period plus all cash
refunds for federal, state, provincial and local income Taxes received after the
Closing Date and during such period plus the lesser of (x) Growth Capital
Expenditures made (to the extent not already incurred in a prior period) or
incurred during such period, and (y) $5,000,000, to (b) Fixed Charges for such
period; provided that, in any event, EBITDA, Unfinanced Capital Expenditures and
Fixed Charges attributable to Restricted Subsidiaries that are not Loan Parties
shall not constitute more than 15% of such respective amounts.

For the purposes of calculating Fixed Charge Coverage Ratio for any Reference
Period, if at any time during such Reference Period (and after the Closing
Date), any Loan Party or any of its Subsidiaries shall have made a Permitted
Acquisition, Fixed Charges and Unfinanced Capital Expenditures for such
Reference Period shall be calculated after giving pro forma effect thereto or in
such other manner acceptable to Agent as if any such Permitted Acquisition
occurred on the first day of such Reference Period. In addition, notwithstanding
the foregoing, (a) Unfinanced Capital Expenditures for the quarter ended
December 31, 2016 shall be deemed to be $149,000, (b) Unfinanced Capital
Expenditures for the quarter ended March 31, 2017 shall be deemed to be
$5,198,000, (c) Unfinanced Capital Expenditures for the quarter ended June 30,
2017 shall be deemed to be $8,651,000, (d) Unfinanced Capital Expenditures for
the quarter ended September 30, 2017 shall be deemed to be $7,079,000, and
(e) Growth Capital Expenditures for each of the quarters ended December 31,
2016, March 31, 2017, June 30, 2017 and September 30, 2017 shall be deemed to be
$1,250,000 each. (f) federal, state, provincial and local income Taxes required
to be paid for each of the quarters ended December 31, 2016, March 31, 2017 and
June 30, 2017 is deemed to be $0, and (g) federal, state, provincial and local
income Taxes required to be paid for the quarter ended September 30, 2017 is
deemed to be $1,541,000.

“Flow of Funds Agreement” means a flow of funds agreement, dated as of even date
with this Agreement, in form and substance reasonably satisfactory to Agent,
executed and delivered by Borrowers and Agent.

“Foreclosed Canadian Borrower” has the meaning specified therefor in
Section 2.15(h) of this Agreement.

“Foreclosed US Borrower” has the meaning specified therefor in Section 2.14(h)
of this Agreement.

“Foreign Currency” means each Agreed Currency (other than Dollars).

“Foreign Currency Equivalent” means, at any time, with respect to any amount
denominated in US Dollars, the equivalent amount thereof in the applicable
Foreign Currency as determined by the Agent or the applicable Issuing Bank, as
the case may be, at such time on the basis of the Spot Rate (determined in
respect of the most recent Revaluation Date) for the purchase of such Foreign
Currency with US Dollars.

“Foreign Currency L/C” means any Letter of Credit issued or deemed issued
hereunder which is denominated in currency other than Dollars.

 

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“Foreign Subsidiary” means any direct or indirect subsidiary of any Loan Party
that is organized under the laws of any jurisdiction other than the United
States, any state thereof or the District of Columbia.

“Foreign Subsidiary Holding Company” or “FSHCO” means any direct or indirect
Domestic Subsidiary that is a Restricted Subsidiary substantially all of the
assets of which consist, directly or indirectly, of Equity Interests in one or
more CFCs.

“Forum Canada” has the meaning specified therefor in the preamble to this
Agreement.

“Funded Indebtedness” means, as of any time of determination, all Indebtedness
for borrowed money or letters of credit of Parent and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP,
including, in any event, but without duplication, with respect to the Loan
Parties and their Restricted Subsidiaries, the US Revolver Usage, the Canadian
Revolver Usage, and the amount of their Capitalized Lease Obligations.

“Funding Date” means the date on which a Borrowing occurs.

“Funding Losses” has the meaning specified therefor in Section 2.11(b)(ii) of
this Agreement.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

“Governmental Authority” means the government of any nation or any political
subdivision thereof, whether at the national, state, territorial, provincial,
county, municipal or any other level, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of, or pertaining to, government (including any supra-national bodies
such as the European Union or the European Central Bank).

“Growth Capital Expenditure” means, for the Parent and its consolidated
Restricted Subsidiaries, all Capital Expenditures consisting of spending for new
assets, expansion or the enhancement of existing assets but only to the extent
such spending generates new revenue or costs savings and is not addressing wear
and tear of existing assets.

“Guarantor” means (a) each Person that guaranties all or a portion of the
Obligations, including Parent and any Person that is a “Guarantor” under the
Guaranty and Security Agreement, and (b) each other Person that becomes a
guarantor after the Closing Date pursuant to Section 5.11 of this Agreement.

“Guaranty and Security Agreement” means (a) a guaranty and security agreement,
dated as of even date with this Agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by each of the US Loan Parties to
Agent which secures and guarantees the Obligations, and (b) a guaranty and
security agreement, dated as of even date with this Agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by each of
the Loan Parties to Agent which secures and guarantees the Canadian Obligations.

 

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“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

“Hedge Agreement” means a “swap agreement” as that term is defined in
Section 101(53B)(A) of the Bankruptcy Code.

“Hedge Obligations” means US Hedge Obligations and/or Canadian Hedge
Obligations, as the context requires.

“Hedge Provider” means any Bank Product Provider that is a party to a Hedge
Agreement with a Loan Party or its Restricted Subsidiaries or otherwise provides
Bank Products under clause (f) of the definition thereof; provided, that if, at
any time, a Lender ceases to be a Lender under this Agreement (prior to the
payment in full of the Obligations), then such former Lender and any of its
Affiliates shall constitute Hedge Providers only through the stated termination
(without extension or renewal) of the individual Hedge Agreements (and not
Master ISDA Agreements) entered into with such former Lender or any of its
Affiliates.

“Immaterial Subsidiary” means each Subsidiary of a Borrower that is not a
Material Subsidiary.

“Increase” has the meaning specified therefor in Section 2.13.

“Increase Date” the date of the effectiveness of the increased US Revolver
Commitments and the Maximum Revolver Amount.

“Increase Joinder” has the meaning specified therefor in Section 2.13.

“Increased Reporting Event” means if Excess Availability is less than the
greater of (a) 15.0% of the Line Cap and (b) $30,000,000.

“Increased Reporting Period” means the period commencing after the continuance
of an Increased Reporting Event and continuing until the date when no Increased
Reporting Event has occurred for 30 consecutive days.

“Indebtedness” as to any Person means (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability is
assumed, (e) all obligations of such Person to pay the deferred purchase price
of assets (other than trade payables incurred in the ordinary course of business
and repayable in accordance with customary trade practices and, for the
avoidance of doubt, other than royalty payments payable in the ordinary course
of business in respect of non-exclusive licenses) and any earn-out or

 

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similar obligations, (f) all monetary obligations of such Person owing under
Hedge Agreements (which amount shall be calculated based on the amount that
would be payable by such Person if the Hedge Agreement were terminated on the
date of determination), (g) any Disqualified Equity Interests of such Person,
and (h) any obligation of such Person guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (g) above. For purposes of this
definition, (i) the amount of any Indebtedness represented by a guaranty or
other similar instrument shall be the lesser of the principal amount of the
obligations guaranteed and still outstanding and the maximum amount for which
the guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Indebtedness, and (ii) the amount of any Indebtedness which is
limited or is non-recourse to a Person or for which recourse is limited to an
identified asset shall be valued at the lesser of (A) if applicable, the limited
amount of such obligations, and (B) if applicable, the fair market value of such
assets securing such obligation.

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
this Agreement.

“Indemnified Person” has the meaning specified therefor in Section 10.3 of this
Agreement.

“Indemnified Taxes” means, (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by, or on account of any obligation of, any
Loan Party under any Loan Document, and (b) to the extent not otherwise
described in the foregoing clause (a), Other Taxes.

“Insolvency Laws” means, collectively, (i) the Bankruptcy Code, (ii) the
Bankruptcy and Insolvency Act (Canada), (iii) the Companies’ Creditors
Arrangement Act (Canada), (iv) the Winding-Up and Restructuring Act (Canada),
(v) corporate statutes where such statute is used by a Person to propose an
arrangement involving the compromise of the claims of creditors; and (vi) any
similar legislation in a relevant jurisdiction, in each case as applicable and
as in effect from time to time.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any Insolvency Law or under any other provincial, state or federal
bankruptcy or insolvency law, each as now and hereafter in effect, any
successors to such statutes, and any similar laws in any jurisdiction including,
without limitation, any laws relating to assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief and any law permitting a debtor to obtain a stay or a compromise of the
claims of its creditors.

“Intercompany Subordination Agreement” means an intercompany subordination
agreement, dated as of even date with this Agreement, executed and delivered by
each Loan Party and each of its Restricted Subsidiaries, and Agent, the form and
substance of which is reasonably satisfactory to Agent.

“Intercompany Threshold Amount” has the meaning specified therefor in the
definition of Permitted Dispositions.

“Interest Expense” means, for any period and with respect to any Person, total
cash interest expense net of gross interest income of Parent and its Restricted
Subsidiaries, letter of credit fees and other fees and expenses incurred by such
Person in connection with any Indebtedness for such period whether paid or
accrued (including that attributable to obligations which have been or should
be, in accordance with GAAP, recorded as Capital Leases), including, without
limitation, all commissions,

 

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discounts, and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing, fees owed with respect to the Obligations, and
net costs under Hedge Agreements entered into addressing interest rates, all as
determined in conformity with GAAP; provided that, no amounts of the
Unrestricted Subsidiaries’ Interest Expense shall be taken into account in
calculating the Parent’s consolidated Interest Expense.

“Interest Period” means, (a) with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, 3, or 6 months thereafter and (b) with respect
to each CDOR Rate Loan, a period commencing on the date of the making of such
CDOR Rate Loan (or the continuation of a CDOR Rate Loan or the conversion of a
Base Rate Loan to a CDOR Rate Loan) and ending 1, 2, 3, or 6 months thereafter;
provided, that for both LIBOR Rate Loans and CDOR Rate Loans, (i) interest shall
accrue at the applicable rate based upon the LIBOR Rate or CDOR Rate, as
applicable, from and including the first day of each Interest Period to, but
excluding, the day on which any Interest Period expires and (ii) Borrowers may
not elect an Interest Period which will end after the Maturity Date; provided,
further, that for LIBOR Rate Loans (but not CDOR Rate Loans) (A) any Interest
Period that would end on a day that is not a Business Day shall be extended to
the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (B) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, 3, or 6 months after the date on which the Interest Period
began, as applicable.

“Inventory” means inventory (as that term is defined in the Code or, to the
extent applicable, the PPSA).

“Inventory Reserves” means, as of any date of determination, (a) Landlord
Reserves in respect of Inventory, (b) those reserves that Agent deems necessary
or appropriate, in its Permitted Discretion and subject to Section 2.1(d), to
establish and maintain (including reserves for slow moving Inventory and
Inventory shrinkage) with respect to US Eligible Inventory or the Canadian
Eligible Inventory or the Maximum Revolver Amount, including based on the
results of appraisals, and (c) with respect to US Eligible In-Transit Inventory
or Canadian Eligible In-Transit Inventory, those reserves that Agent deems
necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(d), to establish and maintain with respect to US Eligible In-Transit
Inventory, Canadian Eligible In-Transit Inventory or the Maximum Revolver Amount
(i) for the estimated costs relating to unpaid freight charges, warehousing or
storage charges, Taxes, duties, and other similar unpaid costs associated with
the acquisition of such US Eligible In-Transit Inventory or Canadian Eligible
In-Transit Inventory, plus (ii) for the estimated reclamation claims of unpaid
sellers of such US Eligible In-Transit Inventory or Canadian Eligible In-Transit
Inventory.

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital contributions (excluding (a) commission, travel, and similar
advances to officers and employees of such Person made in the ordinary course of
business, and (b) bona fide accounts receivable arising in the ordinary course
of business), or acquisitions of Indebtedness, Equity Interests, or all or
substantially all of the assets of such other Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustment for increases or
decreases in value, or write-ups, write-downs, or write-offs with respect to
such Investment.

 

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“Investment Grade Account Debtor” means any Account Debtor that, at the time of
determination, (a) has a credit rating no lower than Baa3 (by Moody’s) or a
credit rating no lower than BBB- (by S&P) (an “Investment Grade Rating”), or
(b) is a wholly-owned Subsidiary of a Person that has an Investment Grade
Rating; provided that (i) for the avoidance of doubt, if neither of such rating
agencies provide a credit rating for an Account Debtor (or parent of such
Account Debtor) such Account Debtor shall not qualify as an Investment Grade
Account Debtor, (ii) an Account Debtor that is an Investment Grade Account
Debtor solely based on its status as a wholly-owned Subsidiary of a Person with
an Investment Grade Rating shall cease to be an Investment Grade Account Debtor
when its parent company ceases to have an Investment Grade Rating, and (iii) no
Specified 10% Affiliate and no Specified Affiliate shall qualify as an
Investment Grade Account Debtor.

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
version or revision thereof accepted by an Issuing Bank for use.

“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by a Borrower in
favor of Issuing Bank and relating to such Letter of Credit.

“Issuing Bank” means any US Issuing Bank and/or Canadian Issuing Bank, as the
context requires.

“Joinder” means a joinder agreement substantially in the form of Exhibit J-1 to
this Agreement.

“Joint Book Runners” has the meaning set forth in the preamble to this
Agreement.

“Joint Lead Arrangers” has the meaning set forth in the preamble to this
Agreement.

“Joint Venture” means, with respect to any Person (the “holder”) at any date,
any incorporated, formed or organized corporation, limited liability company,
partnership, association or other entity, a less than a majority of whose
outstanding voting Equity Interests shall at any time be owned by the holder or
one or more Subsidiaries of the holder. Unless expressly provided otherwise, all
references herein to any “Joint Venture” or “Joint Ventures” means a Joint
Venture or Joint Ventures of the Parent.

“Landlord Reserve” means, as to each location at which a Borrower has Inventory
or books and records located and as to which a Collateral Access Agreement has
not been received by Agent, a reserve in an amount equal to 3 months’ rent,
storage charges, fees or other amounts under the lease or other applicable
agreement relative to such location.

“Lender” has the meaning set forth in the preamble to this Agreement, shall
include each Issuing Bank and each Swing Line Lender, and shall also include any
other Person made a party to this Agreement pursuant to the provisions of
Section 13.1 of this Agreement and “Lenders” means each of the Lenders or any
one or more of them.

“Lender Group” means each of the Lenders (including each Issuing Bank and each
Swing Line Lender) and Agent, or any one or more of them.

 

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“Lender Group Expenses” means all (a) costs or expenses (including Taxes and
insurance premiums) required to be paid by any Loan Party or its Restricted
Subsidiaries under any of the Loan Documents that are paid, advanced, or
incurred by the Lender Group, (b) reasonable documented out-of-pocket fees or
charges paid or incurred by Agent in connection with the Lender Group’s
transactions with each Loan Party and its Restricted Subsidiaries under any of
the Loan Documents, including, photocopying, notarization, couriers and
messengers, telecommunication, public record searches, filing fees, recording
fees, publication, real estate surveys if applicable, real estate title policies
and endorsements if applicable, and environmental audits, (c) Agent’s customary
fees and charges imposed or incurred in connection with any background checks or
OFAC/PEP searches related to any Loan Party or its Restricted Subsidiaries,
(d) Agent’s customary fees and charges (as adjusted from time to time) with
respect to the disbursement of funds (or the receipt of funds) to or for the
account of any Borrower (whether by wire transfer or otherwise), together with
any out-of-pocket costs and expenses incurred in connection therewith,
(e) customary charges imposed or incurred by Agent resulting from the dishonor
of checks payable by or to any Loan Party, (f) reasonable, documented
out-of-pocket costs and expenses paid or incurred by the Lender Group to correct
any default or enforce any provision of the Loan Documents, or during the
continuance of an Event of Default, in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (g) field examination, appraisal, and valuation
fees and expenses of Agent related to any field examinations, appraisals, or
valuation to the extent of the fees and charges (and up to the amount of any
limitation) provided in Section 2.9 of this Agreement, (h) Agent’s and Lenders’
reasonable, documented costs and expenses (including reasonable and documented
attorneys’ fees and expenses) relative to third party claims or any other
lawsuit or adverse proceeding paid or incurred, whether in enforcing or
defending the Loan Documents or otherwise in connection with the transactions
contemplated by the Loan Documents, Agent’s Liens in and to the Collateral, or
the Lender Group’s relationship with any Loan Party or any of its Restricted
Subsidiaries, (i) Agent’s reasonable and documented costs and expenses
(including reasonable and documented attorneys’ fees and due diligence expenses
but limited to one law firm serving as counsel for the Agent, and if applicable,
one law firm serving as local counsel for each applicable jurisdiction) incurred
in advising, structuring, drafting, reviewing, administering (including travel,
meals, and lodging), syndicating (including reasonable costs and expenses
relative to the rating of the CUSIP, DXSyndicate™, SyndTrak or other
communication costs incurred in connection with a syndication of the loan
facilities), or amending, waiving, or modifying the Loan Documents, and
(j) Agent’s and each Lender’s reasonable and documented costs and expenses
(including reasonable and documented attorneys, accountants, consultants, and
other advisors fees and expenses) incurred in terminating, enforcing (including
attorneys, accountants, consultants, and other advisors fees and expenses
incurred in connection with a “workout,” a “restructuring,” or an Insolvency
Proceeding concerning any Loan Party or any of its Restricted Subsidiaries or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether a lawsuit or other adverse proceeding is
brought, or in taking any enforcement action or any Remedial Action with respect
to the Collateral.

“Lender Group Representatives” has the meaning specified therefor in
Section 17.9 of this Agreement.

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

“Letter of Credit” means a Canadian Letter of Credit or a US Letter of Credit.

“Letter of Credit Collateralization” means with respect to the US Letter of
Credit Obligations or the Canadian Letter of Credit Obligations, as applicable,
either (a) providing cash collateral in the Agreed Currency (pursuant to
documentation reasonably satisfactory to Agent, including

 

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provisions that specify that the applicable Letter of Credit Fees and all
commissions, fees, charges and expenses provided for in this Agreement
(including any fronting fees) will continue to accrue while the applicable
Letters of Credit are outstanding) to be held by Agent for the benefit of the
applicable Revolving Lenders in an amount equal to the Required Cash Collateral
Percentages of the then existing US Letter of Credit Usage and the then existing
Canadian Letter of Credit Usage, (b) delivering to Agent documentation executed
by all beneficiaries under the applicable Letters of Credit, in form and
substance reasonably satisfactory to Agent and the applicable Issuing Bank,
terminating all of such beneficiaries’ rights under the Letters of Credit, or
(c) providing Agent with a standby letter of credit, in form and substance
reasonably satisfactory to Agent in the Agreed Currency, from a commercial bank
acceptable to Agent (in its sole discretion) in an amount equal to applicable
Required Cash Collateral Percentages of the US Letter of Credit Usage and the
Canadian Letter of Credit Usage (it being understood that the applicable Letter
of Credit Fee and all fronting fees set forth in this Agreement will continue to
accrue while the applicable Letters of Credit are outstanding and that any such
fees that accrue must be an amount that can be drawn under any such standby
letter of credit).

“Letter of Credit Disbursement” means a US Letter of Credit Disbursement and/or
a Canadian Letter of Credit Disbursement, as the context requires.

“Letter of Credit Exposure” means the US Letter of Credit Exposure and/or the
Canadian Letter of Credit Exposure, as the context requires.

“Letter of Credit Fees” means the US Letter of Credit Fees and/or the Canadian
Letter of Credit Fees, as the context requires.

“Letter of Credit Indemnified Costs” means any and all claims, demands, suits,
actions, investigations, proceedings, liabilities, fines, costs, penalties, and
damages, and all reasonable documented fees and disbursements of attorneys or
experts, and all other costs and expenses actually incurred in connection
therewith or in connection with the enforcement of the indemnification set forth
in Section 2.10A or Section 2.10B (as and when they are incurred and
irrespective of whether suit is brought), which may be incurred by or awarded
against any Letter of Credit Related Person (other than Taxes, which shall be
governed by Section 16) in connection with any Letter of Credit.

“Letter of Credit Obligations” means the US Letter of Credit Obligations or the
Canadian Letter of Credit Obligations, as the context requires.

“Letter of Credit Related Person” has the means each member of the Lender Group
(including Issuing Bank and its branches, Affiliates, and correspondents) and
each such Person’s respective directors, officers, employees, attorneys and
agents.

“Letter of Credit Usage” means the US Letter of Credit Usage and/or the Canadian
Letter of Credit Usage, as the context requires.

“LIBOR Rate” means the rate per annum as published by ICE Benchmark
Administration Limited (or any successor page or other commercially available
source as the Agent may designate from time to time) as of 11:00 a.m., London
time, two Business Days prior to the commencement of the requested Interest
Period, for a term, and in an amount, comparable to the Interest Period and the
amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan
or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan
to a LIBOR Rate Loan) by Borrowers in accordance with this Agreement (and, if
any such published rate is below zero, then the rate for such determination
shall be deemed to be zero). Each determination of the LIBOR Rate shall be made
by the Agent and shall be conclusive in the absence of manifest error.

 

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“LIBOR Rate Loan” means each portion of a Revolving Loan denominated in US
Dollars that bears interest at a rate determined by reference to the Adjusted
LIBOR Rate.

“LIBOR/CDOR Rate Margin” has the meaning set forth in the definition of
Applicable Margin.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the foregoing.

“Line Cap” means, as of any time of determination, the lesser of (a) the Maximum
Revolver Amount, and (b) the sum of (i) the lesser of $30,000,000 and the
Canadian Borrowing Base, and (ii) the US Borrowing Base.

“Loan” means any Revolving Loan, Swing Loan, or Extraordinary Advance made (or
to be made) hereunder.

“Loan Account” means the US Loan Account or the Canadian Loan Account, as the
context requires.

“Loan Documents” means this Agreement, the Control Agreements, any Borrowing
Base Certificate, the Fee Letter, the Guaranty and Security Agreement, the
Intercompany Subordination Agreement, any Issuer Documents, the Letters of
Credit, the Loan Manager Side Letter, , the Patent Security Agreement, the
Trademark Security Agreement, any note or notes executed by Borrowers in
connection with this Agreement and payable to any member of the Lender Group,
and any other instrument or agreement entered into, now or in the future, by any
Loan Party or any of its Restricted Subsidiaries and any member of the Lender
Group in connection with this Agreement (but specifically excluding Bank Product
Agreements).

“Loan Manager Side Letter” means that certain letter agreement between the
Borrowers and Wells Fargo regarding the terms under which Wells Fargo will
provide services to the Borrowers in respect of Wells Fargo’s proprietary
automated loan management program.

“Loan Party” means any Borrower or any Guarantor.

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect
from time to time.

“Material Adverse Effect” means (a) a material adverse effect in the business,
operations, assets, liabilities or financial condition of the Loan Parties and
their Restricted Subsidiaries, taken as a whole, (b) a material impairment of
the Loan Parties’ and their Restricted Subsidiaries’ ability to perform their
payment and other material obligations under the Loan Documents to which they
are parties or of the Lender Group’s ability to enforce the Obligations or
realize upon the Collateral (other than as a result of an action taken or not
taken that is solely in the control of Agent), or (c) a material impairment of
the enforceability or priority of Agent’s Liens with respect to all or a
material portion of the Collateral.

 

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“Material Subsidiary” means (a) each Borrower, and (b) each Restricted
Subsidiary of a Loan Party that (i) owns at least 2.50% of the consolidated
total assets of the Loan Parties and their Restricted Subsidiaries,
(ii) generates at least 2.50% of the consolidated revenues of the Loan Parties
and Restricted their Subsidiaries, (iii) is the owner of Equity Interests of any
Restricted Subsidiary of a Loan Party that otherwise constitutes a Material
Subsidiary, or (iv) any group comprising Restricted Subsidiaries of a Loan Party
that each would not have been a Material Subsidiary under clauses (i), (ii), or
(iii) but that, taken together, had revenues or total assets in excess of 5.00%
of the consolidated revenues or total assets, as applicable, of the Loan Parties
and their Restricted Subsidiaries.

“Maturity Date” means July 1, 2021; provided that if on or prior to July 1,
2021, the Senior Notes are refinanced or replaced as permitted under this
Agreement, or the maturity of the Senior Notes is otherwise extended to a date
on or after January 31, 2023, then effective as of the date when all of the
preceding conditions are satisfied and so long as no Default or Event of Default
is outstanding on such date, “Maturity Date” means October 30, 2022.

“Maximum Revolver Amount” means $300,000,000, decreased by the amount of
reductions in the US Revolver Commitments and Canadian Revolver Commitments made
in accordance with Section 2.3(c) of this Agreement and increased by the amount
of any Increase made in accordance with Section 2.13 of this Agreement.

“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.

“Multiemployer Plan” means any multiemployer plan within the meaning of
Section 3(37) or 4001(a)(3) of ERISA with respect to which any Loan Party or
ERISA Affiliate has an obligation to contribute or has any liability, contingent
or otherwise or could be assessed withdrawal liability assuming a complete
withdrawal from any such multiemployer plan.

“Net Income” means, for any period and with respect to any Person, the net
income for such period for such Person after Taxes as determined in accordance
with GAAP, excluding, however, (a) extraordinary items, including (i) any net
non-cash gain or loss during such period arising from the sale, exchange,
retirement or other disposition of capital assets (such term to include all
fixed assets and all securities) other than in the ordinary course of business,
and (ii) any write-up or write-down of assets, and (b) the cumulative effect of
any change in GAAP. For the avoidance of doubt, in determining net income, gross
interest income shall be applied to increase income or decrease interest expense
but not both.

“Net Recovery Percentage” means, as of any date of determination, the percentage
of the book value of Borrowers’ Inventory that is estimated to be recoverable in
an orderly liquidation of such Inventory net of all associated costs and
expenses of such liquidation, such percentage to be determined as to each
category of Inventory and to be as specified in the most recent Acceptable
Appraisal of Inventory.

“Non-Base Rate” means (a) with respect to Obligations denominated in Canadian
Dollars, the CDOR Rate, and (b) respect to Obligations denominated in US
Dollars, the Adjusted LIBOR Rate.

“Non-Base Rate Deadline” has the meaning specified therefor in
Section 2.11(b)(i).

“Non-Base Rate Loan” means a Non-Base Rate Revolving Loan.

“Non-Base Rate Notice” means a written notice in the form of Exhibit N-1.

“Non-Base Rate Option” has the meaning specified therefor in Section 2.11(a).

 

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“Non-Base Rate Revolving Loan” means a Revolving Loan that bears interest at a
rate determined by reference to the applicable Non-Base Rate.

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of
this Agreement.

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of
Extraordinary Advances and Swing Loans)), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Letters of Credit (irrespective of whether contingent), premiums,
liabilities (including all amounts charged to the Loan Account pursuant to this
Agreement), obligations (including indemnification obligations), fees (including
the fees provided for in the Fee Letter), Lender Group Expenses (including any
fees or expenses that accrue after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), guaranties, and all covenants and duties of any
other kind and description owing by any Loan Party arising out of, under,
pursuant to, in connection with, or evidenced by this Agreement or any of the
other Loan Documents 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 interest not paid when due and
all other expenses or other amounts that any Loan Party is required to pay or
reimburse by the Loan Documents or by law or otherwise in connection with the
Loan Documents, and (b) all Bank Product Obligations; provided that, anything to
the contrary contained in the foregoing notwithstanding, the Obligations shall
exclude all Excluded Swap Obligation. Without limiting the generality of the
foregoing, the Obligations of Borrowers under the Loan Documents include the
obligation to pay (i) the principal of the Revolving Loans, (ii) interest
accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing
Bank for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of
Credit commissions, fees (including fronting fees) and charges, (v) Lender Group
Expenses, (vi) fees payable under this Agreement or any of the other Loan
Documents, and (vii) indemnities and other amounts payable by any Loan Party
under any Loan Document. Any reference in this Agreement or in the Loan
Documents to the Obligations shall include all or any portion thereof and any
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
this Agreement.

“Other Connection Taxes” means, with respect to any Lender, Taxes imposed as a
result of a present or former connection between such Lender and the
jurisdiction or taxing authority imposing the Tax (other than any such
connection arising from such Lender having executed, delivered or performed its
obligations or received payment under, or enforced its rights or remedies under
this Agreement or any other Loan Document).

“Other Debt” means the Senior Notes, the Refinancing Senior Notes, the
Indebtedness permitted under clause (s) of the definition of Permitted
Indebtedness, the Indebtedness permitted under clause (v) of the definition of
Permitted Indebtedness, the Indebtedness permitted under clause (w) of the
definition of Permitted Indebtedness, and any Refinancing Indebtedness of any of
the foregoing regardless of whether such Indebtedness is permitted hereunder.

 

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“Other Debt Documents” means the agreements, instruments and documents
evidencing or securing or otherwise governing any Other Debt.

“Other Taxes” means all present or future stamp, court, excise, value added, or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 14.2 or any assignment made as a result of
an Increase).

“Overadvance” means a US Overadvance and/or a Canadian Overadvance, as the
context requires.

“Parent” has the meaning specified therefor in the preamble to this Agreement.

“Participant” has the meaning specified therefor in Section 13.1(e) of this
Agreement.

“Participant Register” has the meaning set forth in Section 13.1(i) of this
Agreement.

“Patent Security Agreement” has the meaning specified therefor in the Guaranty
and Security Agreement.

“Patriot Act” has the meaning specified therefor in Section 4.13 of this
Agreement.

“Payment Conditions” means, at the time of determination with respect to a
proposed payment to fund a Specified Transaction (or the designation of a
Subsidiary as an Unrestricted Subsidiary), that:

(a) no Default or Event of Default then exists or would arise as a result of the
consummation of such Specified Transaction,

(b) either

(i) Excess Availability (x) at all times during the 30 consecutive days
immediately preceding the date of such proposed payment and the consummation of
such Specified Transaction, calculated on a pro forma basis as if such proposed
payment was made, and the Specified Transaction was consummated, on the first
day of such period, and (y) after giving effect to such proposed payment and
Specified Transaction, in each case, is not less than the greater of (1) 20% of
the Line Cap, and (2) $40,000,000, or

(ii) both (A) the Fixed Charge Coverage Ratio of the Loan Parties and their
Restricted Subsidiaries is equal to or greater than 1.00:1.00 for the trailing
12 month period most recently ended for which financial statements are required
to have been delivered to Agent pursuant to Schedule 5.1 to this Agreement
(calculated on a pro forma basis as if such proposed payment is a Fixed Charge
made on the last day of such 12 month period (it being understood that such
proposed payment shall also be a Fixed Charge made on the last day of such 12
month period for purposes of calculating the Fixed Charge Coverage Ratio under
this clause (ii) for any subsequent proposed payment to fund a Specific
Transaction)) and otherwise calculated on a pro forma basis as if such Specified
Transaction was

 

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consummated on the first day of such period, and (B) Excess Availability, (x) at
all times during the 30 consecutive days immediately preceding the date of such
proposed payment and the consummation of such Specified Transaction, calculated
on a pro forma basis as if such proposed payment was made, and the Specified
Transaction was consummated, on the first day of such period, and (y) after
giving effect to such proposed payment and Specified Transaction, in each case,
is not less than the greater of (1) 15% of the Line Cap, and (2) $30,000,000,
and

(c) Administrative Borrower has delivered a certificate to Agent certifying that
all conditions described in clauses (a) and (b) above have been satisfied;

provided that, in determining compliance with the Payment Conditions with
respect to the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary, the Borrowers must be in compliance with clause (b)(ii) rather than
clause (b)(i).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV or Section 302 of ERISA or
Sections 412 or 430 of the IRC sponsored, maintained, or contributed to by any
Loan Party or ERISA Affiliate or to which any Loan Party or ERISA Affiliate has
any liability, contingent or otherwise.

“Perfection Certificate” means a certificate in the form of Exhibit P-1 to this
Agreement.

“Permitted Acquisition” means any Acquisition so long as:

(a) no Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual,

(b) no Indebtedness will be incurred, assumed, or would exist with respect to
any Loan Party or its Restricted Subsidiaries as a result of such Acquisition,
other than Permitted Indebtedness and no Liens will be incurred, assumed, or
would exist with respect to the assets of any Loan Party or its Restricted
Subsidiaries as a result of such Acquisition other than Permitted Liens,

(c) Borrowers have provided Agent with its due diligence package relative to the
proposed Acquisition, including forecasted balance sheets, profit and loss
statements, and cash flow statements of the Person or assets to be acquired, all
prepared on a basis consistent with such Person’s (or assets’) historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions for the one year period following the date
of the proposed Acquisition, on a quarter by quarter basis); provided that such
due diligence package shall only be required to be delivered by Borrowers if
requested by the Agent and only for (i) Acquisitions (x) with a purchase price
consideration in excess of $25,000,000 and (y) made in reliance on clause
(b)(ii) of the definition of Payment Conditions, and (ii) Acquisitions which
result in Accounts or Inventory that are to be included in the applicable
Borrowing Base as a result of the provisos in clause (q) of the definition of
Canadian Eligible Accounts or US Eligible Accounts or in clause (l) of the
definition of Canadian Eligible Inventory or US Eligible Inventory; provided
further that in the case of clause (ii) above, the due diligence package
provided to Agent shall be limited to information relating to the Accounts and
Inventory that are to be included in the applicable Borrowing Base and such
other information that is necessary in order to determine availability arising
from such Accounts and Inventory,

(d) such Acquisition is not hostile in nature,

(e) [Reserved],

 

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(f) If the proceeds of any Borrowing will be used to fund any part of the
purchase price of any proposed Acquisition or any proposed Acquisition which
result in Accounts or Inventories that are to be included in the applicable
Borrowing Base as a result of the provisos in clause (q) of the definition of
Canadian Eligible Accounts or US Eligible Accounts or in clause (l) of the
definition of Canadian Eligible Inventory or US Eligible Inventory, the
Borrowers have provided Agent with written notice of the proposed Acquisition at
least five Business Days prior to the anticipated closing date of the proposed
Acquisition and, not later than five Business Days prior to the anticipated
closing date of the proposed Acquisition, copies of the draft acquisition
agreement and other draft material documents relative to the proposed
Acquisition; provided that the Borrowers shall inform Agent of any material
changes made to such draft acquisition agreement and material documents prior to
the closing of the proposed Acquisition and shall provide copies of the
acquisition agreement and other material documents relating to such Acquisition
promptly after the closing thereof,

(g) the assets being acquired (other than a de minimis amount of assets in
relation to Parent’s and its Restricted Subsidiaries’ total assets), or the
Person whose Equity Interests are being acquired, are useful in or engaged in,
as applicable, the business of the Loan Parties and their Restricted
Subsidiaries or a business reasonably related thereto,

(h) if the assets being acquired (other than a de minimis amount of assets in
relation to the assets being acquired) are located outside of the United States
or Canada, or the Person whose Equity Interests are being acquired is organized
in a jurisdiction located outside the United States or Canada, then the
Borrowers shall have an Excess Availability of at least the greater of (a) 25%
of the Line Cap and (b) $35,000,000 immediately after giving effect to each such
acquisition,

(i) the subject assets or Equity Interests, as applicable, are being acquired
directly by a Borrower or a Restricted Subsidiary, and, in connection therewith,
the applicable Loan Party shall have complied with Section 5.11 or 5.12 of this
Agreement, as applicable, and, in the case of an acquisition of Equity
Interests, the Person whose Equity Interests are acquired shall become a Loan
Party or any other Restricted Subsidiary, or an Unrestricted Subsidiary if the
conditions to designating such Person as an Unrestricted Subsidiary required
under Section 5.11 could be satisfied with respect to such Person, and

(j) the Payment Conditions are satisfied.

“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment in good
faith.

“Permitted Dispositions” means:

(a) sales, abandonment, or other dispositions of property (other than ABL
Collateral) that is substantially worn, damaged, or obsolete or no longer used
or useful in the ordinary course of business and leases or subleases of Real
Property not useful in the conduct of the business of the Loan Parties and their
Restricted Subsidiaries,

(b) sales of Inventory to buyers in the ordinary course of business,

(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents,

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business,

(e) the granting of Permitted Liens,

 

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(f) the sale or discount, in each case without recourse, of accounts receivable
(other than Eligible Accounts) arising in the ordinary course of business, but
only in connection with the compromise or collection thereof,

(g) any involuntary loss, damage or destruction of property,

(h) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property,

(i) the leasing or subleasing of assets of any Loan Party or its Restricted
Subsidiaries in the ordinary course of business,

(j) (i) the sale or issuance of Equity Interests (other than Disqualified Equity
Interests) of Parent and the sale of Equity Interests in Joint Ventures,
(ii) the sale of Equity Interests in Unrestricted Subsidiaries, and (iii) the
designation or redesignation of a Subsidiary as an Unrestricted Subsidiary in
accordance with Section 5.12,

(k) (i) the lapse of registered patents, trademarks, copyrights and other
intellectual property of any Loan Party or any of its Restricted Subsidiaries to
the extent not economically desirable in the conduct of its business, or
(ii) the abandonment of patents, trademarks, copyrights, or other intellectual
property rights in the ordinary course of business so long as (in each case
under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are
not material revenue generating copyrights, and (B) such lapse is not materially
adverse to the interests of the Lender Group,

(l) the making of Restricted Payments that are expressly permitted to be made
pursuant to this Agreement,

(m) the making of Permitted Investments,

(n) so long as no Event of Default has occurred and is continuing or would
immediately result therefrom, (i) transfers of assets from any US Loan Party to
a US Loan Party, (ii) transfers of assets from any Canadian Loan Party to a
Canadian Loan Party, (iii) from any Restricted Subsidiary of any Loan Party that
is not a Loan Party to any other Restricted Subsidiary of any Loan Party,
(iv) the transfer of Inventory in the ordinary course of business between any US
Loan Party and any Canadian Loan Party provided, that if, as of any time of
determination, such transfers pursuant to this clause (iv) during the period of
time from the first day of the month in which such date of determination occurs
until such date of determination, either individually or in the aggregate,
involve $10,000,000 or more of assets included in any Borrowing Base (based on
the fair market value of the assets so disposed) (the “Intercompany Threshold
Amount”), then Borrowers shall have, prior to consummation of such transfer that
causes the assets included in the Borrowing that are disposed of during such
period to exceed the Intercompany Threshold Amount, delivered to Agent an
updated Borrowing Base Certificate that reflects the removal of the applicable
assets from the applicable Borrowing Base, and (v) transfers of assets (other
than ABL Collateral) by any Loan Party to any Restricted Subsidiary or by any
Restricted Subsidiary to any Loan Party not otherwise covered above in this
clause (n),

(o) dispositions of Equipment or Real Property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property, or (ii) the proceeds of such disposition are applied
within 90 days to the purchase price of such replacement property; provided,
that to the extent the property being transferred constitutes Collateral, such
replacement property shall constitute Collateral,

 

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(p) dispositions of assets acquired by the Loan Parties and their Restricted
Subsidiaries pursuant to a Permitted Acquisition consummated within 12 months of
the date of the proposed disposition so long as (i) the consideration received
for the assets to be so disposed is at least equal to the fair market value of
such assets, (ii) the assets to be so disposed are not necessary or economically
desirable in connection with the business of the Loan Parties and their
Restricted Subsidiaries, and (iii) the assets to be so disposed are readily
identifiable as assets acquired pursuant to the subject Permitted Acquisition,
and

(q) sales or other dispositions of assets (other than ABL Collateral) not
otherwise permitted in clauses (a) through (p) above, so long as (i) no Default
or Event of Default has occurred and is continuing or would immediately result
therefrom, (ii) each such sale or disposition is in an arm’s-length transaction
and the applicable Loan Party or its Restricted Subsidiary receives at least the
fair market value of the assets so disposed, (iii) the consideration received by
the applicable Loan Party or its Restricted Subsidiary consists of at least 75%
cash and Cash Equivalents and is paid at the time of the closing of such sale or
disposition, and (iv) the aggregate amount of the cash and non-cash proceeds
received from all assets sold or disposed of pursuant to this clause (q) taken
together with all such sales and dispositions completed since the Closing Date,
shall not exceed 5% of the Tangible Net Assets in the aggregate and calculated
at the time of such subject sale or disposition;

provided, that if, as of any time of determination, sales or dispositions (other
than in the ordinary course of business) by the Loan Parties to any Person that
is not a Loan Party during the period of time from the first day of the month in
which such date of determination occurs until such date of determination, either
individually or in the aggregate, involve $10,000,000 or more of assets included
in any Borrowing Base (based on the fair market value of the assets so disposed)
(the “Threshold Amount”), then Borrowers shall have, prior to consummation of
the sale or disposition that causes the assets included in the Borrowing that
are disposed of during such period to exceed the Threshold Amount, delivered to
Agent an updated Borrowing Base Certificate that reflects the removal of the
applicable assets from the applicable Borrowing Base.

“Permitted Holder” means collectively, SCF-V, L.P., SCF-VI, L.P., and SCF-VII,
L.P., each a Delaware limited partnership.

“Permitted Indebtedness” means:

(a) Indebtedness in respect of the Obligations other than Bank Product
Obligations,

(b) Indebtedness as of the Closing Date set forth on Schedule 4.14 to this
Agreement and any Refinancing Indebtedness in respect of such Indebtedness,

(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,

(d) Indebtedness arising in connection with the endorsement of instruments or
other payment items for deposit,

(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary
course of business with respect to surety and appeal bonds, performance bonds,
bid bonds, appeal bonds, completion guarantee and similar obligations;
(ii) unsecured guarantees arising with respect to customary indemnification
obligations to purchasers in connection with Permitted Dispositions;
(iii) guarantees with respect to Indebtedness of any Loan Party or one of its
Restricted Subsidiaries, to the extent that the Person that is obligated under
such guaranty could have incurred such underlying Indebtedness; provided that, a
guarantee provided by a Loan Party which guarantees Indebtedness of a Restricted
Subsidiary that is not a Loan Party must be an unsecured guarantee, and
(iv) unsecured guarantees by the Parent of Foreign Subsidiaries Indebtedness
permitted under clause (y) below in this definition of Permitted Indebtedness,

 

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(f) unsecured Indebtedness of any Loan Party that is incurred on the date of the
consummation of a Permitted Acquisition solely for the purpose of consummating
such Permitted Acquisition so long as (i) no Event of Default has occurred and
is continuing or would result therefrom, (ii) such unsecured Indebtedness is not
incurred for working capital purposes, (iii) such unsecured Indebtedness does
not mature prior to the date that is 91 days after the later of (x) the Maturity
Date and (y) the fifth anniversary of the Closing Date, (iv) such unsecured
Indebtedness does not amortize until 91 days after the later of (x) the Maturity
Date and (y) the fifth anniversary of the Closing Date, (v) such unsecured
Indebtedness does not provide for the payment of interest thereon in cash or
Cash Equivalents prior to the date that is 91 days after the later of (x) the
Maturity Date and (y) the fifth anniversary of the Closing Date, and (vi) such
Indebtedness is subordinated in right of payment to the Obligations on terms and
conditions reasonably satisfactory to Agent and is otherwise on terms and
conditions (including economic terms and absence of covenants) reasonably
satisfactory to Agent,

(g) Acquired Indebtedness and any Refinancing Indebtedness in respect of such
Indebtedness; provided that, the aggregate amount of Indebtedness permitted
under this clause (g) shall not exceed $50,000,000 outstanding at any one time,

(h) Indebtedness incurred in the ordinary course of business under performance,
surety, bid, statutory, or appeal bonds,

(i) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to any Loan Party or any of its Subsidiaries, so long as the
amount of such Indebtedness is not in excess of the amount of the unpaid cost
of, and shall be incurred only to defer the cost of, such insurance for the year
in which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year,

(j) the incurrence by any Loan Party or its Subsidiaries of Indebtedness under
Hedge Agreements that is incurred for the bona fide purpose of hedging the
interest rate, commodity, or foreign currency risks associated with such Loan
Party’s or such Restricted Subsidiary’s operations and not for speculative
purposes,

(k) Indebtedness of Loan Parties incurred in the ordinary course of business in
respect of credit cards, credit card processing services, debit cards, stored
value cards, commercial cards (including so-called “purchase cards”,
“procurement cards” or “p-cards”), or Cash Management Services,

(l) unsecured Indebtedness of any Loan Party owing to employees, former
employees, former officers, directors, or former directors (or any spouses,
ex-spouses, or estates of any of the foregoing) incurred in connection with the
repurchase or redemption by such Loan Party of the Equity Interests of Parent
that has been issued to such Persons, so long as (i) no Default or Event of
Default has occurred and is continuing or would result from the incurrence of
such Indebtedness, and (ii) the aggregate amount of all such Indebtedness
outstanding at any one time does not exceed $7,500,000,

(m) contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligation of any Loan
Party incurred in connection with the consummation of one or more Permitted
Acquisitions,

(n) Indebtedness composing Permitted Investments,

 

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(o) unsecured Indebtedness of a Loan Party or its Restricted Subsidiaries (other
than Foreign Subsidiaries) incurred in respect of netting services, overdraft
protection, and other like services, in each case, incurred in the ordinary
course of business,

(p) unsecured Indebtedness of any Loan Party or its Restricted Subsidiaries in
respect of Earn-Outs owing to sellers of assets or Equity Interests to such Loan
Party or its Restricted Subsidiaries that is incurred in connection with the
consummation of one or more Permitted Acquisitions so long as such unsecured
Indebtedness is paid within 60 days after such amount becomes due,

(q) Permitted Intercompany Advances,

(r) accrual of interest, accretion or amortization of original issue discount,
or the payment of interest in kind, in each case, on Indebtedness that otherwise
constitutes Permitted Indebtedness,

(s) any other secured Indebtedness the aggregate outstanding principal amount of
which does not exceed $50,000,000; provided that (i) if any Lien securing such
Indebtedness encumbers ABL Collateral, then such Lien and such Indebtedness
shall rank junior to the Obligations and the Liens encumbering ABL Collateral
secures the Obligations, and (ii) if any Lien securing such Indebtedness
encumbers any other Collateral, such Lien and such Indebtedness may rank senior
to, pari passu with or junior to the Obligations and the Liens encumbering such
other Collateral securing the Obligations, and in each case under the foregoing
clause (i) and (ii), such Liens and such Indebtedness shall be subject to a
customary intercreditor agreement in form and substance reasonably acceptable to
Agent and the Administrative Borrower,

(t) any other unsecured Indebtedness incurred by any Loan Party or any of its
Restricted Subsidiaries in an aggregate outstanding principal amount not to
exceed $50,000,000, at any one time,

(u) the Senior Notes outstanding on the Closing Date and any Refinancing Senior
Notes in respect thereof,

(v) unsecured Indebtedness of the Parent (and guarantees thereof by its
Restricted Subsidiaries that are Guarantors) evidenced by term loans, bonds,
debentures, notes or other similar instruments (including extensions,
refinancings, refundings, replacements and renewals of thereof) in an aggregate
outstanding principal amount not to exceed $250,000,000 at any one time;
provided that, (i) the scheduled maturity date of such Indebtedness shall not be
earlier than 91 days after the later of (x) the Maturity Date and (y) the fifth
anniversary of the Closing Date, (ii) no Default or Event of Default shall have
occurred and be continuing at the time of incurrence thereof or shall result
therefrom, (iii) such Indebtedness shall not have any amortization or other
requirement to purchase, redeem, retire, defease or otherwise make any payment
in respect thereof, other than at scheduled maturity thereof, mandatory
prepayments which are customary with respect to such type of Indebtedness and
that are triggered upon change in control and sale of all or substantially all
assets and certain other asset sales, and (iv) the agreements and instruments
governing such Indebtedness shall not contain (A) any affirmative or negative
covenants that are, taken as a whole, materially more restrictive than those set
forth in this Agreement; provided that the inclusion of any financial covenant
that is customary with respect to such type of Indebtedness and that is not
found in this Agreement shall not be deemed to be more restrictive for purposes
of this clause (A), (B) any restrictions on the ability of Parent or any
Restricted Subsidiary of the Parent to guarantee the Obligations, provided that
a requirement that any such Restricted Subsidiary also guarantee such
Indebtedness shall not be deemed to be a violation of this clause (B), (C) any
restrictions on the ability of Parent or any Restricted Subsidiary to pledge
Collateral as collateral security for the Obligations, or (D) any restrictions
on the ability of Parent or any Restricted Subsidiary to incur Indebtedness
under this Agreement or any other Loan Document other than a restriction as to
the outstanding principal amount of such Indebtedness in excess of the aggregate
Maximum Revolver Amount then in effect on the initial issuance date of such
Indebtedness,

 

 

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(w) unsecured Indebtedness of the Parent (and guarantees thereof by its
Restricted Subsidiaries that are Guarantors) evidenced by term loans, bonds,
debentures, notes or other similar instruments (including extensions,
refinancings, refundings, replacements and renewals of thereof); provided that,
(i) the scheduled maturity date of such Indebtedness shall not be earlier than
91 days after the later of (x) the Maturity Date and (y) the fifth anniversary
of the Closing Date, (ii) no Default or Event of Default shall have occurred and
be continuing at the time of incurrence thereof or shall result therefrom,
(iii) at the time of incurrence thereof and after giving pro forma effect
thereto and the use of proceeds thereof, the Borrowers would be in compliance
with the Total Net Leverage Ratio, calculated on a pro forma basis as of the
most recently ended fiscal quarter or year, as applicable, for which Agent has
received financial statements pursuant to Section 5.1 on or prior to the
incurrence of such unsecured Indebtedness, that is no greater than 5.00:1.00,
(iv) such Indebtedness shall not have any amortization or other requirement to
purchase, redeem, retire, defease or otherwise make any payment in respect
thereof, other than at scheduled maturity thereof, mandatory prepayments which
are customary with respect to such type of Indebtedness and that are triggered
upon change in control and sale of all or substantially all assets and certain
other asset sales, and (v) the agreements and instruments governing such
Indebtedness shall not contain (A) any affirmative or negative covenants that
are, taken as a whole, materially more restrictive than those set forth in this
Agreement; provided that the inclusion of any financial covenant that is
customary with respect to such type of Indebtedness and that is not found in
this Agreement shall not be deemed to be more restrictive for purposes of this
clause (A), (B) any restrictions on the ability of Parent or any Restricted
Subsidiary of the Parent to guarantee the Obligations, provided that a
requirement that any such Restricted Subsidiary also guarantee such Indebtedness
shall not be deemed to be a violation of this clause (B), (C) any restrictions
on the ability of Parent or any Restricted Subsidiary to pledge Collateral as
collateral security for the Obligations, or (D) any restrictions on the ability
of Parent or any Restricted Subsidiary to incur Indebtedness under this
Agreement or any other Loan Document other than a restriction as to the
outstanding principal amount of such Indebtedness in excess of the aggregate
Maximum Revolver Amount then in effect on the initial issuance date of such
Indebtedness,

(x) secured Indebtedness in connection with letters of credit issued by any
financial institution that is a Lender hereunder at the time of such issuance
pursuant to a bilateral line of credit available for the account of any Loan
Party or any Restricted Subsidiary; provided that (i) the sum of outstanding
amounts drawn plus available amounts to be drawn under all such letters of
credit issued under all such bilateral lines of credit shall not exceed
$10,000,000 at any time, and (ii) the Lien securing such Indebtedness shall only
encumber cash, Cash Equivalents and Deposit Accounts held with such financial
institution,

(y) Indebtedness owing by Foreign Subsidiaries (other than a Loan Party) in
respect of netting services, overdraft protection (including overdraft lines of
credit), and other like services, in any event, made available to support the
operations of Foreign Subsidiaries in the United Kingdom, Singapore, the United
Arab Emirates, Saudi Arabia, the People’s Republic of China, Germany or any
other jurisdiction that is not a Sanctioned Entity in an aggregate outstanding
principal amount not to exceed $38,000,000 at any time (which Indebtedness, for
the avoidance of doubt, may not be secured by a Lien on any assets of any Loan
Party), and

(z) to the extent constituting Indebtedness, deferred compensation owed to
employees, officers and directors in the ordinary course of business, not in
excess of an aggregate principal amount of $12,500,000 at any time outstanding.

 

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“Permitted Intercompany Advances” means loans made by (a) a US Loan Party to
another US Loan Party, (b) a Canadian Loan Party to another Canadian Loan Party,
(c) a Restricted Subsidiary that is not a Loan Party to another Restricted
Subsidiary that is not a Loan Party, (d) a Restricted Subsidiary that is not a
Loan Party to a Loan Party, so long as the parties thereto are party to the
Intercompany Subordination Agreement but subject to any applicable time periods
provided under Schedule 3.6, and (e) a Loan Party to a Restricted Subsidiary
that is not a Loan Party so long as, in the case of this clause (e), (i) at the
time of the making of such loan, no Event of Default has occurred and is
continuing or would result therefrom, (ii) such loan made by a Loan Party is
Collateral, and (iii) Borrowers have Excess Availability of greater than
$10,000,000 immediately after giving effect to each such loan.

