EXHIBIT 10.2

WASTE MANAGEMENT OF CANADA CORPORATION

WM QUÉBEC INC.

as Borrowers

and

WASTE MANAGEMENT, INC.

WASTE MANAGEMENT HOLDINGS, INC.

as Guarantors

and

THE BANK OF NOVA SCOTIA

as Administrative Agent

and

JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A. and

PNC BANK, NATIONAL ASSOCIATION

as Co-Syndication Agents

THE BANK OF NOVA SCOTIA, J.P. MORGAN SECURITIES LLC, MERRILL

LYNCH, PIERCE, FENNER & SMITH INCORPORATED AND PNC CAPITAL

MARKETS LLC

as Joint Lead Arrangers and Joint Bookrunners

and

THE LENDERS FROM TIME TO TIME

PARTY TO THIS AGREEMENT

as Lenders

 

 

C$650,000,000 CREDIT FACILITIES

CREDIT AGREEMENT

DATED AS OF 7 NOVEMBER 2012

 

 

BORDEN LADNER GERVAIS LLP

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TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION

     2    1.1       

Definitions

     2    1.2       

Construction

     19    1.3       

Certain Rules of Interpretation

     19    1.4       

Accounting Terms

     20    1.5       

Existing Credit Agreement

     20   

ARTICLE 2 THE CREDITS

     20    2.1       

Amounts and Availment Options

     20    2.2       

Re-borrowing

     21    2.3       

Use of the Credits

     21    2.4       

Term and Repayment

     22    2.5       

Interest Rates, Fees and Commissions

     23    2.6       

Standby Fee

     24    2.7       

Agency, Assignment and Other Fees

     24    2.8       

Exchange Rate Fluctuations

     24   

ARTICLE 3 SECURITY

     25    3.1       

Security

     25   

ARTICLE 4 DISBURSEMENT CONDITIONS

     25    4.1       

Conditions Precedent to Initial Advance

     25    4.2       

Conditions Precedent to all Advances

     27   

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

     28    5.1       

Representations and Warranties

     28    5.2       

Survival of Representations and Warranties

     34   

ARTICLE 6 COVENANTS

     34    6.1       

Financial Covenants

     34    6.2       

Positive Covenants

     34    6.3       

Reporting Requirements

     38   

PERIODIC FINANCIAL REPORTS

     38    6.4       

Negative Covenants

     39   

 

(i)

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ARTICLE 7 DEFAULT

     43    7.1       

Default

     43    7.2       

Acceleration and Termination of Rights

     45    7.3       

Payment of L/Cs and B/As

     46    7.4       

Remedies

     46    7.5       

Interest After Stay of Proceedings

     46    7.6       

Saving

     46    7.7       

Perform Obligations

     47    7.8       

Third Parties

     47    7.9       

Remedies Cumulative

     47    7.10     

Set-Off or Compensation

     47    7.11     

Direct Payments

     48   

ARTICLE 8 THE AGENT AND THE LENDERS

     49    8.1       

Authorization of Agent

     49    8.2       

Rights as a Lender

     49    8.3       

Exculpatory Provisions

     49    8.4       

Reliance by Agent

     50    8.5       

Delegation of Duties

     50    8.6       

Administration of the Credits

     51    8.7       

Acknowledgments, Representations and Covenants of Lenders

     54    8.8       

Defaulting Lenders

     54    8.9       

Reference Lenders

     55    8.10     

Provisions Operative Between Lenders and Agent Only

     55   

ARTICLE 9 DETAILS REGARDING ADVANCES, PAYMENTS, INTEREST AND FEES

     56    9.1       

Lenders’ Obligations Relating to L/Cs and Revolving Credit

     56    9.2       

Adjustment of Applicable Percentages for Revolving Credit

     56    9.3       

Exceptions Regarding the Revolving Credit

     57    9.4       

Evidence of Indebtedness

     57    9.5       

Calculation and Other Matters Regarding Interest and Fees

     58    9.6       

Conversions, Rollovers, Renewals, Repayments and Reductions

     60    9.7       

Notice of Advances and Payments

     61    9.8       

Size and Term of Advances

     62    9.9       

Payment of B/As, LIBOR Advances and L/Cs

     63    9.10     

Co-ordination of Prime Rate, Base Rate, B/A and LIBOR Advances

     64    9.11     

Execution of B/As

     65    9.12     

Funding of B/As

     65    9.13     

Other B/A Provisions

     66    9.14     

Issuance and Use of L/Cs

     66    9.15     

Reimbursement Obligation - L/Cs

     67    9.16     

Failure of Lender to Fund

     67    9.17     

Payments by the Borrowers

     68    9.18     

Payments by Agent

     69   

 

(ii)

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9.19     

Increased Costs, Etc.

     70    9.20     

Taxes

     71    9.21     

Mitigation Obligations; Replacement of Lenders

     72    9.22     

Illegality

     73    9.23     

Inability to Determine Rates, Etc.

     74   

ARTICLE 10 ADDITIONAL LENDERS, SUCCESSORS AND ASSIGNS

     74    10.1     

Successors and Assigns

     74    10.2     

Assignments by Lenders

     75    10.3     

Register

     76    10.4     

Participations

     76   

ARTICLE 11 MISCELLANEOUS PROVISIONS

     77    11.1     

Severability, Etc.

     77    11.2     

Amendment, Supplement or Waiver

     77    11.3     

Governing Law and Agent for Service

     78    11.4     

Due Diligence by Lenders

     78    11.5     

Currency

     78    11.6     

Liability of Lenders

     79    11.7     

Currency Indemnity

     79    11.8     

Expenses and Indemnity

     79    11.9     

Address for Notice

     80    11.10   

Time of the Essence

     81    11.11   

Further Assurances

     81    11.12   

Term of Agreement

     82    11.13   

Payments on Business Day

     82    11.14   

Counterparts and Facsimile

     82    11.15   

Waiver of Jury Trial and Consequential Damages

     82    11.16   

Whole Agreement

     83    11.17   

This Agreement to Govern

     83    11.18   

Language

     83    11.19   

Limitation Periods

     83    11.20   

Services Provided and Conflicts of Interest

     84    11.21   

Date of Agreement

     84   

 

SCHEDULE A    – FORM OF NOTICE OF ADVANCE OR PAYMENT SCHEDULE B    – FORM OF
COMPLIANCE CERTIFICATE SCHEDULE C    – FORM OF ASSIGNMENT AGREEMENT SCHEDULE D
   – ADDRESS FOR NOTICE SCHEDULE E    – LENDERS AND THEIR APPLICABLE PERCENTAGES

 

(iii)

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CREDIT AGREEMENT dated as of 7 November 2012.

BETWEEN:

WASTE MANAGEMENT OF CANADA CORPORATION

WM QUÉBEC INC.

as Borrowers

- and -

WASTE MANAGEMENT, INC.

WASTE MANAGEMENT HOLDINGS, INC.

as Guarantors

- and -

THE LENDERS FROM TIME TO TIME PARTY

TO THIS AGREEMENT

as Lenders

- and -

THE BANK OF NOVA SCOTIA

as Administrative Agent

RECITALS:

 

A. Certain of the parties to this Agreement are also parties to a credit
agreement dated as of November 30, 2005 as amended by an amendment agreement
dated as of December 21, 2007 (as amended, the “Existing Credit Agreement”).

 

B. By commitment letter dated July 23, 2012 and accepted on July 25, 2012, The
Bank of Nova Scotia provided certain commitments to the Borrowers in connection
with the establishment in favour of the Borrowers of certain new senior credit
facilities, namely, a revolving operating credit in the maximum amount of
C$150,000,000 and a non-revolving term credit in the maximum amount of
C$500,000,000 or, in each case, the Equivalent Amount in US Dollars, subject to
certain conditions.

 

C. The Parties are entering into this Agreement to provide for the terms of the
new senior credit facilities.

FOR VALUE RECEIVED, and intending to be legally bound by this Agreement, the
Parties agree as follows:

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ARTICLE 1

INTERPRETATION

 

1.1 Definitions

In this Agreement, unless something in the subject matter or context is
inconsistent therewith:

 

(1) “Accountants” means Ernst & Young LLP or other independent auditors
reasonably acceptable to the Lenders.

 

(2) “Advance” means an availment of a Credit by the Borrowers by way of Prime
Rate Advance, Base Rate Advance, B/A, B/A Equivalent Loan, L/C or LIBOR Advance,
including overdrafts under the Swing Line Tranche, deemed advances and
conversions, renewals and rollovers of existing Advances. Any reference to the
amount of Advances is a reference to the sum of all outstanding Prime Rate
Advances, Base Rate Advances and LIBOR Advances, including overdrafts under the
Swing Line Tranche, the face amount of all outstanding B/As, the aggregate
amount payable at the end of the term of all outstanding B/A Equivalent Loans,
the undrawn amount of all outstanding L/Cs and the amount of any Advance for
which the Borrowers have failed to provide for payment under Section 9.9.

 

(3) “Advance Date” means the date, which shall be a Business Day, of any
Advance.

 

(4) “Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

(5) “Agent” or “Administrative Agent” means The Bank of Nova Scotia in its
capacity as administrative agent for the Lenders, and any successor
administrative agent appointed in accordance with this Agreement.

 

(6) “Agreement”, “hereof”, “herein”, “hereto”, “hereunder” or similar
expressions mean this Agreement, the Recitals hereto and any Schedules hereto,
as amended, supplemented, restated and replaced from time to time in accordance
with the provisions hereof, and not any particular Article, Section or other
portion hereof.

 

(7) “Agreement of Purchase and Sale” means the asset purchase agreement dated
July 26, 2012 entered into between WMQ, WMI, RCI Environnement Inc., Location
P.S.M. Inc., Gestion Environnementale Nord-Sud Inc. and Fiducie Remdev in
connection with the Transaction.

 

(8) “Applicable Law” means (a) any domestic or foreign statute, law (including
common and civil law), treaty, code, ordinance, rule, regulation, restriction or
by-law (zoning or otherwise); (b) any judgment, order, writ, injunction,
decision, ruling, decree or award; (c) any regulatory policy, practice, request,
guideline or directive; or (d) any franchise, licence, qualification,
authorization, consent, exemption, waiver, right, permit or other approval of
any Governmental Authority, binding on or affecting the Person referred to in
the context in which the term is used or binding on or affecting the Property of
that Person, in each case whether or not having the force of law.

 

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(9) “Applicable Percentage” means with respect to any Lender, the percentage of
the total Commitments represented by such Lender’s Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be the
percentage of the total outstanding Advances represented by such Lender’s
outstanding Advances. The Applicable Percentage of each Lender as of the date of
this Agreement is the percentage calculated based on the amounts set out in
Schedule E to this Agreement, which shall be amended and distributed to all
parties by the Agent from time to time as Applicable Percentages change in
accordance with this Agreement.

 

(10) “Assignment Agreement” means an assignment agreement substantially in the
form of Schedule C or any other form approved by the Agent.

 

(11) “B/A” means a depository bill as defined in the Depository Bills and Notes
Act (Canada) in Canadian Dollars that is in the form of an order signed by the
Borrowers and accepted by a Lender pursuant to this Agreement or, for Lenders
not participating in clearing services contemplated in that Act, a draft or bill
of exchange in Canadian Dollars that is drawn by the Borrowers and accepted by a
Lender pursuant to this Agreement. For this purpose, orders or drafts that
become depository bills, drafts and bills of exchange are sometimes collectively
referred to as “orders” in this Agreement.

 

(12) “B/A Discount Proceeds” means, in respect of any B/A, the amount that is
calculated on the applicable Advance Date in accordance with Section 9.5(5).

 

(13) “B/A Discount Rate” means:

 

  (a) with respect to any B/A accepted by a Lender named on Schedule I to the
Bank Act (Canada), the greater of:

 

  (i) the average rate that appears on the Reuters screen CDOR page at or about
10:00 a.m. on the applicable Advance Date, for bankers’ acceptances having an
identical maturity date to the maturity date of that B/A; or

 

  (ii) the rate determined by the Agent as being the arithmetic average (rounded
upward to the nearest multiple of 0.01%) of the discount rates of the Schedule I
Reference Lenders, determined in accordance with normal market practice at or
about 10:00 a.m. on the applicable Advance Date, for bankers’ acceptances having
a comparable face amount and identical maturity date to the face amount and
maturity date of that B/A; and

 

  (b) with respect to any B/A accepted by any other Lender, the rate determined
in accordance with item (a) above plus 0.07% per annum.

 

(14) “B/A Equivalent Loan” is defined in Section 9.12(3).

 

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(15) “B/A Fee” means the fee payable with respect to a B/A that is calculated in
accordance with Section 9.5(4).

 

(16) “Balance Sheet Date” means December 31, 2011.

 

(17) “Base Rate” means, on any day, the greatest of:

 

  (a) the average of the annual rates of interest established by each Schedule I
Reference Lender as its reference rate for that day for commercial loans made by
it in Canada in US Dollars;

 

  (b) the interest rate per annum equal to 0.50% per annum above (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers as
published for the day (or, if the day is not a Business Day, for the first
preceding Business Day) by the Federal Reserve Bank of New York or, (ii) if that
rate is not published for that day by the Federal Reserve Bank of New York, the
average of the quotations for that day for those transactions received by the
Agent from three federal funds brokers of recognized standing; and

 

  (c) LIBOR for a period of 30 days plus 1.00% per annum.

 

(18) “Base Rate Advance” means an Advance in US Dollars bearing interest based
on the Base Rate, and includes availments that are deemed to be Base Rate
Advances under this Agreement.

 

(19) “Borrowers” means WMOCC and WMQ, on a joint and several basis, and their
respective successors and permitted assigns.

 

(20) “Branch of Account” means GWS–Loan Administration & Agency Operations of
the Agent located at 720 King Street West, 2nd Floor, Global Wholesale Services,
Toronto, Ontario, M5V 2T3, or such other branch or branches as may be designated
by the Agent from time to time.

 

(21) “Business Day” means a day of the year, except a Saturday or a Sunday, on
which:

 

  (a) the Agent is open for normal banking business at its principal offices in
Toronto, Ontario and New York, U.S.A.; and

 

  (b) with respect to notices, determinations, payments or advances relating to
LIBOR Advances, the Agent is open for normal banking business at its principal
offices in New York, U.S.A., London, England and Toronto, Ontario;

except that, if banks are open in some but not all of these locations on a
particular day and the Agent determines that the closing of its offices on that
day will not adversely affect completion of relevant transactions in accordance
with customary banking market and trading practices, the Agent may, on
reasonable notice to the Borrowers and the Lenders, specify that particular day
to be a Business Day. Any reference in the Provisions to a “business day” shall
be interpreted as referring to a Business Day.

 

- 4 -

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(22) “Canadian Dollar”, “Cdn. Dollars”, “Cdn. $” and “$” mean the lawful money
of Canada.

 

(23) “Capital Leases” means leases under which a Person is the lessee or obligor
and the discounted future rental payment obligations under which are required to
be capitalized on the consolidated balance sheet of the lessee or obligor in
accordance with GAAP.

 

(24) “CDOR Rate” means, on any date, with respect to any B/A, the simple average
of the rates shown on the display referred to as the “CDOR Page” (or any display
substituted therefor) on Reuters Domestic Money Service (or any successor source
from time to time) with respect to the banks and other financial institutions
named in such display at or about 10:00 a.m. (Toronto time) on such date for
banker’s acceptances having an identical maturity date to the maturity date of
such B/A, as determined by the Agent, or if such day is not a Business Day, then
on the immediately preceding Business Day; provided, however, that if such rates
are not available, then the CDOR Rate for any day shall be calculated as the
average of the bid rates (rounded upwards to the nearest 1/16th of 1%) quoted by
each of the Schedule I Reference Lenders for its own banker’s acceptances for
the applicable period as of 10:00 a.m. (Toronto time) on such day, as determined
by the Agent, or if such day is not a Business Day, then on the immediately
preceding Business Day.

 

(25) “CERCLA” has the meaning defined in Section 5.1(15).

 

(26) “Change in Law” means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any Applicable Law,
(b) any change in any Applicable Law or in the administration, interpretation or
application thereof by any Governmental Authority, or (c) the making or issuance
of any Applicable Law by any Governmental Authority (it being acknowledged that
(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives 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”).

 

(27) “Closing Date” means 7 November 2012 or such other day as may be agreed to
by the parties.

 

(28) “Collateral” means cash, a bank draft or a letter of credit issued by a
Canadian chartered bank, all in a form satisfactory to the Agent, acting
reasonably.

 

(29) “Commitment” means, for each Lender from time to time, the agreement to
make Advances to the Borrowers and to purchase participations in Advances in
accordance with Sections 9.1(1) and 9.1(2) in the Lender’s Applicable Percentage
of the maximum amount of each Credit and, where the context requires, the
maximum amount of Advances that the Lender has agreed to make. Each Lender’s
Commitment may change from time to time or be cancelled in accordance with this
Agreement.

 

- 5 -

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(30) “Compliance Certificate” means a certificate in the form of Schedule B
signed by a senior officer of each of the Borrowers and WMI.

 

(31) “Consolidated Tangible Assets” means all assets of WMI determined on a
consolidated basis in accordance with GAAP less the sum of:

 

  (a) the total book value of all assets of WMI on a consolidated basis properly
classified as intangible assets under GAAP, including such items as goodwill,
the purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, customer lists, brand names,
copyrights, patents and licenses, and rights with respect to the foregoing; plus

 

  (b) all amounts representing any write-up in the book value of any assets of
WMI on a consolidated basis resulting from a revaluation thereof subsequent to
December 31, 2010.

 

(32) “Consolidated Total Interest Expense” means, for any period, the aggregate
amount of interest expense required by GAAP to be paid or (without duplication)
accrued during such period on all Debt of WMI on a consolidated basis
outstanding during all or any part of such period, including capitalized
interest expense for such period, the amortization of debt discounts and the
amortization of fees payable in connection with the incurrence of Debt.

 

(33) “Consolidated Net Income (or Deficit)” means the consolidated net income
(or deficit) of WMI, after deduction of all expenses, taxes, and other proper
charges, determined in accordance with GAAP.

 

(34) “Constating Documents” means, with respect to any Person, its articles or
certificate of incorporation, amendment, amalgamation, continuance or
association, memorandum of association, by-laws, declaration of trust, trust
indenture, partnership agreement, limited liability company agreement or other
similar document, as applicable, and all unanimous shareholder agreements, other
shareholder agreements, voting trust agreements and similar arrangements
applicable to the Person’s capital stock, all as amended, supplemented, restated
or replaced from time to time.

 

(35) “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have corresponding meanings.

 

(36) “Credits” means the Revolving Credit and the Term Credit, and “Credit”
means either of them.

 

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(37) “Debt” means collectively, without duplication, whether classified as
indebtedness, an investment or otherwise on the Obligor’s balance sheet, (a) all
indebtedness for borrowed money (including the face amount of all bankers’
acceptances), (b) all obligations for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of business
which either (i) are not overdue by more than 90 days, or (ii) are being
disputed in good faith and for which adequate reserves have been established in
accordance with GAAP), (c) all obligations evidenced by notes, bonds, debentures
or other similar debt instruments, (d) all obligations created or arising under
any conditional sale or other title retention agreement with respect to property
acquired (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations, liabilities and indebtedness under Capital
Leases, (f) all obligations, liabilities or indebtedness arising from the making
of a drawing under surety, performance bonds, or any other bonding arrangement,
(g) Guarantees of any Debt of others referred to in clauses (a) through
(f) above, and (h) all Debt of others referred to in clauses (a) through
(f) above secured or supported by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured or supported by) any
Encumbrance on the property or assets of any Obligor or any Subsidiary, even
though the owner of the property has not assumed or become liable, contractually
or otherwise, for the payment of such Debt; provided that if a Permitted
Receivables Transaction is outstanding and is accounted for as a sale of
accounts receivable under generally accepted accounting principles, Debt shall
also include the additional Debt, determined on a consolidated basis, which
would have been outstanding had such Permitted Receivables Transaction been
accounted for as a borrowing.

 

(38) “Defaulting Lender” means any Lender, as determined by the Agent, that:

 

  (a) has failed to fully fund its share of any Advance or fulfill its
obligations under Section 9.1 within three Business Days of the date it is
required to do so under this Agreement unless such Lender notifies the Agent and
the Borrowers 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, shall be
specifically identified in such writing) has not been satisfied;

 

  (b) has notified the Borrowers, the Agent or any other Lender in writing that
it does not intend to comply with any of its funding obligations under this
Agreement (including Section 9.1), has issued financial statements containing a
“going concern” or similar qualification or indicating a potential inability to
comply with funding obligations, or has made a public statement to the effect
that it does not intend or is unable to comply with its funding obligations
under this Agreement or under other agreements in which it commits to extend
credit unless such written notice relates to such Lender’s obligation to fund an
Advance hereunder and states that such position is based on such Lender’s
determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot been
satisfied;

 

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  (c) has failed, within three Business Days after request by the Agent, to
confirm that it will comply with its funding obligations under this Agreement
(including Section 9.1);

 

  (d) has otherwise failed to pay over to the Agent or any other Lender any
other amount required to be paid by it under this Agreement within three
Business Days of the date when due, unless payment is the subject of a good
faith dispute;

 

  (e) has become or is insolvent, is deemed to be insolvent, or is Controlled by
a Person that has become or is insolvent or deemed to be insolvent; or

 

  (f) has itself or is Controlled by a Person that has (i) become the subject of
a bankruptcy or insolvency proceeding, (ii) had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or custodian,
appointed for it, or (iii) taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment.

 

(39) “Designated Account” means, in respect of any Advance, the account or
accounts maintained by the Borrowers at the Agent’s West Metro Commercial
Banking Centre, 2 Robert Speck Parkway, Mississauga, Ontario L4Z 1H8 that the
Borrowers designate in their notice requesting an Advance.

 

(40) “Disclosure Documents” means the financial statements referred to in
Section 5.1(4)(a), and filings made by any Obligor with the Securities and
Exchange Commission that were publicly available prior to the date of this
Agreement.

 

(41) “Distribution” means the declaration or payment of any dividend or other
return on equity on or in respect of any shares of any class of capital stock,
any partnership interests or any membership interests of any Person (other than
dividends or other such returns payable solely in shares of capital stock,
partnership interests or membership units of such Person, as the case may be);
the purchase, redemption, or other retirement of any shares of any class of
capital stock, partnership interests or membership units of such Person,
directly or indirectly through a Subsidiary or otherwise; the return of equity
capital by any Person to its shareholders, partners or members as such; or any
other distribution on or in respect of any shares of any class of capital stock,
partnership interest or membership unit of such Person.

 

(42) “Drawdown Date” means the date, which shall be a Business Day, of any
Advance.

 

(43)

“EBIT” means, for any period, the Consolidated Net Income (or Deficit) of WMI on
a consolidated basis plus, without duplication, the sum of (a) interest expense,
(b) equity in losses (earnings) of unconsolidated entities, (c) income taxes,
(d) non-cash write-downs or write-offs of assets, including non-cash losses on
the sale of assets outside the ordinary course of business and (e) EBIT of the
businesses acquired by WMI or any of its Subsidiaries (through asset purchases
or otherwise) (each an “Acquired Business”) or the Subsidiaries acquired or
formed since the beginning of such period (each a “New Subsidiary”) provided
that a statement identifying all such Acquired Businesses and the

 

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  EBIT of such Acquired Businesses is delivered to the Lenders with the
Compliance Certificate for such period, all to the extent that each of items
(a) through (d) was deducted in determining Consolidated Net Income (or Deficit)
in the relevant period, minus non-cash extraordinary gains on the sale of assets
outside the ordinary course of business to the extent included in Consolidated
Net Income (or Deficit).

 

(44) “EBITDA” means, for a period, EBIT plus (a) depreciation expense, and
(b) amortization expense to the extent the same would be included in the
calculation of Consolidated Net Income (or Deficit) for such period, determined
in accordance with GAAP.

 

(45) “Eligible Assignee” means any Person (other than a natural person, any
Obligor or any Affiliate of an Obligor), in respect of which any consent that is
required by Section 10.2(1) has been obtained.

 

(46) “Employee Benefit Plan” means any employee benefit plan within the meaning
of §3(3) of ERISA maintained or contributed by WMI, any of its Subsidiaries, or
any ERISA Affiliate, other than a Multiemployer Plan.

 

(47) “Encumbrance” means, with respect to any asset, (a) any mortgage, deed of
trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance,
charge, security interest, assignment, deposit arrangement or other restriction
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset, and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

 

(48) “Environmental Laws” has the meaning defined in Section 5.1(15)(a).

 

(49) “Equivalent Amount” means, with respect to an amount in one currency, the
amount in another currency that could be purchased by the amount in the first
currency determined by reference to the Exchange Rate at the time of
determination.

 

(50) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.

 

(51) “ERISA Affiliate” means any Person which is treated as a single employer,
member of a controlled group, or under common control with WMI or any of its
Subsidiaries under §412, §412, or §430 of the Code.

 

(52) “ERISA Reportable Event” means a reportable event within the meaning of
§4043 of ERISA and the regulations promulgated thereunder with respect to a
Guaranteed Pension Plan as to which the requirement of notice has not been
waived.

 

(53) “Event of Default” means any of the events or circumstances described in
Section 7.1.

 

(54)

“Exchange Rate” means on any day, for the purpose of calculations under this
Agreement, the amount of Canadian Dollars into which another currency may be
converted, or vice versa, using the Bank of Canada noon spot rate for converting
the one

 

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  currency into the other on that day or if that day is not a Business Day, the
preceding Business Day, or if such rate is not so published by the Bank of
Canada for any such day, then at the mid rate (i.e. the average of the Agent’s
spot buying and selling rates) quoted by the Agent at the Branch of Account at
approximately noon (Toronto time) on that day in accordance with its normal
practice for the applicable currency conversion in the wholesale market, or if
that day is not a Business Day, the preceding Business Day.

 

(55) “Excluded Taxes” means any income or capital Tax now or hereafter imposed,
levied, collected, withheld or assessed on a Lender by any applicable
Governmental Authority in Canada or any other jurisdiction in which that Lender
is subject to Tax as a result of the Lender: (a) having a permanent
establishment in such jurisdiction, (b) being organized under the laws of such
jurisdiction, (c) being resident or deemed to be resident in such jurisdiction,
or (d) not dealing at arm’s length with an Obligor or any other Lender; but does
not include any sales, goods or services Tax payable under the laws of any such
jurisdiction with respect to any goods or services made available by a Lender to
the Borrowers under this Agreement or any withholding tax.

 

(56) “Existing Credit Agreement” is defined in the first recital to this
Agreement.

 

(57) “FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board

 

(58) “Fee Letter” means the confidential fee letter dated July 23, 2012 from The
Bank of Nova Scotia to the Borrowers and accepted by the Borrowers on July 25,
2012.

 

(59) “GAAP” “ means, when used in this Agreement, whether directly or indirectly
through reference to a capitalized term used therein, means (a) principles that
are consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board (U.S.) and its predecessors, in effect for the fiscal
year ended on the December 31, 2010, and (b) to the extent consistent with such
principles, the accounting practice of WMI reflected in its financial statements
for the year ended on December 31, 2010; provided, that, with respect to any
financial statements prepared after the December 31, 2010, such meaning in each
of clause (a) and (b) shall include the revised guidance associated with
multiple-deliverable revenue arrangements effective per FASB ASC 605 on
January 1, 2011; provided, further, that in each case referred to in this
definition of “GAAP” a certified public accountant would, insofar as the use of
such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, “Debt” of WMI and its subsidiaries
shall be deemed to be carried at 100% of the outstanding principal amount
thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial
liabilities shall be disregarded.

 

(60)

“Governmental Authority” means the government of Canada or any other nation, or
of any political subdivision thereof, whether provincial, state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising

 

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  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) and any group or body
charged with setting financial accounting or regulatory capital rules or
standards (including, without limitation, the Financial Accounting Standards
Board, the Bank for International Settlements or the Basel Committee on Banking
Supervision or any successor or similar authority to any of the foregoing).

 

(61) “Guarantee” means any obligation, contingent or otherwise, of a Person
guaranteeing or having the economic effect of guaranteeing any Debt or other
obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Debt or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Debt or other obligation, or (d) as an account party in
respect of any letter of credit or letter of guarantee issued to support such
Debt or obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.

 

(62) “Guaranteed Pension Plan” means any employee pension benefit plan within
the meaning of §3(2) of ERISA maintained or contributed to by WMI, its
Subsidiaries or any ERISA Affiliate (or pursuant to which any such Person
accrued an obligation to make contributions at any time during the preceding
five plan years) the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

 

(63) “Guarantors” means each of Waste Management, Inc., a Delaware corporation,
and Waste Management Holdings, Inc., a Delaware corporation, and each other
Person which delivers a guarantee hereunder, and becomes a party hereto, from
time to time.

 

(64) “Hazardous Substances” has the meaning defined in Section 5.1(15)(b).

 

(65) “Indemnified Taxes” means Taxes other than Excluded Taxes.

 

(66) “Interbank Reference Rate” means, in respect of any currency, the interest
rate expressed as a percentage per annum that is determined by the Agent at any
time in accordance with banking industry rules on interbank compensation for use
when calculating interest due by it or owing to it arising from correction of
errors in transactions in that currency between it and other banks.

 

(67) “Interest Payment Date” means the 21st day of each calendar month.

 

(68) “Interest Period” has the same meaning as LIBOR Period.

 

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(69) “Interim Balance Sheet Date” means September 30, 2012.

 

(70) “Investment” means all expenditures made by a Person and all liabilities
incurred (contingently or otherwise) by a Person for the acquisition of stock of
(other than the stock of Subsidiaries), or Debt of, or for loans, advances,
capital contributions or transfers of property to, or in respect of any
Guarantees or other commitments as described under Debt, or obligations of, any
other Person, including without limitation, the funding of any captive insurance
company (other than loans, advances, capital contributions or transfers of
property to any Subsidiaries or variable interest entities consolidated in
accordance with FASB ASC 810, or Guarantees with respect to Debt of any
Subsidiary or variable interest entities consolidated in accordance with FASB
ASC 810). In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a Guarantee
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding, (b) there shall be included as an Investment
all interest accrued with respect to Debt constituting an Investment unless and
until such interest is paid, (c) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by partial or
full repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution), (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.

 

(71) “Issuing Bank” means The Bank of Nova Scotia as the issuer of Letters of
Credit on the basis that it is “fronting” for the other Lenders and not on the
basis that it is the attorney of the other Lenders to sign Letters of Credit on
their behalf. If The Bank of Nova Scotia resigns as Issuing Bank, a successor
shall be agreed to by the Borrower and the Required Lenders, acting reasonably,
and the new Issuing Bank.

 

(72) “L/C” or “Letter of Credit” means a standby letter of credit, letter of
guarantee or commercial letter of credit in a form satisfactory to the Issuing
Bank, issued by the Issuing Bank at the request of the Borrowers in favour of a
third Person to secure the payment or performance of an obligation to the third
Person.

 

(73) “L/C Fee” means the fee payable with respect to an L/C that is calculated
in accordance with Section 9.5(6).

 

(74) “Lenders” means each of the Persons listed on Schedule E and other lenders
that from time to time become Lenders in accordance with the terms of this
Agreement and “Lender” means any one of the Lenders. However, references to the
Lenders in the context of the Agent or others holding Security or other rights
or documents for the benefit or on behalf of the Lenders shall be interpreted as
including other Persons to whom Other Guaranteed Obligations are owed.

 

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(75) “LIBOR” means, for any LIBOR Period and LIBOR Advance, the greatest of:

 

  (a) the rate expressed as a percentage per annum for deposits in US Dollars in
the London interbank market for a period equal to the LIBOR Period and in an
amount approximately equal to the amount of the LIBOR Advance, that appears on
the Reuters LIBOR 01 Page (or any successor source from time to time) as of
11:00 a.m. (London time) two Business Days before the first day of the LIBOR
Period; and

 

  (b) the interest rate expressed as a percentage per annum determined by the
Agent to be its cost of funds in the London interbank market for US Dollars for
a period equal to the LIBOR Period and in an amount approximately equal to the
amount of the LIBOR Advance, at 11:00 a.m. (London time) two Business Days
before the first day of the LIBOR Period.

 

(76) “LIBOR Advance” or “LIBO Rate Loan” means an Advance in US Dollars bearing
interest based on LIBOR.

 

(77) “LIBOR Period” means the period selected by the Borrowers for a LIBOR
Advance.

 

(78) “Loan Documents” means this Agreement, the Security, the Fee Letter, and
all other documents relating to the Credits, or either of them.

 

(79) “Material Adverse Effect” means a material adverse effect on (a) the
business, operations, or financial condition of the Obligors, taken as a whole,
(b) the ability of either Guarantor to perform its obligations under any Loan
Document to which it is a party, or (c) the rights of, or remedies or benefits
available to, the Agent or any of the Lenders under any Loan Document.

 

(80) “Maturity Date” means 7 November 2017.

 

(81) “Moody’s” means Moody’s Investors Service, or any successor to it.

 

(82) “Multiemployer Plan” means any multiemployer plan within the meaning of
§3(37) of ERISA maintained or contributed to by WMI, any of its Subsidiaries, or
any ERISA Affiliate (or pursuant to which any such Person accrued an obligation
to make contributions at any time during the preceding five plan years).

 

(83) “Non-B/A Lender” is defined in Section 9.12(3).

 

(84)

“Obligations” means all debts, liabilities and obligations of the Borrowers to
the Lenders under or in connection with this Agreement, whether present or
future, direct or indirect, absolute or contingent, matured or not, at any time
owing or remaining unpaid by the Borrowers to the Lenders in any currency under
or in connection with this Agreement, whether arising from dealings between the
Lenders and the Borrowers or from other dealings or proceedings by which the
Lenders may be or become in any manner whatever creditors of the Borrowers under
or in connection with this Agreement, and wherever incurred, and whether
incurred by the Borrowers alone or with another or others and

 

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  whether as principal or surety, and all interest, fees, commissions and legal
and other costs, charges and expenses owing or remaining unpaid by the Borrowers
to the Lenders in any currency under or in connection with this Agreement. In
this definition, “Lenders” means the Lenders, or any of them. For certainty, the
Other Guaranteed Obligations are not Obligations.

 

(85) “Obligors” means the Borrowers and each of the Guarantors, and “Obligor”
means any of them.

 

(86) “Other Guaranteed Obligations” means the present and future debts,
liabilities and obligations of the Borrowers or either of them to any Lender or
its affiliates that arise under or in connection with, (i) derivatives or other
hedging arrangements, and (ii) cash management arrangements, entered into with
such Lender or its affiliates that are permitted under this Agreement, which
Other Guaranteed Obligations shall rank pari passu with the Credits.

 

(87) “Parties” means collectively the Borrowers, the other Obligors, the Lenders
and the Agent.

 

(88) “PBGC” means the Pension Benefit Guaranty Corporation created by §4002 of
ERISA.

 

(89) “Pending Event of Default” means an event which would constitute an Event
of Default hereunder, except for satisfaction of any requirement for giving of
notice, lapse of time, or both, or other condition subsequent.

 

(90) “Permitted Encumbrances” means, any of the following:

 

  (a) Encumbrances for taxes not due or that are being contested in good faith
by appropriate proceedings and for which adequate reserves with respect thereto
have been set aside as required by GAAP;

 

  (b) carriers’, warehousemen’s, maritime, mechanics’, materialmen’s,
repairmen’s other like Encumbrances arising in the ordinary course of business
that are being contested in good faith by appropriate proceedings and for which
adequate reserves with respect thereto have been set aside as required by GAAP;

 

  (c) pledges and deposits made in the ordinary course of business in compliance
with workmen’s compensation, unemployment insurance and other social security
laws or regulations;

 

  (d) Encumbrances to secure the performance of bids, trade contracts (other
than for Debt), leases (other than Capital Leases), statutory obligations,
surety and appeal bonds, suretyship, performance and landfill closure bonds and
other obligations of a like nature incurred in the ordinary course of business;

 

  (e) zoning restrictions, easements, rights-of-way, restrictions on use of
property and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of WMI or any of its Subsidiaries;

 

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  (f) the Encumbrances on Schedule 1.1 of the U.S. Credit Agreement (a copy of
which is attached hereto as Annex 1.1) securing the obligations listed on such
Schedule and any replacement Encumbrance securing any renewal, extension or
refunding of such obligations if the amount secured by such renewal, extension
or refunding Encumbrance shall not exceed the amount of the outstanding
obligations secured by the Encumbrance being replaced at the time of such
renewal, extension or refunding (plus transactions costs, including premiums and
fees, related to such renewal, extension or refunding) and if such replacement
Encumbrance shall be limited to substantially the same property that secured the
Encumbrance so replaced;

 

  (g) legal or equitable encumbrances deemed to exist by reason of the existence
of any litigation or other legal proceeding or arising out of a judgment or
award with respect to which an appeal is being prosecuted in good faith by
appropriate action and with respect to which adequate reserves are being
maintained and, in the case of judgment liens, execution thereon is stayed;

 

  (h) rights reserved or vested in any municipality or governmental, statutory
or public authority to control or regulate any property of WMI or any
Subsidiary, or to use such property in a manner that does not materially impair
the use of such property for the purposes for which it is held by WMI or such
Subsidiary;

 

  (i) any obligations or duties affecting the property of WMI or any of its
Subsidiaries to any municipality, governmental, statutory or public authority
with respect to any franchise, grant, license or permit;

 

  (j) Encumbrances filed in connection with sales of receivables by any of the
Subsidiaries of WMI (other than Waste Management Holdings, Inc.) to a
wholly-owned special purpose financing Subsidiary for purposes of perfecting
such sales, provided that no third party has any rights with respect to such
Encumbrances or any assets subject thereto;

 

  (k) any interest or title of a lessor under any sale-leaseback transaction
entered into by WMI or any Subsidiary conveying only the assets so leased back
to the extent the related Debt is permitted under Section 6.4(1);

 

  (l)

Encumbrances created or deemed to be created under Permitted Receivables
Transactions at any time provided such Encumbrances do not extend to any
property or assets other then the trade receivables sold pursuant to such
Permitted Receivables Transactions, interests in the goods or products
(including returned goods and products), if any, relating to the sales giving
rise to such trade receivables; any security interests or other Encumbrances and
property subject thereto (other than on any leases or related lease payment
rights or receivables between WMI and any of its Subsidiaries, as lessors or
sublessors) from time to

 

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  time purporting to secure the payment by the obligors of such trade
receivables (together with any financing statements authorized by such obligors
describing the collateral securing such trade receivables) pursuant to such
Permitted Receivables Transactions; and

 

  (m) Encumbrances securing other Debt, provided that the aggregate amount of
all liabilities, including any Debt, of WMI and its Subsidiaries secured by all
Encumbrances permitted in subsections (k), (l) and (m), when added (without
duplication) to the aggregate amount of Debt of WMI’s Subsidiaries permitted
under Section 6.4(1)(b) and Debt with respect to Permitted Receivables
Transactions, shall not exceed 15% of Consolidated Tangible Assets at any time.

 

(91) “Permitted Receivables Transaction” means any sale or sales of, and/or
securitization of, any accounts receivable of WMI and/or any of its Subsidiaries
(the “Receivables”) pursuant to which (a) WMI and its Subsidiaries realize
aggregate net proceeds of not more than $750,000,000 at any one time
outstanding, including, without limitation, any revolving purchase(s) of
Receivables where the maximum aggregate uncollected purchase price (exclusive of
any deferred purchase price) for such Receivables at any time outstanding does
not exceed $750,000,000, and (b) which Receivables shall not be discounted more
25%.

 

(92) “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

(93) “Prime Rate” means, on any day, the greater of:

 

  (a) the average of the annual rates of interest established by each of the
Schedule I Reference Lenders as its reference rate for that day for commercial
loans made by it in Canada in Canadian Dollars; and

 

  (b) the CDOR Rate for one-month Canadian Dollar bankers’ acceptances on that
day plus 1.00% per annum.

 

(94) “Prime Rate Advance” means an Advance in Canadian Dollars bearing interest
based on the Prime Rate and includes availments that are deemed to be Prime Rate
Advances under this Agreement.

 

(95) “RCRA” has the meaning defined in Section 5.1(15).

 

(96) “Real Property” means all real property heretofore, now, or hereafter
owned, operated or leased by WMI or any of its Subsidiaries.

 

(97) “Register” has the meaning defined in Section 10.3.

 

(98)

“Release” shall have the meaning specified in CERCLA and the term “Disposal” (or
“Disposed”) shall have the meaning specified in RCRA and regulations promulgated
thereunder provided that in the event either CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply as of

 

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  the effective date of such amendment and provided further, to the extent that
the laws of Canada or a state, province, territory or other political
subdivision thereof wherein the property lies establish a meaning for “Release”
or “Disposal” which is broader than specified in either CERCLA, or RCRA, such
broader meaning shall apply to WMI’s or any of its Subsidiaries’ activities in
that state, province, territory or political subdivision.

 

(99) “Relevant Rating” means, as of any date of determination, the ratings as
determined by S&P and Moody’s of WMI’s non-credit enhanced, senior unsecured
long-term debt and in circumstances when the ratings are not the same level (in
the grid set forth in Section 2.5(1)), then the higher of the two ratings shall
apply, provided however that if the higher rating is more than one level higher
than the lower rating, the Relevant Rating shall be set at one level below the
higher rating.

 

(100) “Required Lenders” means a Lender or Lenders holding, in the aggregate, a
minimum of 50.1% of the amount of the Commitments (or the outstanding Advances
if the Commitments have terminated including after the occurrence of any
Default), excluding in all cases Commitments or Advances held by any Obligor or
any Affiliate or Related Party of any Obligor.

 

(101) “Revolving Credit” means the revolving credit of up to C$150,000,000 or
the Equivalent Amount in US Dollars in favour of the Borrowers that is
established pursuant to Section 2.1(1), unless the context otherwise requires,
includes the Swing Line Tranche.

 

(102) “Revolving Lenders” means the Lenders who have provided Commitments
relating to the Revolving Credit as specified in Schedule E.

 

(103) “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc., or any successor to it.

 

(104) “Schedule I Reference Lenders” means Lenders that are banks named on
Schedule I of the Bank Act (Canada) and that have been designated as or deemed
to be Schedule I Reference Lenders pursuant to Section 8.9.

 

(105) “Security” means the guarantees held from time to time by or on behalf of
the Agent and the Lenders supporting or intended to support, inter alia,
repayment of any of the Obligations, including, without limitation, the Existing
Guarantees and the New Guarantees.

 

(106) “Standby Fee” has the meaning defined in Section 2.5(5).

 

(107) “Subsidiary” means any Person of which the designated parent shall at any
time own directly or indirectly through one or more subsidiaries at least a
majority of the outstanding capital stock or other interests entitled to vote
generally and whose financial results are required to be consolidated with the
financial results of the designated parent in accordance with GAAP.

 

(108) “Swap Contract” means all obligations in respect of interest rate,
currency or commodity exchange, forward, swap, or futures contracts or similar
transactions or arrangements entered into to protect or hedge any of the
Obligors against interest rate, exchange rate or commodity price risks or
exposure, or to lower or diversify their funding costs.

 

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(109) “Swing Line Lender” means the Lender that, subject to Section 9.1(2),
makes Advances under the Swing Line Tranche. As of the date of this Agreement,
the Swing Line Lender is The Bank of Nova Scotia. The Borrowers may from time to
time with the consent of the Agent and the proposed replacement Lender,
designate another Revolving Lender to replace The Bank of Nova Scotia as the
Swing Line Lender, in which case the Parties shall make such arrangements as are
necessary to ensure that all amounts owing under or in connection with the Swing
Line Tranche to the outgoing Swing Line Lender are promptly paid in full.

 

(110) “Swing Line Tranche” means the carveout of the Revolving Credit under
which overdrafts are available as described in Section 2.1(1).

 

(111) “Taxes” means all taxes, levies, imposts, stamp taxes, duties, deductions,
withholdings and similar governmental impositions payable, levied, collected,
withheld or assessed as of the date of this Agreement or at any time in the
future and all interest, charges and penalties in respect thereof, and “Tax”
shall have a corresponding meaning.

 

(112) “Term Credit” means the credit of up to C$500,000,000 or the Equivalent
Amount in US Dollars in favour of the Borrowers that is established pursuant to
Section 2.1(2).

 

(113) “Term Lenders” means the Lenders who have provided Commitments relating to
the Term Credit as specified in Schedule E.

 

(114) “Total Debt” means the sum, without duplication, of all (1) Debt of WMI on
a consolidated basis, under subsections (a) through (h) of the definition of
“Debt” (provided, however, that Debt with respect to Permitted Receivables
Transactions shall not be included in such calculation), plus (2) non-contingent
reimbursement obligations of WMI and its Subsidiaries with respect to drawings
under any L/Cs.

 

(115) “Transaction” means the acquisition of the assets of RCI Environnement
Inc., Location P.S.M. Inc. and Gestion Environnementale Nord-Sud Inc. by WM
Québec as described more particularly in the Agreement of Purchase and Sale.

 

(116) “U.S. Credit Agreement” means the U.S. $2,000,000,000 amended and restated
revolving credit agreement dated as of May 9, 2011 by and among WMI, as
borrower, Waste Management Holdings, Inc., as guarantor, various banks party
thereto from time to time, as lenders, Bank of America, N.A., as administrative
agent and others.

 

(117) “US Dollars” and “U.S. $” means lawful monies of the United States of
America.

 

(118) “WMI” means Waste Management, Inc., a Delaware corporation.

 

(119) “WMOCC” means Waste Management of Canada Corporation, a Nova Scotia
unlimited liability company.

 

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(120) “WMQ” means WM Québec Inc., a corporation incorporated under the laws of
Canada.

 

1.2 Construction

This Agreement has been negotiated by each party with the benefit of legal
representation and any rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not apply to the
construction or interpretation of this Agreement.

 

1.3 Certain Rules of Interpretation

In this Agreement:

 

  (a) the division into sections and other subdivisions thereof and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement; and

 

  (b) unless otherwise specified or the context otherwise requires:

 

  (i) references to any Section or Schedule are references to the Section of, or
Schedule to, this Agreement;

 

  (ii) “including” or “includes” means “including (or includes) but not limited
to” and shall not be construed to limit any general statement preceding it to
the specific or similar items or matters immediately following it;

 

  (iii) references to contracts, agreements or instruments, unless otherwise
specified, are deemed to include all present and future amendments, supplements,
restatements or replacements to or of such contracts, agreements or instruments,
provided that such amendments, supplements, restatements or replacements to or
of such contracts, agreements or instruments have been, if applicable, approved
or consented to and otherwise made in accordance with the provisions of this
Agreement;

 

  (iv) references to any legislation, statutory instrument or regulation or a
section or other provision thereof, unless otherwise specified, is a reference
to the legislation, statutory instrument, regulation, section or other provision
as amended, restated or re-enacted from time to time;

 

  (v) references to any thing includes the whole or any part of that thing and a
reference to a group of things or Persons includes each thing or Person in that
group;

 

  (vi) references to a Person includes that Person’s successors and assigns;

 

  (vii) all references to specific times are references to Toronto time; and

 

  (viii) words in the singular include the plural and vice-versa and words in
one gender include all genders.

 

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1.4 Accounting Terms

In this Agreement, unless specified otherwise, each accounting term has the
meaning assigned to it under GAAP.

 

1.5 Existing Credit Agreement

The Credits are in addition to the credit provided to WMOCC under the Existing
Credit Agreement which remains in full, force and effect, unamended by this
Agreement.

ARTICLE 2

THE CREDITS

 

2.1 Amounts and Availment Options

 

(1) Upon and subject to the terms and conditions of this Agreement, the
Revolving Lenders severally (not jointly and not jointly and severally) agree to
provide to the Borrowers a credit facility referred to as the Revolving Credit
for the use of the Borrowers in the aggregate amount of up to $150,000,000
(provided that each Revolving Lender’s obligation hereunder shall be limited to
its respective Applicable Percentage of the Revolving Credit).

 

(2) Subject to the terms and conditions of this Agreement, the Term Lenders
severally (not jointly and not jointly and severally) agree to provide to the
Borrowers a credit facility referred to as the Term Credit for the use of the
Borrowers in the aggregate amount of up to $500,000,000 or the Equivalent Amount
in US Dollars (provided that each Term Lender’s obligation shall be limited to
its respective Applicable Percentage of the Term Credit).

 

(3) The principal amount of the Credits may be increased by up to an aggregate
of $100,000,000 to be allocated between the Credits as agreed between the
Borrowers and the Agent, on one or more occasions if (a) one or more existing
Lenders agree with the Borrowers in their sole discretion to increase their
Commitments and confirm their agreement in a form satisfactory to the Agent or
(b) one or more other financial institutions identified by the Borrowers and/or
the Agent and acceptable to the Agent, the Issuing Lender and the Swing Line
Lender, provide Commitments in a form satisfactory to the Agent. In that case,
the Agent shall notify the Lenders and the Obligors of the increased amount of
each of the Credits and shall provide them with a revised version of Schedule E.

 

(4) At the option of the Borrowers, the Revolving Credit (other than the Swing
Line Tranche) may be used by:

 

  (a) requesting the Revolving Lenders to make Prime Rate Advances, Base Rate
Advances and/or LIBOR Advances;

 

  (b) presenting orders to the Revolving Lenders for acceptance as B/As and/or
requesting the Revolving Lenders to make B/A Equivalent Loans; and/or

 

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  (c) requesting that L/Cs in Canadian Dollars or US Dollars be issued by the
Issuing Bank on behalf of all the Revolving Lenders except that the aggregate
face amount of L/Cs outstanding under the Revolving Credit at any time shall not
exceed $50,000,000, measured at the time of issuance or renewal of any L/C.

 

(5) At the option of the Borrowers, they may obtain Advances in an aggregate
amount of up to $20,000,000 or the Equivalent Amount in US Dollars by incurring
overdrafts in their Canadian Dollar and US Dollar accounts with the Swing Line
Lender, which shall be deemed to be Prime Rate Advances and Base Rate Advances,
respectively, by the Swing Line Lender. The Swing Line Lender shall not,
however, be required to make any such Advance if doing so would result in the
sum of the Advances made by the Swing Line Lender under the Revolving Credit
(other than the Swing Line Tranche) plus the Advances made by the Swing Line
Lender under the Swing Line Tranche exceeding the Swing Line Lender’s Applicable
Percentage of the Revolving Credit (without reference to the Swing Line
Tranche).

 

(6) The Term Credit may be drawn only in a single Advance only up to 7 August
2013, at which time the undrawn amount of the Term Credit shall be permanently
cancelled. The Borrowers may cancel the Term Credit at any time following the
Closing Date prior to the date which is nine months following the Closing Date
upon written notice to the Agent. Other than the Standby Fee (as defined in
Section 2.6), no other fee, penalty or other amount shall be owed in connection
with cancellation of the Term Credit.

 

(7) At the option of the Borrowers, the Term Credit may be used by:

 

  (a) requesting the Term Lenders to make Prime Rate Advances, Base Rate
Advances and/or LIBOR Advances; and/or

 

  (b) presenting orders to the Term Lenders for acceptance as B/As and/or
requesting the Term Lenders to make B/A Equivalent Loans.

 

2.2 Re-borrowing

 

(1) The Revolving Credit is a revolving credit and the principal amount of any
Advance under the Revolving Credit that is repaid may be re-borrowed, if the
Borrowers are otherwise entitled to an Advance under the Revolving Credit.

 

(2) The Term Credit is a non-revolving credit and the principal amount of any
Advance under the Term Credit that is repaid may not be re-borrowed.

 

2.3 Use of the Credits

 

(1) The Revolving Credit may be used to, (a) finance the general corporate
requirements of the Borrowers and their Subsidiaries, (b) at the option of the
Borrowers, refinance WMOCC’s existing indebtedness owing under the Existing
Credit Agreement, and (c) to finance the implementation of the Transaction
including, without limitation, payment of the purchase price, payment of any
ancillary costs and expenses relating thereto and funding of any immediate
working capital requirements in connection therewith, subject to the other terms
of this Agreement.

 

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(2) The Term Credit may only be used to finance the implementation of the
Transaction including, without limitation, payment of the purchase price,
payment of any ancillary costs and expenses relating thereto and funding of any
immediate working capital requirements in connection therewith.

 

2.4 Term and Repayment

 

(1) The Revolving Credit shall be repaid in full and cancelled on or before the
Maturity Date.

 

(2) The Term Credit shall be repaid in full and cancelled on or before the
Maturity Date.

 

(3) Subject to the terms hereof, the Swing Line Lender may, at its option,
request that the aggregate outstanding Advances under the Swing Line Tranche be
reduced by way of Advances under the Revolving Credit. The Agent, in
consultation with the Swing Line Lender, shall notify the other Revolving
Lenders of the Advances they are required to make based on their respective
Applicable Percentages. On the day of receipt of that notice, each of the other
Revolving Lenders shall disburse their respective Advances to the Swing Line
Lender, which shall thereupon be deemed to be Prime Rate Advances and Base Rate
Advances as applicable, in each case under the Revolving Credit. No Revolving
Lender shall, however, be required to make an Advance under this Section 2.4(3)
that would result in the total Advances made by the Lender under the Revolving
Credit exceeding the Lender’s Applicable Percentage of the Revolving Credit.

 

(4)

If at any time the Borrowers request an Advance under the Revolving Credit
(other than the Swing Line Tranche) and the Advance would result in the sum of
the Advances made by the Swing Line Lender under the Revolving Credit (other
than the Swing Line Tranche) plus the Advances made by the Swing Line Lender
under the Swing Line Tranche exceed the Swing Line Lender’s Applicable
Percentage of the Revolving Credit (other than the Swing Line Tranche), then the
Borrowers shall be deemed to have directed the Agent to pay the proceeds of the
requested Advance to the Swing Line Lender to repay the Swing Line Tranche to
the extent of the excess, and the Agent shall do so. In addition, and
notwithstanding anything to the contrary in this Agreement, (i) if an Event of
Default occurs and is continuing, or (ii) if the Swing Line Lender so requires
from time to time, and there are then outstanding any Advances under the Swing
Line Tranche, effective on the day of notice to that effect to the other
Revolving Lenders from the Swing Line Lender, the Borrowers shall be deemed to
have requested, and hereby request, an Advance or Advances under the Revolving
Credit sufficient to repay the Advances under the Swing Line Tranche in the
currencies in which they were made, including accrued and unpaid interest in
respect thereof. On the day of receipt of such notice, each of the other
Revolving Lenders shall disburse to the Swing Line Lender its respective
Applicable Percentage thereof, which shall thereupon be deemed to be Prime Rate
Advances (to the extent that the Advances under the Swing Line Tranche were in
Canadian Dollars) and Base Rate Advances (to the extent that the Advances under
the Swing Line Tranche were in US Dollars), in each case under the Revolving
Credit. No

 

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  Revolving Lender shall, however, be required to make an Advance under this
Section 2.4(4) that would result in the total Advances made by the Lender under
the Revolving Credit exceeding the Lender’s Applicable Percentage of the
Revolving Credit.