“Permitted Investments” means:

(a) Investments in cash and Cash Equivalents,

(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business,

(c) advances made in connection with purchases of goods or services in the
ordinary course of business,

(d) Investments received in settlement of amounts due to any Loan Party or any
of its Restricted Subsidiaries effected in the ordinary course of business or
owing to any Loan Party or any of its Restricted Subsidiaries as a result of
Insolvency Proceedings involving an account debtor or upon the foreclosure or
enforcement of any Lien in favor of a Loan Party or its Restricted Subsidiaries,

(e) Investments owned by any Loan Party or any of its Restricted Subsidiaries on
the Closing Date and set forth on Schedule P-1 to this Agreement,

(f) guarantees permitted under the definition of Permitted Indebtedness,

(g) Permitted Intercompany Advances,

(h) Equity Interests or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Restricted Subsidiaries (in bankruptcy of customers or suppliers or
otherwise outside the ordinary course of business) or as security for any such
Indebtedness or claims,

(i) deposits of cash made in the ordinary course of business to secure
performance of operating leases,

(j) (i) non-cash loans and advances to employees, officers, and directors of a
Loan Party or any of its Restricted Subsidiaries for the purpose of purchasing
Equity Interests in Parent so long as the proceeds of such loans are used in
their entirety to purchase such Equity Interests in Parent, and (ii) loans and
advances to employees and officers of a Loan Party or any of its Restricted
Subsidiaries in the ordinary course of business for any other business purpose,
provided that, the aggregate amount of such Investments permitted under this
clause (j) shall not to exceed $7,500,000 at any one time,

(k) Permitted Acquisitions,

 

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(l) (i) Investments in the form of capital contributions and the acquisition of
Equity Interests made by any US Loan Party in any other US Loan Party (other
than capital contributions to or the acquisition of Equity Interests of Parent),
(ii) Investments in the form of capital contributions and the acquisition of
Equity Interests made by any Canadian Loan Party in any other Canadian Loan
Party (other than capital contributions to or the acquisition of Equity
Interests of Parent), or (iii) Investments in the form of capital contributions
and the acquisition of Equity Interests made by any Restricted Subsidiary that
is not a Loan Party in any other Restricted Subsidiary that is not a Loan Party
(other than capital contributions to or the acquisition of Equity Interests of
Parent),

(m) Investments resulting from entering into (i) Bank Product Agreements, or
(ii) agreements relative to obligations permitted under clause (j) of the
definition of Permitted Indebtedness,

(n) equity Investments by any Loan Party in any Restricted Subsidiary of such
Loan Party which is required by law to maintain a minimum net capital
requirement or as may be otherwise required by applicable law,

(o) Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition,

(p) so long as no Event of Default has occurred and is continuing or would
result therefrom, any other Investments in an aggregate amount not to exceed
$30,000,000 during the term of this Agreement,

(q) Investments consisting of non-cash consideration received in connection with
Permitted Dispositions, so long as the non-cash consideration received in
connection with any Permitted Disposition does not exceed 25% of the total
consideration received in connection with such Permitted Disposition,

(r) Investments in the form of Equity Interests, including the purchase or
acquisition thereof and capital contributions in connection therewith, made by
any Loan Party in or to any Restricted Subsidiary; provided that, (i) at the
time of the making of such Investment, no Event of Default has occurred and is
continuing or would result therefrom, (ii) such Investment is Collateral, and
(iii) Borrowers have Excess Availability of greater than $10,000,000 immediately
after giving effect to each such Investment, and

(s) other Investments (other than Acquisitions) so long as the Payment
Conditions are satisfied.

“Permitted Liens” means:

(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

(b) Liens for unpaid Taxes, assessments, or other governmental charges or levies
that either (i) are not yet delinquent, or (ii) are not material with respect to
which the underlying Taxes, assessments, or charges or levies are the subject of
Permitted Protests,

(c) judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under Section 8.3
of this Agreement,

(d) Liens set forth on Schedule P-2 to this Agreement; provided, that to qualify
as a Permitted Lien, any such Lien described on Schedule P-2 to this Agreement
shall only secure the Indebtedness that it secures on the Closing Date and any
Refinancing Indebtedness in respect thereof,

 

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(e) the interests of lessors under operating leases and non-exclusive licensors
under license agreements,

(f) purchase money Liens on fixed assets or the interests of lessors under
Capital Leases to the extent that such Liens or interests secure Permitted
Purchase Money Indebtedness and so long as (i) such Lien attaches only to the
fixed asset purchased, acquired, constructed or improved and the proceeds
thereof, and (ii) such Lien only secures the Indebtedness that was incurred to
acquire, construct or improve such fixed asset or any Refinancing Indebtedness
in respect thereof,

(g) Liens arising by operation of law (or under contract other than with respect
to ABL Collateral) in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, in any event, incurred in the ordinary
course of business and not in connection with the borrowing of money, and which
Liens either (i) are for sums not yet delinquent, (ii) are not more than 30 days
overdue so long as a Reserve has been established with respect thereto, or
(iii) are the subject of Permitted Protests,

(h) Liens on amounts deposited to secure any Borrower’s and its Restricted
Subsidiaries’ obligations in connection with worker’s compensation or other
unemployment insurance, old age pensions or other social security or retirement
benefits, or similar legislation to secure public or statutory obligations,

(i) Liens on amounts deposited to secure any Borrower’s and its Restricted
Subsidiaries’ obligations in connection with the making or entering into of
bids, tenders, leases, performance bonds, statutory obligations, regulatory
obligations and other obligations of a like nature incurred in the ordinary
course of business and not in connection with the borrowing of money,

(j) Liens on amounts deposited to secure any Borrower’s and its Restricted
Subsidiaries’ reimbursement obligations with respect to surety or appeal bonds
obtained in the ordinary course of business,

(k) with respect to any Real Property, easements, rights of way, servitudes,
zoning restrictions and other restrictions on the use of Real Property that do
not materially interfere with or impair the use or operation thereof,

(l) non-exclusive licenses of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business,

(m) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of permitted Refinancing Indebtedness and
so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,

(n) rights of setoff or bankers’ liens upon deposits of funds in favor of banks
or other depository institutions, solely to the extent incurred in connection
with the maintenance of such Deposit Accounts or securities accounts in the
ordinary course of business,

(o) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness,

(p) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods,

 

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(q) Liens solely on any cash earnest money deposits made by a Loan Party or any
of its Restricted Subsidiaries in connection with any letter of intent or
purchase agreement with respect to a Permitted Acquisition,

(r) Liens assumed by any Loan Party or its Restricted Subsidiaries in connection
with a Permitted Acquisition that secure Acquired Indebtedness that is Permitted
Indebtedness,

(s) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into in the ordinary course of
business or Liens arising by operation of law under Article 2 of the UCC or by
contract in favor of a reclaiming seller of goods or buyer of goods (including
purchase money security interests in favor of vendors in the ordinary course of
business);

(t) Liens created pursuant to joint venture agreements and related documents (to
the extent a Lien on the Equity Interest owned by any Borrower or Restricted
Subsidiary in the applicable Joint Venture is required thereunder) having
ordinary and customary terms (including with respect to Liens) and entered into
in the ordinary course of business and securing (x) obligations other than
Indebtedness or (y) Indebtedness of such Joint Venture that is non-recourse to
any Borrower or Restricted Subsidiary or to any property thereof other than such
Equity Interests;

(u) Liens consisting of cash or Cash Equivalents deposits with any Governmental
Authority for any purpose at any time as required by applicable law as a
condition to the transaction of any business or the exercise of any privilege or
license;

(v) Liens (other than Liens encumbering Real Property) securing any Indebtedness
pursuant to clause (s) of the definition of “Permitted Indebtedness” subject to
the restrictions set forth therein;

(w) Liens granted to any Lender in its individual capacity (and not, if
applicable, as Agent) on cash, Cash Equivalents and Deposit Accounts held with
such Lender to secure Indebtedness permitted under clause (x) of the definition
of “Permitted Indebtedness;

(x) other Liens which do not encumber Real Property and which do not secure
Indebtedness for borrowed money or letters of credit and as to which the
aggregate amount of the obligations secured thereby does not exceed $10,000,000;

(y) Liens encumbering properties of Foreign Subsidiaries that are not Collateral
or required to be Collateral hereunder and only securing the Indebtedness
permitted under clause (y) of the definition of “Permitted Indebtedness”; and

(z) Lien on the Equity Interests of Unrestricted Subsidiaries which secure
Indebtedness of such Unrestricted Subsidiary that is non-recourse to any
Borrower or other Restricted Subsidiary or to any property of any Borrower or
other Restricted Subsidiary other than such Equity Interests.

“Permitted Protest” means the right of any Loan Party or any of its Restricted
Subsidiaries to protest any Lien (other than any Lien that secures the
Obligations), Taxes, or rental payment; provided, that (a) a reserve with
respect to such obligation is established on such Loan Party’s or its Restricted
Subsidiaries’ books and records in such amount as is required under GAAP,
(b) any such protest is instituted promptly and prosecuted diligently by such
Loan Party or its Restricted Subsidiary, as applicable, in good faith, and
(c) Agent is reasonably satisfied that, while any such protest is pending, there
will be no impairment of the enforceability, validity, or priority of any of
Agent’s Liens.

 

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“Permitted Purchase Money Indebtedness” means, as of any time of determination,
Indebtedness (other than the Obligations, but including Capitalized Lease
Obligations), incurred after the Closing Date and at the time of, or within 90
days after, the acquisition, construction or improvement of any fixed or capital
assets for the purpose of financing all or any part of the acquisition,
construction or improvement cost thereof, in an aggregate principal amount
outstanding at any one time not in excess of $50,000,000.

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

“Platform” has the meaning specified therefor in Section 17.9(c) of this
Agreement.

“PPSA” means the Personal Property Security Act (Alberta) and the regulations
thereunder, as from time to time in effect; provided, however, if attachment,
perfection or priority of Agent’s Lien on any Collateral are governed by the
personal property security laws of any jurisdiction in Canada other than the
laws of the Province of Alberta, “PPSA” means those personal property security
laws in such other jurisdiction in Canada for the purposes of the provisions
hereof relating to such attachment, perfection or priority and for the
definitions related to such provisions.

“Post-Increase Revolver Lenders” has the meaning specified therefor in
Section 2.13 of this Agreement.

“Pre-Increase Revolver Lenders” has the meaning specified therefor in
Section 2.13 of this Agreement.

“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent
with Parent’s historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.

“Pro Rata Share” means, as of any time of determination:

(a) with respect to a Lender’s obligation to make all or a portion of the US
Revolving Loans, with respect to such Lender’s right to receive payments of
interest, fees, and principal with respect to the US Revolving Loans, and with
respect to all other computations and other matters related to the US Revolver
Commitments or the US Revolving Loans, the percentage obtained by dividing
(i) the US Revolving Loan Exposure of such Lender, by (ii) the aggregate US
Revolving Loan Exposure of all Lenders,

(b) with respect to a Lender’s obligation to make all or a portion of the
Canadian Revolving Loans, with respect to such Lender’s right to receive
payments of interest, fees, and principal with respect to the Canadian Revolving
Loans, and with respect to all other computations and other matters related to
the Canadian Revolver Commitments or the Canadian Revolving Loans, the
percentage obtained by dividing (i) the Canadian Revolving Loan Exposure of such
Lender, by (ii) the aggregate Canadian Revolving Loan Exposure of all Lenders,

(c) with respect to a Lender’s obligation to participate in the US Letters of
Credit, with respect to such Lender’s obligation to reimburse the applicable US
Issuing Bank, and with respect to such Lender’s right to receive payments of US
Letter of Credit Fees, and with respect to all other computations and other
matters related to the US Letters of Credit, the percentage obtained by dividing
(i)

 

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the US Revolving Loan Exposure of such Lender, by (ii) the aggregate US
Revolving Loan Exposure of all Lenders; provided, that if all of the US
Revolving Loans have been repaid in full and all US Revolver Commitments have
been terminated, but US Letters of Credit remain outstanding, Pro Rata Share
under this clause shall be the percentage obtained by dividing (A) the US Letter
of Credit Exposure of such Lender, by (B) the US Letter of Credit Exposure of
all Lenders,

(d) with respect to a Lender’s obligation to participate in the Canadian Letters
of Credit, with respect to such Lender’s obligation to reimburse the applicable
Canadian Issuing Bank, and with respect to such Lender’s right to receive
payments of Canadian Letter of Credit Fees, and with respect to all other
computations and other matters related to the Canadian Letters of Credit, the
percentage obtained by dividing (i) the Canadian Revolving Loan Exposure of such
Lender, by (ii) the aggregate Canadian Revolving Loan Exposure of all Lenders;
provided, that if all of the Canadian Revolving Loans have been repaid in full
and all Canadian Revolver Commitments have been terminated, but Canadian Letters
of Credit remain outstanding, Pro Rata Share under this clause shall be the
percentage obtained by dividing (A) the Canadian Letter of Credit Exposure of
such Lender, by (B) the Canadian Letter of Credit Exposure of all Lenders, and

(e) with respect to all other matters and for all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 15.7 of this Agreement and including the obligations under
Section 13.4), the percentage obtained by dividing (i) the US Revolving Loan
Exposure and Canadian Revolving Loan Exposure of such Lender, by (ii) the
aggregate US Revolving Loan Exposure and Canadian Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to Section 13.1; provided, that if all of the
Loans have been repaid in full and all Commitments have been terminated, Pro
Rata Share under this clause shall be the percentage obtained by dividing
(A) the aggregate Letter of Credit Exposure of such Lender, by (B) the aggregate
Letter of Credit Exposure of all Lenders.

“Protective Advances” means the US Protective Advances and/or the Canadian
Protective Advances, as the context requires.

“Public Lender” has the meaning specified therefor in Section 17.9(c) of this
Agreement.

“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
fair market value of any Equity Interests of Parent issued in connection with
such Acquisition and including the maximum amount of Earn-Outs), paid or
delivered by a Loan Party or one of its Restricted Subsidiaries in connection
with such Acquisition (whether paid at the closing thereof or payable thereafter
and whether fixed or contingent), but excluding therefrom (a) any cash of the
seller and its Affiliates used to fund any portion of such consideration, and
(b) any cash or Cash Equivalents acquired in connection with such Acquisition.

“Qualified Equity Interests” means and refers to any Equity Interests issued by
Parent (and not by one or more of its Subsidiaries) that is not a Disqualified
Equity Interest.

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Loan Party or one of its Restricted Subsidiaries and
the improvements thereto.

“Receivable Reserves” means, as of any date of determination, those reserves
that Agent deems necessary or appropriate, in its Permitted Discretion and
subject to Section 2.1(d), to establish and maintain (including Landlord
Reserves for books and records locations and reserves for rebates, discounts,
warranty claims, and returns) with respect to the US Eligible Accounts, Canadian
Eligible Accounts or the Maximum Revolver Amount.

 

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“Receivables” has the meaning set forth in the definition of ABL Collateral.

“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

“Reference Period” means twelve consecutive months.

“Refinancing Indebtedness” means refinancings, renewals, or extensions of
Indebtedness so long as:

(f) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and accrued interest
(including, for the purpose of defeasance, future interest) and the fees and
expenses incurred in connection therewith and by the amount of unfunded
commitments with respect thereto,

(g) such refinancings, renewals, or extensions do not result in a shortening of
the final stated maturity or the average weighted maturity (measured as of the
refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed,
or extended, nor are they on terms or conditions that, taken as a whole, are or
could reasonably be expected to be materially adverse to the interests of the
Lenders,

(h) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness,

(i) the Indebtedness that is refinanced, renewed, or extended is not recourse to
any Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended,

(j) if the Indebtedness that is refinanced, renewed or extended was unsecured,
such refinancing, renewal or extension shall be unsecured, and

(k) if the Indebtedness that is refinanced, renewed, or extended was secured
(i) such refinancing, renewal, or extension shall be secured by substantially
the same or less collateral as secured such refinanced, renewed or extended
Indebtedness on terms no less favorable to Agent or the Lender Group and
(ii) the Liens securing such refinancing, renewal or extension shall not have a
priority more senior than the Liens securing such Indebtedness that is
refinanced, renewed or extended.

“Refinancing Senior Notes” means refinancings, renewals, or extensions of the
Senior Notes so long as:

(a) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and accrued interest
(including, for the purpose of defeasance, future interest) and the fees and
expenses incurred in connection therewith and by the amount of unfunded
commitments with respect thereto,

 

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(b) such refinancings, renewals, or extensions do not result in a shortening of
the final stated maturity or the average weighted maturity (measured as of the
refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed,
or extended,

(c) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness,

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to
any Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended,

(e) such refinancing, renewal or extension shall be unsecured, and

(f) the scheduled maturity date of such refinancings, renewals, or extensions
shall not be earlier than 91 days after the later of (x) the Maturity Date and
(y) the fifth anniversary of the Closing Date.

“Register” has the meaning set forth in Section 13.1(h) of this Agreement.

“Registered Loan” has the meaning set forth in Section 13.1(h) of this
Agreement.

“Related Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course and that is administered, advised or managed by
(a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of
an entity that administers, advises or manages a Lender.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.

“Replacement Lender” has the meaning specified therefor in Section 2.12(b) of
this Agreement.

“Report” has the meaning specified therefor in Section 15.16 of this Agreement.

“Required Cash Collateral Percentages” means (a) 103% for US Dollar-denominated
US Letters of Credit or Canadian Letters of Credit, and (b) 104% for Foreign
Currency-denominated US Letters of Credit or Canadian Letters of Credit.

“Required Lenders” means Lenders having or holding more than 50% of the
aggregate Revolving Loan Exposure of all Lenders; provided, that (A) the
Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the
determination of the Required Lenders, and (B) at any time there are two or more
Lenders (who are not Affiliates of one another or Defaulting Lenders), “Required
Lenders” must include at least two Lenders (who are not Affiliates of one
another).

“Rescission” has the meaning specified therefor in Section 6.17(b) of this
Agreement.

 

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“Reserves” means, as of any date of determination, without duplication,
Inventory Reserves, Receivables Reserves, Bank Product Reserves, the Canadian
Priority Payables Reserves, and those other reserves that Agent deems necessary
or appropriate, in its Permitted Discretion and subject to Section 2.1(d), to
establish and maintain (including reserves with respect to (a) sums that any
Loan Party or its Restricted Subsidiaries are required to pay under any Section
of this Agreement or any other Loan Document (such as Taxes, assessments,
insurance premiums, or, in the case of leased assets, rents or other amounts
payable under such leases) and has failed to pay, and (b) amounts owing by any
Loan Party or its Restricted Subsidiaries to any Person to the extent secured by
a Lien on, or trust over, any of the Collateral (other than a Permitted Lien),
which Lien or trust, in the Permitted Discretion of Agent likely would have a
priority superior to the Agent’s Liens (such as Liens or trusts in favor of
landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other Taxes
where given priority under applicable law) in and to such item of the
Collateral) with respect to the US Borrowing Base, the Canadian Borrowing Base,
or the Maximum Revolver Amount.

“Restricted Payment” means (a) any declaration or payment of any dividend or the
making of any other payment or distribution, directly or indirectly, on account
of Equity Interests issued by Parent or any of its Restricted Subsidiaries
(including any payment in connection with any merger or consolidation involving
Parent or to the direct or indirect holders of Equity Interests issued by Parent
or any of its Restricted Subsidiaries in their capacity as such (other than
dividends or distributions payable in Qualified Equity Interests issued by
Parent or any warrants, options or rights to purchase or acquire such Equity
Interests), or (b) any purchase, redemption, making of any sinking fund or
similar payment, or other acquisition or retirement for value (including in
connection with any merger or consolidation involving Parent) any Equity
Interests issued by Parent or any of its Restricted Subsidiaries, or (c) any
making of any payment to retire, or to obtain the surrender of, any outstanding
warrants, options, or other rights to acquire Equity Interests of Parent now or
hereafter outstanding.

“Restricted Subsidiary” means (a) each Subsidiary of Parent on the Closing Date
which has not been designated as an Unrestricted Subsidiary under the Existing
Credit Facility, and (b) each other Subsidiary of Parent that is not an
Unrestricted Subsidiary.

“Revaluation Date” means (a) with respect to any Revolving Loan, each of the
following: (i) each date of a Borrowing of such Revolving Loan, (ii) each date
of a continuation of such Revolving Loan pursuant to Section 2.11, and
(iii) such additional dates as Agent shall determine or the Required Lenders
shall require, (b) with respect to any Letter of Credit, each of the following:
(i) each date of issuance of such Letter of Credit, (ii) each date of an
amendment of such Letter of Credit having the effect of increasing the amount
thereof, (iii) each date of any payment by an Issuing Bank under such Letter of
Credit, and (iv) such additional dates as Agent or an Issuing Bank shall
determine or the Required Lenders shall require, and (c) with respect to any
other Obligations, each date as Agent shall determine unless otherwise
prescribed in this Agreement or any other Loan Documents.

“Revolver Commitments” means the US Revolver Commitment and the Canadian
Revolver Commitment.

“Revolver Usages” means the US Revolver Usage and the Canadian Revolver Usage.

“Revolving Lenders” means the US Revolver Lenders and the Canadian Revolver
Lenders.

“Revolving Loan Exposure” means the aggregate of the US Revolving Loan Exposure
and the Canadian Revolving Loan Exposure.

 

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“Revolving Loans” means the aggregate of the US Revolving Loans and the Canadian
Revolving Loans.

“Same Day Funds” means (a) with respect to disbursements and payments in US
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in a Foreign Currency, same day or other funds as may be reasonably
determined by the Agent or applicable Issuing Bank, as the case may be, to be
customary in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Foreign Currency.

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, or (d) a Person resident
in or determined to be resident in a country, in each case of clauses
(a) through (d) that is a target of Sanctions, including a target of any country
sanctions program administered and enforced by OFAC.

“Sanctioned Person” means, at any time (a) any Person named on the list of
Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s
consolidated Non-SDN list or any other Sanctions-related list maintained by any
Governmental Authority, (b) a Person or legal entity that is a target of
Sanctions, (c) any Person operating, organized or resident in a Sanctioned
Entity, or (d) any Person directly or indirectly owned or controlled
(individually or in the aggregate) by or acting on behalf of any such Person or
Persons described in clauses (a) through (c) above.

“Sanctions” means individually and collectively, respectively, any and all
economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions
laws, regulations or embargoes, including those imposed, administered or
enforced from time to time by: (a) the United States of America, including those
administered by OFAC, the U.S. Department of State, the U.S. Department of
Commerce, or through any existing or future executive order, (b) the United
Nations Security Council, (c) the European Union or any European Union member
state, (d) Her Majesty’s Treasury of the United Kingdom, or (d) any other
Governmental Authority with jurisdiction over any member of Lender Group or any
Loan Party or any of their respective Subsidiaries or Affiliates.

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Securities Account” means a securities account (as that term is defined in the
Code or, to the extent applicable, the PPSA).

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

“Senior Notes” means the $400,000,000 6.250% Senior Notes due 2021, issued under
the Indenture dated as of October 2, 2013 among the Parent, as issuer, certain
subsidiaries of the Parent, as guarantors, and Wells Fargo Bank, National
Association, as trustee.

“Settlement” has the meaning specified therefor in Section 2.2(e)(i) of this
Agreement.

“Settlement Date” has the meaning specified therefor in Section 2.2(e)(i) of
this Agreement.

 

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“Solvent” means, with respect to any Person as of any time of determination,
that (a) at fair valuations, the sum of such Person’s debts (including
contingent liabilities) is less than all of such Person’s assets, (b) such
Person is not engaged or about to engage in a business or transaction for which
the remaining assets of such Person are unreasonably small in relation to the
business or transaction or for which the property remaining with such Person is
an unreasonably small capital, (c) such Person has not incurred and does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or otherwise),
and (d) such Person is “solvent” or not “insolvent”, as applicable within the
meaning given those terms and similar terms under applicable Insolvency Law or
other laws relating to fraudulent transfers and conveyances. For purposes of
this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability (irrespective of whether such contingent
liabilities meet the criteria for accrual under Statement of Financial
Accounting Standard No. 5).

“Specified Account Debtor” means (a) any Account Debtor listed on Schedule
1.1(B), (b) any other Account Debtor approved by the Agent in its Permitted
Discretion, and (c) any wholly-owned Subsidiary of a Specified Account Debtor;
provided that (i) the Agent may not approve any Account Debtor as a Specified
Account Debtor under clause (b) above if, at the time of such approval, such
Account Debtor has been assigned a credit rating by Moody’s or S&P and such
credit rating is lower than Ba3 (as set by Moody’s) or BB- (as set by S&P) or
neither of such rating agencies provide a credit rating for such Account Debtor,
(ii) after approval by the Agent under clause (b) above, an Account Debtor shall
cease to be a Specified Account Debtor under clause (b) above if such Account
Debtor is assigned a credit rating of less than Ba3 (as set by Moody’s) or BB-
(as set by S&P) or neither of such rating agencies provide a credit rating for
such Account Debtor; (iii) an Account Debtor shall cease to be a Specified
Account Debtor under clause (a) if such Account Debtor’s credit or other
financial condition materially deteriorates after the Closing Date as determined
by the Agent in is Permitted Discretion, (iv) a wholly-owned Subsidiary of an
Account Debtor that is a Specified Account Debtor solely based on its status as
a wholly-owned Subsidiary of a Specified Account Debtor shall cease to be a
Specified Account Debtor when its parent company ceases to be a Specified
Account Debtor, and (v) no Specified 10% Affiliate and no Specified Affiliate
shall qualify as a Specified Account Debtor.

“Specified Affiliate” means any Person that qualifies as an Affiliate of a Loan
Party solely as a result of such Person and such Loan Party being under common
Control by any of the following: (a) a Permitted Holder, (b) Quantum Energy
Partners LP, and (c) John Schmitz.

“Specified 10% Affiliate” means an Affiliate of a Loan Party solely by virtue of
the application of clause (a) of the definition of “Affiliate” (and is not an
Affiliate by virtue of any other provision of such definition).

“Specified Currency” has the meaning specified therefor in Section 17.14 of this
Agreement.

“Specified Event of Default” means any Event of Default described in any of
Sections 8.1, 8.2 (but only with respect to a breach under Section 5.1,
Section 5.2, Section 6.17 or Section 7), 8.4, or 8.5.

“Specified Transaction” means, any Investment, prepayment of Indebtedness,
Restricted Payment (or declaration of any prepayment or Restricted Payment), or
any designation of a Subsidiary as an Unrestricted Subsidiary.

“Sponsor Affiliated Entity” means the Permitted Holder or any of its Affiliates.

 

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“Spot Rate” means, for a currency, the rate determined by Agent to be the rate
quoted by Wells Fargo acting in such capacity as the spot rate for the purchase
by Wells Fargo of such currency with another currency through its principal
foreign exchange trading office at approximately 11:00 a.m. (New York time) on
the date two Business Days prior to the date as of which the foreign exchange
computation is made; provided, that Agent may obtain such spot rate from another
financial institution designated by Agent if Wells Fargo acting in such capacity
does not have as of the date of determination a spot buying rate for any such
currency.

“STA” means the Securities Transfer Act, 2006 (Alberta) or to the extent
applicable, comparable legislation in other Canadian provinces.

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or
foreign law or letter of credit practices applicable in the city in which
Issuing Bank issued the applicable Letter of Credit or, for its branch or
correspondent, such laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors to which the Agent is subject, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board of Governors). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Non-Base Rate Loans shall be deemed
to constitute Eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the Equity Interests having ordinary voting power to elect a majority
of the Board of Directors of such corporation, partnership, limited liability
company, or other entity.

“Supermajority Lenders” means, at any time, Revolving Lenders having or holding
more than 66 2/3% of the aggregate Revolving Loan Exposure of all Revolving
Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender
shall be disregarded in the determination of the Supermajority Lenders, and
(ii) at any time there are two or more Revolving Lenders (who are not Affiliates
of one another), “Supermajority Lenders” must include at least two Revolving
Lenders (who are not Affiliates of one another or Defaulting Lenders).

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swing Line Lender” means the US Swing Line Lender and/or the Canadian Swing
Line Lender, as the context requires.

“Swing Loans” means US Swing Loans and Canadian Swing Loans.

 

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“Swing Loan Exposure” means the US Swing Line Exposure or the Canadian Swing
Line Exposure.

“Tangible Net Assets” means (a) the consolidated net book value of all assets of
the Parent and is consolidated Restricted Subsidiaries minus (b) the
consolidated net book value of all intangible assets of the Parent and its
consolidated Restricted Subsidiaries.

“Tax Indemnitee” has the meaning specified therefor in Section 16.1 of this
Agreement.

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of this
Agreement.

“Taxes” means any taxes, levies, imposts, duties, deductions, withholdings
(including backup withholding), assessments or other charges in the nature of a
tax now or hereafter imposed by any jurisdiction or by any political subdivision
or taxing authority thereof or therein, and all interest, penalties or similar
liabilities with respect thereto.

“Termination Event” means (a) the occurrence with respect to a Pension Plan of a
“reportable event” described in Section 4043(c) of ERISA for which the 30-day
notice requirement has not been waived by applicable regulations issued by the
PBGC, (b) the withdrawal of any Loan Party or ERISA Affiliate from a Pension
Plan during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing
of a notice of intent to terminate a Pension Plan or the treatment of a Pension
Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets
are not sufficient to pay all plan liabilities, (d) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC or any Pension Plan or Multiemployer Plan
administrator, or (e) any other event or condition that would constitute grounds
under Section 4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan.

“Threshold Amount” has the meaning specified therefor in the definition of
Permitted Dispositions.

“Total Net Leverage Ratio” means, as of any date of determination the result of
(a) (i) the amount of Parent’s consolidated Funded Indebtedness as of such date
minus Domestic Cash as of such date, to (b) Parent’s consolidated EBITDA for the
12 month period ended as of such date.

“Trademark Security Agreement” has the meaning specified therefor in the
Guaranty and Security Agreement.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any version or revision thereof accepted by
Issuing Bank for use.

“Unfinanced Capital Expenditures” means Capital Expenditures (a) not financed
with the proceeds of any incurrence of Indebtedness (other than the incurrence
of any Revolving Loans), the proceeds of any sale or issuance of Equity
Interests or equity contributions, the proceeds of any asset sale (other than
the sale of Inventory in the ordinary course of business) or any insurance
proceeds, and (b) that are not reimbursed by a third person (excluding any Loan
Party or any of its Affiliates) in the period such expenditures are made
pursuant to a written agreement.

“United States” means the United States of America.

 

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“Unrestricted Subsidiaries” means any Subsidiary of Parent that has been
designated as an Unrestricted Subsidiary in compliance with Section 5.11.

“Unused Canadian Line Fee” has the meaning specified therefor in Section 2.9(b)
of this Agreement.

“Unused US Line Fee” has the meaning specified therefor in Section 2.9(b) of
this Agreement.

“Unused Line Fees” means the Unused (US) Line Fee and the Unused (Canadian) Line
Fee.

“US Availability” means, as of any time of determination, the amount that US
Borrowers are entitled to borrow as US Revolving Loans under Section 2.1 of this
Agreement (after giving effect to the then outstanding US Revolver Usage).

“US Bank Product” means any one or more of the following financial products or
accommodations extended to a US Loan Party by a Bank Product Provider:
(a) credit cards (including commercial credit cards (including so-called
“purchase cards”, “procurement cards” or “P-cards”)), (b) credit card processing
services, (c) debit cards, (d) stored value cards, (e) Cash Management Services,
or (f) transactions under Hedge Agreements.

“US Bank Product Agreements” means those agreements entered into from time to
time by a US Loan Party with a Bank Product Provider in connection with the
obtaining of any of the US Bank Products.

“US Bank Product Obligations” means (a) all obligations, liabilities,
reimbursement obligations, fees, or expenses owing by any US Loan Party to any
Bank Product Provider pursuant to or evidenced by a US Bank Product Agreement
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, (b) all US Hedge Obligations, and (c) all amounts that Agent
or any Lender is obligated to pay to a Bank Product Provider as a result of
Agent or such Lender purchasing participations from, or executing guarantees or
indemnities or reimbursement obligations to, a Bank Product Provider with
respect to the US Bank Products provided by such Bank Product Provider to any US
Loan Party; provided, in order for any item described in clauses (a), (b), or
(c) above, as applicable, to constitute “US Bank Product Obligations”, if the
applicable Bank Product Provider is any Person other than Wells Fargo or its
Affiliates, then the applicable US Bank Product must have been (i) provided on
or prior to the Closing Date (or such later date as Agent shall agree to in
writing in its sole discretion), or (ii) provided after the Closing Date and
Agent shall have received a Bank Product Provider Agreement within 10 days after
the date of the provision of the applicable US Bank Product to a US Loan Party
(or such later date as Agent shall agree to in writing in its sole discretion).

“US Bank Product Reserves” means, as of any date of determination, those
reserves that Agent has established (based upon the applicable Bank Product
Provider’s reasonable and good faith determination of its credit exposure to the
US Loan Parties in respect of US Bank Product Obligations) in respect of US Bank
Products then provided or outstanding.

“US Base Rate” means the greatest of (a) the Federal Funds Rate plus  1⁄2%, (c)
the Adjusted LIBOR Rate (which rate shall be calculated based upon a contract
period of one month and shall be determined on a daily basis), plus one
percentage point, and (d) 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

 

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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 (and, if any such announced
rate is below zero, then the rate determined pursuant to this clause (d) shall
be deemed to be zero).

“US Borrower” and “US Borrowers” have the respective meanings specified therefor
in the preamble to this Agreement.

“US Borrowing” means a borrowing consisting of US Revolving Loans made on the
same day by the Revolving Lenders with US Revolver Commitments (or Agent on
behalf thereof), or by Swing Line Lender in the case of a US Swing Loan, or by
Agent in the case of a US Extraordinary Advance.

“US Borrowing Base” means, as of any date of determination, the result of:

(a) 85% of the amount of US Eligible Accounts, less the amount, if any, of the
US Dilution Reserve; provided that, (i) the amount of US Eligible Accounts from
Specified 10% Affiliates to be included in the US Borrowing Base shall not
exceed $15,000,000, and (ii) the amount of Accounts that are Eligible US
Accounts as a result of being covered by credit insurance and which are to be
included in the US Borrowing Base shall not exceed $5,000,000, plus

(b) the lesser of (i) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of US Eligible Finished Goods Inventory, at such time, and
(ii) the product of 85% multiplied by the Net Recovery Percentage identified in
the most recent Acceptable Appraisal of Inventory, multiplied by the value
(calculated at the lower of cost or market on a basis consistent with Borrowers’
historical accounting practices) of US Eligible Finished Goods Inventory (such
determination may be made as to different categories of US Eligible Finished
Goods Inventory based upon the Net Recovery Percentage applicable to such
categories) at such time, plus

(c) the lesser of (i) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of US Eligible In-Transit Inventory at such time, and
(ii) the product of 85% multiplied by the Net Recovery Percentage identified in
the most recent Acceptable Appraisal of Inventory, multiplied by the value
(calculated at the lower of cost or market on a basis consistent with US Loan
Parties’ historical accounting practices) of US Eligible In-Transit Inventory
(such determination may be made as to different categories of finished goods,
raw materials or work-in-process Inventory based upon the Net Recovery
Percentage applicable to such categories) at such time, provided that, (A) until
the completion of an Acceptable Appraisal of such US Eligible In-Transit
Inventory and the completion of a field examination with respect to such
Inventory that is satisfactory to Agent in its Permitted Discretion, the amount
determined under this clause (c) shall be equal to $0, and (B) the amount
determined under this clause (c), when aggregated with the amount determined
under clause (c) of the definition of “Canadian Borrowing Base”, shall not
exceed $5,000,000, plus

(d) the lesser of (i) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of US Eligible Raw Materials Inventory at such time, and
(ii) the product of 85% multiplied by the Net Recovery Percentage identified in
the most recent Acceptable Appraisal of Inventory, multiplied by the value
(calculated at the lower of cost or market on a basis consistent with Borrowers’
historical accounting practices) of US Eligible Raw Materials Inventory (such
determination may be made as to different categories of US Eligible Raw
Materials Inventory based upon the Net Recovery Percentage applicable to such
categories) at such time, plus

 

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(e) the lesser of

(i) $25,000,000, and

(ii) the lesser of (A) the product of 70% multiplied by the value (calculated at
the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices) of US Eligible Work-In-Process Inventory at such time, and
(B) the product of 85% multiplied by the Net Recovery Percentage identified in
the most recent Acceptable Appraisal of Inventory, multiplied by the value
(calculated at the lower of cost or market on a basis consistent with Borrowers’
historical accounting practices) of US Eligible Work-In-Process Inventory (such
determination may be made as to different categories of US Eligible
Work-In-Process Inventory based upon the Net Recovery Percentage applicable to
such categories) at such time; minus

(f) the aggregate amount of Reserves, if any, established by Agent from time to
time under Section 2.1(d) of this Agreement.

“US Borrowing Base Certificate” means a certificate in the form of Exhibit B-1,
containing the calculation of the US Borrowing Base.

“US Designated Account” means the Deposit Account(s) of US Borrowers identified
on Schedule D-2 to this Agreement (or such other Deposit Account(s) of US
Borrowers located at US Designated Account Bank that has been designated as
such, in writing, by Administrative Borrower to Agent).

“US Designated Account Bank” has the meaning specified therefor in Schedule D-2
to this Agreement (or such other bank that is located within the United States
that has been designated as such, in writing, by Administrative Borrower to
Agent).

“US Dilution” means, as of any date of determination, a percentage, based upon
the experience of the immediately prior twelve months, that is the result of
dividing the US Dollar Equivalent amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to US Loan
Parties’ Accounts during such period, by (b) US Loan Parties’ billings with
respect to such Accounts during such period.

“US Dilution Reserve” means, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts of US Loan
Parties by 1 percentage point for each percentage point by which US Dilution is
in excess of 5%.

“US Dollars”, “Dollars”, “$” or “US$” means United States dollars.

“US Dollar Equivalent” means, at any time (a) with respect to any amount
denominated in US Dollars, such US Dollars, and (b) with respect to any amount
denominated in any Foreign Currency, the equivalent amount thereof in US Dollars
as determined by Agent, at such time on the basis of the Spot Rate (determined
in respect of the most recent Revaluation Date or such other date determined by
Agent) for the purchase of US Dollars with such Foreign Currency.

 

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“US Eligible Accounts” means those Accounts created by a US Loan Party that is
the Parent or that is a Wholly-Owned Restricted Subsidiary and created in the
ordinary course of its business, that arise out of such US Loan Party’s sale of
goods or rendition of services, that comply with each of the representations and
warranties respecting US Eligible Accounts made in the Loan Documents, and that
are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, that such criteria may be revised from time
to time by Agent in Agent’s Permitted Discretion to address the results of any
information with respect to the US Loan Parties’ business or assets of which
Agent becomes aware after the Closing Date, including any field examination
performed by (or on behalf of) Agent from time to time after the Closing Date.
In determining the amount to be included, US Eligible Accounts shall be
calculated net of customer deposits, unapplied cash, Taxes, finance charges,
service charges, discounts, credits, allowances, and rebates. US Eligible
Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 90 days of
original invoice date or 60 days of due date; provided that any Account unpaid
for more than 90 days of original invoice date but not more than 120 days from
the date of the relevant invoice shall not be excluded under this clause (a) so
long as (i) the aggregate amount of such Accounts under this clause (a) does not
exceed 10% of the US Borrowing Base (prior to the inclusion of such Accounts
therein), (ii) the Account Debtor in respect of such Account is a Specified
Account Debtor, and (iii) such Account is not unpaid more than 60 days past its
due date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of
all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,

(c) Accounts with respect to which the Account Debtor is a Specified Affiliate
except that up to $5,000,000 in the aggregate of such Accounts (when also
aggregated with the Canadian Eligible Accounts owing by one or more Specified
Affiliate), may be included in US Eligible Account unless (i) the Agent
otherwise determines, from time to time, in its sole discretion that a lower
amount (including $0) shall apply, or (ii) such Accounts were not on an arms’
length basis, not for fair market value or not in the ordinary course of
business,

(d) (i) Accounts with respect to which the Account Debtor is an Affiliate of any
Loan Party or an employee or agent of any Loan Party or any Affiliate of any
Loan Party, in any case, other than a Specified Affiliate or a Specified 10%
Affiliate, and (ii) Accounts with respect to which the Account Debtor is a
Specified 10% Affiliate of any Loan Party unless such Accounts were on an arms’
length basis, for fair market value and in the ordinary course of business,

(e) Accounts (i) arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional, or (ii) with respect to which the
payment terms are “C.O.D.”, cash on delivery or other similar terms,

(f) Accounts that are not payable in US Dollars,

(g) Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States, or (ii) is not
organized under the laws of the United States any state thereof, or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof, (unless (A) the
Account is supported by an irrevocable letter of credit reasonably satisfactory
to Agent (as to form, substance and issuer or domestic confirming bank) that has
been delivered to Agent and, if requested by Agent, is directly drawable by
Agent or (B) with the consent of Agent which may be exercised in its sole
discretion and exercised from time to time as to any particular Account, the
Account is covered by credit insurance in form, substance and amount, and by an
insurer, acceptable to Agent in its sole discretion), except that (x) as to
Accounts with respect to which the Account Debtor maintains its chief executive
office in Canada or is organized under the laws of Canada

 

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or any state, territory or province thereof; up to $15,000,000 of such Accounts
may be included in US Eligible Accounts, and (y) except that, as to Accounts
with respect to which the Account Debtor maintains its chief executive office in
any of the five islands previously known as the “Netherlands Antilles” or
Switzerland or is organized under the laws of any such island or Switzerland or
any state, territory or province thereof; up to $7,500,000 of such Accounts may
be included in US Eligible Account,

(h) Accounts with respect to which the Account Debtor is either (i) the United
States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which US Loan Parties have
complied, to the reasonable satisfaction of Agent, with the Assignment of Claims
Act, 31 USC §3727), or (ii) any state of the United States or any other
Governmental Authority and applicable law of such state or other Governmental
Authority restricts or does not allow (A) an assignment of Accounts owing by
such Account Debtor or (B) the exercise of rights or remedies of a secured party
with respect to Accounts owing by such Account Debtor,

(i) Accounts with respect to which the Account Debtor is a creditor of any Loan
Party, has or has asserted a right of recoupment or setoff, or has disputed its
obligation to pay all or any portion of the Account, to the extent of such
claim, right of recoupment or setoff, or dispute,

(j) (i) Accounts with respect to an Account Debtor (other than Concentration
Account Debtors and Investment Grade Account Debtors) whose US Eligible Accounts
owing to US Loan Parties exceed 15% (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor deteriorates) of all US Eligible
Accounts, (ii) Accounts with respect to Investment Grade Account Debtors whose
US Eligible Accounts owing to US Loan Parties exceed 25% (such percentage, as
applied to a particular Account Debtor, being subject to reduction by Agent in
its Permitted Discretion if the creditworthiness of such Account Debtor
deteriorates) of all US Eligible Accounts, and (iii) Accounts with respect to a
Concentration Account Debtor whose US Eligible Accounts owing to US Loan Parties
exceed 30% (such percentage, as applied to a particular Account Debtor, being
subject to reduction by Agent in its Permitted Discretion if the
creditworthiness of such Account Debtor deteriorates) of all US Eligible
Accounts, in each of the foregoing, to the extent of the obligations owing by
such Account Debtor in excess of such percentage; provided, that in each case
under the preceding clause (i), (ii) and (iii), the amount of US Eligible
Accounts that are excluded because they exceed the applicable foregoing
percentages shall be determined by Agent based on all of the otherwise US
Eligible Accounts prior to giving effect to any eliminations based upon the
foregoing concentration limits,

(k) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
any Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor, in each
case unless the Account from such Account Debtor arises subsequent to a decree
or order for relief with respect to such Account Debtor under the federal
bankruptcy laws, as now or hereafter in effect, and Agent shall have determined
in its sole discretion that the timely payment and collection of such Account
will not be impaired,

(l) Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful, including by reason of the Account Debtor’s financial
condition,

(m) Accounts that are not subject to a valid and perfected first priority
Agent’s Lien,

(n) Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor,

 

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(o) Accounts with respect to which the Account Debtor is a Sanctioned Person or
Sanctioned Entity,

(p) Accounts (i) that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by the
applicable US Loan Party of the subject contract for goods or services, or
(ii) that represent credit card sales, or

(q) Accounts owned by a target acquired in connection with a Permitted
Acquisition or Permitted Investment, or Accounts owned by a Person that is
joined to this Agreement as a US Loan Party pursuant to the provisions of this
Agreement, until the completion of a field examination with respect to such
Accounts, in each case, satisfactory to Agent in its Permitted Discretion (which
examination may be conducted prior to the closing of such Permitted Acquisition,
Permitted Investment or joinder); provided that (i) until the completion of such
field examination, such Accounts may be included in US Eligible Account for a
period of up to 45 days after the date of consummation of the Permitted
Acquisition or Permitted Investment or joinder so long as such Accounts
otherwise qualify as US Eligible Accounts and (ii) the aggregate amount of such
Accounts which are US Eligible Accounts, together with the aggregate amount of
US Eligible Inventory related to Permitted Acquisitions, Permitted Investments,
and joinders that are not subject to an acceptable field examination and an
Acceptable Appraisal, do not constitute more than 10% of the US Borrowing Base.

“US Eligible Finished Goods Inventory” means Inventory that qualifies as US
Eligible Inventory and consists of first quality finished goods held for sale in
the ordinary course of US Loan Parties’ business.

“US Eligible Inventory” means Inventory of a US Loan Party that it the Parent or
that is a Wholly-Owned Restricted Subsidiary, that complies with each of the
representations and warranties respecting US Eligible Inventory made in the Loan
Documents, and that is not excluded as ineligible by virtue of one or more of
the excluding criteria set forth below; provided, that such criteria may be
revised from time to time by Agent in Agent’s Permitted Discretion to address
the results of any information with respect to the US Loan Parties’ business or
assets of which Agent becomes aware after the Closing Date, including any field
examination or appraisal performed or received by Agent from time to time after
the Closing Date. In determining the amount to be so included, Inventory shall
be valued at the lower of cost or market on a basis consistent with US Loan
Parties’ historical accounting practices. An item of Inventory shall not be
included in US Eligible Inventory if:

(a) a US Loan Party does not have good, valid, and marketable title thereto,

(b) a US Loan Party does not have actual and exclusive possession thereof
(either directly or through a bailee or agent of a US Loan Party),

(c) it is not located at one of the locations in the continental United States
set forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be
amended from time to time with the prior written consent of Agent) (or
in-transit from one such location to another such location),

(d) it is stored at locations holding less than $100,000 of the aggregate value
of any US Loan Party’s Inventory,

(e) it is in-transit to or from a location of a US Loan Party (other than
in-transit from one location set forth on Schedule 4.25 to this Agreement to
another location set forth on Schedule 4.25 to this Agreement (as such Schedule
4.25 may be amended from time to time with the prior written consent of Agent)),

 

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(f) it is located on real property leased by a US Loan Party or in a contract
warehouse or with a bailee, in each case, unless either (i) it is subject to a
Collateral Access Agreement executed by the lessor or warehouseman, as the case
may be, and it is segregated or otherwise separately identifiable from goods of
others, if any, stored on the premises, or (ii) Agent has established a Landlord
Reserve with respect to such location; provided that, until the 90th day after
the Closing Date, such Inventory that is located at a location not covered by a
Collateral Access Agreement or a Landlord Reserve may be US Eligible Inventory
if it otherwise qualifies as a US Eligible Inventory,

(g) it is the subject of a bill of lading or other document of title,

(h) it is not subject to a valid and perfected first priority Agent’s Lien,

(i) it consists of goods returned or rejected by a US Loan Party’s customers,
unless such Inventory is undamaged and able to be resold in the ordinary course
of business to a readily available market without any modification,

(j) it consists of goods that are obsolete, slow moving, spoiled or are
otherwise past the stated expiration, “sell-by” or “use by” date applicable
thereto, restrictive or custom items or otherwise is manufactured in accordance
with customer-specific requirements, or goods that constitute spare parts that
are consumed or consumable by any Loan Party or Restricted Subsidiary, packaging
and shipping materials, supplies used or consumed in US Loan Parties’ business,
bill and hold goods, defective goods, “seconds,” or Inventory acquired on
consignment,

(k) it is subject to third party intellectual property, licensing or other
proprietary rights, unless Agent is reasonably satisfied that such Inventory can
be freely sold by Agent on and after the occurrence of an Event of a Default
despite such third party rights, or

(l) it was acquired in connection with a Permitted Acquisition or Permitted
Investment, or such Inventory is owned by a Person that is joined to this
Agreement as a US Loan Party pursuant to the provisions of this Agreement, until
the completion of an Acceptable Appraisal of such Inventory and the completion
of a field examination with respect to such Inventory that is satisfactory to
Agent in its Permitted Discretion (which examination may be conducted prior to
the closing of such Permitted Acquisition, Permitted Investment or joinder);
provided that (i) until the completion of such field examination and Acceptable
Appraisal, such Inventory may be included in US Eligible Inventory for a period
of up to 45 days after the date of consummation of the Permitted Acquisition or
Permitted Investment or joinder so long as such Inventory otherwise qualify as
US Eligible Inventory and (ii) the aggregate amount of such Inventory which are
US Eligible Inventory, together with the aggregate amount of US Eligible
Accounts related to Permitted Acquisitions, Permitted Investments, and joinders
that are not subject to a satisfactory field examination, do not constitute more
than 10% of the US Borrowing Base.

“US Eligible In-Transit Inventory” means those items of Inventory that do not
qualify as Eligible Inventory solely because they are not in a location set
forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended
from time to time with prior notice to Agent) or in transit among such locations
and a US Loan Party that is the Parent or that is a Wholly-Owned Restricted
Subsidiary does not have actual and exclusive possession thereof, but as to
which,

(a) such Inventory currently is in transit (by vessel or land) from a location
outside of the continental United States to a location set forth on Schedule
4.25 to this Agreement (as such Schedule 4.25 may be amended from time to time
with prior notice to Agent) to the extent that such Inventory is the subject of
a negotiable bill of lading governed by the laws of a state within the United
States that is (x) that is consigned to Agent or one of its Customs Brokers
(either directly or by means of

 

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endorsements), (y) that was issued by the carrier (including a non-vessel
operating common carrier) in possession of the Inventory that is subject to such
bill of lading, and (z) that either is in the possession of Agent or a Customs
Broker (in each case in the continental United States),

(b) title to such Inventory has passed to a US Loan Party that is the Parent or
that is a Wholly-Owned Restricted Subsidiary and Agent shall have received such
evidence thereof as it may from time to time require,

(c) such Inventory is insured against types of loss, damage, hazards, and risks,
and in amounts, satisfactory to Agent in its Permitted Discretion, and Agent
shall have received a copy of the certificate of marine cargo insurance in
connection therewith in which it has been named as an additional insured and
loss payee in a manner acceptable to Agent,

(d) such Inventory is the subject of a negotiable bill of lading governed by the
laws of a state within the United States (x) that is consigned to Agent or one
of its Customs Brokers (either directly or by means of endorsements), (y) that
was issued by the carrier (including a non-vessel operating common carrier) in
possession of the Inventory that is subject to such bill of lading, and (z) that
either is in the possession of Agent or a Customs Broker (in each case in the
continental United States),

(e) such Inventory is in the possession of a common carrier (including on behalf
of any non-vessel operating common carrier) that has issued the bill of lading
or other document of title with respect thereto or the Customs Broker handling
the importing, shipping and delivery of such Inventory;

(f) the documents of title related thereto are subject to the valid and
perfected first priority Lien of Agent;

(g) Agent determines that such Inventory is not subject to (i) any Person’s
right of reclamation, repudiation, stoppage in transit or diversion or (ii) any
other right or claim of any other Person which is (or is capable of being)
senior to, or pari passu with, the Lien of Agent or Agent determines that any
Person’s right or claim impairs, or interferes with, directly or indirectly, the
ability of Agent to realize on, or reduces the amount that Agent may realize
from the sale or other disposition of such Inventory;

(h) Administrative Borrower has provided, upon Agent’s request, a copy of the
invoice, packing slip and manifest with respect thereto,

(i) such Inventory shall not have been in transit for more than sixty (60) days,
and

(j) with respect to Inventory transferred from a Person that is not a Loan
Party, upon Agent’s request, the Agent shall have received such other agreements
or documents in form and substance satisfactory to the Agent executed by such
Person related to such Person’s right or claim to such Inventory or to any Loan
Party.

“US Eligible Raw Materials Inventory” means Inventory that qualifies as US
Eligible Inventory and consists of goods that are first quality raw materials
and that are not located in open pallets or containers.

“US Eligible Work-in-Process Inventory” means Inventory that qualifies as US
Eligible Inventory and consists of goods that are first quality work-in-process;
provided, that anything to the contrary contained herein notwithstanding, the
value of such Inventory shall not include the value of any labor or other
services rendered to produce such Inventory.

 

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“US Extraordinary Advances” has the meaning specified therefor in
Section 2.2(d)(iii) of this Agreement.

“US Guarantors” means the Guarantors that are Domestic Subsidiaries of the
Parent provided, however, that, with respect to US Borrowers, recovery from any
US Guarantor that is a FSHCO will be limited to 65% of the voting Equity
Interests in any CFCs and FSCHOs owned by such US Guarantor (and 100% of any
other interests in such entity along with all other assets of such FSHCO);
provided that, for the avoidance of doubt, with respect to US Borrowers, no
direct or indirect Domestic Subsidiary of a Foreign Subsidiary that is a CFC
shall be a US Guarantor.

“US Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of any US Loan Party arising under, owing pursuant to, or existing in respect of
Hedge Agreements entered into with one or more of the Hedge Providers; provided
that, as to such obligations or liabilities owing to a former Lender or an
Affiliate of a former Lender, such obligations and liabilities shall constitute
US Hedge Obligations only as to the individual Hedge Agreements (and not Master
ISDA Agreements) entered into prior to such Lender ceasing to be a Lender
hereunder and without giving effect to any extension or renewal thereof.

“US Issuing Bank” means Wells Fargo or any other Lender or any Affiliate thereof
that, at the request of Administrative Borrower and with the consent of Agent
(not to be unreasonably withheld, delayed or conditioned), agrees, in such
Lender’s or such Affiliate’s sole discretion, to become a US Issuing Bank for
the purpose of issuing US Letters of Credit pursuant to Section 2.10A of this
Agreement.

“US Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by US Issuing Bank for the account of the Parent or any Restricted
Subsidiary.

“US Letter of Credit Disbursement” means a payment made by US Issuing Bank
pursuant to a US Letter of Credit.

“US Letter of Credit Exposure” means, as of any time of determination with
respect to any Lender, such Lender’s Pro Rata Share of the US Letter of Credit
Usage on such date.

“US Letter of Credit Fees” has the meaning specified therefor in Section 2.5(b).

“US Letter of Credit Sublimit” means $25,000,000.

“US Letter of Credit Obligations” means the obligation of each US Loan Party to
reimburse US Issuing Bank for amounts paid pursuant to US Letters of Credit.