 

2.5 Interest Rates, Fees and Commissions

 

(1) Interest rates on Prime Rate Advances, Base Rate Advances and LIBOR Advances
and the rates for calculation of B/A Fees and L/C Fees shall be determined and
adjusted based on the Relevant Rating as follows:

 

Relevant Rating

   Standby Fee     L/C Fees     Prime Rate
and Base Rate
Advances     B/A Fees/
LIBOR Advances  

Greater than or equal to A-/A3

     0.225 %      1.125 %      0.125 %      1.125 % 

BBB+/Baa1

     0.25 %      1.25 %      0.25 %      1.25 % 

BBB/Baa2

     0.28 %      1.40 %      0.40 %      1.40 % 

BBB-/Baa3

     0.33 %      1.65 %      0.65 %      1.65 % 

Less than or equal to BB+/ Ba1

     0.43 %      2.15 %      1.15 %      2.15 % 

All figures in the table above represent percent per annum. Each of the amounts
specified above, except the Standby Fee, shall be increased by 2% per annum if
an Event of Default has occurred and is continuing. If an Event of Default is
disclosed by a Compliance Certificate, any increase shall be applied beginning
as of the end of the fiscal period to which the Compliance Certificate relates.

 

(2) Any increase or decrease in the interest rates and fees resulting from a
change in the Relevant Rating shall be effective on the day that the Relevant
Rating changes. WMI shall immediately notify the Agent of any change in the
Relevant Rating, or in the rating of S&P or Moody’s composing the Relevant
Rating.

 

(3) Interest shall accrue and be payable on Prime Rate Advances and Base Rate
Advances at the Prime Rate or the Base Rate, respectively, plus the relevant
figure shown under “Prime Rate and Base Rate Advances” in the table in
Section 2.5(1). Interest shall accrue and be payable on LIBOR Advances at LIBOR
plus the relevant figure shown under “LIBOR Advances” in that table. The rate
for calculation of B/A Fees and L/C Fees shall be the relevant figure shown
under “B/A Fees” and “L/C Fees”, respectively, in that table. In addition, a
fronting fee at a rate of 0.25% per annum on the amount of each L/C shall be
payable to the Issuing Bank for its own account.

 

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(4) The Borrowers shall pay interest and fees at the applicable rate specified
in Section 2.5(1) to the Agent at the Branch of Account on Advances outstanding
from time to time, except that the B/A Fee for any B/A shall be paid by each
Lender deducting the B/A Fee from the proceeds of the B/A remitted to the Agent
pursuant to Section 9.10(4). The Borrowers shall pay interest on Prime Rate
Advances and Base Rate Advances on the 22nd day of each month. The Borrowers
shall pay interest on each LIBOR Advance on the last day of the applicable LIBOR
Period and, if the LIBOR Period is longer than three months, every three months
after the date of the relevant LIBOR Advance. The Borrowers shall pay L/C Fees
and the fronting fee applicable to L/Cs quarterly in arrears on the third
Business Day after the end of each calendar quarter.

 

(5) The Agent shall distribute interest and fees for the Revolving Credit (other
than the Swing Line Tranche) to the Revolving Lenders based on their respective
Applicable Percentages, except that the fronting fee for L/Cs shall be paid to
the Issuing Bank for its own account. Interest for the Swing Line Tranche shall
be paid to the Swing Line Lender for its own account. The Agent shall distribute
interest and fees for the Term Credit to the Term Lenders based on their
respective Applicable Percentages.

 

2.6 Standby Fee

The Borrowers shall pay a standby fee (the “Standby Fee”) on the daily
unadvanced portion of the Revolving Credit and, until the date of the first
Advance thereunder or its cancellation, the Term Credit, at a rate that shall be
adjusted based on the Relevant Rating and that shall be as specified under
“Standby Fee” in the table in Section 2.5(1). The Standby Fee shall be payable
quarterly in arrears on the third Business Day after the end of each quarter,
with the first payment to be made on the third Business Day after the end of the
first quarter following the Closing Date. On termination of all Commitments
under the Revolving Credit, the Borrowers shall also pay any accrued but unpaid
Standby Fees.

 

2.7 Agency, Assignment and Other Fees

The Borrowers shall, concurrently with the execution of this Agreement, pay the
non-refundable upfront and other fees to the Agent in accordance with the Fee
Letter. The Borrowers shall also pay agency and other fees to the Agent from
time to time in accordance with the Fee Letter.

 

2.8 Exchange Rate Fluctuations

If fluctuations in rates of exchange in effect between US Dollars and Canadian
Dollars cause the amount of Advances (expressed in Canadian Dollars) under a
Credit to exceed the maximum amount of that Credit permitted in this Agreement
by five (5%) percent or more for a period of five (5) consecutive Business Days,
the Borrowers shall promptly pay the Lenders the amount by which the maximum
amount of that Credit is exceeded. If, on the date of any Advance under a Credit
(whether by rollover, renewal, conversion or otherwise), the amount of Advances
(expressed in Canadian Dollars) under that Credit exceeds the maximum amount of
that Credit because of fluctuations in rates of exchange, the Borrowers shall
promptly pay the Lenders the excess and shall not be entitled to any Advance
that would result in the amount of that Credit being exceeded.

 

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ARTICLE 3

SECURITY

 

3.1 Security

 

(1) The security shall comprise the, (i) unlimited and unconditional guarantees
of the Obligations and the Other Guaranteed Obligations in favour of the Agent
and the Lenders by each of the Guarantors, and (ii) the unlimited and
unconditional guarantees of the Other Guaranteed Obligations of the other
Borrower in favour of the Agent and the Lenders by each of the Borrowers, each
of which are to be delivered pursuant to this Agreement.

ARTICLE 4

DISBURSEMENT CONDITIONS

 

4.1 Conditions Precedent to Initial Advance

The conditions precedent specified in this Section 4.1 must be satisfied at or
before the time of the first Advance under this Agreement, unless waived by all
Lenders. Where delivery of documents is referred to, the documents must be
delivered to the Agent, for and on behalf of the Lenders, the documents must be
in form and substance satisfactory to the Lenders, duly executed by all parties
and in full force and effect, and all matters disclosed by the documents must be
satisfactory to the Lenders.

 

(1) Documents

 

  (a) The Agent must have received duly executed copies of this Agreement and
the Fee Letter.

 

  (b) The Agent must have received duly executed copies of the Security and the
other Loan Documents.

 

(2) Other Debt and Liens

 

  (a) The Agent must have received a true copy of the U.S. Credit Agreement
together with all amendments thereto up to the date of this Agreement;

 

  (b) The Agent must have received all statements, postponements and
acknowledgements that are reasonably required in respect of other Encumbrances
affecting the Property of the Obligors to confirm that those Encumbrances are
Permitted Encumbrances.

 

(3) Financial Information

 

  (a) The Agent must have received summary projected information for WMOCC.

 

  (b) The Agent must have received a Compliance Certificate from the Borrowers
for the trailing twelve month period ended as of the Interim Balance Sheet Date.

 

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(4) Corporate and Other Information

 

  (a) The Agent must have received a certificate of each Obligor attaching
copies of its Constating Documents, a list of its officers and directors with
occupations of all directors, specimens of the signatures of those officers or
directors who are executing Loan Documents on its behalf, copies of the
corporate proceedings taken to authorize it to execute, deliver and perform its
obligations under the Loan Documents, and other corporate and “know your client”
information that the Agent or any Lender may reasonably require.

 

  (b) The Agent must have received a certificate of status, compliance, good
standing or equivalent for each Obligor for its jurisdiction of incorporation
and for each jurisdiction where it carries on business or where registrations or
filings in relation to the Security given by that Obligor have been effected,
except for any jurisdiction where certificates of that kind are not customarily
issued by a Governmental Authority.

 

  (c) The Agent must have received evidence that the delivery of Loan Documents
will not contravene applicable law governing financial assistance or other
similar law that affects the Loan Documents.

 

  (d) Each Obligor must have complied with Section 6.3(2).

 

(5) Opinions The Agent must have received the opinions of:

 

  (a) Borden Ladner Gervais LLP, counsel to the Agent and the Lenders in
relation to the Loan Documents which are governed by Ontario law.

 

  (b) In-house counsel to the Obligors addressed to the Agent, the Lenders and
Borden Ladner Gervais LLP in relation to, among other things, the Obligors and
the enforceability of the Loan Documents governed by Ontario law and such other
matters as the Agent may reasonably require.

 

  (c) The opinion of local counsel to the Borrowers, addressed to the Agent, the
Lenders and Borden Ladner Gervais LLP in relation to, among other things, the
existence of each of the Borrowers, its corporate power and authority and the
due authorization, execution and delivery of the Loan Documents and such other
matters as the Agent may reasonably require.

 

(6) Other Matters The following other conditions must be satisfied:

 

  (a) All fees and expenses payable under the Loan Documents and the Fee Letter
(including upfront fees, agency fees, and reasonable legal fees and expenses of
the Lenders’ counsel invoiced prior to the Closing Date) shall have been paid.

 

  (b) The Lenders must be satisfied that there has not occurred and does not
exist since December 31, 2011 any event or circumstance that has, or could
reasonably be expected to have, a Material Adverse Effect; and

 

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  (c) The Agent must have received any other documents that the Lenders may
reasonably require.

 

4.2 Conditions Precedent to an Advance under the Term Credit

In addition to the other conditions precedent specified in this Agreement, the
obligation of the Lenders to make any Advance under the Term Credit is subject
to the conditions precedent specified in this Section 4.2, unless waived by all
the Lenders. Where delivery of documents is referred to, the documents must be
delivered to the Agent, for and on behalf of the Lenders, the documents must be
in form and substance reasonably satisfactory to the Lenders, duly executed by
all parties and in full force and effect, and all matters disclosed by the
documents must be satisfactory to the Lenders.

 

  (a) The Lenders must have been provided with all relevant information and
documentation reasonably requested in connection with the Transaction,
including, without limitation, the Agreement of Purchase and Sale and copies of
material third party consents and approvals.

 

  (b) The Lenders must be satisfied that the Transaction has been completed
substantially in compliance with the terms of the Agreement of Purchase and
Sale.

 

  (c) The Lenders must be satisfied that there is no pending or threatened
dispute that seeks to adjourn, delay, enjoin, prohibit or impose material
limitations on any aspect of the Transaction or that has had, or could
reasonably be expected to have, a Material Adverse Effect.

 

  (d) The Agent must have received other documents that the Lenders may
reasonably require.

 

4.3 Conditions Precedent to all Advances

In addition to the other conditions precedent specified in this Agreement, the
obligation of the Lenders to make any Advance is subject to the following
conditions precedent:

 

  (a) No Pending Event of Default or Event of Default has occurred and is
continuing on the Advance Date, or would result from making the Advance.

 

  (b) The Agent must have received timely notice as required under Section 9.7.

 

  (c) The representations and warranties made in Section 5.1 of this Agreement,
except those expressly stated to be made as of a specific date, must be true and
correct on and as of the Advance Date with the same force and effect as if the
representations and warranties had been made on and as of the Advance Date.

 

  (d) All other terms and conditions of this Agreement on which an Advance may
be obtained must be fulfilled.

 

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ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

5.1 Representations and Warranties

Each Obligor represents and warrants to the Lenders as specified in this
Section 5.1.

 

(1) Corporate Authority.

 

  (a) Each of the Obligors (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, (ii) has all requisite
corporate power to own its property and conduct its business as now conducted
and as presently contemplated, and (iii) is in good standing and is duly
authorized to do business in each jurisdiction in which its property or business
as presently conducted or contemplated makes such qualification necessary,
except where a failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect.

 

  (b) The execution, delivery and performance of its Loan Documents and the
transactions contemplated hereby and thereby (i) are within the corporate
authority of each of the Obligors, (ii) have been duly authorized by all
necessary corporate proceedings on the part of each of the Obligors, (iii) do
not conflict with or result in any breach or contravention of any provision of
law, statute, rule or regulation to which any of the Obligors is subject,
(iv) do not contravene any judgment, order, writ, injunction, license or permit
applicable to any Obligor so as to have a Material Adverse Effect, and (v) do
not conflict with any provision of the Constating Documents of any of the
Obligors or any agreement or other instrument binding upon any Obligor, except
for those conflicts with any such agreement or instrument which could not
reasonably be expected to have a Material Adverse Effect.

 

  (c) The execution, delivery and performance of the Loan Documents by each of
the Obligors will result in valid and legally binding obligations of each of the
Obligors enforceable against each in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights generally and general
principles of equity.

 

(2) Governmental and Other Approvals. The execution, delivery and performance of
the Loan Documents by each of the Obligors and the consummation by each of the
Obligors of the transactions contemplated hereby and thereby do not require any
approval or consent of, or filing with, any governmental agency or authority or
other third party other than those already obtained and those required after the
date hereof in connection with the Obligors’ performance of the covenants
contained in this Agreement.

 

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(3) Title to Properties; Leases. WMI and its Subsidiaries own all of the assets
reflected in the consolidated balance sheet as at the Interim Balance Sheet Date
or acquired since that date (except property and assets (a) operated under
capital leases (b) sold or otherwise disposed of in the ordinary course of
business since that date), or (c) consolidated in accordance with variable
entity guidance in FASB ASC 810) subject to no Encumbrances except Permitted
Encumbrances.

 

(4) Financial Statements; Solvency.

 

  (a) There have been furnished to the Lenders consolidated balance sheets of
WMI dated the Balance Sheet Date and consolidated statements of operations for
the fiscal periods then ended, certified by Accountants. In addition, there have
been furnished to the Lenders consolidated balance sheets of WMI and its
Subsidiaries (including the Borrowers) dated the Interim Balance Sheet Date and
the related consolidated statements of operations for the fiscal quarter ending
on the Interim Balance Sheet Date. All said balance sheets and statements of
operations have been prepared in accordance with GAAP (but, in the case of any
of such financial statements which are unaudited, only to the extent GAAP is
applicable to interim unaudited reports), and fairly present, in all material
respects, the financial condition of WMI on a consolidated basis as at the close
of business on the dates thereof and the results of operations for the periods
then ended, subject, in the case of unaudited interim financial statements, to
changes resulting from audit and normal year-end adjustments and to the absence
of complete footnotes. There are no contingent liabilities of WMI and its
Subsidiaries involving material amounts, known to the officers of any of the
Obligors, which have not been disclosed in said balance sheets and the related
notes thereto or otherwise in writing to the Lenders.

 

  (b) Each of the Obligors on a consolidated basis (both before and after giving
effect to the transactions contemplated by this Agreement) is solvent (i.e., it
has assets having a fair value in excess of the amount required to pay its
probable liabilities on its existing debts as they become absolute and matured)
and has, and expects to have, the ability to pay its debts from time to time
incurred in connection therewith as such debts mature.

 

(5) No Material Changes, Etc. Since the Balance Sheet Date, there have been no
material adverse changes in the consolidated financial condition, business,
assets or liabilities (contingent or otherwise) of WMI and its Subsidiaries,
taken as a whole, other than changes in the ordinary course of business which
have not had a Material Adverse Effect.

 

(6) Franchises, Patents, Copyrights, Etc. Each of the Obligors possess all
franchises, patents, copyrights, trademarks, trade names, licenses and permits,
and rights in respect of the foregoing, adequate for the conduct of their
business substantially as now conducted (other than those the absence of which
would not have a Material Adverse Effect) without known conflict with any rights
of others other than a conflict which would not have a Material Adverse Effect.

 

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(7) Litigation. Except as disclosed in the Disclosure Documents, there are no
actions, suits, proceedings or investigations of any kind pending or, to the
knowledge of the Obligors, threatened against the Obligors before any court,
tribunal or administrative agency or board which, either in any case or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

(8) No Materially Adverse Contracts, Etc. None of the Obligors is subject to any
restriction in its Constating Documents, corporate or other legal restriction,
or any judgment, decree, order, rule or regulation which in the judgment of such
Obligor’s officers has or could reasonably be expected in the future to have a
Material Adverse Effect. None of the Obligors is a party to any contract or
agreement which in the judgment of such Obligor’s officers has or could
reasonably be expected to have any Material Adverse Effect, except as otherwise
reflected in adequate reserves as required by GAAP.

 

(9) Compliance With Other Instruments, Laws, Etc. None of the Obligor is
(a) violating any provision of its Constating Documents, or (b) violating any
agreement or instrument to which any of them may be subject or by which any of
them or any of their properties may be bound or any decree, order, judgment, or
any statute, license, rule or regulation, in a manner which could (in the case
of such agreements or such instruments) reasonably be expected to result in a
Material Adverse Effect.

 

(10) Tax Status. Each of the Obligors have filed all federal, state, provincial
and territorial income and all other tax returns, reports and declarations (or
obtained extensions with respect thereto) required by applicable law to be filed
by them (unless and only to the extent that such Obligor has set aside on its
books provisions reasonably adequate for the payment of all unpaid and
unreported taxes as required by GAAP); and have paid all taxes and other
governmental assessments and charges (other than taxes, assessments and other
governmental charges imposed by jurisdictions other than the United States,
Canada or any political subdivision thereof which in the aggregate are not
material to the financial condition, business or assets of any Obligor on an
individual basis or of WMI on a consolidated basis) that are material in amount,
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith; and, as required by GAAP, have set aside on
their books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. Except to the extent contested in the manner permitted in the preceding
sentence, there are no unpaid taxes in any material amount claimed by the taxing
authority of any jurisdiction to be due and owing by any Obligor, nor do the
officers of any Obligor know of any basis for any such claim.

 

(11) No Event of Default. No Pending Event of Default or Event of Default has
occurred hereunder and is continuing.

 

(12) Investment Company Act. None of the Obligors is a “registered investment
company”, or an “affiliated 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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(13) Absence of Financing Statements, Etc. Except as permitted by
Section 6.4(1), there is no Debt senior to the Obligations, and except for
Permitted Encumbrances, there are no Encumbrances, or any effective financing
statement, security agreement, chattel mortgage, real estate mortgage or other
document filed, registered or recorded with any filing records, registry, or
other public office, which purports to cover, affect or give notice of any
present or possible future Encumbrances on any assets or property of any Obligor
or right thereunder.

 

(14) Employee Benefit Plans.

 

  (a) In General. Each Employee Benefit Plan has been maintained and operated in
material compliance with the provisions of ERISA and, to the extent applicable,
the Code, including but not limited to the provisions thereunder respecting
prohibited transactions. Promptly upon the request of any Lender or the Agent,
the Borrowers will furnish to the Administrative Agent the most recently
completed annual report, Form 5500, with all required attachments, and actuarial
statement required to be submitted under §103(d) of ERISA, with respect to each
Guaranteed Pension Plan.

 

  (b) Terminability of Welfare Plans. Under each Employee Benefit Plan which is
an employee welfare benefit plan within the meaning of §3(1) or §3(2)(B) of
ERISA, no benefits are due unless the event giving rise to the benefit
entitlement occurs prior to plan termination (except as required by Title 1,
Part 6 of ERISA). WMI or an ERISA Affiliate, as appropriate, may terminate each
such employee welfare benefit plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of WMI or
such ERISA Affiliate without material liability to any Person.

 

  (c) Guaranteed Pension Plans. Each contribution required to be made to a
Guaranteed Pension Plan, whether required to be made to avoid the incurrence of
an accumulated funding deficiency, the notice or lien provisions of §303(k) of
ERISA, or otherwise, has been timely made. No waiver of an accumulated funding
deficiency or extension of amortization periods has been received with respect
to any Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by any
Obligor or any ERISA Affiliate with respect to any Guaranteed Pension Plan
(other than Terminated Plans) and there has not been any ERISA Reportable Event,
or any other event or condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Other than with respect to the
Terminated Plans, based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for that
valuation, each Guaranteed Pension Plan is in compliance with the minimum
funding standards as set forth in §302 of ERISA and is not subject to any
restrictions concerning (i) providing shutdown or similar benefits,
(ii) amendments to increase benefits, (iii) paying lump sums or (iv) continuing
to accrue benefits, as described by the Pension Protection Act of 2006.

 

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  (d) Multiemployer Plans. Except for liabilities that have been discharged
prior to the Effective Date or as to which accruals have been made in accordance
with GAAP prior to the Effective Date as reflected in the Disclosure Documents,
neither any Obligor nor any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under §4201 of ERISA
or as a result of a sale of assets described in §4204 of ERISA. Neither any
Obligor nor any ERISA Affiliate has been notified that any Multiemployer Plan is
in reorganization or insolvent under and within the meaning of §4241 or §4245 of
ERISA or that any Multiemployer Plan intends to terminate or has been terminated
under §4041A of ERISA.

 

(15) Environmental Compliance. Each of the Obligors have taken all steps that
they have deemed reasonably necessary to investigate the past and present
condition and usage of its Real Property and the operations conducted by it and,
based upon such diligent investigation, have determined that, except as set
forth in the Disclosure Documents:

 

  (a) None of the Obligors, nor any operator of their properties, is in
violation, or alleged violation, of any judgment, decree, order, law, permit,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and Recovery
Act, (“RCRA”) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended (“CERCLA”), the Superfund Amendments and
Reauthorization Act of 1986, the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any applicable international, federal,
state, provincial, territorial or local statute, regulation, ordinance, order or
decree relating to health, safety, waste transportation or disposal, or the
environment (the “Environmental Laws”), which violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

  (b) Except with respect to any such matters that could not reasonably be
expected to have a Material Adverse Effect, none of the Obligors has received
notice from any third party including, without limitation: any federal, state,
provincial, territorial or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection Agency
(“EPA”) as a potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B, (ii) that
any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances
as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by
42 U.S.C. §9601(33) or any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws, excluding household
hazardous waste (“Hazardous Substances”), which any one of them has generated,
transported or disposed of, has been found at any site at which a federal,
state, provincial, territorial or local agency or other third party has
conducted or has ordered that an Obligor conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law, or
(iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, legal or administrative proceeding arising out of any third
party’s incurrence of costs, expenses, losses or damages of any kind whatsoever
in connection with the Release of Hazardous Substances.

 

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  (c) Except for those occurrences or situations that could not reasonably be
expected to have a Material Adverse Effect (i) no portion of the Real Property
or other assets of the Obligors has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with applicable
Environmental Laws, (ii) in the course of any activities conducted by the
Obligors or their respective operators of the Real Property or other assets of
the Obligors, no Hazardous Substances have been generated or are being used on
such properties except in accordance with applicable Environmental Laws,
(iii) there have been no unpermitted Releases or threatened Releases of
Hazardous Substances on, upon, into or from the Real Property or other assets of
the Obligors, and (iv) any Hazardous Substances that have been generated on the
Real Property or other assets of the Obligors have been transported offsite only
by carriers having an identification number issued by the EPA or other relevant
Governmental Authority, treated or disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are, to the Obligors’
knowledge, operating in compliance with such permits and applicable
Environmental Laws.

 

(16) Disclosure. No representation or warranty made by any Obligor in this
Agreement or in any agreement, instrument, document, certificate, or financial
statement furnished to the Lenders or the Agent by or on behalf of or at the
request of the Borrowers and any other Obligor in connection with any of the
transactions contemplated by the Loan Documents contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained therein, taken as a whole, not misleading in light of the
circumstances in which they are made.

 

(17) Permits and Governmental Authority. All permits (other than those the
absence of which could not reasonably be expected to have a Material Adverse
Effect) required for the construction and operation of all landfills currently
owned or operated by WMI or the other Obligors have been obtained and remain in
full force and effect and are not subject to any appeals or further proceedings
or to any unsatisfied conditions that may allow material modification or
revocation. None of the Obligors, to the knowledge of any such Obligor, or the
holder of such permits, is in violation of any such permits, except for any
violation which could not reasonably be expected to have a Material Adverse
Effect.

 

(18) Margin Stock. No Obligor is engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds of any 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
margin stock in violation of Regulations T, U or X of the Board of Governors of
the Federal Reserve System.

 

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5.2 Survival of Representations and Warranties

The representations and warranties made in this Agreement or any other Loan
Document shall survive the execution of this Agreement and all other Loan
Documents until such time as all of the Obligations and Other Guaranteed
Obligations have been paid in full. No investigation by or on behalf of the
Agent or Lenders at any time shall have the effect of waiving, diminishing the
scope or otherwise affecting any representation or warranty made in any Loan
Document. Unless expressly stated to be made as of a specific date, they shall
be deemed to be repeated as of the date of each Advance and as of the date of
delivery of each Compliance Certificate. The Lenders shall be deemed to have
relied upon all representations and warranties at each time they make an Advance
as a condition of making an Advance and continuing to extend the Credits.

ARTICLE 6

COVENANTS

 

6.1 Financial Covenants

WMI shall comply with the following covenants:

 

  (a) Interest Coverage Ratio. As of the end of any fiscal quarter of WMI, WMI
will not permit the ratio of (a) EBIT for the four fiscal quarters then ending
to (b) Consolidated Total Interest Expense for such period to be less than
2.75:1.00;

 

  (b) Total Debt to EBITDA. As of the end of any fiscal quarter of WMI, WMI will
not permit the ratio of (a) Total Debt to (b) EBITDA for the four fiscal
quarters then ending to exceed 3.50:1.00.

 

6.2 Positive Covenants

Each Obligor shall perform the covenants specified in this Section 6.2.

 

(1) Punctual Payment. Each of the Borrowers shall duly and punctually pay and
perform its indebtedness, liabilities and obligations under this Agreement and
under the other Loan Documents to which it is a party and each Guarantor shall
duly and punctually pay and perform (or cause to be paid and performed) its
indebtedness, liabilities and obligations under this Agreement and under the
other Loan Documents to which it is a party, in each case, at the times and
places and in the manner required by the terms hereof and thereof.

 

(2) Chief Place of Business. The Borrowers’ place of business is located at 117
Wentworth Court, Brampton, Ontario L6T 5L4. The Borrowers will give 30 days’
prior written notice to the Agent of any change in their place of business.

 

(3) Records and Accounts. Each of the Obligors will keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with GAAP and with the requirements of all regulatory
authorities and maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties, all other contingencies, and all other proper reserves.

 

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(4) Existence and Conduct of Business. Each of the Obligors will do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence, rights and franchises; and effect and maintain its foreign
qualifications (except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect), licensing, domestication or
authorization, except as any of the foregoing may be terminated by its board of
directors in the exercise of its reasonable judgment; provided that such
termination could not reasonably be expected to have a Material Adverse Effect.
None of the Obligors will become obligated under any contract or binding
arrangement which, at the time it was entered into, could reasonably be expected
to have a Material Adverse Effect. Each of the Obligors will continue to engage
primarily in any of the businesses now conducted by it and in related,
complementary or supplemental businesses, and any additional businesses acquired
pursuant to the terms of Section 6.4(4).

 

(5) Maintenance of Properties. Each of the Obligors will cause all material
properties used or useful in the conduct of its businesses to be maintained and
kept in good condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment and cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in its judgment may be necessary so that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 6.2(6) shall prevent any Obligor
from discontinuing the operation and maintenance of any of its properties if
such discontinuance is, in its judgment, desirable in the conduct of its
business and could not reasonably be expected to have a Material Adverse Effect.

 

(6) Insurance. Each Obligor shall maintain or cause to be maintained insurance
of the kinds, covering the risks (other than risks arising out of or in any way
connected with personal liability of any officers and directors thereof) and in
the relative proportionate amounts usually carried by reasonable and prudent
companies conducting businesses similar to that of the Obligors, in amounts
substantially similar to the existing coverage maintained by the Obligors. Such
insurance shall be with financially sound and reputable insurance companies
(including captive insurance companies), funds or underwriters, or may be
pursuant to self-insurance plans. In addition, the Obligors will furnish from
time to time, upon the Agent’s request, summary of the insurance coverage of the
Obligors, which summary shall be in form and substance satisfactory to the Agent
and, if requested by the Agent, will furnish to the Agent copies of the
applicable policies.