“US Letter of Credit Usage” means, as of any time of determination, the sum of
(a) the aggregate undrawn amount of all outstanding US Letters of Credit plus
(b) the aggregate amount of outstanding reimbursement obligations with respect
to US Letters of Credit which remain unreimbursed or which have not been paid
through a Revolving Loan.

“US Loan Account” has the meaning specified therefor in Section 2.8.

“US Loan Party” means the US Borrowers and the US Guarantors.

 

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“US Obligations” means (a) all loans (including the US Revolving Loans
(inclusive of US Extraordinary Advances and US Swing Loans)), debts, principal,
interest (including any interest that accrues after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), reimbursement or
indemnification obligations with respect to US Letters of Credit (irrespective
of whether contingent), premiums, liabilities (including all amounts charged to
the US Loan Account pursuant to this Agreement), obligations (including
indemnification obligations) of any US Loan Party, fees (including the fees
Schedule 1.1 provided for in the Fee Letter) of any US Loan Party, Lender Group
Expenses (including any fees or expenses that accrue after the commencement of
an Insolvency Proceeding, regardless of whether allowed or allowable in whole or
in part as a claim in any such Insolvency Proceeding) of any US Loan Party,
guaranties of any US Loan Party, and all covenants and duties of any other kind
and description owing by any US Loan Party arising out of, under, pursuant to,
in connection with, or evidenced by this Agreement or any of the other Loan
Documents 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 interest not paid when due and all other
expenses or other amounts that any US Loan Party is required to pay or reimburse
by the Loan Documents or by law or otherwise in connection with the Loan
Documents, (b) all debts, liabilities, or obligations (including reimbursement
obligations, irrespective of whether contingent) owing by US Borrower or any
other US Loan Party to US Issuing Bank now or hereafter arising from or in
respect of a US Letters of Credit, and (c) all US Bank Product Obligations;
provided, that US Obligations shall not include Excluded Swap Obligations.
Without limiting the generality of the foregoing, the US Obligations under the
Loan Documents include the obligation to pay (i) the principal of the US
Revolving Loans, (ii) the interest accrued on the US Revolving Loans, (iii) the
amount necessary to reimburse US Issuing Bank for amounts paid or payable
pursuant to US Letters of Credit, (iv) letter of credit commissions, charges,
expenses, and fees, in each case in respect of US Letters of Credit (v) Lender
Group Expenses of any US Loan Party, (vi) fees payable by any US Loan Party
under this Agreement or any of the other Loan Documents, and (vii) indemnities
and other amounts payable by any US Loan Party under any Loan Document
(excluding Excluded Swap Obligations). Any reference in this Agreement or in the
Loan Documents to the US Obligations shall include all or any portion thereof
and any extensions, modifications, renewals, or alterations thereof, both prior
and subsequent to any Insolvency Proceeding.

“US Overadvance” means, as of any time of determination, that the US Revolver
Usage is greater than any of the limitations set forth in Section 2.1 or
Section 2.10A.

“US Protective Advances” has the meaning specified therefor in Section 2.2(d)(i)
of this Agreement.

“US Revolver Commitment” means, with respect to each Revolving Lender, its US
Revolver Commitment, and, with respect to all Revolving Lenders, their US
Revolver Commitments, in each case as such US Dollar amounts are set forth
beside such Revolving Lender’s name under the applicable heading on Schedule C-1
to this Agreement or in the Assignment and Acceptance or Increase Joinder
pursuant to which such Revolving Lender became a Revolving Lender under this
Agreement, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1
of this Agreement, and as such amounts may be decreased by the amount of
reductions in the US Revolver Commitments made in accordance with Section 2.3(c)
hereof.

“US Revolver Usage” means, as of any time of determination, the sum of (a) the
amount of outstanding US Revolving Loans (inclusive of Swing Loans and US
Protective Advances), plus (b) the amount of the US Letter of Credit Usage.

“US Revolving Lender” means a Lender that has a US Revolving Loan Exposure or US
Letter of Credit Exposure.

 

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“US Revolving Loan Exposure” means, with respect to any Lender, as of any time
of determination (a) prior to the termination of the US Revolver Commitments,
the amount of such Lender’s US Revolver Commitment, and (b) after the
termination of the US Revolver Commitments, the aggregate outstanding principal
amount of the US Revolving Loans of such Lender plus such Lender’s US Letter of
Credit Exposure.

“US Revolving Loans” has the meaning specified therefor in Section 2.1(a) of
this Agreement.

“US Swing Line Lender” means Wells Fargo or any other Lender that, at the
request of US Borrowers and with the consent of Agent (not to be unreasonably
withheld, delayed or conditioned) agrees, in such Lender’s sole discretion, to
become a US Swing Line Lender under Section 2.2(b) of this Agreement.

“US Swing Loan” has the meaning specified therefor in Section 2.2(b) of this
Agreement.

“US Swing Loan Exposure” means, as of any time of determination with respect to
any Lender, such Lender’s Pro Rata Share of the US Swing Loans on such date.

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of this
Agreement.

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

“WF Canada” means Wells Fargo Capital Finance Corporation Canada.

“Wholly-Owned” means, as used in reference to a Restricted Subsidiary, any
Restricted Subsidiary whose Equity Interest is owned 100%, either directly or
indirectly, by the Parent.

“Withdrawal Liability” means liability with respect to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

1.2 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP; provided, that if Administrative Borrower
notifies Agent that Borrowers request an amendment to any provision hereof to
eliminate the effect of any Accounting Change occurring after the Closing Date
or in the application thereof on the operation of such provision (or if Agent
notifies Administrative Borrower that the Required Lenders request an amendment
to any provision hereof for such purpose), regardless of whether any such notice
is given before or after such Accounting Change or in the application thereof,
then Agent and Borrowers agree that they will negotiate in good faith amendments
to the provisions of this Agreement that are directly affected by such
Accounting Change with the intent of having the respective positions of the
Lenders and Borrowers after such Accounting Change conform as nearly as possible
to their respective positions immediately before such Accounting Change took
effect and, until any such amendments have been agreed upon and agreed to by the
Required Lenders, the provisions in this Agreement shall be calculated as if no
such Accounting

 

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Change had occurred. When used herein, the term “financial statements” shall
include the notes and schedules thereto. Whenever the term “Parent” or
“Borrowers” is used in respect of a financial covenant or a related definition,
it shall be understood to mean the Loan Parties and their Restricted
Subsidiaries on a consolidated basis, unless the context clearly requires
otherwise. Notwithstanding anything to the contrary contained herein, (a) all
financial statements delivered hereunder shall be prepared, and all financial
covenants contained herein shall be calculated, without giving effect to any
election under the Statement of Financial Accounting Standards Board’s
Accounting Standards Codification Topic 825 (or any similar accounting
principle) permitting a Person to value its financial liabilities or
Indebtedness at the fair value thereof, and (b) the term “unqualified opinion”
as used herein to refer to opinions or reports provided by accountants shall
mean an opinion or report that is (i) unqualified, and (ii) does not include any
explanation, supplemental comment, or other comment concerning the ability of
the applicable Person to continue as a going concern or concerning the scope of
the audit. Notwithstanding any changes in GAAP after the Closing Date, any lease
of the Borrowers or their Restricted Subsidiaries that would be characterized as
an operating lease under GAAP in effect on the Closing Date (whether such lease
is entered into before or after the Closing Date) shall not constitute a Capital
Lease under this Agreement or any other Loan Document as a result of such
changes in GAAP unless otherwise agreed to in writing by the Borrowers and
Required Lenders.

1.3 Code; PPSA. Any terms used in this Agreement that are defined in (a) the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein; provided, that to the extent that the Code is used to define any
term herein and such term is defined differently in different Articles of the
Code, the definition of such term contained in Article 9 of the Code shall
govern, and (b) with respect to the Canadian Loan Parties or Collateral subject
to the PPSA, the PPSA (but not the Code) shall be construed and defined as set
forth in the PPSA unless otherwise defined herein. Notwithstanding the
foregoing, and where the context so requires, (i) any term defined in this
Agreement by reference to the “Code”, the “UCC” or the “Uniform Commercial Code”
shall also have, with respect to the Canadian Loan Parties or Collateral subject
to the PPSA, any extended, alternative or analogous meaning given to such term
in applicable Canadian personal property security and other laws (including,
without limitation, the PPSA, 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 the Collateral,
(ii) all references in this Agreement to “Article 8” shall be deemed to refer
also to applicable Canadian securities transfer laws (including, without
limitation, the STA), (iii) all references in this Agreement to a financing
statement, continuation statement, amendment or termination statement shall be
deemed to refer also to the analogous documents used under the PPSA, and
(iv) all references to federal or state securities law of the United States
shall be deemed to refer also to analogous federal (where applicable) and
provincial securities laws in Canada.

1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
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reference herein or in any other Loan Document to the satisfaction, repayment,
or payment in full of the Obligations shall mean (a) the payment or repayment in
full in Same Day Funds of (i) the principal amount of, and interest accrued and
unpaid with respect to, all outstanding Loans, together with the payment of any
premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses
that have accrued and are unpaid regardless of whether demand has been made
therefor, and (iii) all fees or charges that have accrued hereunder or under any
other Loan Document (including the Letter of Credit Fee and the Unused Line Fee)
and are unpaid, (b) in the case of contingent reimbursement obligations with
respect to Letters of Credit, providing Letter of Credit Collateralization,
(c) in the case of obligations with respect to Bank Products (other than Hedge
Obligations), providing Bank Product Collateralization, (d) the receipt by Agent
of cash collateral in order to secure any other contingent Obligations for which
a claim or demand for payment has been made on or prior to such time or in
respect of matters or circumstances known to Agent or a Lender at such time that
are reasonably expected to result in any loss, cost, damage, or expense
(including attorneys’ fees and legal expenses), such cash collateral to be in
such amount as Agent reasonably determines is appropriate to secure such
contingent Obligations, (e) the payment or repayment in full in Same Day Funds
of all other outstanding Obligations (including the payment of any termination
amount then applicable (or which would or could become applicable as a result of
the repayment of the other Obligations) under Hedge Agreements provided by Hedge
Providers) other than (i) unasserted contingent indemnification Obligations,
(ii) any Bank Product Obligations (other than Hedge Obligations) that, at such
time, are allowed by the applicable Bank Product Provider to remain outstanding
without being required to be repaid or cash collateralized, and (iii) any Hedge
Obligations that, at such time, are allowed by the applicable Hedge Provider to
remain outstanding without being required to be repaid, and (f) the termination
of all of the Commitments of the Lenders. Any reference herein to any Person
shall be construed to include such Person’s successors and assigns. Any
requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record.

1.5 Time References. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, all references to time of day refer to
Central standard time or Central daylight saving time, as in effect in Houston,
Texas on such day. For purposes of the computation of a period of time from a
specified date to a later specified date, unless otherwise expressly provided,
the word “from” means “from and including” and the words “to” and “until” each
means “to and including”; provided, that with respect to a computation of fees
or interest payable to Agent or any Lender, such period shall in any event
consist of at least one full day.

1.6 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

1.7 Currencies; Agreed Currencies; Change of Currency.

(a) Currency Equivalents. All references to “Dollars” or “$” shall mean US
Dollars unless otherwise specified herein. For purposes of this Agreement and
the other Loan Documents, the US Dollar Equivalent of the Revolving Loans,
Letters of Credit, other Obligations and other references to amounts denominated
in a currency other than US Dollars shall be determined in accordance with the
terms of this Agreement. Such US Dollar Equivalent shall become effective as of
such Revaluation Date for such Revolving Loans, Letters of Credit and other
Obligations and shall be the US Dollar Equivalent employed in converting any
amounts between the applicable currencies until the next Revaluation Date to
occur for such Revolving Loans, Letters of Credit and other Obligations. Except
as otherwise expressly provided herein or in the applicable other Loan Document,
the applicable amount of any currency for purposes of this Agreement and the
other Loan Documents (including all calculations in connection with the
covenants, including the financial covenants) shall be the US Dollar Equivalent
thereof, and for the purpose of such calculations, comparisons, measurements or
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currencies other than US Dollars shall be converted into the US Dollar
Equivalent of such amount on the date of calculation, comparison, measurement or
determination; provided that, for purposes of determining compliance with
respect to any amount of Indebtedness, Investment, sale, other disposition,
distribution or payment in a currency other than US Dollars, no Default or Event
of Default shall be deemed to have occurred solely as a result of changes in
rates of exchange occurring after the time such Indebtedness or Investment is
incurred or sale, other disposition, distribution or payment is made.
Notwithstanding the foregoing, for the purposes of financial statements and any
components of the financial covenant contained in Section 7 derived therefrom,
in each case prepared by Parent or Borrowers, the US Dollar Equivalent of each
amount in a currency other than US Dollars shall be determined in accordance
with GAAP. Wherever in this Agreement and the other Loan Documents in connection
with a borrowing, conversion, continuation or prepayment of a Revolving Loan or
the issuance, amendment or extension of a Letter of Credit, an amount, such as a
required minimum or multiple amount, is expressed in US Dollars, but such
Revolving Loan or Letter of Credit is denominated in any Foreign Currency, such
amount shall be the relevant Foreign Currency Equivalent of such US Dollar
amount (rounded to the nearest unit of such Foreign Currency, with 0.5 of a unit
being rounded upward), as determined by the Administrative Agent or the
applicable Issuing Bank, as the case may be.

(b) Agreed Currencies.

(i) Subject to the terms and conditions set forth in this Agreement, the US
Borrowers may from time to time request (A) US Revolving Loans in US Dollars,
and (B) Letters of Credit in any Agreed Currency, and the Canadian Borrowers may
from time to time request (x) Canadian Revolving Loans in US Dollars or Canadian
Dollars, and (y) Letters of Credit in any Agreed Currency; provided that, in any
event, any request for a Letter of Credit in any currency other than US Dollars
from a US Issuing Bank shall be subject to the approval of such US Issuing Bank
and any request for a Letter of Credit in any currency other than US Dollars or
Canadian Dollars from a Canadian Issuing Bank shall be subject to the approval
of such Canadian Issuing Bank. Any such request required in the preceding
proviso shall be made to the applicable Issuing Bank, with a copy to the Agent,
not later than 11:00 a.m., five Business Days prior to the date of the desired
issuance of a Letter of Credit (or such other time or date as may be agreed by
the applicable Issuing Bank in its sole discretion). The applicable Issuing Bank
shall notify the Agent, not later than 1:00 p.m., three Business Days (or such
other time or date as may be reasonably agreed by the Agent in its sole
discretion) after receipt of such request whether it consents, in its sole
discretion, to the issuance of Letters of Credit in such requested Foreign
Currency.

(ii) Any failure by an Issuing Bank to respond to such request within the time
period specified in the preceding sentence shall be deemed to be a refusal by
such Issuing Bank to permit Letters of Credit to be issued in such requested
currency. If the applicable Issuing Bank consents to the issuance of Letters of
Credit in such requested currency, such Issuing Bank shall so notify the
requesting Borrower and the Agent and such currency shall thereupon be deemed
for all purposes to be an Agreed Currency hereunder for purposes of any Letter
of Credit issuances by such Issuing Bank. Any specified currency of an Existing
Letter of Credit that is neither Dollars nor one of the Agreed Currencies
specifically listed in the definition of “Agreed Currency” shall be deemed an
Agreed Currency with respect to such Existing Letter of Credit only unless
otherwise agreed to by the applicable Issuing Bank.

(iii) If, after the designation of any currency as an Agreed Currency for
purposes of a Letter of Credit (A) currency control or other exchange
regulations are imposed in the country in which such currency is issued with the
result that different types of such currency are introduced, (B) such currency,
in the reasonable determination of the Agent or an applicable Issuing Bank, no
longer qualifies as an “Eligible Currency” for purposes of a Letter of Credit or
(C) in the reasonable determination of the Agent or any applicable Issuing Bank,
a US Dollar Equivalent of such currency is not readily calculable, the Agent (or
if applicable, such Issuing Bank) shall promptly notify

 

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the other Issuing Banks, the Borrowers, and, in the case of a determination made
by an Issuing Bank, the Agent, and such currency shall no longer be an Agreed
Currency for purposes of a Letter of Credit with respect to all the Issuing
Banks if such determination is made by the Agent and with respect to any
particular Issuing Bank if such determination is made by such Issuing Bank, in
any event, until such time as the Agent and the Issuing Banks (or such
applicable Issuing Bank), as provided herein, agree to reinstate such currency
as an Agreed Currency for purposes of Letters of Credit.

(c) Change of Currency.

(i) Each obligation of the Borrowers to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the date hereof shall be redenominated into
Euro at the time of such adoption (in accordance with the EMU Legislation). If,
in relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London interbank market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency.

(ii) Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro.

(iii) Each provision of this Agreement also shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect a change in currency of any other country
and any relevant market conventions or practices relating to the change in
currency.

1.8 Quebec Interpretation. For all purposes of any assets, liabilities or
entities located in the Province of Quebec and for all purposes pursuant to
which the interpretation or construction of this Agreement may be subject to the
laws of the Province of Quebec or a court or tribunal exercising jurisdiction in
the Province of Quebec, (a) “personal property” shall include “movable
property”, (b) “real property” shall include “immovable property”, (c) “tangible
property” shall include “corporeal property”, (d) “intangible property” shall
include “incorporeal property”, (e) “security interest”, “mortgage” and “lien”
shall include a “hypothec”, “prior claim” and a “resolutory clause”, (f) all
references to filing, registering or recording under the Code or PPSA shall
include publication under the Civil Code of Quebec, (g) all references to
“perfection” of or “perfected” liens or security interest shall include a
reference to an “opposable” or “set up” lien or security interest as against
third parties, (h) any “right of offset”, “right of setoff’ or similar
expression shall include a “right of compensation”, (i) “goods” shall include
corporeal movable property” other than chattel paper, documents of title,
instruments, money and securities, (j) an “agent” shall include a “mandatary”,
(k) “construction liens” shall include “legal hypothecs”, (l) “joint and
several” shall include solidary, (m) “gross negligence or willful misconduct”
shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership”
shall include “ownership on behalf of another as mandatary”, (o) “easement”
shall include “servitude”, (p) “priority” shall include “prior claim”, (q)
“survey” shall include “certificate of location and plan”, and (r) “fee simple
title” shall include “absolute ownership”.

 

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2. LOANS AND TERMS OF PAYMENT.

2.1 Revolving Loans.

(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a US Revolver Commitment agrees (severally,
not jointly or jointly and severally) to make revolving loans in US Dollars (“US
Revolving Loans”) to US Borrowers in an amount at any one time outstanding not
to exceed an amount which would cause such Lender’s Pro Rata Share of the US
Revolver Usage to exceed the least of:

(i) such Lender’s US Revolver Commitment,

(ii) such Lender’s Pro Rata Share of the US Borrowing Base, and

(iii) such Lender’s Pro Rata Share of an amount equal to (A) the Line Cap less
(B) the Canadian Revolver Usage at such time.

(b) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a Canadian Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make revolving loans in US
Dollars or in Canadian Dollars (“Canadian Revolving Loans”) to Canadian
Borrowers in an amount at any one time outstanding not to exceed an amount which
would cause such Lender’s Pro Rata Share of the Canadian Revolver Usage to
exceed the least of:

(i) such Lender’s Canadian Revolver Commitment,

(ii) such Lender’s Pro Rata Share of an amount equal to (A) the Line Cap less
(B) the US Revolver Usage,

(iii) such Lender’s Pro Rata Share of the Canadian Borrowing Base, and

(iv) such Lender’s Pro Rata Share of $30,000,000.

(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement. The outstanding principal amount of the Revolving Loans,
together with interest accrued and unpaid thereon, shall constitute Obligations
and shall be due and payable on the Maturity Date or, if earlier, on the date on
which they otherwise become due and payable pursuant to the terms of this
Agreement.

(d) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right (but not the obligation) at any time, in the exercise of its
Permitted Discretion, to establish and increase or decrease Reserves and against
the US Borrowing Base, the Canadian Borrowing Base or the Maximum Revolver
Amount; provided, that Agent shall endeavor to notify Borrowers at or before the
time any such Reserve in a material amount is to be established or increased,
but a non-willful failure of Agent to so notify Borrowers shall not be a breach
of this Agreement and shall not cause such establishment or increase of any such
Reserve to be ineffective; provided further, that (A) the Borrowers may not
obtain any new Revolving Loans (including Swing Loans) or Letters of Credit to
the extent that such Revolving Loan (including Swing Loans) or Letter of Credit
would cause an Overadvance after giving effect to the establishment or increase
of such Reserve as set forth in any such notice; (B) no such prior notice shall
be required for changes to any Reserves resulting solely by virtue of
mathematical calculations of the amount of the Reserve in accordance with the
methodology of calculation set forth in this Agreement or previously utilized;
(C) no such prior notice shall be required during the continuance of any Event
of Default, (D) no such prior notice shall be required with respect to any
Reserve established in respect of any Lien that has priority over Agent’s Liens
on any Collateral (regardless of whether such prior Lien is permitted
hereunder), (E) no such prior notice shall be required with respect to any
Reserve established in respect of US Eligible In-Transit Inventory prior to the
first US Borrowing Base determined where the value attributed to such Inventory
is greater than $0 and (F) no such prior notice

 

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shall be required with respect to any Reserve established in respect of Canadian
Eligible In-Transit Inventory prior to the first Canadian Borrowing Base
determined where the value attributed to such Inventory is greater than $0. The
amount of any Reserve established by Agent, and any changes to the eligibility
criteria set forth in the definitions of US Eligible Accounts, US Eligible
Inventory, US Eligible Raw Material Inventory, US Eligible Work-in-Process
Inventory, US Eligible Finished Goods Inventory, US Eligible In-Transit
Inventory, Canadian Eligible In-Transit Inventory, Canadian Eligible Accounts,
Canadian Eligible Inventory, Canadian Eligible Raw Material Inventory, Canadian
Eligible Work-in-Process Inventory, Canadian Eligible Finished Goods Inventory
shall have a reasonable relationship to the event, condition, other
circumstance, or fact that is the basis for such reserve or change in
eligibility and shall not be duplicative of any other reserve established and
currently maintained or eligibility criteria; provided that, (i) that
circumstances, conditions, events or contingencies existing or arising prior to
the Closing Date and, in each case, disclosed in writing in the field
examination conducted by the Agent in connection herewith prior to the Closing
Date, shall not be the basis for any establishment of any Reserves after the
Closing Date, unless (A) such circumstances, conditions, events or contingencies
shall have changed in a material respect since the Closing Date (it being
understood, however, that the forgoing shall not restrict or affect changes in
Reserves by Agent solely by virtue of mathematical calculations of the amount of
such Reserves), (B) such Reserves relate to tax liabilities and landlord rights
which were so disclosed to the Agent prior to the Closing Date, or (C) such
Reserve relate to an insufficient or incomplete set-up of the electronic
collateral reporting acceptable to the Agent in its sole discretion within 180
days after the Closing Date, and (ii) the limitations in the foregoing clause
(i) of this proviso shall not apply to establishing Landlord Reserves, Bank
Product Reserves or any Reserves established with respect to US Eligible
In-Transit Inventory or Canadian Eligible In-Transit Inventory. Upon
establishment or increase in Reserves, Agent agrees to make itself available to
discuss the Reserve or increase, and Borrowers may take such action as may be
required so that the event, condition, circumstance, or fact that is the basis
for such reserve or increase no longer exists, in a manner and to the extent
reasonably satisfactory to Agent in the exercise of its Permitted Discretion. In
no event shall such opportunity limit the right of Agent to establish or change
such Reserve, unless Agent shall have determined, in its Permitted Discretion,
that the event, condition, other circumstance, or fact that was the basis for
such Reserve or such change no longer exists or has otherwise been adequately
addressed by Borrowers.

(e) Anything to the contrary in this Section 2.1 notwithstanding, at no time
shall the sum of (i) the US Revolver Usage and (ii) the Canadian Revolver Usage
exceed the Maximum Revolver Amount, and at no time shall the Canadian Revolver
Usage exceed $30,000,000.

(f) Each Lender may, at its option, make any Loan available to any Borrower by
causing any foreign or domestic branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of such Borrower to repay such Loan in accordance with the terms of this
Agreement.

2.2 Borrowing Procedures and Settlements.

(a) Procedure for Borrowing Revolving Loans. Each Borrowing shall be made by a
written request by an Authorized Person delivered to the Agent and received by
the Agent no later than 1:00 p.m. (i) on the Business Day that is the requested
Funding Date in the case of a request for a Swing Loan, (ii) on the Business Day
that is three Business Days prior to the requested Funding Date in the case of a
request for a Non-Base Rate Loan, and (iii) on the Business Day that is one
Business Day prior to the requested Funding Date in the case of all other
requests, specifying (A) the amount of such Borrowing and whether such Borrowing
is for the account of US Borrowers or Canadian Borrowers, and in each case,
whether in US Dollars or Canadian Dollars, and (B) the requested Funding Date
(which shall be a Business Day); provided, that the Agent may, in its sole
discretion, elect to accept as timely requests that are received later than 1:00
p.m. on the applicable Business Day. At the Agent’s election, in lieu of

 

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delivering the above described written request, any Authorized Person may give
the Agent telephonic notice of such request by the required time. In such
circumstances, the Borrowers agree that any such telephonic notice will be
confirmed in writing by Administrative Borrower within 24 hours of the giving of
such telephonic notice, but the failure to provide such written confirmation
shall not affect the validity of the request. Borrowings for the account of US
Borrowers shall be denominated in US Dollars and Borrowings for the account of
Canadian Borrowers shall be denominated in Canadian Dollars or US Dollars (as
selected by the Administrative Borrower).

(b) Making of Swing Loans. In the case of a request for a US Swing Loan by the
Administrative Borrower and so long as either (i) the aggregate amount of US
Swing Loans made since the last Settlement Date, minus all payments or other
amounts applied to US Swing Loans since the last Settlement Date, plus the
amount of the requested US Swing Loan, does not exceed $15,000,000, or (ii) the
US Swing Line Lender, in its sole discretion, agrees to make such US Swing Loan
notwithstanding the foregoing limitation, the US Swing Line Lender shall make a
Revolving Loan (any such Revolving Loan for the account of US Borrowers made by
US Swing Line Lender pursuant to this Section 2.2(b) being referred to as a “US
Swing Loan” and all such Revolving Loans for the account of US Borrowers by US
Swing Line Lender being referred to as “US Swing Loans”) available to US
Borrowers on the Funding Date applicable thereto by transferring Same Day Funds
in the Agreed Currency in the amount of such requested Borrowing to the US
Designated Account. In the case of a request for a Canadian Swing Loan by the
Administrative Borrower and so long as either (i) the aggregate US Dollar
Equivalent amount of Canadian Swing Loans made since the last Settlement Date,
minus all payments or other amounts applied to Canadian Swing Loans since the
last Settlement Date, plus the amount of the requested Canadian Swing Loan, does
not exceed $3,000,000, or (ii) the Canadian Swing Line Lender, in its sole
discretion, agrees to make such Canadian Swing Loan notwithstanding the
foregoing limitation, the Canadian Swing Line Lender shall make a Revolving Loan
(any such Revolving Loan for the account of a Canadian Borrower made by Canadian
Swing Line Lender pursuant to this Section 2.2(b) being referred to as a
“Canadian Swing Loan” and all such Revolving Loans for the account of a Canadian
Borrower by Canadian Swing Line Lender being referred to as “Canadian Swing
Loans”) available to Canadian Borrowers on the Funding Date applicable thereto
by transferring Same Day Funds in the Agreed Currency in the amount of such
requested Borrowing to the Canadian Designated Account. Each Swing Loan shall be
deemed to be a Revolving Loan hereunder and shall be subject to all the terms
and conditions (including Section 3) applicable to other US Revolving Loans or
Canadian Revolving Loans, as applicable, except that all payments (including
interest) on any Swing Loan shall be payable to the applicable Swing Line Lender
solely for its own account. Subject to the provisions of Section 2.2(d)(ii), no
Swing Line Lender shall make or be obligated to make any Swing Loan if such
Swing Line Lender has actual knowledge that (i) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or (ii) the requested
Borrowing would exceed US Availability (if a US Borrowing) or Canadian
Availability (if a Canadian Borrowing) on such Funding Date. No Swing Line
Lender shall otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any Swing Loan. The US Swing Loans shall
be secured by the Agent’s Liens, constitute US Revolving Loans and US
Obligations, and bear interest at the rate applicable from time to time to US
Revolving Loans that are Base Rate Loans and the Canadian Swing Loans shall be
secured by the Agent’s Liens, constitute Canadian Revolving Loans and Canadian
Obligations, and bear interest at the rate applicable from time to time to
Canadian Revolving Loans in the Agreed Currency that are Base Rate Loans.

 

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(c) Making of Revolving Loans.

(i) In the event that the applicable Swing Line Lender is not obligated to make
a Swing Loan, then after receipt of a request for a Borrowing pursuant to
Section 2.2(a), the Agent shall notify the applicable Lenders by telecopy,
telephone, email, or other electronic form of transmission, of the requested
Borrowing (and whether such borrowing is for the account of US Borrowers or
Canadian Borrowers); such notification to be sent on the Business Day that is
one Business Day prior to the requested Funding Date. If Agent has notified the
applicable Lenders of a requested Borrowing on the Business Day that is one
Business Day prior to the Funding Date, then each Lender with the applicable
Revolving Commitment shall make the amount of such Lender’s Pro Rata Share of
the requested Borrowing available to the Agent in Same Day Funds in the Agreed
Currency, to the Agent’s US Account or the Agent’s Canadian Account, as
applicable, not later than 12:00 noon on the Business Day that is the requested
Funding Date. After the Agent’s receipt of the proceeds of such Revolving Loans
from the applicable Lenders, the Agent shall make the proceeds thereof available
to the applicable Borrowers on the applicable Funding Date by transferring Same
Day Funds in the Agreed Currency equal to such proceeds received by the Agent to
the US Designated Account or the Canadian Designated Account, as applicable;
provided, that subject to the provisions of Section 2.2(d)(ii), no Lender shall
have an obligation to make any Revolving Loan, if (1) one or more of the
applicable conditions precedent set forth in Section 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, or (2) the requested Borrowing would exceed the US Availability
(in the case of a US Borrowing) or the Canadian Availability (in the case of a
Canadian Borrowing) on such Funding Date.

(ii) Unless the Agent receives notice from a Lender prior to 11:30 a.m. on the
Business Day that is the requested Funding Date relative to a requested
Borrowing as to which the Agent has notified the Lenders of a requested
Borrowing that such Lender will not make available as and when required
hereunder to the Agent for the account of US Borrowers or Canadian Borrowers, as
applicable, the amount of that Lender’s Pro Rata Share of the Borrowing, the
Agent may assume that each Lender has made or will make such amount available to
the Agent in Same Day Funds in the Agreed Currency on the Funding Date and the
Agent may (but shall not be so required), in reliance upon such assumption, make
available to US Borrowers or Canadian Borrowers, as applicable, a corresponding
amount. If, on the requested Funding Date, any Lender shall not have remitted
the full amount that it is required to make available to the Agent in Same Day
Funds in the Agreed Currency and if the Agent has made available to US Borrowers
or Canadian Borrowers, as applicable, such amount on the requested Funding Date,
then such Lender shall make the amount of such Lender’s Pro Rata Share of the
requested Borrowing available to the Agent in Same Day Funds in the Agreed
Currency, to the Agent’s Applicable Account, no later than 12:00 noon on the
Business Day that is the first Business Day after the requested Funding Date (in
which case, the interest accrued on such Lender’s portion of such Borrowing for
the Funding Date shall be for the Agent’s separate account). If any Lender shall
not remit the full amount that it is required to make available to the Agent in
Same Day Funds in the Agreed Currency as and when required hereby and if the
Agent has made available to US Borrowers or Canadian Borrowers, as applicable,
such amount, then that Lender shall be obligated to immediately remit such
amount to the Agent, together with interest at the applicable Defaulting Lender
Rate for each day until the date on which such amount is so remitted. A notice
submitted by the Agent to any Lender with respect to amounts owing under this
Section 2.2(c)(ii) shall be conclusive, absent manifest error. If the amount
that a Lender is required to remit is made available to the Agent, then such
payment to the Agent shall constitute such Lender’s US Revolving Loans (in the
case of Revolving Loans for the account of US Borrowers) or Canadian Revolving
Loans (in the case of Revolving Loans for the account of Canadian Borrower) for
all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Funding Date, the Agent will notify the
Administrative Borrower of such failure to fund and, upon demand by the Agent,
US Borrowers (in the case of US Revolving Loans) and Canadian Borrowers (in the
case of Canadian Revolving Loans) shall pay such amount in the Agreed Currency
to the Agent, together with interest thereon for each day elapsed since the date
of such Borrowing, at a rate per annum equal to the interest rate applicable at
the time to the applicable Revolving Loans composing such Borrowing.

 

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(d) Protective Advances and Optional Overadvances.

(i) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, (but subject to Section 2.2(d)(iv)), at any time (A) after the
occurrence and during the continuance of a Default or an Event of Default, or
(B) that any of the other applicable conditions precedent set forth in Section 3
are not satisfied, the Agent hereby is authorized by Borrowers and the Lenders,
from time to time, in the Agent’s sole discretion, to make US Revolving Loans
to, or for the benefit of, US Borrowers, and/or Canadian Revolving Loans to, or
for the benefit of, Canadian Borrowers, in each case, on behalf of the
applicable Revolving Lenders, that the Agent, in its Permitted Discretion, deems
necessary or desirable (1) to preserve or protect the Collateral, or any portion
thereof, or (2) to enhance the likelihood of repayment of the Obligations (other
than the Bank Product Obligations) (the US Revolving Loans described in this
Section 2.2(d)(i) shall be referred to as “US Protective Advances” and the
Canadian Revolving Loans described in this Section 2.2(d)(i) shall be referred
to as “Canadian Protective Advances”). Agent’s authorization to make Protective
Advances may be revoked at any time by the Required Lenders delivering written
notice of such revocation to Agent. Any such revocation shall become effective
prospectively upon Agent’s receipt thereof. The Protective Advances shall be
made in Canadian Dollars or US Dollars, as determined by the Agent.
Notwithstanding the foregoing, at the time any Protective Advance is made, the
aggregate amount of all Protective Advances outstanding at such time, after
giving effect to such Protective Advance, shall not exceed 10% of the Line Cap
then in effect.

(ii) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.2(d)(iv), the Lenders hereby authorize
the Agent or the applicable Swing Line Lender, as applicable, and either the
Agent or the applicable Swing Line Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make US Revolving Loans
(including US Swing Loans) to US Borrowers and Canadian Revolving Loans
(including Canadian Swing Loans) to Canadian Borrowers notwithstanding that an
Overadvance exists or would be created thereby, so long as (A) with respect to
any such US Revolving Loans, (i) after giving effect to any such US Revolving
Loans, the outstanding US Revolver Usage does not exceed the US Borrowing Base
by more than 10% of the Maximum Revolver Amount (unless Required Lenders
otherwise agree to a higher amount), and (ii) after giving effect to such US
Revolving Loans, the US Revolver Usage (except for and excluding amounts charged
to the US Loan Account for interest, fees, or Lender Group Expenses) does not
exceed the Maximum Revolver Amount, and (B) with respect to any such Canadian
Revolving Loans, after giving effect to such Canadian Revolving Loans, the
Canadian Revolver Usage (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) does not exceed the
Canadian Borrowing Base by more than $3,000,000 (unless Required Lenders
otherwise agree to a higher amount). In the event the Agent obtains actual
knowledge that the applicable US Revolver Usage or Canadian Revolver Usage
exceeds the amounts permitted by the immediately foregoing provisions,
regardless of the amount of, or reason for, such excess, the Agent shall notify
the Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the
applicable Loan Account for interest, fees, or Lender Group Expenses) unless the
Agent determines that prior notice would result in imminent harm to the
Collateral or its value, in which case the Agent may make such Overadvances and
provide notice as promptly as practicable thereafter), and the Lenders with
applicable Revolver Commitments thereupon shall, together with the Agent,
jointly determine the terms of arrangements that shall be implemented with the
applicable Borrowers intended to reduce, within a reasonable time, the
outstanding principal amount of the applicable Revolving Loans to such Borrowers
to an amount permitted by the preceding sentence. In such circumstances, if any
Lender with a Revolver Commitment objects to the proposed terms of reduction or
repayment of any Overadvance, the terms of reduction or repayment thereof shall
be implemented according to the determination of the Required Lenders. Agent’s
and Swing Line Lender’s authorization to make intentional Overadvances may be
revoked at any time by the Required Lenders delivering written notice of such
revocation to Agent. Any such revocation shall become effective prospectively
upon Agent’s receipt thereof.

 

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(iii) Each US Protective Advance and each US Overadvance (each, an “US
Extraordinary Advance”) shall be deemed to be a US Revolving Loan hereunder and
each Canadian Protective Advance and Canadian Overadvance (each, a “Canadian
Extraordinary Advance”) shall be deemed a Canadian Revolving Loan hereunder. No
Extraordinary Advance shall be eligible to be a Non-Base Rate Loan. Prior to
Settlement of any Extraordinary Advances, all payments with respect thereto,
including interest thereon, shall be payable to the Agent solely for its own
account. The US Extraordinary Advances shall be repayable on demand, constitute
US Obligations hereunder, and bear interest at the rate applicable from time to
time to US Revolving Loans that are Base Rate Loans, and the Canadian
Extraordinary Advances shall be repayable on demand, constitute Canadian
Obligations hereunder, and bear interest at the rate applicable from time to
time to Canadian Revolving Loans in the Agreed Currency that are Base Rate
Loans. The provisions of this Section 2.2(d) are for the exclusive benefit of
the Agent, Swing Line Lender, and the Lenders and are not intended to benefit
Borrowers (or any other Loan Party) in any way.

(iv) Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary, no Extraordinary Advance may be made by Agent if such
Extraordinary Advance would cause the aggregate Revolver Usage to exceed the
Maximum Revolver Amount or any Lender’s Pro Rata Share of the Revolver Usage to
exceed such Lender’s Revolver Commitments; provided that Agent may make
Extraordinary Advances in excess of the foregoing limitations so long as such
Extraordinary Advances that cause the aggregate Revolver Usage to exceed the
Maximum Revolver Amount or a Lender’s Pro Rata Share of the Revolver Usage to
exceed such Lender’s Revolver Commitments are for Agent’s sole and separate
account and not for the account of any Lender. No Lender shall have an
obligation to settle with Agent for such Extraordinary Advances that cause the
aggregate Revolver Usage to exceed the Maximum Revolver Amount or a Lender’s Pro
Rata Share of the Revolver Usage to exceed such Lender’s Revolver Commitments as
provided in Section 2.2(e).

(e) Settlement. It is agreed that each Lender’s funded portion of the (i) US
Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s
Pro Rata Share of the outstanding US Revolving Loans and (ii) Canadian Revolving
Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata
Share of the outstanding Canadian Revolving Loans. Such agreement
notwithstanding, the Agent, Swing Line Lender, and the other Lenders agree
(which agreement shall not be for the benefit of Borrowers) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among the Lenders as to the Revolving Loans (including Swing Loans
and Extraordinary Advances) shall take place on a periodic basis in accordance
with the following provisions:

(i) The Agent shall request settlement (“Settlement”) with the Lenders on a
weekly basis, or on a more frequent basis if so determined by the Agent in its
sole discretion (1) on behalf of US Swing Line Lender, with respect to the
outstanding US Swing Loans, (2) on behalf of Canadian Swing Line Lender, with
respect to the outstanding Canadian Swing Loans, (3) for itself, with respect to
the outstanding Extraordinary Advances, and (4) with respect to any Loan Party’s
or any of their Restricted Subsidiaries’ payments or other amounts received, as
to each by notifying the Lenders by telecopy, telephone, or other similar form
of transmission, of such requested Settlement, no later than 4:00 p.m. on the
Business Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the “Settlement Date”). Such notice of a
Settlement Date shall include a summary statement of the amount of outstanding
US Revolving Loans (including US Swing Loans and US Extraordinary Advances) and
Canadian Revolving Loans (including Canadian Swing Loans and Canadian
Extraordinary Advances) for the period since the prior Settlement Date. Subject
to the terms

 

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and conditions contained herein (including Section 2.2(g)): (y) if the amount of
the applicable Revolving Loans (including applicable Swing Loans and applicable
Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds
such Lender’s Pro Rata Share of the applicable Revolving Loans (including
applicable Swing Loans and applicable Extraordinary Advances) as of a Settlement
Date, then the Agent shall, by no later than 2:00 p.m. on the Settlement Date,
transfer in Same Day Funds in the Agreed Currency to a Deposit Account of such
Lender (as such Lender may designate), an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata
Share of the US Revolving Loans (including US Swing Loans and US Extraordinary
Advances) and the Canadian Revolving Loans (including Canadian Swing Loans and
Canadian Extraordinary Advances), as applicable, and (z) if the amount of the
applicable Revolving Loans (including applicable Swing Loans and applicable
Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata
Share of the applicable Revolving Loans (including applicable Swing Loans and
applicable Extraordinary Advances) as of a Settlement Date, such Lender shall no
later than 2:00 p.m. on the Settlement Date transfer in Same Day Funds in the
Agreed Currency to the Agent’s Applicable Account, an amount such that each such
Lender shall, upon transfer of such amount, have as of the Settlement Date, its
Pro Rata Share of the US Revolving Loans (including US Swing Loans and US
Extraordinary Advances) and Canadian Revolving Loans (including Canadian Swing
Loans and Canadian Extraordinary Advances). Such amounts made available to Agent
under clause (z) of the immediately preceding sentence shall be applied against
the amounts of the applicable Swing Loans or Extraordinary Advances and,
together with the portion of such Swing Loans or Extraordinary Advances
representing Swing Line Lender’s Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not made available to
Agent by any Lender on the Settlement Date applicable thereto to the extent
required by the terms hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the applicable Revolving Loans
(including Swing Loans and Extraordinary Advances) is less than, equal to, or
greater than such Lender’s Pro Rata Share of the applicable Revolving Loans
(including Swing Loans and Extraordinary Advances) as of a Settlement Date, the
Agent shall, as part of the relevant Settlement, apply to such balance the
portion of payments applicable to such Obligations actually received in good
funds by Agent with respect to principal, interest, fees payable by Borrowers
and allocable to the Lenders hereunder, and proceeds of Collateral.

(iii) Between Settlement Dates, the Agent, to the extent Extraordinary Advances
or Swing Loans are outstanding, may pay over to the Agent or Swing Line Lender,
as applicable, any payments or other amounts received by the Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of
the applicable Revolving Loans, for application to the applicable Extraordinary
Advances or applicable Swing Loans. Between Settlement Dates, the Agent, to the
extent no Extraordinary Advances or Swing Loans are outstanding, may pay over to
the applicable Swing Line Lender any payments or other amounts received by the
Agent, that in accordance with the terms of this Agreement would be applied to
the reduction of the applicable Revolving Loans, for application to the
applicable Swing Line Lender’s Pro Rata Share of the applicable Revolving Loans.
If, as of any Settlement Date, payments or other amounts of the Loan Parties or
their Restricted Subsidiaries received since the then immediately preceding
Settlement Date have been applied to a Swing Line Lender’s Pro Rata Share of the
applicable Revolving Loans other than to its Swing Loans, as provided for in the
previous sentence, such Swing Line Lender shall pay to the Agent for the
accounts of the Lenders, and the Agent shall pay to the Lenders (other than a
Defaulting Lender if the Agent has implemented the provisions of
Section 2.2(g)), to be applied to the outstanding applicable Revolving Loans of
such Lenders, an amount such that each such Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the applicable
Revolving Loans. During the period between Settlement Dates, a Swing Line Lender
with respect to its Swing Loans, the Agent with respect to

 

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Extraordinary Advances, and each Lender with respect to the Revolving Loans
other than Swing Loans and Extraordinary Advances, shall be entitled to interest
at the applicable rate or rates payable under this Agreement on the daily amount
of funds employed by such Swing Line Lender, the Agent, or the Lenders, as
applicable.

Anything in this Section 2.2(e) to the contrary notwithstanding, in the event
that a Lender is a Defaulting Lender, the Agent shall be entitled to refrain
from remitting settlement amounts to the Defaulting Lender and, instead, shall
be entitled to elect to implement the provisions set forth in Section 2.2(g)

(f) Notation. Consistent with Section 13.1(h), the Agent, as a non-fiduciary
agent for the Borrowers, shall maintain a register showing in the Agreed
Currency the principal amount and stated interest of the Revolving Loans, owing
to each Lender, including Swing Loans owing to the applicable Swing Line Lender,
and Extraordinary Advances owing to Agent, and the interests therein of each
Lender, from time to time and such register shall, absent manifest error,
conclusively be presumed to be correct and accurate.

(g) Defaulting Lenders.

(i) Notwithstanding the provisions of Section 2.3(b)(iii), the Agent shall not
be obligated to transfer to a Defaulting Lender any payments made by Borrowers
to the Agent for the Defaulting Lender’s benefit or any proceeds of Collateral
that would otherwise be remitted hereunder to the Defaulting Lender, and, in the
absence of such transfer to the Defaulting Lender, the Agent shall transfer any
such payments (A) pertaining to or securing US Obligations (i) first, to the
Agent to the extent of any US Extraordinary Advances that were made by the Agent
and that were required to be, but were not, paid by the Defaulting Lender,
(ii) second, to US Swing Line Lender to the extent of any US Swing Loans that
were made by US Swing Line Lender and that were required to be, but were not,
paid by the Defaulting Lender, (iii) third, to US Issuing Bank, to the extent of
the portion of a US Letter of Credit Disbursement that was required to be, but
was not, paid by the Defaulting Lender, (iv) fourth, to each Non-Defaulting
Lender ratably in accordance with their US Revolver Commitments (but, in each
case, only to the extent that such Defaulting Lender’s portion of a US Revolving
Loan (or other funding obligation) was funded by such other Non-Defaulting
Lender), (v) fifth, in the Agent’s sole discretion, to a suspense account
maintained by the Agent, the proceeds of which shall be retained by the Agent
and may be made available to be re-advanced to or for the benefit of US
Borrowers (upon the request of the Administrative Borrower and subject to the
conditions set forth in Section 3.2) as if such Defaulting Lender had made its
portion of US Revolving Loans (or other funding obligations) hereunder, and
(vi) sixth, from and after the date on which all other US Obligations have been
paid in full, to such Defaulting Lender in accordance with tier (A)(13) of
Section 2.3(b)(iii), and (B) pertaining to or securing Canadian Obligations,
(i) first, to the Agent to the extent of any Canadian Extraordinary Advances
that were made by the Agent and that were required to be, but were not, paid by
the Defaulting Lender, (ii) second, to the Canadian Swing Line Lender to the
extent of any Canadian Swing Loans that were made by Canadian Swing Line Lender
and that were required to be, but were not, paid by the Defaulting Lender,
(iii) third, to Canadian Issuing Bank, to the extent of the portion of a
Canadian Letter of Credit Disbursement that was required to be, but was not,
paid by the Defaulting Lender, (iv) fourth, to each Non-Defaulting Lender
ratably in accordance with their Canadian Commitments (but, in each case, only
to the extent that such Defaulting Lender’s portion of a Canadian Revolving Loan
(or other funding obligation) was funded by such other Non-Defaulting Lender),
(v) fifth, in the Agent’s sole discretion, to a suspense account maintained by
the Agent, the proceeds of which shall be retained by the Agent and may be made
available to be re-advanced to or for the benefit of Canadian Borrowers (upon
the request of the Administrative Borrower and subject to the conditions set
forth in Section 3.2) as if such Defaulting Lender had made its portion of
Canadian Revolving Loans (or other funding obligations) hereunder, and
(vi) sixth, from and after the date on which all other Canadian Obligations have
been paid in full, to such Defaulting Lender

 

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in accordance with tier (B)(12) of Section 2.3(b)(iii). Subject to the
foregoing, the Agent may hold and, in its discretion, re-lend to the applicable
Borrowers for the account of such Defaulting Lender the amount of all such
payments received and retained by the Agent for the account of such Defaulting
Lender. Solely for the purposes of voting or consenting to matters with respect
to the Loan Documents (including the calculation of Pro Rata Share in connection
therewith) and for the purpose of calculating the fee payable under
Section 2.9(b), such Defaulting Lender shall be deemed not to be a “Lender” and
such Lender’s Commitment shall be deemed to be zero; provided, that the
foregoing shall not apply to any of the matters governed by Section 14.1(a)(i)
through (iii). The provisions of this Section 2.2(g) shall remain effective with
respect to such Defaulting Lender until the earlier of (y) the date on which all
of the Non-Defaulting Lenders, the Agent, Issuing Bank, and Borrowers shall have
waived, in writing, the application of this Section 2.2(g) to such Defaulting
Lender, or (z) the date on which such Defaulting Lender makes payment of all
amounts that it was obligated to fund hereunder, pays to the Agent all amounts
owing by Defaulting Lender in respect of the amounts that it was obligated to
fund hereunder, and, if requested by the Agent, provides adequate assurance of
its ability to perform its future obligations hereunder (on which earlier date,
so long as no Event of Default has occurred and is continuing, any remaining
cash collateral held by the Agent pursuant to Section 2.2(g)(ii) shall be
released to the applicable Borrowers). The operation of this Section 2.2(g)
shall not be construed to increase or otherwise affect the Commitment of any
Lender, to relieve or excuse the performance by such Defaulting Lender or any
other Lender of its duties and obligations hereunder, or to relieve or excuse
the performance by any Borrower of its duties and obligations hereunder to the
Agent, Issuing Bank, or to the Lenders other than such Defaulting Lender. Any
failure by a Defaulting Lender to fund amounts that it was obligated to fund
hereunder shall constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Borrowers, at their option, upon written notice to
the Agent, to arrange for a substitute Lender to assume the Commitment of such
Defaulting Lender, such substitute Lender to be reasonably acceptable to the
Agent. In connection with the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be replaced hereunder, and
agrees to execute and deliver a completed form of Assignment and Acceptance in
favor of the substitute Lender (and agrees that it shall be deemed to have
executed and delivered such document if it fails to do so) subject only to being
paid its share of the outstanding Obligations (other than Bank Product
Obligations, but including (1) all interest, fees, and other amounts that may be
due and payable in respect thereof, and (2) an assumption of its Pro Rata Share
of its participation in the Letters of Credit); provided, that any such
assumption of the Commitment of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups’ or Borrowers’ rights or
remedies against any such Defaulting Lender arising out of or in relation to
such failure to fund. In the event of a direct conflict between the priority
provisions of this Section 2.2(g) and any other provision contained in this
Agreement or any other Loan Document, it is the intention of the parties hereto
that such provisions be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.2(g) shall control and govern.

(ii) If any applicable Swing Loan or Letter of Credit is outstanding at the time
that a Lender becomes a Defaulting Lender then:

(A) Such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure
shall be reallocated among the applicable Non-Defaulting Lenders in accordance
with their respective Pro Rata Shares but only to the extent (x) the sum of all
Non-Defaulting Lenders’ US Revolver Usage plus such Defaulting Lender’s US Swing
Loan Exposure and US Letter of Credit Exposure does not exceed the total of all
Non-Defaulting Lenders’ US Revolver Commitments, (y) the sum of the Dollar
Equivalent of all Non-Defaulting Lenders’ Canadian Revolver Usage plus such
Defaulting Lender’s Canadian Swing Line Exposure and Canadian Letter of Credit
Exposure does not exceed the total of all Non-Defaulting Lender’s Canadian
Revolver Commitments, and (z) the conditions set forth in Section 3.2 are
satisfied at such time;

 

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(B) If the reallocation described in clause (A) above cannot, or can only
partially, be effected, the applicable Borrowers shall within one Business Day
following notice by the Agent (x) first, prepay such Defaulting Lender’s
applicable Swing Loan Exposure (after giving effect to any partial reallocation
pursuant to clause (A) above), and (y) second, cash collateralize such
Defaulting Lender’s applicable Letter of Credit Exposure (after giving effect to
any partial reallocation pursuant to clause (A) above), pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent, for so long as such Letter of Credit Exposure is
outstanding; provided, that such Borrowers shall not be obligated to cash
collateralize any Defaulting Lender’s Letter of Credit Exposure if such
Defaulting Lender is also the Issuing Bank;

(C) if the applicable Borrowers cash collateralize any portion of such
Defaulting Lender’s Letter of Credit Exposure pursuant to this
Section 2.2(g)(ii), such Borrowers shall not be required to pay any Letter of
Credit Fees to Agent for the account of such Defaulting Lender pursuant to
Section 2.5(b) with respect to such cash collateralized portion of such
Defaulting Lender’s Letter of Credit Exposure during the period such Letter of
Credit Exposure is cash collateralized;

(D) to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is
reallocated pursuant to this Section 2.2(g)(ii), then the Letter of Credit Fees
payable to the Non-Defaulting Lenders pursuant to Section 2.5(b) shall be
adjusted in accordance with such Non-Defaulting Lenders’ Letter of Credit
Exposure;

(E) to the extent any Defaulting Lender’s Letter of Credit Exposure is neither
cash collateralized nor reallocated pursuant to this Section 2.2(g)(ii), then,
without prejudice to any rights or remedies of any Issuing Bank or any Lender
hereunder, all Letter of Credit Fees that would have otherwise been payable to
such Defaulting Lender under Section 2.5(b) with respect to such portion of such
Letter of Credit Exposure shall instead be payable to the applicable Issuing
Bank until such portion of such Defaulting Lender’s Letter of Credit Exposure is
cash collateralized or reallocated;

(F) so long as any Lender is a Defaulting Lender, no Swing Line Lender shall be
required to make any Swing Loan and no Issuing Bank shall be required to issue,
amend, or increase any Letter of Credit, in each case, to the extent (x) the
Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter of Credit
cannot be reallocated pursuant to this Section 2.2(g)(ii), or (y) the applicable
Swing Line Lender or Issuing Bank, as applicable, has not otherwise entered into
arrangements reasonably satisfactory to the applicable Swing Line Lender or
Issuing Bank, as applicable, and the applicable Borrowers to eliminate the Swing
Line Lender’s or Issuing Bank’s risk with respect to the Defaulting Lender’s
participation in such Swing Loans or Letters of Credit; and

(G) the Agent may release any cash collateral provided by the applicable
Borrowers pursuant to this Section 2.2(g)(ii) to the applicable Issuing Bank and
such Issuing Bank may apply any such cash collateral to the payment of such
Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is
not reimbursed by the applicable Borrowers pursuant to Section 2.10A(d) or
Section 2.10B(d). Subject to Section 17.16, no reallocation hereunder shall
constitute a waiver or release of any claim of any party hereunder against a
Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such
Non-Defaulting Lender’s increased exposure following such reallocation.

If any Lender with a US Revolver commitment is a Defaulting Lender, then any
Affiliate of such Lender with a Canadian Revolver Commitment shall be deemed to
be a Defaulting Lender and if any Lender with a Canadian Revolver Commitment is
a Defaulting Lender, then any Affiliate of such Lender with a US Revolver
Commitment shall be deemed to be a Defaulting Lender.

 

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(h) Independent Obligations. All Revolving Loans (other than Swing Loans and
Extraordinary Advances) shall be made by the applicable Lenders
contemporaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loan (or other extension of credit)
hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of any failure by any other Lender to perform its obligations hereunder,
and (ii) no failure by any Lender to perform its obligations hereunder shall
excuse any other Lender from its obligations hereunder.

2.3 Payments; Reductions of Commitments; Prepayments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers
shall be made to the Agent’s Applicable Account for the account of the Lender
Group and shall be made in Same Day Funds in the Agreed Currency, no later than
1:30 p.m. on the date specified herein. Any payment received by the Agent later
than 1:30 p.m. shall be deemed to have been received (unless the Agent, in its
sole discretion, elects to credit it on the date received) on the following
Business Day and any applicable interest or fee shall continue to accrue until
such following Business Day.

(ii) Unless the Agent receives notice from Borrowers prior to the date on which
any payment is due to the Lenders that the applicable Borrowers will not make
such payment in full as and when required, the Agent may assume that such
Borrowers have made (or will make) such payment in full to the Agent on such
date in Same Day Funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
applicable Borrowers do not make such payment in full to the Agent on the date
when due, each Lender severally shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at the Defaulting
Lender Rate for each day from the date such amount is distributed to such Lender
until the date repaid.

(b) Apportionment and Application.

(i) So long as no Application Event has occurred and is continuing and except as
otherwise provided herein with respect to Defaulting Lenders, all principal and
interest payments received by the Agent shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Obligations to which
such payments relate held by each Lender) and all payments of fees and expenses
received by the Agent (other than fees or expenses that are for the Agent’s
separate account or for the separate account of Issuing Bank) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee or expense relates.

(ii) Subject to Section 2.3(b)(v) and Section 2.3(e), all payments to be made
hereunder by US Borrowers shall be remitted to the Agent and all such payments,
and all proceeds of Collateral securing US Obligations received by the Agent,
shall be applied, so long as no Application Event has occurred and is continuing
and except as otherwise provided herein with respect to Defaulting Lenders, to
reduce the balance of the US Revolving Loans outstanding and, thereafter, to US
Borrowers (to be wired to the US Designated Account) or such other Person
entitled thereto under applicable law. Subject to Section 2.3(b)(v) and
Section 2.3(e), all payments in respect of Canadian Obligations to be made
hereunder by Canadian Borrowers shall be remitted to the Agent and all such
payments, and all proceeds of Collateral securing Canadian Obligations (other
than Collateral also securing US Obligations) received by the Agent, shall be
applied, so long as no Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, to
reduce the balance of the Canadian Revolving Loans outstanding and, thereafter,
to Canadian Borrowers (to be wired to the Canadian Designated Account) or such
other Person entitled thereto under applicable law.

 

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(iii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to the Agent and all proceeds of Collateral received by the
Agent shall be applied as follows:

(A) All payments in respect of US Obligations and all proceeds of Collateral
securing the US Obligations received by the Agent shall be applied as follows:

first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to the Agent under the Loan Documents in
respect of US Obligations, until paid in full,

second, to pay any fees or premiums then due to the Agent under the Loan
Documents, in respect of US Obligations until paid in full,

third, to pay interest due in respect of all US Protective Advances, until paid
in full,

fourth, to pay the principal of all US Protective Advances, until paid in full,

fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan
Documents in respect of US Obligations, until paid in full,

sixth, ratably, to pay any fees or premiums then due to any of the Lenders under
the Loan Documents in respect of US Obligations, until paid in full,

seventh, to pay interest accrued in respect of the US Swing Loans, until paid in
full,

eighth, to pay the principal of all US Swing Loans, until paid in full,

ninth, ratably, to pay interest accrued in respect of the US Revolving Loans
(other than US Protective Advances), until paid in full,

tenth, ratably

 

  (1) to pay the principal of all US Revolving Loans until paid in full,

 

  (2) to the Agent, to be held by the Agent, for the benefit of US Issuing Banks
(and for the ratable benefit of each of the Lenders that have an obligation to
pay to the Agent, for the account of US Issuing Banks, a share of each US Letter
of Credit Disbursement), as cash collateral in an amount up to the applicable
Required Cash Collateral Percentages of the US Letter of Credit Usage (to the
extent permitted by applicable law, such cash collateral shall be applied to the
reimbursement of any US Letter of Credit Disbursement as and when such
disbursement occurs and, if a US Letter of Credit expires undrawn, the cash
collateral held by the Agent in respect of such Letter of Credit shall, to the
extent permitted by applicable law, be reapplied pursuant to this
Section 2.3(b)(iii), beginning with tier (A) hereof),

 

  (3)

ratably, up to the amount (after taking into account any amounts previously paid
pursuant to this clause (iii) during the continuation of the applicable
Application Event) of the most recently established US Bank Product Reserve,
which amount was established prior to the occurrence of, and not in
contemplation of, the subject Application Event, to (I) ratably to the Bank
Product

 

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  Providers of US Bank Products (based on the US Bank Product Reserve, if any,
established for each US Bank Product of such Bank Product Provider) up to the
amounts then certified the applicable Bank Product Provider to the Agent (in
form and substance satisfactory to the Agent) to be due and payable to such Bank
Product Provider on account of US Bank Product Obligations and (II) with any
balance to be paid to the Agent, to be held by the Agent, for the ratable
benefit (based on the US Bank Product Reserve established for each US Bank
Product) of the Bank Product Providers for US Bank Products, as cash collateral
(which cash collateral may be released by the Agent to the applicable Bank
Product Provider and applied by such Bank Product Provider to the payment or
reimbursement of any amounts due and payable with respect to US Bank Product
Obligations owed to the applicable Bank Product Provider as and when such
amounts first become due and payable and, if and at such time as all such US
Bank Product Obligations are paid or otherwise satisfied in full, the cash
collateral held by the Agent in respect of such US Bank Product Obligations
shall be reapplied pursuant to this Section 2.3(b)(iii), beginning with tier
(A) hereof,

eleventh, to pay any US Obligations arising as a result of any guaranty by a US
Loan Party of the Canadian Obligations (and if no amounts are due under any such
guaranty, to cash collateralize the obligations under such guaranty unless the
Canadian Revolver Commitments of Lenders to make Canadian Revolving Loans have
terminated and the Canadian Obligations have been paid in full),

twelfth, to pay any other US Obligations other than Obligations owed to
Defaulting Lenders (including being paid, ratably, to the Bank Product Providers
on account of all amounts then due and payable in respect of US Bank Product
Obligations, with any balance to be paid to the Agent, to be held by the Agent,
for the ratable benefit of the Bank Product Providers, as cash collateral (which
cash collateral may be released by the Agent to the applicable Bank Product
Provider and applied by such Bank Product Provider to the payment or
reimbursement of any amounts due and payable with respect to US Bank Product
Obligations owed to the applicable Bank Product Provider as and when such
amounts first become due and payable and, if and at such time as all such US
Bank Product Obligations are paid or otherwise satisfied in full, the cash
collateral held by the Agent in respect of such Bank Product Obligations shall
be reapplied pursuant to this Section 2.3(b)(iii), beginning with tier
(A) hereof),

thirteenth, ratably to pay any US Obligations owed to Defaulting Lenders; and

fourteenth, to US Borrowers (to be wired to the US Designated Account) or such
other Person entitled thereto under applicable law.

(B) All payments in respect of Canadian Obligations and all proceeds of
Collateral securing the Canadian Obligations received by the Agent shall be
applied as follows:

first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to the Agent under the Loan Documents in
respect of Canadian Obligations, until paid in full,

second, to pay any fees or premiums then due to the Agent under the Loan
Documents, in respect of Canadian Obligations until paid in full,

third, to pay interest due in respect of all Canadian Protective Advances, until
paid in full,

fourth, to pay the principal of all Canadian Protective Advances, until paid in
full,

 

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fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan
Documents in respect of Canadian Obligations, until paid in full,

sixth, ratably, to pay any fees or premiums then due to any of the Lenders under
the Loan Documents in respect of Canadian Obligations, until paid in full,

seventh, to pay interest accrued in respect of the Canadian Swing Loans, until
paid in full,

eighth, to pay the principal of all Canadian Swing Loans, until paid in full,

ninth, ratably, to pay interest accrued in respect of the Canadian Revolving
Loans , until paid in full,

tenth, ratably

(1) to pay the principal of all Canadian Revolving Loans until paid in full,

(2) to the Agent, to be held by the Agent, for the benefit of Canadian Issuing
Banks (and for the ratable benefit of each of the Lenders that have an
obligation to pay to the Agent, for the account of Canadian Issuing Banks, a
share of each Canadian Letter of Credit Disbursement), as cash collateral in an
amount up to the applicable Required Cash Collateral Percentages of the US
Letter of Credit Usage and the Canadian Letter of Credit Usage (to the extent
permitted by applicable law, such cash collateral shall be applied to the
reimbursement of any Canadian Letter of Credit Disbursement as and when such
disbursement occurs and, if a Canadian Letter of Credit expires undrawn, the
cash collateral held by the Agent in respect of such Letter of Credit shall, to
the extent permitted by applicable law, be reapplied pursuant to this
Section 2.3(b)(iii), beginning with tier (B) hereof),

(3) ratably, up to the amount (after taking into account any amounts previously
paid pursuant to this clause (iii) during the continuation of the applicable
Application Event) of the most recently established Canadian Bank Product
Reserve, which amount was established prior to the occurrence of, and not in
contemplation of, the subject Application Event, to (I) ratably to the Bank
Product Providers of Canadian Bank Products (based on the Canadian Bank Product
Reserve, if any, established for each Canadian Bank Product of such Bank Product
Provider) up to the amounts then certified by the applicable Bank Product
Provider to the Agent (in form and substance satisfactory to the Agent) to be
due and payable to such Bank Product Provider on account of Canadian Bank
Product Obligations and (II) with any balance to be paid to the Agent, to be
held by the Agent, for the ratable benefit (based on the Canadian Bank Product
Reserve established for each Canadian Bank Product) of the Bank Product
Providers for Canadian Bank Products, as cash collateral (which cash collateral
may be released by the Agent to the applicable Bank Product Provider and applied
by such Bank Product Provider to the payment or reimbursement of any amounts due
and payable with respect to Canadian Bank Product Obligations owed to the
applicable Bank Product Provider as and when such amounts first become due and
payable and, if and at such time as all such Canadian Bank Product Obligations
are paid or otherwise satisfied in full, the cash collateral held by the Agent
in respect of such Canadian Bank Product Obligations shall be reapplied pursuant
to this Section 2.3(b)(iii), beginning with tier (B) hereof,

 

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eleventh, to pay any other Canadian Obligations other than Obligations owed to
Defaulting Lenders (including being paid, ratably, to the Bank Product Providers
on account of all amounts then due and payable in respect of Canadian Bank
Product Obligations, with any balance to be paid to the Agent, to be held by the
Agent, for the ratable benefit of the Bank Product Providers, as cash collateral
(which cash collateral may be released by the Agent to the applicable Bank
Product Provider and applied by such Bank Product Provider to the payment or
reimbursement of any amounts due and payable with respect to Canadian Bank
Product Obligations owed to the applicable Bank Product Provider as and when
such amounts first become due and payable and, if and at such time as all such
Canadian Bank Product Obligations are paid or otherwise satisfied in full, the
cash collateral held by the Agent in respect of such Bank Product Obligations
shall be reapplied pursuant to this Section 2.3(b)(iii), beginning with tier
(B) hereof),

twelfth, ratably to pay any Canadian Obligations owed to Defaulting Lenders; and

thirteenth, to Canadian Borrowers (to be wired to the Canadian Designated
Account) or such other Person entitled thereto under applicable law.

For the avoidance of doubt, none of the payments in respect of any Obligations
and none of the proceeds of Collateral shall be applied to Excluded Swap
Obligations.

(iv) The Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
Section 2.2(e).

(v) In each instance, so long as no Application Event has occurred and is
continuing, Section 2.3(b)(ii) shall not apply to any payment made by Borrowers
to the Agent and specified by Borrowers to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement or any other Loan Document.

(vi) For purposes of Section 2.3(b)(iii), “paid in full” of a type of Obligation
means payment in cash or Same Day Funds of all amounts owing on account of such
type of Obligation, including interest accrued after the commencement of any
Insolvency Proceeding, default interest, interest on interest, and expense
reimbursements, irrespective of whether any of the foregoing would be or is
allowed or disallowed in whole or in part in any Insolvency Proceeding.

(vii) In the event of a direct conflict between the priority provisions of this
Section 2.3 and any other provision contained in this Agreement or any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, if the conflict relates to the provisions of
Section 2.2(g) and this Section 2.3, then the provisions of Section 2.2(g) shall
control and govern, and if otherwise, then the terms and provisions of this
Section 2.3 shall control and govern.

(viii) Payments from US Loan Parties shall be deemed to be in respect of US
Obligations, and if no US Obligations are outstanding, then in respect of
Canadian Obligations. Payments from Canadian Loan Parties shall be deemed to be
in respect of Canadian Obligations. If a payment is from proceeds of Collateral
that secures both US Obligations and Canadian Obligations, or is a payment from
a Person that is not organized under the laws of the United States or any state
thereof but has guaranteed both the US Obligations and the Canadian Obligations,
any such payment shall be, so long as no Application Event has occurred and is
continuing, applied as specified by Administrative Borrower or, if not so
specified or if an Application Event has occurred and is continuing, applied as
determined by the Agent (and in the absence of such determination, shall be
assumed to be a payment in respect of US Obligations until the US Obligations
are paid in full).

 

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(c) Reduction of Commitments. The Revolver Commitments shall terminate on the
Maturity Date or earlier termination thereof pursuant to the terms of this
Agreement. The applicable Borrowers may reduce the US Revolver Commitments or
the Canadian Revolver Commitments, as applicable, without premium or penalty, to
an amount (which may be zero) not less than the sum of (A) the applicable
Revolver Usage as of such date, plus (B) the principal amount of all applicable
Revolving Loans not yet made as to which a request has been given by Borrowers
under Section 2.2(a), plus (C) the amount of all applicable Letters of Credit
not yet issued as to which a request has been given by Borrowers pursuant to
Section 2.10A or Section 2.10B, as applicable. Each such reduction shall be in
an amount which is not less than $5,000,000 (unless the applicable Revolver
Commitments are being reduced to zero and the amount of the applicable Revolver
Commitments in effect immediately prior to such reduction are less than
$5,000,000), shall be made by providing not less than three Business Days prior
written notice to the Agent, and shall be irrevocable. The applicable Revolver
Commitments, once reduced, may not be increased. Each such reduction of the
applicable Revolver Commitments shall reduce the applicable Revolver Commitments
of each Lender proportionately in accordance with its ratable share thereof. In
connection with any reduction in the Revolver Commitments prior to the Maturity
Date, if any Loan Party or any of its Restricted Subsidiaries owns or carries
any Margin Stock, Borrowers shall deliver to Agent an updated Form U-1 (with
sufficient additional originals thereof for each Lender), duly executed and
delivered by the Borrowers, together with such other documentation as Agent
shall reasonably request, in order to enable Agent and the Lenders to comply
with any of the requirements under Regulations T, U or X of the Federal Reserve
Board.

(d) Optional Prepayments. The applicable Borrowers may prepay the principal of
any US Revolving Loan or Canadian Revolving Loan, as applicable, at any time in
whole or in part, without premium or penalty.

(e) Mandatory Prepayments. If, at any time, (A) the US Revolver Usage on such
date exceeds (B) the lesser of (x) the US Borrowing Base reflected in the US
Borrowing Base Certificate most recently delivered by US Borrowers to the Agent,
or (y) the Maximum Revolver Amount, minus (C) the Canadian Revolver Usage, in
all cases as adjusted for Reserves established by the Agent in accordance with
Section 2.1(d), then Borrowers shall immediately prepay the Obligations in
accordance with Section 2.3(f) in an aggregate amount equal to the amount of
such excess. If, at any time, (A) the Canadian Revolver Usage on such date
exceeds (B) the lesser of (x) the Canadian Borrowing Base reflected in the
Canadian Borrowing Base Certificate most recently delivered by Canadian
Borrowers to the Agent (including any excess arising as a result of fluctuations
in exchange rates), or (y) $30,000,000, then the Canadian Borrowers shall
immediately prepay the Obligations in accordance with Section 2.3(f) in an
aggregate amount equal to the amount of such excess.

(f) Application of Payments. Each prepayment pursuant to the first sentence of
Section 2.3(e) shall, (1) so long as no Application Event shall have occurred
and be continuing, be applied, first, to the outstanding principal amount of the
US Revolving Loans until paid in full, and second, to cash collateralize the
Letters of Credit in an amount equal to applicable Required Cash Collateral
Percentages of the US Letter of Credit Usage and the Canadian Letter of Credit
Usage, and (2) if an Application Event shall have occurred and be continuing, be
applied in the manner set forth in Section 2.3(b)(iii). Each prepayment pursuant
to the second sentence of Section 2.3(e) shall, (1) so long as no Application
Event shall have occurred and be continuing, be applied, first, to the
outstanding principal amount of the Canadian Revolving Loans until paid in full,
and second, to cash collateralize the Canadian Letters of Credit in an amount
equal to applicable Required Cash Collateral Percentages of the US Letter of
Credit Usage and the Canadian Letter of Credit Usage, and (2) if an Application
Event shall have occurred and be continuing, be applied in the manner set forth
in Section 2.3(b)(iii).

 

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2.4 Promise to Pay; Promissory Notes.

(a) Each Borrower agrees to pay the Lender Group Expenses owing by such Borrower
on the earlier of (i) the first day of the month following the date on which the
applicable Lender Group Expenses were first incurred, or (ii) the date on which
demand therefor is made by Agent (it being acknowledged and agreed that any
charging of such costs, expenses or Lender Group Expenses to the applicable Loan
Account pursuant to the provisions of Section 2.5(d) shall be deemed to
constitute a demand for payment thereof for the purposes of this subclause
(ii)). Each Borrower promises to pay all of the Obligations (including
principal, interest, premiums, if any, fees, costs, and expenses (including
Lender Group Expenses)) owing by such Borrower in full on the Maturity Date or,
if earlier, on the date on which such Obligations (other than the Bank Product
Obligations) become due and payable pursuant to the terms of this Agreement.
Borrowers agree that their obligations contained in the first sentence of this
Section 2.4(a) shall survive payment or satisfaction in full of all other
Obligations.

(b) Any Lender may request that any portion of its Commitments or the Loans made
by it be evidenced by one or more promissory notes. In such event, the
applicable Borrowers shall execute and deliver to such Lender the requested
promissory notes payable to the order of such Lender in a form furnished by the
Agent and reasonably satisfactory to the applicable Borrowers. Thereafter, the
portion of the Commitments and Loans evidenced by such promissory notes and
interest thereon shall at all times be represented by one or more promissory
notes in such form payable to the order of the payee named therein.

2.5 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.5(c), all Obligations
(except for undrawn Letters of Credit) that have been charged to the Loan
Account pursuant to the terms hereof shall bear interest as follows:

(i) if the relevant Obligation is a Non-Base Rate Loan in Canadian Dollars, at a
per annum rate equal to the CDOR Rate plus the Applicable Margin;

(ii) if the relevant Obligation is a Non-Base Rate Loan in US Dollars, at a per
annum rate equal to the Adjusted LIBOR Rate plus the Applicable Margin,

(iii) if the relevant Obligation is a Base Rate Loan in Canadian Dollars, at a
per annum rate equal to the Canadian Base Rate plus the Applicable Margin,

(iv) if the relevant Obligation is a Base Rate Loan in US Dollars, at a per
annum rate equal to the US Base Rate plus the Applicable Margin,

(v) otherwise, at a per annum rate equal to the Canadian Base Rate (if such
Obligation is denominated in Canadian Dollars) plus the Base Rate Margin or the
US Base Rate (if such Obligation is denominated in US Dollars) plus the Base
Rate Margin.

(b) Letter of Credit Fee. US Borrowers shall pay to the Agent, for the ratable
account of the US Revolving Lenders, a Letter of Credit fee (the “US Letter of
Credit Fees”) (which fee shall be in addition to the fronting fees and
commissions, other fees, charges and expenses set forth in Section 2.10A(k) and
Section 2.10B(k), as applicable) that shall accrue at a per annum rate equal to
the LIBOR/CDOR Rate Margin times the average amount of the US Letter of Credit
Usage during

 

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the immediately preceding month (or portion thereof). Canadian Borrower shall
pay to Agent, for the ratable account of the Canadian Revolving Lenders, a
Letter of Credit fee (the “Canadian Letter of Credit Fees”) (which fee shall be
in addition to the fronting fees and commissions, other fees, charges and
expenses set forth in Section 2.10A(k) and Section 2.10B(k), as applicable) that
shall accrue at a per annum rate equal to the LIBOR/CDOR Rate Margin times the
average amount of the Canadian Letter of Credit Usage during the immediately
preceding month (or portion thereof).

(c) Default Rate. (i) Automatically upon the occurrence and during the
continuation of an Event of Default under Section 8.4 or 8.5 and (ii) upon the
occurrence and during the continuation of any other Specified Event of Default
(other than an Event of Default under Section 8.4 or 8.5), at the direction of
Agent or the Required Lenders, and upon written notice by Agent to Borrowers of
such direction (provided, that such notice shall not be required for any Event
of Default under Section 8.1), (A) all Loans and all Obligations (except for
undrawn Letters of Credit) that have been charged to the Loan Account pursuant
to the terms hereof shall bear interest at a per annum rate equal to two
percentage points above the per annum rate otherwise applicable hereunder, and
(B) the Letter of Credit Fee shall be increased to two percentage points above
the per annum rate otherwise applicable hereunder.

(d) Payment.

(i) Except to the extent provided to the contrary in Section 2.9,
Section 2.10A(k), Section 2.10B(k) or Section 2.11(a), (A) all interest and all
other fees payable hereunder or under any of the other Loan Documents (other
than Letter of Credit Fees) shall be due and payable, in arrears, on the first
Business Day of each month, (B) all Letter of Credit Fees payable hereunder, and
all fronting fees and all commissions, other fees, charges and expenses provided
for in Section 2.10A(k) and Section 2.10B(k) shall be due and payable, in
arrears, on the first Business Day of each month, and (C) all costs and expenses
payable hereunder or under any of the other Loan Documents, and all other Lender
Group Expenses shall be due and payable on the earlier of (x) the first day of
the month following the date on which the applicable costs, expenses, or Lender
Group Expenses were first incurred, or (y) the date on which demand therefor is
made by the Agent (it being acknowledged and agreed that any charging of such
costs, expenses or Lender Group Expenses to the Loan Account pursuant to the
provisions of the following clauses of this Section 2.5(d) shall be deemed to
constitute a demand for payment thereof for the purposes of this subclause (y)).

(ii) Each Canadian Borrower hereby authorizes the Agent, from time to time
without prior notice to Borrowers, to charge to the Loan Account for the
Canadian Borrowers (A) on the first Business Day of each month, all interest
accrued during the prior month on the Canadian Revolving Loans that are Base
Rate Loans hereunder, (B) as and when due and payable under Section 2.11(a), all
interest accrued on the Canadian Revolving Loans that are Non-Base Rate Loans
hereunder, (C) on the first Business Day of each month, all Canadian Letter of
Credit Fees accrued or chargeable hereunder during the prior month, (D) as and
when incurred or accrued, all fees and costs provided for in Section 2.9(a) or
(c) and owing by the Canadian Borrowers, (E) on the first Business Day of each
month, the Unused Line Fees accrued during the prior month pursuant to
Section 2.9(b), (F) as and when due and payable, all other fees payable
hereunder or under any of the other Loan Documents by the Canadian Borrowers,
(G) as and when incurred or accrued, all other Lender Group Expenses owing by
the Canadian Borrowers, and (H) as and when due and payable all other payment
obligations payable under any Loan Document or any Canadian Bank Product
Agreement (including any amounts due and payable to the Bank Product Providers
in respect of Canadian Bank Products) owing by the Canadian Borrowers.

(iii) Each US Borrower hereby authorizes the Agent, from time to time without
prior notice to Borrowers, to charge to the Loan Account for the US Borrowers
(A) on the first Business Day of each month, all interest accrued during the
prior month on the US Revolving Loans that

 

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are Base Rate Loans, (B) as and when due and payable under Section 2.11(a), all
interest accrued on the US Revolving Loans that are Non-Base Rate Loans
hereunder, (C) on the first Business Day of each month, all US Letter of Credit
Fees accrued or chargeable hereunder during the prior month, (D) as and when
incurred or accrued, all fees and costs provided for in Section 2.9(a) or
(c) and owing by the US Borrowers, (E) on the first Business Day of each month,
the Unused Line Fees accrued during the prior month pursuant to Section 2.9(b),
(F) as and when due and payable, all other fees payable hereunder or under any
of the other Loan Documents by the US Borrowers, (G) as and when incurred or
accrued, all other Lender Group Expenses owing by the US Borrowers, and (H) as
and when due and payable all other payment obligations payable under any Loan
Document or any US Bank Product Agreement (including any amounts due and payable
to the Bank Product Providers in respect of US Bank Products) owing by the US
Borrowers.

(iv) All amounts (including interest, fees, costs, expenses, Lender Group
Expenses, or other amounts payable hereunder or under any other Loan Document or
under any Bank Product Agreement) charged to the applicable Loan Account shall
thereupon constitute Revolving Loans hereunder for the account of the applicable
Borrowers, shall constitute Obligations hereunder of such Borrowers, and shall
initially accrue interest at the rate then applicable to Base Rate Revolving
Loans in the Agreed Currency (unless and until converted into Non-Base Rate
Loans in accordance with the terms of this Agreement).

(e) Computation. All interest and fees chargeable under the Loan Documents
(other than amounts accruing at the Base Rate or CDOR Rate) shall be computed on
the basis of a 360 day year, in each case, for the actual number of days elapsed
in the period during which the interest or fees accrue. All interest and fees
chargeable under the Loan Documents accruing at the Base Rate or the CDOR Rate
shall be computed on the basis of a 365 or 366 day year for the actual number of
days elapsed in the period during which the interest or fees accrue. In the
event the Base Rate is changed from time to time hereafter, the rates of
interest hereunder based upon the Base Rate automatically and immediately shall
be increased or decreased by an amount equal to such change in the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Subject to Section 2.17 in the case of Canadian Borrower and the
Canadian Obligations, Borrowers and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; provided, that anything
contained herein to the contrary notwithstanding, if such rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum amount as is allowed by law, and
payment received from Borrowers in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to
the extent of such excess.

2.6 Crediting Payments. The receipt of any payment item by the Agent shall not
be required to be considered a payment on account unless such payment item is a
wire transfer of Same Day Funds in the Agreed Currency made to the Agent’s
Applicable Account or unless and until such payment item is honored when
presented for payment. Should any payment item not be honored when presented for
payment, then the applicable Borrowers shall be deemed not to have made such
payment. Anything to the contrary contained herein notwithstanding, any payment
item shall be deemed received by the Agent only if it is received into the
Agent’s Applicable Account on a Business Day on or before 3:30 p.m. If any
payment item is received into the Agent’s Applicable Account on a non-Business
Day or after 3:30 p.m. on a Business Day (unless the Agent, in its sole
discretion, elects to credit it on the date received), it shall be deemed to
have been received by the Agent as of the opening of business on the immediately
following Business Day.

 

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2.7 Designated Account. The Agent is authorized to make the Revolving Loans, and
each Issuing Bank is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person or, without instructions, if pursuant to
Section 2.5(d). US Borrowers agree to establish and maintain the US Designated
Account with the US Designated Account Bank and the Canadian Borrowers agree to
establish and maintain the Canadian Designated Account with the Canadian
Designated Bank, in each case, for the purpose of receiving the proceeds of the
applicable Revolving Loans requested by such Borrowers and made by the Agent or
the applicable Lenders hereunder. Unless otherwise agreed by the Agent and
Borrowers, any Revolving Loan or Swing Loan requested by Borrowers and made by
the Agent or the Lenders hereunder shall be made to the applicable Designated
Account.

2.8 Maintenance of Loan Account; Statements of Obligations. The Agent shall
maintain an account on its books in the name of US Borrowers (the “US Loan
Account”) on which US Borrowers will be charged with all US Revolving Loans
(including US Extraordinary Advances and US Swing Loans) made by the Agent, US
Swing Line Lender, or the Lenders to US Borrowers or for the US Borrowers’
account, the US Letters of Credit issued or arranged by a US Issuing Bank for a
US Borrowers’ account, and with all other payment of US Obligations hereunder or
under the other Loan Documents, including, accrued interest, fees and expenses,
and Lender Group Expenses of US Borrowers with respect thereto. The Agent shall
maintain an account on its books in the name of Canadian Borrowers (the
“Canadian Loan Account”) on which Canadian Borrowers will be charged with all
Canadian Revolving Loans (including Canadian Extraordinary Advances and Canadian
Swing Loans) made by the Agent, Canadian Swing Line Lender, or the Lenders to
Canadian Borrowers or for the Canadian Borrowers’ account, the Canadian Letters
of Credit issued or arranged by a Canadian Issuing Bank for a Canadian
Borrowers’ account, and with all other payment of Canadian Obligations hereunder
or under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses of Canadian Borrowers with respect thereto.
In accordance with Section 2.6, the applicable Loan Account will be credited
with all payments received by the Agent from the applicable Borrowers or for the
applicable Borrowers’ account. The Agent shall make available to the
Administrative Borrower monthly statements regarding the Loan Accounts,
including the principal amount of the Revolving Loans, interest accrued
hereunder, fees accrued or charged hereunder or under the other Loan Documents,
and a summary itemization of all charges and expenses constituting Lender Group
Expenses accrued hereunder or under the other Loan Documents, and each such
statement, absent manifest error, shall be conclusively presumed to be correct
and accurate and constitute an account stated between Borrowers and the Lender
Group unless, within 30 days after Agent first makes such a statement available
to the Administrative Borrower. Administrative Borrower shall deliver to the
Agent written objection thereto describing the error or errors contained in such
statement.

2.9 Fees.

(a) Agent Fees. Borrowers shall pay to the Agent, for the account of the Agent,
as and when due and payable under the terms of the Fee Letter, the fees set
forth in the Fee Letter.

(b) Unused Line Fees.

(i) Borrowers shall pay to Agent, for each US Revolving Lender, an unused line
fee (the “Unused US Line Fee”) in an amount equal to the Applicable Unused Line
Fee Percentage per annum times the result of (A) such US Revolving Lender’s US
Revolver Commitment, less (B) such US Revolving Lender’s (or such US Revolving
Lender’s Affiliate’s) Canadian Revolver Commitment, if any, less (C) such US
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Average US Revolver Usage during the immediately preceding month (or portion
thereof), which Unused US Line Fee shall be due and payable, in arrears, on the
first day of each month from and after the Closing Date up to the first day of
the month prior to the date on which the Obligations are paid in full and on the
date on which the Obligations are paid in full.

(ii) Borrowers shall pay to Agent, for each Canadian Revolving Lenders, an
unused line fee (the “Unused Canadian Line Fee”) in an amount equal to the
Applicable Unused Line Fee Percentage per annum times the result of (A) such
Canadian Revolving Lender’s Canadian Revolver Commitment, less (B) such Canadian
Revolving Lender’s Pro Rata Share of the Average Canadian Revolver Usage during
the immediately preceding month (or portion thereof), which Unused Canadian Line
Fee shall be due and payable, in arrears, on the first day of each month from
and after the Closing Date up to the first day of the month prior to the date on
which the Obligations are paid in full and on the date on which the Obligations
are paid in full.

(c) Field Examination and Other Fees. Subject to Section 5.7, the Borrowers
shall pay to the Agent, field examination, appraisal, and valuation fees and
charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per
day, per examiner, plus reasonable and documented out-of-pocket expenses
(including travel, meals, and lodging) for each field examination of any Loan
Party or its Restricted Subsidiaries performed by or on behalf of the Agent, and
(ii) the reasonable and documented fees, charges or expenses paid or incurred by
the Agent if it elects to employ the services of one or more third Persons to
perform field examinations, appraise the Collateral, or any portion thereof, or
to assess any Loan Party’s or its Restricted Subsidiaries’ business valuation.

2.10 Letters of Credit.

A. US Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of
Borrowers made in accordance herewith, and prior to the Maturity Date, US
Issuing Banks agree to issue a requested standby US Letter of Credit or a sight
commercial US Letter of Credit for the account of US Borrowers on their behalf
or on behalf of any Restricted Subsidiary. By submitting a request to a US
Issuing Bank for the issuance of a US Letter of Credit, US Borrowers shall be
deemed to have requested that such US Issuing Bank issue the requested US Letter
of Credit. Each request for the issuance of a US Letter of Credit, or the
amendment, renewal, or extension of any outstanding US Letter of Credit, shall
be (i) irrevocable and made in writing by an Authorized Person, (ii) delivered
to the Agent and US Issuing Bank via telefacsimile or other electronic method of
transmission reasonably acceptable to the Agent and US Issuing Bank and
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension, and (iii) subject to such US Issuing Bank’s authentication procedures
with results satisfactory to such US Issuing Bank. Each such request shall be in
form and substance reasonably satisfactory to the Agent and US Issuing Bank and
(i) shall specify (A) the amount of such US Letter of Credit, (B) the date of
issuance, amendment, renewal, or extension of such US Letter of Credit, (C) the
proposed expiration date of such US Letter of Credit, (D) the name and address
of the beneficiary of the US Letter of Credit, and (E) such other information
(including, the conditions to drawing, and, in the case of an amendment,
renewal, or extension, identification of the US Letter of Credit to be so
amended, renewed, or extended) as shall be necessary to prepare, amend, renew,
or extend such US Letter of Credit, and (ii) shall be accompanied by such Issuer
Documents as the Agent or US Issuing Bank may request or require, to the extent
that such requests or requirements are consistent with the Issuer Documents that
such US Issuing Bank generally requests for US Letters of Credit in similar
circumstances. Such US Issuing Bank’s records of the content of any such request
will be conclusive. Anything contained herein to the contrary notwithstanding, a
US Issuing Bank may, but shall not be obligated to, issue a US Letter of Credit
that supports the obligations of a Credit Party or one of its Restricted
Subsidiaries in respect of (x) a lease of

 

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real property to the extent that the face amount of such US Letter of Credit
exceeds the highest rent (including all rent-like charges) payable under such
lease for a period of one year, or (y) an employment contract to the extent that
the face amount of such US Letter of Credit exceeds the highest compensation
payable under such contract for a period of one year.

(b) An US Issuing Bank shall have no obligation to issue an US Letter of Credit
if any of the following would result after giving effect to the requested
issuance:

(i) the US Letter of Credit Usage would exceed $25,000,000, or

(ii) the US Letter of Credit Usage would exceed the Maximum Revolver Amount less
the sum of (x) the outstanding amount of US Revolving Loans (including Swing
Loans) and (y) the Canadian Revolver Usage, or

(iii) the US Letter of Credit Usage would exceed the US Borrowing Base at such
time less the outstanding principal balance of the US Revolving Loans (inclusive
of Swing Loans) at such time.

(c) In the event there is a Defaulting Lender as of the date of any request for
the issuance of a US Letter of Credit, a US Issuing Bank shall not be required
to issue or arrange for such US Letter of Credit to the extent (i) the
Defaulting Lender’s US Letter of Credit Exposure with respect to such US Letter
of Credit may not be reallocated pursuant to Section 2.2(g)(ii), or (ii) the US
Issuing Bank has not otherwise entered into arrangements reasonably satisfactory
to it and US Borrowers to eliminate the US Issuing Bank’s risk with respect to
the participation in such US Letter of Credit of the Defaulting Lender, which
arrangements may include US Borrowers cash collateralizing such Defaulting
Lender’s US Letter of Credit Exposure in accordance with Section 2.2(g)(ii).
Additionally, a US Issuing Bank shall have no obligation to issue or extend a US
Letter of Credit if (A) any order, judgment, or decree of any Governmental
Authority or arbitrator shall, by its terms, purport to enjoin or restrain such
US Issuing Bank from issuing such US Letter of Credit, or any law applicable to
such US Issuing Bank or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over such US
Issuing Bank shall prohibit or request that such US Issuing Bank refrain from
the issuance of letters of credit generally or such US Letter of Credit in
particular, (B) the issuance of such US Letter of Credit would violate one or
more policies of such US Issuing Bank applicable to letters of credit generally,
or (C) if amounts demanded to be paid under any US Letter of Credit will not or
may not be in the Agreed Currency that such Letter of Credit was issued.

(d) Any US Issuing Bank (other than Wells Fargo or any of its Affiliates) shall
notify the Agent in writing no later than the Business Day prior to the Business
Day on which such US Issuing Bank issues any US Letter of Credit. In addition,
each US Issuing Bank (other than Wells Fargo or any of its Affiliates) shall, on
the first Business Day of each week, submit to the Agent a report detailing the
daily undrawn amount of each US Letter of Credit issued by US Issuing Bank
during the prior calendar week. The US Borrowers and the Lender Group hereby
acknowledge and agree that all Existing US Letters of Credit shall constitute US
Letters of Credit under this Agreement on and after the Effective Date with the
same effect as if such Existing Letters of Credit were issued by a US Issuing
Bank at the request of US Borrowers on the Closing Date. Each US Letter of
Credit shall be in form and substance reasonably acceptable to US Issuing Bank,
including the requirement that the amounts payable thereunder must be payable in
US Dollars or Canadian Dollars. If US Issuing Bank makes a payment under a US
Letter of Credit, US Borrowers shall pay to the Agent an amount equal to the
applicable US Letter of Credit Disbursement on the Business Day such US Letter
of Credit Disbursement is made and, in the absence of such payment, the amount
of the US Letter of Credit Disbursement immediately and automatically shall be
deemed to be a US Revolving Loan hereunder (notwithstanding any failure to

 

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satisfy any condition precedent set forth in Section 3) and, initially, shall
bear interest at the rate then applicable to US Revolving Loans that are Base
Rate Loans. If a US Letter of Credit Disbursement is deemed to be a US Revolving
Loan hereunder, US Borrowers’ obligation to pay the amount of such US Letter of
Credit Disbursement to a US Issuing Bank shall be automatically converted into
an obligation to pay the resulting US Revolving Loan. Promptly following receipt
by the Agent of any payment from US Borrowers pursuant to this paragraph, the
Agent shall distribute such payment to such US Issuing Bank or, to the extent
that any Revolving Lenders have made payments pursuant to Section 2.10A(e) to
reimburse such US Issuing Bank, then to such Revolving Lenders and US Issuing
Bank as their interests may appear.

(e) Promptly following receipt of a notice of a US Letter of Credit Disbursement
pursuant to Section 2.10A(d), each Revolving Lender agrees to fund its Pro Rata
Share of any US Revolving Loan deemed made pursuant to Section 2.10A(d) on the
same terms and conditions as if Administrative Borrower had requested the amount
thereof as a US Revolving Loan and the Agent shall promptly pay to the US
Issuing Bank the amounts so received by it from the Revolving Lenders. By the
issuance of a US Letter of Credit (or an amendment, renewal, or extension of a
US Letter of Credit) and without any further action on the part of US Issuing
Bank or the Revolving Lenders, an US Issuing Bank shall be deemed to have
granted to each Revolving Lender with a US Revolver Commitment, and each
Revolving Lender with a US Revolver Commitment shall be deemed to have
purchased, a participation in each US Letter of Credit issued by US Issuing
Bank, in an amount equal to its Pro Rata Share of such US Letter of Credit, and
each such Revolving Lender agrees to pay to the Agent, for the account of US
Issuing Bank, such Revolving Lender’s Pro Rata Share of any US Letter of Credit
Disbursement made by US Issuing Bank under the applicable US Letter of Credit.
In consideration and in furtherance of the foregoing, each Revolving Lender with
a US Revolver Commitment hereby absolutely and unconditionally agrees to pay to
the Agent, for the account of US Issuing Bank, such Revolving Lender’s Pro Rata
Share of each US Letter of Credit Disbursement made by an US Issuing Bank and
not reimbursed by US Borrowers on the date due as provided in Section 2.10A(d),
or of any reimbursement payment that is required to be refunded (or that the
Agent or US Issuing Bank elects, based upon the advice of counsel, to refund) to
US Borrowers for any reason. Each Revolving Lender acknowledges and agrees that
its obligation to deliver to the Agent, for the account of an US Issuing Bank,
an amount equal to its respective Pro Rata Share of each US Letter of Credit
Disbursement pursuant to this Section 2.10A(e) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3. If any such Revolving Lender fails to make
available to the Agent the amount of such Revolving Lender’s Pro Rata Share of a
US Letter of Credit Disbursement as provided in this Section, such Revolving
Lender shall be deemed to be a Defaulting Lender and the Agent (for the account
of the US Issuing Bank) shall be entitled to recover such amount on demand from
such Revolving Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.

(f) US Borrowers jointly and severally agree to indemnify, defend and hold
harmless each Letter of Credit Related Person (to the fullest extent permitted
by law) from and against any Letter of Credit Indemnified Costs, and which arise
out of or in connection with, or as a result of:

(i) any US Letter of Credit or any pre-advice of its issuance;

(ii) any transfer, sale, delivery, surrender or endorsement (or lack thereof) of
any Drawing Document at any time(s) held by any such Letter of Credit Related
Person in connection with any US Letter of Credit;

(iii) any action or proceeding arising out of, or in connection with, any US
Letter of Credit (whether administrative, judicial or in connection with
arbitration), including any action or proceeding to compel or restrain any
presentation or payment under any US Letter of Credit, or for the wrongful
dishonor of, or honoring a presentation under, any US Letter of Credit;

 

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(iv) any independent undertakings issued by the beneficiary of any US Letter of
Credit;

(v) any unauthorized instruction or request made to US Issuing Bank in
connection with any US Letter of Credit or requested US Letter of Credit, or any
error, omission, interruption or delay in such instruction or request, whether
transmitted by mail, courier, electronic transmission, SWIFT, or any other
telecommunication including communications through a correspondent;

(vi) an adviser, confirmer or other nominated person seeking to be reimbursed,
indemnified or compensated in connection with any US Letter of Credit;

(vii) any third party seeking to enforce the rights of an applicant,
beneficiary, nominated person, transferee, assignee of US Letter of Credit
proceeds or holder of an instrument or document;

(viii) the fraud, forgery or illegal action of parties in connection with US
Letter of Credit other than the Letter of Credit Related Person;

(ix) any prohibition on payment or delay in payment of any amount payable by US
Issuing Bank to a beneficiary or transferee beneficiary of a US Letter of Credit
arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

(x) US Issuing Bank’s performance of the obligations of a confirming institution
or entity that wrongfully dishonors a confirmation;

(xi) any foreign language translation provided to US Issuing Bank in connection
with any US Letter of Credit;

(xii) any foreign law or usage as it relates to US Issuing Bank’s issuance of a
US Letter of Credit in support of a foreign guaranty including without
limitation the expiration of such guaranty after the related US Letter of Credit
expiration date and any resulting drawing paid by US Issuing Bank in connection
therewith; or

(xiii) the acts or omissions, whether rightful or wrongful, of any present or
future de jure or de facto governmental or regulatory authority or cause or
event beyond the control of the Letter of Credit Related Person related to a US
Letter of Credit;

provided, that such indemnity shall not be available to any Letter of Credit
Related Person claiming indemnification under clauses (i) through (x) above to
the extent that such Letter of Credit Indemnified Costs may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction to have resulted directly from the gross negligence or willful
misconduct of the Letter of Credit Related Person claiming indemnity. US
Borrowers hereby agree to pay the Letter of Credit Related Person claiming
indemnity on demand from time to time all amounts owing under this
Section 2.10A(f). If and to the extent that the obligations of US Borrowers
under this Section 2.10A(f) are unenforceable for any reason, US Borrowers agree
to make the maximum contribution to the Letter of Credit Indemnified Costs
permissible under applicable law. This indemnification provision shall survive
termination of this Agreement and all US Letters of Credit.

 

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(g) The liability of US Issuing Bank (or any other Letter of Credit Related
Person) under, in connection with or arising out of any US Letter of Credit (or
pre-advice), regardless of the form or legal grounds of the action or
proceeding, shall be limited to direct damages suffered by US Borrowers that are
caused directly by US Issuing Bank’s gross negligence or willful misconduct in
(i) honoring a presentation under a US Letter of Credit that on its face does
not at least substantially comply with the terms and conditions of such US
Letter of Credit, (ii) failing to honor a presentation under a US Letter of
Credit that strictly complies with the terms and conditions of such US Letter of
Credit, or (iii) retaining Drawing Documents presented under a US Letter of
Credit. US Borrowers’ aggregate remedies against US Issuing Bank and any Letter
of Credit Related Person for wrongfully honoring a presentation under any US
Letter of Credit or wrongfully retaining honored Drawing Documents shall in no
event exceed the aggregate amount paid by US Borrowers to US Issuing Bank in
respect of the honored presentation in connection with such US Letter of Credit
under Section 2.10A(d), plus interest at the rate then applicable to US
Revolving Loans in the Agreed Currency that are Base Rate Loans hereunder. US
Borrowers shall take action to avoid and mitigate the amount of any damages
claimed against any US Issuing Bank or any other Letter of Credit Related
Person, including by enforcing its rights against the beneficiaries of the US
Letters of Credit. Any claim by US Borrowers under or in connection with any US
Letter of Credit shall be reduced by an amount equal to the sum of (x) the
amount (if any) saved by US Borrowers as a result of the breach or alleged
wrongful conduct complained of, and (y) the amount (if any) of the loss that
would have been avoided had US Borrowers taken all reasonable steps to mitigate
any loss, and in case of a claim of wrongful dishonor, by specifically and
timely authorizing such US Issuing Bank to effect a cure.

(h) Administrative Borrower is responsible for the final text of the US Letter
of Credit as issued by any US Issuing Bank, irrespective of any assistance US
Issuing Bank may provide such as drafting or recommending text or by US Issuing
Bank’s use or refusal to use text submitted by Administrative Borrower. US
Borrowers understand that the final form of any US Letter of Credit may be
subject to such revisions and changes as are deemed necessary or appropriate by
US Issuing Bank, and US Borrowers hereby consent to such revisions and changes
not materially different from the application executed in connection therewith.
US Borrowers are solely responsible for the suitability of the US Letter of
Credit for US Borrowers’ purposes. If US Borrowers request a US Issuing Bank to
issue a Letter of Credit for the account of a Restricted Subsidiary that is not
a US Borrower (i) such Restricted Subsidiary shall have no rights against any US
Issuing Bank; (ii) US Borrowers shall be responsible for the application and
obligations under this Agreement; and (iii) communications (including notices)
related to the respective Letter of Credit shall be among the US Issuing Banks
and US Borrowers. US Borrowers will examine the copy of the US Letter of Credit
and any other documents sent by US Issuing Bank in connection therewith and
shall promptly notify the applicable US Issuing Bank (not later than three
(3) Business Days following US Borrowers’ receipt of documents from the
applicable US Issuing Bank) of any non-compliance with the US Borrowers’
instructions and of any discrepancy in any document under any presentment or
other irregularity. US Borrowers understand and agree that no Issuing Bank is
required to extend the expiration date of any US Letter of Credit for any
reason. With respect to any US Letter of Credit containing an “automatic
amendment” to extend the expiration date of such US Letter of Credit, a US
Issuing Bank, in its sole and absolute discretion, may give notice of nonrenewal
of such US Letter of Credit and, if US Borrowers do not at any time want the
then current expiration date of such Letter of Credit to be extended, US
Borrowers will so notify the Agent and US Issuing Bank at least 30 calendar days
before such US Issuing Bank is required to notify the beneficiary of such US
Letter of Credit or any advising bank of such non-extension pursuant to the
terms of such US Letter of Credit.

(i) US Borrowers’ reimbursement and payment obligations under this Section 2.10A
are absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever, including:

 

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(i) any lack of validity, enforceability or legal effect of any US Letter of
Credit, any Issuer Document, this Agreement, or any Loan Document, or any term
or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment
under any Drawing Document that does not comply in whole or in part with the
terms of the applicable US Letter of Credit or which proves to be fraudulent,
forged or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, or which is signed, issued or presented by a Person
or a transferee of such Person purporting to be a successor or transferee of the
beneficiary of such US Letter of Credit;

(iii) US Issuing Bank or any of its branches or Affiliates being the beneficiary
of any US Letter of Credit;

(iv) US Issuing Bank or any correspondent honoring a drawing against a Drawing
Document up to the amount available under any US Letter of Credit even if such
Drawing Document claims an amount in excess of the amount available under the US
Letter of Credit;

(v) the existence of any claim, set-off, defense or other right that any Credit
Party or any of its Restricted Subsidiaries may have at any time against any
beneficiary or transferee beneficiary, any assignee of proceeds, US Issuing Bank
or any other Person;

(vi) US Issuing Bank or any correspondent honoring a drawing upon receipt of an
electronic presentation under a US Letter of Credit requiring the same,
regardless of whether the original Drawing Documents arrive at US Issuing Bank’s
counters or are different from the electronic presentation;

(vii) any other event, circumstance or conduct whatsoever, whether or not
similar to any of the foregoing that might, but for this Section 2.10A(i),
constitute a legal or equitable defense to or discharge of, or provide a right
of set-off against, any US Borrower’s or any of its Restricted Subsidiaries’
reimbursement and other payment obligations and liabilities, arising under, or
in connection with, any US Letter of Credit, whether against US Issuing Bank,
the beneficiary or any other Person; or

(viii) the fact that any Default or Event of Default shall have occurred and be
continuing;

provided, that subject to Section 2.10A(g) above, the foregoing shall not
release an US Issuing Bank from such liability to US Borrowers as may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction against such US Issuing Bank following reimbursement or payment of
the obligations and liabilities, including reimbursement and other payment
obligations, of US Borrowers to US Issuing Bank arising under, or in connection
with, this Section 2.10A or any US Letter of Credit.

(j) Without limiting any other provision of this Agreement, US Issuing Bank and
each other Letter of Credit Related Person (if applicable) shall not be
responsible to US Borrowers for, and US Issuing Bank’s rights and remedies
against US Borrowers and the obligation of US Borrowers to reimburse US Issuing
Bank for each drawing under each US Letter of Credit shall not be impaired by:

 

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(i) honor of a presentation under any US Letter of Credit that on its face
substantially complies with the terms and conditions of such US Letter of
Credit, even if the US Letter of Credit requires strict compliance by the
beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to
have been signed, presented or issued (A) by any purported successor or
transferee of any beneficiary or other Person required to sign, present or issue
such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for
payment under a US Letter of Credit, even if nonnegotiable or not in the form of
a draft or notwithstanding any requirement that such draft, demand or request
bear any or adequate reference to the US Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing
Document or the form, accuracy, genuineness or legal effect of any Drawing
Document (other than US Issuing Bank’s determination that such Drawing Document
appears on its face substantially to comply with the terms and conditions of the
US Letter of Credit);

(v) acting upon any instruction or request relative to a US Letter of Credit or
requested US Letter of Credit that US Issuing Bank in good faith believes to
have been given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery
of any message, advice or document (regardless of how sent or transmitted) or
for errors in interpretation of technical terms or in translation or any delay
in giving or failing to give notice to any US Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary,
any nominated person or entity or any other Person or any breach of contract
between any beneficiary and any US Borrower or any of the parties to the
underlying transaction to which the US Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily
benefits an issuer of a letter of credit, including any requirement that any
Drawing Document be presented to it at a particular hour or place;

(ix) payment to any presenting bank (designated or permitted by the terms of the
applicable US Letter of Credit) claiming that it rightfully honored or is
entitled to reimbursement or indemnity under Standard Letter of Credit Practice
applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of
Credit Practice applicable to where US Issuing Bank has issued, confirmed,
advised or negotiated such US Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any US Letter of
Credit notwithstanding that a presentation was made prior to such expiration
date and dishonored by US Issuing Bank if subsequently US Issuing Bank or any
court or other finder of fact determines such presentation should have been
honored;

 

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(xii) dishonor of any presentation that does not strictly comply or that is
fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by US Issuing
Bank to have been made in violation of international, federal, state or local
restrictions on the transaction of business with certain prohibited Persons.

(k) US Borrowers shall pay immediately upon demand to the Agent for the account
of US Issuing Bank as non-refundable fees, commissions, and charges (it being
acknowledged and agreed that any charging of such fees, commissions, and charges
to the US Loan Account pursuant to the provisions of Section 2.5(d) shall be
deemed to constitute a demand for payment thereof for the purposes of this
Section 2.10A(k)): (i) a fronting fee which shall be imposed by US Issuing Bank
equal to .125% per annum times the average amount of the US Letter of Credit
Usage during the immediately preceding month, plus (ii) any and all other
customary commissions, fees and charges then in effect imposed by, and any and
all expenses incurred by, US Issuing Bank, or by any adviser, confirming
institution or entity or other nominated person, relating to US Letters of
Credit, at the time of issuance of any US Letter of Credit and upon the
occurrence of any other activity with respect to any US Letter of Credit
(including transfers, assignments of proceeds, amendments, drawings, renewals or
cancellations).