 

(7)

Taxes. Each Obligor will duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labour, materials, or supplies, which if unpaid might by
law become an Encumbrances upon any of its property; provided, however, that any
such tax, assessment, charge, levy or claim need not be paid if the failure to
do so (either individually, or in the aggregate for all such failures) could not
reasonably be expected to have a Material Adverse Effect and the

 

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  validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if such Obligor shall have set aside on its books
adequate reserves with respect thereto as required by GAAP; and provided,
further, that each Obligor will pay all such taxes, assessments, charges, levies
or claims prior to the foreclosure on any Encumbrance which may have attached as
security therefor.

 

(8) Inspection of Properties, Books and Contracts. Each Obligor will permit the
Agent or any Lender or any of their respective designated representatives, upon
reasonable notice, to visit and inspect any of its properties, to examine its
books of account or contracts (and to make copies thereof and extracts
therefrom), and to discuss its affairs, finances and accounts with, and to be
advised as to the same by, its officers, all at such times and intervals as may
be reasonably requested.

 

(9) Compliance with Laws, Contracts, Licenses and Permits; Maintenance of
Material Licenses and Permits. Each Obligor will (a) comply with the provisions
of its Constating Documents, (b) comply with all agreements and instruments by
which it or any of its properties may be bound except where non-compliance could
not reasonably be expected to have a Material Adverse Effect, (c) comply with
all applicable laws and regulations (including Environmental Laws), decrees,
orders, judgments, licenses and permits, including, without limitation, all
environmental permits (“Applicable Requirements”), except where non-compliance
with such Applicable Requirements could not reasonably be expected to have a
Material Adverse Effect, (d) maintain all operating permits for all landfills
now owned or hereafter acquired, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and (e) dispose of
hazardous waste only at licensed disposal facilities operating, to such
Obligor’s knowledge, in compliance with Environmental Laws, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. If at any time any authorization, consent, approval, permit or license
from any officer, agency or instrumentality of any government shall become
necessary or required in order that any Obligor may fulfill any of its
obligations hereunder or under any other Loan Document, such Obligor will
immediately take or cause to be taken all reasonable steps within its power to
obtain such authorization, consent, approval, permit or license and furnish the
Agent with evidence thereof.

 

(10) Environmental Indemnification. Each of the Obligors covenants and agrees
that it will indemnify and hold the Lenders and the Agent and their respective
affiliates, and each of the representatives, agents and officers of each of the
foregoing, harmless from and against any and all claims, expense, damage, loss
or liability incurred by the Lenders or the Agent (including all reasonable
costs of legal representation incurred by the Lenders or the Agent) relating to
(a) any Release or threatened Release of Hazardous Substances on any of its Real
Property, (b) any violation of any Environmental Laws or other Applicable
Requirements with respect to conditions of the Real Property or other assets of
the Obligors, or the operations conducted thereon, or (c) the investigation or
remediation of offsite locations at which any of the Obligors, or their
predecessors, are alleged to have directly or indirectly disposed of Hazardous
Substances. It is expressly acknowledged by the Obligors that this covenant of
indemnification shall survive the payment of the Obligations and termination of
the Credit and shall inure to the benefit of the Lenders, the Agent and their
affiliates, successors and assigns.

 

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(11) Further Assurances. Each of the Obligors will cooperate with the Agent and
execute such further instruments and documents as the Agent shall reasonably
request to carry out to the Required Lenders’ satisfaction the transactions
contemplated by this Agreement.

 

(12) Notice of Potential Claims or Litigation. WMI shall deliver to the Agent
written notice of the initiation of any action, claim, complaint, investigation
or any other notice of dispute or litigation against any Obligor that could
reasonably be expected to have a Material Adverse Effect, or which questions the
validity or enforceability of any Loan Document, together with a copy of each
such complaint or other notice received by such Obligor if requested by the
Agent within 30 days of receipt thereof or of the determination that such action
could reasonably be expected to have a Material Adverse Effect, whichever occurs
later (and such Obligor will make such determination in each case as promptly as
practicable).

 

(13) Notice of Certain Events Concerning Environmental Claims. WMI shall
promptly, and in any event within ten Business Days of the Obligor obtaining
knowledge thereof, notify the Agent of any of the following events:

 

  (a) any Obligor obtaining knowledge of any violation of any Environmental Law
regarding its Real Property or operations which violation could reasonably be
expected to have a Material Adverse Effect;

 

  (b) any Obligor obtaining knowledge of any potential or known Release, or
threat of Release, of any Hazardous Substance at, from, or into any Real
Property which could reasonably be expected to have a Material Adverse Effect;

 

  (c) any Obligor receiving any notice of any material violation of any
Environmental Law or of any Release or threatened Release of Hazardous
Substance, including a notice or claim of liability or potential responsibility
from any third party (including any Governmental Authority) and including notice
of any formal inquiry, proceeding, demand, investigation or other action with
regard to (i) any Obligor’s or other Person’s operation of the Real Property of
such Obligor, (ii) contamination on, from, or into the Real Property, or
(iii) investigation or remediation of offsite locations at which any Obligor, or
its predecessors, are alleged to have directly or indirectly disposed of
Hazardous Substances, if any thereof could reasonably be expected to have a
Material Adverse Effect; or

 

  (d) any Obligor obtaining knowledge that any expense or loss has been incurred
by any Governmental Authority in connection with the assessment, containment,
removal or remediation of any Hazardous Substance with respect to which any
Obligor has been alleged to be liable by such Governmental Authority or for
which an Encumbrance may be imposed on any Real Property by such Governmental
Authority, if any thereof could reasonably be expected to have a Material
Adverse Effect.

 

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(14) Notice of Default. The Borrowers will promptly notify the Agent in writing
of the occurrence of any Pending Event of Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Agreement
or any other note, evidence of indebtedness, indenture or other obligation
evidencing indebtedness in excess of U.S. $75,000,000 as to which any Obligor is
a party or obligor, whether as principal or surety, such Obligor shall promptly
upon obtaining actual knowledge thereof give written notice thereof to the
Agent, describing the notice of action and the nature of the claimed default.

 

(15) Use of Proceeds. The proceeds of the Advances shall be used as set forth in
Section 2.3.

 

(16) Certain Transactions. Except as disclosed in the Disclosure Documents, and
except for arm’s length transactions pursuant to which any Obligor makes
payments in the ordinary course of business, none of such Obligor’s officers,
directors, or employees (or any affiliate of such officers, directors or
employees) are presently or shall be a party to any transaction with the
Borrowers or any Guarantor (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers or any
Guarantor, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

 

6.3 Reporting Requirements

During the term of this Agreement, WMI and the Borrowers shall deliver or cause
the delivery of the periodic reports specified below and shall give notices in
the circumstances specified below, or cause notices to be given. All financial
statements and other reports shall be prepared in accordance with GAAP applied
on a consistent basis.

 

(1) Periodic Financial Reports

 

  (a) WMI shall, as soon as practicable and in any event within 60 days of the
end of each of its fiscal quarters (excluding the fourth fiscal quarter), cause
to be prepared and delivered to the Agent, its interim unaudited consolidated
financial statements as at the end of such quarter; provided, however, if such
information is filed with the Securities and Exchange Commission and publicly
available on the Securities and Exchange Commission’s website, such filing shall
be deemed delivery to the Agent.

 

  (b) WMI shall, as soon as practicable and in any event within 100 days after
the end of each of its fiscal years, prepare and deliver to the Agent its
consolidated annual financial statements, audited by the Accountants; provided,
however, if such information is filed with the Securities and Exchange
Commission and publicly available on the Securities and Exchange Commission’s
website, such filing shall be deemed delivery to the Agent.

 

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  (c) WMOCC shall, as soon as practicable and in any event within 100 days after
the end of each of its fiscal years, deliver to the Agent its internally
prepared consolidated financial information reasonably acceptable to the
Lenders.

 

  (d) WMI shall, concurrently with the delivery of its quarterly financial
statements and annual financial statements, provide the Agent with a Compliance
Certificate.

 

  (e) WMI shall provide to the Agent, promptly following the filing or mailing
thereof, copies of all material of a financial nature filed by WMI with the
Securities and Exchange Commission or sent to WMI’s stockholders generally;
provided, however, if such information is filed with the Securities and Exchange
Commission and publicly available on the Securities and Exchange Commission’s
website, such filing shall be deemed delivery to the Agent.

 

  (f) The Obligors shall promptly provide the Agent with all other information,
reports and certificates reasonably requested by the Lenders from time to time
concerning the business, financial condition and property of the Borrowers and
each other Obligor.

 

(2) Know Your Client Matters The Obligors shall promptly provide all
information, including information concerning their direct and indirect holders
of equity interests and other Persons exercising control over it, and its and
their respective directors and officers, and including supporting documentation
and other evidence, as may reasonably be requested by the Agent, any Lender, or
any prospective assignee or participant of a Lender, in order to comply with the
requesting person’s policies and procedures relating to Applicable Law regarding
anti-money laundering, anti-terrorist financing, government sanction and “know
your client” matters, including the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada) and the United Nations Act (Canada) or any
similar Canadian legislation, 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.

 

6.4 Negative Covenants

No Obligor shall do any of the things specified in this Section 6.4.

 

(1) Restrictions on Indebtedness. None of the Obligors (other than WMI) will
create, incur, assume, or be or remain liable, contingently or otherwise, with
respect to any Debt, or become or be responsible in any manner (whether by
agreement to purchase any obligations, stock, assets, goods or services, or to
supply or advance any funds, assets, goods or services or otherwise) with
respect to any Debt, in each case, of any other Person (other than WMI or any of
its Subsidiaries), other than:

 

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  (a) Debt of WMI’s Subsidiaries listed in Schedule 8.1(a) of the U.S. Credit
Agreement (a copy of which is attached hereto as Annex 8.1(a)) and any
extension, renewal or refinancing of such Debt, provided that the terms and
conditions of any such extensions, renewals or refinancings do not increase the
relative priority of the original Debt and provided, further, that such
extended, renewed or refinanced Debt does not in the aggregate exceed the
U.S. Dollar amount of the original Debt; and

 

  (b) other Debt of WMI’s Subsidiaries (other than Waste Management Holdings,
Inc.) provided that the aggregate amount of all such Debt under this
Section 6.4(1)(b), when added (without duplication) to the aggregate outstanding
amount of secured Debt of WMI and its Subsidiaries under (k), (l) and (m) of the
definition of “Permitted Encumbrances” and Debt with respect to Permitted
Receivables Transactions, shall not exceed 15% of Consolidated Tangible Assets.

 

(2) Restrictions on Encumbrances.

 

  (a) None of the Obligors will create or incur or suffer to be created or
incurred or to exist any Encumbrance of any kind upon any property or assets of
any character, whether now owned or hereafter acquired, or upon the income or
profits therefrom; or transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to the payment of Debt
or performance of any other obligation in priority to payment of its general
creditors; or acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; or suffer to exist for a period of more than
30 days after the same shall have been incurred any Debt or claim or demand
against it which if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or sell,
assign, pledge or otherwise transfer any accounts, contract rights, general
intangibles or chattel paper, with or without recourse, except for Permitted
Encumbrances.

 

  (b) Each Obligor covenants and agrees that if any of them shall create or
incur any Encumbrance upon any of their respective property or assets, whether
now owned or hereafter acquired, other than Permitted Encumbrances (unless prior
written consent shall have been obtained from the Lenders), the Obligors will
make or cause to be made effective provision whereby the Obligations will be
secured by such Encumbrance equally and ratably with any and all other Debt
thereby secured so long as such other Debt shall be so secured; provided that
the covenants of the Obligors contained in this sentence shall only be in effect
for so long as the Obligors shall be similarly obligated under any other Debt;
provided, further, that an Event of Default shall occur for so long as such
other Debt becomes secured notwithstanding any actions taken by the Obligor to
ratably secure the Obligations hereunder.

 

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(3) Restrictions on Investments. Except to the extent provided in
Section 6.4(4), none of the Obligors may make or permit to exist or to remain
outstanding any Investment, other than Investments in cash equivalents unless
both before and after giving effect thereto (a) WMI and its Subsidiaries are in
compliance with the covenants set forth herein, and (ii) there does not exist an
Event of Default or Pending Event of Default and no Event of Default or Pending
Event of Default would be created by the making of such Investment; provided
that the aggregate amount of all Investments (excluding Investments in cash
equivalents), does not exceed 15% of Consolidated Tangible Assets; and provided
further that the ability of the Subsidiaries of WMI to incur any Debt in
connection with any Investment permitted by this Section 6.4(3) shall be
governed by Section 6.4(1).

 

(4) Mergers, Consolidations, Sales.

 

  (a) No Obligor shall be a party to any merger, consolidation or exchange of
stock unless WMI shall be the surviving entity with respect to any such
transaction to which WMI is a party and Waste Management Holdings, Inc. shall be
the survivor of any merger with any other Obligor or a Subsidiary shall be the
surviving entity (and continue to be a Subsidiary) with respect to any such
transactions to which one or more Obligors is a party (and the conditions set
forth below are satisfied), or purchase or otherwise acquire all or
substantially all of the assets or stock of any class of, or any partnership,
membership or joint venture or other interest in, any other Person except as
otherwise provided in Section 6.4(3) or this Section 6.4(4). Notwithstanding the
foregoing, the Obligor may purchase or otherwise acquire all or substantially
all of the assets or stock of any class of, or joint venture or other interest
in, any Person if the following conditions have been met: (i) the proposed
transaction will not otherwise create an Event of Default or a Pending Event of
Default hereunder; and (ii) the business to be acquired predominantly involves
(A) the collection, transfer, hauling, disposal or recycling of solid waste or
thermal soil remediation, or (B) other lines of businesses currently engaged in,
or related, associated, complementary or supplementary thereto, whether from an
operational, business financial, technical or administrative standpoint;
provided that an Obligor may purchase or otherwise acquire all or substantially
all of the assets or stock of any class of, or partnership, membership or joint
venture or other interest in, any Persons in unrelated businesses, not to exceed
a total aggregate amount of $400,000,000 during the term of this Agreement.
Notwithstanding anything herein to the contrary, the ability of the Subsidiaries
of WMI to incur any Debt in connection with any transaction permitted pursuant
to this Section 6.4(4) shall be governed Section 6.4(1). For the avoidance of
doubt, this section shall not restrict the Transaction, and no portion of the
Transaction shall apply against the total aggregate cap of $400,000,000 set
forth above.

 

  (b)

No Obligor shall sell, transfer, convey or lease any assets or group of assets,
including the sale or transfer of any property owned by such Obligor in order
then or thereafter to lease such property or lease other property which such
Obligor intends to use for substantially the same purpose as the property being
sold or transferred, or sell or assign, with or without recourse, any
receivables, except (i) transfers of real or personal property among
Subsidiaries of WMI, (ii) so long as no Default or Event of Default has occurred
and is continuing, or would result

 

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  therefrom, sales of assets or pursuant to sale-leaseback transaction; provided
that any net cash proceeds from any such sale or sale-leaseback shall within 180
days, either be used to pay down outstanding Obligations under either this
Agreement or the U.S. Credit Agreement or be reinvested by such Person in assets
of the business of the Obligors, used for working capital, invested in
Investments in accordance with the provisions of Section 6.4(3) or used for
general corporate purposes, (iii) sales of accounts receivable (and contract
rights, general intangibles or chattel paper related thereto) more than sixty
(60) days past due sold or assigned in the ordinary course of collecting past
due accounts, or (iv) pursuant to a Permitted Receivables Transaction.

 

(5) Restricted Distributions and Redemptions. None of the Obligors will
(a) declare or pay any Distributions, or (b) redeem, convert, retire or
otherwise acquire shares of any class of its capital stock (other than in
connection with a merger permitted by Section 6.4(4) hereof or conversion into
another form of equity of any preferred shares of WMI existing as of the Closing
Date pursuant to the terms thereof), unless at the time of such Distribution or
redemption no Event of Default or Pending Event of Default exists or would be
created hereunder. Notwithstanding the above, any Subsidiary may make
Distributions to WMI and WMI agrees that no Obligor will enter into any
agreement restricting Distributions from such Obligor to the Borrower.

 

(6) Employee Benefit Plans. No Obligor or any ERISA Affiliate will:

 

  (a) engage in any “prohibited transaction” within the meaning of §406 of ERISA
or §4975 of the Code which could result in a material liability for WMI on a
consolidated basis; or

 

  (b) permit any Guaranteed Pension Plan to be in “at risk” status or subject to
the notice and lien provisions described in §303 of ERISA, whether or not a
minimum funding waiver has been granted; or

 

  (c) fail to contribute to any Guaranteed Pension Plan to an extent which, or
terminate any Guaranteed Pension Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of any Obligor pursuant to
§303 or §4068 or ERISA; or

 

  (d) permit or take any action which would result in the aggregate benefit
liabilities (within the meaning of §4001 of ERISA), other than with respect to
The Waste Management, Inc. Pension Plan and The Waste Management of Alameda
County, Inc. Retirement Plan, of all Guaranteed Pension Plans exceeding the
value of the aggregate assets of such Guaranteed Pension Plans, disregarding for
this purpose the benefit liabilities and assets of any such Guaranteed Pension
Plan with assets in excess of benefit liabilities.

The Obligors will (i) promptly upon the request of any Lender or the Agent,
furnish to the Lenders a copy of the most recent actuarial statement required to
be submitted under §103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in

 

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respect of each Guaranteed Pension Plan, and (ii) promptly upon receipt or
dispatch, furnish to the Lenders any notice, report or demand sent or received
in respect of a Guaranteed Pension Plan under §§302, 303, 4041, 4042, 4043,
4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under
§§4041A, 4202, 4219, 4242 or 4245 of ERISA.

 

(7) Perform Obligations. If an Event of Default has occurred and is continuing
and any Obligor has failed to perform any of its covenants or agreements in the
Loan Documents, the Required Lender, may, but shall be under no obligation to,
instruct the Agent on behalf of the Lenders to perform any such covenants or
agreements in any manner deemed fit by the Required Lenders without thereby
waiving any rights to enforce the Loan Documents. The reasonable expenses
(including any legal costs) paid by the Agent and/or the Lenders in respect of
the foregoing shall be secured by the Security.

ARTICLE 7

DEFAULT

 

7.1 Default

Each of the following events shall constitute an Event of Default under this
Agreement:

 

  (a) the Borrowers fail to pay, whether by acceleration or otherwise, any
amount of principal (including any amount relating to a B/A or an L/C) when due;
or

 

  (b) the Borrowers fail to pay any amount of interest, fees, commissions or
other Obligations (other than amounts on account of principal) when due, and
such failure continues for five Business Days after the date of such default; or

 

  (c) there occurs a breach of any of the covenants in Section 6.1 or
Section 6.4; or

 

  (d) any Obligor makes any representation or warranty in any Loan Document, or
in any written statement or certificate made or delivered pursuant to this
Agreement which shall prove to have been false in any material respect upon the
date when made or deemed to be made; or

 

  (e) there is a breach of any covenant, condition or other provision of any
Loan Document (other than a breach which is specifically dealt with elsewhere in
this Section 7.1), by any party thereto other than the Agent or the Lenders, and
such breach, if capable of being remedied, is not corrected or otherwise
remedied within 30 days after the Agent or any Lender gives written notice
thereof to the Borrowers; or

 

  (f) any Obligor shall fail to pay when due, or within any applicable period of
grace, any Debt or obligations under Swap Contracts in an aggregate amount
greater than U.S. $75,000,000, or fail to observe or perform any material term,
covenant or agreement contained in any one or more agreements by which it is
bound, evidencing or securing any Debt or obligations under Swap Contracts in an
aggregate amount greater than U.S. $75,000,000 for such period of time as would
permit, or would have permitted (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof or terminate its commitment with respect
thereto; or

 

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  (g) any Obligor makes an assignment for the benefit of creditors, or admits in
writing its inability to pay or generally fails to pay its debts as they mature
or become due, or petitions or applies for the appointment of a trustee or other
custodian, liquidator or receiver of any Obligor, or of any substantial part of
the assets of any Obligor or commences any case or other proceeding relating to
any Obligor under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or takes any action to authorize or in
furtherance of any of the foregoing, or if any such petition or application is
filed or any such case or other proceeding is commenced against any Obligor or
any Obligor indicates its approval thereof, consent thereto or acquiescence
therein; or

 

  (h) if a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any Obligor bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or order
for relief is entered in respect of any Obligor in an involuntary case under the
bankruptcy laws of any jurisdiction as now or hereafter constituted; or

 

  (i) if there shall remain in force, undischarged, unsatisfied and unstayed,
for more than 30 days, whether or not consecutive, any final judgment against
any Obligor which, with other outstanding final judgments against any Obligor,
exceeds in the aggregate U.S. $50,000,000 after taking into account any
undisputed insurance coverage; or

 

  (j) if, with respect to any Guaranteed Pension Plan, an ERISA Reportable Event
shall have occurred and the Lenders shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrowers or any Subsidiary to the PBGC or such Plan in an aggregate
amount exceeding $50,000,000 and such event in the circumstances occurring
reasonably could constitute grounds for the partial or complete termination of
such Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer such Plan; or a trustee shall have
been appointed by the appropriate United States District Court to administer
such Plan; or the PBGC shall have instituted proceedings to terminate such Plan;

 

  (k) if any of the Loan Documents shall be cancelled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Lenders, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of any
Obligor, or any of their respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;

 

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  (l) if any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 25% or more of the
outstanding shares of common voting stock of WMI; or during any period of twelve
consecutive calendar months, individuals who were directors of WMI on the first
day of such period (together with any new directors whose election by such board
or whose nomination for election by the shareholders of WMI was approved by a
vote of a majority of the directors still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) shall cease to constitute a majority of the board of
directors of WMI;

 

  (m) either of the Borrowers ceases to be directly or indirectly wholly-owned
by WMI; or

 

  (n) the occurrence of any Event of Default (as such term is defined in the
U.S. Credit Agreement as at the date of this Agreement) under the U.S. Credit
Agreement.

 

7.2 Acceleration and Termination of Rights

 

(1) If any Event of Default occurs, the Lenders shall be under no further
obligation to make Advances and the Required Lenders may instruct the Agent to
give notice to the Borrowers (a) declaring the Lenders’ obligations to make
Advances to be terminated, in which case they shall terminate immediately,
and/or (b) declaring the Obligations or any of them to be due and payable, in
which case they shall be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by the Borrowers.

 

(2) Notwithstanding the preceding paragraph, if any Obligor becomes a bankrupt
(voluntarily or involuntarily), or institutes any proceeding seeking
liquidation, dissolution, arrangement, winding-up, relief of debtors or from
creditors or the appointment of a receiver or trustee over any material part of
its property or analogous proceeding in any jurisdiction, then without prejudice
to the other rights of the Lenders as a result of any such event, without any
notice or action of any kind by the Agent or any Lender, and without
presentment, demand or protest, the Lenders’ obligation to make Advances shall
immediately terminate, the Obligations shall immediately become due and payable
and the Borrowers shall be obligated to deposit forthwith with the Agent for the
Lenders’ benefit Collateral equal to the full face amount at maturity of all
L/Cs and B/As then outstanding for its account

 

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7.3 Payment of L/Cs and B/As

 

(1) Immediately on any Obligations becoming due and payable under Section 7.2,
the Borrowers shall, without necessity of further act or evidence, be
unconditionally obligated to immediately deposit with the Agent for the Lenders’
benefit Cash Collateral equal to the full face amount of all L/Cs and B/As then
outstanding for its account and the Borrowers hereby unconditionally promise and
agree to do so. The amounts required to be deposited as Cash Collateral form
part of the Obligations. Each of the Borrowers authorizes the Lenders, or any of
them, to debit its accounts with the amount required to pay outstanding L/Cs,
and to pay outstanding B/As including any that are held by the Lenders, or any
of them, in their own right at maturity. Amounts paid to the Agent in respect of
B/As and L/Cs shall be applied against, and shall reduce, pro rata among the
Lenders, to the extent of the amounts paid to the Agent in respect of B/As and
L/Cs, respectively, the obligations of the Borrowers to pay amounts then or
subsequently payable under B/As and L/Cs, respectively, at the times amounts
become payable thereunder.

 

(2) The Borrowers shall be entitled to receive interest on cash held as Cash
Collateral in accordance with Section 9.5(9).

 

7.4 Remedies

On the occurrence of any event by which any of the Obligations become due and
payable under Section 7.2, the Security shall become immediately enforceable and
the Required Lenders may instruct the Agent to take any action or proceedings on
behalf of the Lenders and in compliance with applicable Requirements of Law that
the Required Lenders in their sole discretion deem expedient to enforce the
Security, all without any additional notice, presentment, demand, protest or
other formality, all of which are expressly waived by the Obligors.

 

7.5 Interest After Stay of Proceedings

If a stay of proceedings is obtained or ordered in respect of either of the
Borrowers under the provisions of the Bankruptcy and Insolvency Act (Canada) or
the Companies’ Creditors Arrangement Act (Canada), then without prejudice to the
Lenders’ rights to contest the stay, the Borrowers agree to continue to pay
interest and fees on all amounts due to the Lenders in accordance with this
Agreement. Each of the Borrowers acknowledge that permitting the Borrowers to
continue to use the proceeds of Advances after a stay is obtained or ordered
constitutes valuable consideration in the same way that permitting the Borrowers
to use leased premises constitutes valuable consideration.

 

7.6 Saving

Neither the Agent nor any Lender shall be under any obligation to the Obligors
or any other Person to realize any collateral that is subject to the Security or
enforce all or any part of the Security or to allow any of the collateral to be
sold, dealt with or otherwise disposed of. Neither the Agent nor any Lender
shall be responsible or liable to the Obligors or any other Person for any loss
or damage upon the realization or enforcement of, the failure to realize or
enforce the Security or any part of it, the failure to allow any of the
collateral to be sold, dealt with or otherwise disposed of or any act or
omission on their respective parts or on the part of any director, officer,
agent, servant or adviser in connection with any of the foregoing, except that
the Agent or a Lender may be responsible or liable for any loss or damage
arising from its wilful misconduct or gross negligence.

 

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7.7 Perform Obligations

If an Event of Default has occurred and is continuing and if any Obligor has
failed to perform any of its covenants or agreements in the Loan Documents, the
Required Lenders may, but shall be under no obligation to, instruct the Agent on
behalf of the Lenders to perform any of those covenants or agreements in any
manner deemed fit by the Required Lenders without waiving any rights to enforce
the Loan Documents as a result. The reasonable expenses (including any legal
costs) paid by the Agent and/or the Lenders in respect of the foregoing shall be
secured by the Security.

 

7.8 Third Parties

No Person dealing with any Lender, the Agent or any agent of the Lenders is
required to determine (a) whether the Security has become enforceable, the
powers that the Lenders, the Agent or their agents are purporting to exercise
have become exercisable, or any Obligations remain outstanding, (b) as to the
necessity or expediency of the stipulations and conditions subject to which any
sale shall be made, (c) otherwise as to the propriety or regularity of any sale
or other disposition or any other dealing with any collateral, or (d) how any
payment to the Lenders or the Agent.

 

7.9 Remedies Cumulative

The rights and remedies of the Lenders under the Loan Documents are cumulative
and are in addition to and not in substitution for any rights or remedies
provided by Applicable Law. Any single or partial exercise by the Lenders of any
right or remedy for a default or breach of any agreement, term, covenant or
condition in this Agreement shall not be deemed to be a waiver of or to alter,
affect, or prejudice any other right or remedy or other rights or remedies to
which the Lenders may be lawfully entitled for the same default or breach. Any
waiver by the Lenders of the strict observance, performance or compliance with
any agreement, term, covenant or condition in this Agreement and any indulgence
granted by the Lenders shall be deemed not to be a waiver of any subsequent
default.

 

7.10 Set-Off or Compensation

During the continuance of an Event of Default, any deposits or other sums
credited by or due from any Lender to any Borrower and any securities or other
property of any Borrower in the possession of such Lender may be applied to or
set-off against the payment of the Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of the Borrowers to the Lenders or the Agent.

 

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7.11 Direct Payments

 

(1) If any Lender, by exercising any right of set-off or counterclaim or
otherwise, obtains any payment or other reduction that might result in that
Lender receiving payment or other reduction of a proportion of the aggregate
amount of its Advances and accrued interest on them or other Obligations and
Other Secured Obligations greater than its pro rata share of them as provided in
this Agreement, then the Lender receiving the payment or other reduction shall
(a) notify the Agent of that fact, and (b) purchase (for cash at face value)
participations in the Advances and other Obligations and Other Secured
Obligations owing to the other Lenders, or make other adjustments as shall be
equitable, so that the benefit of all those payments shall be shared by the
Lenders and others to whom Other Secured Obligations are owed rateably in
accordance with the aggregate amount of Obligations and Other Secured
Obligations owing to them, provided that:

 

  (a) if any participation is purchased and all or any portion of the payment
giving rise to it is recovered, the participation shall be rescinded and the
purchase price restored to the extent of the recovery, without interest,

 

  (b) the provisions of this Section shall not be construed to apply to (i) any
payment made by any Obligor pursuant to and in accordance with the express terms
of this Agreement or (ii) any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Advances to any
assignee or participant, other than to any Obligor or any Affiliate of an
Obligor (as to which the provisions of this Section shall apply); and

 

  (c) the provisions of this Section shall not be construed to apply to (i) any
payment (including a payment in respect of Other Secured Obligations) made while
no Event of Default has occurred and is continuing in respect of obligations of
the Borrowers to a Lender that do not arise under or in connection with the Loan
Documents, (ii) any payment made in respect of an obligation that is secured by
a Permitted Lien (other than the Security) or that is otherwise entitled to
priority over the Borrowers’ obligations under or in connection with the Loan
Documents, (iii) any reduction arising from an amount owing to an Obligor upon
the termination of Derivatives entered into between the Obligor and a Lender
except for a net amount available after the termination of all Derivatives
entered into between the Obligors and that Lender and the set-off of resulting
amounts owing by the Obligors and to the Obligors, or (iv) any payment to which
a Lender is entitled as a result of any form of credit protection obtained by
that Lender.

 

(2) The Obligors consent to the foregoing and agree, to the extent they may
effectively do so under Applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Obligor rights of set-off and counterclaim and similar rights of Lenders with
respect to that participation as fully as if the Lender were a direct creditor
of each Obligor in the amount of the participation.

 

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ARTICLE 8

THE AGENT AND THE LENDERS

 

8.1 Authorization of Agent

 

(1) Each of the Lenders hereby irrevocably appoints The Bank of Nova Scotia as
the Agent to act on its behalf as the Agent under the Loan Documents and
authorizes the Agent to take the actions on its behalf and to exercise the
powers that are delegated to the Agent by the terms of the Loan Documents,
together with actions and powers that are reasonably incidental to them.

 

(2) Without limiting section 8.1(1), each Lender grants to the Agent:

 

  (a) a power of attorney for the purposes of Applicable Laws in respect of the
Security, to sign documents comprising the Security from time to time as the
party accepting the grant of the Security; and

 

  (b) the right to delegate its authority as attorney to any other Person,
whether or not an officer or employee of the Agent.

 

8.2 Rights as a Lender

The Person serving as the Agent shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Agent in its individual capacity. That Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
any Obligor or any Affiliate of an Obligor as if the Person were not the Agent
and without any duty to account to the Lenders.

 

8.3 Exculpatory Provisions

 

(1) The Agent shall not have any duties or obligations except those expressly
specified in the Loan Documents. Without limiting the generality of the
foregoing, the Agent:

 

  (a) shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing;

 

  (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Agent is required to exercise as
directed in writing by the Required Lenders (or another number or percentage of
the Lenders that is expressly provided for in the Loan Documents), but the Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Agent to liability or that is contrary to any Loan
Document or Applicable Law; and

 

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  (c) shall not, except as expressly specified in the Loan Documents, have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrowers or any of their Affiliates that is
communicated to or obtained by the person serving as the Agent or any of its
Affiliates in any capacity.

 

(2) The Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Required Lenders (or another
number or percentage of the Lenders that is necessary, or that the Agent
believes in good faith is necessary, under the provisions of the Loan Documents)
or (ii) in the absence of its own gross negligence or wilful misconduct. The
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing the Default is given to the Agent by the Borrowers or a
Lender.

 

(3) Except as otherwise expressly specified in this Agreement, the Agent shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered under or in connection with any Loan Document, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
in any Loan Document or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document or (v) the satisfaction of any condition
specified in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Agent

 

8.4 Reliance by Agent

The Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet posting or other distribution) believed by it to be genuine and to have
been signed, sent or otherwise authenticated by the proper Person. The Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying on it. In determining compliance with any condition to the making of
an Advance, including the issuance of an L/C, that by its terms must be
fulfilled to the satisfaction of a Lender, the Agent may presume that the
condition is satisfactory to the Lender unless the Agent has received notice to
the contrary from the Lender before the making of the Advance or the issuance of
the L/C. The Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with their
advice.

 

8.5 Delegation of Duties

The Agent may perform any and all of its duties and exercise its rights and
powers under any Loan Document by or through any one or more sub-agents
appointed by the Agent from among the Lenders (including the Person serving as
Agent) and their respective Affiliates. The Agent and any sub-agent may perform
any and all of its duties and

 

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exercise its rights and powers by or through their respective Related Parties.
The provisions of this Article and other provisions of this Agreement for the
benefit of the Agent shall apply to any sub-agent and to the Related Parties of
the Agent and any sub-agent, and shall apply to their respective activities in
connection with the syndication of the Credits as well as activities as Agent.

 

8.6 Administration of the Credits

 

(1) Any reference in this Agreement to the Agent means, where the Agent is also
a Lender, the agency department of that Lender specifically responsible for
acting as Agent under and in connection with this Agreement. In acting as Agent,
the agency department will be treated as a separate entity from any other
department or division of the Lender in question. Without limiting the
foregoing, the Agent shall not be deemed to have notice of a document or
information received by any other department or division of that Lender, nor
will that Lender be deemed to have notice of a document or information received
by the Agent.

 

(2) Unless otherwise specified in this Agreement, the Agent shall perform the
following duties:

 

  (a) take delivery of each Lender’s Applicable Percentage of an Advance and
make all Advances hereunder in accordance with the procedures set forth in
Article 9;

 

  (b) use reasonable efforts to collect promptly all sums due and payable by the
Borrowers pursuant to this Agreement;

 

  (c) make all payments to the Lenders in accordance with the provisions hereof;

 

  (d) hold the Security on behalf of the Lenders;

 

  (e) hold all legal documents relating to the Credit, maintain complete and
accurate records showing all Advances made by the Lenders, all remittances and
payments made by the Borrowers to the Agent, all remittances and payments made
by the Agent to the Lenders and all fees or any other sums received by the Agent
and, except for accounts, records and documents relating to the fees payable by
the Borrowers to the Agent in its capacity as Agent under the Agency Fee Letter
or the Arrangers under the Fee Letter, allow each Lender and their respective
advisors to examine such accounts, records and documents at their own expense,
and provide any Lender, upon reasonable notice, with such copies thereof or
information contained therein as such Lender may reasonably require from time to
time at the Lender’s expense;

 

  (f) except as otherwise specifically provided for in this Agreement, promptly
advise each Lender upon receipt of each notice and deliver to each Lender,
promptly upon receipt, all other written communications furnished by any Obligor
to the Agent on behalf of the Lenders pursuant to this Agreement, including
copies of financial reports and certificates which are to be furnished to the
Agent; and

 

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  (g) upon learning of same, promptly advise each Lender in writing of the
occurrence of an Event of Default or Pending Event of Default or the occurrence
of any event, condition or circumstance which would or could reasonably be
expected to have a Material Adverse Effect or of any material adverse
information coming to the attention of the Agent (using reasonable efforts)
relative to the Security or of the occurrence of any material adverse change in
the financial condition or property of any Obligor, provided that, except as
aforesaid, the Agent shall be under no duty or obligation whatsoever to provide
any notice to the Lenders and further provided that each Lender hereby agrees to
notify the Agent of any Event of Default or Pending Event of Default of which it
may become aware.

 

(3) The Agent may take the following actions only with the prior consent of the
Required Lenders, subject to Sections 8.6(4), 8.6(5) and 8.6(6) or unless
otherwise expressly specified in this Agreement:

 

  (a) subject to Section 9.7(4), exercise any and all rights of approval
conferred upon the Lenders by this Agreement;

 

  (b) give written notice to any Obligor in respect of any matter in respect of
which notice may be required, permitted, necessary or desirable in accordance
with or pursuant to this Agreement, promptly after receiving the consent of the
Required Lenders, except that the Agent shall, without direction from the
Lenders, immediately give the Borrowers notice of any payment that is due or
overdue under the terms of this Agreement unless the Agent considers that it
should request the direction of the Required Lenders, in which case the Agent
shall promptly request that direction;

 

  (c) amend, modify or waive any of the terms of this Agreement, including
waiver of an Event of Default or Pending Event of Default, if such action is not
otherwise provided for in Section 9.7(4);

 

  (d) declare an Event of Default or take, or cause to be taken by the Agent,
action to enforce performance of the Obligations and to realize upon the
Security, including the appointment of a receiver, the exercise of powers of
distress, lease or sale given by the Security or by law and the taking of
foreclosure proceedings and/or the pursuit of any other legal remedy necessary;

 

  (e) decide to accelerate the amounts outstanding under the Credit; and

 

  (f) pay, or instruct the Agent to pay insurance premiums, Taxes and any other
sums as may be reasonably required to protect the interests of the Lenders.

 

(4) The Agent may take the following actions only with the unanimous consent of
the Lenders that are directly affected, unless otherwise specified in this
Agreement:

 

  (a) amend, modify, discharge, terminate or waive any of the terms of the
Security;

 

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  (b) amend, modify, discharge, terminate or waive any of the terms of this
Agreement or the Security if such amendment, modification, discharge,
termination or waiver would increase the amount of the Credit, amend the purpose
of the Credit, reduce the interest rates and similar charges applicable to the
Credit, reduce the fees payable with respect to the Credit, extend any date
fixed for payment of principal, interest or any other amount relating to the
Credit or extend the term of the Credit;

 

  (c) waive payment of any amounts outstanding under the Credit; and

 

  (d) amend the definition of “Required Lenders” or this Section 9.7(4).

 

(5) Except as expressly contemplated in this Agreement, no Lender’s Commitment
or Applicable Percentage may be amended without the consent of that Lender. In
addition, no amendment, modification or waiver affecting the rights or
obligations of the Agent, the Issuing Bank or the Swing Line Lender may be made
without their respective consents and no amendment, modification or waiver
affecting rights or obligations under the Loan Documents relating to Other
Guaranteed Obligations may be made without the consent of the Lenders who are or
whose Affiliates are affected as holders of Other Guaranteed Obligations. No
amendment to the definition of “Defaulting Lender” or Section 8.8 may be made
without the consent of the Agent, the Issuing Bank and the Swing Line Lender. An
amendment, modification or waiver affecting the Agency Fee Letter shall be made
only by the parties to it.

 

(6) Notwithstanding Sections 8.6(3), 8.6(4) and 8.6(5), the Agent may, without
the consent of any Lender, make amendments to the Loan Documents that are for
the sole purpose of curing any ambiguity, defect or inconsistency that is
clerical or not Material, but shall immediately notify the Lenders if it does
so. The Agent may also, without the consent of any Lender, discharge any
Security and/or release any Obligor other than the Borrowers to the extent
necessary to allow completion of any sale or other disposition of Property
(including Equity Interests of an Obligor) or any corporate reorganization
permitted by this Agreement or in respect of which the Lenders or Required
Lenders have, as applicable, consented or waived the requirements of this
Agreement.

 

(7) As between the Obligors, on the one hand, and the Agent and the Lenders, on
the other hand:

 

  (a) all statements, certificates, consents and other documents that the Agent
purports to deliver on behalf of the Lenders or the Required Lenders shall be
binding on each Lender, and the Obligors shall not be required to ascertain or
confirm the authority of the Agent in delivering the documents;

 

  (b) all certificates, statements, notices and other documents that are
delivered by the Obligors to the Agent in accordance with this Agreement shall
be deemed to have been duly delivered to each Lender; and

 

  (c) all payments that are delivered by the Borrowers to the Agent in
accordance with this Agreement shall be deemed to have been received by each
Lender entitled to payment.

 

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(8) Except in its own right as a Lender, the Agent shall not be required to
advance its own funds for any purpose, and in particular, shall not be required
to pay with its own funds insurance premiums, taxes or public utility charges or
the cost of repairs or maintenance with respect to the Property that is the
subject matter of the Security, nor shall it be required to pay with its own
funds the fees of solicitors, counsel, auditors, experts or agents engaged by it
as permitted by the Loan Documents.

 

8.7 Acknowledgments, Representations and Covenants of Lenders

 

(1) Each Lender represents and warrants that it has full power and authority,
and has taken all action necessary, to execute and deliver this Agreement, to
consummate the transactions contemplated by this Agreement and to be a Lender.

 

(2) Each Lender acknowledges and confirms that if the Agent does not receive
payment in accordance with this Agreement, it shall not be the Agent’s
obligation to maintain the Credits in good standing, nor shall any Lender have
recourse to the Agent in respect of any amounts owing to the Lender under this
Agreement.

 

(3) Each Lender acknowledges and agrees that its obligation to advance its
Applicable Percentage of Advances in accordance with the terms of this Agreement
is independent and in no way related to the obligation of any other Lender.

 

(4) Each Lender acknowledges receipt of a copy of this Agreement, the Security
(to the extent that the Security has been delivered) that exists at the date of
this Agreement, and acknowledges that it is satisfied with the form and content
of those documents.

 

8.8 Defaulting Lenders

 

(1) Notwithstanding any other provision of this Agreement, if any Lender becomes
a Defaulting Lender, then the provisions of this Section 8.8 shall apply until
the Agent, the Borrowers, the Issuing Bank and the Swing Line Lender all agree
that the Defaulting Lender has remedied all matters that caused it to be a
Defaulting Lender.

 

(2) Any Standby Fee shall cease to accrue on the Defaulting Lender’s unadvanced
portion of any Credit.

 

(3) The Defaulting Lender shall not be entitled to exercise any right of consent
under Sections 8.6(3) and 8.6(4) and its Commitment shall not be included in
determining whether the Lenders or the Required Lenders have provided any
consent under those Sections. However, the Defaulting Lender shall be entitled
to exercise its right of consent in respect of any matter that expressly
requires its consent and any matter that requires the consent of all Lenders if
it would be affected differently than the other Lenders.

 

(4)

If the Defaulting Lender is a Revolving Lender, the Borrowers’ right to receive
Advances of the Defaulting Lender’s unadvanced Commitment under the Revolving
Credit shall be suspended and, provided that no Event of Default or Pending
Event of Default has occurred and is continuing, the participation of the other
Revolving Lenders in Advances under the Revolving Credit shall be re-adjusted
without regard to the unadvanced

 

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  Commitment of the Defaulting Lender but without increasing the overall
Commitments of the other Revolving Lenders to the Revolving Credit. If the
unadvanced Commitments of the other Revolving Lenders would not be sufficient to
cover their obligations and the obligations of the Defaulting Lender under
Section 9.1 then the Borrowers shall repay Advances under the Swing Line Tranche
and/or provide cash Collateral to the Issuing Bank to secure L/Cs to the extent
necessary to cover the deficiency.

 

(5) If the Borrowers provide cash Collateral to the Issuing Bank to secure L/Cs,
the Borrowers shall not be required to pay an L/C Fee for the account of the
Defaulting Lender in respect of the amount for which it has provided cash
Collateral. If the obligation of the Defaulting Lender regarding L/Cs under
Section 9.1 is borne by the other Revolving Lenders as a result of
Section 8.8(4), then the other Revolving Lenders shall be entitled to receive
any L/C Fee that would otherwise have been payable to the Defaulting Lender.

 

(6) The Agent may, without prejudice to the other rights of the Lenders, make
adjustments to the payments to a Defaulting Lender under this Agreement as
necessary to compensate the other Lenders and the Agent for the Defaulting
Lender’s failure to make any payment or fulfill any other obligation under this
Agreement.

 

8.9 Reference Lenders

 

(1) If more than one Lender is a bank named on Schedule I of the Bank Act
(Canada), the Agent shall be a Schedule I Reference Lender and the Borrowers
shall designate a different Lender named on Schedule I to be a Schedule I
Reference Lender for the purpose of providing quotations to the Agent to be used
in determining rates as required by this Agreement.

 

(2) If any Schedule I Reference Lender ceases to be a Lender, the person that
originally designated that Schedule I Reference Lender shall have the right to
designate in a timely manner another Lender that is a named on Schedule I of the
Bank Act (Canada) as a replacement Reference Lender, failing which the
applicable rate shall be determined on the basis of the quotation provided by
the notice from the remaining Schedule I Reference Lender.

 

(3) If only one Lender is a bank named on Schedule I of the Bank Act (Canada),
that Lender shall be deemed to be the Schedule I Reference Lender and any
applicable rate shall be determined on the basis of the quotation provided by
that Lender.

 

8.10 No Other Duties etc.

Anything herein to the contrary notwithstanding, none of the Joint Bookrunners,
Joint Lead Arrangers or Co-Syndication Agents listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any of
the other Loan Documents, except in its capacity, as applicable, as the Agent, a
Lender or an Issuing Bank hereunder.

 

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8.11 Provisions Operative Between Lenders and Agent Only

Except for Sections 8.6(7), 8.7(1), 8.7(3), 8.8, 8.9 and this Section 8.11, the
provisions of this Article relating to the rights and obligations of the Lenders
and the Agent inter se shall be operative as between the Lenders and the Agent
only, and the Obligors shall not have any rights under or be entitled to rely
for any purpose on those provisions.

ARTICLE 9

DETAILS REGARDING ADVANCES, PAYMENTS, INTEREST AND FEES

 

9.1 Lenders’ Obligations Relating to L/Cs and Revolving Credit

 

(1) Notwithstanding that L/Cs are issued by the Issuing Bank, it is the
intention of the Parties that the ultimate credit risk and exposure of any
Revolving Lender be in accordance with its overall Applicable Percentage of the
Revolving Credit. Each Revolving Lender shall immediately indemnify the Issuing
Bank for that Revolving Lender’s Applicable Percentage of any payment made by
the Issuing Bank in respect of an L/C for which the Issuing Bank is not
immediately reimbursed by the Borrowers, and shall do all things, including
purchases of participations in Advances made by the Issuing Bank, that are
necessary to ensure that result. Any such action on the part of the Lenders
shall be binding on the Borrowers.

 

(2) Each Lender acknowledges and agrees that its obligations under
Section 9.1(1) in respect of L/Cs and under Sections 2.4(3) and 2.4(4) in
respect of Advances under the Swing Line Tranche are absolute, unconditional and
irrevocable and shall not be affected by any circumstance whatsoever, including
any amendment, renewal or extension of any L/C, the occurrence and continuance
of a Default or the reduction or termination of its Commitment, and that any
payment it is required to make pursuant to its obligations shall be made without
any offset, abatement, withholding or reduction whatsoever. If for any reason a
payment to the Swing Line Lender under Sections 2.4(4) or 2.4(1) in respect of
Advances under the Swing Line Tranche cannot be made or must be rescinded, each
Lender shall immediately indemnify the Swing Line Lender for that Lender’s
Applicable Percentage of any such payment, and shall do all such things,
including purchase of participations in Advances made by the Swing Line Lender,
as shall be required to ensure that result.

 

9.2 Adjustment of Applicable Percentages for Revolving Credit

While the Swing Line Lender is the sole Lender making Advances under the Swing
Line Tranche, its participation in Advances and payments (including standby
fees) under the Revolving Credit shall be reduced and the participation of the
other Revolving Lenders under the Revolving Credit shall be correspondingly
increased as specified in Schedule E. The Agent may revise those adjustments
from time to time, having regard to the amounts outstanding or committed under
the Swing Line Tranche and the Main Tranche, so that the aggregate of the
Advances made by the Swing Line Lender under the Revolving Credit reflects as
closely as reasonably possible its overall Applicable Percentage of the
Revolving Credit. The Agent shall amend Schedule E and distribute it

 

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to all Parties to reflect the adjustment to the Applicable Percentages. The
Agent may also, and shall at the request of the Swing Line Lender, require the
Borrowers to obtain Advances under the Revolving Credit and use the proceeds to
repay the Swing Line Tranche, if doing so would result in the aggregate of the
Advances made by the Swing Line Lender under the Revolving Credit reflecting
more closely its overall Applicable Percentage of the Revolving Credit.

 

9.3 Exceptions Regarding the Revolving Credit

 

(1) All Advances under the Swing Line Tranche shall be made solely by the Swing
Line Lender and records concerning Advances under the Swing Line Tranche shall
be maintained solely by the Swing Line Lender. All payments of principal,
interest, fees and other amounts relating to the Swing Line Tranche shall be
made solely to the Swing Line Lender. Any notices by the Borrowers in connection
with the Swing Line Tranche shall be made to the Swing Line Lender. Notice and
minimum amount requirements for Advances shall not apply to Advances by way of
overdraft under the Swing Line Tranche.

 

(2) In connection with Advances by way of overdraft under the Swing Line
Tranche, the Swing Line Lender shall, at the close of business daily, ascertain
the position or net position of the account or accounts agreed on by the
Borrowers and the Swing Line Lender from time to time. If a position or net
position is a debit in favour of the Swing Line Lender and if the Borrowers are
entitled to an Advance, the debit shall be deemed to be a Prime Rate Advance (in
the case of Canadian Dollars) or Base Rate Advance (in the case of US Dollars)
under the Swing Line Tranche in the amount of the debit. If a position or net
position is a credit in favour of the Borrowers, the credit shall be deemed to
be a repayment of Prime Rate Advances (in the case of Canadian Dollars) or Base
Rate Advances (in the case of US Dollars) under the Swing Line Tranche in the
amount of the credit.

 

9.4 Evidence of Indebtedness

The Agent shall maintain records concerning the Obligations and each Lender
shall maintain records concerning those Advances it has made. The records
maintained by the Agent, by the Issuing Bank relating to L/Cs and by the Swing
Line Lender relating to the Swing Line Tranche, shall constitute prima facie
evidence of the Obligations and all related details. The failure of the Agent or
any Lender to correctly record any detail relating to an Advance shall not,
however, adversely affect the obligation of the Borrowers to pay any of the
Obligations in accordance with this Agreement.

Any Lender may request that any Advances made by it be evidenced by a promissory
note. In such event, the Borrowers shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Agent. Thereafter, the Advances evidenced by such promissory
note and interest thereon shall at all times (including after assignment in
accordance with this Agreement) be represented by one or more promissory notes
in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

 

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9.5 Calculation and Other Matters Regarding Interest and Fees

 

(1) All interest on Prime Rate Advances, Base Rate Advances and LIBOR Advances
shall accrue from day to day and shall be payable in arrears, calculated on the
actual number of days elapsed from and including the date of Advance or the
previous date on which interest was due in accordance with Section 2.5, as the
case may be, to but excluding the date on which interest is due. If interest is
not paid on the date it is due, the principal amount shall continue to bear
interest at the rate that is applicable to the particular type of Advance from
time to time in accordance with Section 2.5(1), both before and after maturity,
default and judgment, and overdue interest shall bear interest at the same rate,
compounded monthly, and be payable on demand. Notwithstanding the immediately
preceding sentence, upon the expiry of the LIBOR Period applicable to any LIBOR
Advance, the principal amount and any overdue interest with respect to that
LIBOR Advance shall bear interest calculated at the rates applicable to Base
Rate Advances.

 

(2) Interest and fees shall be calculated on the basis of a calendar year unless
otherwise specified. Interest calculated with reference to LIBOR shall be
calculated on the basis of a year of 360 days and the B/A Discount Rate shall be
calculated on the basis of a year of 365 days. Any rate that is calculated with
reference to a period (the “deemed interest period”) that is less than the
actual number of days in the calendar year of calculation is, for the purposes
of the Interest Act (Canada), equivalent to a rate based on a calendar year
calculated by multiplying that rate of interest by the actual number of days in
the calendar year of calculation and dividing by the number of days in the
deemed interest period. All calculations of interest and fees under the Loan
Documents shall be made on the basis of the nominal rates described in this
Agreement and not on the basis of effective yearly rates or on any other basis
that gives effect to the principle of deemed reinvestment. The Parties
acknowledge that there is a material difference between the stated nominal rates
and effective yearly rates taking into account reinvestment, and that they are
capable of making the calculations required to determine effective yearly rates.

 

(3) In this Section 9.5, any reference to a “calendar year” means the calendar
year in which the period for which the calculation in question falls. If the
period falls in two calendar years, one of which is a leap year, the calculation
shall be done separately for the parts of the period that fall in each calendar
year and the calculated amounts for each period shall be added.

 

(4) The B/A Fee for a B/A is calculated by multiplying the face amount of the
B/A by the rate for calculation of the B/A Fee specified in Section 2.5, and
multiplying the result by a fraction, the numerator of which is the term of the
B/A and the denominator of which is the number of days in the calendar year.

 

(5)

The B/A Discount Proceeds for a B/A are equal to the face amount of that B/A
multiplied by the price and shall be rounded to the nearest full cent, with
one-half of one cent being rounded up. The price is calculated by dividing one
by the sum of one plus the product

 

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  of (i) the B/A Discount Rate applicable to that B/A expressed as a decimal
fraction, multiplied by (ii) a fraction, the numerator of which is the term in
days of that B/A and the denominator of which is 365. The price shall be rounded
to the nearest multiple of 0.001%.

 

(6) The L/C Fee for an L/C is calculated by multiplying the face amount of the
L/C by the rate for calculation of the L/C Fee specified in Section 2.5, and
multiplying the result by a fraction, the numerator of which is the number of
days elapsed in the period from and including the issuance or renewal of the L/C
or the previous date on which the L/C Fee was due, as the case may be, to but
excluding the date on which the L/C Fee is due or the L/C is drawn or cancelled,
as the case may be, and the denominator of which is the number of days in the
calendar year. The fronting fee payable to the Issuing Bank shall be calculated
in the same manner using the rate specified in Section 2.5(3).

 

(7) The standby fee shall be calculated daily on the undrawn amount of the
applicable Credit at the rate for calculation of the standby fee specified in
Section 2.5, beginning on the date of this Agreement, and each payment shall
cover the period from and including the date of this Agreement or the previous
date on which the standby fee was due in accordance with Section 2.5, as the
case may be, to but excluding the date on which the standby fee is due.

 

(8) If an Obligor fails to pay when due any amount payable under any Loan
Document for which interest is not otherwise provided in this Agreement or
another relevant Loan Document, that Obligor shall, on demand, pay interest on
the overdue amount to the Agent from and including the due date up to but
excluding the date of actual payment, both before and after demand, default or
judgment, at the rate of interest determined from time to time in accordance
with Section 2.5(1) that is applicable to Prime Rate Advances (if the amount is
denominated in Canadian Dollars) or Base Rate Advances (if the amount is
denominated in US Dollars), in each case compounded monthly.

 

(9) If the Borrowers deposit cash as cash Collateral pursuant to a requirement
under this Agreement, the Agent or the Lender or Lenders holding the cash shall
pay the Borrowers interest on the cash while it continues to be held as cash
Collateral at the rate offered by the Person holding the cash from time to time
for deposits in the relevant currency of comparable size and term.

 

(10)

The Parties intend to comply with Applicable Law relating to usury.
Notwithstanding any other provision of this Agreement or any other Loan
Document, in no event shall any Loan Document require the payment or permit the
collection of interest or other amounts in an amount or at a rate in excess of
the amount or rate that is permitted by Applicable Law or in an amount or at a
rate that would result in the receipt by the Lenders or the Agent of interest at
a criminal rate, as the terms “interest” and “criminal rate” are defined under
the Criminal Code (Canada). Where more than one Applicable Law applies to any
Obligor, that Obligor shall not be obliged to make payment in an amount or at a
rate higher than the lowest permitted amount or rate. If from any circumstance
whatever, fulfilment of any provision of any Loan Document would result in
exceeding the highest rate or amount permitted by Applicable Law for the
collection or charging of interest, the

 

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  obligation to be fulfilled shall be reduced to reflect the highest permitted
rate or amount. If from any circumstance the Agent or the Lenders shall ever
receive anything of value as interest or deemed interest under any Loan Document
that would result in exceeding the highest lawful rate or amount of interest
permitted by Applicable Law, the amount that would be excessive interest shall
be applied to the reduction of the principal amount of the relevant Credit, and
not to the payment of interest, or if the excessive interest exceeds the unpaid
principal balance of the relevant Credit, the amount exceeding the unpaid
balance shall be refunded to the Borrowers. In determining whether or not the
interest paid or payable under any specified contingency exceeds the highest
lawful rate, the Obligors, the Agent and the Lenders shall, to the maximum
extent permitted by Applicable Law, (i) characterize any non-principal payment
as an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and their effects, (iii) amortize, prorate, allocate and spread the
total amount of interest throughout the term of the applicable Credit so that
interest does not exceed the maximum amount permitted by Applicable Law, and/or
(iv) allocate interest between portions of the Obligations to the end that no
portion shall bear interest at a rate greater than that permitted by Applicable
Law. For the purposes of the Criminal Code (Canada), the effective annual rate
of interest shall be determined in accordance with generally accepted actuarial
practices and principles and if there is any dispute, the determination of a
Fellow of the Canadian Institute of Actuaries appointed by the Agent shall be
conclusive.

 

9.6 Conversions, Rollovers, Renewals, Repayments and Reductions

 

(1) Subject to the other terms of this Agreement, the Borrowers may from time to
time:

 

  (a) convert all or any part of the outstanding amount of any LIBOR Advance
into a Base Rate Advance in the same principal amount, or vice versa;

 

  (b) convert all or any part of the outstanding amount of any Advance by way of
B/As into a Prime Rate Advance in the same principal amount, or vice versa;

 

  (c) rollover all or any part of the outstanding amount of any LIBOR Advance at
the end of the LIBOR Period as a new LIBOR Advance or rollover all or any part
of the outstanding amount of any Advance by way of B/As as a new Advance by way
of B/As;

 

  (d) renew an L/C at its maturity date by extending the maturity date; and

 

  (e) in circumstances not mentioned in items (a) to (d) immediately above,
concurrently repay one Advance and obtain a different type of Advance.

 

(2) Subject to giving notice required by Section 9.7, the Borrowers may from
time to time repay Advances outstanding under the Revolving Credit without
penalty, except that:

 

  (a) The Borrowers must prepay all Lenders under the Revolving Credit pro rata
and must prepay the same Advance made by each applicable Lender.

 

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  (b) LIBOR Advances may not be paid before the end of the applicable LIBOR
Periods unless the Borrowers indemnify the relevant Lenders for any loss or
expense that the Lenders incur as a result, including any breakage costs.

 

  (c) No B/A may be paid before its maturity date. The Borrowers may provide
Cash Collateral to the Lenders that have accepted B/As in an amount equal to the
face amount of any or all outstanding B/As if the Borrowers concurrently repay
all corresponding BA Equivalent Loans.

No voluntary payment by the Borrowers shall affect their obligation to make all
other principal payments required by this Agreement in full when due, until the
Revolving Credit is repaid in full and cancelled.

 

(3) The Borrower may from time to time cancel the Revolving Credit, or
permanently reduce the committed amount of the Revolving Credit by an amount
that must be a minimum of $5,000,000 and a whole multiple of $1,000,000. The
Borrower shall do so by giving not less than three Business Days’ irrevocable
notice to the Agent and paying all accrued and unpaid standby fees on the amount
cancelled or reduced to the effective date of cancellation or reduction. Any
reduction shall be applied pro rata to the respective Commitments of the Lenders
under the Revolving Credit. The Borrower shall have no right to any
reinstatement of any previously committed amount of the Revolving Credit after
any cancellation or reduction.

 

(4) Subject to giving notice required by Section 9.7, the Borrowers may from
time to time repay Advances outstanding under the Term Credit without penalty,
except that:

 

  (a) The Borrowers must prepay all Lenders under the Term Credit pro rata and
must prepay the same Advance made by each applicable Lender.

 

  (b) LIBOR Advances may not be paid before the end of the applicable LIBOR
Periods unless the Borrowers indemnify the relevant Lenders for any loss or
expense that the Lenders incur as a result, including any breakage costs.

 

  (c) No B/A may be paid before its maturity date. The Borrowers may provide
Cash Collateral to the Lenders that have accepted B/As in an amount equal to the
face amount of any or all outstanding B/As if the Borrowers concurrently repay
all corresponding BA Equivalent Loans.

No voluntary payment by the Borrowers shall affect their obligation to make all
other principal payments required by this Agreement in full when due, until the
Term Credit is repaid in full and cancelled.

 

9.7 Notice of Advances and Payments

 

(1) The Borrowers shall give the Agent irrevocable notice, in the form attached
as Schedule A, of any request for any Advance to it. The Borrowers shall also
give the Agent irrevocable notice in the same form of any payment by it of any
Advance (whether resulting from repayment, prepayment, rollover or conversion).

 

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(2) Notice for B/As shall be given not later than the second Business Day before
the Advance Date or date of payment. Notice for LIBOR Advances shall be given
not later than the third Business Day before the Advance Date or date of
payment. Notice for an Advance by way of L/C shall be given not later than the
third Business Day before the Advance Date or at such earlier time as the
Issuing Bank may reasonably require so that it has sufficient time to review the
proposed form of L/C. Notice for a Prime Rate Advance or Base Rate Advance shall
be given on or before the Business Day before the Advance Date or date of
payment.

 

(3) Notices shall be given not later than 11:00 a.m. on the date for notice.
Payments (except those being made solely from the proceeds of rollovers and
conversions) must be made before 11 a.m. on the date for payment. If a notice or
payment is not given or made by those times, it shall be deemed to have been
given or made on the next Business Day, unless all Lenders affected by the late
notice or payment agree, in their sole discretion, to accept a notice or payment
at a later time as being effective on the date it is given or made.

 

(4) Without limiting section 9 of the Provisions, the Borrowers shall indemnify
the Agent and the Lenders for all costs that they incur if the Borrowers give
notice requesting an Advance or notice of a payment and subsequently fails to
complete the Advance or payment or the conditions of the Advance are not
satisfied before the time specified in Section 9.10(5) on the proposed Advance
Date.

 

9.8 Size and Term of Advances

 

(1) Each Prime Rate Advance or Base Rate Advance shall be in an aggregate
minimum amount of $1,000,000 or US $1,000,000, respectively and in a whole
multiple of $100,000 or US $100,000, respectively.

 

(2) Each Advance of B/As shall be in an aggregate minimum amount of $5,000,000
and in a whole multiple of $1,000. In its notice requesting an Advance of B/As,
the Borrowers shall select a term of one, two, three or six months to apply to
the Advance.

 

(3) Each LIBOR Advance shall be in a minimum amount of US $5,000,000 and a whole
multiple of US $500,000. In its notice requesting a LIBOR Advance, the Borrowers
shall select a LIBOR Period of one, two, three or six months to apply to any
particular LIBOR Advance.

 

(4) Terms of B/As and LIBOR Periods of lengths other than those specified in
Sections 9.8(2) and 9.8(3) shall also be available at the discretion of the
Lenders from time to time and the Agent may, in circumstances of market
disruption or illiquidity, restrict the term or maturity dates of B/As and/or
LIBOR Advances. There shall not at any time be B/As and/or LIBOR Advances
outstanding with more than six different maturity dates. No B/A may mature and
no LIBOR Period may end on a date that is not a Business Day, after the maturity
date of the applicable Credit, or after a date on which the applicable Credit is
required to be reduced if that would adversely affect the Borrowers’ ability to
make the reduction.

 

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(5) Each L/C issued under this Agreement shall have a term that is not more than
one year after its issuance date or renewal date (which may extend beyond the
then-current maturity date of the Credit under which the L/C is issued), but may
provide for automatic renewal of its term for successive periods of up to one
year each as long as the Issuing Bank has the right to avoid automatic renewal
by giving notice to the beneficiary of the L/C before the extension becomes
effective. An L/C may otherwise be renewed by the Borrowers subject to complying
with the terms of this Agreement applicable to an Advance by way of L/C. On the
cancellation of the applicable Credit, the Borrowers shall arrange for all
outstanding L/Cs to be returned to the Issuing Bank for cancellation or, provide
Cash Collateral to the Issuing Bank in an amount sufficient to fully secure all
outstanding L/Cs, all L/C Fees and all fronting fees for the remainder of their
respective terms, in which case the Cash Collateral shall be held by the Issuing
Bank in place of the Security.

 

9.9 Payment of B/As, LIBOR Advances and L/Cs

 

(1) The Borrowers shall provide for the following by giving notice under
Section 9.7 requesting a rollover or conversion if the Borrowers are otherwise
entitled to an Advance, or by delivery of payment:

 

  (a) payment to the Agent at the Branch of Account of the full face amount of
each B/A for value on the date of its maturity;

 

  (b) payment to the Agent at the Branch of Account of the amount of each LIBOR
Advance for value on the last day of the applicable LIBOR Period; and

 

  (c) payment to the Issuing Bank at the office where an L/C was issued of each
amount payable to the beneficiary of the L/C for value on the date on which the
amount is payable.

 

(2) If the Borrowers fail to provide for payment in accordance with
Section 9.9(1), and if the Borrowers are otherwise entitled to an Advance but
for failing to give notice under Section 9.7 due to inadvertence, the Agent may
deem a Prime Rate Advance to have been made in the case of failure to provide
for a B/A or Canadian Dollar L/C or a Base Rate Advance to have been made in the
case of failure to provide for a LIBOR Advance or US Dollar L/C, in each case
under the Credit under which the B/A, LIBOR Advance or L/C was originally
advanced. If the Agent deems an Advance to have been made, the Agent shall
immediately give notice to the Borrowers and the Lenders and, in the case of a
deemed Advance relating to an L/C, the Lenders shall remit their respective
shares of the Advance to the Agent for forwarding to the Issuing Bank.

 

(3)

If the Borrowers fail to provide for payment in accordance with Section 9.9(1)
and if the Agent does not deem an Advance to have been made under
Section 9.9(2), then without limiting the Lenders’ other rights, the Borrowers
shall pay interest on the amount for which it has not provided for payment at a
rate of interest per annum equal to the rate applicable to Prime Rate Advances
(in the case of a B/A or Canadian Dollar L/C) or Base Rate Advances (in the case
of a LIBOR Advance or US Dollar L/C) as determined in

 

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  accordance with Section 2.5(1), compounded monthly. Interest shall be
calculated from and including the date on which payment was to have been
provided for, up to but excluding the date the payment and all interest, both
before and after demand, default and judgment, is provided for by the Borrowers.

 

9.10 Co-ordination of Prime Rate, Base Rate, B/A and LIBOR Advances

 

(1) The Agent shall advise each Lender of its receipt of a notice pursuant to
Section 9.7 requesting a Prime Rate, Base Rate or LIBOR Advance or Advance of
B/As on the day that notice is received from the Borrowers and shall, as soon as
possible, advise each Lender of that Lender’s share of the Advance. Each
Lender’s share shall be based on its Applicable Percentage, but if the Agent
determines that a Lender’s Applicable Percentage would result in its share of an
Advance not being a whole multiple of $1,000 or US $1,000, as the case may be,
the Agent may increase or reduce the amount to be advanced by that Lender in the
Agent’s sole discretion to the extent necessary to make the amount a whole
multiple.

 

(2) In advising a Lender of the amount it is to deliver to the Agent in respect
of any Advance, the Agent shall allow for deduction by each Lender of the
applicable B/A Fee in connection with an Advance by way of B/As and may also net
other amounts payable in the same currency by the Borrowers to the Agent for the
account of that Lender on the Advance Date.

 

(3) The LIBOR Period applicable to a LIBOR Advance and the maturity date for an
Advance of B/As shall be identical for each Lender.

 

(4) Each Lender shall deliver its share of the Advance to the Agent not later
than 11:00 a.m. on the Advance Date, for value on that date.

 

(5) If the Agent determines that all the conditions precedent to an Advance
specified in this Agreement have been met, it shall advance to the Borrowers the
amount delivered by each Lender by crediting the Designated Account before 2:00
p.m. (Toronto time) on the Advance Date, but if the conditions precedent to the
Advance are not met by 2:00 p.m. (Toronto time) on the Advance Date, the Agent
shall return the funds to the Lenders or invest them in an overnight investment
as orally instructed by each Lender until the Advance is made. The Agent is not
required to advance any amount to the Borrowers that the Agent has not actually
received from a Lender.

 

(6) Any difference between the actual proceeds of a newly issued B/A and the
amount required to pay a maturing B/A that is being rolled over or the amount
required to pay a Prime Rate Advance that is being converted to B/As, any
difference between the actual proceeds of an Advance and the amount required to
repay any Advance that is concurrently being repaid and any difference between
the actual proceeds of an Advance and the amount required to fulfill any
specific use of the proceeds that the Borrowers have directed the Agent to make,
shall be paid by the Borrowers to the Agent from its own resources by 11:00 a.m.
(Toronto time) on the Advance Date or may be advanced as a Prime Rate Advance or
Base Rate Advance under the Swing Line Tranche if the Borrowers are otherwise
entitled to an Advance under the Swing Line Tranche.

 

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9.11 Execution of B/As

 

(1) To facilitate the acceptance of B/As under this Agreement, the Borrowers
appoint each Lender as its attorney to sign and endorse on its behalf, as and
when considered necessary by the Lender, an appropriate number of orders in the
form prescribed by that Lender.

 

(2) Each Lender may, at its option, execute any order in handwriting or by the
facsimile or mechanical signature of any of its authorized officers, and the
Lenders are authorized to accept or pay, as the case may be, any order of the
Borrowers that purports to bear such a signature notwithstanding that the
signatory has ceased to be an authorized officer of the Lender. Any such order
or B/A shall be as valid as if the individual were an authorized officer at the
date of issue of the order or B/A.

 

(3) Any order or B/A signed by a Lender as attorney for the Borrowers, whether
signed in handwriting or by facsimile or mechanical signature may be dealt with
by the Agent or any Lender to all intents and purposes and shall bind the
Borrowers as if duly signed and issued by the Borrowers.

 

(4) The receipt by the Agent of a notice requesting an Advance by way of B/As
shall be each Lender’s sufficient authority to execute, and each Lender shall,
subject to the terms and conditions of this Agreement, execute orders in
accordance with that request and the advice of the Agent given pursuant to
Section 9.10. The executed orders shall be deemed to have been presented for
acceptance.

 

9.12 Funding of B/As

 

(1) It shall be the responsibility of each Lender to arrange, in accordance with
normal market practice, for the sale on each Advance Date of the B/As issued by
the Borrowers and to be accepted by that Lender, failing which the provisions of
this Agreement relating to Non B/A Lenders shall apply.

 

(2) Notwithstanding any other provision of this Agreement, the amount to be
transferred by a Lender to the Agent in connection with any B/A accepted by that
Lender shall be determined by the B/A Discount Proceeds calculated with respect
to the B/A rather than the actual proceeds of any sale of that B/A. Accordingly,
in respect of any particular B/A accepted by it, a Lender (a) shall be entitled
to retain for its own account the amount, if any, by which any actual proceeds
of sale exceed the calculated B/A Discount Proceeds with respect to the B/A, and
(b) shall be required to pay out of its own funds the amount, if any, by which
the actual proceeds of sale are less than the calculated B/A Discount Proceeds.

 

(3)

Whenever the Borrowers request an Advance that includes B/As, each Lender that
is not permitted by Applicable Law or by customary market practice to accept
B/As or for any other reason elects by notice to the Agent from time to time not
to do so (a “Non B/A Lender”) shall, in lieu of accepting its pro rata amount of
B/As, make available to the

 

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  Borrowers on the Advance Date a loan (a “B/A Equivalent Loan”) in Canadian
Dollars and in an amount equal to the B/A Discount Proceeds of the B/As that the
Non B/A Lender would otherwise have accepted, less the B/A Fee that would
otherwise have been applicable. The B/A Equivalent Loan shall have a term equal
to the term of the B/As that the Non B/A Lender would otherwise have accepted
and the Borrowers shall, at the end of that term, be obligated to pay the Non
B/A Lender an amount equal to the aggregate face amount of the B/As that it
would otherwise have accepted. All provisions of this Agreement applicable to
B/As and Lenders that accept B/As shall apply mutatis mutandis to B/A Equivalent
Loans and Non B/A Lenders.

 

9.13 Other B/A Provisions

 

(1) The Borrowers shall not claim from a Lender any days of grace for the
payment at maturity of any B/A accepted by the Lender pursuant to this
Agreement. The Borrowers waive any defence to payment that might otherwise exist
if for any reason a B/A is held at maturity by a Lender in its own right, and
the doctrine of merger shall not apply to any B/A that is at any time held by a
Lender in its own right.

 

(2) Any executed orders to be used as B/As shall be held by a Lender in
safekeeping with the same degree of care as if they were the Lender’s own
Property, and shall be kept at the place at which executed orders are ordinarily
held by the Lender.

 

(3) The obligations of the Borrowers with respect to B/As under this Agreement
shall be unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including the
following circumstances:

 

  (a) any lack of validity or enforceability of any order accepted by a Lender
as a B/A; or

 

  (b) the existence of any claim, set-off, defence or other right that the
Borrowers may have at any time against the holder of a B/A, a Lender or any
other Person or entity, whether in connection with this Agreement or otherwise.

 

(4) The Borrowers shall not enter into any agreement or arrangement of any kind
with any Person to whom B/As have been delivered by which the Borrowers
undertake to replace the B/As on a continuing basis with other B/As, nor shall
the Borrowers directly or indirectly take, use or provide B/As as security for
loans or advances from any other Person.

 

9.14 Issuance and Use of L/Cs

 

(1) A request for an Advance by way of L/C shall be made by the Borrowers in
accordance with Section 9.7, except that a copy of the request shall be sent
directly to the Issuing Bank. The Agent shall promptly notify the Lenders of the
receipt of a request for an L/C, but L/Cs shall only be issued by the Issuing
Bank as fronting bank for all Revolving Lenders. A request shall include the
details of the L/C to be issued. The Issuing Bank shall promptly notify the
Borrowers of any comment concerning the form of the L/C requested by the
Borrowers and shall, if the Borrowers are otherwise entitled to an Advance,
issue the L/C to the Borrowers on the Advance Date or as soon afterwards as the
Issuing Bank is satisfied with the form of L/C to be issued.

 

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(2) The Borrowers shall not directly or indirectly use or provide an L/C as
security for Debt owing to any other Person.

 

9.15 Reimbursement Obligation - L/Cs

 

(1) Notwithstanding Section 9.9 or any other provision of this Agreement, the
Borrowers’ obligations to reimburse any payment to a beneficiary of an L/C shall
be absolute and unqualified, but without prejudice to the Borrowers’ right,
after making full reimbursement, to claim damages from the Issuing Bank for
matters arising from the Issuing Bank’s wilful misconduct or gross negligence.
The Borrowers’ obligation shall not be reduced by any demand or other request
for payment of an L/C (a “Demand”) that is paid or acted on in good faith and in
conformity with Applicable Laws or applicable commercial customs or practices
being invalid, insufficient, fraudulent or forged, nor shall the Borrowers’
obligation be subject to any defence or be affected by any right of set-off,
counter-claim or recoupment that the Borrowers may have now or in the future
against the beneficiary, the Issuing Bank or any other Person for any reason
whatsoever, including the fact that a Demand or Demands (if applicable)
aggregating up to the amount of the L/C were paid notwithstanding any contrary
instructions from the Borrowers or the occurrence of any event including the
commencement of legal proceedings to prohibit payment of a Demand. Any action,
inaction or omission taken or suffered by the Issuing Bank or any other Person
under or in connection with an L/C or any Demand, if in good faith and in
conformity with Applicable Laws or applicable customs or practices shall be
binding on the Borrowers and shall not place the Issuing Bank or any other
Person under any resulting liability to the Borrowers. Without limiting the
foregoing, the Issuing Bank may receive, accept or pay as complying with the
terms of the L/C, any Demand that is otherwise in order that may be signed by,
or issued to, any administrator, executor, trustee in bankruptcy, receiver or
other person or entity acting as the representative or in place of, the
beneficiary. The Borrowers shall not take any steps, issue any instructions to
the Issuing Bank or any other Person or institute any proceedings intended to
derogate from the right or ability of the Issuing Bank or any other Person to
honour or pay any Demand.

 

(2) If any L/C remains outstanding after the maturity date or other cancellation
of the Revolving Credit, the Borrowers’ obligations under Section 9.15(1) shall
continue, notwithstanding the delivery of Cash Collateral.

 

9.16 Failure of Lender to Fund

 

(1)

Unless the Agent has received notice from a Lender before the proposed date of
any Advance that the Lender will not make available to the Agent its share of
the Advance, the Agent may assume that the Lender has made its share available
on that date in accordance with the provisions of this Agreement concerning
funding by Lenders and may, in reliance upon that assumption, make available to
the Borrowers a corresponding amount. In that event, if a Lender has not in fact
made its share of the applicable

 

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  Advance available to the Agent, then the applicable Lender shall pay to the
Agent immediately on demand that corresponding amount, with interest for each
day from and including the date the amount is made available to the Borrowers to
but excluding the date of payment to the Agent, at a rate determined by the
Agent in accordance with prevailing banking industry practice on interbank
compensation. If the Lender pays that amount to the Agent, then the amount shall
constitute the Lender’s Advance. If the Lender does not do so immediately, the
Borrowers shall pay to the Agent immediately on demand the corresponding amount
with interest at the interest rate applicable to the Advance in question. Any
payment by the Borrowers shall be without prejudice to any claim the Borrowers
may have against a Lender that has failed to make its payment to the Agent.

 

(2) Notwithstanding Section 9.16(1), if any Lender fails to deliver its share of
any Advance to the Agent (that Lender being the “Non-Funding Lender”), the Agent
shall immediately give notice of that failure by the Non-Funding Lender to the
Borrowers and the other Lenders and indicate to the other Lenders that any
Lender (individually a “Contributing Lender” and collectively the “Contributing
Lenders”) may make available to the Agent all or any portion of the Non-Funding
Lender’s share of that Advance in place of the Non-Funding Lender, but in no way
shall any other Lender or the Agent be obliged to do so. A Contributing Lender
shall make funds available to the Agent as soon as possible for delivery by the
Agent to the Borrowers. If more than one Contributing Lender gives notice that
it is prepared to make funds available and the aggregate of the funds that the
Contributing Lenders are prepared to make available exceeds the amount of the
Advance that the Non-Funding Lender failed to make, then each Contributing
Lender shall make available a portion of that Advance based on the Contributing
Lenders’ relative Commitments to the applicable Credit. If a Contributing Lender
makes funds available in the place of a Non-Funding Lender, then the Non-Funding
Lender shall pay the Contributing Lender, immediately on demand, the amount
advanced on its behalf together with interest at the rate applicable to that
Advance from the date of advance to the date of payment, and the Non-Funding
Lender shall then be entitled to receive all interest paid in respect of the
Advance by the Borrowers. The failure of any Lender to deliver its Applicable
Percentage of any Advance to the Agent as required shall not relieve any other
Lender of its obligation to deliver its Applicable Percentage of any Advance as
required.

 

9.17 Payments by the Borrowers

 

(1) Except as otherwise specified in this Agreement, all payments made by or on
behalf of the Borrowers shall be made to and received by the Agent and shall be
distributed by the Agent to the Lenders as soon as possible upon receipt by the
Agent. Except as otherwise provided in this Agreement (including Section 9.18),
the Agent shall distribute:

 

  (a) payments of interest in accordance with each Lender’s Applicable
Percentage of the relevant Credit;

 

  (b) repayments of principal in accordance with each Lender’s Applicable
Percentage of the relevant Credit; or

 

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  (c) all other payments received by the Agent, including amounts received on
the realization of Security, in accordance with each Lender’s Applicable
Percentage of the relevant Credit, except that no Lender shall receive proceeds
of realization in excess of the Obligations owing to it.

 

(2) If the Agent does not distribute a Lender’s share of a payment made by the
Borrowers to that Lender for value on the day that payment is made or deemed to
have been made to the Agent, the Agent shall pay to the Lender on demand an
amount equal to the product of (a) the Interbank Reference Rate per annum
multiplied by (b) the Lender’s share of the amount received by the Agent from
the Borrowers and not distributed to the Lender, multiplied by (c) a fraction,
the numerator of which is the number of days that have elapsed from and
including the date of receipt of the payment by the Agent to but excluding the
date on which the payment is made by the Agent to the Lender and the denominator
of which is 365. The Agent shall be entitled to withhold any Tax applicable to
any payment as required by Applicable Law.

 

(3) The Agent may debit accounts, credits and other balances maintained by the
Borrowers from time to time with the Agent or its Affiliates to facilitate or
otherwise obtain payment of interest, fees and other Obligations owing by the
Borrowers.

 

9.18 Payments by Agent

For greater certainty, the following provisions shall apply to payments made by
the Agent to the Lenders:

 

  (a) The Agent shall be under no obligation to make any payment to any Lender
(whether in respect of principal, interest, fees or otherwise) until an amount
in respect of that payment has been received by the Agent from the Borrowers.

 

  (b) If the Agent receives less than the full amount of any payment of
principal, interest, fees or other amount owing by the Borrowers under this
Agreement, the Agent shall have no obligation to remit to each Lender any amount
except that Lender’s Applicable Percentage of the amount actually received by
the Agent.

 

  (c) If any Lender advances more or less than its Applicable Percentage of a
Credit, that Lender’s entitlement to that payment shall be increased or reduced,
as the case may be, in proportion to the amount actually advanced by that
Lender.

 

  (d) Except as specified in any applicable Assignment, if a Lender’s share of
an Advance has been advanced, or a Lender’s Commitment has been outstanding, for
less than the full period to which any payment (except a payment of principal)
by the Borrowers relates, that Lender’s entitlement to that payment shall be
reduced in proportion to the length of time the Lender’s share of the relevant
Advance or the Lender’s Commitment, as the case may be, has actually been
outstanding.

 

  (e) The Agent acting reasonably and in good faith shall, after consultation
with the Lenders in the case of any dispute, determine in all cases the amount
of all payments to which each Lender is entitled and that determination shall,
in the absence of manifest error, be binding and conclusive.

 

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On request, the Agent shall deliver a statement detailing any of the payments to
the Lenders.

 

9.19 Increased Costs, Etc.

 

(1) If any Change in Law from time to time shall:

 

  (a) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender;

 

  (b) subject any Lender to any Tax of any kind whatsoever with respect to this
Agreement or any Advance made by it, or change the basis of taxation of payments
to the Lender in respect of this Agreement or any Advance, except for
Indemnified Taxes or Other Taxes covered by Section 9.20 and the imposition, or
any change in the rate, of any Excluded Tax payable by that Lender; or

 

  (c) impose on any Lender or any applicable interbank market any other
condition, cost or expense affecting this Agreement or any Advance made by that
Lender;

and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any Advance (or of maintaining its obligation to
make any Advance), or to reduce the amount of any sum received or receivable by
the Lender under this Agreement (whether of principal, interest or any other
amount), then upon request of the Lender from time to time the Borrowers will
pay to that Lender an additional amount or amounts that will compensate the
Lender for the additional costs incurred or reduction suffered.

 

(2) If any Lender determines in its sole and absolute discretion that any Change
in Law affecting the Lender or any lending office of the Lender or its holding
company (or other Controlling Person), if any, regarding capital requirements
has or would have the effect of reducing the rate of return on the Lender’s
capital or on the capital of its holding company (or other Controlling Person),
if any, as a consequence of this Agreement, the Commitments of the Lender or any
Advance made by the Lender, to a level below that which the Lender or its
holding company (or other Controlling Person) could have achieved but for that
Change in Law (taking into consideration the Lender’s policies and the policies
of its holding company (or other Controlling Person) with respect to capital
adequacy, each from time to time), then from time to time the Borrowers will pay
to that Lender an additional amount or amounts that will compensate Lender or
its holding company (or other Controlling Person) for the reduction suffered.

 

(3) A certificate of a Lender specifying the amount or amounts necessary to
compensate the Lender or its holding company (or other Controlling Person), as
the case may be, as specified in this Section, including reasonable detail of
the basis of calculation of the amount or amounts determined based on methods of
averaging and attribution in its sole and absolute discretion, and delivered to
the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay
the Lender the amount shown as due on any such certificate within 10 days after
receipt of the certificate.

 

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(4) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section shall not constitute a waiver of the Lender’s right to demand
compensation, except that the Borrowers shall not be required to compensate a
Lender pursuant to this Section for any increased costs incurred or reductions
suffered more than nine months before the date that the Lender notifies the
Borrowers of the Change in Law giving rise to the increased costs or reductions
and of the Lender’s intention to claim compensation, unless the Change in Law
giving rise to the increased costs or reductions is retroactive, in which case
the nine month period referred to above shall be extended to include the period
of retroactive effect.

 

9.20 Taxes

 

(1) If any Obligor, the Agent, or any Lender is required by Applicable Law to
deduct or pay any Indemnified Taxes (including any Other Taxes) in respect of
any payment by or on account of any obligation of an Obligor under any Loan
Document, then (i) the sum payable shall be increased by that Obligor when
payable as necessary so that after making or allowing for all required
deductions and payments (including deductions and payments applicable to
additional sums payable under this Section) the Agent or Lender, as the case may
be, receives an amount equal to the sum it would have received had no deductions
or payments been required, (ii) the Obligor shall make any deductions required
to be made by it under Applicable Law and (iii) the Obligor shall timely pay the
full amount required to be deducted to the relevant Governmental Authority in
accordance with Applicable Law.

 

(2) Without limiting the provisions of Section 9.20(1), the Borrowers shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with Applicable Law.

 

(3) The Borrowers shall indemnify the Agent and each Lender, within 10 days
after demand, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Agent or that
Lender and any penalties, interest and reasonable expenses arising from or with
respect to the Indemnified Taxes or Other Taxes, whether or not they were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of the payment or liability delivered to the
Borrowers by a Lender (with a copy to the Agent), or by the Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(4) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by an Obligor to a Governmental Authority, the Obligor shall deliver to the
Agent the original or a certified copy of a receipt issued by the Governmental
Authority evidencing payment, a copy of the return reporting the payment or
other evidence of the payment reasonably satisfactory to the Agent.

 

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(5) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which each of the Borrowers
is resident for tax purposes, or any treaty to which that jurisdiction is a
party, with respect to payments under any Loan Document shall, at the request of
the Borrowers, deliver to the Borrowers (with a copy to the Agent), at the time
or times prescribed by Applicable Law or reasonably requested by the Borrowers
or the Agent, all properly completed and executed documentation prescribed by
Applicable Law that will permit the payments to be made without withholding or
at a reduced rate of withholding. In addition, (a) any Lender, if requested by
the Borrowers or the Agent, shall deliver other documentation prescribed by
Applicable Law or reasonably requested by the Borrowers or the Agent that will
enable the Borrowers or the Agent to determine whether or not that Lender is
subject to withholding or information reporting requirements, and (b) any Lender
shall notify the Borrowers and the Agent in writing within five Business Days of
ceasing to be, or to be deemed to be, resident in Canada for purposes of Part
XIII of the Income Tax Act (Canada) or any successor provision.

 

(6) If the Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which an Obligor has paid
additional amounts pursuant to this Section or that, because of the payment of
those Taxes or Other Taxes, it has benefited from a reduction in Excluded Taxes
otherwise payable by it, it shall pay to the Borrowers or the Obligor, as
applicable, an amount equal to the refund or reduction (but only to the extent
of indemnity payments made, or additional amounts paid, by the Borrowers or
Obligor under this Section with respect to the Taxes or Other Taxes giving rise
to the refund or reduction), net of all out-of-pocket expenses of the Agent or
Lender, as the case may be, and without interest (other than any net after Tax
interest paid by the relevant Governmental Authority with respect to the
refund). The Borrowers or Obligor, as applicable, upon the request of the Agent
or Lender, agrees to repay the amount paid over to the Borrowers or Obligor
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Agent or the Lender if the Agent or Lender is
required to repay the refund or reduction to the Governmental Authority. This
Section shall not be construed to require the Agent or any Lender to make
available its tax returns (or any other information relating to its Taxes that
it deems confidential) to the Borrowers or any other Person, to arrange its
affairs in any particular manner or to claim any available refund or reduction.

 

9.21 Mitigation Obligations; Replacement of Lenders

 

(1) If any Lender requests compensation under Section 9.19, or requires the
Borrowers to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 9.20, then the
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Advances or to assign its rights and obligations under
this Agreement to another of its offices, branches or Affiliates, if, in the
judgment of the Lender, doing so (i) would eliminate or reduce amounts payable
pursuant to Section 9.19 or 9.20, as the case may be, in the future and
(ii) would not subject the Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to the Lender. Each of the Borrowers hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

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(2) If any Lender requests compensation under Section 9.19, if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 9.20, if any
Lender’s obligations are suspended pursuant to Section 9.22 or if any Lender
becomes a Defaulting Lender, then the Borrowers may, at their sole expense and
effort, upon 10 days’ notice to that Lender and the Agent, require the Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 10.2), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that will assume those obligations (which assignee may
be another Lender, if a Lender accepts the assignment), provided that:

 

  (a) in the case of an assignment, the Borrowers pay the Agent the assignment
fee specified in Section 10.2(1)(g);

 

  (b) the Lender receives payment of an amount equal to the outstanding
principal of its Advances, accrued interest, accrued fees and all other amounts
payable to it under the Loan Documents (including any breakage costs and amounts
required to be paid under this Agreement as a result of prepayment to a Lender)
from any assignee and/or the Borrowers;

 

  (c) in the case of any assignment resulting from a claim for compensation
under Section 9.19 or payments required to be made pursuant to Section 9.20, the
assignment will result in a reduction in future compensation or payments; and

 

  (d) any assignment does not conflict with Applicable Law.

 

(3) A Lender shall not be required to make any such assignment or delegation or
accept repayment if, before completion, as a result of a waiver by the Lender or
otherwise, the circumstances entitling the Borrowers to require the assignment
and delegation or repayment cease to apply.

 

9.22 Illegality

If any Lender determines that any Applicable Law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable lending office to make or maintain any Advance (or to maintain
its obligation to make any Advance), or to determine or charge interest rates
based upon any particular rate, then, on notice by that Lender to the Borrowers
through the Agent, any obligation of the Lender with respect to the activity
that is unlawful shall be suspended until the Lender notifies the Agent and the
Borrowers that the circumstances giving rise to that determination no longer
exist. Upon receipt of that notice, the Borrowers shall, upon demand from that
Lender (with a copy to the Agent), prepay or, if conversion would avoid the
activity that is unlawful, convert any Advances, or take any necessary steps
with respect to any L/C in order to avoid the activity that is unlawful. Upon
any such prepayment or conversion, the Borrowers shall also pay accrued interest
on the amount so prepaid or converted. Each Lender agrees to designate a
different lending office if doing so will avoid the need for that notice and
will not, in the good faith judgment of the Lender, otherwise be materially
disadvantageous to the Lender.

 

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9.23 Inability to Determine Rates, Etc.

Notwithstanding Section 9.12(1), if the Required Lenders determine that for any
reason a market for B/As does not exist at any time, or the Lenders cannot for
other reasons, after reasonable efforts, readily sell B/As or perform their
other obligations under this Agreement with respect to B/As, the Agent will
promptly notify the Borrowers and each Lender. Thereafter, the Borrowers’ right
to request acceptance of B/As shall be and remain suspended until the Required
Lenders determine and the Agent notifies the Borrowers and each Lender that any
condition causing the original determination no longer exists. If the Required
Lenders determine that for any reason adequate and reasonable means do not exist
for determining LIBOR for any requested LIBOR Period with respect to a proposed
LIBOR Advance, or that LIBOR for any requested LIBOR Period with respect to a
proposed LIBOR Advance does not adequately and fairly reflect the cost to those
Lenders of funding that Advance, the Agent will promptly notify the Borrowers
and each Lender. Thereafter, the obligation of the Lenders to make or maintain
LIBOR Advances shall be suspended until the Agent (upon the instruction of the
Required Lenders) revokes the notice. Upon receipt of that notice, the Borrowers
may revoke any pending request for a borrowing, conversion or continuation of
LIBOR Advances or, failing that, will be deemed to have converted its request
into a request for a borrowing of Base Rate Advances in the amount specified in
the request.

ARTICLE 10

ADDITIONAL LENDERS, SUCCESSORS AND ASSIGNS

 

10.1 Successors and Assigns

The provisions of this Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors and assigns permitted by this
Agreement, except that no Obligor may assign or otherwise transfer any of its
rights or obligations under any Loan Document without the prior written consent
of the Agent and each Lender and no Lender may assign or otherwise transfer any
of its rights or obligations under this Agreement except (i) to an Eligible
Assignee in accordance with the provisions of Section 10.2, or (ii) by way of
participation in accordance with the provisions of Section 10.4, (and any other
attempted assignment or transfer by any Party shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the Parties, their respective successors and permitted
assigns, sub-agents contemplated by this Agreement, Participants to the extent
provided in Section 10.4 and, to the extent expressly contemplated by this
Agreement, the Related Parties of each of the Agent, any sub-agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

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10.2 Assignments by Lenders

 

(1) Any Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Advances at the time owing to it), provided
that:

 

  (a) except if an Event of Default has occurred and is continuing or in the
case of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and the Advances at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender, the aggregate amount of the
Commitment being assigned (which for this purpose includes Advances outstanding
under the Commitment) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Advances of the assigning Lender
subject to each such assignment (determined as of the date the Assignment with
respect to the assignment is delivered to the Agent or, if “Trade Date” is
specified in the Assignment, as of the Trade Date) shall not be less than
$5,000,000, in the case of any assignment in respect of the Revolving Credit, or
$1,000,000, in the case of any assignment in respect of the Term Credit, unless
each of the Agent and, so long as no Default has occurred and is continuing, the
Borrowers otherwise consent to a lower amount (each consent not to be
unreasonably withheld or delayed);

 

  (b) 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;

 

  (c) any assignment of a Commitment relating to a Credit under which L/Cs may
be issued must be approved by the Issuing Bank in its sole discretion unless the
Person that is the proposed assignee is itself already a Lender with a
Commitment under that Credit;

 

  (d) any assignment must be approved by the Agent (which is not to be
unreasonably withheld or delayed) unless:

 

  (i) in the case of an assignment of a Commitment relating to the Revolving
Credit, the proposed assignee is itself already a Revolving Lender;

 

  (ii) no Event of Default has occurred and is continuing, the assignment is of
a Commitment relating to the Term Credit, and the Term Credit is fully advanced;
or

 

  (iii) the proposed assignee is a bank whose senior, unsecured, non-credit
enhanced, long term debt is rated at least A3, A- or A low by at least two of
Moody’s, S&P and Dominion Bond Rating Service Limited, respectively;

 

  (e) any assignment of a Commitment relating to the Revolving Credit must be
approved by the Swing Line Lender in its sole discretion;

 

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  (f) any assignment must be approved by the Borrowers (which is not to be
unreasonably withheld or delayed) unless the proposed assignee is itself already
a Lender with the same type of Commitment or is an Affiliate of the Assignor or
an Event of Default or Pending Event of Default has occurred and is continuing;
and

 

  (g) the parties to each assignment shall execute and deliver to the Agent an
Assignment, together with a processing and recordation fee of $3,500 and the
Eligible Assignee, if it is not a Lender, shall deliver any administrative
questionnaire required by the Agent.

 

(2) Subject to acceptance and recording by the Agent pursuant to Section 10.3,
from and after the effective date specified in the Assignment, the Eligible
Assignee shall be a Party and, to the extent of the interest assigned by the
Assignment, have the rights and obligations of a Lender under this Agreement and
the other Loan Documents, including the Security, and the assigning Lender
shall, to the extent of the interest assigned by the Assignment, be released
from its obligations under this Agreement (and, in the case of an Assignment
covering all of the assigning Lender’s rights and obligations under this
Agreement, it shall cease to be a Party) but shall continue to be entitled to
the benefits of Sections 9.19, 9.20 and 11.9, and shall continue to be liable
for any breach by it of this Agreement, with respect to facts and circumstances
occurring before the effective date of the assignment. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 10.2 shall be treated for purposes of this Agreement as
a sale by that Lender of a participation in those rights and obligations in
accordance with Section 10.4. Any payment by an assignee to an assigning Lender
in connection with an assignment or transfer shall not be or be deemed to be a
repayment by the Borrowers or a new Advance to the Borrowers.

 

10.3 Register

The Agent shall maintain at one of its offices in Toronto, Ontario a copy of the
Assignment delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Advances owing to, each Lender from time to time (the “Register”). The entries
in the Register shall be conclusive, absent manifest error, and the Borrowers,
the Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrowers
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

 

10.4 Participations

 

(1)

Any Lender may at any time, without the consent of, or notice to, the Borrowers
or the Agent, sell participations to any Person (other than a natural person, an
Obligor or any Affiliate of an Obligor) (each, a “Participant”) in all or a
portion of that Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Advances owing to it).
However, (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the

 

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  other Parties for the performance of its obligations and (iii) the Borrowers,
the Agent and the other Lenders shall continue to deal solely and directly with
that Lender in connection with its rights and obligations under this Agreement.
Any payment by a Participant to a Lender in connection with a sale of a
participation shall not be or be deemed to be a repayment by the Borrowers or a
new Advance to the Borrowers.

 

(2) Subject to Section 10.4(3), each of the Borrowers agrees that each
Participant shall be entitled to the benefits of Sections 9.19 and 9.20 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.2. To the extent permitted by Applicable Law, each
Participant also shall be entitled to the benefits of Section 7.10 as though it
were a Lender, provided the Participant agrees to be subject to Section 7.11 as
though it were a Lender.

 

(3) A Participant shall not be entitled to receive any greater payment under
Sections 9.19 and 9.20 than the applicable Lender would have been entitled to
receive with respect to the participation sold to that Participant, unless the
sale of the participation to the Participant is made with the Borrowers’ prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 9.20 unless the
Borrowers are notified of the participation sold to that Participant and the
Participant agrees, for the benefit of the Borrowers, to comply with that
Section as though it were a Lender.

ARTICLE 11

MISCELLANEOUS PROVISIONS

 

11.1 Severability, Etc.

If, in any jurisdiction, any provision of any Loan Document or its application
to any circumstance is restricted, prohibited or unenforceable, that provision
shall, as to that jurisdiction, be ineffective only to the extent of that
restriction, prohibition or unenforceability without invalidating the remaining
provisions of the affected Loan Document, without affecting the validity or
enforceability of that provision in any other jurisdiction and, if applicable,
without affecting its application to other circumstances.

 

11.2 Amendment, Supplement or Waiver

No amendment, supplement or waiver of any provision of any Loan Document, nor
any consent to any departure by an Obligor from any provision, shall in any
event be effective unless it is in writing, makes express reference to the
affected provision and is signed by the Agent and the applicable Lenders, or by
the Agent with any approval of any applicable Lenders, all as required by
Sections 8.6(3), 8.6(4), 8.6(5) and 8.6(6), as applicable. It shall be effective
only in the specific instance and for the specific purpose for which it is
given. No waiver or act or omission of the Agent or any Lender shall extend to
or be taken in any way to affect any subsequent Default or other matter or their
resulting rights.

 

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11.3 Governing Law and Agent for Service

 

(1) Each of the Loan Documents, except for those that expressly provide
otherwise, shall be conclusively deemed to be a contract made under, and shall
for all purposes be governed by and construed in accordance with, the laws of
the Province of Ontario and the laws of Canada applicable in Ontario. Each
Obligor irrevocably and unconditionally submits, for itself and its Property, to
the exclusive jurisdiction of the courts of the Province of Ontario, and any
appellate court from any of those courts, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each Party irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in those courts. Each Party 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 Applicable Law. Nothing in this Agreement or in any other Loan
Document shall affect any right that the Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement or any other Loan
Document against any Obligor or its Property in the courts of any jurisdiction.
Each Obligor irrevocably and unconditionally waives, to the fullest extent
permitted by Applicable Law, any objection that it may now or in the future have
to the laying of venue of any action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court of the Province of
Ontario. Each Party hereby irrevocably waives, to the fullest extent permitted
by Applicable Law, the defence of an inconvenient forum to the maintenance of
such an action or proceeding in any such court.

 

11.4 Due Diligence by Lenders

Each Obligor agrees that none of the Agent or the Lenders shall have any
liability to it in relation to any due diligence investigations conducted by any
of them in connection with the transactions contemplated by the Loan Documents
or be under any obligation whatsoever to disclose to it any information received
or facts disclosed by any investigations. Each Obligor also agrees that it is
not relying, will not rely, and will not be deemed, in any respect whatsoever,
to have relied upon the facts received by and information disclosed to any of
the Agent or the Lenders under or in connection with due diligence
investigations.

 

11.5 Currency

All payments made under this Agreement shall be made in the currency in which
the obligation requiring payment arose. Unless the context otherwise requires,
all amounts expressed in this Agreement in terms of money shall refer to
Canadian Dollars. Except as otherwise expressly provided in this Agreement,
wherever this Agreement contemplates or requires the calculation of the
equivalent in one currency of an amount expressed in another currency for a
purpose that does not involve the actual purchase of currency, the calculation
shall be made on the basis of the Exchange Rate at the effective time of the
calculation.

 

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11.6 Liability of Lenders

The liability of the Lenders in respect of all matters relating to this
Agreement and the other Loan Documents is several and not joint or joint and
several. Without limiting that statement, the obligations of the Lenders to make
Advances are limited to their respective Applicable Percentages of any Advance
that is requested, and, in the aggregate, to their respective Applicable
Percentages of the total amount of each Credit.

 

11.7 Currency Indemnity

If a judgment or order is rendered by any court or tribunal for the payment of
any amount owing to the Agent or any Lender under any Loan Document or for the
payment of damages in respect of any breach of any Loan Document, or under or in
respect of a judgment or order of another court or tribunal for the payment of
those amounts or damages, and the judgment or order is expressed in a currency
(“the Judgment Currency”) except the currency payable under the relevant Loan
Document (“the Agreed Currency”), the party against whom the judgment or order
is made shall indemnify and hold the Agent and the Lenders harmless against any
deficiency in terms of the Agreed Currency in the amounts received by the Agent
and the Lenders arising or resulting from any variation as between (a) the
actual rate of exchange at which the Agreed Currency is converted into the
Judgment Currency for the purposes of the judgment or order, and (b) the actual
rate of exchange at which the Agent or Lender is able to purchase the Agreed
Currency with the amount of the Judgment Currency actually received by the Agent
or Lender on the date of receipt. The indemnity in this Section shall constitute
a separate and independent obligation from the other obligations of the Obligors
under the Loan Documents, shall apply irrespective of any indulgence granted by
the Agent or any Lender and shall be secured by the Security.

 

11.8 Expenses and Indemnity

 

(1) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred
by the Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agent, in connection with the syndication of
the Credits, the preparation, negotiation, execution, delivery and
administration of the Loan Documents or any amendments, modifications or waivers
of their provisions (whether or not the transactions contemplated by them are
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any L/C
or any demand for payment under an L/C and (iii) all reasonable out-of-pocket
expenses incurred by the Agent or any Lender, including the reasonable fees,
charges and disbursements of counsel, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with Advances, including those
incurred during any workout, restructuring or negotiations in respect of the
Obligations but excluding any expenses incurred in connection with the
assignment or participation of an interest in the Credits following the initial
Advance under this Agreement. Without limiting the foregoing, the Borrowers
shall promptly pay all invoices issued by legal counsel to the Agent and the
Agent may debit any account maintained by the Borrowers with it to pay invoices.

 

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(2) The Borrowers shall indemnify the Agent (and its sub-agents), each Lender
and each Related Party of any of the foregoing Persons (each of whom is called
an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by any
Indemnitee or asserted against any Indemnitee by any Obligor or other Person
(except an Indemnitee) arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any agreement or
instrument contemplated by it, the performance or non-performance by the Parties
of their respective obligations under any Loan Document or the consummation or
non-consummation of the transactions contemplated by the Loan Documents,
(ii) any Advance or the use or proposed use of its proceeds (including any
refusal by the Issuing Bank to honour a demand for payment under an L/C if the
documents presented in connection with the demand do not strictly comply with
the terms of the L/C), (iii) any actual or alleged presence or release, spill,
leakage, emission, deposit, discharge, leaching, migration or disposition of any
Hazardous Material on or from any Property owned or operated by any Obligor, or
any related remedial action taken by the Agent or Lender or any breach of
Applicable Law with respect thereto that is related in any way to any Obligor
(including the assertion of any Lien under Applicable Law), or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by an Obligor and regardless of whether any
Indemnitee is a party to it, provided that the indemnity shall not, as to any
Indemnitee, be available to the extent that its losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from its
gross negligence or wilful misconduct or (y) result from a claim brought by the
Borrowers or any other Obligor against an Indemnitee for breach in bad faith of
that Indemnitee’s obligations under any Loan Document, if the Obligor has
obtained a final and non-appealable judgment in its favour on that claim as
determined by a court of competent jurisdiction, nor shall it be available in
respect of matters specifically addressed in Sections 9.19, 9.20 and 11.8(1).

 

(3) All amounts due under this Section 11.8 shall be payable promptly after
demand. A certificate of the Agent or a Lender specifying the amount or amounts
owing to the Agent, Lender or a sub-agent or Related Party, as the case may be,
as specified in this Section, including reasonable detail of the basis of
calculation of the amount or amounts, and delivered to the Borrowers shall be
conclusive absent manifest error.

 

11.9 Address for Notice

 

(1) Except in the case of notices and other communications expressly permitted
to be given by telephone (and except as provided in Section 11.9(3)), all
notices and other communications provided for in this Agreement shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier to the addresses or
telecopier numbers specified on Schedule D or, if to a Lender, to it at its
address or telecopier number specified in the Register or, if to an Obligor
other than the Borrowers, in care of the Borrowers. Those addresses shall apply
to notices under all Loan Documents, unless otherwise expressly provided.

 

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(2) Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given on a Business Day between 9:00 a.m. and 5:00 p.m. local time where the
recipient is located, shall be deemed to have been given at 9:00 a.m. on the
next Business Day for the recipient). Notices delivered through electronic
communications to the extent provided in Section 11.9(3), shall be effective as
provided in that Section.

 

(3) Notices and other communications to the Lenders may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Agent, except that the
foregoing shall not apply to notices to any Lender of Advances to be made if the
Lender has notified the Agent that it is incapable of receiving notices relating
to Advances by electronic communication. The Agent or the Borrowers may, in its
discretion, agree to accept notices and other communications to it by electronic
communications pursuant to procedures approved by it, but approval of those
procedures may be limited to particular notices or communications.

 

(4) Unless the Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), except that if a notice or other communication is not sent
during the normal business hours of the recipient, the notice or communication
shall be deemed to have been sent at the opening of business on the next
Business Day for the recipient, and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that the notice or communication is available and
identifying the website address.

 

(5) Any Party may change its address or telecopier number for notices and other
communications by notice to the other Parties.

 

11.10 Time of the Essence

Time is of the essence of this Agreement.

 

11.11 Further Assurances

The Obligors shall, at the request of the Agent, promptly do, execute, deliver
or cause to be done, executed or delivered all further acts, documents and
matters that may, in the reasonable opinion of the Agent (or the Required
Lenders or Lenders, as applicable), be necessary or desirable in order to fully
perform and carry out the purpose and intent of the Loan Documents.

 

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11.12 Term of Agreement

Except as otherwise provided in this Agreement, it shall remain in full force
and effect until the indefeasible payment and performance in full in cash of all
of the Obligations and the termination of all Commitments. The obligations of
the Obligors in Sections 9.15, 9.19, 9.20, 11.7 and 11.8 shall continue for the
benefit of those to whom the obligations are owed notwithstanding the
termination of this Agreement, the Commitments or any particular person’s role
as Obligor, Agent or Lender.

 

11.13 Payments on Business Day

Whenever any payment or performance under the Loan Documents would otherwise be
due on a day other than a Business Day, such payment shall be made on the
following Business Day, unless the following Business Day is in a different
calendar month, in which case the payment shall be made on the preceding
Business Day.

 

11.14 Counterparts and Facsimile

This Agreement may be executed in any number of counterparts, each of which when
executed and delivered shall be deemed to be an original, and such counterparts
together shall constitute one and the same agreement. For the purposes of this
Section, the delivery of a facsimile copy of an executed counterpart of this
Agreement shall be deemed to be valid execution and delivery of this Agreement.

 

11.15 Waiver of Jury Trial and Consequential Damages

 

(1) Each party hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in any legal proceeding
directly or indirectly arising out of or relating to this the Loan Documents,
the transactions contemplated thereby or any course of conduct, course of
dealing, statements (whether oral or written) or actions of any party (whether
based on contract, tort or any other theory).

 

(2) No party shall assert, and each party hereby waives, to the fullest extent
permitted by applicable law, any claim against any other party on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, the Loan Documents, the transactions contemplated thereby or any course of
conduct, course of dealing, statements (whether oral or written) or actions of
any party (whether based on contract, tort or any other theory).

 

(3) Each Obligor acknowledges and agrees that none of the Agent or the Lenders
shall have any liability to them in relation to any due diligence investigations
conducted by any of them in connection with the transactions contemplated hereby
or be under any obligation whatsoever to disclose to them any information
received or facts disclosed by any such investigations. Each Obligor further
acknowledges and agrees that it is not relying, will not rely, and will not be
deemed, in any respect whatsoever, to have relied upon the facts received by and
information disclosed to any of the Agent or the Lenders under or in connection
with such due diligence investigations.

 

- 82 -

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(4) Each party hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the foregoing provisions,
and (b) acknowledges that it and the other parties hereto have been induced to
enter into this Agreement by, among other things, the waivers, acknowledgments
and certifications in this Section.

 

11.16 Whole Agreement

Except in relation to matters contemplated by the other Loan Documents, this
Agreement constitutes the whole and entire agreement between the parties hereto
concerning the matters addressed in this Agreement, and cancels and supersedes
any prior agreements, undertakings, declarations, commitments or
representations, written or verbal, in respect thereof.

 

11.17 This Agreement to Govern

If there is any conflict or inconsistency between the terms of this Agreement
and the terms of any other Loan Document (except any Intercreditor Agreement,
which shall prevail as against this Agreement), the provisions of this Agreement
shall govern to the extent necessary to remove the conflict or inconsistency.

 

11.18 USA PATRIOT Act.

Each Lender that is subject to the Act (as hereinafter defined) and the Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrowers that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrowers, which information
includes the name and address of each Borrower and other information that will
allow such Lender or the Agent, as applicable, to identify such Borrower in
accordance with the Act. Each Borrower shall, promptly following a request by
the Agent or any Lender, provide all documentation and other information that
the Agent or such Lender requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Act.

 

11.19 Language

The Loan Documents have been negotiated in English and will be or have been
executed in the English language. Les soussignés ont expressément demandé que ce
document soit rédigé en langue anglaise. All paper writings given or delivered
pursuant to this Agreement and the other Loan Documents shall, if requested by
the Agent, be in the English language or, if not, shall be accompanied by a
certified English translation thereof. The English language version of any
document shall, absent manifest error, control the meaning and interpretation of
the matters set forth therein.

 

- 83 -

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11.20 Limitation Periods

To the extent that any limitation period applies to any claim for payment of
obligations or remedy for enforcement of obligations under any Loan Document,
the Obligors agree that:

 

  (a) any limitation period applying to a Loan Document expressed to be payable
on demand shall not begin before an express demand for payment of the relevant
obligations is made in writing by the Agent to the relevant Obligor;

 

  (b) any applicable limitation period shall begin afresh upon any payment or
other acknowledgment by any Obligor of its relevant obligations; and

 

  (c) each Loan Document is a “business agreement” as defined in the Limitations
Act, 2002 (Ontario) if that Act applies to it.

 

11.21 Services Provided and Conflicts of Interest

 

(1) The Agent and Lenders shall not be responsible for providing or arranging
services to the Obligors except providing the Credits. The services of the Agent
and Lenders do not include the provision of general corporate finance advisory
services. The responsibility of the Agent and Lenders is solely contractual in
nature and they do not owe the Obligors any fiduciary duty as a result of the
Loan Documents.

 

(2) The Obligors acknowledge that the Agent, the Lenders and/or one or more of
their respective Affiliates may now and in the future provide debt financing,
equity capital or other services (including financial advisory services) to
other Persons with whom the Obligors may have conflicting interests. Subject to
the provisions of this Agreement, the Agent, the Lenders and their respective
Affiliates will not disclose confidential information obtained from the Obligors
in connection with the performance of services for others. Similarly, the Agent,
the Lenders and their respective Affiliates have no obligation to disclose the
existence of or use for the Obligors’ benefit confidential information that they
have obtained or may obtain from any other Person.

 

(3) The Obligors also acknowledge that the Agent, the Lenders and their
respective Affiliates engage in securities trading and brokerage activities as
well as providing investment banking and other financial services. In the
ordinary course of business, the Agent, the Lenders and their respective
Affiliates may provide investment banking and other financial services to other
Persons with which the Obligors may have commercial or other relationships,
and/or acquire, hold or sell, for their own accounts and the accounts of
customers, the Obligors’ equity, debt and other securities and financial
instruments (including bank loans and other obligations) and those of other
Persons with which the Obligors may have commercial or other relationships. All
rights in respect of securities and financial instruments held by the Agent, the
Lenders and their respective Affiliates or their respective customers, including
any voting rights, will be exercised by the holder of the rights in its sole
discretion.

 

- 84 -

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(4) The Agent, the Lenders and their respective Affiliates are not responsible
to provide the Obligors with advice relating to legal, regulatory, accounting or
tax matters. The Obligors acknowledge that (a) they have relied and will
continue to rely on the advice of their own legal, regulatory, accounting and
tax advisors for all matters relating to the Credits and otherwise and (b) they
have not received or relied upon advice from the Agent, the Lenders and their
respective Affiliates or advisors regarding legal, regulatory, accounting or tax
matters.

 

(5) The Obligors acknowledge that no client or near-client relationship has been
or will be established between the Obligors and any legal counsel to the Agent
or Lenders as a result of their representation of the Agent or Lenders,
including by reason of any confidential information regarding any Obligor being
provided to legal counsel to the Agent or Lenders or by reason of any Obligor
paying or reimbursing the Agent or Lenders for fees, charges or disbursements of
legal counsel to the Agent or Lenders. The Obligors also acknowledge that legal
counsel to the Agent or Lenders shall not be prevented from (a) continuing to
act for the Agent and Lenders in connection with the Credits and the Loan
Documents, including any enforcement of the Security, for any reason including
any client or near-client relationship that may exist now or in the future
between legal counsel to the Agent or Lenders and any Obligor, or (b) acting for
any other Person whose interests conflict with the interests of any Obligor
unless the Obligors establish, without the benefit of any presumption, that
counsel has provided the other Person, to the detriment of the Obligors, with
confidential information regarding the Obligors that they have received as a
result of acting as legal counsel to the Agent or Lenders.

 

11.22 Date of Agreement

This Agreement may be referred to as being dated 7 November 2012 or as of
7 November 2012, notwithstanding the actual date of execution.

[SIGNATURE PAGES FOLLOW]

 

- 85 -

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IN WITNESS OF WHICH, the Parties have duly executed this Agreement.

 

WASTE MANAGEMENT OF CANADA CORPORATION By:   /s/ Devina A. Rankin   Devina A.
Rankin   Vice President & Treasurer By:   /s/ Don P. Carpenter   Don P.
Carpenter   Vice President, Chief Financial Officer & Controller

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S1 -

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

WM QUÉBEC INC. By:   /s/ Devina A. Rankin   Devina A. Rankin   Vice President &
Treasurer By:   /s/ Don P. Carpenter   Don P. Carpenter   Vice President, Chief
Financial Officer & Controller

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S2 -

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

WASTE MANAGEMENT, INC. By:   /s/ Devina A. Rankin   Devina A. Rankin   Vice
President & Treasurer By:   /s/ Don P. Carpenter   Don P. Carpenter   Vice
President & Chief Accounting Officer

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S3 -

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

WASTE MANAGEMENT HOLDINGS, INC. By:   /s/ Devina A. Rankin   Devina A. Rankin  
Vice President & Treasurer By:   /s/ Don P. Carpenter   Don P. Carpenter   Vice
President, Chief Financial Officer and Controller

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S4 -

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

THE BANK OF NOVA SCOTIA, as Lender By:   /s/ Matt Macdonald   Name: Matt
Macdonald   Title:   Director, Commercial Banking By:   /s/ Phil Damecour  
Name: Phil Damecour   Title:   Director, Credit Solutions

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S5 -

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

COMERICA BANK, as Lender By:   /s/ Lad Perenyi   Name: Lad Perenyi   Title:
  Vice President

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S6 -

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

SUMITOMO MITSUI BANKING CORPORATION OF CANADA, as Lender By:   /s/ E.R. Langley
  Name: E.R. Langley   Title:   Senior Vice President By:       Name:   Title:

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S7 -

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

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Lender By:   /s/ Thomas Danielson  
Name: Thomas Danielson   Title:   Authorized Signatory By:       Name:   Title:

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S8 -

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

U.S. BANK NATIONAL ASSOCIATION, CANADA BRANCH, as Lender By:   /s/ Joseph
Rauhala   Name: Joseph Rauhala   Title:   Principal Officer By:       Name:  
Title:

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S9 -

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

U.S. BANK, NATIONAL ASSOCIATION, as Lender By:   /s/ Patrick Engel   Name:
Patrick Engel   Title:   Vice President By:       Name:   Title:

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S10 -

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

MIZUHO CORPORATE BANK, LTD., as Lender By:   /s/ Leon Mo   Name: Leon Mo  
Title:   Authorized Signatory By:       Name:   Title:

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S11 -

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

BANK OF AMERICA, N.A., CANADA BRANCH, as Lender By:   /s/ Medina Sales de
Andrade   Name: Medina Sales de Andrade   Title:   Vice President By:      
Name:   Title:

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S12 -

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

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Lender By:   /s/ Aized A. Rabbani
  Name: Aized A. Rabbani   Title:   Vice President

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S13 -

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

PNC BANK CANADA BRANCH, as Lender By:   /s/ Nazmin Adatia   Name: Nazmin Adatia
  Title:   Senior Vice President

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S14 -

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

THE BANK OF NOVA SCOTIA, as Agent By:   /s/ Jim Beninger   Name: Jim Beninger  
Title:   Director By:   /s/ Nikhil Shah   Name: Nikhil Shah   Title:   Analyst

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation

and WM Quebec Inc. et al.]

 

- S15 -

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

SCHEDULE A

FORM OF NOTICE OF ADVANCE OR PAYMENT

[see reference in Section 9.6]

 

TO:   

The Bank of Nova Scotia

GWS – Loan Administration & Agency Operations

720 King Street West

2nd Floor

Global Wholesale Services

Toronto, ON M5V 2T3

 

Attention:     Managing Director

Facsimile:    (416) 866-5991

   c.c.   

The Bank of Nova Scotia

West Metro Commercial Banking Centre

2 Robert Speck Parkway Mississauga, ON L4Z 1H8

 

Attention:     Unit Head

Facsimile:    (905) 276-4920

   c.c.   

The Bank of Nova Scotia

Corporate Banking – Loan Syndications

62nd Floor, Scotia Plaza

40 King Street West

Toronto, ON M5W 2X6

 

Attention:     Unit Head

Facsimile:    (416) 866-3329

We refer to the credit agreement dated as of 7 November 2012 between Waste
Management of Canada Corporation and WM Québec Inc., as Borrowers, others, as
Guarantors, The Bank of Nova Scotia, as Administrative Agent and the Lenders
named therein, as amended, supplemented, restated or replaced from time to time
(the “Credit Agreement”). All terms used in this certificate and that are
defined in the Credit Agreement will have the meanings defined in the Credit
Agreement.

1. Request for Advance

Notice is hereby given pursuant to Section 9.6 of the Credit Agreement that the
undersigned hereby irrevocably requests as follows:

 

  (a) that an Advance be made under the following Credit:

 

Revolving Credit

     (     ) 

Term Credit

     (     ) 

 

  (b) the requested Advance represents the following [check one or more]:

 

initial Advance under the Credit

     (     ) 

increase in an Advance under the Credit

     (     ) 

rollover of an existing Advance under the Credit

     (     ) 

conversion of an existing Advance to another type of Advance

     (     ) 

 

  (c) the Drawdown Date shall be                     ;

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

  (d) the Advance shall be in the form of [check one or more and complete
details]:

 

Prime Rate Advance

        (    )   

        Amount:

   $                       

Base Rate Advance

        (    )   

        Amount

   $                       

B/As

        (    )   

        Face Amount:

   $                       

        Term:

                          

L/C

     

        Face Amount:

   $                       

        Expiry:

                          

 

  (e) the proceeds of the Advance shall be deposited in [specify Designated
Account].

2. The undersigned hereby confirms as follows:

 

  (a) the representations and warranties made in Section 5.1 of the Credit
Agreement, other than those expressly stated to be made as of a specific date or
otherwise expressly modified pursuant to the provisions of Section 5.2 of the
Credit Agreement, are true and correct on and as of the date hereof with the
same force and effect as if such representations and warranties had been made on
and as of the date hereof, but subject to the same qualifications as are
contained in Section 5.2 of the Credit Agreement;

 

  (b) no Event of Default or Pending Event of Default has occurred and is
continuing on the date hereof or will result from the Advance(s) requested
herein;

 

  (c) after due inquiry, there is no reasonable expectation that the Borrower
will not be in compliance with all covenants contained in Section 6.2 of the
Credit Agreement at the end of its current fiscal quarter and was not in
compliance with those covenants at the end of its immediately preceding fiscal
quarter if it has not yet delivered its Compliance Certificate for that quarter;

 

  (d) the undersigned will immediately notify you if it becomes aware of the
occurrence of any event which would mean that the statements in the immediately
preceding paragraphs (a), (b) and (c) would not be true if made on the Drawdown
Date; and

 

  (e) all other conditions precedent set out in Sections [4.1 and 4.3 as
applicable] of the Credit Agreement have been fulfilled.

 

CREDIT AGREEMENT

 

- A2 -

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

3. Notice of Payment, Rollover Conversion

Pursuant to Section 9.6 of the Credit Agreement, the undersigned hereby
irrevocably notify you of the following:

 

  (a) that a payment will be made under the following Credit:

 

Revolving Credit

     (     ) 

Term Credit

     (     ) 

 

  (b) the payment represents the following [check one or more]:

 

reduction in Advances under the Credit

     (     ) 

payment of existing Advances which will be rolled over as the same type of
Advance under the Credit

     (     ) 

payment of existing Advances which will be converted to another type of Advance
under the Credit

     (     ) 

 

  (c) the payment date shall be                             ;

 

  (d) the Advance to be paid shall be in the form of [check one or more and
complete details]:

 

  Prime Rate Advance

              (    )   

        Amount:

   $                             

  Base Rate Advance

              (    )   

        Amount

   $                             

  B/As

              (    )   

        Face Amount:

   $                             

        Term:

                                

  L/C

           

        Face Amount:

   $                             

        Expiry:

                                

DATED                     .

 

CREDIT AGREEMENT

 

- A3 -

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

WASTE MANAGEMENT OF CANADA

CORPORATION

By:

   

 

  Name:   Title:

By:

   

 

  Name:   Title:

 

WM QUÉBEC INC.

By:

   

 

  Name:   Title:

By:

   

 

  Name:   Title:

 

CREDIT AGREEMENT

 

- A4 -

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

SCHEDULE B

FORM OF COMPLIANCE CERTIFICATE

[see references in Section 6.3(1)(c)]

TO:                 THE LENDERS (as defined in the Credit Agreement referred to
below)

AND TO:       THE BANK OF NOVA SCOTIA, as Agent

We refer to Section 6.3(1)(c) of the credit agreement dated as of 7 November
2012 between Waste Management of Canada Corporation and WM Québec, as Borrowers,
Waste Management, Inc. and others, as Guarantors, The Bank of Nova Scotia, as
Administrative Agent and the Lenders named therein, as amended, supplemented,
restated or replaced from time to time (the “Credit Agreement”). All terms used
in this certificate that are defined in the Credit Agreement will have the
meanings defined in the Credit Agreement.

The undersigned hereby certify that:

I,             , [Chief Financial Officer] [Chief Accounting Officer] [Corporate
Treasurer] of WASTE MANAGEMENT, INC. certify that no Pending Event of Default or
Event of Default exists and that the Obligors are in compliance with
Sections 6.1, 6.2 and 6.4 of the Credit Agreement, [as of the end of the quarter
ended             ]. Computations to evidence compliance with the financial
covenants are detailed below.

6.1(a) Interest Coverage Ratio

 

Consolidated Net Income (or Deficit)

Plus (without duplication):

interest expense

equity in losses (earnings) of unconsolidated entities

income tax expense

non-cash writedowns or writeoffs of assets

Minus non-cash extraordinary gains on the sale of assets

     

$                    (i)

 

$                    (ii)

$                    (iii)

$                    (iv)

$                    (v)

$                    (vi)

EBIT (sum of (i) through (vi))       $                    (a)

Consolidated Net Income of Acquired Businesses

Plus (without duplication):

interest expense

equity in losses (earnings) of
unconsolidated entities

income tax expense

non-cash writedowns or write-offs of assets

non-recurring extraordinary charges

     

$                    (i)

 

$                    (ii)

 

$                    (iii)

$                    (iv)

$                    (v)

$                    (vi)

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

EBIT of Acquired Businesses (sum of (i) through (vi))

   $                    (b)

Sum of (a) plus (b)

   $                    (c)

Consolidated Total Interest Expense

   $                    (d)

Ratio of (c) to (d)

               :            

Minimum ratio

   2.75:1

6.1(b) Total Debt to EBITDA

  

EBIT (from 6.1(a) item (c) above)

   $                    (i)

Plus:

  

Depreciation expense

   $                    (ii)

Amortization expense

   $                    (iii)

 

EBITDA (sum of (i) through (iii))

  

 

$                    (iv)

The sum of the following (calculated on a consolidated basis for Waste
Management Inc. and its Subsidiaries):

  

Indebtedness for borrowed money

   $                    (v)

Obligations for deferred purchase price of property or services (other than
trade payables)

   $                    (vi)

Obligations evidenced by debt instruments

   $                    (vii)

Obligations under conditional sales

   $                    (viii)

Obligations, liabilities and indebtedness under Capitalized Leases

   $                    (ix)

Obligations, liabilities and indebtedness under bonding arrangements

   $                    (x)

(to the extent that a surety has been called upon to make payment on a bond)

Guarantees of the Debt of others

   $                    (xi)

Debt secured by liens or encumbrances on property

   $                    (xii)

Reimbursement obligations with respect to letters of credit

   $                    (xiii)

Total Debt (sum of v - xiv)

   $                    (xiv)

Ratio of (xv) to (iv)

               :                

Maximum ratio:

   3.50:1.00

DATED                         .

 

CREDIT AGREEMENT

 

- B2 -

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

WASTE MANAGEMENT, INC.

By:    

 

  Name:   Title: By:    

 

  Name:   Title:

 

WASTE MANAGEMENT OF CANADA

CORPORATION

By:

   

 

  Name:   Title:

By:

   

 

  Name:   Title:

 

WM QUÉBEC INC.

By:

   

 

  Name:   Title:

By:

   

 

  Name:   Title:

 

CREDIT AGREEMENT

 

- B3 -

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

SCHEDULE C

FORM OF ASSIGNMENT AGREEMENT

[see references in Sections 1.1(9) and 10.2(1)(g)]

We refer to Section [6.3(1)(c)] of the credit agreement dated as of 7 November
2012 between Waste Management of Canada Corporation and WM Québec Inc., as
Borrowers, Waste Management, Inc. and others, as Guarantors, The Bank of Nova
Scotia, as Administrative Agent and the Lenders named therein, as amended,
supplemented, restated or replaced from time to time (the “Credit Agreement”).
All terms used in this certificate that are defined in the Credit Agreement will
have the meanings defined in the Credit Agreement.

For value received, the “Assignor” and the “Assignee” named below hereby agree
as follows:

 

1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, the Proportionate
Share specified on Appendix 1 in and to the Assignor’s rights and obligations
under the Credit Agreement, the Security and all other Credit Documents.

 

2. The Assignor (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder, that such interest is free
and clear of any lien or security interest and that it is entitled to enter into
this Assignment Agreement, (b) makes no representation or warranty, other than
as provided in this Assignment Agreement and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other Credit Document, and (c) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Obligor or the
performance or observance by any Obligor of any of the obligations under the
Credit Agreement or any other Credit Document.

 

3. The Assignee, for the benefit of the Borrower, the Guarantors, the other
Obligors, the Agent and all Lenders from time to time, including the Assignor,
(a) acknowledges receipt of any upfront fee payable by the Assignor,
(b) confirms that it has received a copy of the Credit Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement,
(c) agrees that it will, independently and without reliance upon the Agent, the
Assignor 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 the Credit Agreement, (d) appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers and discretion under the Credit Agreement as are delegated to the Agent
by the terms thereof, together with such powers and discretion as are reasonably
incidental thereto, (e) ratifies and adopts the powers of attorney and related
powers given to the Agent and the Collateral Agent under the Credit Agreement,
(f) agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender, (g) agrees to be bound by the terms of all
Intercreditor Agreements, and (h) specifies as its address for notice and
payments its office at the address set forth on Appendix 1 hereto.

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

4. Following the execution of this Assignment Agreement, it shall immediately be
delivered to the Agent, together with the processing and recording fee specified
in Section [10.2 (1)(s)] of the Credit Agreement if applicable, for approval and
recording by the Agent, the Issuing Lender and the Borrower, if applicable. The
Assignee’s agreement to become a Lender, as constituted by this Assignment
Agreement, is irrevocable, unless the Assignee is not approved by the Agent, the
Issuing Lender or the Borrower, if applicable. The Assignee shall become a
Lender, and shall be bound by the obligations and entitled to the benefits in
the Credit Agreement, immediately upon this Assignment Agreement being approved
and recorded by the Agent, the Issuing Lender and the Borrower, if applicable
(the “Effective Date”). On the Effective Date, the Assignee (a) shall pay the
Assignor an amount equal to the Assignee’s Proportionate Share of Prime Rate
Advances made by the Assignor as of the Effective Date, and (b) shall become
entitled to receive standby fees in accordance with the Credit Agreement in
respect of its Proportionate Share of the aggregate amount of the Credit that
has not been advanced by the Lenders.

 

5. If Advances made by the Assignee to the Borrower are for any reason less than
the Assignee’s Proportionate Share of the aggregate Advances made by all Lenders
under the Credit Agreement, the Assignee shall, on demand, indemnify the
Assignor in respect of the principal amount of the corresponding Advances made
by the Assignor in excess of the Assignor’s Proportionate Share. The Advances by
the Assignor in respect of which the Assignee is bound to indemnify the Assignor
are set out on Appendix 2 to this Assignment Agreement. The Assignor shall pay
the Assignee indemnity fees during the period in which the Assignee is obliged
to indemnify the Assignor. The fee shall be in the amount specified on
Appendix 2 and shall be payable on the Effective Date in respect of Advances by
way of B/As.

 

6. This Assignment Agreement shall be governed by, and construed in accordance
with the laws of the Province of Ontario, Canada.

 

CREDIT AGREEMENT

 

- C2 -

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

7. This Assignment Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Assignment Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment Agreement.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
Agreement to be executed by their duly authorized officers as of the dates
specified below.

 

Assignor:                                                                      

By:

   

 

  Name:   Title:

Date:

   

 

Assignee:                                                                      

By:

   

 

  Name:   Title:

Date:

   

 

 

CREDIT AGREEMENT

 

- C3 -

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

Approved on       [If applicable] Approved on
                                                     

THE BANK OF NOVA SCOTIA, as Agent

      WASTE MANAGEMENT OF CANADA
CORPORATION

By:

         By:      

 

        

 

   Name:          Name:    Title:          Title:

By:

         By:      

 

        

 

   Name:          Name:    Title:          Title:

Effective Date:                                          
                               

      Date:               

 

              

WM QUÉBEC INC.

     

By:

              

 

         Name:          Title:      

By:

              

 

         Name:          Title:       Date:               

 

 

CREDIT AGREEMENT

 

- C4 -

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

APPENDIX 1

TO

ASSIGNMENT AGREEMENT

 

Proportionate Share assigned by Assignor:

                              

Proportionate Share retained by Assignor:

                              

Payment Details, including address of Assignee for notices:

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

APPENDIX 2

TO

ASSIGNMENT AGREEMENT

Advances in respect of which the Assignee is to indemnify the Assignor, as of
the Effective Date:

 

Type of Advance

  

Maturity Date of Advance

  

Principal Amount of Advance

Indemnity fee:

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

SCHEDULE D

ADDRESS FOR NOTICE

Waste Management of Canada Corporation/WM Québec Inc.

c/o Waste Management, Inc.

1001 Fannin Street, Suite 4000

Houston, Texas 77002

Attention:         Treasurer

Fax No.:           713-942-1580

with a copy to:

Attention:         General Counsel

Fax No.:           713-942-1580

The Bank of Nova Scotia

West Metro Commercial Banking Centre

2 Robert Speck Parkway Mississauga, Ontario L4Z 1H8

Attention:        Unit Head

Fax No.:          (905) 276-4920

with a copy to:

Corporate Banking – Loan Syndications

62nd Floor, Scotia Plaza

40 King Street West

Toronto, Ontario M5W 2X6

Attention:        Unit Head

Fax No.:          (416) 866-3329

Comerica Bank

Brookhollow II

2900 North Loop West, 9th Floor

Houston, Texas 77092

Attention:        Vice President

Fax No.:           713-507-2889

PNC Bank Canada Branch

130 King Street West, Suite 2140

P.O. Box 462, Toronto, Ontario M5X 1E4

Attention:        Relationship Manager

Fax No.:          416-361-0085

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

with a copy to:

Attention:        Relationship Manager

Fax No.:          412-762-6484

U.S. Bank, National Association Canada Branch

120 Adelaide Street West, Suite 2300

Toronto, Ontario M5H 1T1

Attention:        Principal Officer

Fax No.:          416-306-3545

U.S. Bank, National Association

214 North Tryon Street, 30th Floor

Charlotte, NC 28202

Attention:        Vice President

Fax No.:          704-335-2815

Mizuho Corporate Bank, Ltd.

1251 Avenue of the Americas

New York, NY 10020

Attention:        Vice President

Fax No.:          212-282-4488

Sumitomo Mitsui Banking Corporation of Canada

Suite 1400, Ernst & Young Tower

Toronto-Dominion Centre

P.O. Box 172 222 Bay Street

Toronto, Ontario M5K 1H6

Attention:        Senior Vice President

Fax No.:          416-214-3606

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1251 Avenue of the Americas

New York, NY 10020-1104

Attention:        Benita Volid

Fax No.:          312-696-4535

Bank of America, N.A., Canada Branch

181 Bay Street, 4th Floor

Toronto, Ontario M5J 2V8

Attention:        Maria Maia

Fax No.:          980-233-7700

 

CREDIT AGREEMENT

 

- D2 -

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

with a copy to:

Attention:        Medina Sales de Andrade

Fax No.:          312-453-0401

JPMorgan Chase Bank, N.A., Toronto Branch

383 Madison Avenue Floor 24

New York, NY 10179

Attention:        Aized Rabbani

Fax No.:          212-622-6642

 

CREDIT AGREEMENT

 

- D3 -

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

SCHEDULE E

LENDERS AND THEIR APPLICABLE PERCENTAGES

[see references in Sections 1.1(9), 1.1(74), 1.1(102), 1.1(113) and 9.2]

The Bank of Nova Scotia

(original total Commitment – $130,000,000)

Revolving Credit – $30,000,000

Swing Line Tranche – $20,000,000

Term Credit – $100,000,000

Applicable Percentage: 20%

JPMorgan Chase Bank, N.A.

(original total Commitment – $100,000,000)

Revolving Credit – $23,076,923.08

Swing Line Tranche – nil

Term Credit – $76,923,076.92

Applicable Percentage: 15.38461538%

Bank of America, N.A.

(original total Commitment – $100,000,000)

Revolving Credit – $23,076,923.08

Swing Line Tranche – nil

Term Credit – $76,923,076.92

Applicable Percentage: 15.38461538%

PNC Bank, National Association

(original total Commitment – $100,000,000)

Revolving Credit – $23,076,923.08

Swing Line Tranche – nil

Term Credit – $76,923,076.92

Applicable Percentage: 15.38461538%

Mizuho Corporate Bank, Ltd.

(original total Commitment – $50,000,000)

Revolving Credit – $11,538,461.54

Swing Line Tranche – nil

Term Credit – $38,461,538.46

Applicable Percentage: 7.69230769%

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

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

(original total Commitment – $50,000,000)

Revolving Credit – $11,538,461.54

Swing Line Tranche – nil

Term Credit – $38,461,538.46

Applicable Percentage: 7.69230769%

U.S. Bank, National Association

(original total Commitment – $50,000,000)

Revolving Credit – $11,538,461.54

Swing Line Tranche – nil

Term Credit – $38,461,538.46

Applicable Percentage: 7.69230769%

Sumitomo Mitsui Banking Corporation of Canada

(original total Commitment – $50,000,000)

Revolving Credit – $11,538,461.54

Swing Line Tranche – nil

Term Credit – $38,461,538.46

Applicable Percentage: 7.69230769%

Comerica Bank

(original total Commitment – $20,000,000)

Revolving Credit – $4,615,384.62

Swing Line Tranche – nil

Term Credit – $15,384,615.38

Applicable Percentage: 3.07692308%

 

- E2 -