(l) If by reason of (x) any Change in Law, or (y) compliance by US Issuing Bank
or any other member of the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Board of Governors as from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any US Letter of Credit issued or caused to be issued
hereunder or hereby, or any Loans or obligations to make Loans hereunder or
hereby, or

(ii) there shall be imposed on US Issuing Bank or any other member of the Lender
Group any other condition regarding any US Letter of Credit,

and the result of the foregoing is to increase, directly or indirectly, the cost
to US Issuing Bank or any other member of the Lender Group of issuing, making,
participating in, or maintaining any US Letter of Credit or to reduce the amount
receivable in respect thereof, then, and in any such case, the Agent may, at any
time within a reasonable period after the additional cost is incurred or the
amount received is reduced, notify US Borrowers, and US Borrowers shall pay
within 30 days after demand therefor, such amounts as the Agent may specify to
be necessary to compensate US Issuing Bank or any other member of the Lender
Group for such additional cost or reduced receipt, together with interest on
such amount from the date of such demand until payment in full thereof at the
rate then applicable to US Revolving Loans in the Agreed Currency that are Base
Rate Loans hereunder; provided, that (A) US Borrowers shall not be required to
provide any compensation pursuant to this Section 2.10A(l) for any such amounts
incurred more than 180 days prior to the date on which the demand for payment of
such amounts is first made to US Borrowers, and (B) if an event or circumstance
giving rise to such amounts is retroactive, then the 180-day period referred to
above shall be extended to include the period of retroactive effect thereof. The
determination by the Agent of any amount due pursuant to this Section 2.10A(l),
as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.

(m) Each US Letter of Credit shall expire not later than the date that is 36
months after the date of the issuance of such US Letter of Credit; provided,
that any US Letter of Credit may provide for the automatic extension thereof for
any number of additional periods each of up to 36 months in duration; provided
further, that with respect to any US Letter of Credit which extends beyond the
Maturity Date, Letter of Credit Collateralization shall be provided therefor on
or before the date that is five Business Days prior to the Maturity Date.

 

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(n) If (i) any Event of Default shall occur and be continuing, or (ii) Excess
Availability shall at any time be less than zero, then on the Business Day
following the date when the Administrative Borrower receives notice from the
Agent or the Required Lenders (or, if the maturity of the Obligations has been
accelerated, Revolving Lenders with US Letter of Credit Exposure representing
greater than 50% of the total Letter Credit Exposure) demanding Letter of Credit
Collateralization pursuant to this Section 2.10A(n) upon such demand, US
Borrowers shall provide Letter of Credit Collateralization with respect to the
then existing US Letter of Credit Usage. If US Borrowers are required to provide
Letter of Credit Collateralization hereunder as a result of the occurrence of an
Event of Default, any cash collateral held by Agent as a result of such Event of
Default shall be returned by Agent to US Borrowers promptly, but in no event
later than seven Business Days, after such Event of Default has been waived in
accordance with this Agreement. If US Borrowers fail to provide Letter of Credit
Collateralization as required by this Section 2.10A(n), the applicable Revolving
Lenders may (and, upon direction of the Agent, shall) advance, as US Revolving
Loans the amount of the cash collateral required pursuant to the Letter of
Credit Collateralization provision so that the then existing US Letter of Credit
Usage is cash collateralized in accordance with the Letter of Credit
Collateralization provision (whether or not the US Revolver Commitments have
terminated, an US Overadvance exists or the conditions in Section 3 are
satisfied).

(o) Unless otherwise expressly agreed by the applicable US Issuing Bank and US
Borrowers when a US Letter of Credit is issued, (i) the rules of the ISP shall
apply to each standby US Letter of Credit, and (ii) the rules of the UCP shall
apply to each commercial US Letter of Credit.

(p) US Issuing Bank shall be deemed to have acted with due diligence and
reasonable care if US Issuing Bank’s conduct is in accordance with Standard
Letter of Credit Practice or in accordance with this Agreement.

(q) In the event of a direct conflict between the provisions of this
Section 2.10A and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.10A shall control and
govern.

(r) The provisions of this Section 2.10A shall survive the termination of this
Agreement and the repayment in full of the Obligations with respect to any
Letters of Credit that remain outstanding.

(s) At US Borrowers’ costs and expense, US Borrowers shall execute and deliver
to US Issuing Bank such additional certificates, instruments and/or documents
and take such additional action as may be reasonably requested by US Issuing
Bank to enable US Issuing Bank to issue any US Letter of Credit pursuant to this
Agreement and related Issuer Document, to protect, exercise and/or enforce such
US Issuing Banks’ rights and interests under this Agreement or to give effect to
the terms and provisions of this Agreement or any Issuer Document. Each US
Borrower irrevocably appoints each US Issuing Bank as its attorney-in-fact and
authorizes each US Issuing Bank, without notice to US Borrowers, to execute and
deliver ancillary documents and letters customary in the letter of credit
business that may include but are not limited to advisements, indemnities,
checks, bills of exchange and issuance documents. The power of attorney granted
by the US Borrowers is limited solely to such actions related to the issuance,
confirmation or amendment of any US Letter of Credit and to ancillary documents
or letters customary in the letter of credit business. This appointment is
coupled with an interest.

 

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(t) Notwithstanding that a US Letter of Credit issued or outstanding hereunder
is in support of any obligations of, or is for the account of, a Guarantor or
any Restricted Subsidiary, the US Borrowers shall be obligated to reimburse each
US Issuing Bank hereunder for any and all drawings under such Letter of Credit
issued hereunder by such US Issuing Bank. Each US Borrower hereby acknowledge
that the issuance of US Letters of Credit for the account of any Guarantor, any
Borrower or any other Restricted Subsidiary inures to the benefit of such US
Borrower, and that such US Borrower’s business (indirectly or directly) derives
substantial benefits from the businesses of such other Persons.

B. Canadian Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of
Administrative Borrower made in accordance herewith, and prior to the Maturity
Date, Canadian Issuing Banks agree to issue or if Canadian Issuing Bank is WF
Canada, to cause a Canadian Underlying Issuer (including as Canadian Issuing
Bank’s agent) to issue, a requested standby Canadian Letter of Credit or a sight
commercial Canadian Letter of Credit for the account of Canadian Borrowers on
their behalf or on behalf of any other Restricted Subsidiary. If Canadian
Issuing Bank is WF Canada, it may, at its option, elect to cause a Canadian
Underlying Issuer to issue a requested Canadian Letter of Credit. If WF Canada
makes such election, it agrees that it will enter into arrangements relative to
the reimbursement of such Canadian Underlying Issuer (which may include, among
other means, by becoming an applicant with respect to such Canadian Letter of
Credit or entering into undertakings or other arrangements that provide for
reimbursement of such Canadian Underlying Issuer with respect to such drawings
under Canadian Letter of Credit; each such obligation or undertaking,
irrespective of whether in writing, a “Canadian Reimbursement Undertaking”) with
respect to Canadian Letters of Credit issued by such Canadian Underlying Issuer
for the account of Canadian Borrower. By submitting a request to a Canadian
Issuing Bank for the issuance of a Canadian Letter of Credit, Canadian Borrowers
shall be deemed to have requested that (x) Canadian Issuing Bank issue the
requested Canadian Letter of Credit or (y) in the case in which WF Canada is the
Canadian Issuing Bank a Canadian Underlying Issuer issue the requested Canadian
Letter of Credit (and, in such case, to have requested WF Canada to issue a
Canadian Reimbursement Undertaking with respect to such requested Canadian
Letter of Credit). Each request for the issuance of a Canadian Letter of Credit,
or the amendment, renewal, or extension of any outstanding Canadian Letter of
Credit, shall be (i) irrevocable and made in writing by an Authorized Person,
(ii) delivered to the Agent and Canadian Issuing Bank via telefacsimile or other
electronic method of transmission reasonably acceptable to the Agent and
Canadian Issuing Bank and reasonably in advance of the requested date of
issuance, amendment, renewal, or extension, and (iii) subject to such Canadian
Issuing Bank’s authentication procedures with results satisfactory to such
Canadian Issuing Bank. Each such request shall be in form and substance
reasonably satisfactory to the Agent and Canadian Issuing Bank and (i) shall
specify (A) the amount of such Canadian Letter of Credit and whether such
Canadian Letter of Credit is to be issued in US Dollars or Canadian Dollars,
(B) the date of issuance, amendment, renewal, or extension of such Canadian
Letter of Credit, (C) the proposed expiration date of such Canadian Letter of
Credit, (D) the name and address of the beneficiary of the Canadian Letter of
Credit, and (E) such other information (including, the conditions to drawing,
and, in the case of an amendment, renewal, or extension, identification of the
Canadian Letter of Credit to be so amended, renewed, or extended) as shall be
necessary to prepare, amend, renew, or extend such Canadian Letter of Credit,
and (ii) shall be accompanied by such Issuer Documents as the Agent or Canadian
Issuing Bank may request or require, to the extent that such requests or
requirements are consistent with the Issuer Documents that such Canadian Issuing
Bank generally requests for Canadian Letters of Credit in similar circumstances.
Such Canadian Issuing Bank’s records of the content of any such request will be
conclusive. Anything contained herein to the contrary notwithstanding, a
Canadian Issuing Bank may, but shall not be obligated

 

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to, issue a Canadian Letter of Credit that supports the obligations of a Credit
Party or one of its Restricted Subsidiaries in respect of (x) a lease of real
property to the extent that the face amount of such Canadian Letter of Credit
exceeds the highest rent (including all rent-like charges) payable under such
lease for a period of one year, or (y) an employment contract to the extent that
the face amount of such Canadian Letter of Credit exceeds the highest
compensation payable under such contract for a period of one year.

(b) A Canadian Issuing Bank shall have no obligation to issue a Canadian Letter
of Credit or a Canadian Reimbursement Undertaking in respect of a Canadian
Letter of Credit, in either case, if any of the following would result after
giving effect to the requested issuance:

(i) the Canadian Letter of Credit Usage would exceed $3,000,000, or

(ii) the Canadian Letter of Credit Usage would exceed an amount equal to (A) the
lesser of (x) $30,000,000 and (y) Canadian Borrowing Base minus (B) the
US Dollar Equivalent of the outstanding amount of Canadian Revolving Loans, or

(iii) the Canadian Letter of Credit Usage would exceed the Canadian Borrowing
Base at such time less the outstanding principal balance of the US Dollar
Equivalent of the Canadian Revolving Loans (inclusive of Swing Loans) at such
time.

(c) In the event there is a Defaulting Lender as of the date of any request for
the issuance of a Canadian Letter of Credit, a Canadian Issuing Bank shall not
be required to issue or arrange for such Canadian Letter of Credit or any
applicable Canadian Reimbursement Undertaking to the extent (i) the Defaulting
Lender’s Canadian Letter of Credit Exposure with respect to such Canadian Letter
of Credit or any applicable Canadian Reimbursement Undertaking may not be
reallocated pursuant to Section 2.2(g)(ii), or (ii) the Canadian Issuing Bank
has not otherwise entered into arrangements reasonably satisfactory to it and
Canadian Borrowers to eliminate the Canadian Issuing Bank’s risk with respect to
the participation in such Canadian Letter of Credit or any applicable Canadian
Reimbursement Undertaking of the Defaulting Lender, which arrangements may
include Canadian Borrowers cash collateralizing such Defaulting Lender’s
Canadian Letter of Credit Exposure in accordance with Section 2.2(g)(ii).
Additionally, a Canadian Issuing Bank shall have no obligation to issue or
extend a Canadian Letter of Credit or a Canadian Reimbursement Undertaking in
respect of a Canadian Letter of Credit if (A) any order, judgment, or decree of
any Governmental Authority or arbitrator shall, by its terms, purport to enjoin
or restrain such Canadian Issuing Bank from issuing such Canadian Letter of
Credit or a Canadian Reimbursement Undertaking or Canadian Underlying Issuer
form issuing such Canadian Letter of Credit, or any law applicable to a Canadian
Issuing Bank or Canadian Underlying Issuer or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over such Canadian Issuing Bank or Canadian Underlying Issuer shall
prohibit or request that such Canadian Issuing Bank or Canadian Underlying
Issuer refrain from the issuance of letters of credit generally or such Canadian
Letter of Credit or Canadian Reimbursement Undertaking, as applicable, in
particular, (B) the issuance of such Canadian Letter of Credit would violate one
or more policies of such Canadian Issuing Bank or Canadian Underlying Issuer
applicable to letters of credit generally, or (C) if amounts demanded to be paid
under any Canadian Letter of Credit will not or may not be in US Dollars or
Canadian Dollars.

(d) Any Canadian Issuing Bank (other than WF Canada or any of its Affiliates)
shall notify the Agent in writing no later than the Business Day prior to the
Business Day on which such Canadian Issuing Bank issues any Canadian Letter of
Credit or Canadian Reimbursement Undertaking. In addition, each Canadian Issuing
Bank (other than WF Canada or any of its Affiliates) shall, on the first
Business Day of each week, submit to the Agent a report detailing the daily
undrawn amount of each Canadian Letter of Credit issued by a Canadian Issuing
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Canadian Letter of Credit shall be in form and substance reasonably acceptable
to Canadian Issuing Bank and Canadian Underlying Issuer, including the
requirement that the amounts payable thereunder must be payable in US Dollars or
Canadian Dollars. If Canadian Issuing Bank makes a payment under a Canadian
Letter of Credit or a Canadian Reimbursement Undertaking, Canadian Borrowers
shall pay to the Agent an amount equal to the applicable Canadian Letter of
Credit Disbursement on the Business Day such Canadian Letter of Credit
Disbursement is made and, in the absence of such payment, the amount of the
Canadian Letter of Credit Disbursement immediately and automatically shall be
deemed to be a Canadian Revolving Loan in the Agreed Currency hereunder
(notwithstanding any failure to satisfy any condition precedent set forth in
Section 3) and, initially, shall bear interest at the rate then applicable to
Canadian Revolving Loans in the Agreed Currency that are Base Rate Loans. If a
Canadian Letter of Credit Disbursement is deemed to be a Canadian Revolving Loan
hereunder, Canadian Borrowers’ obligation to pay the amount of such Canadian
Letter of Credit Disbursement to a Canadian Issuing Bank shall be automatically
converted into an obligation to pay the resulting Canadian Revolving Loan.
Promptly following receipt by the Agent of any payment from Canadian Borrowers
pursuant to this paragraph, the Agent shall distribute such payment to such
Canadian Issuing Bank or, to the extent that any Revolving Lenders have made
payments pursuant to Section 2.10B(e) to reimburse such Canadian Issuing Bank,
then to such Revolving Lenders and Canadian Issuing Bank as their interests may
appear.

(e) Promptly following receipt of a notice of a Canadian Letter of Credit
Disbursement pursuant to Section 2.10B(d), each Revolving Lender agrees to fund
its Pro Rata Share of any Canadian Revolving Loan deemed made pursuant to
Section 2.10B(d) on the same terms and conditions as if Administrative Borrower
had requested the amount thereof as a Canadian Revolving Loan and the Agent
shall promptly pay to Canadian Issuing Bank the amounts so received by it from
the Revolving Lenders. By the issuance of a Canadian Letter of Credit or
Canadian Reimbursement Undertaking (or an amendment, renewal, or extension of a
Canadian Letter of Credit or Canadian Reimbursement Undertaking) and without any
further action on the part of Canadian Issuing Bank or the Revolving Lenders,
Canadian Issuing Bank shall be deemed to have granted to each Revolving Lender
with a Canadian Revolver Commitment, and each Revolving Lender with a Canadian
Revolver Commitment shall be deemed to have purchased, a participation in each
Canadian Letter of Credit issued by Canadian Issuing Bank and each Canadian
Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Canadian Letter of Credit or Canadian Reimbursement Undertaking, and each such
Revolving Lender agrees to pay to the Agent, for the account of Canadian Issuing
Bank, such Revolving Lender’s Pro Rata Share of any Canadian Letter of Credit
Disbursement made by Canadian Issuing Bank under the applicable Canadian Letter
of Credit or Canadian Reimbursement Undertaking. In consideration and in
furtherance of the foregoing, each Revolving Lender with a Canadian Revolver
Commitment hereby absolutely and unconditionally agrees to pay to the Agent, for
the account of Canadian Issuing Bank, such Revolving Lender’s Pro Rata Share of
each Canadian Letter of Credit Disbursement made by a Canadian Issuing Bank and
not reimbursed by Canadian Borrowers on the date due as provided in
Section 2.10B(d), or of any reimbursement payment that is required to be
refunded (or that the Agent or Canadian Issuing Bank elects, based upon the
advice of counsel, to refund) to Canadian Borrowers for any reason. Each
Revolving Lender with a Canadian Revolver Commitment acknowledges and agrees
that its obligation to deliver to the Agent, for the account of a Canadian
Issuing Bank, an amount equal to its respective Pro Rata Share of each Canadian
Letter of Credit Disbursement pursuant to this Section 2.10B(e) shall be
absolute and unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the failure to
satisfy any condition set forth in Section 3. If any such Revolving Lender fails
to make available to the Agent the amount of such Revolving Lender’s Pro Rata
Share of a Canadian Letter of Credit Disbursement as provided in this Section,
such Revolving Lender shall be deemed to be a Defaulting Lender and the Agent
(for the account of Canadian Issuing Bank) shall be entitled to recover such
amount on demand from such Revolving Lender together with interest thereon at
the Defaulting Lender Rate until paid in full.

 

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(f) Canadian Borrowers jointly and severally agree to indemnify, defend and hold
harmless each Letter of Credit Related Person (to the fullest extent permitted
by law) from and against any Letter of Credit Indemnified Costs, and which arise
out of or in connection with, or as a result of:

(i) any Canadian Letter of Credit or any pre-advice of its issuance or Canadian
Reimbursement Undertaking;

(ii) any transfer, sale, delivery, surrender or endorsement (or lack thereof) of
any Drawing Document at any time(s) held by any such Letter of Credit Related
Person in connection with any Canadian Letter of Credit or Canadian
Reimbursement Undertaking;

(iii) any action or proceeding arising out of, or in connection with, any
Canadian Letter of Credit or Canadian Reimbursement Undertaking (whether
administrative, judicial or in connection with arbitration), including any
action or proceeding to compel or restrain any presentation or payment under any
Canadian Letter of Credit or Canadian Reimbursement Undertaking, or for the
wrongful dishonor of, or honoring a presentation under, any Canadian Letter of
Credit;

(iv) any independent undertakings issued by the beneficiary of any Canadian
Letter of Credit;

(v) any unauthorized instruction or request made to Canadian Issuing Bank or
Canadian Underlying Issuer in connection with any Canadian Letter of Credit or
Canadian Reimbursement Undertaking or requested Canadian Letter of Credit or
Canadian Reimbursement Undertaking, or any error, omission, interruption or
delay in such instruction or request, whether transmitted by mail, courier,
electronic transmission, SWIFT, or any other telecommunication including
communications through a correspondent;

(vi) an adviser, confirmer or other nominated person seeking to be reimbursed,
indemnified or compensated in connection with any Canadian Letter of Credit or
Canadian Reimbursement Undertaking;

(vii) any third party seeking to enforce the rights of an applicant,
beneficiary, nominated person, transferee, assignee of Canadian Letter of Credit
proceeds or holder of an instrument or document;

(viii) the fraud, forgery or illegal action of parties in connection with a
Canadian Letter of Credit or Canadian Reimbursement Undertaking other than the
Letter of Credit Related Person;

(ix) any prohibition on payment or delay in payment of any amount payable by
Canadian Issuing Bank to a beneficiary or transferee beneficiary of a Canadian
Letter of Credit arising out of Anti-Corruption Laws, Anti-Money Laundering
Laws, or Sanctions;

(x) Canadian Issuing Bank’s or Canadian Underlying Issuer’s performance of the
obligations of a confirming institution or entity that wrongfully dishonors a
confirmation;

(xi) any foreign language translation provided to Canadian Issuing Bank in
connection with any Canadian Letter of Credit;

 

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(xii) any foreign law or usage as it relates to Canadian Issuing Bank’s issuance
of a Canadian Letter of Credit in support of a foreign guaranty including
without limitation the expiration of such guaranty after the related Canadian
Letter of Credit expiration date and any resulting drawing paid by Canadian
Issuing Bank in connection therewith; or

(xiii) the acts or omissions, whether rightful or wrongful, of any present or
future de jure or de facto governmental or regulatory authority or cause or
event beyond the control of the Letter of Credit Related Person related to a
Canadian Letter of Credit or Canadian Reimbursement Undertaking;

provided, that such indemnity shall not be available to any Letter of Credit
Related Person claiming indemnification under clauses (i) through (x) above to
the extent that such Letter of Credit Indemnified Costs may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction to have resulted directly from the gross negligence or willful
misconduct of the Letter of Credit Related Person claiming indemnity. Canadian
Borrowers hereby agree to pay the Letter of Credit Related Person claiming
indemnity on demand from time to time all amounts owing under this
Section 2.10B(f). If and to the extent that the obligations of Canadian
Borrowers under this Section 2.10B(f) are unenforceable for any reason, Canadian
Borrowers agree to make the maximum contribution to the Letter of Credit
Indemnified Costs permissible under applicable law. This indemnification
provision shall survive termination of this Agreement and all Canadian Letters
of Credit and Canadian Reimbursement Undertaking.

(g) The liability of Canadian Issuing Bank (or any other Letter of Credit
Related Person) under, in connection with or arising out of any Canadian Letter
of Credit (or pre-advice) or Canadian Reimbursement Undertaking, regardless of
the form or legal grounds of the action or proceeding, shall be limited to
direct damages suffered by Canadian Borrowers that are caused directly by
Canadian Issuing Bank’s gross negligence or willful misconduct in (i) honoring a
presentation under a Canadian Letter of Credit that on its face does not at
least substantially comply with the terms and conditions of such Canadian Letter
of Credit, (ii) failing to honor a presentation under a Canadian Letter of
Credit that strictly complies with the terms and conditions of such Canadian
Letter of Credit, or (iii) retaining Drawing Documents presented under a
Canadian Letter of Credit. Canadian Borrowers’ aggregate remedies against
Canadian Issuing Bank and any Letter of Credit Related Person for wrongfully
honoring a presentation under any Canadian Letter of Credit or wrongfully
retaining honored Drawing Documents shall in no event exceed the aggregate
amount paid by Canadian Borrowers to Canadian Issuing Bank in respect of the
honored presentation in connection with such Canadian Letter of Credit under
Section 2.10B(d), plus interest at the rate then applicable to Canadian
Revolving Loans in the Agreed Currency that are Base Rate Loans hereunder.
Canadian Borrowers shall take action to avoid and mitigate the amount of any
damages claimed against any Canadian Issuing Bank or any other Letter of Credit
Related Person, including by enforcing its rights against the beneficiaries of
the Canadian Letters of Credit. Any claim by Canadian Borrowers under or in
connection with any Canadian Letter of Credit shall be reduced by an amount
equal to the sum of (x) the amount (if any) saved by Canadian Borrowers as a
result of the breach or alleged wrongful conduct complained of, and (y) the
amount (if any) of the loss that would have been avoided had Canadian Borrowers
taken all reasonable steps to mitigate any loss, and in case of a claim of
wrongful dishonor, by specifically and timely authorizing such Canadian Issuing
Bank or Canadian Underlying Issuer to effect a cure.

(h) Administrative Borrower is responsible for the final text of the Canadian
Letter of Credit as issued by any Canadian Issuing Bank or Canadian Underlying
Issuer, irrespective of any assistance Canadian Issuing Bank or Canadian
Underlying Issuer may provide such as drafting or recommending text or by
Canadian Issuing Bank’s or Canadian Underlying Issuer’s use or refusal to use
text submitted by Administrative Borrower. Canadian Borrowers understand that
the final form of any

 

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Canadian Letter of Credit may be subject to such revisions and changes as are
deemed necessary or appropriate by Canadian Issuing Bank or Canadian Underlying
Issuer, and Canadian Borrowers hereby consent to such revisions and changes not
materially different from the application executed in connection therewith.
Canadian Borrowers are solely responsible for the suitability of the Canadian
Letter of Credit for Canadian Borrowers’ purposes. If Canadian Borrowers request
a Canadian Issuing Bank to issue a Letter of Credit for a Restricted Subsidiary
that is not a Canadian Loan Party (i) such Restricted Subsidiary shall have no
rights against any Canadian Issuing Bank; (ii) Canadian Borrowers shall be
responsible for the application and obligations under this Agreement; and
(iii) communications (including notices) related to the respective Letter of
Credit shall be among the Canadian Issuing Banks and Canadian Borrowers.
Canadian Borrowers will examine the copy of the Canadian Letter of Credit and
any other documents sent by Canadian Issuing Bank in connection therewith and
shall promptly notify the applicable Canadian Issuing Bank (not later than three
(3) Business Days following Canadian Borrowers’ receipt of documents from the
applicable Canadian Issuing Bank) of any non-compliance with the Canadian
Borrowers’ instructions and of any discrepancy in any document under any
presentment or other irregularity. Canadian Borrowers understand and agree that
no Canadian Issuing Bank is required to extend the expiration date of any
Canadian Letter of Credit for any reason. With respect to any Canadian Letter of
Credit containing an “automatic amendment” to extend the expiration date of such
Canadian Letter of Credit, each of Canadian Issuing Bank and Canadian Underlying
Issuer, in its sole and absolute discretion, may give notice of nonrenewal of
such Canadian Letter of Credit and, if Canadian Borrowers do not at any time
want the then current expiration date of such Letter of Credit to be extended,
Canadian Borrowers will so notify the Agent and Canadian Issuing Bank at least
30 calendar days before such Canadian Issuing Bank or Canadian Underlying Issuer
is required to notify the beneficiary of such Canadian Letter of Credit or any
advising bank of such non-extension pursuant to the terms of such Canadian
Letter of Credit.

(i) Canadian Borrowers’ reimbursement and payment obligations under this
Section 2.10B are absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever, including:

(i) any lack of validity, enforceability or legal effect of any Canadian Letter
of Credit, any Canadian Reimbursement Undertaking, any Issuer Document, this
Agreement, or any Loan Document, or any term or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment
under any Drawing Document that does not comply in whole or in part with the
terms of the applicable Canadian Letter of Credit or which proves to be
fraudulent, forged or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, or which is signed, issued or presented by
a Person or a transferee of such Person purporting to be a successor or
transferee of the beneficiary of such Canadian Letter of Credit;

(iii) Canadian Issuing Bank or any of its branches or Affiliates or Canadian
Underlying Issuer being the beneficiary of any Canadian Letter of Credit;

(iv) Canadian Issuing Bank or Canadian Underlying Issuer or any correspondent
honoring a drawing against a Drawing Document up to the amount available under
any Canadian Letter of Credit even if such Drawing Document claims an amount in
excess of the amount available under the Canadian Letter of Credit;

(v) the existence of any claim, set-off, defense or other right that any Credit
Party or any of its Restricted Subsidiaries may have at any time against any
beneficiary or transferee beneficiary, any assignee of proceeds, Canadian
Issuing Bank, Canadian Underlying Issuer or any other Person;

 

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(vi) Canadian Issuing Bank or any correspondent honoring a drawing upon receipt
of an electronic presentation under a Canadian Letter of Credit requiring the
same, regardless of whether the original Drawing Documents arrive at Canadian
Issuing Bank’s counters or are different from the electronic presentation;

(vii) any other event, circumstance or conduct whatsoever, whether or not
similar to any of the foregoing that might, but for this Section 2.10B(i),
constitute a legal or equitable defense to or discharge of, or provide a right
of set-off against, any Canadian Borrower’s or any of its Restricted
Subsidiaries’ reimbursement and other payment obligations and liabilities,
arising under, or in connection with, any Canadian Letter of Credit, whether
against Canadian Issuing Bank, Canadian Underlying Issuer, the beneficiary or
any other Person; or

(viii) the fact that any Default or Event of Default shall have occurred and be
continuing;

provided, that subject to Section 2.10B(g) above, the foregoing shall not
release a Canadian Issuing Bank or Canadian Underlying Issuer from such
liability to Canadian Borrowers as may be finally determined in a final,
non-appealable judgment of a court of competent jurisdiction against such
Canadian Issuing Bank or Canadian Underlying Issuer following reimbursement or
payment of the obligations and liabilities, including reimbursement and other
payment obligations, of Canadian Borrowers to Canadian Issuing Bank arising
under, or in connection with, this Section 2.10B or any Canadian Letter of
Credit or Canadian Reimbursement Undertaking or its correspondent.

(j) Without limiting any other provision of this Agreement, Canadian Issuing
Bank and each other Letter of Credit Related Person (if applicable) shall not be
responsible to Canadian Borrowers for, and Canadian Issuing Bank’s rights and
remedies against Canadian Borrowers and the obligation of Canadian Borrowers to
reimburse Canadian Issuing Bank for each drawing under each Canadian Letter of
Credit and each Canadian Reimbursement Undertaking shall not be impaired by:

(i) honor of a presentation under any Canadian Letter of Credit that on its face
substantially complies with the terms and conditions of such Canadian Letter of
Credit, even if the Canadian Letter of Credit requires strict compliance by the
beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to
have been signed, presented or issued (A) by any purported successor or
transferee of any beneficiary or other Person required to sign, present or issue
such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for
payment under a Canadian Letter of Credit, even if nonnegotiable or not in the
form of a draft or notwithstanding any requirement that such draft, demand or
request bear any or adequate reference to the Canadian Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing
Document or the form, accuracy, genuineness or legal effect of any Drawing
Document (other than Canadian Issuing Bank’s or Canadian Underlying Issuer’s
determination that such Drawing Document appears on its face substantially to
comply with the terms and conditions of the Canadian Letter of Credit);

 

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(v) acting upon any instruction or request relative to a Canadian Letter of
Credit or requested Canadian Letter of Credit that each of Canadian Issuing Bank
and Canadian Underlying Issuer in good faith believes to have been given by a
Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery
of any message, advice or document (regardless of how sent or transmitted) or
for errors in interpretation of technical terms or in translation or any delay
in giving or failing to give notice to any Canadian Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary,
any nominated person or entity or any other Person or any breach of contract
between any beneficiary and any Canadian Borrower or any of the parties to the
underlying transaction to which the Canadian Letter of Credit relates;

(viii) assertion or waiver of any provision of the ISP or UCP that primarily
benefits an issuer of a letter of credit, including any requirement that any
Drawing Document be presented to it at a particular hour or place;

(ix) payment to any presenting bank (designated or permitted by the terms of the
applicable Canadian Letter of Credit) claiming that it rightfully honored or is
entitled to reimbursement or indemnity under Standard Letter of Credit Practice
applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of
Credit Practice applicable to where Canadian Issuing Bank or Canadian Underlying
Issuer has issued, confirmed, advised or negotiated such Canadian Letter of
Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any Canadian Letter of
Credit notwithstanding that a presentation was made prior to such expiration
date and dishonored by Canadian Issuing Bank or Canadian Underlying Issuer, as
applicable, if subsequently Canadian Issuing Bank or Canadian Underlying Issuer,
as applicable, or any court or other finder of fact determines such presentation
should have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is
fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by Canadian
Issuing Bank or Canadian Underlying Issuer, as applicable, to have been made in
violation of international, federal, state or local restrictions on the
transaction of business with certain prohibited Persons.

(k) Canadian Borrowers shall pay immediately upon demand to the Agent for the
account of Canadian Issuing Bank as non-refundable fees, commissions, and
charges (it being acknowledged and agreed that any charging of such fees,
commissions, and charges to the Canadian Loan Account pursuant to the provisions
of Section 2.5(d) shall be deemed to constitute a demand for payment thereof for
the purposes of this Section 2.10B(k)): (i) a fronting fee which shall be
imposed by Canadian Issuing Bank upon the issuance of each Canadian Letter of
Credit equal to .125% per annum times the average amount of the Canadian Letter
of Credit Usage during the immediately preceding month, plus (ii)

 

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any and all other customary commissions, fees and charges then in effect imposed
by, and any and all expenses incurred by, Canadian Issuing Bank or Canadian
Underlying Issuer, or by any adviser, confirming institution or entity or other
nominated person, relating to US Letters of Credit, at the time of issuance of
any Canadian Letter of Credit and upon the occurrence of any other activity with
respect to any Canadian Letter of Credit (including transfers, assignments of
proceeds, amendments, drawings, renewals or cancellations).

(l) If by reason of (x) any Change in Law, or (y) compliance by Canadian Issuing
Bank or any other member of the Lender Group or Canadian Underlying Issuer with
any direction, request, or requirement (irrespective of whether having the force
of law) of any Governmental Authority or monetary authority including,
Regulation D of the Board of Governors as from time to time in effect (and any
successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Canadian Letter of Credit or Canadian Reimbursement
Undertaking issued or caused to be issued hereunder or hereby, or any Loans or
obligations to make Loans hereunder or hereby, or

(ii) there shall be imposed on Canadian Issuing Bank or any other member of the
Lender Group or Canadian Underlying Issuer any other condition regarding any
Canadian Letter of Credit or any Canadian Reimbursement Undertaking,

and the result of the foregoing is to increase, directly or indirectly, the cost
to Canadian Issuing Bank or any other member of the Lender Group or Canadian
Underlying Issuer of issuing, making, participating in, or maintaining any
Canadian Letter of Credit or to reduce the amount receivable in respect thereof,
then, and in any such case, the Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Canadian Borrowers, and Canadian Borrowers shall pay within 30 days after
demand therefor, such amounts as the Agent may specify to be necessary to
compensate Canadian Issuing Bank or any other member of the Lender Group or
Canadian Underlying Issuer for such additional cost or reduced receipt, together
with interest on such amount from the date of such demand until payment in full
thereof at the rate then applicable to Canadian Revolving Loans in the Agreed
Currency that are Base Rate Loans hereunder; provided, that (A) Canadian
Borrowers shall not be required to provide any compensation pursuant to this
Section 2.10B(l) for any such amounts incurred more than 180 days prior to the
date on which the demand for payment of such amounts is first made to Canadian
Borrowers, and (B) if an event or circumstance giving rise to such amounts is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof. The determination by the Agent
of any amount due pursuant to this Section 2.10B(l), as set forth in a
certificate setting forth the calculation thereof in reasonable detail, shall,
in the absence of manifest or demonstrable error, be final and conclusive and
binding on all of the parties hereto.

(m) Each standby Canadian Letter of Credit shall expire not later than the date
that is 36 months after the date of the issuance of such Canadian Letter of
Credit; provided, that any standby Canadian Letter of Credit may provide for the
automatic extension thereof for any number of additional periods each of up to
36 months in duration; provided further, that with respect to any Canadian
Letter of Credit which extends beyond the Maturity Date, Letter of Credit
Collateralization shall be provided therefor on or before the date that is five
Business Days prior to the Maturity Date.

(n) If (i) any Event of Default shall occur and be continuing, or (ii) Excess
Availability shall at any time be less than zero, then on the Business Day
following the date when the Administrative Borrower receives notice from the
Agent or the Required Lenders (or, if the maturity of the Obligations has been
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representing greater than 50% of the total Letter Credit Exposure) demanding
Letter of Credit Collateralization pursuant to this Section 2.10B(n) upon such
demand, Canadian Borrowers shall provide Letter of Credit Collateralization with
respect to the then existing Canadian Letter of Credit Usage. If Canadian
Borrowers are required to provide Letter of Credit Collateralization hereunder
as a result of the occurrence of such Event of Default, any cash collateral held
by Agent as a result of such Letter of Credit Collateralization shall be
returned by Agent to Canadian Borrowers promptly, but in no event later than
seven Business Days, after such Event of Default has been waived in accordance
with this Agreement. If Canadian Borrowers fail to provide Letter of Credit
Collateralization as required by this Section 2.10B(n), the applicable Revolving
Lenders may (and, upon direction of the Agent, shall) advance, as Canadian
Revolving Loans the amount of the cash collateral required pursuant to the
Letter of Credit Collateralization provision so that the then existing Canadian
Letter of Credit Usage is cash collateralized in accordance with the Letter of
Credit Collateralization provision (whether or not the Canadian Revolver
Commitments have terminated, a Canadian Overadvance exists or the conditions in
Section 3 are satisfied).

(o) Unless otherwise expressly agreed by Canadian Issuing Banks and Canadian
Borrowers when a Canadian Letter of Credit is issued, (i) the rules of the ISP
shall apply to each standby Canadian Letter of Credit, and (ii) the rules of the
UCP shall apply to each commercial Canadian Letter of Credit.

(p) Canadian Issuing Bank shall be deemed to have acted with due diligence and
reasonable care if Canadian Issuing Bank’s conduct is in accordance with
Standard Letter of Credit Practice or in accordance with this Agreement.

(q) In the event of a direct conflict between the provisions of this
Section 2.10B and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.10B shall control and
govern.

(r) The provisions of this Section 2.10B shall survive the termination of this
Agreement and the repayment in full of the Obligations with respect to any
Letters of Credit that remain outstanding.

(s) At Canadian Borrowers’ costs and expense, Canadian Borrowers shall execute
and deliver to Canadian Issuing Bank such additional certificates, instruments
and/or documents and take such additional action as may be reasonably requested
by Canadian Issuing Bank to enable Canadian Issuing Bank to issue any Canadian
Letter of Credit pursuant to this Agreement and related Issuer Document, to
protect, exercise and/or enforce such Canadian Issuing Banks’ rights and
interests under this Agreement or to give effect to the terms and provisions of
this Agreement or any Issuer Document. Each Canadian Borrower irrevocably
appoints each Canadian Issuing Bank as its attorney-in-fact and authorizes each
Canadian Issuing Bank, without notice to Canadian Borrowers, to execute and
deliver ancillary documents and letters customary in the letter of credit
business that may include but are not limited to advisements, indemnities,
checks, bills of exchange and issuance documents. The power of attorney granted
by the Canadian Borrowers is limited solely to such actions related to the
issuance, confirmation or amendment of any Canadian Letter of Credit and to
ancillary documents or letters customary in the letter of credit business. This
appointment is coupled with an interest.

(t) Notwithstanding that a Canadian Letter of Credit issued or outstanding
hereunder is in support of any obligations of, or is for the account of, a
Guarantor or any Restricted Subsidiary, the Canadian Borrowers shall be
obligated to reimburse each Canadian Issuing Bank hereunder for any and

 

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all drawings under such Letter of Credit issued hereunder by such Canadian
Issuing Bank. Each Canadian Borrower hereby acknowledge that the issuance of
Canadian Letters of Credit for the account of any Foreign Guarantor, any
Canadian Borrower or any other Restricted Subsidiary inures to the benefit of
such Canadian Borrower, and that such Canadian Borrower’s business (indirectly
or directly) derives substantial benefits from the businesses of such other
Persons.

2.11 Non-Base Rate Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option, subject to
Section 2.11(b) below (the “Non-Base Rate Option”) to have interest on all or a
portion of the Revolving Loans be charged (whether at the time when made (unless
otherwise provided herein), upon conversion from a Base Rate Loan to a Non-Base
Rate Loan, or upon continuation of a Non-Base Rate Loan as a Non-Base Rate Loan)
at a rate of interest based upon the Non-Base Rate. Interest on Non-Base Rate
Loans shall be payable on the earliest of (i) the last day of the Interest
Period applicable thereto; provided, that subject to the following clauses
(ii) and (iii), in the case of any Interest Period greater than three months in
duration, interest shall be payable at three month intervals after the
commencement of the applicable Interest Period and on the last day of such
Interest Period), (ii) the date on which all or any portion of the Obligations
are accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Borrowers have properly exercised the
Non-Base Rate Option with respect thereto, the interest rate applicable to such
Non-Base Rate Loan automatically shall convert to the rate of interest then
applicable to Base Rate Loans of the same type hereunder. At any time that an
Event of Default has occurred and is continuing, at the written election of the
Agent or the Required Lenders, Borrowers no longer shall have the option to
request that Revolving Loans bear interest at a rate based upon the Non-Base
Rate.

(b) Non-Base Rate Election.

(i) Borrowers may, at any time and from time to time, so long as no Event of
Default has occurred and is continuing, elect to exercise the Non-Base Rate
Option by notifying Agent prior to 1:00 p.m. at least three Business Days prior
to the commencement of the proposed Interest Period (the “Non-Base Rate
Deadline”). Notice of Borrowers’ election of the Non-Base Rate Option for a
permitted portion of the Revolving Loans and an Interest Period pursuant to this
Section shall be made by delivery to Agent of a Non-Base Rate Notice received by
Agent before the Non-Base Rate Deadline. Promptly upon its receipt of each such
Non-Base Rate Notice, Agent shall provide a copy thereof to each of the affected
Lenders.

(ii) Each Non-Base Rate Notice shall be irrevocable and binding on Borrowers. In
connection with each Non-Base Rate Loan, US Borrowers, if such Non-Base Rate
Loan is a US Revolving Loan, or Canadian Borrowers if such Non-Base Rate Loan is
a Canadian Revolving Loan, shall jointly and severally indemnify, defend, and
hold the Agent and the Lenders harmless against any loss, cost, or expense
incurred by the Agent or any Lender (but excluding any loss of Applicable
Margin) as a result of (A) the payment or required assignment of any principal
of any Non-Base Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (B) the
conversion of any Non-Base Rate Loan other than on the last day of the Interest
Period applicable thereto, or (C) the failure to borrow, convert, continue or
prepay any Non-Base Rate Loan on the date specified in any Non-Base Rate Notice
delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A
certificate of the Agent or a Lender delivered to applicable Borrowers setting
forth in reasonable detail any amount or amounts that the Agent or such Lender
is entitled to receive pursuant to this Section 2.11 shall be conclusive absent
manifest error. US Borrowers, if such Non-Base Rate Loan is a US Revolving Loan
or Canadian Borrowers, if such Non-Base Rate Loan is a

 

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Canadian Revolving Loan, shall jointly and severally pay such amount to the
Agent or the Lender, as applicable, within 30 days of the date of its receipt of
such certificate. If a payment of a Non-Base Rate Loan on a day other than the
last day of the applicable Interest Period would result in a Funding Loss, the
Agent may, in its sole discretion at the request of Borrowers, hold the amount
of such payment as cash collateral in support of the Obligations until the last
day of such Interest Period and apply such amounts to the payment of the
applicable Non-Base Rate Loan on such last day, it being agreed that the Agent
has no obligation to so defer the application of payments to any Non-Base Rate
Loan and that, in the event that the Agent does not defer such application,
Borrowers shall be obligated to pay any resulting Funding Losses. The Borrowers’
obligations to indemnify, defend and hold harmless under this clause (ii) shall
survive the termination of this Agreement and the repayment in full of the
Obligations.

(iii) Unless the Agent, in its sole discretion, agrees otherwise, Borrowers
shall have not more than five Non-Base Rate Loans in effect at any given time.
Borrowers may only exercise the Non-Base Rate Option for proposed Non-Base Rate
Loans of at least $1,000,000.

(c) Conversion; Prepayment. Borrowers may convert Non-Base Rate Loans to Base
Rate Loans in the Agreed Currency or prepay Non-Base Rate Loans at any time;
provided, that in the event that Non-Base Rate Loans are converted or prepaid on
any date that is not the last day of the Interest Period applicable thereto,
including as a result of any prepayment through the required application by
Agent of any payments or proceeds of Collateral in accordance with
Section 2.3(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
the Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with Section 2.11(b)(ii).

(d) Special Provisions Applicable to Non-Base Rate.

(i) The Non-Base Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits, Canadian Dollar
deposits or increased costs (other than Taxes which shall be governed by
Section 16), in each case, due to any Changes in Law (including any changes in
tax laws (except with respect to Taxes excluded from the definition of
“Indemnified Taxes)) occurring subsequent to the commencement of the then
applicable Interest Period and changes in the reserve requirements imposed by
the Board of Governors, which additional or increased costs would increase the
cost of funding or maintaining loans bearing interest at the Non-Base Rate. In
any such event, the affected Lender shall give Administrative Borrower and Agent
notice of such a determination and adjustment and the Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender, Administrative Borrower may, by notice to such
affected Lender (A) require such Lender to furnish to Administrative Borrower a
statement setting forth in reasonable detail the basis for adjusting such
Non-Base Rate and the method for determining the amount of such adjustment, or
(B) repay the Non-Base Rate Loans of such Lender with respect to which such
adjustment is made (together with any amounts due under Section 2.11(b)(ii)).

(ii) In the event that any change in market conditions or any Change in Law
shall at any time after the date hereof, in the reasonable opinion of any
Lender, make it unlawful or impractical for such Lender to fund or maintain
Non-Base Rate Loans or to continue such funding or maintaining, or to determine
or charge interest rates at the Non-Base Rate, such Lender shall give notice of
such changed circumstances to the Agent and Administrative Borrower and the
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any Non-Base Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such Non-Base Rate Loans, and interest upon the Non-Base Rate
Loans of such Lender thereafter shall accrue interest at the rate then
applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect
the Non-Base Rate Option until such Lender determines that it would no longer be
unlawful or impractical to do so.

 

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(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither the Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits or Canadian
Dollar deposits to fund or otherwise match fund any Obligation as to which
interest accrues at the Non-Base Rate.

2.12 Capital Requirements.

(a) If, after the date hereof, any Issuing Bank or any Lender reasonably
determines that (i) any Change in Law regarding capital, liquidity or reserve
requirements for banks or bank holding companies, or (ii) compliance by such
Issuing Bank or such Lender, or their respective parent bank holding companies,
with any guideline, request or directive of any Governmental Authority regarding
capital adequacy or liquidity requirements (whether or not having the force of
law), has the effect of reducing the return on such Issuing Bank’s, such
Lender’s, or such holding companies’ capital as a consequence of such Issuing
Bank’s or such Lender’s commitments, Loans, participations or other obligations
hereunder to a level below that which such Issuing Bank, such Lender, or such
holding companies could have achieved but for such Change in Law or compliance
(taking into consideration such Issuing Bank’s, such Lender’s, or such holding
companies’ then existing policies with respect to capital adequacy or liquidity
requirements and assuming the full utilization of such entity’s capital) by any
amount deemed by such Issuing Bank or such Lender to be material, then such
Issuing Bank or such Lender may notify Administrative Borrower and Agent
thereof. Following receipt of such notice, Borrowers jointly and severally agree
to pay such Issuing Bank or such Lender on demand the amount of such reduction
of return of capital as and when such reduction is determined, payable within 30
days after presentation by such Issuing Bank or such Lender of a statement in
the amount and setting forth in reasonable detail such Issuing Bank’s or such
Lender’s calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
In determining such amount, such Issuing Bank or such Lender may use any
reasonable averaging and attribution methods. Failure or delay on the part of
such Issuing Bank or any Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Issuing Bank’s or such Lender’s right to
demand such compensation; provided that Borrowers shall not be required to
compensate any Issuing Bank or a Lender pursuant to this Section for any
reductions in return incurred more than 180 days prior to the date that such
Issuing Bank or such Lender notifies Administrative Borrower of such Change in
Law giving rise to such reductions and of such Lender’s intention to claim
compensation therefor; provided further that if such claim arises by reason of
the Change in Law that is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.

(b) If any Issuing Bank or any Lender requests additional or increased costs
referred to in Section 2.10A(l), Section 2.10B(1), or Section 2.11(d)(i) or
amounts under Section 2.12(a) or sends a notice under Section 2.11(d)(ii)
relative to changed circumstances (such Issuing Bank or Lender, an “Affected
Lender”), then such Affected Lender shall use reasonable efforts to promptly
designate a different one of its lending offices or to assign its rights and
obligations hereunder to another of its offices or branches, if (i) in the
reasonable judgment of such Affected Lender, such designation or assignment
would eliminate or reduce amounts payable pursuant to Section 2.10A(l),
Section 2.10B(1), Section 2.11(d)(i) or Section 2.12(a), as applicable, or would
eliminate the illegality or impracticality of funding or maintaining Non- Base
Rate Loans and (ii) in the reasonable judgment of such Affected Lender, such
designation or assignment would not subject it to any material unreimbursed cost
or expense and would not otherwise be materially disadvantageous to it.
Borrowers jointly and severally agree to pay all

 

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reasonable out-of-pocket costs and expenses incurred by such Affected Lender in
connection with any such designation or assignment. If, after such reasonable
efforts, such Affected Lender does not so designate a different one of its
lending offices or assign its rights to another of its offices or branches so as
to eliminate Borrowers’ obligation to pay any future amounts to such Affected
Lender pursuant to Section 2.10A(l), Section 2.10B(1), Section 2.11(d)(i) or
Section 2.12(a), as applicable, or to enable Borrowers to obtain Non-Base Rate
Loans, then Administrative Borrower (without prejudice to any amounts then due
to such Affected Lender under Section 2.10A(l), Section 2.10B(1),
Section 2.11(d)(i) or Section 2.12(a), as applicable) may, unless prior to the
effective date of any such assignment the Affected Lender withdraws its request
for such additional amounts under Section 2.10A(l), Section 2.10B(1),
Section 2.11(d)(i) or Section 2.12(a), as applicable, or indicates that it is no
longer unlawful or impractical to fund or maintain Non-Base Rate Loans, may
designate a different Issuing Bank or substitute a Lender, in each case,
reasonably acceptable to Agent to purchase the Obligations owed to such Affected
Lender (and its Affiliates) and such Affected Lender’s (and its Affiliates’)
commitments hereunder (a “Replacement Lender”), and if such Replacement Lender
agrees to such purchase, such Affected Lender (and its Affiliates) shall assign
to the Replacement Lender its Obligations and commitments, and upon such
purchase by the Replacement Lender, which such Replacement Lender shall be
deemed to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of
this Agreement and such Affected Lender shall cease to be an “Issuing Bank” or a
“Lender” (as the case may be) for purposes of this Agreement.

(c) Notwithstanding anything herein to the contrary, the protection of Sections
2.10A(l), 2.10B(1), 2.11(d), and 2.12 shall be available to each Issuing Bank
and each Lender (as applicable) regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, judicial ruling,
judgment, guideline, treaty or other change or condition which shall have
occurred or been imposed, so long as it shall be customary for Issuing Banks or
lenders affected thereby to comply therewith. Notwithstanding any other
provision herein, neither any Issuing Bank nor any Lender shall demand
compensation pursuant to this Section 2.12 if it shall not at the time be the
general policy or practice of such Issuing Bank or such Lender (as the case may
be) to demand such compensation in similar circumstances under comparable
provisions of other credit agreements, if any.

(d) The Borrowers’ obligations under this Section 2.12 shall survive the
termination of this Agreement and the repayment in full of the Obligations.

2.13 Incremental Facilities.

(a) At any time during the period from and after the Closing Date, at the option
of US Borrowers (but subject to the conditions set forth in clause (b) below),
the US Revolver Commitments and the Maximum Revolver Amount may be increased by
an amount in the aggregate for all such increases of the US Revolver Commitments
and the Maximum Revolver Amount not to exceed the Available Revolver Increase
Amount (each such increase, an “Increase”). The Agent shall invite each Lender
to increase its US Revolver Commitments (it being understood that no Lender
shall be obligated to increase its US Revolver Commitments) in connection with a
proposed Increase at the interest margin proposed by US Borrowers, and if
sufficient Lenders do not agree to increase their US Revolver Commitments (as
the case may be) in connection with such proposed Increase, then the Agent or US
Borrowers may invite any prospective lender who is reasonably satisfactory to
the Agent and US Borrowers to become a Lender in connection with a proposed
Increase. Any Increase shall be in an amount of at least $20,000,000 and
integral multiples of $5,000,000 in excess thereof. In no event may the US
Revolver Commitments and the Maximum Revolver Amount be increased pursuant to
this Section 2.13 on more than 3 occasions in the aggregate for all such
Increases. Additionally, for the avoidance of doubt, it is understood and agreed
that in no event shall the aggregate amount of the Increases to the US Revolver
Commitments exceed $100,000,000.

 

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(b) Each of the following shall be conditions precedent to any Increase of the
US Revolver Commitments and the Maximum Revolver Amount in connection therewith:

(i) the Agent or Borrowers have obtained the commitment of one or more Lenders
(or other prospective lenders) reasonably satisfactory to the Agent and
Borrowers to provide the applicable Increase and any such Lenders (or
prospective lenders), Borrowers, and the Agent have signed a joinder agreement
to this Agreement (an “Increase Joinder”), in form and substance reasonably
satisfactory to the Agent, to which such Lenders (or prospective lenders),
Borrowers, and the Agent are party,

(ii) each of the conditions precedent set forth in Section 3.2 are satisfied,

(iii) in connection with any Increase, if any Credit Party or any of its
Restricted Subsidiaries owns any Margin Stock, Borrowers shall deliver to the
Agent an updated Form U-1 (with sufficient additional originals thereof for each
Lender), duly executed and delivered by the Borrowers, together with such other
documentation as the Agent shall reasonably request, in order to enable Agent
and the Lenders to comply with any of the requirements under Regulations T, U or
X of the Federal Reserve Board,

(iv) Borrowers have delivered to the Agent reasonably detailed calculations
(after giving effect to the applicable Increase) for the Loan Parties and their
Restricted Subsidiaries evidencing that on a pro forma basis after giving effect
to the applicable Increase, the Fixed Charge Coverage Ratio of the Loan Parties
and their Restricted Subsidiaries as of the end of the quarter most recently
ended as to which financial statements were required to be delivered pursuant to
this Agreement was at least equal to the minimum Fixed Charge Coverage Ratio
permitted pursuant to Section 7 for such fiscal quarter (calculated as if a
Covenant Testing Period was in effect), and

(c) Unless otherwise specifically provided herein, all references in this
Agreement and any other Loan Document to Revolving Loans shall be deemed, unless
the context otherwise requires, to include Revolving Loans made pursuant to the
increased US Revolver Commitments and Maximum Revolver Amount pursuant to this
Section 2.13.

(d) Each of the Lenders having a US Revolver Commitment prior to the Increase
Date (the “Pre-Increase Revolver Lenders”) shall assign to any Lender which is
acquiring a new or additional US Revolver Commitment on the Increase Date (the
“Post-Increase Revolver Lenders”), and such Post-Increase Revolver Lenders shall
purchase from each Pre-Increase Revolver Lender, at the principal amount
thereof, such interests in the Revolving Loans and participation interests in
the applicable Letters of Credit on such Increase Date as shall be necessary in
order that, after giving effect to all such assignments and purchases, such
Revolving Loans and participation interests in the applicable Letters of Credit
will be held by Pre-Increase Revolver Lenders and Post-Increase Revolver Lenders
ratably in accordance with their Pro Rata Share after giving effect to such
increased US Revolver Commitments.

(e) The Revolving Loans, US Revolver Commitments, and the Maximum Revolver
Amount established pursuant to this Section 2.13 shall constitute US Revolving
Loans, US Revolver Commitments, and the Maximum Revolver Amount under, and shall
be entitled to all the benefits afforded by, this Agreement and the other Loan
Documents, and shall, without limiting the foregoing, benefit equally and
ratably from any guarantees and the security interests created by the Loan
Documents. Borrowers shall take any actions reasonably required by the Agent to
ensure and demonstrate that the Liens and security interests granted by the Loan
Documents continue to be perfected under the Code or otherwise after giving
effect to the establishment of any such new US Revolver Commitments and the
Maximum Revolver Amount.

 

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2.14 Joint and Several Liability of US Borrowers.

(a) Each US Borrower is accepting joint and several liability hereunder and
under the other Loan Documents in consideration of the financial accommodations
to be provided by the Lender Group under this Agreement, 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 US Obligations.

(b) Each US Borrower, jointly and severally, 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 US Obligations (including any US Obligations
arising under this Section 2.14), it being the intention of the parties hereto
that all the US Obligations shall be the joint and several obligations of each
US Borrower without preferences or distinction among them. Accordingly, each US
Borrower hereby waives any and all suretyship defenses that would otherwise be
available to such Borrower under applicable law.

(c) If and to the extent that any US Borrower shall fail to make any payment
with respect to any of the US Obligations as and when due, whether upon
maturity, acceleration, or otherwise or to perform any of the US 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 US Obligation
until such time as all of the US Obligations are paid in full, and without the
need for demand, protest, or any other notice or formality.

(d) The Obligations of each US Borrower under the provisions of this
Section 2.14 constitute the absolute and unconditional, full recourse
Obligations of each US Borrower enforceable against each US Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of the provisions of this Agreement (other than this
Section 2.14(d)) or any other circumstances whatsoever.

(e) Without limiting the generality of the foregoing and except as otherwise
expressly provided in this Agreement, each US Borrower hereby waives
presentment, demands for performance, protests and notices, including notice of
acceptance of its joint and several liability, notice of any Revolving Loans or
any Letters of Credit issued under or pursuant to this Agreement, notice of the
occurrence of any Default, Event of Default, notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Agreement,
notices of the existence, creation or incurring of new or additional obligation
or other financial accommodations or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by the Agent or
Lenders under or in respect of any of the Obligations (other than as required by
any applicable law), any right to proceed against any other US Borrower or any
other Person, to proceed against or exhaust any security held from any other US
Borrower or any other Person, to protect, secure, perfect, or insure any
security interest or Lien on any property subject thereto or exhaust any right
to take any action against any other US Borrower, any other Person, or any
collateral, to pursue any other remedy in any member of the Lender Group’s or
any Bank Product Provider’s power whatsoever, any requirement of diligence or to
mitigate damages and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise provided in this Agreement), any right to assert
against any member of the Lender Group or any Bank Product Provider, any defense
(legal or equitable), set-off, counterclaim, or claim which each US Borrower may
now or at any time hereafter have against any other US Borrower or any other
party liable to any member of the Lender Group or any Bank Product Provider, any
defense, set-off, counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Obligations or any security
therefor, and any right or defense arising by reason of any claim or defense

 

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based upon an election of remedies by any member of the Lender Group or any Bank
Product Provider including any defense based upon an impairment or elimination
of such US Borrower’s rights of subrogation, reimbursement, contribution, or
indemnity of such US Borrower against any other US Borrower. Without limiting
the generality of the foregoing, 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 payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Agent or Lenders at any time or times in respect of any
default by any US Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Agent or Lenders in respect of any of the
Obligations, and the taking, addition, substitution or release, in whole or in
part, at any time or times, of any security for any of the Obligations or the
addition, substitution or release, in whole or in part, of any US Borrower.
Without limiting the generality of the foregoing, 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 payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Agent or Lenders at any time or
times in respect of any default by any US Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Agent or Lenders in respect of
any of the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any US Borrower. Without limiting the generality of the foregoing, each US
Borrower assents to any other action or delay in acting or failure to act on the
part of any Agent or Lender with respect to the failure by any US Borrower to
comply with any of its respective Obligations, 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 2.14 afford grounds for terminating,
discharging or relieving any US Borrower, in whole or in part, from any of its
Obligations under this Section 2.14, it being the intention of each US Borrower
that, so long as any of the Obligations hereunder remain unsatisfied, the
Obligations of each US Borrower under this Section 2.14 shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each US Borrower under this Section 2.14 shall not be diminished
or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any other US
Borrower or any Agent or Lender. Each of the US Borrowers waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement hereof. Any payment by any US Borrower or
other circumstance which operates to toll any statute of limitations as to any
US Borrower shall operate to toll the statute of limitations as to each of the
US Borrowers. Each of the US Borrowers waives any defense based on or arising
out of any defense of any US Borrower or any other Person, other than payment of
the Obligations to the extent of such payment, based on or arising out of the
disability of any US Borrower or any other Person, or the validity, legality, or
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any US Borrower other than payment
of the Obligations to the extent of such payment. Upon the occurrence and during
the continuance of an Event of Default, the Agent may, at the election of the
Required Lenders, foreclose upon any Collateral held by the Agent by one or more
judicial or nonjudicial sales or other dispositions, whether or not every aspect
of any such sale is commercially reasonable or otherwise fails to comply with
applicable law or may exercise any other right or remedy the Agent, any other
member of the Lender Group, or any US Bank Product Provider may have against any
US Borrower or any other Person, or any security, in each case, without
affecting or impairing in any way the liability of any of the US Borrowers
hereunder except to the extent the Obligations have been paid.

(f) Each US Borrower represents and warrants to the Agent and Lenders that such
US Borrower is currently informed of the financial condition of US Borrowers and
of all other circumstances which a diligent inquiry would reveal and which bear
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Obligations. Each US Borrower further represents and warrants to the Agent and
Lenders that such US Borrower has read and understands the terms and conditions
of the Loan Documents. Each US Borrower hereby covenants that such US Borrower
will continue to keep informed of US Borrowers’ financial condition and of all
other circumstances which bear upon the risk of nonpayment or nonperformance of
the Obligations.

(g) The provisions of this Section 2.14 are made for the benefit of the Agent,
each member of the Lender Group, each Bank Product Provider, and their
respective successors and assigns, and may be enforced by it or them from time
to time against any or all US Borrowers as often as occasion therefor may arise
and without requirement on the part of the Agent, any member of the Lender
Group, any Bank Product Provider, or any of their successors or assigns first to
marshal any of its or their claims or to exercise any of its or their rights
against any US Borrower or to exhaust any remedies available to it or them
against any US Borrower 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 2.14 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied. 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 the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of any US
Borrower, or otherwise, the provisions of this Section 2.14 will forthwith be
reinstated in effect, as though such payment had not been made.

(h) Each US Borrower hereby agrees that it will not enforce any of its rights
that arise from the existence, payment, performance or enforcement of the
provisions of this Section 2.14, including rights of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Agent, any other member of the Lender Group, or any Bank
Product Provider against any US Borrower, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including the
right to take or receive from any US Borrower, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
solely on account of such claim, remedy or right, unless and until such time as
all of the Obligations have been paid in full in cash. Any claim which any US
Borrower may have against any other US Borrower with respect to any payments to
any Agent or any member of the Lender Group hereunder or under any of the Bank
Product Agreements 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
and, in the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceeding under the laws of any jurisdiction
relating to any US Borrower, its debts or its assets, whether voluntary or
involuntary, all such Obligations shall be paid in full in cash before any
payment or distribution of any character, whether in cash, securities or other
property, shall be made to any other US Borrower therefor. If any amount shall
be paid to any US Borrower in violation of the immediately preceding sentence,
such amount shall be held in trust for the benefit of the Agent, for the benefit
of the Lender Group and the Bank Product Providers, and shall forthwith be paid
to the Agent to be credited and applied to the Obligations and all other amounts
payable under this Agreement, whether matured or unmatured, in accordance with
the terms of this Agreement, or to be held as Collateral for any Obligations or
other amounts payable under this Agreement thereafter arising. Notwithstanding
anything to the contrary contained in this Agreement, no US Borrower may
exercise any rights of subrogation, contribution, indemnity, reimbursement or
other similar rights against, and may not proceed or seek recourse against or
with respect to any property or asset of, any other US Borrower (the “Foreclosed
US Borrower”), including after payment in full of the Obligations, if all or any
portion of the Obligations have been satisfied in connection with an exercise of
remedies in respect of the Equity Interests of such Foreclosed US Borrower
whether pursuant to this Agreement or otherwise.

 

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2.15 Joint and Several Liability of Canadian Borrowers.

(a) Each Canadian Borrower is accepting joint and several liability hereunder
and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender Group under this Agreement, 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.

(b) Each Canadian Borrower, jointly and severally, 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 (including any
Obligations arising under this Section 2.15), it being the intention of the
parties hereto that all the Canadian Obligations shall be the joint and several
obligations of each Canadian Borrower without preferences or distinction among
them. Accordingly, each Canadian Borrower hereby waives any and all suretyship
defenses that would otherwise be available to such Borrower under applicable
law.

(c) 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, whether
upon maturity, acceleration, or otherwise 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 Obligation until such time as all of the Canadian Obligations are paid in
full, and without the need for demand, protest, or any other notice or
formality.

(d) The Obligations of each Canadian Borrower under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Canadian Borrower enforceable against each Canadian Borrower
to the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of the provisions of this Agreement (other than
this Section 2.15(d)) or any other circumstances whatsoever.

(e) Without limiting the generality of the foregoing and except as otherwise
expressly provided in this Agreement, each Canadian Borrower hereby waives
presentment, demands for performance, protests and notices, including notice of
acceptance of its joint and several liability, notice of any Revolving Loans or
any Letters of Credit issued under or pursuant to this Agreement, notice of the
occurrence of any Default, Event of Default, notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Agreement,
notices of the existence, creation or incurring of new or additional obligation
or other financial accommodations or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by the Agent or
Lenders under or in respect of any of the Obligations (other than as required by
any applicable law), any right to proceed against any other Canadian Borrower or
any other Person, to proceed against or exhaust any security held from any other
Canadian Borrower or any other Person, to protect, secure, perfect, or insure
any security interest or Lien on any property subject thereto or exhaust any
right to take any action against any other Canadian Borrower, any other Person,
or any collateral, to pursue any other remedy in any member of the Lender
Group’s or any Bank Product Provider’s power whatsoever, any requirement of
diligence or to mitigate damages and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this Agreement),
any right to assert against any member of the Lender Group or any Bank Product
Provider, any defense (legal or equitable), set-off, counterclaim, or claim
which each Canadian Borrower may now or at any time hereafter have against any
other Canadian Borrower or any other party liable to any member of the Lender
Group or any Bank Product Provider, any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly from the present or
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sufficiency, validity, or enforceability of the Obligations or any security
therefor, and any right or defense arising by reason of any claim or defense
based upon an election of remedies by any member of the Lender Group or any Bank
Product Provider including any defense based upon an impairment or elimination
of such Canadian Borrower’s rights of subrogation, reimbursement, contribution,
or indemnity of such Canadian Borrower against any other Canadian Borrower.
Without limiting the generality of the foregoing, each Canadian 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 payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Agent or Lenders at any time or
times in respect of any default by any Canadian Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Agent or Lenders in respect of
any of the Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any Canadian Borrower. Without limiting the generality of the foregoing, each
Canadian 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 payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Agent or Lenders at any time or times in respect of any default by any
Canadian Borrower in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by the Agent or Lenders in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any Canadian Borrower. Without limiting the
generality of the foregoing, each Canadian Borrower assents to any other action
or delay in acting or failure to act on the part of any Agent or Lender with
respect to the failure by any Canadian Borrower to comply with any of its
respective Obligations, 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 2.15 afford grounds for terminating, discharging or relieving
any Canadian Borrower, in whole or in part, from any of its Obligations under
this Section 2.15, it being the intention of each Canadian Borrower that, so
long as any of the Obligations hereunder remain unsatisfied, the Obligations of
each Canadian Borrower under this Section 2.15 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations of
each Canadian Borrower under this Section 2.15 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any other
Canadian Borrower or any Agent or Lender. Each of the Canadian Borrowers waives,
to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement hereof. Any
payment by any Canadian Borrower or other circumstance which operates to toll
any statute of limitations as to any Canadian Borrower shall operate to toll the
statute of limitations as to each of the Canadian Borrowers. Each of the
Canadian Borrowers waives any defense based on or arising out of any defense of
any Canadian Borrower or any other Person, other than payment of the Obligations
to the extent of such payment, based on or arising out of the disability of any
Canadian Borrower or any other Person, or the validity, legality, or
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Canadian Borrower other than
payment of the Obligations to the extent of such payment. Upon the occurrence
and during the continuation of any Event of Default, the Agent may, at the
election of the Required Lenders, foreclose upon any Collateral held by the
Agent by one or more judicial or nonjudicial sales or other dispositions,
whether or not every aspect of any such sale is commercially reasonable or
otherwise fails to comply with applicable law or may exercise any other right or
remedy the Agent, any other member of the Lender Group, or any US Bank Product
Provider may have against any Canadian Borrower or any other Person, or any
security, in each case, without affecting or impairing in any way the liability
of any of the Canadian Borrowers hereunder except to the extent the Obligations
have been paid.

 

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(f) Each Canadian Borrower represents and warrants to the Agent and Lenders that
such Canadian Borrower is currently informed of the financial condition of
Canadian Borrowers and of all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Obligations. Each
Canadian Borrower further represents and warrants to the Agent and Lenders that
such Canadian Borrower has read and understands the terms and conditions of the
Loan Documents. Each Canadian Borrower hereby covenants that such Canadian
Borrower will continue to keep informed of Canadian Borrowers’ financial
condition and of all other circumstances which bear upon the risk of nonpayment
or nonperformance of the Obligations.

(g) The provisions of this Section 2.15 are made for the benefit of the Agent,
each member of the Lender Group, each Bank Product Provider, and their
respective successors and assigns, and may be enforced by it or them from time
to time against any or all Canadian Borrowers as often as occasion therefor may
arise and without requirement on the part of the Agent, any member of the Lender
Group, any Bank Product Provider, or any of their successors or assigns first to
marshal any of its or their claims or to exercise any of its or their rights
against any Canadian Borrower or to exhaust any remedies available to it or them
against any Canadian Borrower 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 2.15 shall remain in effect until all of
the Obligations shall have been paid in full or otherwise fully satisfied. 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 the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of any Canadian
Borrower, or otherwise, the provisions of this Section 2.15 will forthwith be
reinstated in effect, as though such payment had not been made.

(h) Each Canadian Borrower hereby agrees that it will not enforce any of its
rights that arise from the existence, payment, performance or enforcement of the
provisions of this Section 2.15, including rights of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Agent, any other member of the Lender Group, or any Bank
Product Provider against any Canadian Borrower, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including the right to take or receive from any Canadian Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and
until such time as all of the Obligations have been paid in full in cash. Any
claim which any Canadian Borrower may have against any other Canadian Borrower
with respect to any payments to any Agent or any member of the Lender Group
hereunder or under any of the Bank Product Agreements 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 and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Canadian Borrower,
its debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Canadian Borrower therefor. If any amount shall be paid to any Canadian
Borrower in violation of the immediately preceding sentence, such amount shall
be held in trust for the benefit of the Agent, for the benefit of the Lender
Group and the Bank Product Providers, and shall forthwith be paid to the Agent
to be credited and applied to the Obligations and all other amounts payable
under this Agreement, whether matured or unmatured, in accordance with the terms
of this Agreement, or to be held as Collateral for any Obligations or other
amounts payable under this Agreement thereafter arising. Notwithstanding
anything to the contrary contained in this Agreement, no Canadian Borrower may
exercise any rights of subrogation, contribution, indemnity, reimbursement or
other similar rights against, and may not proceed or seek recourse against or
with respect to any property or asset of, any other Canadian Borrower (the
“Foreclosed Canadian Borrower”), including after payment in full of the
Obligations, if all or any portion of the Obligations have been satisfied in
connection with an exercise of remedies in respect of the Equity Interests of
such Foreclosed Canadian Borrower whether pursuant to this Agreement or
otherwise.

 

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2.16 Currencies.

(a) The US Revolving Loans and other US Obligations (unless such other US
Obligations expressly provide otherwise) shall be made and repaid in US Dollars.
The Canadian Revolving Loans shall be denominated in Canadian Dollars or US
Dollars (as selected by Administrative Borrower in accordance with Section 2.2
at the time such Canadian Revolving Loan is requested) except (a) Canadian
Protective Advances made by the Agent shall be denominated in Canadian Dollars
or US Dollars (as selected by the Agent), and (b) Canadian Revolving Loans
charged to the Canadian Loan Account pursuant to Section 2.5 to pay fees,
interest, expenses and other amounts shall be denominated in the Agreed Currency
of such fees, interest, expenses and other amounts. All Canadian Obligations
denominated in Canadian Dollars shall be repaid in Canadian Dollars and all
Canadian Obligations denominated in US Dollars shall be repaid in US Dollars.
Payments made in a currency other than the currency in which the applicable
Obligations are denominated may be accepted by the Agent in its sole discretion
and, if so accepted, the Borrowers agree that the Agent may convert the payment
made to the currency of the applicable Obligations at the applicable Spot Rate
in accordance with its normal practices.

(b) Within 5 Business Days of demand made by any Lender or Issuing Bank to the
Administrative Borrower (with a copy to the Agent) from time to time,
Administrative Borrower shall compensate such Lender or Issuing Bank for and
hold such Lender or Issuing Bank harmless from any loss, cost or expense
incurred by it as a result of any payment by any Borrower of reimbursement
drawings under any Foreign Currency L/C in a currency other than such Foreign
Currency, including any foreign exchange losses or any loss or expense from the
performance of any foreign exchange contract. The Borrowers shall also pay any
customary administrative fees charged by such Lender or Issuing Bank in
connection with the foregoing.

2.17 Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest.
Notwithstanding anything to the contrary contained in this Agreement or in any
other Loan Document, solely to the extent that: (i) a court of competent
jurisdiction finally determines that the calculation or determination of
interest payable by Canadian Borrowers in respect of the Canadian Obligations
pursuant to this Agreement and the other Loan Documents shall be governed by the
laws of any province of Canada and the federal laws of Canada; or (ii) the
Interest Act (Canada) otherwise applies:

(a) whenever interest payable by Canadian Borrowers is calculated on the basis
of a period which is less than the actual number of days in a calendar year,
each rate of interest determined pursuant to such calculation is, for the
purposes of the Interest Act (Canada), equivalent to such rate multiplied by the
actual number of days in the calendar year in which such rate is to be
ascertained and divided by the number of days used as the basis of such
calculation,

(b) in no event shall the aggregate “interest” (as defined in Section 347 of the
Criminal Code (Canada), as the same shall be amended, replaced or re-enacted
from time to time (the “Criminal Code Section”)) payable (whether by way of
payment, collection or demand) by Canadian Borrower to the Agent or any Lender
under this Agreement or any other Loan Document exceed the effective annual rate
of interest on the “credit advanced” (as defined in that section) under this
Agreement or such other Loan Document lawfully permitted under that section and,
if any payment, collection or demand pursuant to this Agreement or any other
Loan Document in respect of “interest” (as defined in that section) is
determined to be contrary to the provisions of that section and the amount of
such payment or collection shall be refunded by the Agent and Lenders to
Canadian Borrowers with such “interest” 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 the Criminal Code Section to result in a
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Agent or such Lender of interest at a rate not in contravention of the Criminal
Code Section, such adjustment to be effected, to the extent necessary, as
follows: firstly, by reducing the amounts or rates of interest required to be
paid to the Agent or that Lender; and then, by reducing any fees, charges,
expenses and other amounts required to be paid to the affected Agent or Lender
which would constitute “interest”. Notwithstanding the foregoing, and after
giving effect to all such adjustments, if the Agent or any Lender shall have
received an amount in excess of the maximum permitted by the Criminal Code
Section, then Canadian Borrowers shall be entitled, by notice in writing to the
Agent or affected Lender, to obtain reimbursement from the Agent or that Lender
in an amount equal to such excess. For the purposes of this Agreement and each
other Loan Document to which Canadian Borrowers are a party, the effective
annual rate of interest payable by Canadian Borrowers shall be determined in
accordance with generally accepted actuarial practices and principles over the
term of the loans on the basis of annual compounding for the lawfully permitted
rate of interest and, in the event of dispute, a certificate of a Fellow of the
Institute of Actuaries appointed by the Agent for the account of Canadian
Borrowers will be conclusive for the purpose of such determination in the
absence of evidence to the contrary,

(c) all calculations of interest payable by Canadian Borrowers under this
Agreement or any other Loan Document are to be made on the basis of the nominal
interest rate described herein and therein and not on the basis of effective
yearly rates or on any other basis which gives effect to the principle of deemed
reinvestment of interest. The parties acknowledge that there is a material
difference between the stated nominal interest rates and the effective yearly
rates of interest and that they are capable of making the calculations required
to determine such effective yearly rates of interest,

(d) any provision of this Agreement that would oblige Canadian Borrowers to pay
any fine, penalty or rate of interest on any arrears of principal or interest
secured by a mortgage on real property or hypothec on immovables that has the
effect of increasing the charge on arrears beyond the rate of interest payable
on principal money not in arrears shall not apply to Canadian Borrowers, which
shall be required to pay interest on money in arrears at the same rate of
interest payable on principal money not in arrears, and

(e) if there is a conflict, inconsistency, ambiguity or difference between any
provision of this Section 2.17 and any other Section of this Agreement or any
other Loan Document with respect to Canadian Borrowers then the provisions of
this Section 2.17 shall prevail and be paramount.

3. CONDITIONS; TERM OF AGREEMENT.

3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of
each Lender to make the initial extensions of credit provided for hereunder is
subject to the fulfillment, to the satisfaction of Agent and each Lender, of
each of the conditions precedent set forth on Schedule 3.1 to this Agreement
(the making of such initial extensions of credit by a Lender being conclusively
deemed to be its satisfaction or waiver of the conditions precedent).

3.2 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Revolving Loan hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:

(a) the representations and warranties of each Loan Party or its Restricted
Subsidiaries contained in this Agreement or in the other Loan Documents shall be
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date); and

 

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(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof.

3.3 Maturity. The Commitments shall continue in full force and effect for a term
ending on the Maturity Date (unless terminated earlier in accordance with the
terms hereof).

3.4 Effect of Maturity. On the Maturity Date, all commitments of the Lender
Group to provide additional credit hereunder shall automatically be terminated
and all of the Obligations (other than Hedge Obligations) immediately shall
become due and payable without notice or demand and Borrowers shall be required
to repay all of the Obligations (other than Hedge Obligations) in full. No
termination of the obligations of the Lender Group (other than payment in full
of the Obligations and termination of the Commitments) shall relieve or
discharge any Loan Party of its duties, obligations, or covenants hereunder or
under any other Loan Document and Agent’s Liens in the Collateral shall continue
to secure the Obligations and shall remain in effect until all Obligations have
been paid in full. When all of the Obligations have been paid in full, Agent
will, at Borrowers’ sole expense, execute and deliver any termination
statements, lien releases, discharges of security interests, and other similar
discharge or release documents (and, if applicable, in recordable form) as are
reasonably necessary to release, as of record, Agent’s Liens and all notices of
security interests and liens previously filed by Agent.

3.5 Early Termination by Borrowers. Borrowers have the option, at any time upon
three Business Days prior written notice to Agent (or such lesser time as Agent
may agree), to repay all of the Obligations in full and terminate the
Commitments. The foregoing notwithstanding, (a) Borrowers may rescind
termination notices relative to proposed payments in full of the Obligations
with the proceeds of third party Indebtedness if the closing for such issuance
or incurrence does not happen on or before the date of the proposed termination
(in which case, a new notice shall be required to be sent in connection with any
subsequent termination), and (b) Borrowers may extend the date of termination at
any time with the consent of Agent (which consent shall not be unreasonably
withheld or delayed).

3.6 Conditions Subsequent. The obligation of the Lender Group (or any member
thereof) to continue to make Revolving Loans (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of the conditions subsequent set forth on Schedule 3.6 to this
Agreement (the failure by Borrowers to so perform or cause to be performed such
conditions subsequent as and when required by the terms thereof (unless such
date is extended, in writing, by Agent, which Agent may do without obtaining the
consent of the other members of the Lender Group), shall constitute an Event of
Default).

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each of Parent
and each Borrower makes the following representations and warranties to the
Lender Group which shall be true, correct, and complete, in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof), as of the Closing Date, and shall be true,
correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
date of the making of each Revolving Loan (or other extension of credit) made
thereafter, as though made on and as of the date of such Revolving Loan (or
other extension of credit) (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such representations
and warranties shall be true

 

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and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date), and such representations and warranties shall survive the execution and
delivery of this Agreement:

4.1 Due Organization and Qualification; Subsidiaries.

(a) Each Loan Party and each of its Restricted Subsidiaries (i) is duly
organized and existing and in good standing under the laws of the jurisdiction
of its organization, (ii) is qualified to do business in any state where the
failure to be so qualified could reasonably be expected to result in a Material
Adverse Effect, and (iii) has all requisite power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents to which it is a
party and to carry out the transactions contemplated thereby.

(b) [Reserved].

(c) As of the Closing Date, set forth on Schedule 4.1(c) to this Agreement is a
complete and accurate list of the Loan Parties’ direct and indirect Restricted
Subsidiaries, showing: (i) the number of shares of each class of common and
preferred Equity Interests authorized for each of such Restricted Subsidiaries,
and (ii) the number and the percentage of the outstanding shares of each such
class owned directly or indirectly by each Loan Party. All of the outstanding
Equity Interests of each such Restricted Subsidiary has been validly issued and
is fully paid and non-assessable.

(d) Except as set forth on Schedule 4.1(d) to this Agreement, as of the Closing
Date, there are no subscriptions, options, warrants, or calls relating to any
shares of any Loan Party’s or any of its Restricted Subsidiaries’ Equity
Interests, including any right of conversion or exchange under any outstanding
security or other instrument. As of the Closing Date, no Loan Party is subject
to any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its Equity Interests or any security convertible into or
exchangeable for any of its Equity Interests.

4.2 Due Authorization; No Conflict.

(a) As to each Loan Party, the execution, delivery, and performance by such Loan
Party of the Loan Documents to which it is a party have been duly authorized by
all necessary action on the part of such Loan Party.

(b) As to each Loan Party, the execution, delivery, and performance by such Loan
Party of the Loan Documents to which it is a party do not and will not
(i) violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Restricted Subsidiaries, the Governing
Documents of any Loan Party or its Restricted Subsidiaries, or any order,
judgment, or decree of any court or other Governmental Authority binding on any
Loan Party or its Restricted Subsidiaries, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material agreement of any Loan Party or its Restricted Subsidiaries
where any such conflict, breach or default could individually or in the
aggregate reasonably be expected to have a Material Adverse Effect, (iii) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any assets of any Loan Party, other than Permitted Liens, or (iv) require
any approval of any holder of Equity Interests of a Loan Party or any approval
or consent of any Person under any material agreement of any Loan Party, other
than consents or approvals that have been obtained and that are still in force
and effect and except, in the case of material agreements, for consents or
approvals, the failure to obtain could not individually or in the aggregate
reasonably be expected to cause a Material Adverse Effect.

 

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4.3 Governmental Consents. The execution, delivery, and performance by each Loan
Party of the Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority, other than
registrations, consents, approvals, notices, or other actions that have been
obtained and that are still in force and effect and immaterial registrations,
consents, approvals, notices or other actions the failure to obtain which could
not reasonably be expected to be adverse to the interests of any member of the
Lender Group, and except for filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Agent for filing or
recordation, as of the Closing Date.

4.4 Binding Obligations; Perfected Liens.

(a) Each Loan Document has been duly executed and delivered by each Loan Party
that is a party thereto and is the 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.

(b) Agent’s Liens are validly created, perfected (other than (i) in respect of
motor vehicles that are subject to a certificate of title, (ii) money, (iii)
letter-of-credit rights (other than supporting obligations), (iv) commercial
tort claims (other than those that, by the terms of the Guaranty and Security
Agreement, are required to be perfected), and (v) any Deposit Accounts and
Securities Accounts not subject to a Control Agreement as permitted by
Section 6.17(d) and subject only to the filing of financing statements, in each
case, in the appropriate filing offices), and first priority Liens, subject only
to Permitted Liens.

4.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its
Restricted Subsidiaries has (a) good, sufficient and legal title to (in the case
of fee interests in Real Property), (b) valid leasehold interests in (in the
case of leasehold interests in real or personal property), and (c) good and
marketable title to (in the case of all other personal property), all of their
respective assets reflected in their most recent financial statements delivered
pursuant to Section 5.1, in each case except for (i) assets disposed of since
the date of such financial statements to the extent permitted hereby and
(ii) such defects in title or interests as could not individually or in the
aggregate reasonably be expected to cause a Material Adverse Effect. All of such
assets are free and clear of Liens except for Permitted Liens.

4.6 Litigation.

(a) There are no actions, suits, or proceedings pending or, to the knowledge of
any Borrower, after due inquiry, threatened in writing against a Loan Party or
any of its Restricted Subsidiaries that either individually or in the aggregate
could reasonably be expected to result in a Material Adverse Effect.

(b) Additionally, except as disclosed in writing to the Agent and the Lenders,
there is no pending or, to the knowledge of any Loan Party or any of its
Restricted Subsidiaries, threatened (in writing) action or proceeding instituted
against any Loan Party or any Restricted Subsidiary which seeks to adjudicate
any Loan Party or any Restricted Subsidiary as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or for any substantial part of its property.

 

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4.7 Compliance with Laws. No Loan Party nor any of its Restricted Subsidiaries
(a) is in violation of any applicable laws, rules, regulations, executive
orders, or codes (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (b) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.

4.8 No Material Adverse Effect. All historical financial statements relating to
the Loan Parties and their Restricted Subsidiaries that have been delivered by
Borrowers to Agent have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the Loan Parties’ and their Restricted Subsidiaries’ consolidated
financial condition as of the date thereof and results of operations for the
period then ended. Since December 31, 2016, no event, circumstance, or change
has occurred that has resulted or could reasonably be expected to result in a
Material Adverse Effect.

4.9 Solvency.

(a) The Loan Parties, when taken as a whole, are Solvent.

(b) No transfer of property is being made by any Loan Party and no obligation is
being incurred by any Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of such Loan Party.

4.10 Employee Benefits.

(a) Except as set forth on Schedule 4.10 (as such Schedule may be updated from
time to time, without the consent of any Lender or Agent, to include retirement
and severance plans that are required by a Governmental Authority outside of the
United States so long as such updated Schedule is delivered together with
written notice thereof to Agent), no Loan Party, none of their Restricted
Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any
Benefit Plan.

(b) Each Employee Benefit Plan is, and has been, maintained in substantial
compliance with ERISA, the IRC, all applicable laws and the terms of each such
Employee Benefit Plan.

(c) Each Employee Benefit Plan that is intended to qualify under Section 401(a)
of the IRC has received a favorable determination letter from the Internal
Revenue Service or is entitled to rely on an opinion letter provided under a
volume submitted program. To the knowledge of each Loan Party and the ERISA
Affiliates, nothing has occurred which would prevent, or cause the loss of, such
qualification.

(d) There has been no failure to satisfy the “minimum funding standard” under
Sections 412 or 430 of the IRC or Sections 302 or 303 of ERISA with respect to
any Pension Plan, or excise tax imposed under Section 4971 of the IRC.

(e) The present value of all benefits vested under each Pension Plan (based on
the assumptions used to fund such Pension Plan) did not, as of the last annual
valuation date applicable thereto, exceed the value of the assets of such
Pension Plan allocable to such vested benefits in an amount that could
reasonably be expected to result in a Material Adverse Effect.

 

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(f) No liability to the PBGC (other than for the payment of current premiums
which are not past due) by any Loan Party or ERISA Affiliate has been incurred
or is expected by any Loan Party or ERISA Affiliate to be incurred with respect
to any Pension Plan.

(g) No Termination Event exists or has occurred that would result in an Event of
Default under Section 8.12.

(h) No Loan Party or ERISA Affiliate has had a partial or complete withdrawal
from a Multiemployer Plan for which there is any unsatisfied withdrawal
liability that could reasonably be expected to result in a Material Adverse
Effect or an Event of Default under Section 8.12.

(i) No Loan Party or ERISA Affiliate has incurred any liability as a result of a
Multiemployer Plan being insolvent that could reasonably be expected to result
in a Material Adverse Effect.

(j) No Loan Party, nor any of its Subsidiaries, maintains or contributes to any
Canadian Defined Benefit Plan nor has any liabilities or obligations in respect
of a Canadian Defined Benefit Plan that has been terminated or wound up other
than a Canadian Multi-Employer Plan. Except as set forth on Schedule 4.10, as of
the Closing Date no Loan Party, nor any of their Subsidiaries, maintains or
contributes to any Canadian Pension Plan. Each Canadian Pension Plan is, and has
been maintained in compliance to the Income Tax Act (Canada), all applicable
pension benefit and other laws and the terms of each such Canadian Pension Plan,
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect.

4.11 Environmental Condition. Except as set forth on Schedule 4.11 to this
Agreement, (a) to each Borrower’s knowledge, no Loan Party’s nor any of its
Restricted Subsidiaries’ properties or assets has ever been used by a Loan
Party, its Restricted Subsidiaries, or by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such disposal, production, storage, handling,
treatment, release or transport was in violation, in any material respect, of
any applicable Environmental Law, (b) to each Borrower’s knowledge no Loan
Party’s nor any of its Restricted Subsidiaries’ properties or assets has ever
been designated or identified in any manner pursuant to any Environmental Law as
a Hazardous Materials disposal site, (c) no Loan Party nor any of its Restricted
Subsidiaries has received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any Real Property owned or operated by a Loan
Party or its Restricted Subsidiaries that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, and (d) no
Loan Party nor any of its Restricted Subsidiaries nor any of their respective
facilities or operations is subject to any outstanding written order, consent
decree, or settlement agreement with any Person relating to any Environmental
Law or Environmental Liability that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

4.12 Complete Disclosure. All factual information taken as a whole (other than
forward-looking information and projections and information of a general
economic nature and general information about the industry of any Loan Party or
its Restricted Subsidiaries) furnished by or on behalf of a Loan Party or its
Restricted Subsidiaries in writing to Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement or the other Loan
Documents, and all other such factual information taken as a whole (other than
forward-looking information and projections and information of a general
economic nature and general information about the industry of any Loan Party or
its Restricted Subsidiaries) hereafter furnished by or on behalf of a Loan Party
or its Restricted Subsidiaries in writing to Agent or any Lender are, true and
accurate, in all material respects, on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
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information was provided. The Projections delivered to Agent on October 8, 2017
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent, Borrowers’ good faith estimate, on
the date such Projections are delivered, of the Loan Parties’ and their
Restricted Subsidiaries’ future performance for the periods covered thereby
based upon assumptions believed by Borrowers to be reasonable at the time of the
delivery thereof to Agent (it being understood that such Projections are subject
to significant uncertainties and contingencies, many of which are beyond the
control of the Loan Parties and their Restricted Subsidiaries, and no assurances
can be given that such Projections will be realized, and although reflecting
Borrowers’ good faith estimate, projections or forecasts based on methods and
assumptions which Borrowers believed to be reasonable at the time such
Projections were prepared, are not to be viewed as facts, and that actual
results during the period or periods covered by the Projections may differ
materially from projected or estimated results).

4.13 Patriot Act; Canadian AML and Anti-Terrorism Laws. To the extent
applicable, each Loan Party and each of its Subsidiaries is in compliance in all
material respects with the (a) Trading with the Enemy Act, as amended, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (b) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”) and all
applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation.

4.14 Indebtedness. Set forth on Schedule 4.14 to this Agreement is a true and
complete list of all Indebtedness for borrowed money of each Loan Party and each
of its Restricted Subsidiaries outstanding immediately prior to the Closing Date
(other than unsecured Permitted Indebtedness outstanding immediately prior to
the Closing Date with respect to any one transaction or a series of related
transactions in an amount not to exceed $2,000,000) that is to remain
outstanding immediately after giving effect to the closing hereunder on the
Closing Date and such Schedule accurately sets forth the aggregate principal
amount of such Indebtedness as of the Closing Date.

4.15 Payment of Taxes. Except as otherwise permitted under Section 5.5, all
federal income and other material Tax returns and reports of each Loan Party and
its Restricted Subsidiaries required to be filed by any of them have been timely
filed, and all Taxes shown on such Tax returns to be due and payable and all
other material Taxes upon a Loan Party and its Restricted Subsidiaries and upon
their respective assets, income, businesses and franchises that are due and
payable have been paid when due and payable unless subject to Permitted Protest.
Each Loan Party and each of its Restricted Subsidiaries have made adequate
provision in accordance with GAAP for all Taxes not yet due and payable. No
Borrower knows of any proposed Tax assessment against a Loan Party or any of its
Restricted Subsidiaries that is not subject to Permitted Protest.

4.16 Margin Stock. Neither any Loan Party nor any of its Restricted Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any Margin Stock
or, as of the Closing Date, owns or carries any Margin Stock. No part of the
proceeds of the loans made to Borrowers will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock or for any purpose that violates the provisions of
Regulation T, U or X of the Board of Governors.

4.17 Governmental Regulation. No Loan Party nor any of its Restricted
Subsidiaries is subject to regulation under the Federal Power Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable. No Loan
Party nor any of its Restricted Subsidiaries is a “registered investment
company” or a company “controlled” by a “registered investment company” or a
“principal underwriter” of a “registered investment company” as such terms are
defined in the Investment Company Act of 1940.

 

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4.18 OFAC; Sanctions; Procedures. No Loan Party or any of its Subsidiaries is in
violation of any Sanctions. No Loan Party nor any of its Subsidiaries nor, to
the knowledge of such Loan Party, any director, officer, employee, agent or
Affiliate of such Loan Party or such Subsidiary (a) is a Sanctioned Person or a
Sanctioned Entity, (b) has any assets located in Sanctioned Entities, or
(c) derives revenues from investments in, or transactions with Sanctioned
Persons or Sanctioned Entities. Each of the Loan Parties and its Subsidiaries
has implemented and maintains in effect policies and procedures designed to
ensure compliance with all Sanctions, Anti-Corruption Laws and Anti-Money
Laundering Laws. Each of the Loan Parties and its Subsidiaries, and to the
knowledge of each such Loan Party, each director, officer, employee, agent and
Affiliate of each such Loan Party and each such Subsidiary, is in compliance
with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws. No
proceeds of any Loan made or Letter of Credit issued hereunder will be used to
fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity, or otherwise used in
any manner that would result in a violation of any Sanction, Anti-Corruption Law
or Anti-Money Laundering Law by any Person (including any Lender, Bank Product
Provider, or other individual or entity participating in any transaction).

4.19 Employee and Labor Matters. There is (i) no unfair labor practice complaint
pending or, to the knowledge of any Borrower, threatened in writing against any
Loan Party or its Restricted Subsidiaries before any Governmental Authority and
no grievance or arbitration proceeding pending or, to the knowledge of any
Borrower, threatened in writing against any Loan Party or its Restricted
Subsidiaries which arises out of or under any collective bargaining agreement
and that could reasonably be expected to result in a Material Adverse Effect and
(ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance
pending or threatened in writing against any Loan Party or its Restricted
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect. None of any Loan Party or its Restricted Subsidiaries has incurred any
liability or obligation under the Worker Adjustment and Retraining Notification
Act or similar state, foreign, or provincial law, which remains unpaid or
unsatisfied, except to the extent a failure to pay or satisfy such liability or
obligation could not reasonably be expected to result in a Material Adverse
Effect. The hours worked and payments made to employees of each Loan Party and
its Restricted Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to the extent
such violations could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. All material payments due from
any Loan Party or its Restricted Subsidiaries on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of Parent, except where the failure to do so could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

4.20 [Reserved.]

4.21 Leases. Each Loan Party and its Restricted Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and, subject to Permitted
Protests, all of such material leases are valid and subsisting and no material
default by the applicable Loan Party or its Restricted Subsidiaries exists under
any of them.

4.22 Eligible Accounts. As to each Account that is identified by Borrowers as an
Eligible Account in a Borrowing Base Certificate submitted to Agent, such
Account is (a) a bona fide existing payment obligation of the applicable Account
Debtor created by the sale and delivery of Inventory or the rendition of
services to such Account Debtor in the ordinary course of a Borrower’s business,
(b) owed to a Borrower without any known defenses, disputes, offsets,
counterclaims, or rights of return or cancellation, and (c) not excluded as
ineligible by virtue of one or more of the excluding criteria (other than any
Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

 

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4.23 Eligible Inventory. As to each item of Inventory that is identified by
Borrowers as US Eligible Finished Goods Inventory, US Eligible In-Transit
Inventory, US Eligible Raw Materials Inventory, US Eligible Work-In-Process
Inventory, Canadian Eligible Finished Goods Inventory, Canadian Eligible
In-Transit Inventory, Canadian Eligible Raw Materials Inventory, or Canadian
Eligible Work-In-Process Inventory in a Borrowing Base Certificate submitted to
Agent, such Inventory is (a) of good and merchantable quality, free from known
defects, (b) not excluded as ineligible by virtue of one or more of the
excluding criteria (other than any Agent-discretionary criteria) set forth in
the definition of US Eligible Inventory (in the case of US Eligible In-Transit
Inventory, after giving effect to any exclusions therefrom specified in the
definition of US Eligible In-Transit Inventory) and (c) not excluded as
ineligible by virtue of one or more of the excluding criteria (other than any
Agent-discretionary criteria) set forth in the definition of Canadian Eligible
Inventory (in the case of Canadian Eligible In-Transit Inventory, after giving
effect to any exclusions therefrom specified in the definition of Canadian
Eligible In-Transit Inventory).

4.24 [Reserved]

4.25 Location of Inventory. The Inventory of Loan Parties and their Restricted
Subsidiaries is not stored with a bailee, warehouseman, or similar party and is
located only at, or in-transit between, or in-transit to, the locations
identified on Schedule 4.25 to this Agreement (as such Schedule may be updated
pursuant to Section 5.14).

4.26 Inventory Records. Each Loan Party keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Restricted Subsidiaries’ Inventory and the book value thereof.

5. AFFIRMATIVE COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until the
termination of all of the Commitments and payment in full of the Obligations:

5.1 Financial Statements, Reports, Certificates. Borrowers (a) will deliver to
Agent, with copies to each Lender, each of the financial statements, reports,
and other items set forth on Schedule 5.1 to this Agreement no later than the
times specified therein, (b) agree that no Restricted Subsidiary of a Loan Party
will have a fiscal year different from that of Parent, (c) agree to maintain a
system of accounting that enables Borrowers to produce financial statements in
accordance with GAAP, and (d) agree that they will, and will cause each other
Loan Party to, (i) keep a reporting system that shows all additions, sales,
claims, returns, and allowances with respect to their and their Restricted
Subsidiaries’ sales, and (ii) maintain their billing systems and practices
substantially as in effect as of the Closing Date and shall only make material
modifications thereto with notice to, and with the consent of, Agent.

5.2 Reporting. Borrowers (a) will deliver to Agent (and if so requested by
Agent, with copies for each Lender) each of the reports set forth on Schedule
5.2 to this Agreement at the times specified therein, and (b) agree to use
commercially reasonable efforts in cooperation with Agent to facilitate and
implement a system of electronic collateral reporting acceptable to the Agent in
its sole discretion in order to provide electronic reporting of each of the
items set forth on such Schedule and to complete such implementation within 180
days after the Closing Date.

 

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5.3 Existence. Except as otherwise permitted under Section 6.3 or Section 6.4,
each Loan Party will, and will cause each of its Restricted Subsidiaries to, at
all times preserve and keep in full force and effect such Person’s valid
existence and good standing in its jurisdiction of organization and, except as
could not reasonably be expected to result in a Material Adverse Effect, good
standing with respect to all other jurisdictions in which it is qualified to do
business and any rights, franchises, permits, licenses, accreditations,
authorizations, or other approvals material to their businesses.

5.4 Maintenance of Properties. Each Loan Party will, and will cause each of its
Restricted Subsidiaries to, maintain and preserve all of its assets that are
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear, tear, casualty, and condemnation and Permitted
Dispositions excepted (and except where the failure to so maintain and preserve
assets could not reasonably be expected to result in a Material Adverse
Effect)].

5.5 Taxes. Each Loan Party will, and will cause each of its Restricted
Subsidiaries to, pay in full before delinquency or before the expiration of any
extension period all material Taxes imposed, levied, or assessed against it, or
any of its assets or in respect of any of its income, businesses, or franchises,
other than to the extent that the validity of such Tax is the subject of a
Permitted Protest.

5.6 Insurance. Each Loan Party will, and will cause each of its Restricted
Subsidiaries to, at Borrowers’ expense, maintain insurance respecting each of
each Loan Party’s and its Restricted Subsidiaries’ assets wherever located,
covering liabilities, losses or damages as are customarily are insured against
by other Persons engaged in same or similar businesses and similarly situated
and located. All such policies of insurance shall be with financially sound and
reputable insurance companies reasonably acceptable to Agent (it being agreed
that, as of the Closing Date, AIG, Lloyd’s of London, Travelers Insurance,
Zurich, Ironshore Europe, W.R Berkley Corporation and Starr are acceptable to
Agent) and in such amounts as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated and
located and, in any event, in amount, adequacy, and scope reasonably
satisfactory to Agent (it being agreed that the amount, adequacy, and scope of
the policies of insurance of Borrowers in effect as of the Closing Date are
acceptable to Agent). All property insurance policies in respect of the
Collateral are to be made payable to Agent for the benefit of Agent and the
Lenders, as their interests may appear, in case of loss, pursuant to a standard
lender’s loss payable endorsement with a standard non-contributory “lender” or
“secured party” clause and are to contain such other provisions as Agent may
reasonably require to fully protect the Lenders’ interest in the Collateral and
to any payments to be made under such policies. All certificates of property and
general liability insurance are to be delivered to Agent, with the lender’s loss
payable and additional insured endorsements in favor of Agent and shall provide
for not less than thirty days (ten days in the case of non-payment) prior
written notice to Agent of the exercise of any right of cancellation. If any
Loan Party or its Restricted Subsidiaries fails to maintain such insurance,
Agent may arrange for such insurance, but at Borrowers’ expense and without any
responsibility on Agent’s part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of claims.
Borrowers shall give Agent prompt notice of any loss exceeding $5,000,000
covered by the casualty or business interruption insurance of any Loan Party or
its Restricted Subsidiaries. Upon the occurrence and during the continuance of
any Event of Default, Agent shall have the sole right to file claims under any
property and general liability insurance policies in respect of the Collateral,
to receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.

5.7 Inspection.

(a) Each Loan Party will, and will cause each of its Restricted Subsidiaries to,
permit Agent, any Lender, and each of their respective duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books

 

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and records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees (provided, that an
authorized representative of a Borrower shall be allowed to be present) at such
reasonable times and intervals as Agent or any Lender, as applicable, may
designate and, so long as no Default or Event of Default has occurred and is
continuing, with reasonable prior notice to Borrowers and during regular
business hours, at Borrowers’ expense in accordance with the provisions of the
Fee Letter, subject to the limitations set forth below in Section 5.7(c).

(b) Each Loan Party will, and will cause each of its Restricted Subsidiaries to,
permit Agent and each of its duly authorized representatives or agents to
conduct field examinations, appraisals or valuations at such reasonable times
and intervals as Agent may designate (including an audit of the then effective
US Borrowing Base and the Canadian Borrowing Base within 90 days of the Closing
Date), at Borrowers’ expense in accordance with the provisions of the Fee
Letter, subject to the limitations set forth below in Section 5.7(c).

(c) So long as no Event of Default shall have occurred and be continuing during
a calendar year, Borrowers shall not be obligated to reimburse Agent for more
than 1 field examinations in such calendar year (increasing to 2 field
examinations if an Increased Reporting Event has occurred during such calendar
year), and 1 inventory appraisals in such calendar year (increasing to 2
inventory appraisals if an Increased Reporting Event has occurred during such
calendar year), in each case, except for (i) field examinations and appraisals
conducted in connection with a proposed Permitted Acquisition, Permitted
Investments or joinders (whether or not consummated) and (ii) an audit of the
then effective US Borrowing Base and the Canadian Borrowing Base within 90 days
of the Closing Date. For the avoidance of doubt, a series of field examinations
with respect to the US Borrowing Base and the Canadian Borrowing Base conducted
at or about the same time shall constitute a single field examination for
purposes of the above provisions and a series of appraisals under US Borrowing
Base and the Canadian Borrowing Base conducted at or about the same time shall
constitute a single appraisal for purposes of the above provisions.

5.8 Compliance with Laws. Each Loan Party will, and will cause each of its
Restricted Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

5.9 Environmental. Each Loan Party will, and will cause each of its Restricted
Subsidiaries to,

(a) Keep any property either owned or operated by any Loan Party or its
Restricted Subsidiaries free of any Environmental Liens or post bonds or other
financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, other than, in each case, to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect,

(b) Comply with Environmental Laws, other than Environmental Laws the
non-compliance with which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect,

(c) (i) Promptly notify Agent of any release of which any Loan Party has
knowledge of a Hazardous Material in any reportable quantity from or onto
property owned or operated by any Loan Party or its Restricted Subsidiaries and
(ii) take any Remedial Actions required to abate said release or otherwise to
come into compliance with applicable Environmental Law, other than, in each
case, to the extent that the failure to do so could not reasonably be expected
to result in the imposition of liability in excess of $10,000,000 or require
Remedial Action in excess of $10,000,000, and

 

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(d) Promptly, but in any event within five Business Days of its receipt thereof,
provide Agent with written notice of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of a Loan Party or its Restricted Subsidiaries, (ii) commencement of any
material Environmental Action or written notice that a material Environmental
Action will be filed against a Loan Party or its Restricted Subsidiaries, and
(iii) written notice of a material violation, citation, or other administrative
order from a Governmental Authority.

5.10 Disclosure Updates. Each Loan Party will, promptly and in no event later
than five Business Days after obtaining knowledge thereof, notify Agent if any
written information, exhibit, or report furnished to Agent or the Lenders
contained, at the time it was furnished, any untrue statement of a material fact
or omitted to state any material fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made. The
foregoing to the contrary notwithstanding, any notification pursuant to the
foregoing provision will not cure or remedy the effect of the prior untrue
statement of a material fact or omission of any material fact nor shall any such
notification have the effect of amending or modifying this Agreement or any of
the Schedules hereto.

5.11 Formation of Subsidiaries; Designation.

(a) Each US Loan Party will, at the time that any US Loan Party forms any direct
or indirect Restricted Subsidiary, acquires any direct or indirect Restricted
Subsidiary after the Closing Date, or at any time when any direct or indirect
Restricted Subsidiary of a Loan Party that previously was an Immaterial
Subsidiary becomes a Material Subsidiary, within fourteen days (with respect to
a Domestic Subsidiary) or thirty days (with respect to a Foreign Subsidiary) of
such event (or such later date as permitted by Agent in its sole discretion) (i)
unless such Subsidiary is an Excluded Subsidiary (US), cause such new Restricted
Subsidiary (A) if such Subsidiary is a Domestic Subsidiary and Administrative
Borrower requests, subject to the consent of Agent, that such Domestic
Subsidiary be joined as a US Borrower hereunder, to provide to Agent a Joinder
to this Agreement, and (B) to provide to Agent a joinder to the Guaranty and
Security Agreement, in each case, together with such other security agreements
(other than as to Real Property), as well as appropriate financing statements,
all in form and substance reasonably satisfactory to Agent (including being
sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in
and to the assets of such newly formed or acquired Subsidiary); provided, that
for the avoidance of doubt, a FSHCO can be a guarantor subject to the other
limitations in this Section 5.11 with respect to the pledging of 65% of the
voting Equity Interests it owns in any CFC or other FSCHO provided, further,
that for the avoidance of doubt, no such limitation applies to the other
interests in any CFC or other FSCHO, (ii) provide, or cause the applicable Loan
Party to provide, to Agent a pledge agreement (or an addendum to the applicable
Guaranty and Security Agreement) and appropriate certificates and powers or
financing statements, pledging all of the direct or beneficial ownership
interest in such new Subsidiary in form and substance reasonably satisfactory to
Agent; provided, that only 65% of the total outstanding voting Equity Interests
of any first tier Subsidiary of a Loan Party that is a CFC or a FSHCO (and none
of the Equity Interests of any Subsidiary of such CFC or FSHCO) shall be
required to be pledged, and (iii) provide to Agent all other documentation,
including the Governing Documents of such Subsidiary and one or more opinions of
counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate
with respect to the execution and delivery of the applicable documentation
referred to above. Any document, agreement, or instrument executed or issued by
a Loan Party pursuant to this Section 5.11(a) shall constitute a Loan Document.

(b) Each Canadian Loan Party will, at the time that any Canadian Loan Party
forms any direct or indirect Restricted Subsidiary, acquires any direct or
indirect Restricted Subsidiary after the Closing Date, or at any time when any
direct or indirect Restricted Subsidiary of a Loan Party that previously was an
Immaterial Subsidiary becomes a Material Subsidiary, within fourteen days (with
respect to a Subsidiary organized under the laws of Canada or any province or
territory thereof) or thirty

 

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days (with respect to a Foreign Subsidiary organized under the laws of any
jurisdiction other than Canada) of such event (or such later date as permitted
by Agent in its sole discretion) (i) unless such Subsidiary is an Excluded
Subsidiary (Canadian), cause such new Restricted Subsidiary (A) if such
Subsidiary is a Subsidiary domiciled in Canada or any province or territory
thereof, and Administrative Borrower requests, subject to the consent of Agent,
that such Subsidiary be joined as a Canadian Borrower hereunder, to provide to
Agent a Joinder to this Agreement, and (B) to provide to Agent a joinder to the
applicable Guaranty and Security Agreement, in each case, together with such
other security agreements (other than as to Real Property) as well as
appropriate financing statements, all in form and substance reasonably
satisfactory to Agent (including being sufficient to grant Agent a first
priority Lien (subject to Permitted Liens) in and to the assets of such newly
formed or acquired Subsidiary); (ii) provide, or cause the applicable Loan Party
to provide, to Agent a pledge agreement (or an addendum to the applicable
Guaranty and Security Agreement) and appropriate certificates and powers or
financing statements, pledging all of the direct or beneficial ownership
interest in such new Subsidiary in form and substance reasonably satisfactory to
Agent; and (iii) provide to Agent all other documentation, including the
Governing Documents of such Subsidiary and one or more opinions of counsel
reasonably satisfactory to Agent, which, in its opinion, is appropriate with
respect to the execution and delivery of the applicable documentation referred
to above. Any document, agreement, or instrument executed or issued by a Loan
Party pursuant to this Section 5.11(b) shall constitute a Loan Document.

(c) Any newly acquired or formed Subsidiary shall be deemed a Restricted
Subsidiary unless designated by the Borrowers as an Unrestricted Subsidiary in
accordance with the terms of this Section 5.11. The Borrowers may designate or
redesignate any Unrestricted Subsidiary as a Restricted Subsidiary or designate
or redesignate any Restricted Subsidiary or a newly created or acquired
Subsidiary as an Unrestricted Subsidiary, if each of the following conditions
are satisfied: (i) immediately before and after giving effect to such
designation or redesignation, no Default or Event of Default shall exist and be
continuing; and (ii) if such designation or redesignation is to make an
Unrestricted Subsidiary a Restricted Subsidiary, the Borrower shall deliver to
the Administrative Agent each of the applicable items required in
Section 5.11(a) and (b) above, within the time requirements set forth in
therein. If such designation or redesignation is to make a Restricted Subsidiary
an Unrestricted Subsidiary or to designate any newly acquired or formed
Subsidiary as an Unrestricted Subsidiary (other than as permitted under
Section 5.11(d) below), the Borrower can demonstrate compliance with Sections
6.1 – 6.4, 6.6, 6.7, 6.9 and 7.0 as of the date of such designation or
redesignation, assuming such designation or redesignation had not been made, in
such detail as is reasonably acceptable to the Administrative Agent; provided
that (A) only two such designations may be made as to any particular Subsidiary,
and (B) such designation shall be made effective as of a fiscal quarter end.

(d) Notwithstanding the foregoing, the Parent may designate any newly acquired
or formed Subsidiary as an Unrestricted Subsidiary if (i) such Subsidiary was
acquired pursuant to, or formed in connection with, a Permitted Acquisition and
has not been otherwise designated as a Restricted Subsidiary, (ii) such
designation is made immediately following or concurrently with the acquisition
or formation of such Subsidiary, and (iii) within 30 days after such acquisition
or formation, such Subsidiary becomes a Joint Venture as a result of the sale,
transfer, conveyance, redemption, repurchase, conversion or other disposition of
Equity Interests in such Subsidiary in compliance with the terms of this
Agreement. For the avoidance of doubt, the conditions set forth in
Section 5.11(a) and Section 5.11(b) shall not be required to be satisfied in
connection with any designation pursuant to this clause (c).

(e) The Borrowers shall deliver to the Administrative Agent, within 20 Business
Days after any such designation, a certificate of the Parent stating the
effective date of such designation and stating that the applicable foregoing
conditions have been satisfied.

 

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(f) Notwithstanding anything herein to the contrary: (i) no Subsidiary may be
designated as an Unrestricted Subsidiary if it will be or is treated as a
“restricted subsidiary” for purposes of any other credit agreement, indenture or
similar agreement (other than the Loan Documents), and such Subsidiary shall be,
for all purposes under the Loan Documents, a Restricted Subsidiary; (ii) the
designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall
constitute the incurrence at the time of designation of any Indebtedness and
Liens of such Subsidiary existing at such time, and (iii) no Subsidiary may be
designated as an Unrestricted Subsidiary unless the Payment Conditions are met.

5.12 Further Assurances.

(a) Each US Loan Party will, and will cause each of the other US Loan Parties
to, at any time upon the reasonable request of Agent, execute or deliver to
Agent any and all financing statements, fixture filings, security agreements,
pledges, assignments, opinions of counsel, and all other documents (the
“Additional Documents”) that Agent may reasonably request in form and substance
reasonably satisfactory to Agent, to create, perfect, and continue perfected or
to better perfect Agent’s Liens in all of the assets of each of the US Loan
Parties (whether now owned or hereafter arising or acquired, tangible or
intangible, real or personal) (other than any assets expressly excluded from the
Collateral pursuant to Section 3 of the applicable Guaranty and Security
Agreement), and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents; provided, that the
foregoing shall not apply to any Restricted Subsidiary of a Loan Party that is a
CFC; provided, further, that the foregoing shall not require any FSHCO to pledge
more than 65% of the voting Equity Interests it owns in any CFC or other FSCHO;
provided, however, for the avoidance of doubt, a FSHCO may pledge 100% of the
other interests in in any CFC or other FSCHO. To the maximum extent permitted by
applicable law, if any Borrower or any other Loan Party refuses or fails to
execute or deliver any reasonably requested Additional Documents within a
reasonable period of time not to exceed 5 Business Days following the request to
do so, each US Borrower and each other US Loan Party hereby authorizes Agent to
execute any such Additional Documents in the applicable Loan Party’s name and
authorizes Agent to file such executed Additional Documents in any appropriate
filing office. In furtherance of, and not in limitation of, the foregoing, each
US Loan Party shall take such actions as Agent may reasonably request from time
to time to ensure that the Obligations are guaranteed by the US Guarantors and
are secured by substantially all of the assets of the US Loan Parties, including
all of the outstanding capital Equity Interests of each US Borrower (other than
the Parent) and its Restricted Subsidiaries (in each case, other than with
respect to any assets expressly excluded from the Collateral (as defined in the
applicable Guaranty and Security Agreement) pursuant to Section 3 of the
Guaranty and Security Agreement).

(b) Each Canadian Loan Party will, and will cause each of the other Canadian
Loan Parties to, at any time upon the reasonable request of Agent, execute or
deliver to Agent any and all Additional Documents that Agent may reasonably
request in form and substance reasonably satisfactory to Agent, to create,
perfect, and continue perfected or to better perfect Agent’s Liens in all of the
assets of each of the Canadian Loan Parties (whether now owned or hereafter
arising or acquired, tangible or intangible, real or personal) (other than any
assets expressly excluded from the Collateral pursuant to Section 3 of the
applicable Guaranty and Security Agreement), and in order to fully consummate
all of the transactions contemplated hereby and under the other Loan Documents.
To the maximum extent permitted by applicable law, if any Canadian Borrower or
any other Canadian Loan Party refuses or fails to execute or deliver any
reasonably requested Additional Documents within a reasonable period of time not
to exceed 5 Business Days following the request to do so, each Canadian Borrower
and each other Loan Party hereby authorizes Agent to execute any such Additional
Documents in the applicable Canadian Loan Party’s name and authorizes Agent to
file such executed Additional Documents in any appropriate filing office. In
furtherance of, and not in limitation of, the foregoing, each Canadian Loan
Party shall take such actions as Agent may reasonably request from time to time
to ensure that the

 

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Obligations are guaranteed by the Foreign Guarantors and are secured by
substantially all of the assets of the Canadian Loan Parties, including all of
the outstanding capital Equity Interests of each Canadian Borrower (other than
the Parent) and its Restricted Subsidiaries (in each case, other than with
respect to any assets expressly excluded from the Collateral (as defined in the
applicable Guaranty and Security Agreement) pursuant to Section 3 of the
applicable Guaranty and Security Agreement).

5.13 Lender Meetings. Parent will, within 90 days after the close of each fiscal
year of Parent, at the request of Agent or of the Required Lenders and upon
reasonable prior notice, hold a meeting (at a mutually agreeable location and
time or, at the option of Agent, by conference call) with all Lenders who choose
to attend such meeting at which meeting shall be reviewed the financial results
of the previous fiscal year and the financial condition of the Loan Parties and
their Restricted Subsidiaries and the projections presented for the current
fiscal year of Parent.

5.14 Location of Inventory; Chief Executive Office. Each Loan Party will, and
will cause each of its Restricted Subsidiaries to, keep (a) their Inventory only
at the locations identified on Schedule 4.25 to this Agreement or in-transit to
such locations (provided that Borrowers may amend Schedule 4.25 to this
Agreement so long as such amendment occurs by written notice to Agent not less
than ten days prior to the date on which such Inventory is moved to such new
location and so long as such new location is within the continental United
States or, in the case of Inventory of Canadian Loan Parties, within Canada),
and (b) their respective chief executive offices (and registered offices in the
case of Canadian Loan Parties) only at the locations identified on Schedule 7 to
the Guaranty and Security Agreement (as updated with no less than ten days’
prior written notice to Agent). Each Loan Party will, and will cause each of its
Restricted Subsidiaries to, use their commercially reasonable efforts to obtain
Collateral Access Agreements for each of the locations identified on Schedule 7
to the Guaranty and Security Agreement and Schedule 4.25 to this Agreement.

5.15 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws. Each
Loan Party will, and will cause each of its Subsidiaries to comply with all
applicable Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws. Each
of the Loan Parties and its Subsidiaries shall implement and maintain in effect
policies and procedures designed to ensure compliance by the Loan Parties and
their Subsidiaries and their respective directors, officers, employees, agents
and Affiliates with all Sanctions, Anti-Corruption Laws and Anti-Money
Laundering Laws.

5.16 Canadian Compliance. In addition to and without limiting the generality of
Section 5.8, each of Parent and each Borrower will, and will cause each of its
Restricted Subsidiaries to, (a) comply with applicable provisions and funding
requirements of the Income Tax Act (Canada) and applicable federal or provincial
pension benefits legislation with respect to all Canadian Pension Plans except
where the failure to do so would not reasonably be expected to result in a
Material Adverse Effect and (b) furnish to Agent upon Agent’s written request
such additional information about any Canadian Pension Plan for which Parent or
its Restricted Subsidiaries would reasonably expect to incur any material
liability. All employer or employee payments, contributions or premiums required
to be remitted, paid to or in respect of Canadian statutory benefit plans that
Parent or any of its Restricted Subsidiaries is required to participate in or
comply with, including the Canada Pension Plan or Quebec Pension Plan as
maintained by the Government of Canada or Province of Quebec, respectively, and
plans administered pursuant to applicable workplace safety insurance and
employment insurance legislation will be paid or remitted by each such Person in
accordance with the terms thereof, any agreements relating thereto and all
applicable laws except to the extent that any amount so payable is subject to a
Permitted Protest and a Canadian Priority Payables Reserve for such amount has
been established.

 

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5.17 Compliance with ERISA and the IRC.

(a) Except for matters that could not reasonably be expected to, individually or
in the aggregate, have a Material Adverse Effect, in addition to and without
limiting the generality of Section 5.8, each Loan Party will, and will cause
each of its Subsidiaries to (a) comply with applicable provisions of ERISA and
the IRC with respect to all Employee Benefit Plans, (b) without the prior
written consent of Agent and the Required Lenders, not take any action or fail
to take action the result of which could reasonably be expected to result in a
Loan Party or ERISA Affiliate incurring a liability to the PBGC or to a
Multiemployer Plan (other than to pay contributions or premiums payable in the
ordinary course), (c) not participate in any prohibited transaction that could
result in civil penalty excise tax, fiduciary liability or correction obligation
under ERISA or the IRC, and (d) operate each Employee Benefit Plan in such a
manner that will not incur any tax liability under the IRC (including
Section 4980B of the IRC). Each Loan Party will, and will cause each of its
Subsidiaries to furnish to Agent upon Agent’s written request such additional
information about any Employee Benefit Plan for which any Loan Party or ERISA
Affiliate could reasonably expect to incur any material liability. With respect
to each Pension Plan except as could not reasonably be expected to result in
material liability to the Loan Parties, the Loan Parties and the ERISA
Affiliates shall (i) satisfy in full and in a timely manner, without incurring
any late payment or underpayment charge or penalty and without giving rise to
any Lien, all of the contribution and funding requirements of the IRC and of
ERISA, and (ii) pay, or cause to be paid, to the PBGC in a timely manner,
without incurring any late payment or underpayment charge or penalty, all
material premiums required pursuant to ERISA.

(b) As soon as possible and in any event (i) within 30 days after a Loan Party
or any ERISA Affiliate knows that any Termination Event described in clause
(a) of the definition of Termination Event has occurred, and (ii) within 10 days
after the Loan Party or any ERISA Affiliate knows that any other Termination
Event has occurred, the Loan Party shall provide to Agent a statement of an
authorized officer of the Loan Party describing such Termination Event and the
action, if any, which the Loan Party or any ERISA Affiliate proposes to take
with respect thereto.

(c) Promptly and in any event within five Business Days after receipt thereof by
a Loan Party or any ERISA Affiliate from the PBGC, the Loan Party shall provide
to Agent copies of each notice received by the Loan Party or any such ERISA
Affiliate of the PBGC’s intention to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan.

(d) Promptly and in any event within five Business Days after receipt thereof by
a Loan Party or any ERISA Affiliate from a Multiemployer Plan sponsor, the Loan
Party shall provide to Agent a copy of each notice received by the Loan Party or
any ERISA Affiliate concerning the imposition or amount of Withdrawal Liability
imposed on the Loan Party or any ERISA Affiliate pursuant to Section 4202 of
ERISA.

6. NEGATIVE COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until the
termination of all of the Commitments and the payment in full of the
Obligations:

6.1 Indebtedness. Each Loan Party will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume, suffer to exist, guarantee,
or otherwise become or remain, directly or indirectly, liable with respect to
any Indebtedness, except for Permitted Indebtedness.

6.2 Liens. Each Loan Party will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.

 

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6.3 Restrictions on Fundamental Changes. Each Loan Party will not, and will not
permit any of its Restricted Subsidiaries to,

(a) Other than in order to consummate a Permitted Acquisition, enter into any
merger, amalgamation, arrangement, consolidation, reorganization, or
recapitalization, or reclassify its Equity Interests, except for (i) any merger
or amalgamation solely between or among US Loan Parties; provided, that a
Borrower must be the surviving entity of any such merger to which it is a party,
(ii) any merger or amalgamation solely between or among Canadian Loan Parties;
provided, that a Borrower must be the surviving entity of any such merger to
which it is a party, (iii) any merger or amalgamation between a Loan Party and a
Restricted Subsidiary of such Loan Party that is not a Loan Party so long as
such Loan Party is the surviving entity of any such merger, and (iv) any merger
or amalgamation between Restricted Subsidiaries of any Loan Party that are not
Loan Parties,

(b) liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), except for (i) the liquidation or dissolution of non-operating
Restricted Subsidiaries of any Loan Party with nominal assets and nominal
liabilities, (ii) the liquidation or dissolution of a Loan Party (other than any
Borrower) or any of its wholly-owned Restricted Subsidiaries so long as all of
the assets (including any interest in any Equity Interests) of such liquidating
or dissolving Loan Party or Restricted Subsidiary are transferred to a Loan
Party that is not liquidating or dissolving, or (iii) the liquidation or
dissolution of a Restricted Subsidiary of any Loan Party that is not a Loan
Party (other than any such Restricted Subsidiary the Equity Interests of which
(or any portion thereof) is subject to a Lien in favor of Agent) so long as all
of the assets of such liquidating or dissolving Restricted Subsidiary are
transferred to a Restricted Subsidiary of a Loan Party that is not liquidating
or dissolving,

(c) suspend or cease operating a substantial portion of its or their business,
except as permitted pursuant to clauses (a) or (b) above or in connection with a
transaction otherwise expressly permitted under this Agreement, or

(d) change its classification/status for U.S. federal income tax purposes if
such change reasonably could be expected to adversely affect the Lenders.

6.4 Disposal of Assets. Other than Permitted Dispositions or transactions
expressly permitted by Sections 6.3 or 6.9, each Loan Party will not, and will
not permit any of its Restricted Subsidiaries to, convey, sell, lease, license,
assign, transfer, or otherwise dispose of any of its or their assets (it being
understood and agreed that a designation of a Subsidiary as an Unrestricted
Subsidiary is deemed to be a disposition by its equity holder of assets).

6.5 Nature of Business. Each Loan Party will not, and will not permit any of its
Restricted Subsidiaries to, make any change in the nature of its or their
business as described in Schedule 6.5 to this Agreement or acquire any
properties or assets that are not reasonably related to the conduct of such
business activities; provided, that the foregoing shall not prevent any Loan
Party and its Restricted Subsidiaries from engaging in any business that is
reasonably related or ancillary to its or their business.

6.6 Prepayments and Amendments. Each Loan Party will not, and will not permit
any of its Restricted Subsidiaries to,

(a) Except in connection with Refinancing Indebtedness and Refinancing Senior
Notes permitted by Section 6.1,

(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Loan Party or its Restricted Subsidiaries, other than
(A) the Obligations in accordance with this Agreement, (B) Hedge Obligations,
(C) Permitted Intercompany Advances, or (D) other Indebtedness so long as the
Payment Conditions are satisfied, or

 

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(ii) make any payment on account of Indebtedness that has been contractually
subordinated in right of payment to the Obligations if such payment is not
permitted at such time under the subordination terms and conditions, or

(b) Directly or indirectly, amend, modify, or change any of the terms or
provisions of:

(i) any agreement, instrument, document, indenture, or other writing evidencing
or concerning Indebtedness permitted under clauses (f), (g), (s), (u) or (v) of
the definition of Permitted Indebtedness if (x) the effect thereof, either
individually or in the aggregate, could reasonably be expected to be materially
adverse to the interests of the Lenders or (y) such amendment, modification or
change is prohibited by the intercreditor or subordination terms applicable to
such Indebtedness, or

(ii) the Governing Documents of any Loan Party or any of its Restricted
Subsidiaries if the effect thereof, either individually or in the aggregate,
could reasonably be expected to be materially adverse to the interests of the
Lenders.

6.7 Restricted Payments. Each Loan Party will not, and will not permit any of
its Restricted Subsidiaries to, make any Restricted Payment; provided, that so
long as it is permitted by law,

(a) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, Parent may make distributions to former
employees, officers, or directors of Parent (or any spouses, ex-spouses, or
estates of any of the foregoing) on account of redemptions of Equity Interests
of Parent held by such Persons; provided, that the aggregate amount of such
redemptions made by Parent during the term of this Agreement does not exceed
$10,000,000 in the aggregate,

(b) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, Parent may make distributions to former
employees, officers, or directors of Parent (or any spouses, ex-spouses, or
estates of any of the foregoing), solely in the form of forgiveness of
Indebtedness of such Persons owing to Parent on account of repurchases of the
Equity Interests of Parent held by such Persons; provided, that such
Indebtedness was incurred by such Persons solely to acquire Equity Interests of
Parent,

(c) [Reserved],

(d) (i) any US Loan Party may make Restricted Payments to any other US Loan
Party, (ii) any Canadian Loan Party may make Restricted Payments to any other
Canadian Loan Party, (iii) the US Loan Parties may make Restricted Payments to
Restricted Subsidiaries that are not US Loan Parties so long as the funds or
other property so distributed are immediately applied to make further Restricted
Payments to US Loan Parties, (iv) the Canadian Loan Parties may make Restricted
Payments to Restricted Subsidiaries that are not Canadian Loan Parties so long
as the funds or other property so distributed are immediately applied to make
further Restricted Payments to Canadian Loan Parties, and (v) the Restricted
Subsidiaries that are not Loan Parties may make Restricted Payments to other
Restricted Subsidiaries that are not Loan Parties, and

(e) other Restricted Payments by the Parent so long as the Payment Conditions
are satisfied.

 

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6.8 Accounting Methods. Each Loan Party will not, and will not permit any of its
Restricted Subsidiaries to, modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP).

6.9 Investments. Each Loan Party will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make or acquire any
Investment or incur any liabilities (including contingent obligations) for or in
connection with any Investment except for Permitted Investments.

6.10 Transactions with Affiliates. Each Loan Party will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction with any Affiliate of any Loan Party or any of
its Restricted Subsidiaries except for:

(a) transactions between such Loan Party or its Restricted Subsidiaries, on the
one hand, and any Affiliate of such Loan Party or its Restricted Subsidiaries,
on the other hand, so long as such transactions are no less favorable, taken as
a whole, to such Loan Party or its Restricted Subsidiaries, as applicable, than
would be obtained in an arm’s length transaction with a non-Affiliate,

(b) any indemnity provided for the benefit of directors (or comparable managers)
of a Loan Party or one of its Restricted Subsidiaries so long as it has been
approved by such Loan Party’s or such Restricted Subsidiary’s board of directors
(or comparable governing body) in accordance with applicable law,

(c) the payment of reasonable compensation, severance, or employee benefit
arrangements to employees, officers, and outside directors of a Loan Party or
one of its Restricted Subsidiaries in the ordinary course of business and
consistent with industry practice so long as it has been approved by such Loan
Party’s or such Restricted Subsidiary’s board of directors (or comparable
governing body) in accordance with applicable law,

(d) (i) transactions solely among US Loan Parties, (ii) transactions solely
among Canadian Loan Parties, and (iii) transactions solely among Restricted
Subsidiaries of Loan Parties that are not Loan Parties,

(e) transactions permitted by Section 6.3, Section 6.7, or Section 6.9,

(f) agreements for the non-exclusive licensing of intellectual property, or
distribution of products, in each case, among the Loan Parties and their
Restricted Subsidiaries for the purpose of the counterparty thereof operating
its business, and agreements for the assignment of intellectual property from
any Loan Party or any of its Restricted Subsidiaries to any Loan Party.

6.11 Use of Proceeds. Each Loan Party will not, and will not permit any of its
Restricted Subsidiaries to, use the proceeds of any Loan made hereunder for any
purpose other than (a) on the Closing Date, (i) to repay, in full, the
outstanding principal, accrued interest, and accrued fees and expenses owing
under or in connection with the Existing Credit Facility, and (ii) to pay the
fees, costs, and expenses incurred in connection with this Agreement, the other
Loan Documents, and the transactions contemplated hereby and thereby, in each
case, as set forth in the Flow of Funds Agreement, and (b) thereafter,
consistent with the terms and conditions hereof, for their lawful and permitted
purposes; provided that (x) no part of the proceeds of the Loans will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any such Margin Stock or for any other purpose that
violates the provisions of Regulation T, U or X of the Board of Governors,
(y) no part of the proceeds of any Loan or Letter of Credit will be used,
directly or to Borrowers’ knowledge, indirectly, to make any payments to a
Sanctioned Entity or a Sanctioned Person, to fund any investments, loans or
contributions in, or otherwise make such proceeds available to, a Sanctioned
Entity or a

 

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Sanctioned Person, to fund any operations, activities or business of a
Sanctioned Entity or a Sanctioned Person, or in any other manner that would
result in a violation of Sanctions by any Person, and (z) no part of the
proceeds of any Loan or Letter of Credit will be used, directly or to Borrowers’
knowledge, indirectly, in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Sanctions, Anti-Corruption Laws or Anti-Money
Laundering Laws.

6.12 Limitation on Issuance of Equity Interests. Except for the issuance or sale
of Qualified Equity Interests by Parent, each Loan Party will not, and will not
permit any of its Restricted Subsidiaries to, issue or sell any of its Equity
Interests other than issuances and sales to a Loan Party or a Restricted
Subsidiary thereof or issuances expressly permitted by Section 6.7 or
Section 6.9; provided that, for the avoidance of doubt, this Section 6.12 shall
not prohibit a Permitted Disposition of a Restricted Subsidiary.

6.13 Inventory with Bailees. Each Borrower will not, and will not permit any of
its Restricted Subsidiaries to, store its Inventory at any time with a bailee,
warehouseman, or similar party except as set forth on Schedule 4.25 (as such
Schedule may be amended in accordance with Section 5.14) or in transit to a
location set forth on Schedule 4.25.

6.14 Immaterial Subsidiaries. Each Loan Party will not permit any Immaterial
Subsidiary to guarantee or otherwise become liable for any Other Debt of the
Parent or any other Loan Party unless such Immaterial Subsidiary is also a
Guarantor.

6.15 Employee Benefits. Except for matters which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
each Borrower will not, and will not permit any of its Restricted Subsidiaries
to:

(a) Terminate, or permit any ERISA Affiliate who is a Subsidiary of a Loan Party
to terminate, any Pension Plan in a manner, or take any other action with
respect to any Plan, which could reasonably be expected to result in any
liability of any Loan Party or ERISA Affiliate to the PBGC;

(b) Fail to make, or permit any ERISA Affiliate to fail to make, full payment
when due of all amounts which, under the provisions of any Pension Plan,
agreement relating thereto or applicable Law, any Loan Party or ERISA Affiliate
is required to pay;

(c) Permit to exist, or allow any ERISA Affiliate to permit to exist, any
failure to satisfy the “minimum funding standard” under Sections 412 or 430 of
the IRC or Sections 302 or 303 of ERISA with respect to any Pension Plan;

(d) Acquire, or permit any ERISA Affiliate to acquire, an interest in any Person
that causes such Person to become an ERISA Affiliate if such Person sponsors,
maintains or contributes to, or at any time in the six-year period preceding
such acquisition has sponsored, maintained, or contributed to, (1) any
multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA,
or (2) any employee benefit plan, other than a multiemployer plan, which is
subject to the provisions of Title IV or Section 302 of ERISA or Sections 412 or
430 of the IRC;

(e) Contribute to or assume an obligation to contribute to, or permit any ERISA
Affiliate to contribute to or assume an obligation to contribute to, any
multiemployer plan;

(f) Amend, or permit any ERISA Affiliate to amend, a Pension Plan resulting in a
material increase in current liability such that a Loan Party or ERISA Affiliate
is required to provide security to such Pension Plan under the IRC;

 

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(g) Engage, or permit any ERISA Affiliate to engage, in any transaction in
connection with which the Loan Party or ERISA Affiliate could be subjected to
either a civil penalty assessed pursuant to Section 502(c), (i) or (l) of ERISA
or a tax imposed by Chapter 43 of Subtitle D of the IRC; or

(h) Incur, or permit any ERISA Affiliate to incur, a liability to or on account
of a Pension Plan under Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.

6.16 Canadian Employee Benefits. Neither Parent nor any Borrower will, or will
permit any of its Restricted Subsidiaries to:

(a) establish, maintain, sponsor, administer, contribute to, participate in or
assume or incur any liability in respect of any Canadian Defined Benefit Plan or
amalgamate with any Person if such Person, sponsors, administers, contributes
to, participates in or has any liability in respect of, any Canadian Defined
Benefit Plan other than a Canadian Multi-Employer Plan,

(b) terminate any Canadian Pension Plan in a manner, or take any other action
with respect to any Canadian Pension Plan, which would reasonably be expected to
result in a Material Adverse Effect, or

(c) fail to make full payment when due of any amounts, under the provisions of
any Canadian Pension Plan, any agreement relating thereto or applicable law if
such failure would reasonably be expected to result in a Material Adverse
Effect.

6.17 Controlled Accounts; Controlled Investments.

(a) Subject to any applicable time periods provided under Schedule 3.6 to this
Agreement, each Loan Party shall, and shall cause each of its Subsidiaries that
are Loan Parties to (i) establish and maintain United States and Canadian cash
management services at one or more of the Lenders and their respective
Affiliates (each a “Controlled Account Bank”), (ii) take reasonable steps to
ensure that all of its Account Debtors forward payment of the amounts owed by
them directly to a Collection Account at such Controlled Account Bank that is
not an Excluded Account (each, a “Controlled Account”) (by wire transfer to the
applicable Controlled Account Bank or to a lockbox maintained by the applicable
Controlled Account Bank for deposit into such Collection Account), and
(iii) deposit or cause to be deposited promptly, and in any event no later than
the first Business Day after the date of receipt thereof, all of their
Collections (including those sent directly by their Account Debtors to a Loan
Party) and proceeds of Collateral into a Controlled Account;

(b) Subject to any applicable time periods provided under Schedule 3.6 to this
Agreement, each Loan Party shall, and shall cause each of its Subsidiaries that
are Loan Parties to, establish and maintain Control Agreements with Agent and
the applicable Controlled Account Bank, in form and substance reasonably
acceptable to Agent. Each such Control Agreement shall provide, among other
things, that (i) the Controlled Account Bank will comply with any instructions
originated by Agent directing the disposition of the funds in each applicable
Controlled Account without further consent by the applicable Loan Party,
(ii) the Controlled Account Bank waives, subordinates, or agrees not to exercise
any rights of setoff or recoupment or any other claim against each applicable
Controlled Account other than for payment of its service fees and other charges
directly related to the administration of such Controlled Account and for
returned checks or other items of payment, and (iii) upon the instruction of
Agent (an “Activation Instruction”), the Controlled Account Bank will forward by
daily sweep all amounts in each applicable Controlled Account to the Agent’s
Account. Agent agrees not to issue an Activation Instruction with respect to the
Controlled Accounts unless a Cash Dominion Event has occurred at the time such
Activation Instruction is issued. Agent agrees to use commercially reasonable
efforts to rescind an Activation Instruction (the “Rescission”) after any Cash
Dominion Period has ended;

 

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(c) Each Loan Party shall, each Loan Party shall, and shall cause each of its
Subsidiaries that are Loan Parties to, close any of its Controlled Accounts (and
establish replacement Controlled Account accounts in accordance with the
foregoing sentence) as promptly as practicable and in any event within 45 days
after notice from Agent that the operating performance, funds transfer, or
availability procedures or performance of the Controlled Account Bank with
respect to Controlled Account Accounts or Agent’s liability under any Control
Agreement with such Controlled Account Bank is no longer acceptable in Agent’s
reasonable judgment; and

(d) Subject to any applicable time periods provided under Schedule 3.6 to this
Agreement, other than (i) with respect to Excluded Accounts, (ii) an aggregate
amount of not more than $250,000 (calculated at current exchange rates) at any
one time, in the case of US Loan Parties, and (iii) an aggregate amount of not
more than $250,000 (calculated at current exchange rates) at any one time, in
the case of Canadian Loan Parties, no Loan Party will, and no Loan Party will
permit its Subsidiaries that are Loan Parties to, make, acquire, or permit to
exist (x) Permitted Investments consisting of cash, Cash Equivalents, or
(y) amounts credited to Deposit Accounts or Securities Accounts, unless Loan
Party or such Restricted Subsidiary, as applicable, and the applicable bank or
securities intermediary have entered into Control Agreements or other
arrangement or agreements under applicable foreign law, governing such Permitted
Investments, Deposit Accounts or Securities Accounts, as applicable, in order to
perfect (or further establish) Agent’s Liens in such Permitted Investments,
Deposit Accounts or Securities Accounts, as applicable.

7. FINANCIAL COVENANTS.

Each of Parent and each Borrower covenants and agrees that, until the
termination of all of the Commitments and the payment in full of the
Obligations, Parent and Borrowers will maintain a Fixed Charge Coverage Ratio,
calculated for each 12 month period ending on the first day of any Covenant
Testing Period and the last day of each fiscal quarter occurring until the end
of any Covenant Testing Period (including the last day thereof), in each case of
at least 1.00 to 1.00.

8. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

8.1 Payments. If Borrowers fail to pay when due and payable, or when declared
due and payable, (a) all or any portion of the Obligations consisting of
interest, fees, or charges due the Lender Group, reimbursement of Lender Group
Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of three Business Days,
(b) all or any portion of the principal of the Loans, or (c) any amount payable
to Issuing Bank in reimbursement of any drawing under a Letter of Credit;

8.2 Covenants. If any Loan Party or any of its Restricted Subsidiaries:

(a) fails to perform or observe any covenant or other agreement contained in any
of (i) Sections 5.1, 5.2(a), 5.3 (solely if any Borrower is not in good standing
in its jurisdiction of organization), 5.6, or 5.7 (solely if any Borrower
refuses to allow Agent or its representatives or agents to visit any Borrower’s
properties, inspect its assets or books or records, examine and make copies of
its books and records, or discuss Borrowers’ affairs, finances, and accounts
with officers and employees of any Borrower), 5.10 or 5.11 of this Agreement,
(ii) Section 6 of this Agreement, (iii) Section 7 of this Agreement, or
(iv) Section 8 of the Guaranty and Security Agreement;

 

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(b) fails to perform or observe any covenant or other agreement contained in any
of Sections 5.3 (other than if any Borrower is not in good standing in its
jurisdiction of organization), 5.5, 5.8, 5.12, 5.13 or 5.14 of this Agreement
and such failure continues for a period of ten days after the earlier of (i) the
date on which such failure shall first become known to any officer of any
Borrower, or (ii) the date on which written notice thereof is given to Borrowers
by Agent; or

(c) fails to perform or observe any covenant or other agreement contained in
this Agreement, or in any of the other Loan Documents, in each case, other than
any such covenant or agreement that is the subject of another provision of this
Section 8 (in which event such other provision of this Section 8 shall govern),
and such failure continues for a period of thirty days after the earlier of
(i) the date on which such failure shall first become known to any officer of
any Borrower, or (ii) the date on which written notice thereof is given to
Borrowers by Agent;

8.3 Judgments. If one or more judgments, orders, orders to pay issued by a
Canadian Governmental Authority, or awards for the payment of money involving an
aggregate amount of $25,000,000 or more (except to the extent fully covered
(other than to the extent of customary deductibles) by insurance pursuant to
which the insurer has not denied coverage) is entered or filed against a Loan
Party or any of its Restricted Subsidiaries, or with respect to any of their
respective assets, and either (a) there is a period of thirty consecutive days
at any time after the entry of any such judgment, order, or award during which
(i) the same is not discharged, satisfied, vacated, or bonded pending appeal, or
(ii) a stay of enforcement thereof is not in effect, or (b) enforcement
proceedings are commenced upon such judgment, order, or award;

8.4 Voluntary Bankruptcy, etc. If an Insolvency Proceeding is commenced by a
Loan Party or any of its Restricted Subsidiaries;

8.5 Involuntary Bankruptcy, etc. If an Insolvency Proceeding is commenced
against a Loan Party or any of its Restricted Subsidiaries and any of the
following events occur: (a) such Loan Party or such Restricted Subsidiary
consents to the institution of such Insolvency Proceeding against it, (b) the
petition commencing the Insolvency Proceeding is not timely controverted,
(c) the petition commencing the Insolvency Proceeding is not dismissed within
sixty calendar days of the date of the filing thereof, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
such Loan Party or its Restricted Subsidiary, or (e) an order for relief shall
have been issued or entered therein;

8.6 Default Under Other Agreements. If there is a default in one or more
agreements to which a Loan Party or any of its Restricted Subsidiaries is a
party with one or more third Persons relative to a Loan Party’s or any of its
Restricted Subsidiaries’ Indebtedness involving an aggregate amount of
$25,000,000 or more, and such default (i) occurs at the final maturity of the
obligations thereunder, or (ii) is beyond any applicable grace periods therefor
and results in a right by such third Person, irrespective of whether exercised,
to accelerate the maturity of such Loan Party’s or its Restricted Subsidiary’s
obligations thereunder;

8.7 Representations, etc. If any warranty, representation, certificate,
statement, or Record made herein or in any other Loan Document or delivered in
writing to Agent or any Lender in connection with this Agreement or any other
Loan Document proves to be untrue in any material respect (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of the date of issuance or making or deemed making thereof;

 

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8.8 Guaranty. If the obligation of any Guarantor under the guaranty contained in
the Guaranty and Security Agreement is materially limited or terminated by
operation of law or by such Guarantor (other than in accordance with the terms
of this Agreement) or if any Guarantor repudiates or revokes or purports to
repudiate or revoke any such guaranty;

8.9 Security Documents. If the Guaranty and Security Agreement or any other Loan
Document that purports to create a Lien, shall, for any reason, fail or cease to
create a valid and perfected and, (except to the extent of Permitted Liens which
are non-consensual Permitted Liens or possessory in nature, permitted purchase
money Liens or the interests of lessors under Capital Leases) first priority
Lien on the Collateral covered thereby, except (a) as a result of a sale or
other disposition of the applicable Collateral in a transaction permitted under
this Agreement, (b) with respect to ABL Collateral the aggregate value of which,
for all such ABL Collateral, does not exceed at any time, $2,200,00, (c) with
respect to Collateral other than ABL Collateral, the aggregate value of which,
for all such other Collateral, does not exceed at any time, $25,000,000, and
(d) as the result of an action or failure to act on the part of Agent;

8.10 Loan Documents. The validity or enforceability of any Loan Document or any
material provision therein shall at any time for any reason (other than solely
as the result of an action or failure to act on the part of Agent) be declared
to be null and void, or a proceeding shall be commenced by a Loan Party or its
Restricted Subsidiaries, or by any Governmental Authority having jurisdiction
over a Loan Party or its Restricted Subsidiaries, seeking to establish the
invalidity or unenforceability thereof, or a Loan Party or its Restricted
Subsidiaries shall deny that such Loan Party or its Subsidiaries has any
liability or obligation purported to be created under any Loan Document; or

8.11 Change of Control. A Change of Control shall occur; or

8.12 ERISA. The occurrence of any of the following events: (a) any Termination
Event shall have occurred, and, 30 days after the occurrence of such Termination
Event, such Termination Event shall not have been corrected and shall have
created and caused to be continuing a material risk of Pension Plan termination
or liability for withdrawal from the Pension Plan as a “substantial employer”
(as defined in Section 4001(a)(2) of ERISA), which termination could reasonably
be expected to result in a liability of, or liability for withdrawal could
reasonably be expected to be, greater than $25,000,000 or (b) any Loan Party or
ERISA Affiliate completely or partially withdraws from one or more Multiemployer
Plans and incurs Withdrawal Liability in an annual amount in excess of
$25,000,000 in the aggregate.

9. RIGHTS AND REMEDIES.

9.1 Rights and Remedies. Upon the occurrence and during the continuation of an
Event of Default, Agent may, and, at the instruction of the Required Lenders,
shall, in addition to any other rights or remedies provided for hereunder or
under any other Loan Document or by applicable law, do any one or more of the
following:

(a) by written notice to Borrowers, (i) declare the principal of, and any and
all accrued and unpaid interest and fees in respect of, the Loans and all other
Obligations (other than the Bank Product Obligations), whether evidenced by this
Agreement or by any of the other Loan Documents to be immediately due and
payable, whereupon the same shall become and be immediately due and payable and
Borrowers shall be obligated to repay all of such Obligations in full, without
presentment, demand, protest, or further notice or other requirements of any
kind, all of which are hereby expressly waived by each Borrower, and (ii) direct
Borrowers to provide (and Borrowers agree that upon receipt of such notice
Borrowers will provide) Letter of Credit Collateralization to Agent to be held
as security for Borrowers’ reimbursement obligations for drawings that may
subsequently occur under issued and outstanding Letters of Credit;

 

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(b) by written notice to Borrowers, declare the Commitments terminated,
whereupon the Commitments shall immediately be terminated together with (i) any
obligation of any Revolving Lender to make Revolving Loans, (ii) the obligation
of the Swing Line Lenders to make Swing Loans, and (iii) the obligation of
Issuing Bank to issue Letters of Credit; and

exercise all other rights and remedies available to Agent or the Lenders under
the Loan Documents, under applicable law, or in equity.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to Borrowers or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of the
principal of, and any and all accrued and unpaid interest and fees in respect
of, the Loans and all other Obligations (other than the Bank Product
Obligations), whether evidenced by this Agreement or by any of the other Loan
Documents, shall automatically become and be immediately due and payable and
Borrowers shall automatically be obligated to repay all of such Obligations in
full (including Borrowers being obligated to provide (and Borrowers agree that
they will provide) (1) Letter of Credit Collateralization to Agent to be held as
security for Borrowers’ reimbursement obligations in respect of drawings that
may subsequently occur under issued and outstanding Letters of Credit and
(2) Bank Product Collateralization to be held as security for Borrowers’ or
their Restricted Subsidiaries’ obligations in respect of outstanding Bank
Products), without presentment, demand, protest, or notice or other requirements
of any kind, all of which are expressly waived by the Borrowers.

9.2 Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Default or Event of Default shall be
deemed a continuing waiver. No delay by the Lender Group shall constitute a
waiver, election, or acquiescence by it.

10. WAIVERS; INDEMNIFICATION.

10.1 Demand; Protest; etc. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any Borrower may in any way be liable.

10.2 The Lender Group’s Liability for Collateral. Each Borrower hereby agrees
that: (a) so long as Agent complies with its obligations, if any, under the Code
or the PPSA, as applicable, the Lender Group shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by the
Loan Parties.

10.3 Indemnification. Each Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons and the Issuing Banks (each,
an “Indemnified Person”) harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits,

 

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actions, investigations, proceedings, liabilities, fines, costs, penalties, and
damages, and all reasonable and documented out-of-pocket fees and disbursements
of attorneys, experts, or consultants and all other costs and expenses incurred
in connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution and
delivery (provided, that Borrowers shall not be liable for costs and expenses
(including attorneys’ fees) of any Lender (other than Wells Fargo or any of its
Affiliates) incurred in advising, structuring, drafting, reviewing,
administering or syndicating the Loan Documents), enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Loan Parties’ and their
Subsidiaries’ compliance with the terms of the Loan Documents (provided, that
the indemnification in this clause (a) shall not extend to (i) disputes solely
between or among the Lenders that do not involve any acts or omissions of any
Loan Party or any Affiliate thereof, or (ii) disputes solely between or among
the Lenders and their respective Affiliates that do not involve any acts
or omissions of any Loan Party or any Affiliate thereof; it being understood and
agreed that the indemnification in this clause (a) shall extend to Wells Fargo
and its Affiliates, in their respective capacity as Agent, Issuing Bank, Swing
Line Lender, arranger, bookrunner or any other similar capacity (but not the
Lenders unless the dispute involves an act or omission of a Loan Party or any
Affiliate thereof) relative to disputes between or among Wells Fargo (or one or
more of its Affiliates) on the one hand, and one or more Lenders, or one or more
of their Affiliates, on the other hand, or (iii) any claims for Taxes, which
shall be governed by Section 16, other than Taxes which relate to primarily
non-Tax claims), (b) with respect to any actual or prospective investigation,
litigation, or proceeding related to this Agreement, any other Loan
Document, the making of any Loans or issuance of any Letters of Credit
hereunder, or the use of the proceeds of the Loans or the Letters of Credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto and irrespective of whether such investigation, litigation, or
proceeding is brought by any Loan Party, any of its Affiliates, any Indemnified
Party or any other Person), or any act, omission, event, or circumstance in any
manner related thereto, and (c) in connection with or arising out of any
presence or release of Hazardous Materials at, on, under, to or from any assets
or properties owned, leased or operated by any Loan Party or any of its
Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial
Actions related in any way to any such assets or properties of any Loan Party or
any of its Subsidiaries (each and all of the foregoing, the “Indemnified
Liabilities”). The foregoing to the contrary notwithstanding, no Borrower shall
have any obligation to any Indemnified Person under this Section 10.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence, bad faith or
willful misconduct of such Indemnified Person or its officers, directors,
employees, attorneys, or agents. This provision shall survive the termination of
this Agreement and the repayment in full of the Obligations. If any Indemnified
Person makes any payment to any other Indemnified Person with respect to an
Indemnified Liability as to which Borrowers were required to indemnify the
Indemnified Person receiving such payment, the Indemnified Person making such
payment is entitled to be indemnified and reimbursed by Borrowers with respect
thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN
PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON AND REGARDLESS OF WHETHER SUCH
NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
SEVERAL. No Indemnified Person shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
to such unintended recipients by such Indemnitee through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby other than for direct or actual damages resulting from the gross
negligence, bad faith or willful misconduct of such Indemnitee as determined by
a final and non-appealable judgment of a court of competent jurisdiction.

 

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11. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile. In the case of notices or
demands to any Loan Party or Agent, as the case may be, they shall be sent to
the respective address set forth below:

 

If to any Loan Party:   

c/o Forum Energy Technologies, Inc.

920 Memorial City Way, Suite 1000

     Houston, Texas      77024      Attn: General Counsel      Fax No. (713)
583-9346 with copies to:    Baker Botts L.L.P.      30 Rockefeller Plaza     

New York, New York

10112-4498

     Attn: Martin Toulouse, Esq.      Fax No.: (212) 259-2559 If to Agent:   
WELLS FARGO BANK, NATIONAL ASSOCIATION      14241 Dallas Parkway Suite 900     
Dallas TX 75254      Attn: Paul Truax, Relationship Manager, VP      Fax No.:
866-718-6291      Email: paul.truax@wellsfargo.com with copies to:    Bracewell
LLP      711 Louisiana St., Suite 2300      Houston, Texas 77401      Attn:
Stephanie K. Song      Email: stephanie.song@bracewell.com

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or three Business
Days after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received,
(b) notices by facsimile shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient) and (c) notices by electronic mail shall be deemed received
upon the sender’s receipt of an acknowledgment from the intended recipient (such
as by the “return receipt requested” function, as available, return email or
other written acknowledgment).

 

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12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY
CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED
IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF PARENT
AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF PARENT AND EACH
BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF
ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS (EACH A “CLAIM”). EACH OF PARENT AND EACH BORROWER AND EACH
MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(d) EACH OF PARENT AND EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN
THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS

 

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AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS
OF ANY JURISDICTION.

(e) (i) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST THE AGENT, ANY SWING LINE
LENDER, ANY OTHER LENDER, ISSUING BANK, OR ANY AFFILIATE, DIRECTOR, OFFICER,
EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR
ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN
RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE
UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.

(ii) NO CLAIM MAY BE MADE BY ANY AGENT, ANY SWING LINE LENDER, ANY LENDER, OR
ANY ISSUING BANK, AGAINST ANY LOAN PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER,
EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR
ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN
RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
THEREWITH, AND EACH AGENT, SWING LINE LENDER, LENDER, AND ISSUING BANK HEREBY
WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER
OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR;
PROVIDED THAT, for the avoidance of doubt, nothing contained in this clause
(ii) shall limit any Loan Party’s indemnification, hold harmless or
reimbursement obligations to extent set forth in Section 10.3 to the extent such
special, indirect, consequential, punitive or exemplary damages or losses are
included in any third party claim in which such Indemnified Person is otherwise
entitled to indemnification, hold harmless or reimbursement hereunder.

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1 Assignments and Participations.

(a) (i) Subject to the conditions set forth in clause (a)(ii) below, any Lender
may assign and delegate all or any portion of its rights and duties under the
Loan Documents (including the Obligations owed to it and its Commitments) to one
or more assignees (each, an “Assignee”), with the prior written consent (such
consent not be unreasonably withheld or delayed) of:

(A) Borrowers; provided, that no consent of Borrowers shall be required (1) if
an Event of Default has occurred and is continuing, or (2) in connection with an
assignment to a Person that is a Lender or an Affiliate (other than natural
persons) of a Lender or a Related Fund; provided further, that Borrowers shall
be deemed to have consented to a proposed assignment unless they object thereto
by written notice to Agent within five Business Days after having received
notice thereof; and

(B) Agent, Swing Line Lender, and Issuing Bank.

 

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(ii) Assignments shall be subject to the following additional conditions:

(A) no assignment may be made to a natural person,

(B) no assignment may be made to a Loan Party, any Affiliate of a Loan Party or
any Subsidiary of a Loan Party,

(C) the amount of the Commitments and the other rights and obligations of the
assigning Lender hereunder and under the other Loan Documents subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to Agent) shall be in a minimum amount
(unless waived by Agent) of $5,000,000 (except such minimum amount shall not
apply to (I) an assignment or delegation by any Lender to any other Lender, an
Affiliate of any Lender, or a Related Fund of such Lender, or (II) a group of
new Lenders, each of which is an Affiliate of each other or a Related Fund of
such new Lender to the extent that the aggregate amount to be assigned to all
such new Lenders is at least $5,000,000),

(D) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement,

(E) the parties to each assignment shall execute and deliver to Agent an
Assignment and Acceptance; provided, that Borrowers and Agent may continue to
deal solely and directly with the assigning Lender in connection with the
interest so assigned to an Assignee until written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Borrowers and Agent by such Lender
and the Assignee,

(F) unless waived by Agent, the assigning Lender or Assignee has paid to Agent,
for Agent’s separate account, a processing fee in the amount of $3,500, and

(G) the assignee, if it is not a Lender, shall deliver to Agent an
Administrative Questionnaire in a form approved by Agent (the “Administrative
Questionnaire”).

(b) From and after the date that Agent receives the executed Assignment and
Acceptance and, if applicable, payment of the required processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall be a “Lender” and shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 10.3) and be released from any future
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto); provided, that nothing contained
herein shall release any assigning Lender from obligations that survive the
termination of this Agreement, including such assigning Lender’s obligations
under Section 15 and Section 17.9(a).

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document

 

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furnished pursuant hereto, (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under this Agreement or any other Loan Document furnished
pursuant hereto, (iii) such Assignee confirms that it has received a copy of
this Agreement, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance, (iv) such Assignee will, independently and
without reliance upon Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement, (v) such Assignee appoints and authorizes Agent to take
such actions and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent, by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto, and (vi) such Assignee
agrees that it will perform all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

(d) Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.

(e) Any Lender may, without the consent of any other party to this Agreement, at
any time sell to one or more commercial banks, financial institutions, or other
Persons (a “Participant”) participating interests in all or any portion of its
Obligations, its Commitment, and the other rights and interests of that Lender
(the “Originating Lender”) hereunder and under the other Loan Documents;
provided, that (i) the Originating Lender shall remain a “Lender” for all
purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a “Lender” hereunder or under the other Loan Documents and the
Originating Lender’s obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or
substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender (other than a waiver of default interest), or
(E) decreases the amount or postpones the due dates of scheduled principal
repayments or prepayments or premiums payable to such Participant through such
Lender, (v) no participation shall be sold to a natural person, (vi) no
participation shall be sold to a Loan Party, an Affiliate of a Loan Party, or
any Sponsor Affiliated Entity, and (vii) all amounts payable by Borrowers
hereunder shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement. The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant

 

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participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, Agent,
Borrowers, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.

(f) In connection with any such assignment or participation or proposed
assignment or participation or any grant of a security interest in, or pledge
of, its rights under and interest in this Agreement, a Lender may, subject to
the provisions of Section 17.9, disclose all documents and information which it
now or hereafter may have relating to any Loan Party and its Subsidiaries and
their respective businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement to secure obligations of such Lender,
including any pledge in favor of any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR
§203.24, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law; provided, that no such
pledge shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or
cause to be maintained, a register (the “Register”) on which it enters the name
and address of each Lender as the registered owner of the Commitments (and the
principal amount thereof and stated interest thereon) held by such Lender (each,
a “Registered Loan”). Other than in connection with an assignment by a Lender of
all or any portion of its portion of the Commitments to an Affiliate of such
Lender or a Related Fund of such Lender (i) a Registered Loan (and the
registered note, if any, evidencing the same) may be assigned or sold in whole
or in part only by registration of such assignment or sale on the Register (and
each registered note shall expressly so provide) and (ii) any assignment or sale
of all or part of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by registration of such assignment or
sale on the Register, together with the surrender of the registered note, if
any, evidencing the same duly endorsed by (or accompanied by a written
instrument of assignment or sale duly executed by) the holder of such registered
note, whereupon, at the request of the designated assignee(s) or transferee(s),
one or more new registered notes in the same aggregate principal amount shall be
issued to the designated assignee(s) or transferee(s). Prior to the registration
of assignment or sale of any Registered Loan (and the registered note, if any
evidencing the same), Borrowers shall treat the Person in whose name such
Registered Loan (and the registered note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary. In
the case of any assignment by a Lender of all or any portion of its Commitments
to an Affiliate of such Lender or a Related Fund of such Lender, and which
assignment is not recorded in the Register, the assigning Lender, on behalf of
Borrowers, shall maintain a register comparable to the Register.

(i) In the event that a Lender sells participations in the Registered Loan, such
Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or
cause to be maintained) a register on which it enters the name of all
participants in the Registered Loans held by it (and the principal amount (and
stated interest thereon) of the portion of such Registered Loans that is subject
to such participations) (the “Participant Register”). A Registered Loan (and the
registered Note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register. No Lender shall have any obligation to disclose all or any portion of
the Participant Register (including the identity of any Participant or any

 

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information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Agent (in its capacity as Agent) shall have no responsibility for
maintaining a Participant Register.

(j) Agent shall make a copy of the Register (and each Lender shall make a copy
of its Participant Register to the extent it has one) available for review by
Borrowers from time to time as Borrowers may reasonably request.

13.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, that no
Borrower may assign this Agreement or any rights or duties hereunder without the
Lenders’ prior written consent and any prohibited assignment shall be absolutely
void ab initio. No consent to assignment by the Lenders shall release any
Borrower from its Obligations. A Lender may assign this Agreement and the other
Loan Documents and its rights and duties hereunder and thereunder pursuant to
Section 13.1 and, except as expressly required pursuant to Section 13.1, no
consent or approval by any Borrower is required in connection with any such
assignment.

13.3 Intercreditor Matters. The Agent is hereby authorized to enter into any
other usual and customary intercreditor agreements to the extent contemplated by
the terms hereof, and the parties hereto acknowledge that each such
intercreditor agreement is binding upon them. Each member of the Lender Group
(a) hereby agrees that it will be bound by and will take no actions contrary to
the provisions of the intercreditor agreements and (b) hereby authorizes and
instructs the Agent to enter into usual and customary intercreditor agreements
and to subject the Liens on the Collateral securing the Obligations to the
provisions thereof. In addition, but in conformance with the terms hereof, each
member of the Lender Group hereby authorizes the Agent to enter into (i) any
amendments to any intercreditor agreements, and (ii) any other intercreditor
arrangements, in the case of clauses (i), and (ii) to the extent required to
give effect to the establishment of intercreditor rights and privileges as
contemplated and required by Section 6.2 of this Agreement. Each member of the
Lender Group waives any conflict of interest, now contemplated or arising
hereafter, in connection therewith and agrees not to assert against any Agent or
any of its affiliates any claims, causes of action, damages or liabilities of
whatever kind or nature relating thereto.

13.4 Collection Allocation Mechanism.

(a) On the first date after the Closing Date on which there shall occur an Event
of Default under Section 8.4 or Section 8.5 or the acceleration of Obligations
pursuant to Section 9 (the “CAM Exchange Date”), (A) each Lender shall
immediately be deemed to have acquired (and shall promptly make payment therefor
to the Agent in accordance with Section 2.2(e)) participations in the Loans, in
an amount equal to such Lender’s Pro Rata Share of each Loan outstanding on such
date, (B) each Lender shall immediately be deemed to have acquired (and shall
promptly make payment therefor to the Agent in accordance with Section 2.10)
participations in the Obligations with respect to each Letter of Credit in an
amount equal to such Lender’s Pro Rata Share of the aggregate amount available
to be drawn under such Letter of Credit, and (C) the Lenders shall automatically
and without further act be deemed to have exchanged interests in the Loans and
participations in all Swing Loans and Letters of Credit, such that in lieu of
the interest of each Lender in each Loan and the Obligations with respect to
each Swing Loan and Letter of Credit in which it shall participate as of such
date (including such Lender’s interest in

 

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the Obligations, Guaranties and Collateral of each Loan Party in respect
thereof), such Lender shall hold an interest in every one of the Loans and a
participation in all of the Obligations in respect of Swing Loans and Letters of
Credit (including the Obligations, Guaranties 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 Loan or any
participation in any Swing Loan 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 any promissory notes
originally received by it in connection with its Loans hereunder to the Agent
against delivery of any promissory notes evidencing its interests in the Loans
so executed and delivered; 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 any Loan Document in respect of any of the
Obligations related to the Loans, the Letters of Credit and the Swing Loans, and
all fees, costs and expenses arising out of or related to any of the foregoing,
in each case as provided in the Loan 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 13.4 are solely an agreement among the
Lenders and Agent for the purpose of allocating risk and the Loan Parties have
no additional obligations with respect thereto. The provisions of this
Section 13.4 shall apply notwithstanding anything to the contrary set forth in
this Agreement.

(d) For purposes of this Section 13.4, “CAM Percentage” means, as to each
Lender, a fraction, expressed as a decimal, of which (A) the numerator shall be
the aggregate amount of all Obligations owed to such Lender, and (B) the
denominator shall be the aggregate amount of all Obligations owed to the
Lenders.

14. AMENDMENTS; WAIVERS.

14.1 Amendments and Waivers.

(a) No amendment, waiver or other modification of any provision of this
Agreement or any other Loan Document (other than the Fee Letter), and no consent
with respect to any departure by any Borrower therefrom, shall be effective
unless the same shall be in writing and signed by the Required Lenders (or by
Agent at the written request of the Required Lenders) and the Loan Parties that
are party thereto and then any such waiver or consent shall be effective, but
only in the specific instance and for the specific purpose for which given;
provided, that no such waiver, amendment, or consent shall, unless in writing
and signed by all of the Lenders directly and adversely affected thereby and all
of the Loan Parties that are party thereto, do any of the following:

(i) increase the amount of or extend the expiration date of any Commitment of
any Lender or amend, modify, or eliminate the penultimate sentence of
Section 2.3(c)(i),

 

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(ii) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

(iii) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except (y) in connection with the
waiver of applicability of Section 2.5(c) (which waiver shall be effective with
the written consent of the Required Lenders), and (z) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees
for purposes of this clause (iii)),

(iv) amend, modify, or eliminate this Section 14.1 or any provision of this
Agreement providing for consent or other action by all Lenders,

(v) amend, modify, or eliminate Section 3.1,

(vi) amend, modify, or eliminate Section 15.11,

(vii) other than as permitted by Section 15.11 or in connection with Permitted
Indebtedness incurred pursuant to clause (s) of the definition thereof, release
or contractually subordinate Agent’s Lien in and to any of the Collateral,

(viii) amend, modify, or eliminate the definitions of “Required Lenders”,
Supermajority Lenders or “Pro Rata Share”,

(ix) other than in connection with a merger, amalgamation, arrangement,
liquidation, dissolution or sale of such Person expressly permitted by the terms
hereof or the other Loan Documents, release any Borrower or any Guarantor from
any obligation for the payment of money or consent to the assignment or transfer
by any Borrower or any Guarantor of any of its rights or duties under this
Agreement or the other Loan Documents,

(x) amend, modify, or eliminate any of the provisions of Section 2.3(b)(i), (ii)
or (iii) or Section 2.3(d) or (e), or

(xi) amend, modify, or eliminate any of the provisions of Section 13.1 with
respect to assignments to, or participations with, Persons who are Loan Parties,
Affiliates of a Loan Party, or Sponsor Affiliated Entities;

(b) No amendment, waiver, modification, or consent shall amend, modify, waive,
or eliminate,

(i) the definition of, or any of the terms or provisions of, the Fee Letter,
without the written consent of Agent and Borrowers (and shall not require the
written consent of any of the Lenders),

(ii) any provision of Section 15 pertaining to Agent, or any other rights or
duties of Agent under this Agreement or the other Loan Documents, without the
written consent of Agent, Borrowers, and the Required Lenders, or

 

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(iii) require Real Property to be Collateral without the written consent of
Agent, Borrowers and each Lender (which consent shall not be unreasonably
withheld, conditioned or delayed).

(c) No amendment, waiver, modification, elimination, or consent shall amend,
without written consent of Agent, Borrowers and the Supermajority Lenders,
modify, or eliminate the definition of Borrowing Base or any of the defined
terms (including the definitions of US Eligible Accounts, US Eligible Finished
Goods Inventory, US Eligible Raw Materials Inventory, US Eligible
Work-in-Process Inventory, US Eligible Inventory, US Eligible In-Transit
Inventory, Canadian Eligible In-Transit Inventory, Canadian Eligible Accounts,
Canadian Eligible Finished Goods Inventory, Canadian Eligible Raw Materials
Inventory, Canadian Eligible Work-in-Process Inventory and Canadian Eligible
Inventory) that are used in such definition to the extent that any such change
results in more credit being made available to Borrowers based upon the
Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount,
or change Section 2.1(d);

(d) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Issuing Bank, or any other rights or duties of Issuing Bank under
this Agreement or the other Loan Documents, without the written consent of
Issuing Bank, Agent, Borrowers, and the Required Lenders;

(e) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Swing Line Lender, or any other rights or duties of Swing Line
Lender under this Agreement or the other Loan Documents, without the written
consent of Swing Line Lender, Agent, Borrowers, and the Required Lenders; and

(f) Anything in this Section 14.1 to the contrary notwithstanding, (i) any
amendment, modification, elimination, waiver, consent, termination, or release
of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of any Loan
Party, shall not require consent by or the agreement of any Loan Party, and
(ii) any amendment, waiver, modification, elimination, or consent of or with
respect to any provision of this Agreement or any other Loan Document may be
entered into without the consent of, or over the objection of, any Defaulting
Lender other than any of the matters governed by Section 14.1(a)(i) through
(iii) that affect such Lender.

14.2 Replacement of Certain Lenders.

(a) If (i) any action to be taken by the Lender Group or Agent hereunder
requires the consent, authorization, or agreement of all Lenders or all Lenders
affected thereby and if such action has received the consent, authorization, or
agreement of the Required Lenders but not of all Lenders or all Lenders affected
thereby, or (ii) any Lender makes a claim for compensation under Section 16,
then Borrowers or Agent, upon at least five Business Days prior irrevocable
notice, may permanently replace any Lender that failed to give its consent,
authorization, or agreement (a “Non-Consenting Lender”) or any Lender that made
a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders,
and the Non-Consenting Lender or Tax Lender, as applicable, shall have no right
to refuse to be replaced hereunder. Such notice to replace the Non-Consenting
Lender or Tax Lender, as applicable, shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.

(b) Prior to the effective date of such replacement, the Non-Consenting Lender
or Tax Lender, as applicable, and each Replacement Lender shall execute and
deliver an Assignment and Acceptance, subject only to the Non-Consenting Lender
or Tax Lender, as applicable, being repaid in full

 

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its share of the outstanding Obligations (without any premium or penalty of any
kind whatsoever, but including (i) all interest, fees and other amounts that may
be due in payable in respect thereof, (ii) an assumption of its Pro Rata Share
of participations in the Letters of Credit, and (iii) Funding Losses). If the
Non-Consenting Lender or Tax Lender, as applicable, shall refuse or fail to
execute and deliver any such Assignment and Acceptance prior to the effective
date of such replacement, Agent may, but shall not be required to, execute and
deliver such Assignment and Acceptance in the name or and on behalf of the
Non-Consenting Lender or Tax Lender, as applicable, and irrespective of whether
Agent executes and delivers such Assignment and Acceptance, the Non-Consenting
Lender or Tax Lender, as applicable, shall be deemed to have executed and
delivered such Assignment and Acceptance. The replacement of any Non-Consenting
Lender or Tax Lender, as applicable, shall be made in accordance with the terms
of Section 13.1. Until such time as one or more Replacement Lenders shall have
acquired all of the Obligations, the Commitments, and the other rights and
obligations of the Non-Consenting Lender or Tax Lender, as applicable, hereunder
and under the other Loan Documents, the Non-Consenting Lender or Tax Lender, as
applicable, shall remain obligated to make the Non-Consenting Lender’s or Tax
Lender’s, as applicable, Pro Rata Share of Revolving Loans and to purchase a
participation in each Letter of Credit, in an amount equal to its Pro Rata Share
of participations in such Letters of Credit.

14.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by the Borrowers of any
provision of this Agreement. Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

15. AGENT; THE LENDER GROUP.

15.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints Wells Fargo as its agent under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to designate,
appoint, and authorize) Agent to execute and deliver each of the other Loan
Documents on its behalf and to take such other action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms
of this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Agent agrees to act as agent for and on behalf of
the Lenders (and the Bank Product Providers) on the conditions contained in this
Section 15. Any provision to the contrary contained elsewhere in this Agreement
or in any other Loan Document notwithstanding, Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Loan Documents, nor shall Agent have or be deemed to have any fiduciary
relationship with any Lender (or Bank Product Provider), and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent. Without limiting the generality of the foregoing, the use of the
term “agent” in this Agreement or the other Loan Documents with reference to
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only a representative relationship between independent contracting
parties. Each Lender hereby further authorizes (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to act as the secured party under each of the Loan Documents that create a
Lien on any item of Collateral. Except as expressly otherwise provided in this
Agreement, Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
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taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
payments and proceeds of Collateral, and related matters, (b) execute or file
any and all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other written
agreements with respect to the Loan Documents, or to take any other action with
respect to any Collateral or Loan Documents which may be necessary to perfect,
and maintain perfected, the security interests and Liens upon Collateral
pursuant to the Loan Documents, (c) make Revolving Loans, for itself or on
behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive,
apply, and distribute payments and proceeds of the Collateral as provided in the
Loan Documents, (e) open and maintain such bank accounts and cash management
arrangements as Agent deems necessary and appropriate in accordance with the
Loan Documents for the foregoing purposes, (f) perform, exercise, and enforce
any and all other rights and remedies of the Lender Group with respect to any
Loan Party or its Subsidiaries, the Obligations, the Collateral, or otherwise
related to any of same as provided in the Loan Documents, and (g) incur and pay
such Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.

15.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

15.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders (or Bank Product
Providers) for any recital, statement, representation or warranty made by any
Loan Party or any of its Subsidiaries or Affiliates, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, 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 other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or its Subsidiaries or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lenders (or Bank Product Providers) 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 other Loan Document, or to
inspect the books and records or properties of any Loan Party or its
Subsidiaries. No Agent-Related Person shall have any liability to any Lender,
and Loan Party or any of their respective Affiliates if any request for a Loan,
Letter of Credit or other extension of credit was not authorized by the
applicable Borrower. Agent shall not be required to take any action that, in its
opinion or in the opinion of its counsel, may expose it to liability or that is
contrary to any Loan Document or applicable law or regulation.

15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or

 

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counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders (and, if it so elects, the Bank Product Providers)
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Required
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders (and Bank Product Providers).

15.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Borrowers referring to
this Agreement, describing such Default or Event of Default, and stating that
such notice is a “notice of default.” Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
actual knowledge. If any Lender obtains actual knowledge of any Event of
Default, such Lender promptly shall notify the other Lenders and Agent of such
Event of Default. Each Lender shall be solely responsible for giving any notices
to its Participants, if any. Subject to Section 15.4, Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with Section 9; provided, that unless and
until Agent has received any such request, 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 as it shall deem advisable.

15.6 Credit Decision. Each Lender (and Bank Product Provider) acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it,
and that no act by Agent hereinafter taken, including any review of the affairs
of any Loan Party and its Subsidiaries or Affiliates, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender (or Bank Product Provider). Each Lender represents (and by entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) to Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such due diligence, documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition and
creditworthiness of each Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers. Each Lender also represents (and by entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of each Borrower or any other Person
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender (or Bank Product
Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any Borrower or any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons. Each
Lender acknowledges (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that Agent does not have any
duty or responsibility, either initially or on a continuing basis (except to the

 

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extent, if any, that is expressly specified herein) to provide such Lender (or
Bank Product Provider) with any credit or other information with respect to any
Borrower, its Affiliates or any of their respective business, legal, financial
or other affairs, and irrespective of whether such information came into Agent’s
or its Affiliates’ or representatives’ possession before or after the date on
which such Lender became a party to this Agreement (or such Bank Product
Provider entered into a Bank Product Agreement).

15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, attorneys’ fees and expenses, fees
and expenses of financial accountants, advisors, consultants, and appraisers,
costs of collection by outside collection agencies, auctioneer fees and
expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrowers are obligated to reimburse Agent or
Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from payments or
proceeds of the Collateral received by Agent to reimburse Agent for such Lender
Group Expenses prior to the distribution of any amounts to Lenders (or Bank
Product Providers). In the event Agent is not reimbursed for such Lender Group
Expenses by the Loan Parties and their Subsidiaries, each Lender hereby agrees
that it is and shall be obligated to pay to Agent such Lender’s ratable thereof.
Whether or not the transactions contemplated hereby are consummated, each of the
Lenders, on a ratable basis, shall indemnify and defend the Agent-Related
Persons (to the extent not reimbursed by or on behalf of Borrowers and without
limiting the obligation of Borrowers to do so) from and against any and all
Indemnified Liabilities; provided, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person’s gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make a Revolving Loan or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender’s ratable share of any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and
expenses) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any other Loan
Document to the extent that Agent is not reimbursed for such expenses by or on
behalf of Borrowers. The undertaking in this Section shall survive the payment
of all Obligations hereunder and the resignation or replacement of Agent.

15.8 Agent in Individual Capacity. Wells Fargo and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, provide
Bank Products to, acquire Equity Interests in, and generally engage in any kind
of banking, trust, financial advisory, underwriting, or other business with any
Loan Party and its Subsidiaries and Affiliates and any other Person party to any
Loan Document as though Wells Fargo were not Agent hereunder, and, in each case,
without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that,
pursuant to such activities, Wells Fargo or its Affiliates may receive
information regarding a Loan Party or its Affiliates or any other Person party
to any Loan Documents that is subject to confidentiality obligations in favor of
such Loan Party or such other Person and that prohibit the disclosure of such
information to the Lenders (or Bank Product Providers), and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them. The terms “Lender” and “Lenders”
include Wells Fargo in its individual capacity.

 

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15.9 Successor Agent. Agent may resign as Agent upon 30 days (ten days if an
Event of Default has occurred and is continuing) prior written notice to the
Lenders (unless such notice is waived by the Required Lenders) and Borrowers
(unless such notice is waived by Borrowers or a Default or Event of Default has
occurred and is continuing) and without any notice to the Bank Product
Providers. If Agent resigns under this Agreement, the Required Lenders shall be
entitled, with (so long as no Event of Default has occurred and is continuing)
the consent of Borrowers (such consent not to be unreasonably withheld, delayed,
or conditioned), appoint a successor Agent for the Lenders (and the Bank Product
Providers). If, at the time that Agent’s resignation is effective, it is acting
as Issuing Bank or Swing Line Lender, such resignation shall also operate to
effectuate its resignation as Issuing Bank or Swing Line Lender, as applicable,
and it shall automatically be relieved of any further obligation to issue
Letters of Credit, or to make Swing Loans. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders and Borrowers, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among the Lenders with (so
long as no Event of Default has occurred and is continuing) the consent of
Borrowers (such consent not to be unreasonably withheld, delayed, or
conditioned). In any such event, upon the acceptance of its appointment as
successor Agent hereunder, such successor Agent shall succeed to all the rights,
powers, and duties of the retiring Agent and the term “Agent” shall mean such
successor Agent and the retiring Agent’s appointment, powers, and duties as
Agent shall be terminated. After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Section 15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor Agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time,
if any, as the Lenders appoint a successor Agent as provided for above.

15.10 Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, provide Bank Products to, acquire Equity Interests in and generally engage
in any kind of banking, trust, financial advisory, underwriting, or other
business with any Loan Party and its Subsidiaries and Affiliates and any other
Person party to any Loan Documents as though such Lender were not a Lender
hereunder without notice to or consent of the other members of the Lender Group
(or the Bank Product Providers). The other members of the Lender Group
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, pursuant to such activities, such
Lender and its respective Affiliates may receive information regarding a Loan
Party or its Affiliates or any other Person party to any Loan Documents that is
subject to confidentiality obligations in favor of such Loan Party or such other
Person and that prohibit the disclosure of such information to the Lenders, and
the Lenders acknowledge (and by entering into a Bank Product Agreement, each
Bank Product Provider shall be deemed to acknowledge) that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them.

15.11 Collateral Matters.

(a) The Lenders hereby irrevocably authorize (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by the Loan Parties and their
Restricted Subsidiaries of all of the Obligations, (ii) constituting property
being sold or disposed of in accordance with the Loan Documents if a release is
required or desirable in connection therewith and, at the request of the Agent,
if Borrowers certify to Agent that the sale or disposition is permitted under
Section 6.4 (and Agent may rely conclusively on any such certificate, without
further

 

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inquiry), (iii) constituting property in which no Loan Party or any of its
Restricted Subsidiaries owned any interest at the time Agent’s Lien was granted
nor at any time thereafter, (iv) constituting property leased or licensed to a
Loan Party or its Restricted Subsidiaries under a lease or license that has
expired or is terminated in a transaction permitted under this Agreement, or
(v) in connection with a credit bid or purchase authorized under this
Section 15.11. The Loan Parties and the Lenders hereby irrevocably authorize
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to authorize) Agent, based upon the instruction of the Required
Lenders, to (a) consent to the sale of, credit bid, or purchase (either directly
or indirectly through one or more entities) all or any portion of the Collateral
at any sale thereof conducted under the provisions of the Bankruptcy Code, or
similar Insolvency Laws in any other relevant jurisdiction, including
Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly
or indirectly through one or more entities) all or any portion of the Collateral
at any sale or other disposition thereof conducted under the provisions of the
Code, the PPSA, including pursuant to Sections 9-610 or 9-620 of the Code, the
PPSA or similar Insolvency Laws in any other relevant jurisdiction or any
similar provision of the PPSA, or (c) credit bid or purchase (either directly or
indirectly through one or more entities) all or any portion of the Collateral at
any other sale or foreclosure conducted or consented to by Agent in accordance
with applicable law in any judicial action or proceeding or by the exercise of
any legal or equitable remedy. In connection with any such credit bid or
purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers
shall be entitled to be, and shall be, credit bid on a ratable basis (with
Obligations with respect to contingent or unliquidated claims being estimated
for such purpose if the fixing or liquidation thereof would not impair or unduly
delay the ability of Agent to credit bid or purchase at such sale or other
disposition of the Collateral and, if such contingent or unliquidated claims
cannot be estimated without impairing or unduly delaying the ability of Agent to
credit bid at such sale or other disposition, then such claims shall be
disregarded, not credit bid, and not entitled to any interest in the Collateral
that is the subject of such credit bid or purchase) and the Lenders and the Bank
Product Providers whose Obligations are credit bid shall be entitled to receive
interests (ratably based upon the proportion of their Obligations credit bid in
relation to the aggregate amount of Obligations so credit bid) in the Collateral
that is the subject of such credit bid or purchase (or in the Equity Interests
of the any entities that are used to consummate such credit bid or purchase),
and (ii) Agent, based upon the instruction of the Required Lenders, may accept
non-cash consideration, including debt and equity securities issued by any
entities used to consummate such credit bid or purchase and in connection
therewith Agent may reduce the Obligations owed to the Lenders and the Bank
Product Providers (ratably based upon the proportion of their Obligations credit
bid in relation to the aggregate amount of Obligations so credit bid) based upon
the value of such non-cash consideration; provided, that Bank Product
Obligations not entitled to the application set forth in
Section 2.3(b)(iii)A(tenth) shall not be entitled to be, and shall not be,
credit bid, or used in the calculation of the ratable interest of the Lenders
and Bank Product Providers in the Obligations which are credit bid. Except as
provided above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of the Lenders (without
requiring the authorization of the Bank Product Providers), or (z) otherwise,
the Required Lenders (without requiring the authorization of the Bank Product
Providers). Upon request by Agent or Borrowers at any time, the Lenders will
(and if so requested, the Bank Product Providers will) confirm in writing
Agent’s authority to release any such Liens on particular types or items of
Collateral pursuant to this Section 15.11; provided, that (1) anything to the
contrary contained in any of the Loan Documents notwithstanding, Agent shall not
be required to execute any document or take any action necessary to evidence
such release on terms that, in Agent’s opinion, could expose Agent to liability
or create any obligation or entail any consequence other than the release of
such Lien without recourse, representation, or warranty, and (2) such release
shall not in any manner discharge, affect, or impair the Obligations or any
Liens (other than those expressly released) upon (or obligations of Borrowers in
respect of) any and all interests retained by any Borrower, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral. Each Lender further hereby irrevocably authorize (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to

 

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irrevocably authorize) Agent, at its option and in its sole discretion, to
subordinate (by contract or otherwise) any Lien granted to or held by Agent on
any property under any Loan Document (a) to the holder of any Permitted Lien on
such property if such Permitted Lien secures purchase money Indebtedness
(including Capitalized Lease Obligations) which constitute Permitted
Indebtedness and (b) to the extent Agent has the authority under this
Section 15.11 to release its Lien on such property.

(b) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank
Product Providers) (i) to verify or assure that the Collateral exists or is
owned by a Loan Party or any of its Restricted Subsidiaries or is cared for,
protected, or insured or has been encumbered, (ii) to verify or assure that
Agent’s Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, (iii) to
verify or assure that any particular items of Collateral meet the eligibility
criteria applicable in respect thereof, (iv) to impose, maintain, increase,
reduce, implement, or eliminate any particular reserve hereunder or to determine
whether the amount of any reserve is appropriate or not, or (v) to exercise at
all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission,
or event related thereto, subject to the terms and conditions contained herein,
Agent may act in any manner it may deem appropriate, in its sole discretion
given Agent’s own interest in the Collateral in its capacity as one of the
Lenders and that Agent shall have no other duty or liability whatsoever to any
Lender (or Bank Product Provider) as to any of the foregoing, except as
otherwise expressly provided herein.

15.12 Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, set off against the Obligations, any amounts owing by such
Lender to any Loan Party or its Restricted Subsidiaries or any deposit accounts
of any Loan Party or its Restricted Subsidiaries now or hereafter maintained
with such Lender. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings to
enforce any Loan Document against any Borrower or any Guarantor or to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in Same Day Funds, as applicable, for the account of all of
the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (B) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to the
other Lenders so that such excess payment received shall be applied ratably as
among the Lenders in accordance with their Pro Rata Shares; provided, that to
the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

 

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15.13 Agency for Perfection. Agent hereby appoints each other Lender (and each
Bank Product Provider) as its agent (and each Lender hereby accepts (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens
in assets which, in accordance with Article 8 or Article 9, as applicable, of
the Code or the applicable provisions of the PPSA can be perfected by possession
or control. Should any Lender obtain possession or control of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s
request therefor shall deliver possession or control of such Collateral to Agent
or in accordance with Agent’s instructions.

15.14 Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders (or Bank Product Providers) shall be made by bank wire transfer of Same
Day Funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.

15.15 Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the
other Loan Documents. Each member of the Lender Group agrees (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
agree) that any action taken by Agent in accordance with the terms of this
Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders (and such Bank Product Provider).

15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information. By becoming a party to this Agreement, each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field examination report respecting any
Loan Party or its Restricted Subsidiaries (each, a “Report”) prepared by or at
the request of Agent, and Agent shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any field
examination will inspect only specific information regarding the Loan Parties
and their Restricted Subsidiaries and will rely significantly upon Borrowers’
and their Restricted Subsidiaries’ books and records, as well as on
representations of Borrowers’ personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding the Loan Parties and their Restricted Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 17.9, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys’ fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.

 

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In addition to the foregoing, (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by any Loan Party or its Restricted Subsidiaries to Agent that
has not been contemporaneously provided by such Loan Party or such Restricted
Subsidiary to such Lender, and, upon receipt of such request, Agent promptly
shall provide a copy of same to such Lender, (y) to the extent that Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from any Loan Party or its Restricted Subsidiaries, any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Borrowers the additional reports or information reasonably specified
by such Lender, and, upon receipt thereof from such Loan Party or such
Restricted Subsidiary, Agent promptly shall provide a copy of same to such
Lender, and (z) any time that Agent renders to Borrowers a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.

15.17 Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 15.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to any Borrower or any other Person for any failure by any other
Lender (or Bank Product Provider) to fulfill its obligations to make credit
available hereunder, nor to advance for such Lender (or Bank Product Provider)
or on its behalf, nor to take any other action on behalf of such Lender (or Bank
Product Provider) hereunder or in connection with the financing contemplated
herein.

15.18 Joint Lead Arrangers, Joint Book Runners, Co-Syndication Agents, and
Documentation Agent. Each of the Joint Lead Arrangers, Joint Book Runners,
Co-Syndication Agents, and Documentation Agent, in such capacities, shall not
have any right, power, obligation, liability, responsibility, or duty under this
Agreement other than those applicable to it in its capacity as a Lender, as
Agent, as Swing Line Lender, or as Issuing Bank. Without limiting the foregoing,
each of the Joint Lead Arrangers, Joint Book Runners, Co-Syndication Agents, and
Documentation Agent, in such capacities, shall not have or be deemed to have any
fiduciary relationship with any Lender or any Loan Party. Each Lender, Agent,
Swing Line Lender, Issuing Bank, and each Loan Party acknowledges that it has
not relied, and will not rely, on the Joint Lead Arrangers, Joint Book Runners,
Co-Syndication Agents, and Documentation Agent in deciding to enter into this
Agreement or in taking or not taking action hereunder. Each of the Joint Lead
Arrangers, Joint Book Runners, Co-Syndication Agents, and Documentation Agent,
in such capacities, shall be entitled to resign at any time by giving notice to
Agent and Borrowers.

15.19 Quebec Security. In its capacity as Agent, for the purposes of holding any
hypothec granted to Agent, Wells Fargo is hereby appointed and shall serve as
the hypothecary representative for all present and future Lenders and Bank
Product Providers as contemplated by Article 2692 of the Civil Code of Québec.
Any person who becomes a Lender or a Bank Product Provider shall, by its
execution of an Assignment and Acceptance (in the case of a Lender), or by
entering into a Bank Product

 

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Agreement (in the case of a Bank Product Provider) be deemed to have consented
to and confirmed Agent as the person acting as hypothecary representative
holding the aforesaid hypothecs as aforesaid and to have ratified, as of the
date it becomes a Lender or Bank Product Provider, as the case may be, all
actions taken by Agent in such capacity. The substitution of Agent pursuant to
the provisions of this Section 15 also constitute the substitution of the
hypothecary representative.

16. WITHHOLDING TAXES.

16.1 Payments. All payments made by any Loan Party under any Loan Document will
be made free and clear of, and without deduction or withholding for, any Taxes,
except as otherwise required by applicable law, and in the event any deduction
or withholding of Taxes is required, the applicable Loan Party or Agent, as the
case may be, shall make the requisite withholding, promptly pay over to the
applicable Governmental Authority the withheld tax. Upon request by Agent, after
the payment of Taxes by any Loan Party to a Governmental Authority as provided
in this Section 16.1, such Loan Party shall furnish to Agent certified copies of
tax receipts evidencing such payment by the Loan Parties or other evidence of
payment by the Loan Parties reasonably acceptable to Agent. Furthermore, if any
such Tax is an Indemnified Tax or an Indemnified Tax is so levied or imposed,
the Loan Parties agree to pay the full amount of such Indemnified Taxes and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement, any note, or Loan Document, including any amount paid
pursuant to this Section 16.1 after withholding or deduction for or on account
of any Indemnified Taxes, will not be less than the amount provided for herein.
The Loan Parties will promptly pay any Other Taxes or reimburse Agent for such
Other Taxes upon Agent’s demand. The Loan Parties shall jointly and severally
indemnify each Indemnified Person (as defined in Section 10.3) (collectively a
“Tax Indemnitee”) for the full amount of Indemnified Taxes arising in connection
with this Agreement or any other Loan Document or breach thereof by any Loan
Party (including, without limitation, any Indemnified Taxes imposed or asserted
on, or attributable to, amounts payable under this Section 16) imposed on, or
paid by, such Tax Indemnitee and all reasonable costs and expenses related
thereto (including reasonable fees and disbursements of attorneys and other tax
professionals), as and when they are incurred and irrespective of whether suit
is brought, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority (other than
Indemnified Taxes and additional amounts that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Tax Indemnitee). The obligations of the Loan Parties under
this Section 16 shall survive the termination of this Agreement, the resignation
and replacement of the Agent, and the repayment of the Obligations.

16.2 Exemptions.

(a) If a Lender is entitled to claim an exemption or reduction from United
States withholding Tax (including backup withholding Tax), such Lender agrees to
deliver to Agent and the Administrative Borrower on behalf of all Borrowers one
of the following before receiving its first payment under this Agreement:

(i) if such Lender is entitled to claim an exemption from United States
withholding Tax pursuant to the portfolio interest exception, (A) a statement of
the Lender , signed under penalty of perjury, that it is not a (I) a “bank” as
described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of
Administrative Borrower (within the meaning of Section 871(h)(3)(B) of the IRC),
or (III) a controlled foreign corporation related to Borrowers within the
meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and
executed IRS Form W-8BEN, Form W-8BEN-E or Form W-8IMY (or any successor forms)
(with proper attachments as applicable);

 

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(ii) if such Lender is entitled to claim an exemption from, or a reduction of,
withholding Tax under a United States tax treaty, a properly completed and
executed copy of IRS Form W-8BEN or Form W-8BEN-E (or any successor forms), as
applicable;

(iii) if such Lender is entitled to claim that interest paid under this
Agreement is exempt from United States withholding Tax because it is effectively
connected with a United States trade or business of such Lender, a properly
completed and executed copy of IRS Form W-8ECI (or any successor forms);

(iv) if such Lender is entitled to claim that interest paid under this Agreement
is exempt from United States withholding Tax because such Lender serves as an
intermediary, a properly completed and executed copy of IRS Form W-8IMY (or any
successor forms) (including a withholding statement and copies of the tax
certification documentation for its beneficial owner(s) of the income paid to
the intermediary, if required based on its status provided on the Form W-8IMY);
or

(v) a properly completed and executed copy of any other form or forms, including
IRS Form W-9 (or any successor forms), as may be required under the IRC or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding or backup withholding Tax.

(b) Each Lender shall provide new forms (or successor forms) upon the expiration
or obsolescence of any previously delivered forms and to promptly notify Agent
and Administrative Borrower of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.

(c) If a Lender claims an exemption from withholding Tax in a jurisdiction other
than the United States, such Lender agrees with and in favor of Agent and
Borrowers, to deliver to Agent and Administrative Borrower any such form or
forms, as may be required under the laws of such jurisdiction as a condition to
exemption from, or reduction of, foreign withholding or backup withholding Tax,
but only if such Lender is legally able to deliver such forms, or the providing
of or delivery of such forms in the Lender’s reasonable judgment would not
subject such Lender to any material unreimbursed cost or expense or materially
prejudice the legal or commercial position of such Lender (or its Affiliates);
provided, further, that nothing in this Section 16.2(c) shall require a Lender
to disclose any information that it deems to be confidential (including without
limitation, its tax returns). Each Lender shall provide new forms (or successor
forms) upon the expiration or obsolescence of any previously delivered forms and
to promptly notify Agent and Administrative Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

(d) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable due diligence and reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the IRC, as
applicable), such Lender shall deliver to Agent at the time or times prescribed
by law and at such time or times reasonably requested by Agent such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by Agent as may be necessary for Agent or Borrowers to
comply with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(d), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

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16.3 Reductions. On or prior to the date of this Agreement, the Agent shall (and
any successor or replacement Agent shall, on or before the date on which it
becomes the Agent hereunder), deliver to the Borrower two duly executed
originals of either (i) IRS Form W-9 or (ii) IRS Form W-8ECI or IRS Form
W-8BEN-E (with respect to any payments to be received on its own behalf) and IRS
Form W-8IMY (for all other payments), in each case establishing that Borrower
can make payments to the Agent without deduction or withholding of any Taxes
imposed by the United States, including Taxes imposed under FATCA. The Agent
agrees that if any form or certification it previously delivered expires or
becomes obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify Borrower in writing of its legal inability to
do so.

16.4 Refunds. If Agent or a Lender determines, in its sole discretion, that it
has received a refund of any Indemnified Taxes to which the Loan Parties have
paid additional amounts pursuant to this Section 16, so long as no Default or
Event of Default has occurred and is continuing, it shall pay over such refund
to the Administrative Borrower on behalf of the Loan Parties (but only to the
extent of payments made, or additional amounts paid, by the Loan Parties under
this Section 16 with respect to Indemnified Taxes giving rise to such a refund),
net of all reasonable out-of-pocket expenses of Agent or such Lender and without
interest (other than any interest paid by the applicable Governmental Authority
with respect to such a refund); provided, that the Loan Parties, upon the
request of Agent or such Lender, agrees to repay the amount paid over to the
Loan Parties (plus any penalties, interest or other charges, imposed by the
applicable Governmental Authority, other than such penalties, interest or other
charges imposed as a result of the willful misconduct or gross negligence of
Agent or Lender hereunder as finally determined by a court of competent
jurisdiction) to Agent or such Lender in the event Agent or such Lender is
required to repay such refund to such Governmental Authority. Notwithstanding
anything in this Agreement to the contrary, this Section 16 shall not be
construed to require Agent or any Lender to make available its tax returns (or
any other information which it deems confidential) to Loan Parties or any other
Person or require Agent or any Lender to pay any amount to an indemnifying party
pursuant to Section 16.4, the payment of which would place Agent or such Lender
(or their Affiliates) in a less favorable net after-Tax position than such
Person would have been in if the Tax subject to indemnification and giving rise
to such refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had
never been paid.

17. GENERAL PROVISIONS.

17.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by each Borrower, Agent, and each Lender whose signature is provided
for on the signature pages hereof.

17.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.

17.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or any Borrower, whether
under any rule of construction or otherwise. On the contrary, this Agreement has
been reviewed by all parties and shall be construed and interpreted according to
the ordinary meaning of the words used so as to accomplish fairly the purposes
and intentions of all parties hereto.

17.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

 

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17.5 Bank Product Providers. Each Bank Product Provider in its capacity as such
shall be deemed a third party beneficiary hereof and of the provisions of the
other Loan Documents for purposes of any reference in a Loan Document to the
parties for whom Agent is acting. Agent hereby agrees to act as agent for such
Bank Product Providers and, by virtue of entering into a Bank Product Agreement,
the applicable Bank Product Provider shall be automatically deemed to have
appointed Agent as its agent and to have accepted the benefits of the Loan
Documents. It is understood and agreed that the rights and benefits of each Bank
Product Provider under the Loan Documents consist exclusively of such Bank
Product Provider’s being a beneficiary of the Liens and security interests (and,
if applicable, guarantees) granted to Agent and the right to share in payments
and collections out of the Collateral as more fully set forth herein. In
addition, each Bank Product Provider, by virtue of entering into a Bank Product
Agreement, shall be automatically deemed to have agreed that Agent shall have
the right, but shall have no obligation, to establish, maintain, relax, or
release reserves in respect of the Bank Product Obligations and that if reserves
are established there is no obligation on the part of Agent to determine or
insure whether the amount of any such reserve is appropriate or not. In
connection with any such distribution of payments or proceeds of Collateral,
Agent shall be entitled to assume no amounts are due or owing to any Bank
Product Provider unless such Bank Product Provider has provided a written
certification (setting forth a reasonably detailed calculation) to Agent as to
the amounts that are due and owing to it and such written certification is
received by Agent a reasonable period of time prior to the making of such
distribution. Agent shall have no obligation to calculate the amount due and
payable with respect to any Bank Products, but may rely upon the written
certification of the amount due and payable from the applicable Bank Product
Provider. In the absence of an updated certification, Agent shall be entitled to
assume that the amount due and payable to the applicable Bank Product Provider
is the amount last certified to Agent by such Bank Product Provider as being due
and payable (less any distributions made to such Bank Product Provider on
account thereof). Borrowers may obtain Bank Products from any Bank Product
Provider, although Borrowers are not required to do so. Each Borrower
acknowledges and agrees that no Bank Product Provider has committed to provide
any Bank Products and that the providing of Bank Products by any Bank Product
Provider is in the sole and absolute discretion of such Bank Product Provider.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Product shall have any voting or
approval rights hereunder (or be deemed a Lender) solely by virtue of its status
as the provider or holder of such agreements or products or the Obligations
owing thereunder, nor shall the consent of any such provider or holder be
required (other than in their capacities as Lenders, to the extent applicable)
for any matter hereunder or under any of the other Loan Documents, including as
to any matter relating to the Collateral or the release of Collateral or
Guarantors.

17.6 Debtor-Creditor Relationship. The relationship between the Lenders and
Agent, on the one hand, and the Loan Parties, on the other hand, is solely that
of creditor and debtor. No member of the Lender Group has (or shall be deemed to
have) any fiduciary relationship or duty to any Loan Party arising out of or in
connection with the Loan Documents or the transactions contemplated thereby, and
there is no agency or joint venture relationship between the members of the
Lender Group, on the one hand, and the Loan Parties, on the other hand, by
virtue of any Loan Document or any transaction contemplated therein.

17.7 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

 

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17.8 Revival and Reinstatement of Obligations; Certain Waivers. If any member of
the Lender Group or any Bank Product Provider repays, refunds, restores, or
returns in whole or in part, any payment or property (including any proceeds of
Collateral) previously paid or transferred to such member of the Lender Group or
such Bank Product Provider in full or partial satisfaction of any Obligation or
on account of any other obligation of any Loan Party under any Loan Document or
any Bank Product Agreement, because the payment, transfer, or the incurrence of
the obligation so satisfied is asserted or declared to be void, voidable, or
otherwise recoverable under any law relating to creditors’ rights, including
provisions of the Bankruptcy Code or other Insolvency Laws relating to
fraudulent transfers, preferences, or other voidable or recoverable obligations
or transfers (each, a “Voidable Transfer”), or because such member of the Lender
Group or Bank Product Provider elects to do so on the reasonable advice of its
counsel in connection with a claim that the payment, transfer, or incurrence is
or may be a Voidable Transfer, then, as to any such Voidable Transfer, or the
amount thereof that such member of the Lender Group or Bank Product Provider
elects to repay, restore, or return (including pursuant to a settlement of any
claim in respect thereof), and as to all reasonable costs, expenses, and
attorneys’ fees of such member of the Lender Group or Bank Product Provider
related thereto, (i) the liability of the Loan Parties with respect to the
amount or property paid, refunded, restored, or returned will automatically and
immediately be revived, reinstated, and restored and will exist, and
(ii) Agent’s Liens securing such liability shall be effective, revived, and
remain in full force and effect, in each case, as fully as if such Voidable
Transfer had never been made. If, prior to any of the foregoing, (A) Agent’s
Liens shall have been released or terminated, or (B) any provision of this
Agreement shall have been terminated or cancelled, Agent’s Liens, or
such provision of this Agreement, shall be reinstated in full force and effect
and such prior release, termination, cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligation of any
Loan Party in respect of such liability or any Collateral securing
such liability. This provision shall survive the termination of this Agreement
and the repayment in full of the Obligations.

17.9 Confidentiality.

(a) Agent and Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding the Loan
Parties and their Restricted Subsidiaries, their operations, assets, and
existing and contemplated business plans (“Confidential Information”) shall be
treated by Agent and the Lenders in a confidential manner, and shall not be
disclosed by Agent and the Lenders to Persons who are not parties to this
Agreement, except: (i) to attorneys for and other advisors, accountants,
auditors, and consultants to any member of the Lender Group and to employees,
directors and officers of any member of the Lender Group (the Persons in this
clause (i), “Lender Group Representatives”) on a “need to know” basis in
connection with this Agreement and the transactions contemplated hereby and on a
confidential basis, (ii) to Subsidiaries and Affiliates of any member of the
Lender Group (including the Bank Product Providers); provided, that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 17.9, (iii) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided,
that (x) prior to any disclosure under this clause (iv), the disclosing party
agrees to provide Borrowers with prior notice thereof, to the extent that it is
practicable to do so and to the extent that the disclosing party is permitted to
provide such prior notice to Borrowers pursuant to the terms of the applicable
statute, decision, or judicial or administrative order, rule, or regulation and
(y) any disclosure under this clause (iv) shall be limited to the portion of the
Confidential Information as may be required by such statute, decision, or
judicial or administrative order, rule, or regulation, (v) as may be agreed to
in advance in writing by Borrowers, (vi) as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process;
provided, that (x) prior to any disclosure under this clause (vi) the disclosing
party agrees to provide Borrowers with prior written notice thereof, to the
extent that it is practicable to do so and to the extent that the disclosing
party is permitted to provide such

 

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prior written notice to Borrowers pursuant to the terms of the subpoena or other
legal process and (y) any disclosure under this clause (vi) shall be limited to
the portion of the Confidential Information as may be required by such
Governmental Authority pursuant to such subpoena or other legal process,
(vii) as to any such information that is or becomes generally available to the
public (other than as a result of prohibited disclosure by Agent or the Lenders
or the Lender Group Representatives), (viii) in connection with any assignment,
participation or pledge of any Lender’s interest under this Agreement; provided,
that prior to receipt of Confidential Information any such assignee,
participant, or pledgee shall have agreed in writing to receive such
Confidential Information either subject to the terms of this Section 17.9 or
pursuant to confidentiality requirements substantially similar to those
contained in this Section 17.9 (and such Person may disclose such Confidential
Information to Persons employed or engaged by them as described in clause
(i) above), (ix) in connection with any litigation or other adversary proceeding
involving parties hereto which such litigation or adversary proceeding involves
claims related to the rights or duties of such parties under this Agreement or
the other Loan Documents; provided, that prior to any disclosure to any Person
(other than any Loan Party, Agent, any Lender, any of their respective
Affiliates, or their respective counsel) under this clause (ix) with respect to
litigation involving any Person (other than any Borrower, Agent, any Lender, any
of their respective Affiliates, or their respective counsel), the disclosing
party agrees to provide Borrowers with prior written notice thereof, and (x) in
connection with, and to the extent reasonably necessary for, the exercise of any
secured creditor remedy under this Agreement or under any other Loan Document.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may
disclose information concerning the terms and conditions of this Agreement and
the other Loan Documents to loan syndication and pricing reporting services or
in its marketing or promotional materials, with such information to consist of
deal terms and other information customarily found in such publications or
marketing or promotional materials and may otherwise use the name, logos, and
other insignia of any Borrower or the other Loan Parties and the Commitments
provided hereunder in any “tombstone” or other advertisements, on its website or
in other marketing materials of the Agent.

(c) Each Loan Party agrees that Agent may make Borrower Materials available to
the Lenders by posting the Communications on IntraLinks, SyndTrak or a
substantially similar secure electronic transmission system (the “Platform”).
The Platform is provided “as is” and “as available.” Agent does not warrant the
accuracy or completeness of the Borrower Materials, or the adequacy of the
Platform and expressly disclaim liability for errors or omissions in the
communications. No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness for a
particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by Agent in connection with the Borrower
Materials or the Platform. In no event shall Agent or any of the Agent-Related
Persons have any liability to the Loan Parties, any Lender or any other person
for damages of any kind, including direct or indirect, special, incidental or
consequential damages, losses or expenses (whether in tort, contract or
otherwise) arising out of any Loan Party’s or Agent’s transmission of
communications through the Internet, except to the extent the liability of such
person is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such person’s gross negligence or willful
misconduct. Each Loan Party further agrees that certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Loan Parties or their securities)
(each, a “Public Lender”). The Loan Parties shall be deemed to have authorized
Agent and its Affiliates and the Lenders to treat Borrower Materials marked
“PUBLIC” or otherwise at any time filed with the SEC as not containing any
material non-public information with respect to the Loan Parties or their
securities for purposes of United States federal and state securities laws. All
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated as “Public Investor” (or another similar
term). Agent and its Affiliates and the Lenders shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” or that are not at any time
filed with the SEC as being suitable only for posting on a portion of the
Platform not marked as “Public Investor” (or such other similar term).

 

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17.10 Survival. All representations and warranties made by the Loan Parties in
the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that Agent,
Issuing Bank, or any Lender may have had notice or knowledge of any Default or
Event of Default or incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and effect as long as
the principal of, or any accrued interest on, any Loan or any fee or any other
amount payable under this Agreement is outstanding or unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or been
terminated.

17.11 Patriot Act; Due Diligence. Each Lender that is subject to the
requirements of the Patriot Act hereby notifies the Loan Parties that pursuant
to the requirements of the Patriot Act, it is required to obtain, verify and
record information that identifies each Loan Party, which information includes
the name and address of each Loan Party and other information that will allow
such Lender to identify each Loan Party in accordance with the Patriot Act. In
addition, Agent and each Lender shall have the right to periodically conduct due
diligence on all Loan Parties, their senior management and key principals and
legal and beneficial owners. Each Loan Party agrees to cooperate in respect of
the conduct of such due diligence and further agrees that the reasonable costs
and charges for any such due diligence by Agent shall constitute Lender Group
Expenses hereunder and be for the account of Borrowers.

17.12 Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof. The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.

17.13 Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints
the Parent as the borrowing agent and attorney-in-fact for all Borrowers (the
“Administrative Borrower”) which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (a) to provide Agent with
all notices with respect to Revolving Loans and Letters of Credit obtained for
the benefit of any Borrower and all other notices and instructions under this
Agreement and the other Loan Documents (and any notice or instruction provided
by Administrative Borrower shall be deemed to be given by Borrowers hereunder
and shall bind each Borrower), (b) to receive notices and instructions from
members of the Lender Group (and any notice or instruction provided by any
member of the Lender Group to the Administrative Borrower in accordance with the
terms hereof shall be deemed to have been given to each Borrower), and (c) to
enter into Bank Product Provider Agreements on behalf of Borrowers and their
Restricted Subsidiaries, and (d) to take such action as the Administrative
Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters
of Credit and to exercise such other powers as are reasonably incidental thereto
to carry out the purposes of this Agreement. It is understood that the handling
of the Loan Account and Collateral in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at

 

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their request, and that Lender Group shall not incur liability to any Borrower
as a result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the
Lender Group to do so, and in consideration thereof, each Borrower hereby
jointly and severally agrees to indemnify each member of the Lender Group and
hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(i) the handling of the Loan Account and Collateral of Borrowers as herein
provided, or (ii) the Lender Group’s relying on any instructions of the
Administrative Borrower, except that Borrowers will have no liability to the
relevant Agent-Related Person or Lender-Related Person under this Section 17.13
with respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence, bad
faith or willful misconduct of such Agent-Related Person or Lender-Related
Person, as the case may be.

17.14 Judgment Currency. If for the purposes of obtaining judgment in any court
it is necessary to convert a sum due from a Loan Party hereunder in the currency
expressed to be payable herein (the “Specified Currency”) into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with usual
and customary banking procedures the Agent could purchase the Specified Currency
with such other currency at any of the Agent’s offices in the United States of
America on the Business Day preceding that on which final judgment is given. The
obligations of the Loan Parties in respect of any sum due to any member of the
Lender Group hereunder shall, notwithstanding any judgment in a currency other
than the Specified Currency, be discharged only to the extent that on the
Business Day following receipt by such Lender, such Issuing Bank, such Swing
Line Lender or the Agent (as the case may be) of any sum adjudged to be so due
in such other currency such Lender, such Issuing Bank, such Swing Line Lender or
the Agent (as the case may be) may in accordance with normal, reasonable banking
procedures purchase the Specified Currency with such other currency. If the
amount of the Specified Currency so purchased is less than the sum originally
due to such Lender, such Issuing Bank, such Swing Line Lender or the Agent, as
the case may be, in the Specified Currency, each Loan Party agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender, such Issuing Bank,
such Swing Line Lender, and the Agent, as the case may be, against such loss,
and if the amount of the Specified Currency so purchased exceeds (a) the sum
originally due to any Lender, such Issuing Bank, such Swing Line Lender or the
Agent, as the case may be, in the Specified Currency and (b) any amounts shared
with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 15.12, each Lender, each
Issuing Bank, each Swing Line Lender or Agent, as the case may be, agrees to
promptly remit such excess to the applicable Borrower.

17.15 Amendment and Restatement. The parties hereto have agreed that this
Agreement is an amendment and restatement of the Existing Credit Facility in its
entirety, and this Agreement is not a novation of the Existing Credit Facility.
The outstanding commitments under the Existing Credit Facility have been
assigned, renewed, extended, modified, and rearranged as Revolver Commitments
under and pursuant to the terms of this Agreement. Certain of the Lenders (as
Lenders under the Existing Credit Facility) have agreed among themselves, in
consultation with the Borrowers, to adjust their respective Commitments and to
terminate the commitments of certain lenders under the Existing Credit Facility
who will not become a Lender hereunder (each an “Exiting Lender”). The Agent,
the Lenders, the Parent and each other Borrower, and each Exiting Lender (by
receipt of the payment in full of the Advances as defined in, and owing to it
under, the Existing Credit Facility and, at such Exiting Lender’s request, under
a separate exiting agreement executed by such Exiting Lender) consented to such
reallocation and each Exiting Lender’s adjustment of, and each Exiting Lender’s
assignment of, an interest in the commitments

 

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and the Exiting Lenders’ assignments of their respective commitments. On the
Closing Date, and after giving effect to such reallocations, adjustments,
assignments and decreases, the Commitments of each Lender shall be as set forth
on Schedule C-1. The Lenders shall make all appropriate adjustments and payments
between and among themselves to account for the revised pro rata shares
resulting from the initial allocation of the Lenders’ commitments under the
Existing Credit Facility to under this Agreement. The Parent and each Lender
party hereto that was a “Lender” under the Existing Credit Facility hereby
agrees and this Section 17.15 and any exiting agreement executed by an Exiting
Lender that is acceptable to the Agent and the Parent shall be deemed approved
assignment forms as required under the Existing Credit Facility.

17.16 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if
applicable:

(c) a reduction in full or in part or cancellation of any such liability;

(d) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(e) the variation of the terms of such liability in connection with the exercise
of the write-down and conversion powers of any EEA Resolution Authority.

[Signature pages to follow.]

 

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

 

PARENT/US BORROWER:       FORUM ENERGY TECHNOLOGIES, INC.,

a Delaware corporation

      By:   

/s/ James W. Harris

      Name:    James W. Harris       Title:   
Executive Vice President and Chief Financial Officer CANADIAN BORROWER:      
FORUM CANADA ULC,

an Alberta unlimited liability corporation

      By:   

/s/ James W. Harris

      Name:    James W. Harris       Title:    President

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT]

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

WELLS FARGO BANK, NATIONAL ASSOCIATION,

a national banking association, as Agent, as Joint Lead Arranger, as Joint Book
Runner, as Co-Syndication Agent, as Documentation Agent, and as a Lender

By:  

/s/ Heath Israel

Name:   Heath Israel     Its Authorized Signatory

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT]

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

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,

as a Canadian Revolving Lender

By:  

/s/ David Phillips

Name:   David Phillips Title:   Senior Vice President

JPMORGAN CHASE BANK, N.A.,

as a Joint Lead Arranger, as Joint Book Runner, as Co-Syndication Agent, and as
Lender

By:  

/s/ Candice Brooks

Name:   Candice Brooks Title:   Authorized Officer

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,

as a Canadian Revolving Lender

By:  

/s/ Auggie Marchetti

Name:   Auggie Marchetti Title:   Authorized Officer

CITIBANK, NA.,

as a Joint Lead Arranger, as Joint Book Runner, as Co-Syndication Agent, and as
Lender

By:  

/s/ David Foster

Name:   David Foster Title:   Vice President

BANK OF AMERICA, N.A.,

as a Joint Lead Arranger, as Joint Book Runner, as Co-Syndication Agent, and as
Lender

By:  

/s/ Kristen Francis

Name:   Kristen Francis Title:   Credit Officer

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT]

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

BANK OF AMERICA, N.A., CANADA BRANCH

as a Canadian Revolving Lender

By:  

/s/ Sylwia Durkiewicz

Name:   Sylwia Durkiewicz Title:   Vice President

HSBC BANK USA, N.A.,

as a Lender

By:  

/s/ Wadie C. Habiby

Name:   Wadie C. Habiby Title:   SVP, Corporate Banking

DEUTSCHE BANK AG NEW YORK BRANCH.,

as a Lender

By:  

/s/ Duncan Lazarov

Name:   Duncan Lazerov Title:   Director By:  

/s/ Anca Trifan

Name:   Anca Trfan Title:   Managing Director

DEUTSCHE BANK AG CANADA BRANCH.,

as a Lender

By:  

/s/ David W Sooley

Name:   David W. Sooley Title:   Chief Country Officer By:  

/s/ David Gynn

Name:   David Gynn Title:   Chief Financial Officer

ZB, N.A. DBA AMEGY BANK.,

as a Lender

By:  

/s/ Steven Taylor

Name:   Steven Taylor Title:   Vice President

[SIGNATURE PAGE TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT]