Exhibit 10.18
(CHASE LOGO) [c97612c9761200.gif]
CREDIT AGREEMENT
dated as of
October 12, 2005
among
• CORE-MARK HOLDING COMPANY, INC.
• CORE-MARK INTERNATIONAL, INC.
• CORE-MARK HOLDINGS I, INC.
CORE-MARK HOLDINGS II, INC.
CORE-MARK HOLDINGS III, INC.
CORE-MARK MIDCONTINENT, INC.
CORE-MARK INTERRELATED COMPANIES, INC.
HEAD DISTRIBUTING COMPANY
MINTER-WEISMAN CO.
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Syndication Agent,
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN),
as Co-Syndication Agent,
BANK OF AMERICA, N.A.,
as Co-Documentation Agent,
and
WELLS FARGO FOOTHILL, LLC,
as Co-Documentation Agent,
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
CHASE BUSINESS CREDIT

 

 

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TABLE OF CONTENTS

              Page  
 
       
ARTICLE I DEFINITIONS
    2  
SECTION 1.01. Defined Terms
    2  
SECTION 1.02. Classification of Loans and Borrowings
    30  
SECTION 1.03. Terms Generally
    31  
SECTION 1.04. Accounting Terms; GAAP
    31  
 
       
ARTICLE II THE CREDITS
    31  
SECTION 2.01. Commitments
    31  
SECTION 2.02. Loans and Borrowings
    31  
SECTION 2.03. Requests for Revolving Borrowings
    32  
SECTION 2.04. Protective Advances
    33  
SECTION 2.05. Swingline Loans, Canadian Swingline Loans and Overadvances
    34  
SECTION 2.06. Letters of Credit
    37  
SECTION 2.07. Funding of Borrowings
    41  
SECTION 2.08. Interest Elections
    41  
SECTION 2.09. Termination of Commitments
    42  
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt
    43  
SECTION 2.11. Repayment of Loans
    44  
SECTION 2.12. Fees
    45  
SECTION 2.13. Interest
    45  
SECTION 2.14. Alternate Rates of Interest
    46  
SECTION 2.15. Increased Costs
    47  
SECTION 2.16. Break Funding Payments
    48  
SECTION 2.17. Taxes
    48  
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs
    49  
SECTION 2.19. Mitigation Obligations; Replacement of Lenders
    52  
SECTION 2.20. Returned Payments
    52  
SECTION 2.21. Increase In Commitments
    53  
SECTION 2.22. Adjustments of Advance Rates and Reserves; Permitted Acquisition
Eligibility and Reporting
    53  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES
    54  
SECTION 3.01. Organization; Powers
    54  
SECTION 3.02. Authorization; Enforceability
    54  
SECTION 3.03. Governmental Approvals; No Conflicts
    54  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
SECTION 3.04. Financial Condition; No Material Adverse Change
    54  
SECTION 3.05. Properties
    55  
SECTION 3.06. Litigation and Environmental Matters
    55  
SECTION 3.07. Compliance with Laws and Agreements
    55  
SECTION 3.08. Investment and Holding Company Status
    55  
SECTION 3.09. Taxes
    56  
SECTION 3.10. ERISA
    56  
SECTION 3.11. Disclosure
    56  
SECTION 3.12. Material Agreements
    56  
SECTION 3.13. Solvency
    56  
SECTION 3.14. Insurance
    57  
SECTION 3.15. Capitalization and Subsidiaries
    57  
SECTION 3.16. Security Interest in Collateral
    57  
SECTION 3.17. Labor Disputes
    57  
SECTION 3.18. Affiliate Transactions
    57  
SECTION 3.19. Common Enterprise
    58  
 
       
ARTICLE IV CONDITIONS
    58  
SECTION 4.01. Effective Date
    58  
SECTION 4.02. Each Credit Event
    60  
 
       
ARTICLE V AFFIRMATIVE COVENANTS
    61  
SECTION 5.01. Financial Statements; Borrowing Base and Other Information
    61  
SECTION 5.02. Notices of Material Events
    64  
SECTION 5.03. Existence; Conduct of Business
    65  
SECTION 5.04. Payment of Obligations
    65  
SECTION 5.05. Maintenance of Properties
    65  
SECTION 5.06. Books and Records; Inspection Rights
    65  
SECTION 5.07. Compliance with Laws
    65  
SECTION 5.08. Use of Proceeds
    66  
SECTION 5.09. Insurance
    66  
SECTION 5.10. Casualty and Condemnation
    66  
SECTION 5.11. Appraisals and Field Examinations
    66  
SECTION 5.12. Depository Banks
    66  
SECTION 5.13. Additional Collateral; Further Assurances
    67  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
ARTICLE VI NEGATIVE COVENANTS
    68  
SECTION 6.01. Indebtedness
    68  
SECTION 6.02. Liens
    69  
SECTION 6.03. Fundamental Changes
    70  
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
    70  
SECTION 6.05. Asset Sales
    72  
SECTION 6.06. Sale and Leaseback Transactions
    73  
SECTION 6.07. Swap Agreements
    73  
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness
    73  
SECTION 6.09. Transactions with Affiliates
    74  
SECTION 6.10. Restrictive Agreements
    75  
SECTION 6.11. Amendment of Material Documents
    75  
SECTION 6.12. Interest Deduction
    75  
SECTION 6.13. Fixed Charge Coverage Ratio
    75  
 
       
ARTICLE VII EVENTS OF DEFAULT
    76  
 
       
ARTICLE VIII THE ADMINISTRATIVE AGENT
    78  
 
       
ARTICLE IX MISCELLANEOUS
    82  
SECTION 9.01. Notices
    82  
SECTION 9.02. Waivers; Amendments
    83  
SECTION 9.03. Expenses; Indemnity; Damage Waiver
    85  
SECTION 9.04. Successors and Assigns
    87  
SECTION 9.05. Survival
    90  
SECTION 9.06. Counterparts; Integration; Effectiveness
    90  
SECTION 9.07. Severability
    91  
SECTION 9.08. Right of Setoff
    91  
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process;
Judicial Reference
    91  
SECTION 9.10. WAIVER OF JURY TRIAL
    92  
SECTION 9.11. Headings
    92  
SECTION 9.12. Confidentiality
    92  
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law
    93  
SECTION 9.14. USA PATRIOT Act
    93  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
SECTION 9.15. Disclosure
    93  
SECTION 9.16. Appointment for Perfection
    93  
SECTION 9.17. Interest Rate Limitation
    93  
SECTION 9.18. Judgment Currency
    93  
 
       
ARTICLE X LOAN GUARANTY
    94  
SECTION 10.01. Guaranty
    94  
SECTION 10.02. Guaranty of Payment
    94  
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty
    94  
SECTION 10.04. Defenses Waived
    95  
SECTION 10.05. Rights of Subrogation
    95  
SECTION 10.06. Reinstatement; Stay of Acceleration
    95  
SECTION 10.07. Information
    96  
SECTION 10.08. Termination
    96  
SECTION 10.09. [Intentionally omitted.]
    96  
SECTION 10.10. Maximum Liability
    96  
SECTION 10.11. Contribution
    96  
SECTION 10.12. Liability Joint and Several
    97  
 
       
ARTICLE XI MULTIPLE BORROWER PROVISIONS
    97  
SECTION 11.01. Independent Obligations; Subrogation
    97  
SECTION 11.02. Authority to Modify Obligations and Security
    97  
SECTION 11.03. Waiver of Defenses
    98  
SECTION 11.04. Right to Dispose of Security; Impairment of Rights
    98  
SECTION 11.05. Additional Waivers
    99  
SECTION 11.06. No Right To Information
    99  
SECTION 11.07. Notices, Demands, Etc.
    99  
SECTION 11.08. Subordination
    99  
SECTION 11.09. Revival
    100  
SECTION 11.10. Understanding of Waivers
    100  
SECTION 11.11. Unlimited Liability
    100  
SECTION 11.12. Holdings as Agent for Borrowers
    100  

 

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SCHEDULES:
   
 
   
Commitment Schedule
   
Schedule 2.06 — Existing Letters of Credit
   
Schedule 3.05 — Properties
   
Schedule 3.06 — Disclosed Matters
   
Schedule 3.10 — ERISA Matters
   
Schedule 3.12 — Material Agreements
   
Schedule 3.14 — Insurance
   
Schedule 3.15 — Capitalization and Subsidiaries
   
Schedule 3.18 — Affiliate Transactions
   
Schedule 6.01 — Existing Indebtedness
   
Schedule 6.02 — Existing Liens
   
Schedule 6.04 — Existing Investments
   
Schedule 6.10 — Existing Restrictions
   
 
   
EXHIBITS:
   
 
   
Exhibit A — Form of Assignment and Assumption
   
Exhibit B — Form of Opinion of Borrowers’ Counsel
   
Exhibit C — Form of Borrowing Base Certificate
   
Exhibit D — Form of Compliance Certificate
   
Exhibit E-1 — Loan Party Joinder Agreement
   
Exhibit E-2 — Borrower Joinder Agreement
   
Exhibit F — Form of Borrowing Request
   
Exhibit G — Form of Revolving Note
   
Exhibit H — Form of Interest Election Request
   

 

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CREDIT AGREEMENT dated as of October 12, 2005 (as it may be amended or modified
from time to time, this “Agreement”), among Core-Mark Holding Company, Inc.
(“Holdings”), Core-Mark International, Inc. (“International”), Core-Mark
Holdings I, Inc. (“Holdings I”), Core-Mark Holdings II, Inc. (“Holdings II”),
Core- Mark Holdings III, Inc. (“Holdings III”), Core-Mark Midcontinent, Inc.
(“Midcontinent”), Core-Mark Interrelated Companies, Inc. (“Interrelated”), Head
Distributing Company (“Head”), Minter-Weisman Co. (“Minter-Weisman”; each of
Holdings, International, Holdings I, Holdings II, Holdings III, Midcontinent,
Interrelated, Head and Minter-Weisman shall be a “Borrower”, International shall
be the “Canadian Borrower” and collectively such entities shall be the
“Borrowers”), the Lenders party hereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, General Electric Capital Corporation and Wachovia Capital
Finance Corporation (Western), as Co-Syndication Agents, and Bank of America,
N.A. and Wells Fargo Foothill, LLC, as Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
“Account” has the meaning assigned to such term in the Security Agreement.
“Account Debtor” means any Person obligated on an Account.
“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which any Loan Party (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.
“Administrative Borrower” has the meaning assigned to such term in
Section 11.12.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

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“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.
“Aggregate Canadian Credit Exposure” means, at any time, the aggregate Canadian
Credit Exposure of all Canadian Lenders.
“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all the Lenders.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
“Applicable Percentage” means, with respect to any Lender (that is not a
Canadian Lender), (a) with respect to Revolving Loans (that are not Canadian
Revolving Loans), LC Exposure, Swingline Loans or Overadvances, a percentage
equal to a fraction the numerator of which is such Lender’s Revolving Commitment
and the denominator of which is the aggregate Revolving Commitment of all
Revolving Lenders (if the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon such Lender’s share of the
aggregate Revolving Exposures at that time), and (b) with respect to Protective
Advances or with respect to the Aggregate Credit Exposure, a percentage based
upon its share of the Aggregate Credit Exposure and the unused Commitments.
“Applicable Rate” means, for any day, with respect to any Eurodollar Revolving
Loan or CDOR Revolving Loan, or with respect to the unused commitment fees
payable under Section 2.12(a) hereof or the participation fees payable under
Section 2.12(b) hereof, as the case may be, the applicable rate per annum set
forth below under the caption “Eurodollar Spread”, “CDOR Spread” or “Unused
Commitment Fee Rate”, as the case may be, based upon Holdings’ consolidated
EBITDA for the trailing 12 month period as of the most recent determination
date:

                      Eurodollar Spread     Unused Commitment Fee   EBITDA   and
CDOR Spread     Rate  
 
               
Category 1 >$60,000,000
    1.00 %     0.25 %
Category 2 £$60,000,000 >$53,000,000
    1.25 %     0.25 %
Category 3 £$53,000,000 >$48,000,000
    1.50 %     0.25 %
Category 4 £$48,000,000
    1.75 %     0.30 %

For purposes of the foregoing, (a) the initial Applicable Rate shall be the
applicable rate per annum set forth above in Category 3, (b) thereafter, the
Applicable Rate shall be determined as of the end of each fiscal quarter of
Holdings based upon Holdings’ annual or quarterly consolidated financial
statements delivered pursuant to Section 5.01, commencing with the later of
(i) delivery of the quarterly consolidated financial statements for the fiscal
quarter ending September 30, 2005, or (ii) 90 days after the Effective Date, and
(c) each change in the Applicable Rate resulting from a change in EBITDA shall
be effective during the period commencing on and including the date of delivery
to the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change, provided that if the Borrowers fail to deliver the annual
or quarterly consolidated financial statements required to be delivered by them
pursuant to Section 5.01 (and if no waiver or consent with respect thereto has
been delivered) EBITDA shall be deemed to be in the Category that is one
Category higher than the Category corresponding to EBITDA reported by Holdings
in its most recently delivered required financial statements at the option of
the Administrative Agent or at the request of the Required Lenders, during the
period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.

 

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“Approved Fund” has the meaning assigned to such term in Section 9.04.
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
“Availability” means, at any time, an amount equal to (a) the lesser of the
Revolving Commitment and the Borrowing Base minus (b) the Revolving Exposure of
all Revolving Lenders minus (c) fees and expenses payable hereunder that have
not been paid when due minus (d) all Exposure Reserves that have been
established in compliance with Section 2.22(a) and that have not been deducted
or taken into account in the calculation of the Borrowing Base or any element or
component thereof.
“Available Revolving Commitment” means, at any time, the Revolving Commitment
then in effect minus the Revolving Exposure of all Revolving Lenders at such
time.
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.
“Backstop Letter of Credit” has the meaning assigned to such term in Section
2.06(j).
“Banking Services” means each and any of the following bank services provided to
any Loan Party by any Lender or any of its Affiliates: (a) commercial credit
cards, stored value cards, and treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions,
return items, overdrafts and interstate depository network services), and
(b) interest rate, commodities or foreign exchange derivative and hedging
products, including Swap Agreements; provided that in order for any of the
foregoing provided by any Lender or its Affiliates to be included within the
Banking Services by the Administrative Agent: (i) such Lender shall provide to
the Administrative Agent written notice of (A) the existence of such Banking
Services, (B) such Lender’s (or its Affiliate’s) and the Administrative
Borrower’s agreement as to the maximum dollar amount of the applicable
Borrower’s obligations arising under such Banking Services that will be included
in an Exposure Reserve under Availability (the “Banking Services Amount”) and
(C) the methodology agreed upon by such Lender (or its Affiliate) and the
Administrative Borrower to determine the Banking Services Amount, and (ii) the
applicable Borrower must be permitted to enter into such arrangement under this
Agreement or must not be restricted from entering into such arrangement under
this Agreement. The Administrative Agent shall send notice to the Lenders of the
establishment of any Banking Services. After any of the foregoing have been
established as Banking Services hereunder and as long as no Event of Default
exists, the Banking Services Amount may thereafter be changed by written notice
to the Administrative Agent pursuant to an agreement between the applicable
Lender (or its Affiliate) and the Administrative Borrower, provided that no
change in a Banking Services Amount may cause Availability to be less than zero.

 

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“Banking Services Obligations” of the Loan Parties means any and all obligations
of the Loan Parties, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.
“Banking Services Reserves” means all Exposure Reserves which the Administrative
Agent from time to time establishes in its Permitted Discretion for Banking
Services then provided or outstanding.
“BIA” means the Bankruptcy and Insolvency Act (Canada).
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
“Borrower” and “Borrowers” have the meanings set forth in the introductory
paragraph of this Agreement.
“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans or CDOR Loans,
as to which a single Interest Period is in effect, (b) a Swingline Loan, (c) a
Canadian Swingline Loan, (d) a Protective Advance and (e) an Overadvance.
“Borrowing Base” means, at any time, the sum of (a) the product of (i) 85%
multiplied by (ii) the Borrower’s Eligible Accounts at such time minus the
Dilution Reserve, plus (b) the lesser of (i) the product of (x) 65% multiplied
by (y) the Borrower’s Eligible Inventory (excluding Eligible Inventory
consisting of unaffixed tax stamps), valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time, and (ii) the
product of (x) 85% multiplied by (y) the Net Orderly Liquidation Value of the
Borrower’s Inventory identified as “eligible” in the most recent inventory
appraisal ordered by the Administrative Agent (excluding Eligible Inventory
consisting of unaffixed tax stamps), plus (c) 90% of Eligible Unaffixed Tax
Stamps on hand, plus (d) 100% of unrestricted cash and cash equivalents held at,
and subject to a first-priority lien in favor of, the Administrative Agent, plus
(e) the PP&E Component, minus (f) Collateral Reserves; provided that up to two
times per calendar year (but never more than once in any six-month period or
more than a total of 60 days during any calendar year), the Borrowers may
include in the Borrowing Base an Inventory overadvance in an amount not to
exceed either (i) $5,000,000 more than the Inventory component of the Borrowing
Base from time to time under clause (b) above or (ii) an additional 5% of the
Net Orderly Liquidation Value of the Borrowers’ Inventory identified as
“eligible” in the most recent inventory appraisal ordered by the Administrative
Agent above the Inventory component of the Borrowing Base from time to time
under clause (b) above. The Borrowing Base at any time shall be determined by
reference to the most recent Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 5.01(g) of this Agreement.
“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Administrative Borrower, in
substantially the form of Exhibit C or another form which is acceptable to the
Administrative Agent in its sole discretion.
“Borrowing Request” means a request by the Administrative Borrower for a
Revolving Borrowing in accordance with Section 2.02.

 

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“British Columbia Tax Lien” means the Lien evidenced by PPSA registration number
975855A filed on April 4, 2003 in the Province of British Columbia and naming
International, as debtor, and Her Majesty the Queen in the Right of the Province
of British Columbia, as secured party.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed and, if such day relates to any Loan (including CDOR Loans) made
or Letter of Credit issued as part of the Canadian Subfacility, means any such
day other than a day on which commercial banks are authorized to close under the
Laws of, or are in fact closed in, New York City or Toronto, Ontario; provided
that, when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
“Canadian Applicable Percentage” shall mean as to any Canadian Lender, the
percentage of the aggregate Canadian Revolving Commitments constituted by its
Canadian Revolving Commitment (or, if the Canadian Revolving Commitments have
terminated or expired, the percentage which such Canadian Lender’s Canadian
Credit Exposure at such time constitutes of the Aggregate Canadian Credit
Exposure at such time).
“Canadian Borrower” has the meaning set forth in the introduction paragraph of
this Agreement.
“Canadian Credit Exposure” shall mean, at any time and as to each Canadian
Lender, the Dollar Equivalent of the aggregate principal amount of the Canadian
Revolving Loans made by such Canadian Lender outstanding as of such date.
“Canadian Dollar” and “Cdn.$” mean the lawful money of Canada.
“Canadian Funding Bank” shall mean Chase Canada, and any successor to Chase
Canada, acting in such capacity.
“Canadian Lenders” means a Lender with a Canadian Revolving Commitment or is the
holder of a Canadian Revolving Loan.
“Canadian Loans” means the Canadian Revolving Loans and the Canadian Swingline
Loans.
“Canadian Prime Rate” shall mean on any day, the annual rate of interest
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the greater
of: (a) the annual rate of interest announced from time to time by JPMorgan
Canada as its prime rate in effect at its principal office in Toronto, Ontario
Canada on such day being the reference rate used by JPMorgan Canada for
determining interest rates on Cdn.$ denominated commercial loans to its
customers in Canada; and (b) the annual rate of interest equal to the sum of
(i) the one-month CDOR Rate in effect on such day, and (ii) 1%.
“Canadian Prime Rate Loans” shall mean Canadian Revolving Loans which, for
greater certainty, will be Cdn.$ denominated and will bear interest at a rate
based upon the Canadian Prime Rate.
“Canadian Priority Payables Reserve” shall mean Reserves established in the
Permitted Discretion of the Administrative Agent for amounts secured by any
Liens, choate or inchoate, which rank or are capable of ranking in priority to
the Administrative Agent’s and/or Lenders’ Liens, including, without limitation,
in the Permitted Discretion of the Administrative Agent, (i) Exposure Reserves
for any such amounts due and not paid for vacation pay, amounts due and not paid
under any legislation relating to workers’ compensation or to employment
insurance, all amounts deducted or withheld and not paid and remitted when due
under the Income Tax Act (Canada) and all amounts currently or past due and not
contributed, remitted or paid to any Plan or under the Canada Pension Plan, the
Pension Benefits Act (Ontario) or any similar legislation, and (ii) a Collateral
Reserve for amounts currently or past due and not paid for realty, municipal or
similar taxes (to the extent impacting personal or moveable property).

 

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“Canadian Revolving Commitment” shall have the meaning assigned to the
definition of Revolving Commitment.
“Canadian Revolving Loan” means a Canadian Revolving Loan made pursuant to
Section 2.01.
“Canadian Subfacility” has the meaning set forth in Section 2.01 of this
Agreement.
“Canadian Swingline Lender” means the Canadian Funding Bank, in its capacity as
lender of Canadian Swingline Loans hereunder.
“Canadian Swingline Loan” means a Loan made pursuant to Section 2.05.
“Canadian Tobacco Tax Reserve” means a Reserve for Canadian tobacco tax
liabilities net of or less restricted cash specifically reserved for such
purpose, which Reserve will constitute a Collateral Reserve on the Effective
Date, provided that in the event that either (a) a Default or Event of Default
has occurred and is continuing or (b) Availability is less than $60,000,000,
such Reserve shall constitute an Exposure Reserve.
“Capital Expenditures” means, without duplication, any expenditure for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of Holdings and its
Subsidiaries prepared in accordance with GAAP.
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
“CDOR” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the CDOR Rate.
“CDOR Rate” means, with respect to a CDOR Loan for the relevant Interest Period,
the Canadian deposit offered rate which, in turn means on any day the annual
rate of interest which is the rate determined as being the arithmetic average of
the quotations of all institutions listed in respect of the relevant Interest
Period for Canadian dollar denominated bankers’ acceptances displayed and
identified as such on the “Reuters Screen CDOR Page” as defined in the
International Swap Dealer Association, Inc. definitions, as modified and amended
from time to time, as of 10:00 a.m. Toronto, Ontario local time on such day and,
if such day is not a Business Day, then on the immediately preceding Business
Day (as adjusted by the Canadian Funding Bank after 10:00 a.m. Toronto, Ontario
local time to reflect any error in the posted rate of interest or in the posted
average annual rate of interest) plus 10bps; provided that if such rates are not
available on the Reuters Screen CDOR Page on any particular day, then the CDOR
rate calculated on that day shall be calculated as the cost of funds quoted by
the Canadian Funding Bank to raise Canadian dollars for the applicable Interest
Period as of 10:00 a.m. Toronto, Ontario local time on such day for commercial
loans or other extensions of credit to businesses of comparable credit risk; or
if such day is not a Business Day, then as quoted by the Canadian Funding Bank
on the immediately preceding Business Day.

 

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“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of Holdings;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of Holdings by Persons who were neither (i) nominated by the board
of directors of Holdings nor (ii) appointed by directors so nominated; or
(c) the acquisition of direct or indirect Control of Holdings by any Person or
group; or (d) Holdings shall cease to own and control all of the economic and
voting rights associated with all of the outstanding Equity Interests of any of
its Subsidiaries (except in connection with any transaction expressly permitted
by this Agreement).
“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.
“Chase Canada” means JPMorgan Chase Bank, N.A. acting through its Canadian
branch.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Canadian
Revolving Loans, Swingline Loans or Protective Advances or Overadvances.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that is subject to a security
interest or Lien in favor of Administrative Agent, on behalf of itself and the
Lenders, to secure the Secured Obligations.
“Collateral Access Agreement” has the meaning assigned to such term in the
Security Agreement.
“Collateral Documents” means, collectively, the Security Agreement and any other
documents granting a Lien upon the Collateral as security for payment of the
Secured Obligations.
“Collateral Reserves” means any and all reserves established in accordance with
Section 2.22(a) that are deducted from the Borrowing Base and which the
Administrative Agent deems reasonably necessary, in its Permitted Discretion, to
maintain (including, without limitation, the Canadian Priority Payables Reserve
(only to the extent of amounts currently or past due and not paid for realty,
municipal or similar taxes (to the extent impacting personal or moveable
property)), the Canadian Tobacco Tax Reserve (to the extent included as a
Collateral Reserve under the definition of “Canadian Tobacco Tax Reserve”),
Dilution Reserves, reserves for contra Accounts, reserves for Inventory
shrinkage, reserves for customs charges and shipping charges related to any
Inventory in transit) with respect to the Collateral or any Loan Party; provided
that the Administrative Agent will not establish any Collateral Reserves under
this Agreement to the extent that the basis for such Collateral Reserve has
already been addressed in the existing Reserves, determination of eligibility
standards or advance rates hereunder.

 

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“Collection Account” has the meaning assigned to such term in the Security
Agreement.
“Commitment” means, with respect to each Lender, such Lender’s Revolving
Commitment or Canadian Revolving Commitment, as applicable, together with the
commitment of such Lender to acquire participations in Protective Advances
hereunder. The initial amount of each Lender’s Commitment or Canadian Revolving
Commitment, as applicable is set forth on the Commitment Schedule, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable.
“Commitment Schedule” means the Schedule attached hereto identified as such.
“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 meanings correlative thereto.
“Credit Exposure” means, as to (i) any Canadian Lender at any time, the Canadian
Credit Exposure, and (ii) any Lender at any time, the sum of (a) such Lender’s
Revolving Exposure at such time, plus (b) an amount equal to its Applicable
Percentage, if any, of the aggregate principal amount of Protective Advances
outstanding at such time.
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
“Dilution Factors” shall mean, without duplication, with respect to any period,
the aggregate amount of all cash discounts, returns and allowances, shortages,
credit memos, damages, corrections, bad debt write-offs and other non-cash
credits which are recorded to reduce accounts receivable in a manner consistent
with current and historical accounting practices of the Borrower.
“Dilution Ratio” shall mean, at any date, the excess (if any) of (a) the amount
(expressed as a percentage) equal to (i) the aggregate amount of the applicable
Dilution Factors for the twelve (12) most recently ended fiscal months divided
by (ii) total gross sales for the twelve (12) most recently ended fiscal months,
over (b) 5.0%.
“Dilution Reserve” shall mean a Collateral Reserve in an amount equal to, at any
date, the applicable Dilution Ratio (if greater than zero) multiplied by the
Eligible Accounts on such date.
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
“Document” has the meaning assigned to such term in the Security Agreement.
“Dollar Equivalents” means, with respect to any amounts of Canadian Dollars, an
equivalent amount of dollars determined at a rate of exchange quoted by Chase
Canada on the date of determination for the spot purchase in the foreign
exchange market of Canadian Dollars with dollars.

 

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“dollars” or “$” refers to lawful money of the United States of America.
“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period, (ii) income tax expense
for such period, (iii) all amounts attributable to depreciation and amortization
expense for such period, (iv) any extraordinary non-cash charges for such period
and (v) any other non-cash charges for such period (but excluding any non-cash
charge in respect of an item that was included in Net Income in a prior period),
minus (b) without duplication and to the extent included in Net Income, (i) any
cash payments made during such period in respect of non-cash charges described
in clause (a)(v) taken in a prior period and (ii) any extraordinary non-cash
gains and any non-cash items of income for such period, all calculated for
Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Eligible Accounts” means, at any time, the Accounts of the Borrowers which the
Administrative Agent determines in accordance with Section 2.22(a) in its
Permitted Discretion are eligible as the basis for the extension of Revolving
Loans, Swingline Loans, Canadian Swingline Loans and the issuance of Letters of
Credit hereunder. Without limiting the Administrative Agent’s discretion
provided herein, Eligible Accounts shall not include any Account:
(a) which is not subject to a first priority perfected security interest in
favor of the Administrative Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Encumbrance or other Lien permitted by
this Agreement which does not have priority over the Lien in favor of the
Administrative Agent;
(c) which is unpaid more than 90 days after the date of the original invoice
therefor or more than 60 days after the original due date, or which has been
written off the books of any Borrower or otherwise designated as uncollectible;
(d) which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible under the
criteria set forth in clause (c) above;
(e) which is owing by an Account Debtor to the extent of the amount by which the
aggregate amount of Accounts owing from such Account Debtor and its Affiliates
to the Borrowers exceeds (i) in the case of investment grade (defined as rated
at least BBB- (or its equivalent) by S&P or Ba2 (or its equivalent) by Moody’s)
Account Debtors, 20% of the aggregate Eligible Accounts, and (ii) in the case of
all other Account Debtors, 10% of the aggregate Eligible Accounts;
(f) with respect to which any covenant, representation, or warranty contained in
this Agreement or in the Security Agreement has been breached or is not true;
(g) which (i) does not arise from the sale of goods or performance of services
in the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation reasonably satisfactory to the Administrative Agent which has been
sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon any Borrower’s completion of any further performance, or (v)
represents a guaranteed sale, sale-and-return, sale on approval, consignment or
any other repurchase or return basis;

 

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(h) that constitutes a customer deposit, an unaccounted for customer credit,
clean invoice, credit reclass or for which the goods giving rise to such Account
have not been shipped to the Account Debtor or for which the services giving
rise to such Account have not been performed by the Borrowers or if such Account
was invoiced more than once, in each case to the extent of such deposit, credit
or other basis for ineligibility under this clause;
(i) with respect to which any check or other instrument of payment has been
returned uncollected for 30 days or more;
(j) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, monitor, custodian, trustee, or
liquidator of its assets, (ii) has had possession of all or a material part of
its property taken by any receiver, monitor, custodian, trustee or liquidator,
(iii) filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as bankrupt,
winding-up, or voluntary or involuntary case under any state, provincial or
federal bankruptcy laws, (iv) has admitted in writing its inability, or is
generally unable to, pay its debts as they become due, (v) become insolvent, or
(vi) ceased operations; provided that Accounts owed by any Account Debtor that
has successfully exited bankruptcy pursuant to a confirmed reorganization plan
shall not be ineligible under this clause if the Administrative Agent has
determined in its Permitted Discretion that such Account Debtor has adequate
ability to pay amounts owing to the Borrowers;
(k) which is owed by any Account Debtor which has sold all or a substantially
all of its assets if the Administrative Agent determines in its Permitted
Discretion that such Account constitutes a collection risk;
(l) which is owed (i) by an Account Debtor that (A) does not maintain its chief
executive office in the U.S. or Canada or (B) is not organized under applicable
law of the U.S., any state of the U.S., Canada, or any province of Canada
unless, in either case, such Account is backed by a Letter of Credit reasonably
acceptable to the Administrative Agent which is in the possession of, has been
assigned to and is directly drawable by the Administrative Agent, or (ii) in any
currency other than U.S. or Canadian dollars;
(m) which is owed by (i) the government (or any department, agency, public
corporation, Crown corporation or instrumentality thereof) of any country other
than the U.S. or Canada unless such Account is backed by a Letter of Credit
acceptable to the Administrative Agent which is in the possession of the
Administrative Agent, (ii) the federal government of the U.S., or any
department, agency, public corporation, or instrumentality thereof, unless the
Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.
and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien
of the Administrative Agent in such Account have been complied with to the
Administrative Agent’s satisfaction, (iii) any state government in the United
States unless any steps necessary (if any) to perfect the Lien of the
Administrative Agent in such Account have been complied with to the
Administrative Agent’s satisfaction, or (iv) the Canadian federal government, a
Canadian provincial, territorial or municipal government, or any department,
agency, public corporation, or instrumentality thereof, unless the Financial
Administration Act (Canada) and any other steps necessary to perfect the Lien of
the Administrative Agent in such Account have been complied with to the
Administrative Agent’s satisfaction;

 

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(n) which is owed by any Affiliate, employee, officer, director, agent or
stockholder (holding 10% or more of the stock of any Loan Party) of any Loan
Party unless approved in writing by the Administrative Agent in its Permitted
Discretion;
(o) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Loan Party is indebted, but only to the extent of such indebtedness
or is subject to any security, deposit, progress payment, retainage or other
similar advance made by or for the benefit of an Account Debtor, in each case to
the extent thereof;
(p) which (i) is subject to any counterclaim, deduction, defense, setoff or
dispute or with respect to which any Borrower or any Subsidiary thereof is
liable for any goods sold or services rendered by the applicable Account Debtor
to such Borrower or Subsidiary, in each case only to the extent of the potential
offset, or (ii) constitutes a manufacturers’ representative Account to the
extent subject to offset for any amount payable to the manufacturer in
connection therewith;
(q) which is evidenced by any promissory note, chattel paper, or instrument;
(r) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit any Borrower to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Borrower has filed such
report or qualified to do business in such jurisdiction;
(s) with respect to which any Borrower has made any agreement with the Account
Debtor for any reduction thereof (only to the extent of such reduction), other
than discounts and adjustments given in the ordinary course of business, or any
Account which was partially paid and any Borrower created a new receivable for
the unpaid portion of such Account;
(t) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether federal, state, provincial or local,
including without limitation the Federal Consumer Credit Protection Act, the
Federal Truth in Lending Act and Regulation Z of the Board;
(u) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than the Borrowers has or has
had an ownership interest in such goods, or which indicates any party other than
the Borrowers as payee or remittance party;
(v) which was created on cash-on-delivery or cash-and-carry terms;
(w) in the case of any Account acquired pursuant to a Permitted Acquisition,
which has not been the subject of an audit and field examination reasonably
satisfactory to the Administrative Agent or as permitted by the Administrative
Agent in accordance with Section 2.22(b);
(x) to the extent that such Account is pre-billed by any Borrower in excess of
one (1) day or otherwise constitutes a sale on bill and hold;
(y) any Account of a Borrower that is subject to an unreconciled variance
between such Borrower’s general ledger and accounts receivable aging;
(z) that constituted unapplied cash;

 

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(aa) to the extent such Account constitutes a “charge back”, re-bill or similar
adjustment for unauthorized deductions made by the Account Debtor;
(bb) to the extent that such Account is subject to customer rebates in the
ordinary course of business consistent with past practices, but only to the
extent of the amount of such customer rebates; or
(cc) which the Administrative Agent determines, in its Permitted Discretion, is
unlikely to be paid by reason of the Account Debtor’s inability to pay or which
the Administrative Agent otherwise determines, in its Permitted Discretion, is
unacceptable for any legal, credit or likelihood of collectability reason.
In the event that a material Account which was previously an Eligible Account
ceases to be an Eligible Account hereunder (for any reason other than repayment
of the Account), the Borrowers shall notify the Administrative Agent thereof on
and at the time of submission to the Administrative Agent of the next Borrowing
Base Certificate. In determining the amount of an Eligible Account, the face
amount of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that any Borrower may be obligated to rebate to an Account Debtor pursuant to
the terms of any agreement or understanding (written or oral)) and (ii) the
aggregate amount of all cash received in respect of such Account but not yet
applied by the Borrowers to reduce the amount of such Account.
“Eligible Equipment” means the equipment owned by the Borrowers, which equipment
is described on Exhibit E to the Security Agreement as of the Effective Date and
equipment hereafter approved by the Administrative Agent as part of the PP&E
Component, and which equipment meets each of the following requirements:
(a) the Borrowers have good title to such equipment;
(b) the Borrowers have the right to subject such equipment to a Lien in favor of
the Administrative Agent; such equipment is subject to a first priority
perfected Lien in favor of the Administrative Agent and is free and clear of all
other Liens of any nature whatsoever (except for Permitted Encumbrances or other
Liens permitted by this Agreement, in each case which do not have priority over
the Lien in favor of the Administrative Agent);
(c) the full purchase price for such equipment has been paid by the Borrowers;
(d) such equipment is located on premises (i) owned by a Borrower, or
(ii) leased by a Borrower where (x) the lessor has delivered to the
Administrative Agent a Collateral Access Agreement or (y) a Reserve for rent,
charges, and other amounts due or to become due with respect to such facility
has been established by the Administrative Agent in its Permitted Discretion;
(e) such equipment is in good working order and condition (ordinary wear and
tear excepted) and is used or held for use by the Borrowers in the ordinary
course of business of the Borrowers;
(f) such equipment is not subject to any agreement which restricts the ability
of the Borrowers to use, sell, transport or dispose of such equipment or which
restricts the Administrative Agent’s ability to take possession of, sell or
otherwise dispose of such equipment; and

 

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(g) such equipment does not constitute “fixtures” under the applicable statutory
laws or common law of the jurisdiction in which such equipment is located.
“Eligible Inventory” means, at any time, the Inventory of the Borrowers which
the Administrative Agent determines in accordance with Section 2.22(a) in its
Permitted Discretion is eligible as the basis for the extension of Revolving
Loans, Swingline Loans and the issuance of Letters of Credit hereunder. Without
limiting the Administrative Agent’s discretion provided herein, Eligible
Inventory shall not include:
(a) any Inventory which is not subject to a first priority perfected Lien in
favor of the Administrative Agent;
(b) any Inventory which is subject to any Lien other than (i) a Lien in favor of
the Administrative Agent and (ii) a Permitted Encumbrance or other Lien
permitted by this Agreement which does not have priority over the Lien in favor
of the Administrative Agent;
(c) any Inventory with respect to which any covenant, representation, or
warranty contained in this Agreement or the Security Agreement as to such
Inventory has been breached or is not true and which does not conform to all
standards imposed by any applicable Governmental Authority;
(d) any Inventory in which any Person other than the Borrowers shall (i) have
any direct or indirect ownership, interest or title to such Inventory or (ii) be
indicated on any purchase order or invoice with respect to such Inventory as
having or purporting to have an interest therein, including, without limitation,
goods held on consignment;
(e) any Inventory which is not finished goods or which constitutes
work-in-process, raw materials, spare or replacement parts, subassemblies,
packaging and shipping material, manufacturing supplies, samples, prototypes,
equipment displays or display items, bill-and-hold goods, repossessed goods, or
goods which are not of a type held for sale in the ordinary course of business;
(f) any Inventory which is not located in the U.S. or Canada or is in transit
with a common carrier from vendors, suppliers or outside processors, provided
that, up to $500,000 of Inventory in transit from vendors and suppliers may be
included as eligible pursuant to this clause (f) so long as (i) the
Administrative Agent shall have received (1) a true and correct copy of the bill
of lading and other shipping documents for such Inventory, (2) evidence of
satisfactory casualty insurance naming the Administrative Agent as loss payee
and otherwise covering such risks as the Administrative Agent may reasonably
request, and (3) if the bill of lading is (A) non-negotiable, a duly executed
Collateral Access Agreement from the applicable customs broker (if any) for such
Inventory or (B) negotiable, confirmation that the bill is issued in the name of
a Borrower and consigned to the order of the Administrative Agent, and an
acceptable agreement has been executed with the Borrowers’ customs broker, in
which the customs broker agrees that it holds the negotiable bill as agent for
the Administrative Agent and has granted the Administrative Agent access to the
Inventory and (ii) the common carrier is not an Affiliate of the applicable
vendor, supplier or outside processor;
(g) any Inventory which (i) is located in any location leased by any Borrower
unless (A) the lessor has delivered to the Administrative Agent a Collateral
Access Agreement or (B) a Reserve for rent, charges, and other amounts due or to
become due with respect to such facility has been established by the
Administrative Agent in its Permitted Discretion, or (ii) is being processed
offsite at a third party location or outside processor unless such third party
or processor has delivered to the Administrative Agent a Collateral Access
Agreement and evidence reasonably satisfactory to the Administrative Agent that
such Inventory is segregated from the Inventory of such third party or outside
processor and all other Inventory being processed by such third party or outside
processor;

 

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(h) any Inventory which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document (other than bills of lading to the extent permitted pursuant to
clause (f) above), unless (i) such warehouseman or bailee has delivered to the
Administrative Agent a Collateral Access Agreement and such other documentation
as the Administrative Agent may require or (ii) an appropriate Reserve has been
established by the Administrative Agent in its Permitted Discretion;
(i) any Inventory which is the subject of a consignment by a Borrower as
consignor;
(j) any Inventory which is perishable (with a shelf life less than 21 days);
(k) any Inventory which contains or bears any intellectual property rights
licensed to a Borrower unless it may sell or otherwise dispose of such Inventory
without (i) infringing the rights of such licensor, (ii) violating any contract
with such licensor, or (iii) incurring any liability with respect to payment of
royalties other than royalties incurred pursuant to sale of such Inventory under
the current licensing agreement;
(l) any Inventory which is not reflected in a current perpetual inventory report
(or other accounting system acceptable to the Administrative Agent in its
Permitted Discretion) of the Borrowers (unless such Inventory is reflected in a
report to the Administrative Agent as “in transit” Inventory), except for “dry
room” and “excise tax” Inventory to the extent that such Inventory is otherwise
eligible hereunder;
(m) in the case of any Inventory acquired pursuant to a Permitted Acquisition,
which has not been the subject of an audit and field examination reasonably
satisfactory to the Administrative Agent or as permitted by the Administrative
Agent in accordance with Section 2.22(b);
(n) 35% of Inventory that consists of goods which have been returned by the
applicable buyer which constitutes “dry room” inventory;
(o) the amount of Inventory equal to the monthly “shrink” which the Borrowers
accrue for;
(p) (i) 50% of non-cigarette Inventory on hand over 180 days but less than
360 days, (ii) 100% of non-cigarette Inventory on hand over 360 days, and
(iii) 25% of cigarette Inventory on hand over 180 days;
(q) any Inventory which is, in the Administrative Agent’s reasonable opinion,
slow moving, obsolete, unmerchantable, defective, unfit for sale, or not
saleable at prices approximating at least the cost of such Inventory in the
ordinary course of business;
(r) any Inventory the value of which is attributable to intercompany profits
among the Borrowers and their Subsidiaries;
(s) 25% of the portion of Inventory of any Borrower that represents the
difference between the standard cost and discounted purchase price of such
Inventory due to discounts, rebates, allowances and manufacturer incentives;

 

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(t) Inventory of any Borrower which constitutes United States cigarette tax
stamps of a jurisdiction in which such Borrower has a cigarette tax liability
greater than the amount of a surety bond or other similar arrangement backing
such liability, provided that such Inventory shall be ineligible under this
clause (t) only to the extent of any such shortfall;
(u) the amount of Inventory of any Borrower which represents an unreconciled
variance between the book accounts and the physical Inventory counts conducted
by the Administrative Agent or its representatives in accordance with this
Agreement; or
(v) any Inventory which the Administrative Agent otherwise determines, in its
Permitted Discretion, is unacceptable for any legal reason or for any reason
related to saleability, value or merchantability of such Inventory.
In the event that a material portion of the Inventory which was previously
Eligible Inventory ceases to be Eligible Inventory hereunder, the Borrowers
shall notify the Administrative Agent thereof on and at the time of submission
to the Administrative Agent of the next Borrowing Base Certificate.
“Eligible Unaffixed Tax Stamps” shall mean State unaffixed tax stamps which (a)
have been fully paid for by the Borrowers or otherwise reserved by the
Administrative Agent, (b) are subject to a first priority Lien in favor of the
Administrative Agent, and (c) are (i) freely saleable by the Borrowers (or by
the Administrative Agent in the event of foreclosure pursuant to the terms of
the Loan Documents) to a third party without restrictions or (ii) returnable to
the issuing State for full payment thereon without offset or reduction.
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

 

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“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, or a Termination Event with respect
to a Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing, pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA or pursuant to any other applicable legislation
(including the PBA), of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by any Borrower or any of
their respective ERISA Affiliates of any liability under Title IV of ERISA, the
PBA or other applicable law of any jurisdiction with respect to the termination
of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the
PBGC or other applicable Governmental Authority or from a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by any Borrower or any of
their respective ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
including, without limitation, within the meaning of Title IV of ERISA.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article VII.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrowers hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, Canada, or by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located or in which it is
doing business, (b) any branch profits taxes imposed by the United States of
America, Canada, or by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located or in which it is
doing business, or any similar tax imposed by any other jurisdiction in which
any Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrowers under Section 2.19(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section 2.17(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrowers with
respect to such withholding tax pursuant to Section 2.17(a).
“Existing Letters of Credit” means the letters of credit or guarantees of
letters of credit issued for the account of a Borrower by a Lender (or an
Affiliate of a Lender) and listed on Schedule 2.06 attached hereto, which
letters of credit will, as of the Effective Date, be deemed outstanding as
Letters of Credit issued pursuant to Section 2.06.

 

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“Exposure Reserves” means any and all reserves established in accordance with
Section 2.22(a) that are deducted from Availability and which the Administrative
Agent deems reasonably necessary, in its Permitted Discretion, to maintain
(including, without limitation, reserves for interest on the Secured Obligations
that has not been paid when due, Banking Services Reserves, Canadian Priority
Payables Reserves (to the extent not taken as a Collateral Reserve), the
Canadian Tobacco Tax Reserve (to the extent included as an Exposure Reserve
under the definition of “Canadian Tobacco Tax Reserve”), Withholding Reserves,
reserves for rent at locations leased by any Loan Party and for consignee’s,
warehousemen’s and bailee’s charges unless waived (in each case, to the extent
not adequately addressed by an executed Collateral Access Agreement), reserves
for Swap Obligations, reserves for unpaid or unsaleable stamp taxes (including,
without limitation, United States tobacco stamp liabilities to the extent
greater than stamps on hand) and reserves for taxes, fees, assessments, and
other governmental charges) with respect to the Collateral or any Loan Party;
provided that the Administrative Agent will not establish any Exposure Reserves
under this Agreement to the extent that the basis for such Exposure Reserve has
already been addressed in the existing Reserves, determination of eligibility
standards or advance rates hereunder.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of any Borrower.
“Fixed Charges” means, with reference to any period, without duplication, cash
Interest Expense, plus prepayments (other than prepayments in connection with
refinancings of Indebtedness permitted by this Agreement) and scheduled
principal payments on Indebtedness (other than any such payments on intercompany
Indebtedness permitted by this Agreement) made during such period (including
payments made under the RCT Guarantee and the PCT Guarantee, but excluding all
prepayments of the Tranche B Notes), plus dividends or distributions paid in
cash, plus Capital Lease Obligation payments, plus cash contributions to any
Plan to the extent not expensed, all calculated for Holdings and its
Subsidiaries on a consolidated basis.
“Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each
of fiscal quarter of Holdings for the most-recently ended four fiscal quarters,
of (a) EBITDA minus the unfinanced portion of Capital Expenditures minus expense
for income taxes paid in cash, to (b) Fixed Charges, all calculated for Holdings
and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which any Borrower is organized or has a
permanent establishment. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
“Funding Account” has the meaning assigned to such term in Section 4.01(h).
“GAAP” means generally accepted accounting principles in the United States of
America.

 

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“Governmental Authority” means the government of the United States of America,
Canada, any other nation or any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise that is required to be recorded on such Person’s books
under GAAP, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness 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 Indebtedness 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
Indebtedness or other obligation of the payment thereof, or (c) as an account
party in respect of any letter of credit or letter of guaranty issued to support
such Indebtedness or obligation; provided, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business.
“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
“Holdings” has the meaning set forth in the introductory paragraph of this
Agreement.
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person (but
excluding obligations under operating leases to the extent charged on the income
statement of such Person), (i) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and letters of
guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, and (k) any other Off-Balance Sheet Liability.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Information Memorandum” means the Confidential Information Memorandum dated
August 2005 relating to the Borrowers and the Transactions.
“Interest Election Request” means a request by the Borrowers to convert or
continue a Revolving Borrowing in accordance with Section 2.07.

 

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“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of Holdings and its
Subsidiaries for such period with respect to all outstanding Indebtedness of
Holdings and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Swap Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP),
calculated on a consolidated basis for Holdings and its Subsidiaries for such
period in accordance with GAAP.
“Interest Payment Date” means (a) with respect to any ABR Loan or Canadian Prime
Rate Loan (other than a Swingline Loan or Canadian Swingline Loan), the first
day of each calendar month and the Maturity Date, (b) with respect to any
Eurodollar Loan or CDOR Loan, the last day of the Interest Period applicable to
the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing or a CDOR Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and the Maturity Date, and (c) with respect to any Swingline Loan, the day that
such Loan is required to be repaid and the Maturity Date.
“Interest Period” means, with respect to any Eurodollar Borrowing or CDOR
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrowers may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing or CDOR Borrowing only, such next succeeding Business
Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurodollar Borrowing or CDOR Borrowing that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.
“Inventory” has the meaning assigned to such term in the Security Agreement.
“Issuing Bank” means (a) Chase, in its capacity as the issuer of Letters of
Credit hereunder, (b) with respect to the Existing Letters of Credit, the
Lenders set forth in Schedule 2.06, (c) any other Lender approved by the
Administrative Borrower and the Administrative Agent, and (d) their successors
in such capacity as provided in Section 2.06(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
“Joinder Agreement” has the meaning assigned to such term in Section 5.13.
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed (from the proceeds of
Revolving Loans or otherwise) by or on behalf of the Borrowers at such time. The
LC Exposure of any Revolving Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.

 

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“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).
“Lenders” means the Persons (including the Canadian Lenders) listed on the
Commitment Schedule and any other Person that shall have become a party hereto
pursuant to an Assignment and Assumption, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Assumption. Unless the
context otherwise requires, the term “Lenders” includes the Swingline Lenders
and the Canadian Swingline Lender.
“Letter of Credit” means any letter of credit or guarantee of a letter of credit
issued pursuant to this Agreement and shall include the Existing Letters of
Credit.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest 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 (but not including the interest of a lessor under any operating
lease), (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities, and (d) any other lien,
charge, privilege, secured claim, title retention, garnishment right, deemed
trust, encumbrance or other right affecting property, choate or inchoate,
arising by any statute, act of law of any jurisdiction at common law or in
equity or by agreement.
“Loan Documents” means (a) this Agreement, any promissory notes issued pursuant
to the Agreement, any Letter of Credit applications, the Collateral Documents,
the Loan Guaranty and all other agreements, instruments, documents and
certificates identified in Section 4.01 executed and delivered to, or in favor
of, the Administrative Agent or any Lender and including all other pledges,
powers of attorney, consents, assignments, contracts, notices, letter of credit
agreements, (b) all certificates and other materials required to be delivered to
the Administrative Agent or any Lender under this Agreement or any of the
Collateral Documents, and (c) all other material information contained in any
other written communication delivered to the Administrative Agent or any Lender
in connection with this Agreement or any of the Collateral Documents, but
excluding any forecasts or projections. Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
“Loan Guarantor” each Loan Party (other than the Borrowers’ foreign
Subsidiaries).

 

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“Loan Guaranty” means Article X of this Agreement.
“Loan Parties” means the Borrowers, the Borrowers’ material domestic
Subsidiaries that are parties to this Agreement and any other Person who becomes
a party to this Agreement pursuant to a Joinder Agreement and their successors
and assigns.
“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Swingline Loans, Canadian Swingline Loans, Overadvances and
Protective Advances.
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property or condition, financial or otherwise, of the Borrowers and the
Subsidiaries taken as a whole, (b) the ability of the Loan Parties taken as a
whole to pay any of the Obligations when due or to perform any of their other
material obligations under the Loan Documents, (c) the Collateral, or the
Administrative Agent’s Liens (on behalf of itself and the Lenders) on the
Collateral or the priority of such Liens, or (d) the rights of or benefits
available to the Administrative Agent, the Issuing Bank or the Lenders
thereunder.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrowers and their Subsidiaries in an aggregate principal amount
exceeding $5,000,000. For purposes of determining Material Indebtedness, the
“obligations” of any Borrower or any Subsidiary in respect of any Swap Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Borrower or such Subsidiary would be required to pay if
such Swap Agreement were terminated at such time.
“Maturity Date” means October 12, 2010 or any earlier date on which the
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.
“Maximum Liability” has the meaning assigned to such term in Section 10.10.
“Moody’s” means Moody’s Investors Service, Inc. and its successors and assigns.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net Income” means, for any period, the consolidated net income (or loss) of
Holdings and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the income (or deficit) of
any Person accrued prior to the date it becomes a Subsidiary of any Borrower or
is merged into or consolidated with any Borrower or any of the Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of any
Borrower) in which any Borrower or any of the Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by such
Borrower or such Subsidiary in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary of any Borrower to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any contractual
obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
“Net Orderly Liquidation Value” means, with respect to Inventory, Equipment or
intangibles of any Person, the orderly liquidation value thereof as determined
in a manner reasonably acceptable to the Administrative Agent by an appraiser
reasonably acceptable to the Administrative Agent, net of all costs of
liquidation thereof.

 

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“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).
“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.
“Obligated Party” has the meaning assigned to such term in Section 10.02.
“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Loan Parties to the
Lenders or to any Lender, the Administrative Agent, the Canadian Funding Bank,
the Issuing Bank or any indemnified party arising under the Loan Documents.
“Off-Balance Sheet Liability” of a Person means in accordance with GAAP (a) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (b) any indebtedness, liability or
obligation under any so-called “synthetic lease” transaction entered into by
such Person, or (c) any indebtedness, liability or obligation arising with
respect to any other transaction which is the functional equivalent of borrowing
but which does not constitute a liability on the balance sheets of such Person.
For the avoidance of doubt, operating leases are not Off-Balance Sheet
Liabilities.
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
“Overadvance” has the meaning assigned to such term in Section 2.05(c).
“Participant” has the meaning set forth in Section 9.04.
“Paying Guarantor” has the meaning assigned to such term in Section 10.11.
“PBA” means the Pensions Benefit Act (Ontario) and all regulations thereunder as
amended from time to time, and any successor legislation.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
“PCT Guarantee” means that certain Amended and Restated Administrative Claims
Guaranty Agreement dated as of August 31, 2004, made by and between Core-Mark
Holding Company, Inc. (a Delaware corporation), and the Post-Confirmation Trust
(a trust established under a Post-Confirmation Trust Agreement dated as of
August 19, 2004), as the same may be amended or supplemented from time to time.
“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction
that satisfies each of the following requirements:
(a) such Acquisition is not a hostile acquisition or contested by the company to
be acquired;
(b) the business acquired in connection with such Acquisition is (i) located in
the U.S. or Canada, (ii) organized under U.S., Canadian or applicable state or
provincial laws, and (iii) not primarily engaged, directly or indirectly, in any
line of business other than the businesses in which the Loan Parties are engaged
on the Closing Date and any business activities that are substantially similar,
related, or incidental thereto;

 

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(c) both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct (except (i) any such
representation or warranty which relates to a specified prior date and (ii) to
the extent the Agent and the Lenders have been notified in writing by the Loan
Parties that any representation or warranty is not correct and the Required
Lenders have explicitly waived in writing compliance with such representation or
warranty) and no Default or Event of Default exists, will exist, or would result
therefrom;
(d) as soon as available, but not less than fifteen days prior to such
Acquisition, the Borrowers have provided the Lenders (i) notice of such
Acquisition and (ii) a copy of all available business and financial information
reasonably requested by the Agent including pro forma financial statements,
statements of cash flow, and Availability projections;
(e) the aggregate purchase price (whether in cash, notes or any other form of
non-equity consideration) of all Acquisitions made during the term of this
Agreement shall not exceed $75,000,000; provided, however, that if at the
effective date of any proposed Acquisition that otherwise meets the requirements
of this definition of “Permitted Acquisitions”, the Borrowers have pro forma
Availability (on both a 60-day look-back and a 60-day look-forward basis and
including all non-equity consideration given in connection with such Acquisition
as having been paid in cash at the time of making such Acquisition) not less
than $125,000,000, such Acquisition shall not be counted against this
$75,000,000 total basket;
(f) if such Acquisition is an acquisition of the Equity Interests of a Person,
the Acquisition is structured so that the acquired Person shall become a
wholly-owned Subsidiary of a Borrower and, in accordance with Section 5.13, a
Loan Party pursuant to the terms of this Agreement;
(g) if such Acquisition is an acquisition of assets, the Acquisition is
structured so that a Loan Party (or a newly organized Subsidiary that becomes a
Loan Party) shall acquire such assets;
(h) if such Acquisition is an acquisition of Equity Interests, such Acquisition
will not result in any violation of Regulation U;
(i) no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that would
reasonably be expected to have a Material Adverse Effect;
(j) in connection with an Acquisition of the Equity Interests of any Person, all
Liens (other than Permitted Encumbrances and other Liens permitted by
Section 6.02 which were not created in contemplation of such Acquisition) on
property of such Person shall be terminated unless the Administrative Agent in
its sole discretion consents otherwise, and in connection with an Acquisition of
the assets of any Person, all Liens (other than Permitted Encumbrances and other
Liens permitted by Section 6.02 which were not created in contemplation of such
Acquisition) on such assets shall be terminated; and
(k) no Default or Event of Default exists or would result therefrom.
“Permitted Discretion” means a determination made in the Administrative Agent’s
reasonable good faith judgment in consideration of any factor which (a) would
reasonably be expected to adversely affect (i) the value of any Collateral,
(ii) the ability to realize upon any Collateral, (iii) the enforceability or
priority of the Administrative Agent’s Liens on the Collateral or (iv) the
amount that the Administrative Agent and the Lenders would be likely to receive
from the liquidation of the Collateral, or (b) materially increases the
likelihood that the Administrative Agent and the Lenders would not receive
payment for all of the Obligations.

 

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“Permitted Encumbrances” means:
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security or
public liability laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety, customs and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;
(f) non-consensual statutory Liens (other than Liens securing the payment of
taxes) arising in the ordinary course of the Loan Parties’ business to the
extent: (i) such liens secure Indebtedness which is not overdue or (ii) such
liens secure Indebtedness relating to claims or liabilities which are fully
insured and being defended at the sole cost and expense and at the sole risk of
the insurer or being contested in good faith by appropriate proceedings
diligently pursued and available to the Loan Parties, in each case prior to the
commencement of foreclosure or other similar proceedings and with respect to
which adequate reserves have been set aside on their books; and
(g) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of any Borrower or any Subsidiary.
“Permitted Investments” means:
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America or Canada (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America or Canada, as applicable), in each
case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, an investment grade
credit rating obtainable from S&P or from Moody’s;

 

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(c) investments in certificates of deposit, guaranteed investment certificates,
banker’s acceptances and time deposits maturing within 270 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of Canada or the United States of America or any
State thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and
(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated investment grade by S&P or Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Petition Date” means April 1, 2003, the date of the filing of Chapter 11
petitions for Core-Mark International, Inc.; Fleming Companies, Inc.; ABCO Food
Group, Inc.; ABCO Markets, Inc.; ABCO Realty Corp.; ASI Office Automation, Inc.;
C/M Products, Inc.; Core-Mark Interrelated Companies, Inc.; Core-Mark
Mid-Continent, Inc.; Dunigan Fuels, Inc.; Favar Concepts, Ltd.; Fleming Foods
Management Co., L.L.C.; Fleming Foods of Texas, L.P.; Fleming International,
Ltd.; Fleming Supermarkets of Florida, Inc.; Fleming Transportation Service,
Inc.; Food 4 Less Beverage Company, Inc.; Fuelserv, Inc.; General Acceptance
Corporation; Head Distributing Company; Marquise Ventures Company, Inc.;
Minter-Weisman Co.; Piggly Wiggly Company; Progressive Realty, Inc.; Rainbow
Food Group, Inc.; Retail Investments, Inc.; Retail Supermarkets, Inc.; RFS
Marketing Services, Inc.; and Richmar Foods, Inc.
“Plan” means any employee pension benefit plan, pension plan or plan (other than
a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA or the applicable laws of any
other jurisdiction including the PBA, and in respect of which any Borrower or
any ERISA Affiliate (i) sponsors, maintains, or to which it makes, is making, or
is obligated to make contributions, or has made contributions at any time during
the immediately preceding five (5) plan years, and/or (ii) is (or, if such plan
were terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA.
“PP&E Component” shall mean, at the time of any determination, an amount equal
to 75% of the Net Orderly Liquidation Value of the Borrowers’ Eligible Equipment
less Reserves related to the Eligible Equipment established by the
Administrative Agent in its Permitted Discretion; provided that the PP&E
Component shall be subject to straight-line annual amortization from the date of
any Loan on the PP&E Component through the date which is the fifth anniversary
of the Effective Date. As of the Effective Date, the Net Orderly Liquidation
Value of the Borrowers’ Eligible Equipment is $3,629,266. Upon request by the
Borrowers, the Administrative Agent may agree in its Permitted Discretion to the
addition of new Eligible Equipment to the PP&E Component; provided that (A) the
PP&E Component shall never exceed $20,000,000 at any time prior to the first
anniversary of the Effective Date, (B) the PP&E Component shall not exceed $0 at
any time after the fifth anniversary of the Effective Date, and (C) prior to
inclusion in the PP&E Component, all Equipment must be appraised in a manner
reasonably acceptable to the Administrative Agent by an appraiser reasonably
acceptable to the Administrative Agent.

 

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“PPSA” means the Personal Property Security Act (Ontario) (or any successor
statute) or similar legislation (including, without limitation, the Civil Code)
of any other jurisdiction the laws of which are required by such legislation to
be applied in connection with the issue, perfection, enforcement, validity or
effect of security interests.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Chase as its prime rate at its offices at 270 Park Avenue in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
“Projections” has the meaning assigned to such term in Section 5.01(f).
“Protective Advance” has the meaning assigned to such term in Section 2.04.
“RCT Guarantee” means, collectively, (i) that certain Subordinated Secured
Guaranty Agreement dated as of August 20, 2004 by and between Core-Mark Holding
Company, Inc. and the Reclamation Creditors’ Trust for the benefit of the
holders of Allowed Class 3(B) TLV Reclamation Claims as the same may be amended
or supplemented from time to time, and (ii) that certain Junior Subordinated
Secured Guaranty Agreement dated as of August 20, 2004 by and between Core-Mark
Holding Company, Inc. and the Reclamation Creditors’ Trust for the benefit of
the holders of Allowed Net Non-TLV Reclamation Claims, as the same may be
amended or supplemented from time to time.
“Register” has the meaning set forth in Section 9.04.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the Borrowers’ assets from information furnished by or on behalf of any
Borrower, after the Administrative Agent has exercised its rights of inspection
pursuant to this Agreement, which Reports may be distributed to the Lenders by
the Administrative Agent.
“Required Lenders” means, at any time, Lenders having Credit Exposure and unused
Commitments representing more than 50% of the sum of the total Credit Exposure
and unused Commitments at such time.
“Requirement of Law” means, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
“Reserves” means the Collateral Reserves and the Exposure Reserves, as
applicable.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property, other than common stock of Holdings) with respect
to any Equity Interests in any Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property, other than common stock of
Holdings), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in any Borrower or any option, warrant or other right
to acquire any such Equity Interests in any Borrower.

 

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“Revolving Commitment” means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Letters of
Credit, Overadvances and Swingline Loans hereunder, expressed as an amount
representing the maximum possible aggregate amount of such Lender’s Revolving
Exposure hereunder, as such commitment may be (a) increased from time to time
pursuant to Section 2.21 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04; provided that the
aggregate Revolving Commitments shall not at any time exceed $325,000,000. The
initial amount of each Lender’s Revolving Commitment is set forth on the
Commitment Schedule, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders’ Revolving Commitments is $250,000,000. The
Revolving Commitments include the Canadian Revolving Commitments available
pursuant to the Canadian Subfacility in an aggregate amount not to exceed
Cdn.$110,000,000.
“Revolving Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and Canadian
Revolving Loans, as applicable and its LC Exposure and an amount equal to its
Applicable Percentage of the aggregate principal amount of Swingline Loans or
Canadian Applicable Percentage of the aggregate principal amount of the Canadian
Swingline Loans, as applicable, at such time, plus an amount equal to its
Applicable Percentage of the aggregate principal amount of Overadvances
outstanding at such time.
“Revolving Lender” means, as of any date of determination, a Lender with a
Revolving Commitment or, if the Revolving Commitments have terminated or
expired, a Lender with Revolving Exposure.
“Revolving Loan” means a Loan (including Canadian Revolving Loans) made pursuant
to Section 2.01(a).
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc., and its successors and assigns.
“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Obligations owing to one or more Lenders or
their respective Affiliates; provided that at or prior to the time that any
transaction relating to such Swap Obligation is executed (or, in the case of
foreign exchange swaps, promptly thereafter), the Lender party thereto (other
than Chase or Chase Canada) shall have delivered written notice to the
Administrative Agent that such a transaction has been entered into and that it
constitutes a Secured Obligation entitled to the benefits of the Collateral
Documents.
“Security Agreement” means (i) that certain Pledge and Security Agreement, dated
as of the date hereof, between the Loan Parties and the Administrative Agent,
for the benefit of the Administrative Agent and the Lenders, and (ii) any other
pledge or security agreement entered into, after the date of this Agreement by
any other Loan Party (as required by this Agreement or any other Loan Document),
or any other Person, as the same may be amended, restated or otherwise modified
from time to time.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

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“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Administrative Agent.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
“Subsidiary” means any subsidiary of Holdings or a Loan Party, as applicable.
“Supermajority Revolving Lenders” means, at any time, Lenders having Credit
Exposure and unused Commitments representing more than 66 2/3% of the sum of the
total Credit Exposure and unused Commitments at such time.
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrowers or the
Subsidiaries shall be a Swap Agreement.
“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.
“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.
“Swingline Loan” means a Loan made pursuant to Section 2.05.
“Taxes” means any and all present or future taxes, excise taxes, goods and
services taxes, provincial sales taxes, levies, imposts, duties, deductions,
fees, charges or withholdings imposed by any Governmental Authority.
“Termination Event” means (a) the whole or partial withdrawal of the Borrower(s)
or any Subsidiary from a Plan during a plan year; or (b) the filing of a notice
of interest to terminate in whole or in part a Plan or the treatment of a Plan
amendment as a termination of partial termination; or (c) the institution of
proceedings by any Governmental Authority to terminate in whole or in part or
have a trustee appointed to administer a Plan; or (d) any other event or
condition which might constitute grounds for the termination of, winding up or
partial termination of winding up or the appointment of trustee to administer,
any Plan.

 

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“Tranche B Facility” means that certain Note and Warrant Purchase Agreement
dated as of August 20, 2004 among Core-Mark Holding Company, Inc. and the other
Issuers identified therein, Wells Fargo Bank, N.A. as Administrative Agent,
Wells Fargo Bank, as the LC Issuer, and the Purchasers listed therein, as the
same may be amended or supplemented from time to time.
“Tranche B Notes” means the notes issued under the Tranche B Facility.
“Transactions” means the execution, delivery and performance by the Borrowers of
this Agreement, the borrowing of Loans and other credit extensions, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the CDOR Rate, the Alternate
Base Rate or the Canadian Prime Rate.
“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Reserves” shall mean an Exposure Reserve established by the
Administrative Agent in its Permitted Discretion in the event that either
(a) Availability at any time is less than $35,000,000 or (b) an Event of Default
has occurred, which reserve shall be in an amount reasonably deemed adequate by
the Administrative Agent to cover any potential withholding tax liabilities
accruing from the Effective Date in the United States or Canada in connection
with the Canadian Borrower’s status as a Canadian taxpayer or “permanent
establishment” under Canadian law or in connection with the Canadian
Subfacility; provided that the Administrative Agent may in its Permitted
Discretion thereafter decrease or eliminate any Withholding Reserves.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

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SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrowers notify the Administrative Agent that the Borrowers request an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrowers that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein,
each Lender agrees to make Revolving Loans to the Borrowers from time to time in
dollars (or, specifically with respect to Canadian Revolving Loans made under
the Canadian Subfacility, Canadian Dollars) during the Availability Period in an
aggregate principal amount that will not result in either (i) such Lender’s
Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the
total Revolving Exposures exceeding the lesser of (x) the sum of the total
Revolving Commitments or (y) the Borrowing Base, subject to the Administrative
Agent’s authority, in its sole discretion, to make Protective Advances and
Overadvances pursuant to the terms of Sections 2.04 and 2.05; provided that with
respect to Canadian Revolving Loans, the sum of the aggregate principal amount
of Canadian Revolving Loans and the LC Exposure for Canadian Dollar Letters of
Credit issued (under the Letter of Credit facility available pursuant to
Section 2.06 hereof) shall not exceed Cdn.$110,000,000 (the “Canadian
Subfacility”). Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, repay and reborrow
Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan
or Canadian Swingline Loan) shall be made as part of a Borrowing consisting of
Loans of the same Class and Type made by the Lenders ratably in accordance with
their respective Commitments of the applicable Class. Any Protective Advance,
any Overadvance and any Swingline Loan or Canadian Swingline Loan shall be made
in accordance with the procedures set forth in Sections 2.04 and 2.05.
Notwithstanding anything to the contrary herein, (i) all Canadian Loans shall be
made available to the Canadian Borrower only and shall be made by Canadian
Lenders under the Canadian Subfacility, and by the Canadian Funding Bank, by way
of Canadian Swingline Loans, and (ii) the only financial accommodations
available to the Canadian Borrower (in its capacity as Canadian Borrower) under
the Canadian Subfacility shall be Canadian Revolving Loans, Canadian Swingline
Loans and Letters of Credit; for greater certainty, no other bank products or
accommodations, such as, without limitation, Swaps and Swingline Loans (that are
not Canadian Swingline Loans), shall be made available under the Canadian
Subfacility.

 

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(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of ABR Loans, Canadian Prime Rate Loans, Eurodollar Loans or CDOR Loans
as the Administrative Borrower may request in accordance herewith, provided that
all Borrowings (that are not Canadian Prime Rate Borrowings) made on the
Effective Date must be made as ABR Borrowings but may be converted into
Eurodollar Borrowings in accordance with Section 2.08. Each Swingline Loan shall
be an ABR Loan and each Canadian Swingline Loan shall be a Canadian Prime Rate
Loan. Each Lender at its option may make any Eurodollar Loan or CDOR Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of this
Agreement and shall not increase the cost of such Loan to the Borrowers.
(c) At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing or CDOR Revolving Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of (i) $100,000 and not less than $500,000,
in respect of Eurodollar Revolving Borrowings, and (ii) Cdn.$100,000 and not
less than Cdn.$500,000, in respect of CDOR Revolving Borrowings. At the time
that each ABR Revolving Borrowing or Canadian Prime Rate Revolving Borrowing is
made, such Borrowing shall be in an aggregate amount that is not less than
$500,000 or Cdn.$500,000, as applicable; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each
Swingline Loan or Canadian Swingline Loan shall be in an amount that is not less
than $500,000. Borrowings of more than one Type and Class may be outstanding at
the same time and may be made on the same date; provided that there shall not at
any time be more than a total of seven (7) Eurodollar Borrowings and CDOR
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrowers shall
not be entitled to request, or to elect to convert or continue, any Borrowing as
a Eurodollar Loan or CDOR Loan if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Administrative Borrower shall notify the Administrative Agent and
(in the case of a Borrowing under the Canadian Subfacility) the Canadian Funding
Bank of such request either in writing (delivered by hand or facsimile)
substantially in the form attached hereto as Exhibit F and signed by the
Administrative Borrower or by telephone (a) in the case of a Eurodollar
Borrowing or CDOR Borrowing, not later than 12:00 p.m. (noon), Chicago time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing or Canadian Prime Rate Borrowing, not later than 12:00 p.m.
(noon), Chicago time, on the date of the proposed Borrowing; provided that any
such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e) may be given not later than
11:00 a.m., Chicago time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile to the Administrative Agent and (in the
case of a Borrowing under the Canadian Subfacility) the Canadian Funding Bank of
a written Borrowing Request in a form approved by the Administrative Agent and
the (in the case of a Borrowing under the Canadian Subfacility) Canadian Funding
Bank and signed by the Administrative Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.01:
(i) the aggregate amount of the requested Borrowing and a breakdown of the
separate wires comprising such Borrowing;

 

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(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be made in dollars (or, in the case of
Borrowings under the Canadian Subfacility, Canadian Dollars);
(iv) whether such Borrowing is to be an ABR Borrowing, a Canadian Prime Rate
Borrowing, a Eurodollar Borrowing or a CDOR Borrowing; and
(v) in the case of a Eurodollar Borrowing or a CDOR Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term “Interest Period.”
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing or a
CDOR Revolving Borrowing, then the Borrowers shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent and
the Canadian Funding Bank, as applicable shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Protective Advances. (a) Subject to the limitations set forth
below, the Administrative Agent is authorized by the Borrowers and the Lenders,
from time to time in the Administrative Agent’s sole discretion (but shall have
absolutely no obligation to), to make Loans to the Borrowers, on behalf of all
Lenders, which the Administrative Agent, in its Permitted Discretion, deems
necessary or desirable at any time after the occurrence and during the
continuance of any Default (i) to preserve or protect the Collateral, or any
portion thereof, (ii) to pay any other amount chargeable to or required to be
paid by any Borrower pursuant to the terms of this Agreement, including payments
of reimbursable expenses (including costs, fees, and expenses as described in
Section 9.03) and other sums payable under the Loan Documents which the
Borrowers have not paid out at the times required by this Agreement, or
(iii) after the occurrence and during the continuation of an Event of Default,
to enhance the likelihood of, or maximize the amount of, repayment of the Loans
and other Obligations (any of such Loans are herein referred to as “Protective
Advances”); provided that, the aggregate amount of Protective Advances
outstanding at any time shall not exceed $10,000,000; provided further that, the
aggregate amount of outstanding Protective Advances plus the aggregate Revolving
Exposure shall not exceed the aggregate Commitments. Protective Advances may be
made even if the conditions precedent set forth in Section 4.02 have not been
satisfied. The Protective Advances shall be secured by the Liens in favor of the
Administrative Agent in and to the Collateral and shall constitute Obligations
hereunder. All Protective Advances shall be ABR Borrowings or Canadian Prime
Rate Borrowings, as applicable, and shall be payable within one (1) Business Day
after demand by the Administrative Agent. The Administrative Agent’s
authorization to make Protective Advances may be revoked at any time by the
Supermajority Revolving Lenders. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent’s receipt
thereof. At any time that there is sufficient Availability and the conditions
precedent set forth in Section 4.02 have been satisfied, the Administrative
Agent may request the Revolving Lenders to make a Revolving Loan to repay a
Protective Advance. At any other time the Administrative Agent may require the
Lenders to fund their risk participations described in Section 2.04(b).

 

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(b) Upon the making of a Protective Advance by the Administrative Agent (whether
before or after the occurrence of a Default), each Lender shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Administrative Agent without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage or Canadian Applicable Percentage, as
applicable. From and after the date, if any, on which any Lender is required to
fund its participation in any Protective Advance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender’s
Applicable Percentage of all payments of principal and interest and all proceeds
of Collateral received by the Administrative Agent in respect of such Protective
Advance.
SECTION 2.05. Swingline Loans, Canadian Swingline Loans and Overadvances. (a)
(i) Subject to the terms and conditions set forth herein, the Swingline Lender
agrees to make Swingline Loans to the Borrowers (excluding the Canadian Borrower
in its capacity as Canadian Borrower) from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (A) the aggregate principal amount of outstanding Swingline Loans
exceeding $20,000,000 or (B) the sum of the total Revolving Exposures exceeding
the lesser of the total Revolving Commitments and the Borrowing Base; provided
that the Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrowers may borrow, repay
and reborrow Swingline Loans. To request a Swingline Loan, the Administrative
Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by facsimile), not later than 1:00 p.m., Chicago time, on the day of
a proposed Swingline Loan. Each such notice shall be irrevocable and shall
specify the requested date (which shall be a Business Day) and amount of the
requested Swingline Loan. The Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Administrative Borrower.
The Swingline Lender shall make each Swingline Loan available to the Borrowers
by means of a credit to the Funding Account (or, in the case of a Swingline Loan
made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the Issuing Bank, and in the case of repayment
of another Loan or fees or expenses as provided by Section 2.18(c), by
remittance to the Administrative Agent to be distributed to the Lenders) by 3:00
p.m., Chicago time, on the requested date of such Swingline Loan.
(ii) Subject to the terms and conditions set forth herein, the Canadian
Swingline Lender agrees to make Canadian Swingline Loans to the Canadian
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (A) the
aggregate principal amount of outstanding Canadian Swingline Loans (other than
Single-Day Canadian Swingline Loans) exceeding $5,000,000 or (B) the sum of the
total Canadian Credit Exposure exceeding the lesser of the total Canadian Credit
Commitments and the Borrowing Base; provided that the Canadian Swingline Lender
shall not be required to make a Canadian Swingline Loan to refinance an
outstanding Canadian Swingline Loan. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Canadian Borrower may borrow,
repay and reborrow Canadian Swingline Loans. To request a Canadian Swingline
Loan, the Administrative Borrower shall notify the Administrative Agent and the
Canadian Funding Bank of such request by telephone (confirmed by facsimile), not
later than 1:00 p.m., Chicago time, on the day of a proposed Canadian Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Canadian Swingline
Loan. The Canadian Funding Bank will

 

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promptly advise the Canadian Swingline Lender of any such notice received from
the Administrative Borrower. The Canadian Swingline Lender shall make each
Canadian Swingline Loan available to the Canadian Borrower by means of a credit
to the Funding Account (or, in the case of a repayment of another Canadian Loan
or fees or expenses as provided by Section 2.18(c), by remittance to the
Canadian Funding Bank to be distributed to the Canadian Lenders) by 3:00 p.m.,
Chicago time, on the requested date of such Canadian Swingline Loan. For
purposes of this Section 2.05(a)(ii), “Single-Day Canadian Swingline Loans”
shall mean Canadian Swingline Loans that are made by the Canadian Swingline
Lender as an accommodation to Canadian Lenders that are unable to fund on the
same day as a requested Canadian Prime Rate Borrowing, which Single-Day Canadian
Swingline Loans shall be funded by the applicable Canadian Lenders on the first
Business Day following the date of such Canadian Prime Rate Borrowing. The
Canadian Swingline Lender is not required to make any Single-Day Canadian
Swingline Loan hereunder and will not make any Single-Day Swingline Loan that
would cause its outstanding Canadian Revolving Loans to exceed its Canadian
Revolving Commitment.
(b) (i) The Swingline Lender may by written notice given to the Administrative
Agent not later than 9:00 a.m., Chicago time, on any Business Day require the
Revolving Lenders (who are not Canadian Lenders) to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which such
Revolving Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each such Revolving Lender,
specifying in such notice such Lender’s Applicable Percentage of such Swingline
Loan or Loans. Each such Revolving Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender’s Applicable
Percentage of such Swingline Loan or Loans. Each such Revolving Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from such Revolving Lenders.
The Administrative Agent shall notify the Borrowers of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from any
Borrower (or other party on behalf of any Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to such Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear; provided that any such payment so remitted shall be repaid
to the Swingline Lender or to the Administrative Agent, as applicable, if and to
the extent such payment is required to be refunded to any Borrower for any
reason. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrowers of any default in the payment thereof.

 

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(ii) The Canadian Swingline Lender may by written notice given to the
Administrative Agent and Canadian Funding Bank not later than 9:00 a.m., Chicago
time, on any Business Day require the Canadian Lenders to acquire participations
on such Business Day in all or a portion of the Canadian Swingline Loans
outstanding. Such notice shall specify the aggregate amount of Canadian
Swingline Loans in which Canadian Lenders will participate. Promptly upon
receipt of such notice, the Canadian Funding Bank will give notice thereof to
each Canadian Lender, specifying in such notice such Lender’s Canadian
Applicable Percentage of such Canadian Swingline Loan or Loans. Each Canadian
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Canadian Funding Bank, for the account of the
Canadian Swingline Lender, such Lender’s Canadian Applicable Percentage of such
Canadian Swingline Loan or Loans. Each Canadian Lender acknowledges and agrees
that its obligation to acquire participations in Canadian Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Canadian Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Canadian Funding Bank shall promptly pay to
the Canadian Swingline Lender the amounts so received by it from the Canadian
Lenders. The Canadian Funding Bank shall notify the Canadian Borrower of any
participations in any Canadian Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Canadian Swingline Loan
shall be made to the Canadian Funding Bank and not to the Canadian Swingline
Lender. Any amounts received by the Canadian Swingline Lender from the Canadian
Borrower (or other party on behalf of the Canadian Borrower) in respect of a
Canadian Swingline Loan after receipt by the Canadian Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Canadian Funding Bank; any such amounts received by the Canadian Funding Bank
shall be promptly remitted by the Canadian Funding Bank to the Canadian Lenders
that shall have made their payments pursuant to this paragraph and to the
Canadian Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Canadian Swingline Lender or to the
Canadian Funding Bank, as applicable, if and to the extent such payment is
required to be refunded to the Canadian Borrower for any reason. The purchase of
participations in a Canadian Swingline Loan pursuant to this paragraph shall not
relieve the Canadian Borrower of any default in the payment thereof.
(c) Any provision of this Agreement to the contrary notwithstanding, at the
request of the Administrative Borrower, the Administrative Agent may in its
reasonable discretion (but with absolutely no obligation), make Revolving Loans
to the Borrowers, on behalf of the Revolving Lenders, in amounts that exceed
Availability (any such excess Revolving Loans are herein referred to
collectively as “Overadvances”); provided that, no Overadvance shall result in a
Default due to Borrowers’ failure to comply with Section 2.01 for so long as
such Overadvance remains outstanding in accordance with the terms of this
paragraph, but solely with respect to the amount of such Overadvance. In
addition, Overadvances may be made even if the condition precedent set forth in
Section 4.02(c) has not been satisfied. All Overadvances shall constitute ABR
Borrowings or Canadian Prime Rate Borrowings. The authority of the
Administrative Agent to make Overadvances is limited to an aggregate amount not
to exceed $10,000,000 at any time, no Overadvance may remain outstanding for
more than thirty days, all Overadvances shall be payable within one (1) Business
Day after demand by the Administrative Agent and no Overadvance shall cause any
Revolving Lender’s Revolving Exposure to exceed its Revolving Commitment;
provided that, the Supermajority Revolving Lenders may at any time revoke the
Administrative Agent’s authorization to make Overadvances. Any such revocation
must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof.

 

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(d) Upon the making of an Overadvance by the Administrative Agent, each
Revolving Lender shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from the Administrative Agent
without recourse or warranty, an undivided interest and participation in such
Overadvance in proportion to its Applicable Percentage or Canadian Applicable
Percentage, as applicable, of the Revolving Commitment. The Administrative Agent
may, at any time, require the Revolving Lenders to fund their participations.
From and after the date, if any, on which any Revolving Lender is required to
fund its participation in any Overadvance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender’s
Applicable Percentage of all payments of principal and interest and all proceeds
of Collateral received by the Administrative Agent in respect of such Loan.
SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Administrative Borrower may request the
issuance of Letters of Credit for the account of any Borrower, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Administrative Borrower to, or entered into by the
Administrative Borrower with, the Issuing Bank relating to any Letter of Credit,
the terms and conditions of this Agreement shall control. Except as set forth in
Section 2.06(k), all Existing Letters of Credit shall be deemed to have been
issued pursuant hereto, and from and after the Effective Date shall be subject
to and governed by the terms and conditions hereof.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Administrative Borrower shall
hand deliver or facsimile (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (prior to 12:00 noon, Chicago time, at least
three Business Days prior to the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name of the Borrower for whose account such Letter of Credit is to
be issued, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Administrative Borrower also
shall submit a letter of credit application on the Issuing Bank’s standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrowers shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $160,000,000 and
(ii) the total Revolving Exposures shall not exceed the lesser of the total
Revolving Commitments and the Borrowing Base.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrowers on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to
any Borrower for any reason. Each Revolving Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

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(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 1:00 p.m., Chicago time, on the date that such LC Disbursement is
made, if the Borrowers shall have received notice of such LC Disbursement prior
to 11:00 a.m., Chicago time, on such date, or, if such notice has not been
received by the Borrowers prior to such time on such date, then not later than
1:00 p.m., Chicago time, on (i) the Business Day that the Borrowers receive such
notice, if such notice is received prior to 11:00 a.m., Chicago time, on the day
of receipt, or (ii) the Business Day immediately following the day that the
Borrowers receive such notice, if such notice is not received prior to such time
on the day of receipt; provided that the Borrowers hereby request in accordance
with Section 2.03 or 2.05, unless the Administrative Borrower specifically gives
notice to the Administrative Agent to the contrary, that such payment be
financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent
amount and, to the extent so financed, the Borrowers’ obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing or Swingline Loan. If the Borrowers fail to make such payment when
due, the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from the Borrowers in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrowers, in
the same manner as provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from any Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrowers of their obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers’ obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers’ obligations hereunder. Neither
the Administrative Agent, the Revolving Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrowers to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrowers to the extent permitted by applicable law) suffered by
any Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof or by its gross negligence or willful
misconduct.

 

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(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Administrative Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrowers of their obligation
to reimburse the Issuing Bank and the Revolving Lenders with respect to any such
LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrowers shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that any Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment by such Revolving
Lender.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any
time by written agreement among the Administrative Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Revolving Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become effective,
the Borrowers shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

 

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(j) Cash Collateralization and Backstop Letter of Credit. If any Event of
Default shall occur and be continuing, on the Business Day that the Borrowers
receive notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral or the delivery of a Backstop Letter of Credit
pursuant to this paragraph, the Borrowers shall either (a) deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Revolving Lenders (the “LC Collateral Account”), an amount in
cash equal to 103% of the LC Exposure as of such date plus accrued and unpaid
interest thereon (if any); provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to any Borrower described in
clause (g) or (h) of Article VII, or (b) provide to the Administrative Agent,
for the benefit of the Administrative Agent and the Lenders, a letter of credit
in form and substance, on terms and from a lending institution reasonably
satisfactory to the Administrative Agent, which letter of credit shall be in a
face amount equal to 103% of the L/C Exposure as of such date plus accrued and
unpaid interest thereon (if any) (the “Backstop Letter of Credit”). With respect
to any LC Collateral Account: (i) such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Secured Obligations; (ii) the Administrative Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such account and
each of the Borrowers hereby grants the Administrative Agent a security interest
in the LC Collateral Account; (iii) other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
reasonable discretion of the Administrative Agent and at the Borrowers’ risk and
expense, such deposits shall not bear interest; (iv) interest or profits, if
any, on such investments shall accumulate in such account; (v) moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrowers for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other Secured Obligations in accordance with
Section 2.18(b); and (vi) any remaining amount shall be promptly returned to the
Borrowers. If the Borrowers are required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrowers within
three Business Days after all such Events of Default have been cured to the
satisfaction of the Administrative Agent or waived in writing. With respect to
any Backstop Letter of Credit: (A) the Administrative Agent shall be the named
beneficiary of such letter of credit; (B) drawings upon such letter of credit
shall be made in the Administrative Agent’s reasonable discretion to reimburse
the Issuing Bank for LC Disbursements for which it has not been reimbursed and,
to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrowers for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other Secured Obligations in accordance with
Section 2.18(b); and (C) if the Borrowers are required to provide a letter of
credit hereunder as a result of the occurrence of an Event of Default, such
letter of credit (to the extent not drawn as aforesaid) shall be cancelled and
returned to the issuing bank within five Business Days after all such Events of
Default have been cured or waived.
(k) Existing Letters of Credit. Notwithstanding anything to the contrary in this
Agreement, the terms of payment of the Existing Letters of Credit (and any
issuance fees paid in connection therewith) shall be governed by the terms
relating thereto set forth in the loan documents under which such Existing
Letters of Credit were issued.
Any reference to (i) Borrowers in this Section 2.06 shall not include the
Canadian Borrower (in its capacity as Canadian Borrower), and (ii) any reference
to Revolving Lenders in this Section 2.06 shall not include the Canadian
Lenders. For the avoidance of doubt, Letters of Credit issued under this
Section 2.06 may be denominated in either United States or Canadian dollars,
provided that any Letters of Credit issued in Canadian dollars are subject to
both the Letter of Credit sublimit contained in this Section 2.06 and the
Canadian Subfacility sublimit contained in Section 2.01.

 

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SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., Chicago time, to the account of the
Administrative Agent or the Canadian Funding Bank, as applicable, most recently
designated by it for such purpose by notice to the Lenders in an amount equal to
such Lender’s Applicable Percentage or Canadian Applicable Percentage, as
applicable; provided that, Swingline Loans and Canadian Swingline Loans shall be
made as provided in Section 2.05. The Administrative Agent or the Canadian
Funding Bank, as applicable, will make such Loans available to the Borrowers by
promptly crediting the amounts so received, in like funds, to the respective
Funding Account; provided that ABR Revolving Loans and/or Canadian Prime Rate
Loans, as applicable, made to finance the reimbursement of (i) an LC
Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an
Overadvance shall be retained by the Administrative Agent.
(b) Unless the Administrative Agent or the Canadian Funding Bank, as applicable,
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
or the Canadian Funding Bank, as applicable, such Lender’s share of such
Borrowing, the Administrative Agent or the Canadian Funding Bank, as applicable,
may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrowers or the Canadian Borrower, as
applicable, a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative Agent
or the Canadian Funding Bank, as applicable, then the applicable Lender agrees
to pay to the Administrative Agent or the Canadian Funding Bank, as applicable,
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrowers
to but excluding the date of payment to the Administrative Agent or the Canadian
Funding Bank, as applicable, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation; provided that nothing herein shall
discharge the Borrowers of any obligation to pay interest on the Loans in the
manner and amounts set forth in this Agreement. If such Lender pays such amount
to the Administrative Agent or the Canadian Funding Bank, as applicable, then
such amount shall constitute such Lender’s Loan included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Revolving Borrowing or CDOR Revolving Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrowers may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing or CDOR
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrowers may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Canadian Swingline
Borrowings, Swingline Borrowings, Overadvances or Protective Advances, which may
not be converted or continued.
(b) To make an election pursuant to this Section, the Administrative Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the
Administrative Borrower was requesting a Revolving Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or facsimile to the Administrative Agent and
(in the case of a Borrowing under the Canadian Subfacility) the Canadian Funding
Bank of a written Interest Election Request in the form attached hereto as
Exhibit H signed by the Administrative Borrower.

 

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(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing, a Canadian
Prime Rate Borrowing, a Eurodollar Borrowing or a CDOR Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing or a CDOR Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term
“Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing or a CDOR
Borrowing but does not specify an Interest Period, then the Borrowers shall be
deemed to have selected an Interest Period of one month’s duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent or the Canadian Funding Bank, as applicable, shall advise
each Lender of the details thereof and of such Lender’s portion of each
resulting Borrowing.
(e) If the Administrative Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing or a CDOR Revolving
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing or a Canadian Prime
Rate Borrowing, as applicable. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrowers, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing or a CDOR Borrowing and
(ii) unless repaid, each Eurodollar Revolving Borrowing or CDOR Revolving
Borrowing shall be converted to an ABR Borrowing or a Canadian Prime Rate
Borrowing, as applicable, at the end of the Interest Period applicable thereto.
SECTION 2.09. Termination of Commitments. (a) Unless previously terminated, all
Commitments shall terminate on the Maturity Date.
(b) The Borrowers may at any time terminate the Commitments upon (i) the payment
in full of all outstanding Loans, together with accrued and unpaid interest
thereon and on any Letters of Credit, (ii) the cancellation and return of all
outstanding Letters of Credit (or alternatively, with respect to each such
Letter of Credit, the furnishing to the Administrative Agent of a cash deposit
or a Backstop Letter of Credit equal to 103% of the LC Exposure as of such
date), (iii) the payment in full of the accrued and unpaid fees (including,
without limitation all the Issuing Bank’s fees), and (iv) the payment in full of
all reimbursable expenses and other Obligations together with accrued and unpaid
interest thereon.

 

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(c) The Administrative Borrower shall notify the Administrative Agent of any
election to terminate the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Administrative Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Administrative Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities or other
transactions, in which case such notice may be revoked by the Administrative
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination of the
Commitments shall be permanent.
(d) Upon termination of this Agreement, the Administrative Agent may, if either
(i) a claim is asserted or threatened or a notice of assessment has been
received or is threatened for withholding liabilities by any Governmental
Authority in either the United States or Canada arising in connection with this
Agreement or the transactions contemplated hereby or (ii) all or substantially
all of the assets of the Borrowers are (or are contemplated to be) liquidated or
otherwise disposed of or the Borrowers have otherwise substantially ceased (or
are contemplating ceasing) business operations, the Administrative Agent may
require the Borrowers to obtain a letter of credit for the benefit of the
Lenders or pledge cash collateral in an amount that the Administrative Agent
reasonably determines will be sufficient to protect the Administrative Agent and
the Lenders from any liability accrued and unpaid for withholding tax
liabilities (actual or contingent) accrued under United States or Canadian laws
during the term of this Agreement.
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt. (a) The
Borrowers hereby unconditionally, jointly and severally, promise to pay (i) to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan on the Maturity Date, (ii) to the
Administrative Agent the then unpaid amount of each Protective Advance on the
earlier of the Maturity Date and demand by the Administrative Agent, (iii) to
the Swingline Lender and the Canadian Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Maturity Date and the first
date after such Swingline Loan and Canadian Swingline Loan is made that is the
15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan and Canadian Swingline Loan is made; provided that on each
date that a Revolving Loan is made, the Borrowers shall repay all Swingline
Loans and Canadian Swingline Loans then outstanding from the proceeds of
Revolving Loans or otherwise, and (iv) to the Administrative Agent the then
unpaid principal amount of each Overadvance on the earlier of the Maturity Date
and the 30th day after such Overadvance is made.
(b) At all times that full cash dominion is in effect pursuant to Section 7.3 of
the Security Agreement, on each Business Day, at or before 1:00 p.m., Chicago
time, the Administrative Agent shall apply all immediately available funds
credited to the Collection Account first to apply to any Protective Advances and
Overadvances that may be outstanding, pro rata, and second to apply to the
Revolving Loans (including Swingline Loans and Canadian Swingline Loans) and to
cash collateralize outstanding LC Exposure (if and to the extent that such cash
collateral is required under Section 2.06(j)).
(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

 

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(d) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan and the date such Loan is made hereunder, the Class
and Type thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent and the Canadian Funding Bank hereunder for the account
of the Lenders and each Lender’s share thereof.
(e) The entries made in the accounts maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein (absent manifest error); provided that the
failure of any Lender, the Administrative Agent or the Canadian Funding Bank to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Loans in accordance with the terms of
this Agreement.
(f) Any Lender may request that Loans 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 successors and assigns) and substantially
in the form attached hereto as Exhibit G. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) 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).
SECTION 2.11. Repayment of Loans. (a) The Borrowers shall have the right at any
time and from time to time to repay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (c) of this Section.
(b) Except for Overadvances permitted under Section 2.05, in the event and on
such occasion that the total Revolving Exposure exceeds the lesser of (A) the
aggregate Revolving Commitments or (B) the Borrowing Base, the Borrowers shall
repay the Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate
amount equal to such excess.
(c) The Borrowers shall notify the Administrative Agent (and, in the case of
repayment of a Swingline Loan or Canadian Swingline Loan, the Swingline Lender
or the Canadian Funding Bank, as applicable) by telephone (confirmed by
facsimile) of any repayment hereunder (i) in the case of repayment of a
Eurodollar Revolving Borrowing or a CDOR Revolving Borrowing, not later than
12:00 p.m. (noon), Chicago time, three Business Days before the date of
repayment, (ii) in the case of repayment of an ABR Revolving Borrowing or
Canadian Prime Rate Revolving Borrowing, not later than 12:00 p.m. (noon),
Chicago time, on the date of repayment or (iii) in the case of repayment of a
Swingline Loan or Canadian Swingline Loan, not later than 1:00 p.m., Chicago
time, on the date of repayment. Each such notice shall be irrevocable and shall
specify the repayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of repayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of repayment may be revoked if
such notice of termination is revoked in accordance with Section 2.09. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent and the Canadian Funding Bank, if applicable, shall advise
the Lenders of the contents thereof. Each repayment of a Revolving Borrowing
shall be applied ratably to the Revolving Loans included in the prepaid
Borrowing. Repayments shall be accompanied by accrued interest to the extent
required by Section 2.13.

 

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SECTION 2.12. Fees. (a) The Borrowers agree to pay to the Administrative Agent
for the account of each Lender an unused commitment fee, which shall accrue at
the Applicable Rate on the average daily amount of the Available Revolving
Commitment of such Lender during the period from and including the Effective
Date to but excluding the date on which the Lenders’ Revolving Commitments
terminate. Accrued unused commitment fees shall be payable in arrears on the
last day of each March, June, September and December and on the date on which
the Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof. All unused commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrowers agree to pay (i) to the Administrative Agent for the account
of each Revolving Lender (who is not a Canadian Lender) a participation fee with
respect to its participations in Letters of Credit, which shall accrue (A) with
respect to standby Letters of Credit, at the same Applicable Rate used to
determine the interest rate applicable to Eurodollar Revolving Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements), and (B) with respect to
documentary Letters of Credit, at a rate equal to the Applicable Rate used to
determine the interest rate applicable to Eurodollar Revolving Loans minus 0.25%
on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements), in each case during the
period from and including the Effective Date to but excluding the later of the
date on which such Lender’s Revolving Commitment terminates and the date on
which such Revolving Lender ceases to have any LC Exposure, and (ii) to the
Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum
on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank’s standard fees (including
standard fees with respect to the Existing Letters of Credit) with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of each March, June, September and December
shall be payable on the third Business Day following such last day, commencing
on the first such date to occur after the Effective Date; provided that all such
fees shall be payable on the date on which the Revolving Commitments terminate
and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Bank pursuant
to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Borrowers agree to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrowers and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of unused commitment
fees and participation fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate and the
Loans comprising each Canadian Prime Rate Borrowing (including each Canadian
Swingline Loan) shall bear interest at the Canadian Prime Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

 

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(c) The Loans comprising each CDOR Borrowing shall bear interest at the CDOR
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate.
(d) Each Protective Advance and each Overadvance shall bear interest at the
Alternate Base Rate for Revolving Loans plus 2%.
(e) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Administrative Agent or the Required Lenders may, at their
option, by notice to the Borrowers (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 9.02 requiring the
consent of “each Lender affected thereby” for reductions in interest rates),
declare that (i) all Loans shall bear interest at 2% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount outstanding hereunder, such amount shall
accrue at 2% plus the rate applicable to such fee or other obligation as
provided hereunder.
(f) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (e) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan or Canadian Prime Rate Loan
prior to the end of the Availability Period), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan or
CDOR Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion.
The Canadian Borrower shall pay to the Canadian Funding Bank, for the ratable
benefit of the Canadian Lenders, in accordance with this Subsection 2.13(f),
interest accrued on all Canadian Prime Rate Loans and CDOR Loans (which shall be
payable by the Canadian Funding Bank to the Canadian Lenders on the next
Business Day after payment by the Canadian Borrower).
(g) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Canadian Prime Rate and to the
Alternate Base Rate, at times when the Alternate Base Rate is based on the Prime
Rate, shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate, Adjusted LIBO Rate, LIBO Rate, the CDOR Rate or the
Canadian Prime Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
(h) For the purposes of the Interest Act (Canada), the yearly rate of interest
to which any rate calculated on the basis of a period of time different from the
actual number of days in the year (360 days, for example) is equivalent to the
stated rate multiplied by the actual number of days in the year (365 or 366, as
applicable) and divided by the number of days in the shorter period (360 days,
in the example).
SECTION 2.14. Alternate Rates of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing or CDOR Borrowing:
(a) the Administrative Agent or the Canadian Funding Bank, as applicable,
determines (which determination shall be conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate, the LIBO Rate or the CDOR Rate, as applicable, for such Interest Period;
or

 

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(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate, the LIBO Rate or the CDOR Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(or Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing or CDOR
Borrowing, as applicable, shall be ineffective, and (ii) if any Borrowing
Request requests (x) a Eurodollar Revolving Borrowing, such Borrowing shall be
made as an ABR Borrowing, or (y) a CDOR Revolving Borrowing, such Borrowing
shall be made as a Canadian Prime Rate Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans or CDOR Loans made
by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or CDOR Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered. Notwithstanding the foregoing, this Section
2.15(a) shall not apply to any matter governed by Section 2.17.
(b) If any Change in Law regarding capital requirements has the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company would have achieved but for such
Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrowers will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender’s
or the Issuing Bank’s holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrowers. The Borrowers shall pay such Lender
or the Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

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(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan or CDOR Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan or CDOR Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan or CDOR Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.09(c) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan or CDOR Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrowers pursuant to Section 2.19, then, in any such event, the
Borrowers shall compensate each Lender for the loss, cost and expense
attributable to such event, to the extent actually incurred by such Lender. In
the case of a Eurodollar Loan or CDOR Loan, such loss, cost or expense to any
Lender shall include the excess, if any, of (i) the amount of interest which
would have accrued on the principal amount of such Loan had such event not
occurred, at the Adjusted LIBO Rate or CDOR Rate, as applicable, that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrowers and shall be conclusive absent manifest error. The Borrowers
shall pay such Lender the amount shown as due on any such certificate within
10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of or in lieu of
any obligation of the Loan Parties hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrowers shall be required to deduct or withhold any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions or withholdings and (iii) the Loan Parties
shall pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Loan Parties shall indemnify the Administrative Agent, each Lender and
the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Loan Parties hereunder
(including Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, but only to the extent that such Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Loan Parties by a Lender or the Issuing Bank, or by the Administrative Agent on
its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.

 

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(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Loan Parties to a Governmental Authority, the Loan Parties shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which any Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrowers (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law
(including, without limitation, as set out in Article VIII) or reasonably
requested by the Borrowers as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender receives a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Loan Parties or with
respect to which the Loan Parties have paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Loan Parties (but only to the
extent of indemnity payments made, or additional amounts paid, by the Loan
Parties under this Section 2.17 with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
Loan Parties, upon the request of the Administrative Agent or such Lender, agree
to repay the amount paid over to the Loan Parties (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This Section shall not be construed to require the Administrative Agent or any
Lender to make available its Tax returns (or any other information relating to
its taxes which it deems confidential) to the Loan Parties or any other Person.
(g) Notwithstanding anything to the contrary contained in this Section 2.17, the
Loan Parties shall not be liable to any Lender under this Section 2.17 for any
payments required to be made as a result of willful acts made by such Lender,
including, without limitation, any breach or inaccuracy of such Lender’s
representation contained in the last paragraph of Article VIII hereof.
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs.
(a) The Borrowers shall make each payment required to be made by them hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 1:00
p.m., Chicago time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent or the Canadian Funding
Bank, as applicable, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 120 South LaSalle
Street, Chicago, Illinois, except payments to be made directly to the Issuing
Bank (including payments under any Existing Letters of Credit), Swingline
Lender, Canadian Swingline Lender or the Canadian Funding Bank as expressly
provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17
and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars (except that payments made under the Canadian
Subfacility shall be made in Canadian dollars). At all times that full cash
dominion is in effect pursuant to Section 7.3 of the Security Agreement, solely
for purposes of determining the amount of Loans available for borrowing
purposes, checks and cash or other immediately available funds from collections
of items of payment and proceeds of any Collateral shall be applied in whole or
in part against the Obligations, on the day of receipt, subject to actual
collection.

 

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(b) Any proceeds of Collateral received by the Administrative Agent or the
Canadian Funding Bank, as applicable, (i) not constituting either (A) a specific
payment of principal, interest, fees or other sum payable under the Loan
Documents (which shall be applied as specified by the Borrowers) or (B) amounts
to be applied from the Collection Account when full cash dominion is in effect
(which shall be applied in accordance with Section 2.10(b)) or (ii) after an
Event of Default has occurred and is continuing and the Administrative Agent so
elects or the Required Lenders so direct, such funds shall be applied ratably
first, to pay any fees, indemnities, or expense reimbursements including amounts
then due to the Administrative Agent and the Issuing Bank (including with
respect to the Existing Letters of Credit) from the Borrowers (other than in
connection with Banking Services), second, to pay any fees or expense
reimbursements then due to the Lenders from the Borrowers (other than in
connection with Banking Services), third, to pay interest due in respect of the
Overadvances and Protective Advances, fourth, to pay the principal of the
Overadvances and Protective Advances, fifth, to pay interest then due and
payable on the Loans (other than the Overadvances and Protective Advances)
ratably, sixth, to repay principal on the Loans (other than the Overadvances and
Protective Advances) and unreimbursed LC Disbursements ratably, seventh, to pay
an amount to the Administrative Agent equal to one hundred three percent (103%)
of the aggregate undrawn face amount of all outstanding Letters of Credit, to be
held as cash collateral for such Obligations, eighth, to payment of any amounts
owing with respect to Banking Services, ninth, to the payment of any other
Secured Obligation due to the Administrative Agent or any Lender by the
Borrowers, and tenth, payment to Issuing Bank for issuance of standby L/C in
favor of the Administrative Agent in an amount to be determined by the
Administrative Agent with respect to Section 212(13.2) of the Income Tax Act
(Canada). Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrowers, or unless a Default is in existence,
neither the Administrative Agent nor any Lender shall apply any payment which it
receives to any Eurodollar Loan or CDOR Loan of a Class, except (a) on the
expiration date of the Interest Period applicable to any such Eurodollar Loan or
CDOR Loan or (b) in the event, and only to the extent, that there are no
outstanding ABR Loans or Canadian Prime Rate Loans, as applicable, of the same
Class and, in any event, the Borrowers shall pay the break funding payment
required in accordance with Section 2.16. The Administrative Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Secured
Obligations.
(c) All payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to Section 9.03), and other sums payable under the Loan
Documents, may be paid from the proceeds of Borrowings made hereunder whether
made following a request by the Borrowers pursuant to Section 2.03 or a deemed
request as provided in this Section or, if there is not sufficient Availability
to make such payment or if all conditions to Borrowing have not been satisfied,
may be deducted from any deposit account of any Borrower maintained with the
Administrative Agent or the Canadian Funding Bank, as applicable. The Borrowers
hereby irrevocably authorize (i) the Administrative Agent or the Canadian
Funding Bank, as applicable, to make a Borrowing for the purpose of paying each
payment of principal, interest and fees as it becomes due hereunder or any other
amount due under the Loan Documents and agrees that all such amounts charged
shall constitute Loans (including Swingline Loans, Canadian Swingline Loans and
Overadvances, but such a Borrowing may only constitute a Protective Advance if
it is to reimburse costs, fees and expenses as described in Section 9.03) and
that all such Borrowings shall be deemed to have been requested pursuant to
Sections 2.03, 2.04 or 2.05, as applicable and (ii) if there is not sufficient
Availability to make such payment or if all conditions to Borrowing have not
been satisfied, the Administrative Agent to charge any deposit account of any
Borrower maintained with the Administrative Agent or the Canadian Funding Bank,
as applicable, for each payment of principal, interest and fees as it becomes
due hereunder or any other amount due under the Loan Documents.

 

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(d) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by any Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in LC Disbursements to any assignee or participant,
other than to any Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Borrowers 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 any Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.
(e) Unless the Administrative Agent and the Canadian Funding Bank shall have
received notice from the Borrowers prior to the close of business on the date on
which any payment is due to the Administrative Agent or the Canadian Funding
Bank for the account of the Lenders or the Issuing Bank hereunder that the
Borrowers will not make such payment, the Administrative Agent and the Canadian
Funding Bank may assume that the Borrowers have made such payment on such date
in accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the Issuing Bank, as the case may be, the amount due. In such
event, if the Borrowers have not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent and the Canadian Funding Bank, as applicable, forthwith
on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent and the
Canadian Funding Bank, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.
(f) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent or the Canadian Funding Bank, as
applicable, may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Administrative Agent or
the Canadian Funding Bank, as applicable, for the account of such Lender to
satisfy such Lender’s obligations hereunder until all such unsatisfied
obligations are fully paid.

 

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SECTION 2.19. Mitigation Obligations; Replacement of Lenders. If any Lender
requests compensation under Section 2.15 or if any Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant Section 2.17, then:
(a) such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future, and (ii) in the sole
good faith judgment of such Lender, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender (and the Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment);
(b) the Borrowers may, at their sole expense and effort, require such Lender
(but, in the case of a Lender requesting compensation under Section 2.15, only
if the majority of the other Lenders are not similarly affected) or any Lender
that defaults in its obligation to fund Loans hereunder (herein, a “Departing
Lender”), upon notice to the Departing Lender and the Administrative Agent
within thirty (30) days after such default by the Departing Lender, to assign
and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrowers shall have received the prior
written consent of the Administrative Agent (and if a Revolving Commitment is
being assigned, the Issuing Bank), which consent shall not unreasonably be
withheld, (ii) the Departing Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in LC
Disbursements, Swingline Loans or Canadian Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.15 or 2.17, such assignment will result in a reduction in such
compensation or payments. A Departing Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
SECTION 2.20. Returned Payments. If after receipt of any payment which is
applied to the payment of all or any part of the Obligations, the Administrative
Agent, the Canadian Funding Bank or any Lender is for any reason compelled to
surrender such payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, impermissible setoff, or a
diversion of trust funds, or for any other reason, then the Obligations or part
thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent, the Canadian Funding Bank or such
Lender. The provisions of this Section 2.20 shall be and remain effective
notwithstanding any contrary action which may have been taken by the
Administrative Agent, the Canadian Funding Bank or any Lender in reliance upon
such payment or application of proceeds. The provisions of this Section 2.20
shall survive the termination of this Agreement.

 

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SECTION 2.21. Increase In Commitments. Notwithstanding anything to the contrary
contained in this Agreement:
(a) Provided there exists no Default or Event of Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrowers
may from time to time request an increase in the aggregate Revolving Commitments
by an amount not less than $10,000,000 for any such increase and not exceeding
$75,000,000 for all such increases; provided that any increase in the aggregate
Revolving Commitments pursuant to this Section 2.21 shall not result in an
increase in the amount of any of the subfacilities contained in this Agreement.
At the time of sending such notice, the Borrowers (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten (10) Business
Days from the date of delivery of such notice to the Lenders). Each Lender shall
notify the Administrative Agent within such time period whether or not it agrees
to increase its Commitment with respect to Loans and Letters of Credit and, if
so, whether by an amount equal to, greater than, or less than its Pro Rata Share
of such requested increase. Any Lender not responding within such time period
shall be deemed to have declined to increase such Commitment. The Administrative
Agent shall notify the Borrowers and each Lender of the Lenders’ responses to
each request made hereunder. To achieve the full amount of a requested increase,
the Borrower may, with the prior consent of the Administrative Agent (which
consent shall not be unreasonably withheld), invite additional lending
institutions to become Lenders pursuant to a joinder agreement in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.
(b) If the Revolving Commitments are increased in accordance with this Section,
the Administrative Agent and the Borrowers shall determine the effective date
(the “Increase Effective Date”) and the final allocation of such increase. The
Administrative Agent shall promptly notify the Borrowers and the Lenders of the
final allocation of such increase and the Increase Effective Date. As a
condition precedent to such increase, the Borrowers shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the Increase
Effective Date signed by a Financial Officer or otherwise acceptable officer of
such Loan Party (i) certifying and attaching the resolutions adopted by such
Loan Party approving or consenting to such increase, and (ii) in the case of the
Borrowers, certifying that, before and after giving effect to such increase,
(A) the representations and warranties contained in Article III and the other
Loan Documents are true and correct in all material respects on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects as of such earlier date, and (B) no Default
or Event of Default exists.
SECTION 2.22. Adjustments of Advance Rates and Reserves; Permitted Acquisition
Eligibility and Reporting. (a) The Administrative Agent may from time to time,
in its Permitted Discretion, reduce the advance rates used in the calculation of
the Borrowing Base or adjust or establish one or more Collateral Reserves
against the Borrowing Base or Exposure Reserves against Availability, with such
changes to be effective (A) if no Default or Event of Default has occurred and
is continuing, three (3) days after delivery of notice thereof to the Borrowers
and the Lenders, and (B) after the occurrence and during the continuation of a
Default or an Event of Default, immediately. Notwithstanding the foregoing,
(i) the Administrative Agent will not use a single basis for adjustment to both
establish new Reserves and to reduce advance rates, (ii) the size of any
required Reserves and/or advance rate reductions will be reasonably related to
the Administrative Agent’s and the Lenders’ increased risk with respect to the
basis for adjustment, and (iii) no single Reserve will count against both the
Borrowing Base and Availability. The Administrative Agent may use its Permitted
Discretion to determine whether future Reserves should constitute Collateral
Reserves or Exposure Reserves and may from time to time in its Permitted
Discretion determine that a Reserve should be recategorized from a Collateral
Reserve or Exposure Reserve to the other type of Reserve hereunder.
(b) Notwithstanding anything to the contrary contained in this Agreement,
Accounts and Inventory acquired in connection with a Permitted Acquisition that
is permitted pursuant to the terms of this Agreement may be included as Eligible
Accounts and Eligible Inventory without the requirement of a field audit or
other appraisal thereof by the Administrative Agent to the extent that (x) such
Accounts and Inventory meet the requirements of the definitions of Eligible
Accounts and Eligible Inventory, respectively, and (y) in the case of Accounts,
the Accounts are owed by Account Debtors that already have Accounts included in
the calculation of Eligible Accounts, and, in the case of Inventory, the type of
Inventory acquired is already a type of Inventory sold by the Borrowers and
entered as an SKU in the Borrowers’ inventory system. Notwithstanding anything
to the contrary contained in the definition of “Permitted Acquisition” or in
Section 6.04, the Borrowers shall not be required to make any prior reports to
the Administrative Agent or the Lenders in connection with “Permitted
Acquisitions” made by the Borrowers in an aggregate amount during the term of
this Agreement not to exceed $5,000,000.

 

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ARTICLE III
Representations and Warranties
Each Loan Party represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Loan Parties and each of its
Subsidiaries is duly organized, validly existing and subsisting and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within each
Loan Party’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. The Loan Documents to which each
Loan Party is a party have been duly executed and delivered by such Loan Party
and constitute a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c)
will not violate or result in a default under any indenture, agreement or other
instrument binding upon any Loan Party or any of its Subsidiaries, or give rise
to a right thereunder to require any payment to be made by any Loan Party or any
of its Subsidiaries, except for such violations or defaults which would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, and (d) will not result in the creation or imposition of any
Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens
created pursuant to the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrowers
have heretofore furnished to the Lenders Holdings’ consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended December 31, 2004, reported by PricewaterhouseCoopers,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended June 30, 2005, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
Holdings and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.

 

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(b) No event, change or condition has occurred that has had, or would reasonably
be expected to have, a Material Adverse Effect, since December 31, 2004.
SECTION 3.05. Properties. (a) As of the date of this Agreement, Schedule 3.05(a)
sets forth the address of each parcel of real property that is owned or leased
by each Loan Party. Each of such leases and subleases is valid and enforceable
in accordance with its terms and is in full force and effect, and no default by
any Loan Party under any such lease or sublease exists. Each of the Loan Parties
and its Subsidiaries has good and indefeasible title to, or valid leasehold
interests in, all its real and personal property, free of all Liens other than
those permitted by Section 6.02.
(b) Each Loan Party and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted the absence of which would
reasonably be expected to have a Material Adverse Effect, a correct and complete
list of which, as of the date of this Agreement, is set forth on
Schedule 3.05(b), and the use thereof by the Loan Parties and its Subsidiaries
does not infringe in any material respect upon the rights of any other Person,
and except as set forth on Schedule 3.05, the Loan Parties’ rights thereto are
not, as of the date of this Agreement, subject to any licensing agreement or
similar arrangement.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of any Loan Party, threatened against or
affecting the Loan Parties or any of their Subsidiaries (i) as to which there is
a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or
(ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect, (i) no Loan Party nor any of its
Subsidiaries has received notice of any claim with respect to any Environmental
Liability or knows of any basis for any Environmental Liability and (ii) no Loan
Party nor any of its Subsidiaries (1) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law or (2) has become subject to
any Environmental Liability (including any property now or previously in its
charge, management or control).
(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Except with respect to
matters governed by Section 3.09, each Loan Party and its Subsidiaries is in
compliance with all Requirements of Law applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except in each case where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. No Loan Party nor any of
its Subsidiaries is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a “holding company”
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.

 

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SECTION 3.09. Taxes. Each Loan Party and its Subsidiaries has timely filed or
caused to be filed all material federal income tax returns and reports
(including the Canadian Borrower’s Canadian Tax returns) required to have been
filed after the Petition Date and has paid or caused to be paid all material
Taxes required to have been paid by it after the Petition Date, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Loan Party or such Subsidiary, as applicable, has set aside on its books
adequate reserves in accordance with GAAP or (b) to the extent that the failure
to do so could not be expected to result in a Material Adverse Effect. To the
knowledge of the Loan Parties, no tax liens, other than the British Columbia Tax
Lien, have been filed after the Petition Date and no material claims have been
asserted with respect to any such taxes after the Petition Date. The Borrowers
have provided the Administrative Agent with true and complete copies of the
Canadian federal income tax returns of the Canadian Borrower for the years 2003
and 2004. The British Columbia Tax Lien relates to tobacco tax liabilities that
are accounted for in the monthly computation of the Canadian Tobacco Tax
Reserve.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. No Lien has arisen, choate or inchoate, in
respect of any Loan Party or its property in connection with any Plan. Each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and its terms, including timely filing of all reports and
funding as required under the Code or ERISA. Except as set forth on
Schedule 3.10 no Plan has any material unfunded pension liability.
SECTION 3.11. Disclosure. The Borrowers have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any
Borrower or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.12. Material Agreements. All material agreements and contracts to
which any Loan Party is a party or is bound as of the date of this Agreement are
listed on Schedule 3.12. Except for such defaults which would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, no Loan Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(i) any material agreement to which it is a party or (ii) any agreement or
instrument evidencing or governing Indebtedness.
SECTION 3.13. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the assets of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted after
the Effective Date. In computing the amount of contingent or unliquidated
liabilities at any time, such liabilities shall be computed at the amount that,
in the light of all facts and circumstances then existing, represents the amount
that can reasonably be expected to become actual or matured liabilities.
(b) No Loan Party believes that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.

 

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SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties and the Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Borrowers believe that the insurance maintained by
or on behalf of the Borrowers and the Subsidiaries is adequate.
SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth, as of
the Effective Date, (a) a correct and complete list of the name and relationship
to each Borrower of each and all of such Borrower’s active Subsidiaries, (b) a
true and complete listing of each class of each Borrower’s authorized Equity
Interests, of which all of such issued and outstanding shares are validly issued
and outstanding, fully paid and non-assessable, and, in the case of each
Borrower other than Holdings, owned beneficially and of record by the Persons
identified on Schedule 3.15, and (c) the type of entity of each Borrower and
each of its Subsidiaries. All of the issued and outstanding Equity Interests
owned by any Loan Party have been (to the extent such concepts are relevant with
respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable.
SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the Administrative Agent, for the benefit of the Administrative
Agent and the Lenders. For Liens in Collateral for which perfection is governed
by the UCC or filing with the United States Copyright Office, such Liens shall
constitute continuing perfected Liens on the Collateral, securing the Secured
Obligations, upon (a) filing of a financing statement under the UCC and the
completion of the filings and other necessary actions, (b) the delivery to the
Administrative Agent of all Collateral consisting of instruments and
certificated securities, (c) the execution of control agreements with respect to
investment property not in certificated form and deposit accounts and
(d) appropriate filings with the United States Copyright Office. Such security
interest shall be prior to all other Liens on the Collateral except for
(a) Permitted Encumbrances or Liens otherwise permitted under this Agreement, to
the extent any such Permitted Encumbrances or other Liens would have priority
over the Liens in favor of the Administrative Agent pursuant to any applicable
law, and (b) Liens perfected only by possession (including possession of any
certificate of title) to the extent the Administrative Agent has not obtained or
does not maintain possession of such Collateral.
SECTION 3.17. Labor Disputes. Except for matters that, individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect,
(a) as of the Effective Date, there are no strikes, lockouts or slowdowns
against any Loan Party or any Subsidiary pending or, to the knowledge of the
Borrowers, threatened, (b) the hours worked by and payments made to employees of
the Loan Parties and the Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable federal, state, provincial, local or
foreign law dealing with such matters, and (c) all payments due from any Loan
Party or any Subsidiary, or for which any claim may be made against any Loan
Party or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Loan Party or such Subsidiary.
SECTION 3.18. Affiliate Transactions. Except as set forth on Schedule 3.18, as
of the date of this Agreement, there are no existing or proposed agreements,
arrangements, understandings, or transactions involving more than $250,000
individually or $1,000,000 in the aggregate between any Loan Party and any of
the officers, members, managers, directors, stockholders (holding 20% or more of
equity interests in the case of Holdings), parents, other interest holders
(holding 20% or more of equity interests in the case of Holdings), employees, or
Affiliates (other than Subsidiaries) of any Loan Party or any members of their
respective immediate families, and none of the foregoing Persons are directly or
indirectly indebted to or have any direct or indirect ownership, partnership, or
voting interest in any Affiliate of any Loan Party or any Person with which any
Loan Party has a business relationship or which competes with any Loan Party.

 

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SECTION 3.19. Common Enterprise. The successful operation and condition of each
of the Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its best
interest.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the first date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement and (ii) duly executed copies of the
other Loan Documents and such other certificates, documents, instruments and
agreements as the Administrative Agent shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender and a written
opinion of the Loan Parties’ counsel, addressed to the Administrative Agent, the
Issuing Bank and the Lenders in substantially the form of Exhibit B.
(b) Financial Statements, Projections and Canadian Tax Returns. The
Administrative Agent shall have received (i) audited consolidated financial
statements of Holdings for the December 31, 2003 and 2004 fiscal years,
(ii) unaudited interim consolidated financial statements of Holdings for each
fiscal quarter ended after the date of the latest applicable financial
statements delivered pursuant to clause (i) of this paragraph as to which such
financial statements are available including the period ended June 30, 2005,
(iii) satisfactory projections for the period commencing with the beginning of
Borrower’s fiscal year 2006 through the end of the fiscal year ending
December 31, 2010, and (iv) copies of the federal and provincial (if applicable)
Canadian income Tax returns of the Canadian Borrower for Fiscal Years 2003 and
2004.
(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates; etc. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Effective Date and executed by its
Secretary, Assistant Secretary or other Officer, which shall (A) certify the
resolutions of its Board of Directors, members or other body authorizing the
execution, delivery and performance of the Loan Documents to which it is a
party, (B) identify by name and title and bear the signatures of the Financial
Officers and any other officers of such Loan Party authorized to sign the Loan
Documents to which it is a party, and (C) contain appropriate attachments,
including the certificate or articles of incorporation or organization of each
Loan Party certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a true and correct copy of its by-laws or
operating, management or partnership agreement, and (ii) a long form good
standing certificate or certificate of status for each Loan Party from its
jurisdiction of organization.

 

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(d) No Default Certificate. The Administrative Agent shall have received a
certificate, signed by a Financial Officer of each Borrower and each other Loan
Party, on the initial Borrowing date (i) stating that no Default has occurred
and is continuing, (ii) stating that the representations and warranties
contained in Article III are true and correct as of such date, and
(iii) certifying any other factual matters as may be reasonably requested by the
Administrative Agent.
(e) Fees. The Lenders and the Administrative Agent shall have received (i) all
fees required to be paid, and (ii) all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel), on or
before the Effective Date. All such amounts will be paid with proceeds of Loans
made on the Effective Date and will be reflected in the funding instructions
given by the Borrowers to the Administrative Agent on or before the Effective
Date.
(f) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where assets of the Loan Parties
are located, and such search shall reveal no liens on any of the assets of the
Loan Parties except for liens permitted by Section 6.02 or discharged on or
prior to the Effective Date pursuant to a pay-off letter or other documentation
satisfactory to the Administrative Agent.
(g) Pay-Off Letter. The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness to be repaid from the proceeds the
initial Borrowing, confirming that all Liens upon any of the property of the
Loan Parties constituting Collateral will be terminated concurrently with such
payment and all letters of credit issued or guaranteed as part of such
Indebtedness shall have been cash collateralized, supported by a Letter of
Credit or rolled over as an Existing Letter of Credit.
(h) Funding Accounts. The Administrative Agent shall have received a notice
setting forth the deposit account of the Borrowers and the Canadian deposit
account of the Canadian Borrower (domiciled in Canada) (the “Funding Account”)
to which the Administrative Agent, Canadian Funding Bank or any Lender is
authorized by the Borrowers and the Canadian Borrower to transfer the proceeds
of any Borrowings requested or authorized pursuant to this Agreement. Any
reference to the Funding Accounts in this Agreement, in respect of Canadian
Borrowings, shall mean the Canadian Borrower’s deposit account domiciled in
Canada.
(i) Collateral Access and Control Agreements. The Administrative Agent shall
have received each (i) Collateral Access Agreement required to be provided
pursuant to Section 4.13 of the Security Agreement and (ii) Deposit Account
Control Agreements required to be provided pursuant to Section 4.14 of the
Security Agreement.
(j) Solvency. The Administrative Agent shall have received a solvency
certificate, in form and substance reasonably satisfactory to the Administrative
Agent, from a Financial Officer.
(k) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of a mutually
agreed Business Day, which Business Day shall be as recent as practicable and in
no event shall be more than 15 days prior to the Effective Date.

 

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(l) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares of Capital Stock
pledged pursuant to the Security Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of the
pledgor thereof and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Security Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.
(m) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code or PPSA financing statement) required by the Collateral
Documents or under law or reasonably requested by the Administrative Agent to be
filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Lenders, a perfected Lien on the Collateral
described therein, prior and superior in right to any other Person (other than
with respect to Liens expressly permitted by Section 6.02), shall be in proper
form for filing, registration or recordation.
(n) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 5.09
and Section 4.12 of the Security Agreement.
(o) Letter of Credit Application. The Administrative Agent shall have received a
properly completed letter of credit application if the issuance of a Letter of
Credit will be required on the Effective Date.
(p) Consents and Approvals. The Administrative Agent shall have received
evidence from the Borrowers that all governmental and third party consents and
approvals necessary in connection with the Transactions and the continuing
operations of the Borrowers and their Subsidiaries shall have been obtained on
satisfactory terms and shall be in full force and effect.
(q) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent or the Issuing Bank may have reasonably
requested.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 3:00 p.m., Chicago time, on October 15, 2005 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of the Borrowers set forth in this
Agreement shall be true and correct in all material respects on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable (except in the case of representations
and warranties that relate by their terms to a specified date).
(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
(c) After giving effect to any Borrowing or the issuance of any Letter of
Credit, Availability is not less than zero.

 

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Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated (or been cash
collateralized or backstopped in a manner reasonably satisfactory to the
Administrative Agent) and all LC Disbursements shall have been reimbursed, each
Loan Party executing this Agreement covenants and agrees, jointly and severally
with all of the Loan Parties, with the Lenders that:
SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The
Borrowers will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of Holdings, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows (all with segment information for Canadian operations
consistent with the 10-K filed by Holdings with the SEC for that fiscal year) as
of the end of and for such year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on by independent public
accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of Holdings and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP, followed by any management letter prepared by said
accountants;
(b) within 45 days after the end of each of the first three fiscal quarters of
Holdings, its consolidated balance sheet and related statements of operations
and cash flows (all with segment information for Canadian operations, consistent
with the 10-Q filed by Holdings with the SEC for that fiscal quarter) as of the
end of and for such fiscal quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of Holdings and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) within 30 days after the end of each fiscal month of Holdings, its
consolidated balance sheet and related statements of operations and cash flows
as of the end of and for such fiscal month and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of Holdings and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP (on a FIFO basis), subject to normal
year-end audit adjustments and the absence of footnotes;

 

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(d) concurrently with any delivery of financial statements under clause (a) or
(b) or (c) above, a certificate of a Financial Officer of the Administrative
Borrower in substantially the form of Exhibit D (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations demonstrating compliance
with Section 6.13 (if such compliance has been triggered pursuant to the terms
of this Agreement) and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;
(e) within 45 days of the filing thereof, copies of the Canadian Borrower’s
federal and provincial (if applicable) Canadian income Tax returns for the
Fiscal Year to which such financial statements in clause (a) apply;
(f) as soon as available, but in any event not more than 30 days following the
end of each fiscal year of the Borrowers, a copy of the plan and forecast
(including a projected consolidated balance sheet, income statement and funds
flow statement) of Holdings and its Subsidiaries on a consolidated basis for
each month of the upcoming fiscal year (the “Projections”) in form reasonably
satisfactory to the Administrative Agent;
(g) as soon as available but in any event within 20 days of the end of each
calendar month, and at such other times as may be necessary to re-determine
availability of Advances hereunder or as may be requested by the Administrative
Agent, as of the period then ended, a Borrowing Base Certificate and supporting
information in connection therewith, together with any additional reports with
respect to the Borrowing Base as the Administrative Agent may reasonably
request; and the PP&E Component of the Borrowing Base shall be updated (i) from
time to time upon receipt of periodic valuation updates received from the
Administrative Agent’s asset valuation experts, (ii) concurrent with the sale or
commitment to sell any material assets constituting part of the PP&E Component,
(iii) in the event such assets constituting a material part of the PP&E
Component are idled for any reason other than routine maintenance or repairs for
a period in excess of ten (10) consecutive days, or (iv) in the event that the
value of such assets is otherwise impaired, as determined in the Administrative
Agent’s Permitted Discretion; provided that (A) at the option of the Borrowers
at any time or (B) at the request of the Administrative Agent in the event that
either (x) an Event of Default has occurred and is continuing or
(y) Availability is less than $35,000,000 (subject to Availability increases to
more than $40,000,000 as set forth in Section 6.13), the reports required
pursuant to this clause will be delivered by Wednesday of each calendar week
(for the calendar week most recently ended) or more frequently;
(h) as soon as available but in any event within 20 days of the end of each
calendar month and at such other times as may be reasonably requested by the
Administrative Agent in its Permitted Discretion, as of the period then ended,
to the extent practicable delivered electronically in a text formatted file:
(i) a detailed aging of the Borrowers’ Accounts (1) including all invoices aged
by due date (with notation of the terms offered) and (2) reconciled to the
Borrowing Base Certificate delivered as of such date prepared in a manner
reasonably acceptable to the Administrative Agent, together with a summary
specifying the name and balance due for each Account Debtor;
(ii) a schedule detailing the Borrowers’ Inventory, in form reasonably
satisfactory to the Administrative Agent, (1) by location (showing Inventory in
transit, any Inventory located with a third party under any consignment, bailee
arrangement, or warehouse agreement), by class and by product type, which
Inventory shall be valued at the lower of cost (determined on a first-in,
first-out basis) or market and adjusted for Reserves as the Administrative Agent
has previously indicated to the Borrowers are deemed by the Administrative Agent
to be appropriate, (2) including a report of any variances or other results of
Inventory counts performed by the Borrowers since the last Inventory schedule
(including information regarding sales or other reductions, additions, returns,
credits issued by Borrowers and complaints and claims made against the
Borrowers), and (3) reconciled to the Borrowing Base Certificate delivered as of
such date;

 

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(iii) a worksheet of calculations prepared by the Administrative Borrower to
determine Eligible Accounts, Eligible Inventory and Eligible Equipment, such
worksheets detailing the Accounts, Inventory and Equipment excluded from
Eligible Accounts, Eligible Inventory and Eligible Equipment and the reason for
such exclusion; and
(iv) a reconciliation of the Borrowers’ Accounts and Inventory between the
amounts shown in the Borrowers’ general ledger and financial statements and the
reports delivered pursuant to clauses (i) and (ii) above;
provided that (A) at the option of the Borrowers at any time or (B) at the
request of the Administrative Agent in the event that either (x) an Event of
Default has occurred and is continuing or (y) Availability is less than
$35,000,000 (subject to Availability increases to more than $40,000,000 as set
forth in Section 6.13), the reports required pursuant to this clause will be
delivered by Wednesday of each calendar week (for the calendar week most
recently ended) or more frequently, provided that, with respect to the reports
required in clauses (i) and (ii) above, weekly reporting shall include only
summary schedules (and shall not include the report of variances required in
clause (ii)(2) above) unless the detailed schedules are specifically requested
by the Administrative Agent, with the detailed schedules continuing on a monthly
basis, and the reconciliation required under clause (iv) above shall been
delivered at all times on a monthly basis;
(i) as soon as available but in any event within 20 days of the end of each
calendar month, as of the month then ended, a schedule and aging of the
Borrowers’ accounts payable, to the extent practicable delivered electronically
in a text formatted file;
(j) promptly upon the Administrative Agent’s reasonable request:
(i) copies of invoices in connection with the invoices issued by any Borrower in
connection with any Accounts, credit memos, shipping and delivery documents, and
other information related thereto;
(ii) copies of purchase orders, invoices, and shipping and delivery documents in
connection with any Inventory or Equipment purchased by any Loan Party;
(iii) a schedule detailing the Borrowers’ Equipment comprising the PP&E
Component, in form satisfactory to the Administrative Agent, by location and
type; and
(iv) a schedule detailing the balance of all intercompany accounts of the Loan
Parties;
(k) promptly upon the Administrative Agent’s reasonable request, as of the
period then ended, copies of the Borrowers’ sales journals, cash receipts
journals (identifying trade and non-trade cash receipts) and debit memo/credit
memo journals;

 

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(l) promptly upon the Administrative Agent’s reasonable request, copies of
certain income Tax returns filed by any Loan Party with the U.S. Internal
Revenue Service or the Canada Revenue Agency, to be provided 45 days after
filing, if requested;
(m) promptly upon the Administrative Agent’s request, a certificate of good
standing or certificate of status, as applicable, for each Loan Party from the
appropriate governmental officer in its jurisdiction of incorporation,
formation, or organization;
(n) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by any Borrower or
any Subsidiary with the Securities and Exchange Commission, Securities
Commission of any Province of Canada or any Governmental Authority succeeding to
any or all of the functions of said Commission(s), or with any national
securities exchange, or distributed by any Borrower to its shareholders
generally, as the case may be;
(o) concurrently with the delivery of monthly Borrowing Base Certificates
pursuant to this Section 5.01 (and once monthly in the event that Borrowing Base
Certificates are delivered more frequently than monthly hereunder), a copy of
the prior month’s account statement provided by the depository bank to the
Borrowers for any bank account that contains amounts in trust for the payment of
Canadian tobacco tax liabilities; and
(p) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrowers will furnish to the
Administrative Agent prompt written notice of any of the following of which any
Borrower acquires knowledge:
(a) the occurrence of any Default;
(b) receipt of any notice of any governmental investigation or any litigation or
proceeding commenced or threatened against any Loan Party that (i) seeks damages
in excess of $5,000,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets, (iv) alleges
criminal misconduct by any Loan Party, (v) alleges the violation of any law
regarding, or seeks remedies in connection with, any Environmental Laws with
damages in excess of $5,000,000, or (vi) contests any tax, fee, assessment, or
other governmental charge in excess of $5,000,000;
(c) any Lien (other than Permitted Encumbrances) or claim made or asserted
against any of the Collateral in an amount in excess of $500,000;
(d) any loss, damage, or destruction to the Collateral in the amount of
$1,000,000 or more per occurrence, whether or not covered by insurance (for the
avoidance of any doubt, this provision excludes workers compensation, auto and
general liability claims);
(e) any and all default notices received under or with respect to any leased
location or public warehouse where Collateral is located;
(f) the fact that a Loan Party has entered into a Swap Agreement or an amendment
to a Swap Agreement, together with copies of all agreements evidencing such Swap
Agreement or amendments thereto (which shall be delivered within two Business
Days);

 

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(g) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of any Borrower and its Subsidiaries in an aggregate amount exceeding
$2,500,000; and
(h) any other development that results in, or would reasonably be expected to
result in, a Material Adverse Effect.
Each notice delivered under this Section (other than notices under clause
(f) unless reasonably requested by the Administrative Agent) shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Administrative Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will
cause each Subsidiary (other than inactive Subsidiaries that have no material
assets) to, (a) do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights,
qualifications, licenses, permits, franchises, governmental authorizations,
intellectual property rights, licenses and permits material to the conduct of
its business, and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted, provided that the
foregoing shall not prohibit any merger, amalgamation, consolidation,
liquidation or dissolution permitted under Section 6.03, and (b) carry on and
conduct its business in substantially the same fields of enterprise as it is
presently conducted and in substantially the same manner as it is presently
conducted except where a failure to do so would not reasonably be expected to
have a Material Adverse Effect.
SECTION 5.04. Payment of Obligations. Each Loan Party will, and will cause each
Subsidiary to, pay or discharge all Material Indebtedness and all other material
liabilities and obligations, including Taxes, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) none of the Collateral becomes subject
to forfeiture or loss as a result of the contest.
SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted, except in each case where a failure to do so would not reasonably be
expected to have a Material Adverse Effect.
SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (i) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (ii) permit any representatives
designated by the Administrative Agent (including employees of the
Administrative Agent or any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent), upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and (in the presence of such Loan Party) independent accountants, all at such
reasonable times and as often as reasonably requested. Any Lender may
participate, at such Lender’s own expense, in any examination conducted by the
Administrative Agent. The Loan Parties acknowledge that the Administrative
Agent, after exercising its rights of inspection, may prepare and distribute to
the Lenders certain Reports pertaining to the Loan Parties’ assets for internal
use by the Administrative Agent and the Lenders.
SECTION 5.07. Compliance with Laws. Except with respect to matters governed by
Section 5.04, each Loan Party will, and will cause each Subsidiary to, comply
with all Requirements of Law applicable to it or its property, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.

 

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SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only to
finance the working capital needs of the Borrowers in the ordinary course of
business, to refinance certain existing Indebtedness and for other general
business purposes of the Borrowers. No part of the proceeds of any Loan and no
Letter of Credit will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.
SECTION 5.09. Insurance. Each Loan Party will, and will cause each Subsidiary
to, maintain with financially sound and reputable carriers having a financial
strength rating of at least A+ by A.M. Best Company insurance in such amounts
and against such risks (including loss or damage by fire and loss in transit;
theft, burglary, pilferage, larceny, embezzlement, and other criminal
activities; business interruption; and general liability) and such other
hazards, as is customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations.
The Borrowers will furnish to the Administrative Agent, upon request,
information in reasonable detail as to the insurance so maintained.
SECTION 5.10. Casualty and Condemnation. The Borrowers (a) will furnish to the
Administrative Agent prompt written notice of any casualty or other insured
damage to any material portion of the Collateral or the commencement of any
action or proceeding for the taking of any material portion of the Collateral or
interest therein under power of eminent domain or by condemnation or similar
proceeding and (b) will ensure that the Net Proceeds of any such event (whether
in the form of insurance proceeds, condemnation awards or otherwise) are
collected and applied in accordance with the applicable provisions of this
Agreement and the Collateral Documents
SECTION 5.11. Appraisals and Field Examinations. At any time that the
Administrative Agent reasonably requests, the Borrowers and the Subsidiaries
will provide the Administrative Agent with appraisals or updates thereof of
their Inventory and Equipment and other Collateral from an appraiser selected
and engaged by the Administrative Agent, and prepared on a basis satisfactory to
the Administrative Agent, such appraisals and updates to include, without
limitation, information required by applicable law and regulations; provided,
however, that (a) if no Default or Event of Default has occurred and is
continuing, (i) only one such appraisal per calendar year of Inventory and one
such appraisal per calendar year of Equipment shall be at the sole expense of
the Loan Parties and (ii) only two field examinations of the Collateral and
business operations of the Borrowers per calendar year shall be at the sole
expense of the Loan Parties, and (b) upon the occurrence and during the
continuation of a Default or an Event of Default, the Administrative Agent may
conduct as many appraisals and field examinations as it deems appropriate in its
Permitted Discretion and each such appraisal or field examination shall be at
the sole expense of the Loan Parties.
SECTION 5.12. Depository Banks. Each Borrower and each Subsidiary (other than
inactive Subsidiaries) will maintain one or more of the Lenders or another
financial institution reasonably acceptable to the Administrative Agent as its
principal depository bank, including for the maintenance of operating,
administrative, cash management, collection activity, and other deposit accounts
for the conduct of its business.

 

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SECTION 5.13. Additional Collateral; Further Assurances. (a) Subject to
applicable law, each Borrower and each Subsidiary that is a Loan Party shall
cause each of its domestic and Canadian Subsidiaries formed or acquired after
the date of this Agreement in accordance with the terms of this Agreement to
become a Loan Party by executing the Joinder Agreement set forth as Exhibit E-1
hereto (the “Loan Party Joinder Agreement”). Notwithstanding the foregoing, if
the newly formed or acquired Subsidiary has assets that are to be included in
the Borrowing Base, such Subsidiary shall become a Borrower hereunder by
executing the Joinder Agreement set forth as Exhibit E-2 hereto (the “Borrower
Joinder Agreement” and collectively with the Loan Party Joinder Agreement, the
“Joinder Agreements”, and each individually a “Joinder Agreement”). Upon
execution and delivery thereof, each such Person (i) shall automatically become
either a Loan Guarantor or a Borrower, as appropriate in the reasonable judgment
of the Administrative Agent, hereunder and thereupon shall have all of the
rights, benefits, duties, and obligations in such capacity under the Loan
Documents and (ii) will grant Liens to the Administrative Agent, for the benefit
of the Administrative Agent and the Lenders, in any material property of such
Person which constitutes Collateral, including any material parcel of real
property located in the U.S. or Canada owned by such Person, except for Equity
Interests in a foreign subsidiary representing more than 65% of the total
combined voting power in such foreign subsidiary.

(b) Each Borrower and each Subsidiary that is a Loan Party will cause (i) 100%
of the issued and outstanding Equity Interests of each of its domestic and
Subsidiaries in Canada and (ii) 65% of the issued and outstanding Equity
Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2) in
each foreign Subsidiary (excluding Subsidiaries in Canada) directly owned by any
Loan Party to be subject at all times to a first priority, perfected Lien in
favor of the Administrative Agent pursuant to the terms and conditions of the
Loan Documents or other security documents as the Administrative Agent shall
reasonably request.
(c) Subject to the foregoing, each Loan Party will, and will cause each
Subsidiary to, execute and deliver, or cause to be executed and delivered, to
the Administrative Agent such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by law or which the
Administrative Agent may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to
ensure perfection and priority of the Liens created or intended to be created by
the Collateral Documents, all at the expense of the Loan Parties.
(d) If any material assets (including any real property or improvements thereto
or any interest therein) are acquired by any Borrower or any Subsidiary that is
a Loan Party after the Effective Date (other than assets constituting Collateral
under the Security Agreement that become subject to the Lien in favor of the
Security Agreement upon acquisition thereof), the Borrowers will notify the
Administrative Agent thereof, and, if requested by the Administrative Agent, the
Borrowers will cause such assets, except for Equity Interests in a foreign
subsidiary representing more than 65% of the total combined voting power in such
foreign subsidiary, to be subjected to a Lien securing the Secured Obligations
and will take, and cause the Subsidiary Loan Parties to take, such actions as
shall be necessary or reasonably requested by the Administrative Agent to grant
and perfect such Liens, including actions described in paragraph (c) of this
Section, all at the expense of the Loan Parties.

 

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ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under any
Loan Document have been paid in full and all Letters of Credit have expired or
terminated (or been cash collateralized or backstopped in a manner reasonably
satisfactory to the Administrative Agent) and all LC Disbursements shall have
been reimbursed, the Loan Parties covenant and agree, jointly and severally,
with the Lenders that:
SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) the Secured Obligations;
(b) Indebtedness existing on the date hereof (after giving effect to all
Borrowings made on the Effective Date) and set forth in Schedule 6.01;
(c) Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any
Borrower or any other Subsidiary, provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to any Borrower or any Subsidiary that is a
Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any
Borrower to any Subsidiary and Indebtedness of any Subsidiary that is a Loan
Party to any Subsidiary that is not a Loan Party shall be subordinated to the
Secured Obligations on terms reasonably satisfactory to the Administrative
Agent;
(d) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by any Borrower or any Subsidiary that is a Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject to
Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be
subordinated to the Secured Obligations of the applicable Subsidiary on the same
terms (if any) as the Indebtedness so Guaranteed is subordinated to the Secured
Obligations;
(e) Indebtedness which represents an extension, refinancing, or renewal of any
of the Indebtedness described in clauses (b), (h), (j) and (k) hereof; provided
that, (i) the principal amount of such Indebtedness is not increased, (ii) any
Liens securing such Indebtedness are not extended to any additional property of
any Loan Party, (iii) no Borrower that is not originally obligated with respect
to repayment of such Indebtedness is required to become obligated with respect
thereto, (iv) such extension, refinancing or renewal does not result in a
shortening of the average weighted maturity of the Indebtedness so extended,
refinanced or renewed, (v) the terms of any such extension, refinancing, or
renewal are not materially less favorable to the obligor thereunder than the
original terms of such Indebtedness, (vi) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Secured Obligations, then the terms and conditions of the refinancing, renewal,
or extension Indebtedness must include subordination terms and conditions that
are at least as favorable to the Administrative Agent and the Lenders as those
that were applicable to the refinanced, renewed, or extended Indebtedness, and
(vii) in the case of extensions, refinancings or renewals of Indebtedness
described in clause (l), the pro forma Fixed Charge Coverage Ratio required
under that clause has been maintained;
(f) Indebtedness owed to any person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
person, in each case incurred in the ordinary course of business;
(g) Indebtedness of any Borrower or any Subsidiary in respect of performance
bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each
case provided in the ordinary course of business;

 

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(h) Indebtedness secured by purchase money security interests, conditional sales
or other title retention agreements (including Capital Leases) with respect to
equipment, fixtures and/or facilities acquired by any Loan Party in the ordinary
course of business, provided that (a) any Liens securing such Indebtedness
attach only to the assets so acquired, (B) such Indebtedness is incurred no
later than ninety (90) days following the acquisition of such assets and does
not exceed 100% of the purchase price of such assets and (C) the aggregate
principal amount of such Indebtedness does not exceed $5,000,000 at any one time
outstanding;
(i) Indebtedness arising in connection with swaps, hedges and other derivative
transaction entered into in the ordinary course of business;
(j) Indebtedness under sale and leaseback transactions permitted by
Section 6.06; and
(k) in the event that Holdings and its consolidated Subsidiaries have a pro
forma Fixed Charge Coverage Ratio including the effect of proposed Indebtedness
(for the twelve month period ending on the last month-end prior to the date on
which proposed Indebtedness is incurred for which financial information is
available) of at least 1.1 to 1.0, other unsecured Indebtedness of the Borrowers
and the Subsidiaries in an aggregate principal amount not exceeding $75,000,000
at any time outstanding, which Indebtedness may include Indebtedness assumed or
acquired in connection with, or consisting of the deferred purchase price of,
any Permitted Acquisition.
SECTION 6.02. Liens. No Loan Party will, nor will it permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) Liens created pursuant to any Loan Document;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of any Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02 and any replacement Lien in
connection with the refinancing, replacement, renewal of the Indebtedness
underlying such Liens to the extent such Indebtedness is permitted by
Section 6.01; provided that (i) such Lien shall not apply to any other property
or asset of any Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved by any
Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by Section 6.01, (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of any Borrower or any
Subsidiary;
(e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by any Borrower or any Subsidiary or
existing on any property or asset (other than Accounts or Inventory) of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

 

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(f) Liens of a collecting bank arising in the ordinary course of business under
Section 4-208 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon;
(g) Liens arising out of sale and leaseback transactions permitted by
Section 6.06;
(h) Liens granted by a Subsidiary that is not a Loan Party in favor of any
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary; and
(i) Liens arising under operating leases on Equipment that does not constitute a
portion of the PP&E Component.
SECTION 6.03. Fundamental Changes. (a) No Loan Party will, nor will it permit
any Subsidiary to, merge/amalgamate into or consolidate with any other Person,
or permit any other Person to merge/amalgamate into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Event of Default shall have occurred and be continuing
(i) any Subsidiary of any Borrower may merge/amalgamate into such Borrower in a
transaction in which such Borrower is the surviving corporation, provided that
in order for the assets of such Subsidiary to be included in the Borrowing Base,
all eligibility requirement hereunder (including all appraisal and examination
requirements) must be met, (ii) any Loan Party (other than any Borrower) may
merge/amalgamate with any other Person in a transaction in which the surviving
entity is or becomes a Loan Party, provided that if such other Person is not a
Loan Party, the transaction must be permitted by Section 6.04, (iii) any
Borrower other than Holdings may merge/amalgamate into any other Borrower, and
(iv) any Subsidiary that is not a Loan Party may liquidate or dissolve if the
Borrowers determine in good faith that such liquidation or dissolution is in the
best interests of the Borrowers and is not materially disadvantageous to the
Lenders; provided that any such merger/amalgamation involving a Person that is
not a wholly owned Subsidiary immediately prior to such merger/amalgamation
shall not be permitted unless also permitted by Section 6.04.
(b) No Loan Party will, nor will it permit any of its Subsidiaries to, engage in
any business other than businesses of the type conducted by the Borrowers and
their Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto.
(c) Holdings will not engage in any business or activity other than the
ownership of all the outstanding shares of capital stock of its Subsidiaries and
activities incidental thereto. Holdings will not own or acquire any assets
(other than Equity Interests of its Subsidiaries and the cash proceeds of any
Restricted Payments permitted by Section 6.08).
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any Subsidiary to, purchase, hold or acquire
(including pursuant to any merger/amalgamation with any Person that was not a
Loan Party and a wholly owned Subsidiary prior to such merger/amalgamation) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit (whether through
purchase of assets, merger/amalgamation or otherwise), except:
(a) Permitted Investments, subject to control agreements in favor of the
Administrative Agent for the benefit of the Lenders or otherwise subject to a
perfected security interest in favor of the Administrative Agent for the benefit
of the Lenders;
(b) investments and guarantees in existence on the date of this Agreement and
described in Schedule 6.04, and replacements thereof on terms not materially
less favorable to the Loan Parties;

 

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(c) investments by the Borrowers and the Subsidiaries in Equity Interests in
their respective Subsidiaries, provided that (A) any such Equity Interests held
by a Loan Party shall be pledged pursuant to the Security Agreement (subject to
the limitations applicable to common stock of a Foreign Subsidiary referred to
in Section 5.12) and (B) the aggregate amount of investments by Loan Parties in
Subsidiaries that are not Loan Parties (together with outstanding intercompany
loans permitted under clause (B) to the proviso to Section 6.04(d) and
outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not
exceed $2,500,000 at any time outstanding (in each case determined without
regard to any write-downs or write-offs);
(d) loans or advances made by any Borrower to any Subsidiary and made by any
Subsidiary to any Borrower or any other Subsidiary, provided that (A) any such
loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Security Agreement and (B) the amount of such loans and
advances made by Loan Parties to Subsidiaries that are not Loan Parties
(together with outstanding investments permitted under clause (B) to the proviso
to Section 6.04(c) and outstanding Guarantees permitted under the proviso to
Section 6.04(e)) shall not exceed $2,500,000 at any time outstanding (in each
case determined without regard to any write-downs or write-offs);
(e) Guarantees constituting Indebtedness permitted by Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party shall (together with
outstanding investments permitted under clause (B) to the proviso to
Section 6.04(c) and outstanding intercompany loans permitted under clause (B) to
the proviso to Section 6.04(d)) shall not exceed $2,500,000 at any time
outstanding (in each case determined without regard to any write-downs or
write-offs);
(f) loans or advances made by a Loan Party to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $100,000 to any employee and up to a maximum of $2,500,000 in the
aggregate at any one time outstanding;
(g) other equity investments in customers and third party vendors in the
ordinary course of business in an aggregate amount not to exceed $2,500,000;
(h) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable,
or stock or other securities issued by Account Debtors to a Loan Party pursuant
to negotiated agreements with respect to settlement of such Account Debtor’s
Accounts in the ordinary course of business, consistent with past practices;
(i) investments in the form of Swap Agreements permitted by Section 6.07;
(j) investments of any Person existing at the time such Person becomes a
Subsidiary of any Borrower or consolidates or merges with any Borrower or any of
the Subsidiaries (including in connection with a Permitted Acquisition) so long
as such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;

 

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(k) investments received in connection with the dispositions of assets permitted
by Section 6.05;
(l) investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;
(m) in the event that at the date any Acquisition is made (i) Holdings and its
consolidated Subsidiaries have a pro forma Fixed Charge Coverage Ratio including
the effect of such Acquisition (for the twelve month period ending as of the
most recent month-end for which financial data is available) of at least 1.1 to
1.0 and (ii) the Borrowers have pro forma Availability of not less than
$40,000,000, Permitted Acquisitions; provided that promptly after making any
Permitted Acquisition, the Borrowers shall ensure that any assets acquired in
such Acquisition shall be subject to a perfected security interest in favor of
the Administrative Agent, subject only to Permitted Encumbrances and other Liens
permitted under the terms of this Agreement;
(n) any other Permitted Acquisition (determined without regard to clause (e) of
the definition of Permitted Acquisition), if at the effective time of such
Acquisition the Borrowers have pro forma Availability (on a 60-day look-back and
look-forward basis) of not less than $125,000,000; provided that promptly after
making any Permitted Acquisition, the Borrowers shall ensure that any assets
acquired in such Acquisition shall be subject to a perfected security interest
in favor of the Administrative Agent, subject only to Permitted Encumbrances and
other Liens permitted under the terms of this Agreement;
(o) any other investment made in exchange for, or with the proceeds of the
issuance of, any Equity Interests of Holdings; and
(p) loans or advances evidenced by notes receivable from Account Debtors entered
into in the ordinary course of the Borrowers’ business or other payments made to
customers in the ordinary course of the Borrowers’ business.
SECTION 6.05. Asset Sales. No Loan Party will, nor will it permit any Subsidiary
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will the Borrowers permit any Subsidiary to
issue any additional Equity Interest in such Subsidiary (other than to a
Borrower or another Subsidiary in compliance with Section 6.04), except:
(a) sales, transfers and dispositions of (i) inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property, or
equipment or property that is replaced, in the ordinary course of business;
(b) sales, transfers and dispositions to any Borrower or any Subsidiary,
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Loan Party shall be made in compliance with Section 6.09;
(c) sales, transfers and dispositions of accounts receivable in connection with
the compromise, settlement or collection thereof;
(d) sales, transfers and dispositions of investments permitted by clauses (g),
(i) and (k) of Section 6.04;
(e) sale and leaseback transactions permitted by Section 6.06;

 

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(f) dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of any Borrower or any Subsidiary; and
(g) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other paragraph of this Section, provided
that the aggregate fair market value of all assets sold, transferred or
otherwise disposed of in reliance upon this paragraph (g) shall not exceed
$1,000,000 during any calendar year;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (a)(ii), (b), (c) and
(f) above) shall be made for fair value.
SECTION 6.06. Sale and Leaseback Transactions. No Loan Party will, nor will it
permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any material property, real or personal, used
or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except for any such sale of any fixed or capital assets by any
Borrower or any Subsidiary that is made for cash consideration in an amount not
less than the fair value of such fixed or capital asset and is consummated
within 90 days after such Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset; provided that the Borrowers may
engage in a sale and leaseback of the real property located at 1055 Salt River
Road, Leitchfield, Kentucky.
SECTION 6.07. Swap Agreements. No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which any Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of any Borrower
or any of its Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of any Borrower or any
Subsidiary; provided that the Borrowers may enter into other types of Swap
Agreements in the ordinary course of business if the Borrowers have established
appropriate reserves with respect to such Swap Agreements as determined by the
Administrative Agent in its reasonable discretion.
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) No Loan
Party will, nor will it permit any Subsidiary to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except:
(i) each of the Borrowers may declare and pay dividends with respect to its
common stock payable solely in additional shares of its common stock, and, with
respect to its preferred stock, payable solely in additional shares of such
preferred stock or in shares of its common stock,
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
Equity Interests,
(iii) the Borrowers may make Restricted Payments, not exceeding $1,000,000
during any fiscal year, pursuant to and in accordance with stock option plans or
restricted stock plans for management or employees of the Borrowers and their
Subsidiaries,

 

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(iv) in the event that at the time of such Restricted Payment (A) Holdings and
its consolidated Subsidiaries have a pro forma Fixed Charge Coverage Ratio
including such Restricted Payment (for the twelve month period ending on the
most recent month-end for which financial data is available) of at least 1.1 to
1.0, (B) the Borrowers have pro forma Availability of not less than $40,000,000
and (C) no Default or Event of Default has occurred or would result therefrom,
Holdings may declare and pay cash dividends with respect to its capital stock in
an aggregate amount during the term of this Agreement not to exceed $75,000,000,
(v) the Borrowers may make stock repurchases in an aggregate amount during the
term of this Agreement not to exceed $10,000,000, and
(A) any Subsidiary or Borrower may make a Restricted Payment to any other
Borrower.
(b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to
pay or make, directly or indirectly, any payment or other distribution (whether
in cash, securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments as and when
due in respect of any Indebtedness, or prepayments of principal in connection
with assets sales permitted hereunder, other than payments in respect of the
Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iii) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) on the Effective Date, the Borrowers may prepay all amounts outstanding
under the current Tranche B Notes (including interest and applicable premium) in
an amount not to exceed $8,000,000 in the aggregate, replace all letters of
credit issued under the Tranche B Facility with Letters of Credit and pay all
charges relating to such replacement; and
(vi) payments made under the PCT Guarantee and the RCT Guarantee, if any.
SECTION 6.09. Transactions with Affiliates. No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates that
are not Loan Parties, except (a) transactions that (i) are in the ordinary
course of business and (ii) are at prices and on terms and conditions not less
favorable to such Borrower or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties, (b) transactions between or
among any Borrower and any Subsidiary that is a Loan Party not involving any
other Affiliate, (c) any investment permitted by Sections 6.04(c) or 6.04(d),
(d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment
permitted by Section 6.08, (f) loans or advances to employees permitted under
Section 6.04, (g) the payment of reasonable fees to directors of any Borrower or
any Subsidiary who are not employees of any Borrower or any Subsidiary, and
compensation and employee benefit arrangements paid to, and indemnities provided
for the benefit of, directors, officers or employees of any Borrower or its
Subsidiaries in the ordinary course of business and (h) any issuances of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment agreements, stock options and stock
ownership plans approved by any Borrower’s board of directors.

 

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SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Loan Party or any of its Subsidiaries to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any
Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary or any property pending such sale, provided such restrictions and
conditions apply only to the Subsidiary or property that is to be sold and such
sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof, and (vi) clause (a) of the foregoing shall
not apply to agreements that permit the Liens on the Collateral in favor of the
Administrative Agent under the Loan Documents, but prohibit other Liens.
SECTION 6.11. Amendment of Material Documents. No Loan Party will, nor will it
permit any Subsidiary to, amend, modify or waive any of its rights under (a) any
agreement relating to any Subordinated Indebtedness or (b) its certificate of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents, in each case to the extent any such amendment,
modification or waiver would reasonably be expected to be materially adverse to
the Lenders.
SECTION 6.12. Interest Deduction. The Canadian Borrower will not in any fiscal
year, without delivering to the Administrative Agent prior notice of such
proposed deduction and evidence of compliance with all Canadian withholding tax
requirements arising in connection with such proposed deduction, deduct any
interest or other amounts paid to the Administrative Agent in respect of the
Loans (excluding Canadian Revolving Loans and the Canadian Swingline Loans) in
computing its taxable income earned in Canada for purposes of the Income Tax Act
(Canada).
SECTION 6.13. Fixed Charge Coverage Ratio. In the event that at any time the
Borrowers have Availability less than $35,000,000, the Borrowers will not permit
the Fixed Charge Coverage Ratio of Holdings and its consolidated Subsidiaries,
determined as of the end of each fiscal quarter of Holdings (for the period of
four consecutive fiscal quarters ending on such date), beginning with the fiscal
quarter of Holdings most recently ended on the date that Availability was first
less than $35,000,000, to be less than 1.1 to 1.0; provided, however, that if,
at any time after this Section 6.13 has been triggered, the Borrowers maintain
(i) average Availability greater than or equal to $40,000,000 for a 90-day
period and (ii) Availability not less than $35,000,000 at all times during such
90-day period, the requirements of this Section 6.13 shall no longer be deemed
to be triggered.

 

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ARTICLE VII
Events of Default
If any of the following events (“Events of Default”) shall occur:
(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrowers (i) shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable or (ii) shall fail to pay the Administrative Agent or any Lender for any
out-of-pocket expenses owed to a third party payable under and arising in
connection with the Loan Documents within 5 days of the due date thereof;
(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in or in connection with this Agreement or any Loan
Document or any amendment or modification thereof or waiver thereunder, or in
any report, certificate (including, without limitation, any Borrowing Base
Certificate), financial statement or other document furnished pursuant to or in
connection with this Agreement or any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been materially
incorrect when made or deemed made;
(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.01(g), 5.02(a), 5.03 (with respect to a Loan
Party’s existence), 5.08, 6.03, 6.05, 6.06, 6.12 or 6.13 of this Agreement or in
Section 4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.11 or 4.12 or Article VII of the
Security Agreement;
(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement, the Security Agreement or any other Loan
Document (other than those which constitute a default under another Section of
this Article), and such failure shall continue unremedied for a period of (i) 10
Business Days after the earlier of the date on which an officer of any Loan
Party obtains knowledge of such breach or notice thereof from the Administrative
Agent (which notice will be given at the request of the Required Lenders) if
such breach relates to terms or provisions of Section 5.01 (other than
Section 5.01(g)), 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.09,
5.10 or 5.12 of this Agreement or Section 4.1 (other than Section 4.1(a) through
4.1(d)), 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.13, 4.14, 4.15 or 4.16 of the
Security Agreement or (ii) 15 Business Days after the earlier of the date on
which an officer of any Loan Party obtains knowledge of such breach or notice
thereof from the Administrative Agent (which notice will be given at the request
of the Required Lenders) if such breach relates to terms or provisions of any
other Section of this Agreement, the Security Agreement or any other Loan
Document;
(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable, and as a
result, or as a result of any other event or condition occurs, any Material
Indebtedness becomes or is declared due prior to its scheduled maturity;
provided that this clause (f) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary petition or
proposal shall be filed seeking (i) liquidation, reorganization, consolidation
or other relief in respect of a Loan Party or any Subsidiary of any Loan Party
or its debts, or of a substantial part of its assets, or which seeks a stay or
has the effect of staying any creditor, under any federal, state, provincial or
foreign bankruptcy, insolvency, receivership , liquidation, winding up,
corporate or similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, monitor, sequestrator, conservator, administrator
or similar official for any Loan Party or any Subsidiary of any Loan Party or
for a substantial part of its assets, and, in any such case, such proceeding,
petition or proposal shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;

 

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(h) any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily
commence any proceeding or file any petition, proposal or intent to file a
proposal seeking liquidation, reorganization, consolidation or other relief
under any federal, state, provincial or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding, petition, proposal or intent to file a proposal described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, monitor, sequestrator, conservator, administrator
or similar official for such Loan Party or Subsidiary of any Loan Party or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition or proposal filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(i) any Loan Party or any Subsidiary of any Loan Party shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
(j) one or more judgments for the payment of money in an aggregate amount in
excess of $2,500,000 which is not covered by insurance (or an indemnity for
which the obligor thereunder has admitted liability and, in the Administrative
Agent’s reasonable estimation, has the ability to pay) shall be rendered against
any Loan Party, any Subsidiary of any Loan Party or any combination thereof and
the same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of any Loan Party
or any Subsidiary of any Loan Party to enforce any such judgment or any Loan
Party or any Subsidiary of any Loan Party shall fail within 30 days to discharge
one or more non-monetary judgments or orders which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect, and
which judgments or orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by proper proceedings
diligently pursued;
(k) (x) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to either (i) result in a Material Adverse Effect
or (ii) result in liability of any Borrower and its Subsidiaries in an aggregate
amount exceeding $2,500,000 for all periods, or (y) any Lien arises in
connection with any Plan;
(l) a Change in Control shall occur;
(m) the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken by any Loan Party to discontinue or to assert the invalidity or
unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail in any
material respect to comply with any of the material terms or provisions of the
Loan Guaranty to which it is a party, or any Loan Guarantor shall deny that it
has any further liability under the Loan Guaranty to which it is a party, or
shall give notice to such effect;

 

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(n) (i) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral having an aggregate
value in excess of $500,000 purported to be covered thereby, except as permitted
by the terms of this Agreement or (ii) any Collateral Document, or any
Collateral Document shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
any Collateral Document, or (iii) any Loan Party shall fail to comply in any
material respect with any of the material terms or provisions of any Collateral
Document and in the case of this clause (iii), such failure shall continue
unremedied for a period of 10 Business Days after the earlier of the date on
which an officer of any Loan Party obtains knowledge of such breach or notice
thereof from the Administrative Agent; or
(o) any material provision of this Agreement or any material Loan Document for
any reason ceases to be valid, binding and enforceable in accordance with its
terms (or any Loan Party shall challenge the enforceability of this Agreement or
any material Loan Document or shall assert in writing, or engage in any action
or inaction based on any such assertion, that any provision of any of this
Agreement or any of the other material Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms);
or
(p) any Loan Party is criminally indicted or convicted under any law and such
indictment or conviction would, in the Administrative Agent’s reasonably
determination, be likely to result in a Material Adverse Effect;
then, and in every such event (other than an event with respect to any Borrower
described in clause (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrowers, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrowers;
and in case of any event with respect to any Borrower described in clause (g) or
(h) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrowers accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers. Upon
the occurrence and the continuance of an Event of Default, the Administrative
Agent may, and at the request of the Required Lenders shall, exercise any rights
and remedies provided to the Administrative Agent under the Loan Documents or at
law or equity, including all remedies provided under the UCC, the PPSA, the BIA
or the Companies’ Creditors Arrangement Act (Canada).
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder 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 Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Loan Parties or any Subsidiary of a Loan Party
or other Affiliate thereof as if it were not the Administrative Agent hereunder.

 

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The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent 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 Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Loan Party or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrowers or a Lender, and the Administrative 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 hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative 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 believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative 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 the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

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Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a commercial bank
or an Affiliate of any such commercial bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the Administrative Agent’s resignation
hereunder, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.
Each Lender hereby agrees that (a) it has requested a copy of each Report
prepared by or on behalf of the Administrative Agent; (b) the Administrative
Agent (i) makes no representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or omission contained in or relating to a Report and
(ii) shall not be liable for any information contained in any Report; (c) the
Reports are not comprehensive audits or examinations, and that any Person
performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of the Loan Parties’ personnel
and that the Administrative Agent undertakes no obligation to update, correct or
supplement the Reports; (d) it will keep all Reports confidential and strictly
for its internal use, not share the Report with any Loan Party or any other
Person except as otherwise permitted pursuant to this Agreement; and (e) without
limiting the generality of any other indemnification provision contained in this
Agreement, it will pay and protect, and indemnify, defend, and hold the
Administrative Agent and any such other Person preparing a Report harmless from
and against, the claims, actions, proceedings, damages, costs, expenses, and
other amounts (including reasonable attorney fees) incurred by as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
The Syndication Agents and the Documentation Agents shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such.
Each Lender (including, without limitation, any assignee or transferee of all or
any part of any of the Obligations owing by any Borrower) that is not a United
States Person (as such term is defined in Section 7701(a)(30) of the Code) shall
deliver to the Administrative Agent two original copies (one for the Borrowers)
of:
(i) properly completed IRS Form W-8BEN before the payment of any interest in the
first calendar year and before the payment of any interest in each third
succeeding calendar year (if it is then permitted to do so under law) during
which interest may be paid to such Lender under this Agreement properly claiming
such Lender is eligible for an exemption from or a reduction of withholding tax
under a United States of America tax treaty or a provision of the Code or the
regulations thereunder;

 

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(ii) properly completed IRS Form W-8ECI before the payment of any interest is
due in the first taxable year of such Lender and in each succeeding taxable year
(if it is then permitted to do so under law) of such Lender during which
interest may be paid to such Lender under this Agreement properly claiming such
Lender is exempt from United States of America withholding tax or interest paid
under this Agreement because it is effectively connected with a United States of
America trade or business of such Lender; or
(iii) such other form or forms as may be required under the Code or other laws
of the United States of America (if it is then permitted to do so under law) as
a condition to exemption from, or reduction of, United States of America
withholding tax.
Such Lender agrees to promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
If any Lender claims exemption from, or reduction of, withholding tax under a
United States of America tax treaty by providing IRS Form W-8BEN and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations owing to such Lender, pursuant to Section 9.04 hereof, such
Lender agrees to notify the Administrative Agent of the percentage amount in
which it is no longer the beneficial owner of the respective Obligations of the
Borrowers to such Lender. To the extent of such percentage amount, the
Administrative Agent will treat such Lender’s IRS Form W-8BEN as no longer
valid.
Each Canadian Lender (including, without limitation, any assignee or transferee
of all or any part of any of the Obligations owing by the Canadian Borrower)
that is not a Canadian resident, or an “authorized foreign bank” (as such term
is defined in the Income Tax Act (Canada)), for Canadian tax purposes shall
deliver to the Administrative Agent (if it is then permitted to do so under law)
two original copies (one for the Borrower) of such other form or forms as may be
required under a Canadian tax treaty or any provision of Canadian federal or
provincial law as a condition to or exemption from, or reduction of, Canadian
withholding tax, if such Lender is so qualified. Such Canadian Lender agrees to
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.
If any Lender is entitled to a reduction in the applicable withholding tax, the
Administrative Agent (acting through its Canada Branch or otherwise) may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) or subsection (c), as
applicable, of this Section are not delivered to the Administrative Agent
(acting through its Canada Branch or otherwise), then the Administrative Agent
(acting through its Canada Branch or otherwise) may withhold from any interest
payment to such Lender not providing such forms or other documentation an amount
equivalent to the applicable withholding tax.
If the IRS or any other Governmental Authority of the United States of America
or other jurisdiction asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as Tax or otherwise, including penalties and interest, and
including any Taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, together with all costs and expenses
(including reasonable attorneys’ fees and expenses). The obligation of the
Lenders under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Administrative Agent.

 

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Each Canadian Lender hereby certifies that it is an “authorized foreign bank” as
defined in the Income Tax Act (Canada) and it holds its interest in the Canadian
Loans in the course of its “Canadian banking business” as defined in the Income
Tax Act (Canada).
The Canadian Funding Bank, to the extent any of its functions, actions or
obligations under this Agreement, including, the administration of any Loans,
shall be afforded the same protections, agreements, etc. available to the
Administrative Agent under this Article VIII.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:

  (i)   if to any Loan Party, to the Administrative Borrower at:

Core-Mark International, Inc.
395 Oyster Point Blvd. #415
South San Francisco, California 94080
Attention: Treasurer
Facsimile No: (650) 589-4010

  (ii)   if to the Administrative Agent, the Issuing Bank, the Swingline Lender
or the Canadian Swingline Lender, to Chase at:

JPMorgan Chase Bank, N.A.
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: Courtney Jeans
Facsimile No: (214) 965-4731)

  (iii)   if to any other Lender, to it at its address or facsimile number set
forth in its Administrative Questionnaire.

 

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All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient.
(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications (including e-mail and internet or
intranet websites) pursuant to procedures approved by the Administrative Agent
and the Canadian Funding Bank, as applicable; provided that the foregoing shall
not apply to notices pursuant to Article II or to compliance and no Event of
Default certificates delivered pursuant to Section 5.01(d) unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative
Agent or the Borrowers (on behalf of the Loan Parties) may, in their discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. All such
notices and other communications (i) 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), provided that if not given
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) 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 (b)(i) of
notification that such notice or communication is available and identifying the
website address therefor.
(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder and under any other Loan Document are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except (i) in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders or, (ii) in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce or forgive the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive
any interest or fees payable hereunder, without the written consent of each
Lender affected thereby, (iii) postpone any scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any date for the payment of
any interest, fees or other Obligations payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (d) in a manner that would
alter the manner in which payments are shared, without the written consent of
each Lender, (v) increase the advance rates set forth in the definition of
Borrowing Base, add new categories of eligible assets or make less restrictive
the non-discretionary criteria for the exclusion of eligible assets, without the
written consent of each Revolving Lender, (vi) change

 

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any of the provisions of this Section or the definitions of “Required Lenders”
or “Supermajority Revolving Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender, (vii) release any Loan Guarantor from its obligation under its Loan
Guaranty (except as otherwise permitted herein or in the other Loan Documents),
without the written consent of each Lender, or (viii) except as provided in
clauses (c) and (d) of this Section or in any Collateral Document, release a
portion of the Collateral valued in the aggregate in excess of $50,000,000
during any calendar year, without the written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Issuing Bank, the Canadian
Funding Bank, the Swingline Lender or the Canadian Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank,
the Swingline Lender or the Canadian Swingline Lender, as the case may be. The
Administrative Agent may also amend the Commitment Schedule to reflect
assignments entered into pursuant to Section 9.04.
(c) The Lenders hereby irrevocably authorize the Administrative Agent, at its
option and in its reasonable discretion, to release any Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (i) upon the
termination of all Commitments, payment and satisfaction in full in cash of all
Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner satisfactory to
the Administrative Agent, (ii) constituting property being sold or disposed of
if the Loan Party disposing of such property certifies to the Administrative
Agent that the sale or disposition is made in compliance with the terms of this
Agreement (and the Administrative Agent may rely conclusively on any such
certificate, without further inquiry), (iii) constituting property leased to a
Loan Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, or (iv) as required to effect any sale or other
disposition of such Collateral in connection with any exercise of remedies of
the Administrative Agent and the Lenders pursuant to Article VII. Except as
provided in the preceding sentence, the Administrative Agent will not release
any Liens on Collateral without the prior written authorization of the Required
Lenders; provided that, the Administrative Agent may in its discretion, release
its Liens on Collateral valued in the aggregate not in excess of $2,500,000
during any calendar year without the prior written authorization of the Required
Lenders. Any such release shall not in any manner discharge, affect, or impair
the Obligations or any Liens (other than those expressly being released) upon
(or obligations of the Loan Parties in respect of) all interests retained by the
Loan Parties, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(d) If, in connection with any proposed amendment, waiver or consent requiring
the consent of “each Lender” or “each Lender affected thereby,” the consent of
the Required Lenders is obtained, but the consent of other necessary Lenders is
not obtained (any such Lender whose consent is necessary but not obtained being
referred to herein as a “Non-Consenting Lender”), then the Borrowers may elect
within thirty (30) days after the failure to obtain such consent, with the
written consent of the Administrative Agent which written consent shall not be
unreasonably delayed or withheld, to replace a Non-Consenting Lender as a Lender
party to this Agreement, provided that, concurrently with such replacement,
(i) another bank or other entity which is reasonably satisfactory to the
Borrowers and the Administrative Agent shall agree, as of such date, to purchase
for cash the Loans and other Obligations due to the Non-Consenting Lender
pursuant to an Assignment and Assumption and to become a Lender for all purposes
under this Agreement and to assume all obligations of the Non-Consenting Lender
to be terminated as of such date and to comply with the requirements of clause
(b) of Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting
Lender in same day funds on the day of such replacement all interest, fees and
other amounts then accrued but unpaid to such Non-Consenting Lender by the
Borrowers hereunder to and including the date of termination, including without
limitation payments due to such Non-Consenting Lender under Sections 2.15 and
2.17, provided that the Borrowers shall not be obligated to make any payment to
such Lender on the day of such replacement under Section 2.16.

 

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SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication and
distribution (including, without limitation, via the internet or through a
service such as Intralinks) of the credit facilities provided for herein, the
preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions of the Loan Documents (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (iii) all reasonable out-of-pocket expenses
incurred by the Administrative Agent or the Issuing Bank (including with respect
to the Existing Letters of Credit), including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or the Issuing Bank,
in connection with the enforcement, collection or protection of its rights in
connection with the Loan Documents, including its rights under this Section,
including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit, (iv) after the occurrence and during the continuance of a Default or an
Event of Default, all reasonable out-of-pocket expenses incurred by any Lender,
including the reasonable fees, charges and disbursements of any counsel for such
Lender, in connection with the enforcement, collection or protection of its
rights in connection with the Loan Documents, including its rights under this
Section, including all such reasonable out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or Letters
of Credit, and (v) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or the Issuing Bank, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent or the Issuing
Bank, in connection with the Loans made or Letters of Credit issued hereunder.
Expenses being reimbursed by the Borrowers under this Section include, without
limiting the generality of the foregoing and subject to the terms of this
Agreement, reasonable costs and expenses incurred in connection with:
(i) appraisals;
(ii) field examinations and the preparation of Reports based on (A) the fees
charged by a third party retained by the Administrative Agent or (B) the
internally allocated fees for each Person employed by the Administrative Agent
with respect to each field examination, including field examination fees equal
to $850 per day per examiner (plus reasonable out-of-pocket-expenses);
(iii) lien and title searches and title insurance;
(iv) taxes, fees and other charges for filing financing statements and
continuations, and other actions necessary or appropriate to perfect, protect,
and continue the Administrative Agent’s Liens;
(v) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take as required; and
(vi) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.

 

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All of the foregoing costs and expenses may be charged to the Borrowers as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).

(b) The Borrowers shall indemnify the Administrative Agent, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, penalties, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, reasonably incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) in the case
of the Administrative Agent, the Issuing Bank and their Related Parties, the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) the case of the Administrative Agent, the
Issuing Bank and their Related Parties, any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to any
Borrower or any of its Subsidiaries, 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 and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
penalties, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required to be paid
by them to the Administrative Agent, the Issuing Bank, the Canadian Funding
Bank, the Swingline Lender or the Canadian Swingline Lender under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Issuing Bank, the Swingline Lender or the Canadian
Swingline Lender, as the case may be, such Lender’s Applicable Percentage or
Canadian Applicable Percentage, as applicable, (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, penalty, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent, the Canadian Funding
Bank, the Issuing Bank, the Swingline Lender or the Canadian Swingline Lender in
its capacity as such.
(d) To the extent permitted by applicable law, no Loan Party shall assert, and
each hereby waives, any claim against any Indemnitee, 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, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after written
demand therefor.

 

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SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) no Borrower
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by any Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:
(A) the Administrative Borrower, provided that no consent of the Administrative
Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender (other than an assignment by a Canadian Lender to a Lender or an
Affiliate which is not a resident of Canada, or an “authorized foreign bank” for
purposes of the Income Tax Act (Canada)) or an Approved Fund or, if a Default or
an Event of Default has occurred and is continuing, any other assignee;
(B) the Administrative Agent; and
(C) the Issuing Bank.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Administrative Borrower and the Administrative Agent otherwise consent, provided
that no such consent of the Administrative Borrower shall be required if an
Event of Default has occurred and is continuing;
(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) (i) no Lender (who is not a Canadian Lender) shall assign all or any part of
its Commitment or US domestic Loans unless such Lender’s related Affiliate
assigns the same percentage of its Canadian Revolving Commitment and Canadian
Revolving Loans to the same assignee (or related Affiliate of the same
assignee), (ii) no Canadian Lender shall assign all or any part of its Canadian
Revolving Commitment or Canadian Revolving Loans unless such Lender’s related
Affiliate assigns the same percentage of its US Commitment and US domestic Loans
to the same assignee (or related Affiliate of the same assignee),
(D) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and
(E) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and any tax forms required
by Section 2.17(e).

 

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For the purposes of this Section 9.04(b), the term “Approved Fund” means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(iv) Notwithstanding the foregoing, the Swingline Lender shall not be permitted
to make a partial assignment of the Swingline Loans and the Canadian Swingline
Lender shall not be permitted to make a partial assignment of the Canadian
Swingline Loans. Notwithstanding anything contained in this Agreement to the
contrary, (i) no assignee of a Canadian Lender shall be permitted to seek any
indemnification for, or the payment of, any Indemnified Taxes or Other Taxes
described in Section 2.17 hereof or any penalties, interest and reasonable
expenses arising therefrom or with respect thereto from the Canadian Borrower,
unless amounts payable to the Lender from which the assignee received its
assignment (the “assignor”) would have also been subject to, or such assignor
would have also been required to pay, such Indemnified Taxes or Other Taxes and
(ii) no assignee of a Lender (who is not a Canadian Lender) shall be permitted
to seek any indemnification for, or the payment of, any Indemnified Taxes or
Other Taxes described in Section 2.17 hereof or any penalties, interest and
reasonable expenses arising therefrom or with respect thereto from the
Borrowers, unless amounts payable to the assignor would have also been subject
to, or such assignor would have also been required to pay, such Indemnified
Taxes or Other Taxes; provided, however, that the limitations contained in this
Section shall not apply to any assignees who are assigned their interests
hereunder after a Default or Event of Default.
(v) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders (and any changes thereto, whether by assignment or
otherwise), and the Commitment of, and principal amount of the Loans and LC
Disbursements and interest thereon owing to and paid to, each Lender pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive absent manifest error, and the Borrowers, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

 

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(vi) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e),
2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrowers, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, each Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15, 2.16 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers’
prior written consent. A Participant (A) in the case of a participant that would
be a Foreign Lender if it were a Lender, shall not be entitled to the benefits
of Section 2.17 unless the Borrowers are notified of the participation sold to
such Participant, and (B) such Participant agrees, for the benefit of the
Borrowers, to comply with Section 2.17(e) as though it were a Lender. For
greater certainty, any Canadian Lender that intends to sell a participation to a
Person which is not a resident of Canada or an “authorized foreign bank” (for
purposes of the Income Tax Act (Canada)) shall give prior written notice thereof
to the Canadian Borrower. No Lender (who is not a Canadian Lender) shall sell
any participation in its US Commitments or US domestic Loans unless such
Lender’s related Affiliate sells a participation interest of an equal percentage
of its Canadian Revolving Commitment and Canadian Revolving Loans to the same
Participant or a related Affiliate of such Participant, and no Canadian Lender
shall sell any participation in its Canadian Revolving Commitments or Canadian
Revolving Loans unless such Lender (or its related Affiliate) sells an equal
percentage of its US Commitment and US domestic Loans to the same Participant or
a related Affiliate of such Participant.

 

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(iii) Each Lender having sold a participation in any of its Obligations, acting
solely for this purpose as agent for the Borrowers, shall maintain a register
for the recordation of the names and addresses of such Participants (and each
change thereto, whether by assignment or otherwise) and the rights, interests or
Obligations of such Participants in any Obligation, in any Commitment and in any
right to receive any payments hereunder.
(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
has not been cash collateralized or back-stopped and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and
9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

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SECTION 9.07. Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of any Borrower or any
Loan Guarantor against any of and all the Secured Obligations held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under the Loan Documents and although such obligations may be unmatured. The
applicable Lender shall notify the Borrowers and the Administrative Agent of
such set-off or application, provided that any failure to give or any delay in
giving such notice shall not affect the validity of any such set-off or
application under this Section. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process;
Judicial Reference. (a) The Loan Documents (other than those containing a
contrary express choice of law provision) shall be governed by and construed in
accordance with the laws of the State of New York, but giving effect to federal
laws applicable to national banks.
(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any U.S. Federal or New
York State court sitting in New York, New York in any action or proceeding
arising out of or relating to any Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Loan Party or its properties in the
courts of any jurisdiction.
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court (including US and Canadian courts) referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
(e) If any action or proceeding is filed in a court of the State of California
by or against any party hereto in connection with any of the transactions
contemplated by this Agreement or any document related hereto, (a) the court
shall, and is hereby directed to, make a general reference pursuant to
California Code of Civil Procedure Section 638 to a referee or referees to hear
and determine all of the issues in such action or proceeding (whether of fact or
of law) and to report a statement of decision, provided that at the option of
Lender, any such issues pertaining to a “provisional remedy” as defined in
California Code of Civil Procedure Section 1281.8 shall be heard and determined
by the court, and (b) the Borrowers shall be solely responsible to pay all fees
and expenses of any referee appointed in such action or proceeding.

 

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SECTION 9.10. WAIVER OF JURY TRIAL. 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 AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). 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 WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors who need to know such information (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority following notice to the Borrowers of such request by the
Administrative Agent and an opportunity for the Borrowers to protest to such
regulatory authority if practicable, (c) to the extent required by Requirement
of Law or by any subpoena or similar legal process following notice to the
Borrowers of such requirement by the Administrative Agent and an opportunity for
the Borrowers to contest if practicable, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Loan Parties and their obligations,
(g) with the consent of the Borrowers, (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis from a source other than the Borrowers,
and (i) to a Lender’s regulatory authorities in the course of any examination of
its books and records. For the purposes of this Section, “Information” means all
information received from the Borrowers relating to any Borrower or its
business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by any Borrower; provided that, in the case of information
received from any Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

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SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. Each Lender
hereby represents that it is not relying on or looking to any margin stock for
the repayment of the Borrowings provided for herein. Anything contained in this
Agreement to the contrary notwithstanding, neither the Issuing Bank nor any
Lender shall be obligated to extend credit to the Borrowers in violation of any
Requirement of Law.
SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies the Borrowers, which information includes the name and address
of the Borrowers and other information that will allow such Lender to identify
the Borrowers in accordance with the Act.
SECTION 9.15. Disclosure. Each Loan Party and each Lender hereby acknowledges
and agrees that the Administrative Agent and/or its Affiliates from time to time
may hold investments in, make other loans to or have other relationships with
any of the Loan Parties and their respective Affiliates.
SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Lenders, in assets which, in accordance with
Article 9 of the UCC, the PPSA or any other applicable law can be perfected only
by possession. Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver such Collateral to the Administrative Agent or otherwise deal with
such Collateral in accordance with the Administrative Agent’s instructions.
SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.18. Judgment Currency. If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency in
which it is due (the “Original Currency”) into another currency (the “Second
Currency”), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, the Administrative Agent could purchase in the
Chicago foreign exchange market, the Original Currency with the Second Currency
on the date two (2) Business Days preceding that on which judgment is given.
Each Borrower agrees that its obligation in respect of any Original Currency due
from it hereunder shall, notwithstanding any judgment or payment in such other
currency, be discharged only to the extent that, on the date the Lender receives
payment of any sum so adjudged to be due hereunder in the Second Currency, the
Administrative Agent may, in accordance with normal banking procedures,
purchase, in the Chicago foreign exchange market, the Original Currency with the
amount of the Second Currency so paid; and if the amount of the Original
Currency so purchased or could have been so purchased is less than the amount
originally due in the Original Currency, each Borrower agrees as a separate
obligation and notwithstanding any such payment or judgment to indemnify the
Administrative Agent against such loss. The term “rate of exchange” in this
Section 9.18 means the spot rate at which the Administrative Agent, in
accordance with normal practices, is able on the relevant date to purchase the
Original Currency with the Second Currency, and includes any premium and costs
of exchange payable in connection with such purchase.

 

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ARTICLE X
Loan Guaranty
SECTION 10.01. Guaranty. Each Loan Guarantor hereby agrees that it is jointly
and severally liable for, and, as primary obligor and not merely as surety,
absolutely and unconditionally guarantees to the Lenders the prompt payment when
due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all reasonable costs and
expenses including, without limitation, all court costs and reasonable
attorneys’ and paralegals’ fees and expenses paid or incurred after the
occurrence and during the continuance of an Event of Default by the
Administrative Agent, any Lender and the Issuing Bank in endeavoring to collect
all or any part of the Secured Obligations from, or in prosecuting any action
against, any Borrower, any Loan Guarantor or any other guarantor of all or any
part of the Secured Obligations (such costs and expenses, together with the
Secured Obligations, collectively the “Guaranteed Obligations”). Each Loan
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of any Lender that
extended any portion of the Guaranteed Obligations.
SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment
and not of collection. Each Loan Guarantor waives any right to require the
Administrative Agent, the Issuing Bank or any Lender to sue any Borrower, any
Loan Guarantor, any other guarantor, or any other person obligated for all or
any part of the Guaranteed Obligations (each, an “Obligated Party”), or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as
otherwise provided for herein, the obligations of each Loan Guarantor hereunder
are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations or a signed waiver or release
executed by the Administrative Agent), including: (i) any claim of waiver,
release, extension, renewal, settlement, surrender, alteration, or compromise of
any of the Guaranteed Obligations, by operation of law or otherwise other than
as written; (ii) any change in the corporate existence, structure or ownership
of any Borrower or any other guarantor of or other person liable for any of the
Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Obligated Party other than such Loan
Guarantor, or their assets or any resulting release or discharge of any
obligation of any Obligated Party other than such Loan Guarantor; or (iv) the
existence of any claim, setoff or other rights which any Loan Guarantor may have
at any time against any Obligated Party, the Administrative Agent, the Issuing
Bank, any Lender, or any other person, whether in connection herewith or in any
unrelated transactions.

 

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(b) The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.
(c) Further, the obligations of any Loan Guarantor hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of the Administrative
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy with respect to all or any part of the Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision
of any agreement relating to the Guaranteed Obligations; (iii) any release,
non-perfection, or invalidity of any indirect or direct security for the
obligations of the Borrowers for all or any part of the Guaranteed Obligations
or any obligations of any other guarantor of or other person liable for any of
the Guaranteed Obligations; (iv) any action or failure to act by the
Administrative Agent, the Issuing Bank or any Lender with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Loan Guarantor
or that would otherwise operate as a discharge of any Loan Guarantor as a matter
of law or equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).
SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of any Borrower or any Loan Guarantor or the unenforceability of all
or any part of the Guaranteed Obligations from any cause, or the cessation from
any cause of the liability of any Borrower or any Loan Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Loan Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Obligated Party,
or any other person. The Administrative Agent may, at its election, foreclose on
any Collateral held by it by one or more judicial or nonjudicial sales, accept
an assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Loan Guarantor under
this Loan Guaranty except to the extent the Guaranteed Obligations have been
fully and indefeasibly paid in cash. To the fullest extent permitted by
applicable law, each Loan Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of any Loan Guarantor against any Obligated Party or any security.
SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Administrative Agent, the Issuing Bank and the
Lenders.
SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment
of any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Borrower or otherwise, each Loan Guarantor’s obligations under this Loan
Guaranty with respect to that payment shall be reinstated at such time as though
the payment had not been made and whether or not the Administrative Agent, the
Issuing Bank and the Lenders are in possession of this Loan Guaranty. If
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all
such amounts otherwise subject to acceleration under the terms of any agreement
relating to the Guaranteed Obligations shall nonetheless be payable by the Loan
Guarantors forthwith on demand by the Lender.

 

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SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of the Borrowers’ financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
neither the Administrative Agent, the Issuing Bank nor any Lender shall have any
duty to advise any Loan Guarantor of information known to it regarding those
circumstances or risks.
SECTION 10.08. Termination. The Lenders may continue to make loans or extend
credit to the Borrowers based on this Loan Guaranty until five days after it
receives written notice of termination from any Loan Guarantor. Notwithstanding
receipt of any such notice, each Loan Guarantor will continue to be liable to
the Lenders for any Guaranteed Obligations created, assumed or committed to
prior to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for,
all or any part of that Guaranteed Obligations.
SECTION 10.09. [Intentionally omitted.]
SECTION 10.10. Maximum Liability. The provisions of this Loan Guaranty are
severable, and in any action or proceeding involving any state or provincial
corporate law, or any state, provincial, federal or foreign bankruptcy,
insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of any Loan Guarantor under this Loan Guaranty
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of such Loan Guarantor’s liability under this Loan
Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the
contrary, the amount of such liability shall, without any further action by the
Loan Guarantors or the Lenders, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the relevant Loan
Guarantor’s “Maximum Liability”. This Section with respect to the Maximum
Liability of each Loan Guarantor is intended solely to preserve the rights of
the Lenders to the maximum extent not subject to avoidance under applicable law,
and no Loan Guarantor nor any other person or entity shall have any right or
claim under this Section with respect to such Maximum Liability, except to the
extent necessary so that the obligations of any Loan Guarantor hereunder shall
not be rendered voidable under applicable law. Each Loan Guarantor agrees that
the Guaranteed Obligations may at any time and from time to time exceed the
Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or
affecting the rights and remedies of the Lenders hereunder, provided that,
nothing in this sentence shall be construed to increase any Loan Guarantor’s
obligations hereunder beyond its Maximum Liability.
SECTION 10.11. Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Loan Guaranty, each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such
payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage”
with respect to any such payment or loss by a Paying Guarantor shall be
determined as of the date on which such payment or loss was made by reference to
the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has
not been determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from any Borrower after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Loan Guarantors hereunder (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Guarantor, the aggregate amount of all monies received
by such Loan Guarantors from any Borrower after the date hereof (whether by
loan, capital infusion or by other means). Nothing in this provision shall
affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of
the Loan Guarantors covenants and agrees that its right to receive any
contribution under this Loan Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations. This provision is for the benefit of both the
Administrative Agent, the Issuing Bank, the Lenders and the Loan Guarantors and
may be enforced by any one, or more, or all of them in accordance with the terms
hereof.

 

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SECTION 10.12. Liability Joint and Several. The obligations of each Loan Party
as a Loan Guarantor under this Article X is in addition to all obligations of
each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders
under this Agreement and the other Loan Documents to which such Loan Party is a
party or in respect of any obligations or liabilities of the other Loan Parties,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary. The Loan Parties are jointly and severally liable for the repayment in
full of the Obligations.
ARTICLE XI
Multiple Borrower Provisions
SECTION 11.01. Independent Obligations; Subrogation. The obligations of each
Borrower, as guarantor of another Borrower’s Obligations hereunder, are joint
and several. To the maximum extent permitted by law, each Borrower hereby waives
any claim, right or remedy which it may now have or hereafter acquire against
another Borrower that arises hereunder including, without limitation, any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of the
Administrative Agent or any Lender against any Borrower or any Collateral which
Lender now has or hereafter acquires, whether or not such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise
until the Obligations hereunder are fully paid and finally discharged. In
addition, each Borrower hereby waives any right to proceed against another
Borrower, now or hereafter, for contribution, indemnity, reimbursement, and any
other suretyship rights and claims, whether direct or indirect, liquidated or
contingent, whether arising under express or implied contract or by operation of
law, which any Borrower may now have or hereafter have as against another
Borrower with respect to the Obligations hereunder until such Obligations are
fully paid and finally discharged. Each Borrower also hereby waives any rights
of recourse to or with respect to any asset of any other Borrower until the
Obligations hereunder are fully paid and finally discharged.
SECTION 11.02. Authority to Modify Obligations and Security. Each Borrower (a
“Consenting Borrower”) authorizes the Administrative Agent and the Lenders,
without notice or demand (except to the extent otherwise required under this
Agreement) and without affecting such Consenting Borrower’s liability hereunder,
from time to time, whether before or after any notice of termination hereof or
before or after any default in respect of the Obligations hereunder, to:
(a) accept, substitute, waive, decrease, increase, release, exchange or
otherwise alter any Collateral, in whole or in part, securing any other
Borrower’s (an “Affected Borrower”) Obligations;
(b) apply any and all such Collateral and direct the order or manner of sale
thereof as the Administrative Agent, in its discretion, may determine;

 

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(c) deal with any Affected Borrower as the Administrative Agent may elect;
(d) in the Administrative Agent’s reasonable discretion, settle, release on
terms satisfactory to the Administrative Agent, or by operation of law or
otherwise, compound, compromise, collect or otherwise liquidate any Affected
Borrower’s obligations and/or any of the Collateral in any manner, and bid and
purchase any of the collateral at any sale thereof;
(e) apply any and all payments or recoveries from an Affected Borrower as the
Administrative Agent, in its discretion, may determine, whether or not such
payment relates to the Obligations of the Consenting Borrower hereunder; and
whether such Obligations are secured or unsecured or guaranteed or not
guaranteed by others; and
(f) apply any sums realized from Collateral furnished by an Affected Borrower
upon any of its indebtedness or obligations to the Administrative Agent or any
Lender as the Administrative Agent, in its discretion, may determine, whether or
not such indebtedness relates to the Obligations of the Consenting Borrower
hereunder.
SECTION 11.03. Waiver of Defenses. Upon an Event of Default by any Borrower in
respect of any Obligations hereunder, the Administrative Agent may, at its
option and without notice to the other Borrowers, proceed directly against any
Borrower to collect and recover the full amount of the liability hereunder, or
any portion thereof, and each Borrower waives any right to require the
Administrative Agent to:
(a) proceed against any other Borrower or any other person whomsoever;
(b) proceed against or exhaust any Collateral given to or held by the
Administrative Agent or any Lender in connection with the Obligations hereunder;
(c) give notice of the terms, time and place of any public or private sale of
any of the Collateral except as otherwise provided herein or required by
applicable law; or
(d) pursue any other remedy in the Administrative Agent’s power whatsoever.
A separate action or actions may be brought and prosecuted against a Borrower
whether or not action is brought against any other Borrower and whether any
other Borrower be joined in any such action or actions.
SECTION 11.04. Right to Dispose of Security; Impairment of Rights. Each Borrower
hereby authorizes and empowers the Administrative Agent in its discretion,
without any notice or demand to such Borrower whatsoever (except as otherwise
required under this Agreement) and without affecting the liability of such
Borrower hereunder, to exercise any right or remedy which the Administrative
Agent may have available to it against any other Borrower, including, but not
limited to, judicial foreclosure, exercise of rights of power of sale without
judicial action, or taking a deed or an assignment in lieu of foreclosure as to
any Collateral, and such Borrower hereby waives any defense to the recovery by
the Administrative Agent against such Borrower of any deficiency after such
action notwithstanding any impairment or loss of any right of reimbursement or
subrogation or other right or remedy against another Borrower or against any
Collateral for the Obligations hereunder.

 

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SECTION 11.05. Additional Waivers. Each Borrower waives any defense arising by
reason of any disability or other defense of any other Borrower or by reason of
any cessation from any cause whatsoever of the liability of the other Borrower
or by reason of any act or omission of the Administrative Agent, any Lender or
others which directly or indirectly results in or aids the discharge or release
of any other Borrower or any Obligations hereunder or any Collateral by
operation of law or otherwise. No exercise by the Administrative Agent of, and
no omission of the Administrative Agent to exercise, any power or authority
recognized herein and no impairment or suspension of any right or remedy of the
Administrative Agent against any Borrower or any Collateral shall in any way
suspend, discharge, release, exonerate or otherwise affect any of the
Obligations of Borrower hereunder or any Collateral furnished by any Borrower or
give to any Borrower any right of recourse against the Administrative Agent.
Each Borrower specifically agrees that the failure of the Administrative Agent:
(a) to perfect any lien on or security interest in any property heretofore or
hereafter given by any Borrower to secure payment of the Obligations hereunder,
or to record or file any document relating thereto; or (b) to file or enforce a
claim against the estate (either in administration, bankruptcy or other
proceeding) of any Borrower shall not in any manner whatsoever terminate,
diminish, exonerate or otherwise affect the liability of any Borrower hereunder.
SECTION 11.06. No Right To Information. Each Borrower waives the right, if any,
to require the Administrative Agent to disclose to such Borrower any information
it may now have or hereafter acquire concerning another Borrower’s character,
credit, Collateral, financial condition or other matters. Each Borrower has
established adequate means to obtain from the other Borrowers on a continuing
basis financial and other information pertaining to such other Borrower’s
business and affairs, and assumes the responsibility for being and keeping
informed of the financial and other conditions of the other Borrowers and of all
circumstances bearing upon the risk of nonpayment of the Obligations hereunder
which diligent inquiry would reveal. The Administrative Agent need not inquire
into the powers of any Borrower or the authority of any of its respective
officers, directors, partners or agents acting or purporting to act in its
behalf, and any Obligations hereunder created in reliance upon the purported
exercise of such power or authority is hereby guaranteed. All Obligations to the
Administrative Agent heretofore, now, or hereafter created shall be deemed to
have been granted at each Borrower’s special insistence and request and in
consideration of and in reliance upon this Agreement.
SECTION 11.07. Notices, Demands, Etc. Except as expressly provided by this
Agreement, the Administrative Agent shall be under no obligation whatsoever to
make or give to any Borrower, and each Borrower hereby waives diligence, all
rights of setoff and counterclaim against Lender, all demands, presentments,
protests, notices of protests, notices of nonperformance, notices of dishonor,
and all other notices of every kind or nature, including notice of the
existence, creation or incurring of any new or additional Obligations hereunder.
SECTION 11.08. Subordination. Except as otherwise provided in this
Section 11.08, any indebtedness of any Borrower now or hereafter owing to
another Borrower is hereby subordinated to the Obligations of the Borrowers to
the Administrative Agent and the Lenders hereunder, whether heretofore, now or
hereafter created, and whether before or after notice of termination hereof,
and, following the occurrence and during the continuation of an Event of
Default, no Borrower shall, without the prior consent of the Administrative
Agent, pay in whole or in part any of such indebtedness nor will any Borrower
accept any payment of or on account of any such indebtedness at any time while
such Borrower remains liable hereunder. At the request of the Administrative
Agent, after the occurrence and during the continuance of an Event of Default,
each Borrower shall pay to the Administrative Agent all or any part of such
subordinated indebtedness and any amount so paid to the Administrative Agent at
its request shall be applied to payment of the Obligations hereunder. Each
payment on the indebtedness of a Borrower to another Borrower received in
violation of any of the provisions hereof shall be deemed to have been received
by such Borrower as trustee for the Administrative Agent and shall be paid over
to the Administrative Agent immediately on account of the Obligations hereunder,
but without otherwise affecting in any manner such Borrower’s liability under
any of the provisions of this Agreement. Each Borrower agrees to file all claims
against any other Borrower in any bankruptcy or other proceeding in which the
filing of claims is required by law in respect of any indebtedness of any other
Borrower to such Borrower, and the Administrative Agent shall be entitled to all
of any such Borrower’s rights thereunder. If for any reason any Borrower fails
to file such claim at least thirty (30) days prior to the last date on which
such claim should be filed, the Administrative Agent, as such Borrower’s
attorney-in-fact, is hereby authorized to do so in such Borrower’s name or, in
the Administrative Agent’s discretion, to assign such claim to, and cause a
proof of claim to be filed in the name of, the Administrative Agent’s nominee.
In all such cases, whether in administration, bankruptcy or otherwise, the
person or persons authorized to pay such claim shall pay to the Administrative
Agent the full amount payable on the claim in the proceeding, and to the full
extent necessary for that purpose such Borrower hereby assigns to the
Administrative Agent all such Borrower’s rights to any payments or distributions
to which such Borrower otherwise would be entitled. If the amount so paid is
greater than such Borrower’s liability hereunder, the Administrative Agent will
pay the excess amount to the party entitled thereto.

 

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SECTION 11.09. Revival. If any payments of money or transfers of property made
to the Administrative Agent or any Lender by any Borrower should for any reason
subsequently be declared to be fraudulent (within the meaning of any state or
federal law relating to fraudulent conveyances), preferential or otherwise
voidable or recoverable in whole or in part for any reason (hereinafter
collectively called “voidable transfers”) under the bankruptcy code or any other
federal or state or provincial law, and the Administrative Agent or such Lender
is required to repay or restore any such voidable transfer, or the amount or any
portion thereof, then as to any such voidable transfer or the amount repaid or
restored and all costs and expenses (including attorneys’ fees) of the
Administrative Agent or such Lender related thereto, Borrower’s liability
hereunder shall automatically be revived, reinstated and restored and shall
exist as though such voidable transfer had never been made to the Administrative
Agent or such Lender.
SECTION 11.10. Understanding of Waivers. Each Borrower warrants and agrees that
the waivers set forth in this Article XI are made with full knowledge of their
significance and consequences. If any of such waivers are determined to be
contrary to any applicable law or public policy, such waivers shall be effective
only to the maximum extent permitted by law.
SECTION 11.11. Unlimited Liability. The Obligations of the Borrowers hereunder
shall be in addition to any obligations of the Borrowers to the Administrative
Agent and the Lenders heretofore given or hereafter to be given to the
Administrative Agent or any Lender unless such other obligations are expressly
modified or terminated in writing. The Obligations of the Borrowers to the
Administrative Agent and the Lenders shall at all times be deemed to be the
aggregate liability of the Borrowers under the terms of this Agreement and of
any other obligations heretofore or hereafter incurred by any Borrower to the
Administrative Agent or any Lender under this Agreement or the Loan Documents
and not expressly terminated or modified in writing.
SECTION 11.12. International as Agent for Borrowers. Each Borrower hereby
irrevocably appoints International as the borrowing agent and attorney-in-fact
for all Borrowers (the “Administrative Borrower”) which appointment shall remain
in full force and effect unless and until the Administrative Agent shall have
received prior written notice signed by each Borrower that such appointment has
been revoked and that another Borrower has been appointed Administrative
Borrower. Each Borrower hereby irrevocably appoints and authorizes the
Administrative Borrower (i) to provide the Administrative Agent with all notices
with respect to Loans and Letters of Credit obtained for the benefit of any
Borrower and all other notices and instructions under this Agreement and (ii) to
take such action as the Administrative Borrower deems appropriate on its behalf
to obtain Loans and Letters of Credit and to exercise such other powers as are
reasonably incidental thereto to carry out the purposes of this Agreement. It is
understood that the handling of the Loans and Collateral of Borrowers in a
combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing powers
of Borrowers in the most efficient and economical manner and at their request,
and that neither the Administrative Agent nor any Lender shall incur liability
to any Borrower as a result hereof. Each Borrower expects to derive benefit,
directly or indirectly, from the handling of the Loans and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the
Administrative Agent and the Lenders to do so, and in consideration thereof,
each Borrower hereby jointly and severally agrees to indemnify the
Administrative Agent and each Lender and hold the Administrative Agent and each
Lender harmless against any and all liability, expense, loss or claim of damage
or injury, made against the Administrative Agent or any Lender by any Borrower
or by any third party whosoever, arising from or incurred by reason of (a) the
handling of the Loans and Collateral of Borrowers as herein provided,
(b) reliance by the Administrative Agent or any Lender on any instructions of
the Administrative Borrower, or (c) any other action taken by the Administrative
Agent or any Lender hereunder or under the other Loan Documents, except that
Borrowers will have no liability to the Administrative Agent or any Lender under
this Section 11.12 with respect to any liability that has been finally
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of the Administrative Agent or such
Lender, as the case may be.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

            BORROWERS:

CORE-MARK HOLDING COMPANY, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        CORE-MARK INTERNATIONAL, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        CORE-MARK HOLDINGS I, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        CORE-MARK HOLDINGS II, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        CORE-MARK HOLDINGS III, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        CORE-MARK MIDCONTINENT, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer   

- Credit Agreement Signature Pages -

 

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            CORE-MARK INTERRELATED COMPANIES, INC.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        HEAD DISTRIBUTING COMPANY
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer        MINTER-WEISMAN CO.
      By:   /s/ Stacy Loretz-Congdon         Name:   Stacy Loretz-Congdon       
Title:   Treasurer   

- Credit Agreement Signature Pages -

 

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            LENDERS:

JPMORGAN CHASE BANK, N.A., as
Administrative Agent, Issuing Bank,
Swingline Lender and a Revolving Lender
      By:   /s/ Courtney Jeans         Name:   Courtney Jeans        Title:  
Vice President        JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, as Canadian
Swingline Lender and a Canadian Lender
      By:   /s/ Steve Voigt         Name:   Steve Voigt        Title:   Vice
President   

- Credit Agreement Signature Pages -

 

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            GENERAL ELECTRIC CAPITAL
CORPORATION, as Co-Syndication Agent
and a Revolving Lender
      By:   /s/ Philip F. Carfora         Name:   Philip F. Carfora        
Title:   Duly Authorized Signatory        GE CANADA FINANCE HOLDING
COMPANY, as a Canadian Lender
      By:   /s/         Name:           Title:   Duly Authorized Signatory   

- Credit Agreement Signature Pages -

 

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            WACHOVIA CAPITAL FINANCE
CORPORATION (WESTERN), as
Co-Syndication Agent and a Revolving Lender
      By:   /s/ Gary D. Cassianni         Name:   Gary D. Cassianni       
Title:   Vice President        CONGRESS FINANCIAL CORPORATION
(CANADA), as a Canadian Lender
      By:   /s/ Enza Aposta         Name:   Enza Aposta        Title:   Vice
President   

- Credit Agreement Signature Pages -

 

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            BANK OF AMERICA, N.A., as
Co-Documentation Agent and a Revolving
Lender         By:   /s/ Stephen King         Name:   Stephen King       
Title:   Vice President        BANK OF AMERICA, N.A., CANADIAN
BRANCH, as a Canadian Lender
      By:   /s/ L. M. Junior Del Brocco         Name:   L. M. Junior Del Brocco
        Title:   Senior Vice President   

- Credit Agreement Signature Pages -

 

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            WELLS FARGO FOOTHILL, LLC, as
Co-Documentation Agent and a Revolving
Lender
      By:   /s/ Juan Barrera         Name:   Juan Barrera        Title:   Vice
President        WELLS FARGO FINANCIAL
CORPORATION CANADA, as a Canadian
Lender
      By:   /s/ Nick Scarfo         Name:   Nick Scarfo        Title:   Vice
President   

- Credit Agreement Signature Pages -

 

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            UNION BANK OF CALIFORNIA, N.A., as
a Revolving Lender
      By:   /s/ Michele Mojabi         Michele Mojabi        Vice President     
  UNION BANK OF CALIFORNIA,
CANADA BRANCH, as a Canadian Lender
      By:   /s/ James Chepyha         James Chepyha        Vice President   

- Credit Agreement Signature Pages -

 

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            THE BANK OF NOVA SCOTIA, as a
Revolving Lender and a Canadian Lender
      By:   /s/ Chris Osborn         Name:   Chris Osborn        Title:  
Managing Director   

- Credit Agreement Signature Pages -

 

 

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            HARRIS N.A., as a Revolving Lender
      By:   /s/ Graeme Robertson         Name:   Graeme Robertson       
Title:   Vice President        BANK OF MONTREAL, as a Canadian
Lender
      By:   /s/ Ben Ciallella         Name:   Ben Ciallella        Title:   Vice
President   

- Credit Agreement Signature Pages -

 

 

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COMMITMENT SCHEDULE

                      Revolving     Canadian   Lender   Commitment    
Commitment  
 
               
JPMorgan Chase Bank, N.A.
  $ 50,000,000     Cdn.$ 22,000,000  
General Electric Capital Corporation
  $ 32,500,000       -0-  
GE Canada Finance Holding Company
    -0-     Cdn.$ 14,300,000  
Wachovia Capital Finance Corporation (Western)
  $ 32,500,000       -0-  
Congress Financial Corporation (Canada)
    -0-     Cdn.$ 14,300,000  
Bank of America, N.A.
  $ 32,500,000     Cdn.$ 14,300,000  
Wells Fargo Foothill, LLC
  $ 32,500,000       -0-  
Wells Fargo Financial Corporation Canada
    -0-     Cdn.$ 14,300,000  
Union Bank of California, N.A.
  $ 25,000,000     Cdn.$ 11,000,000  
The Bank of Nova Scotia
  $ 22,500,000     Cdn.$ 9,900,000  
Harris N.A.
  $ 22,500,000       -0-  
Bank of Montreal
    -0-     Cdn.$ 9,900,000  
 
               
Total
  $ 250,000,000     Cdn.$ 110,000,000  

Commitment Schedule

 

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Schedule 2.06 to Credit Agreement
Letters of Credit
As of September 30, 2005

                      Beneficiary   LOC #   LC Amount     Purpose   Issuing Bank
 
                   
Reliance Insurance
  P269131     55,177.00     Worker’s Comp   JPM
 
                   
National Union Fire Insurance Pittsburgh
  P203003     3,845,818.00     Worker’s Comp   JPM
 
                   
Travelers Casualty
  P226559     500,000.00     Florida Tobacco Tax Bond   JPM
 
                   
Zurich American Insurance
  S856307     6,250,000.00     Casualty Insurance   ABN AMRO/GECC
 
                   
Hartford Fire Insurance
  S856784     1,238,755.37     Bond for various juristictions   ABN AMRO/GECC
 
                   
Greenwich Insurance Company
  S856316     156,000.00     Bond surety for licensing   ABN AMRO/GECC
 
                   
Alberta Used Oil Management
(CD $25,000.00)
  P324232T04983     21,525.74 1   Surety for oil material recycling   RBC/GECC
 
                   
Imperial Tobacco Canada
(CD $2,500,000.00)
  P324852T04983     2,152,574.48 1   Credit terms & discounts   RBC/GECC
 
                   
Saskatchewan Finance
(CD $500,000.00)
  P326443T04983     430,514.90 1   Tobacco tax   RBC/GECC
 
                   
Manitoba Finance
(CD $500,000.00)
  P329985T04983     430,514.90 1   Tobacco tax   RBC/GECC
 
                   
Ontario Minister of Finance
(CD $1,000,000.00)
  P326661T04983     861,029.79 1   Tobacco tax   RBC/GECC
 
                   
Liberty Mutual Insurance
  SM211657W     2,508,750.00     Insurance for casualty program   Wachovia
 
                   
Affiliated Foods
  SE445389W     300,000.00     Surety for membership   Wachovia/GECC
 
                   
Old Republic Insurance Co
  S04070     10,000,000.00     Insurance for Casualty program   Svenska
Bank/GECC
 
                        Total Letters of Credit     28,750,660.18          

Note:

         
1- LC face value is in CD dollars. This summary shows the amount in US$ based on
the Sept 30rd F/X rate
    1.1614  

 

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Schedule 3.05(a) to Credit Agreement
Owned Real Estate and Leased Properties
SCHEDULE OF OWNED REAL ESTATE

                                              PROPERTY     PROPERTY         DIV
    LESSOR   LOCATION     ADDRESS     TYPE          
 
                          85    
N/A
  LEITCHHFIELD, KY   1055 SALT RIVER ROAD, 42754   WAREHOUSE AND LAND

SCHEDULE OF REAL ESTATE LEASES

                                              PROPERTY     PROPERTY         DIV
    LESSOR   LOCATION     ADDRESS     TYPE          
 
                        US WAREHOUSE                           7    
PRUDENTIAL Prisa
  HAYWARD, CA   31300 MEDALLION DR, 94544   WAREHOUSE   16    
SHELEY & BARBARA DEDRICK (LOUIS SCHULTZ CO)
  SACRAMENTO, CA   3970 PELL CIRCLE, 95838   WAREHOUSE   68    
NORTH MARKET CENTER L.P.
  SACRAMENTO, CA   1520 National Drive, 95834   WAREHOUSE   21    
West Vernon, LLC (ANTHONY BRENT CORP)
  LOS ANGELES, CA   2311 E. 48TH ST., VERNON, 90058   WAREHOUSE   23    
FGW PROPERTIES
  BAKERSFIELD, CA   200 Core-Mark Court, 93307   WAREHOUSE   35    
PROLOGIS CALIFORNIA I LLC
  CORONA, CA   353 MEYER CIRCLE, 92879   WAREHOUSE   44    
NL PROPERTIES;GVA Kidder Mathews
  PORTLAND, OR   13551 S.E. JOHNSON RD,Milwaukie, OR 97222   WAREHOUSE   45    
BROER CO.
  GRANTS PASS, OR   303 N.E. F STREET, 97526   WAREHOUSE   48    
MONTANO TENANTS IN COMMON
  ALBUQUERQUE, N.M.   5600 SECOND NW, 87107   WAREHOUSE   53    
DEVELOPMENT SVCS/AMER
  SPOKANE,WA   NORTH 1015 DYER RD. 99212   WAREHOUSE   53    
CROWN WEST REALTY LLC
  SPOKANE,WA   3808 N. SULLIVAN ST BUILDING 35A 99216   WAREHOUSE   61    
VASCONCELOS, LOU & ELAINE
  RENO, NV   245 TELEGRAPH ST 89502   WAREHOUSE   65    
VALLEY VIEW INDUSTRIAL CENTER C/O HARSCH INVESTMENTS PROPERTIES
  LAS VEGAS, NV   3950 WEST HARMON RD, 89103   WAREHOUSE        
 
                          71    
CVP PARTNERSHIP INC.
  SO. SALT LAKE CITY, UT   1030 WEST 3130 SOUTH, 84119   WAREHOUSE   75    
MADISON WAREHOUSE CORP
  FORT WORTH, TX   6401 Will ROGERS BLVD SUITE 200, 76134   WAREHOUSE   170    
NATHAN LANE ASSOCIATES, LLP Paid by wire transfer
  PLYMOUTH, MN   1035 NATHAN LANE NORTH, 55441   WAREHOUSE   178    
NORTH CHURCH LANE PROPERTIES II. LLC
  SMYRNA, GA   4820 CHURCH LANE, 30080   WAREHOUSE     92    
THEOPACIFIC
  CORONA, CA (AMI)   311 REED CIRCLE (AMI), 92879   WAREHOUSE     256    
MAJESTIC REALTY CO
  AURORA, CO   3797 N. Windsor Drive, Aurora, Colorado 80011   WAREHOUSE   256  
 
MAJESTIC REALTY CO
  AURORA, CO   3797 N. Windsor Drive, Aurora, Colorado 80011   WAREHOUSE

 

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Schedule 3.05(a) to Credit Agreement
Owned Real Estate and Leased Properties
SCHEDULE OF REAL ESTATE LEASES

                                              PROPERTY     PROPERTY         DIV
    LESSOR   LOCATION     ADDRESS     TYPE          
 
                        US OTHER                                
 
                          21    
WORLD M.A.P.
  BURBANK, CA   1419 N SAN FERNANDO BLVD #100 burbank CA 91504   SALES   35    
PROLOGIS
  PHOENIX, AZ   5545 W LATHAM PHONIX AZ 85043   SALES   35    
FUTURES REAL ESTATE PARTNERSHIP & INVESTORS PROPERTY mgmnt Group
  OCEANSIDE, CA   2125 ELCAMINO REAL 92054   SALES   44    
NW BUILDING CORP RE LAKE
  LAKE WOOD, WA   9316 LAKEVIEW AVE S.W. SUITE A LAKEWOOD WA   SALES/DELIVERY  
45    
DAVID AND PEGGY FRANKE
  REDMOND, OR   580 NE HEMLOCK, UNIT 102 97756   SALES   45    
BILL & CATHY DAVIDSON
  EUREKA, CA   10 WEST 7TH ST. 95501   SALES   45    
LAND GROUP-LLC
  GRANTS PASS, OR   1060 S.E. M Street 97526   outside storage   48    
AADF WAREHOUSING CORP (Third Party)
  ALB   5600 2nd ST NW, Alb NM 87107   outside storage   53    
MT SALES JIM MEYER
  MISSOULA, MT   2801 South Russel St., Missoula 59801   Sales office   56    
PLATTE COUNTRY MINI WAREHOUSE
  Plate City, MO   15905HWY 273   Mini warehouse   61    
Rilite Aggregate (pd to BRUNO BENNA)
  RENO, NV   TRUCK LOT, adjacent to S. of 245 Telegraph St 89502   LOT   71    
Valley Storage (third Party)
  SLC   1911 South 900 West   Outside Storage   71    
Ninth West Properties (Third Party)
  SLC   2313 South West 900 West, 84104   Outside Storage   75    
US Cold Storage (Third Party)
  FW   2554 Downing Drive, FortWorth TX 76106   Outside Storage        
 
                          16    
US Cold Storage (Third Party)
  Sacramento   3100 52nd Avenue,CA 95823   frozen product storage        
 
                          99    
ERNESTO RUFINO
  SAN FRANCISCO, CA   152 LOMBARD ST, #608   CORP. APT   99    
KASHIWA FUDOSAN
  SO SAN FRANCISCO, CA   395 OYSTER PT #415   CORP. HDQ   99    
KASHIWA FUDOSAN
  SO SAN FRANCISCO, CA   395 OYSTER PT #410   CORP. HDQ   99    
KASHIWA FUDOSAN
  SO SAN FRANCISCO, CA   395 OYSTER PT #114   storage / suite 114        
 
                               
$U.S. TOTAL
                               
 
                        CANADIAN WAREHOUSE                           20    
MADISON PACIFIC
  BURNABY, B.C.   7800 RIVERFRONT GATE Burnaby B.C., V5J 5L3   WAREHOUSE   30  
 
Heathcliff properties and Bergen properties paid to Canreal Mgmnt
  VICTORIA, B.C.   2924 JACKLIN ROAD V9B 3Y5   WAREHOUSE   79    
MARION HOLDINGS LTD / APEX
  WINNIPEG, MAN   99 BANNISTER RD., R2R 0S2   WAREHOUSE   172    
Summit Reit
  CALGARY, ALBERTA   8225 30TH ST., S.E. T2C 1H7   WAREHOUSE        
previously alberta Paid to Western Spirit
                               
Previously paid to BEUTEL GOODMAN REAL ESTATE
                        CANADIAN OTHER                           88    
GWL Realty Advisors (previously BENTALL Real Estate Services LP in trust for
Knightsbridge
  RICHMOND, B.C.   13211 DELF PLACE, V6V 2A2   MIS/TAX   172    
Summit Reit Prop MGMNT
  CALGARY/EDMON SALES   6028 - 103 Street   SALES        
Previously Roycom (4.5) Property Fund LTD / remit to: O&Y Enterprise
                          172    
MTE Logistix (third Party)
  Calgary Alberta Outside storage   6505 48th E ST, Calgary Alberta   Outside

SCHEDULE OF REAL ESTATE LEASES

 

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

 

SCHEDULE 3.05(b)
to
CREDIT AGREEMENT
INTELLECTUAL PROPERTY
Trademarks

                                                      Mark   Legal Entity  
Country   Classes   App. No.     App. Date     Reg. No.     Reg. Date     Status
CORE-MARK
  Core-Mark International, Inc.   Canada   NA     480,956       1/15/82    
TMA272,823       10/15/82     Registered
CORE-MARK
  Core-Mark International, Inc.   United States   42     73/360,195      
4/16/82       1,283,707       6/26/84     Registered
CORE-MARK & Design (new design)
  Core-Mark International, Inc.   Canada   NA     729,697       5/19/93    
TMA433,460       5/3/94     Registered
CORE-MARK INTERNATIONAL & Design (New Design Logo)
  Core-Mark International, Inc.   United States   42     74/389,810      
5/13/93       1,834,121       5/3/94     Registered
CORE-MARK & Design (YOU CAN COUNT ON US)
  Core-Mark International, Inc.   Canada   NA     729,698       5/19/93    
TMA432,801       5/3/94     Registered
CORE-MARK INTERNATIONAL & Design Logo (YOU CAN COUNT ON US)
  Core-Mark International, Inc.   United States   42     74/391,973      
5/18/93       1,834,123       5/3/94     Registered
SMARTSTOCK
  Core-Mark International, Inc.   United States   35     75/334,833       8/2/97
      2,271,065       8/17/99     Registered

Tradenames
The company uses and has registered a number of trade names including
derivatives of the legal corporate names listed on schedule 3.15. In addition,
the company runs its two consolidation warehouses using the names Allied
Merchandising Industry and Artic Cascade and a number of derivatives thereof.

 

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

 

SCHEDULE 3.06
to
CREDIT AGREEMENT
LITIGATION AND ENVIRONMENTAL MATTERS
None.

 

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

 

SCHEDULE 3.10
to
CREDIT AGREEMENT
Plan Unfunded Pension Liability
Actuarially Underfunded Plans (on funding assumption basis)

1.   Core-Mark International, Inc. Non-Bargaining Employees Pension Plan for
plan year 01/01/05: $1,442,741   2.   ABCO Markets, Inc. Retirement Plan for
Arizona Warehouse and Distribution Employees for plan year 01/01/05: $59,042  
3.   Godfrey Company Subsidiaries’ Pension Plan for plan year 01/01/05: $87,083

 

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

 

Disclosure Schedule 3.12
to
Credit Agreement
Material Agreements

1.   Amended and Restated Administrative Claims Guaranty Agreement dated as of
August 31, 2004, by and between Core-Mark Holding Company, Inc. and the Post
Confirmation Trust.   2.   Subordinated Secured Guaranty Agreement dated dated
as of August 20, 2004, by and between Core-Mark Holding Company, Inc. and the
Reclamation Creditors’ Trust for the benefit of the holders of Allowed
Class 3(B) TLV Reclamation Claims.   3.   Junior Subordinated Secured Guaranty
Agreement dated as of August 20, 2004, by and between Core-Mark Holding Company,
Inc. and the Reclamation Creditors’ Trust for the benefit of the holders of
Allowed Net Non-TLV Reclamation Claims.

 

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

 

Schedule 3.14 to Credit Agreement
CORE-MARK INTERNATIONAL, INC.
2005 SCHEDULE OF INSURANCE — As of September 2, 2005

                                            Policy   Policy              
Deductible     Policy   Number   Period   Carrier   Limits   Including ALAE  
Premium
CASUALTY
                                       
1 Commercial General Liability
  RG2-691-436369-025   1/1/05-1/1/06   Liberty Mutual Fire
Insurance Company   $3,000,000 Per Occurrence
$3,000,000 Products Agg
$5,000,000 General Agg
$1,000,000 Fire Legal
ALAE Outside Policy Limit   $500,000
ALAE Outside Deductible   $213,955
Plus TRIA & Assessments
$1,500 and $971
 
                                       
2 Business Automobile Liability & Physical Damage
  AS2-691-436369-015   1/1/05-1/1/06   Liberty Mutual Fire
Insurance Company   $2,000,000 CSL
ALAE Outside Policy Limit   $500,000
ALAE Outside Deductible

Comprehensive $500,000 Deductible

Collision — $500,000 Deductible
  $388,699
Plus TRIA

$11,950
 
                                       
3 Excess Automobile Liability
  AS2-691-436369-015   1/1/05-1/1/06   Liberty Mutual Fire
Insurance Company   $3,000,000 Excess $2,000,000   None   $195,000
 
                                       
4 Workers’ Compensation & Employers’ Liability
  WA7-69D-436369-045
All states except OR/WI
& AZ   1/1/05-1/1/06   Liberty Mutual Fire
Insurance Company   Coverage A: Statutory

Coverage B:   $500,000
ALAE Outside Deductible   $802,450
Plus TRIA & Assessments
 
  WC7-691-436369-025
OR/WI           $1,000,000/BI by Accident
$1,000,000/BI by Disease Each Employee
$1,000,000/BI by Disease Policy Limit or
Where Required by Law Unlimited           $27,940 and $109,924
 
                                       
5 General Liability (ADC/Core-Mark)

Note: Coverage applies only to the contract between Core-Mark International,
Inc. (ADC Corp.) and Circle-K Stores, Inc.
  RG2-691-436369-065   1/1/05-1/1/06   Liberty Mutual Fire
Insurance Company   $1,000,000 Per Occurrence
$2,000,000 Products Aggregate
$2,000,000 General Aggregate
$2,000,000 Personal & Advertising Injury
$300,000 Damages to Premises Rented to you
$10,000 Medical Payments

8313 B West Latham
Tolleson, AZ   Guaranteed Cost
No Deductible     $65,556  
 
                                       
6 Automobile Liability (ADC/Core-Mark) Incl. Auto Physical Damage (APD)

Note: Coverage applies only to the contract between Core-Mark International,
Inc. (ADC Corp.) and Circle-K Stores, Inc.
  AS2-691-436369-055   1/1/05-1/1/06   Liberty Mutual Fire
Insurance Company   $2,000,000 Any One Accident — CSL
$100,000 Uninsured/Underinsured Motorists

APD Comprehensive & Collision Coverage
$50,000 Limit   Guaranteed Cost — No Deductible

$2,500 Comprehensive Deductible $2,500 Collision Deductible     $121,026

$30,170  
 
                                       
7 Workers’ Compensation & Employers’ Liability (AZ CM + ADC)

Note: Coverage applies only to the contract between Core-Mark International,
Inc. (ADC Corp.) and Circle-K Stores, Inc.
    314525-8     6/1/04-5/31/05   State Compensation
Fund of Arizona   Coverage A: Statutory

Coverage B:
$1,000,000 BI by Accident
$1,000,000 BI by Disease Each Employee
$1,000,000 BI by Disease Policy Limit   Guaranteed Cost   $304,384
Subject to Annual Audit incl. EL Limit Incr $6k
 
                                       
8 Workers’ Compensation & Employers’ Liability (AZ CM + ADC)
  WC7 691 436369-075   6/1/05-12/31/05   Liberty Mutual Fire
Insurance Company   Coverage A: Statutory   N/A
Guaranteed Cost     $61,059  
 
                                       
Note: Coverage applies only to the contract between Core-Mark International,
Inc. (ADC Corp.) and Circle-K Stores, Inc.
                  Coverage B:
$1,000,000/BI by Accident
$1,000,000/BI by Disease Each Employee
$1,000,000/BI by Disease Policy Limit or           Assumes $4,317,259 Annual
Payroll
 
                                       
9 General Liability (RDC/Core-Mark)

Note: Coverage applies only to the contract between Core-Mark International,
Inc. (RDC Corp.) and Valero.
  RG2 691-436369-095   3/1/05-12/31/05   Liberty Mutual Fire
Insurance Company   $1,000,000 Per Occurrence
$2,000,000 Products Agg
$2,000,000 General Agg
$300,000 Fire Legal (any one premise)
$10,000 Medical Expense (any one person)   N/A
Guaranteed Cost   $39,004
Plus TRIA $390

Assumes $249,000,000 Annual Sales

 

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

 

Schedule 3.14 to Credit Agreement
CORE-MARK INTERNATIONAL, INC.
2005 SCHEDULE OF INSURANCE — As of September 2, 2005

                                              Policy   Policy              
Deductible     Policy   Number   Period   Carrier   Limits   Including ALAE  
Premium
10 Business Auto Liability (RDC/CM)
  AS2 691 436369-085   3/1/05-12/31/05   Liberty Mutual Fire
Insurance Company   $2,000,000 CSL
$5,000 Medical Payments   N/A
Guaranteed Cost   $136,588
Plus TRIA $917
 
                                       
Note: Coverage applies only to the contract between Core-Mark International,
Inc. (RDC Corp.) and Valero.
                  $100,000 Uninsured/Underinsured Motorist           Assumes 26
Power Units
 
                                       
11 Auto Physical Damage (RDC/CM)
  AS2 691 436369-085   3/1/05-12/31/05   Liberty Mutual Fire
Insurance Company   $115,000 Limit — Symbol 2 & 8   $2,500 Comp/Coll Deductible
Retained Loss Projection $9,500   $33,733  
Note: Coverage applies only to the contract between Core-Mark International,
Inc. (RDC Corp.) and Valero.
                      Assumes 26 Power Units
 
                                       
12 Workers’ Compensation & Employers’ Liability (RDC/CM)
  WC7 691 436369-105   3/1/05-12/31/05   Liberty Mutual Fire
Insurance Company   Coverage A: Statutory   N/A
Guaranteed Cost   $298,565
Plus TRIA $1,749
 
                                       
Note: Coverage applies only to the contract between Core-Mark International,
Inc. (RDC Corp.) and Valero.
                  Coverage B:
$1,000,000/BI by Accident
$1,000,000/BI by Disease Each Employee
$1,000,000/BI by Disease Policy Limit or           Assumes $6,996,240 Annual
Payroll   
13 Umbrella Liability — Lead
  BE 297 9831   1/1/05-1/1/06   National Union Fire
Insurance Company   $25,000,000   $10,000     $281,779  
 
                                       
14 Excess Liability
  LQ1871073620060   1/1/05-1/1/06   Liberty Insurance Underwriters, Inc.
55 Water Street, 18th Fl.
New York, NY 10041
212.208.4179   $25,000,000 Excess $25,000,000
$10,000,000 Excess $50,000,000
(Added $10mm 3/1/05-12/31/05 $16,760 for RDC)   None   $85,000
$16,760
Charged RDC for add’l $10m Limits
 
                                       
15 Underground Storage Tank Liability
  UST G21740883   2/27/05-2/27/06   Illinois Union Ins. Co. (ACE)   $2,000,000  
$5,000   $860
 
                                       
16 Foreign Liability
  CXC068011   7/1/04-12/31/05
Extended
6/1/05-12/31/05   ACE Master Liability Program
Two River Way, Suite #1100
Houston, TX 77056
713.403.3000   $3,000,000   None   $5,095
US$
Plus extension premium
$ 3,252
US$
 
                                       
17 Canadian General Liability
  CGL322703   7/1/04-12/31/05
Extended
6/1/05-12/31/05   ACE-INA Canadian Liability
Toronto, Canada   $3,000,000   None   $52,504
US$
 
                                       
18 Canadian Auto Liability
  AF 9936550   6/1/04-12/31/05
Extended
6/1/05-12/31/05   Zurich Ins. Co.
Toronto, Canada   C$4,000,000   C$1,000
for Auto Property Damage
  $68,845
US$
$50,714                             Total Casualty (excl. Taxes/TRIA)  
$3,254,998

 

 

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

 

Schedule 3.14 to Credit Agreement
CORE-MARK INTERNATIONAL, INC.
2005 SCHEDULE OF INSURANCE — As of September 2, 2005

                                            Policy   Policy              
Deductible     Policy   Number   Period   Carrier   Limits   Including ALAE  
Premium
PROPERTY
                                       
19 Property including Boiler & Machinery and including ADC
    7558556     8/1/05-8/1/06   Lexington Insurance Co.
Eastern Risk Specialists   $25,000,000 lead — US Locations
Refer to Policy for additional sub-limits   $25,000/Core deductible
Earth Movement: $100,000 Per Occurrence EXCEPT
Earth Movement California Locations: 5% TIV per location /
$250,000 (min) Flood: $100,000 Per Occurrence EXCEPT
Flood-Zone A Buildings per location: 5%TIV /$500,000 (min.)
Flood-Zone A Contents per location: 5%TIV /$500,000 (min.)
Flood-Zone A — Time Element — 3 day waiting period
Windstorm: $100,000 EXCEPT
all of FL: 5%TIV per location /$100,000 (min)
Named Windstorm: 5%TIV per location / $100,000 (min)   $773,962
Excluding taxes
and surcharges
 
                                       
20 Property Including Boiler & Machinery and including ADC
  TBD   8/1/05-8/1/06   American Home Assurance Co.   $25,000,000 lead — Canada
Locations
Refer to Policy for additional sub-limits   $25,000/Core
Earth Movement: $100,000 Per Occurrence

Flood: $100,000 Per Occurrence
Windstorm: $100,000
Named Windstorm: 5%TIV per location / $100,000 (min)   USD 133,805
 
                                       
21 Property Including Boiler & Machinery and including ADC
  PL218405   8/1/05-8/1/06   Lloyd’s of London   $50,000,000
Excess $25,000,000
Program Sublimits Apply

(One policy issued for US & Canada but
Marsh Dallas bills for the US Locations &
Marsh Toronto bills for the Canada Locations)   Refer to Cover Note for Excess
Wording Clause   $104,870
Excluding taxes
and surcharges
for US Locations

USD 18,130
for Canada locations
 
                                       
22 Property / Boiler & Machinery (RDC)

Note: Coverage applies only to the contract between Core-Mark International,
Inc. (RDC Corp.) and Valero.
    7596090     3/1/05-3/1/06   Lexington Insurance Co.
Eastern Risk Specialists
1700 Market Street, Suite #1810
Philadelphia, PA 19103
215.255.6363   Policy Limit $19,000,000
Additional Sublimits Apply   $25,000/Core
$100,000 Earth movement
$100,000 Wind   $42,684
Annual Premium Includes surplus
lines tax and stamping fee
 
                                       
 
                          Total Property   $1,073,451
Excluding taxes
and surcharges

 

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

 

Schedule 3.14 to Credit Agreement
CORE-MARK INTERNATIONAL, INC.
2005 SCHEDULE OF INSURANCE — As of September 2, 2005

                                              Policy   Policy              
Deductible     Policy   Number   Period   Carrier   Limits   Including ALAE  
Premium  
PROFESSIONAL LIABILITY & FINANCIAL
                                       
23 Directors & Officers Liability
  ELU086850-04   8/20/04-10/4/05   XL Specialty / ELU
Executive Liability Underwriters (ELU)
One Constitution Plaza, 16th Fl.
Hartford, CT 06103
860.948.1800   $25,000,000   $0 Each Insured D&O (Non-Indemnified) under
Insuring Agreement 1(A) $1,000,000 Each Securities Claim under Insuring
Agreement 1(C)
$250,000 All Other Claims under Insuring Agreement 1 (B) Pending & Prior
Proceeding Date: 8/20/04   $1,100,000
$135,616  
 
                                       
24 Directors & Officers Liability
  14-MGU-04-A4200   8/20/04-10/4/05   HCC Global behalf of U.S. Specialty
8 Forest Park Drive
Farmington, CT 06034
(860) 674-1900   $15,000,000 Excess $25,000,000   Pending & Prior Claim Date:
8/20/04   $341,000
$41,943  
 
                                       
25 Directors & Officers Liability
  EPG 0002748   8/20/04-10/4/05   RLI Insurance Company
909 Lake Carolyn Parkway, Suite 800
Irving, TX 75030
(972) 677-2155   $10,000,000 Excess $40,000,000   Pending & Prior Claim Date:
8/20/04   $180,000
$22,140  
 
                                       
26 Fiduciary Liability
  EPG 0002749   8/20/04-10/4/05   RLI Insurance Company
909 Lake Carolyn Parkway, Suite 800
Irving, TX 75030
(972) 677-2155   $10,000,000   $100,000 Each Claim

Pending or Prior Litigation Date: 8/20/04   $67,870
$8,348  
 
                                       
27 Commercial Crime
  CCR 400 28G 05   4/5/05-4/5/06   Quanta Specialty Lines Insurance Co  
$10,000,000   $250,000 Each Claim   $78,866    
 
                                  Plus SLT taxes  
 
                                       
28 Special Crime
  647-1301   8/5/05-8/5/06   National Union Fire Insurance
Co. of Pittsburgh, PA (AIG)
8144 Walnut Hill Lane, Suite #1600
Dallas, TX 75231
800.843.1765   $5,000,000   None   $4,398    
 
                          Total Professional Liability & Financial   $1,980,181
   
 
                  GRAND PREMIUM TOTAL (Excl. Taxes, Assessments/TRIA)  
$6,308,631  

 

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

 

Schedule 3.15 to Credit Agreement
Core-Mark Holding Company, Inc. and Subsidiaries

                                                                               
                                      Organization                              
                                          Number assigned     Federal Employer  
                                                        State of     by State of
    Identification     Authorized     Par Value of     Authorized     Par Value
of     Issued as of     Issued as of Dec.   Company   Type of Entity    
Active/Inactive     Incorporation     Incorporation     Number     Common Stock
    Common Stock     Preferred Stock     Preferred Stock     August 23, 2004    
31, 2004  
Core-Mark Holding Company, Inc.
  Corporation   Active   Delaware   3845035     20-1489747     50,000,000    
$0.01     n/a     n/a     9,815,375     9,815,375  
Core-Mark Holdings I, Inc.
  Corporation   Active   Delaware   3843173     20-1489777     1,000     $0.01  
  n/a     n/a     1,000     1,000  
Core-Mark Holdings II, Inc.
  Corporation   Active   Delaware   3843174     20-1489798     1,000     $0.01  
  n/a     n/a     1,000     1,000  
Core-Mark Holdings III, Inc.
  Corporation   Active   Delaware   3843172     20-1489834     1,000     $0.01  
  n/a     n/a     1,000     1,000  
Core-Mark International, Inc.
  Corporation   Active   Delaware   2484265     91-1295550     100     $0.0001  
  n/a     n/a     100     100  
Core-Mark Midcontinent, Inc.
  Corporation   Active   Arkansas   CP00013272     74-2354997     2,000    
$1.00     n/a     n/a     2,000     2,000  
Minter-Weisman Company
  Corporation   Active   Minnesota   1P-571     41-0809931     100,000     $1.00
    n/a     n/a     1,000     1,000  
Head Distributing Company
  Corporation   Active   Georgia   7006574     58-1095258     10,000,000 shares
[1,000,000 class A Voting] [9,000,000 class B non-voting]     $0.01 (for bothing
voting & non-voting class)     n/a     n/a     773,136
[90,000 class A &
683,136 class B]     773,136
[90,000 class A &
683,136 class B]  
Core-Mark Interrelated Companies, Inc.
  Corporation   Active   California   734331     94-2317385     1,000,000    
$1.00     n/a     n/a     1,000,000     1,000,000  
C/M Products, Inc.
  Corporation   Inactive   California   N/A     94-3104739     1,000     $1.00  
  n/a     n/a     100     100  
ASI Office Automation, Inc.
  Corporation   Inactive   California   N/A     95-3256944     300,000     $0.05
    150,000     no par value   300,000     300,000  
General Acceptance Corporation
  Corporation   Inactive   California   N/A     95-3895935     400,000     none
  n/a     n/a     200     200  
Marquise Ventures Company, Inc.
  Corporation   Inactive   California   N/A     95-3983880     75,000     none  
n/a     n/a     75,000     75,000  

Updated on Sept. 9, 2005

 

1 of 1

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Schedule 3.18
to Credit Agreement
Affiliate Transactions
Transactions with Directors and Management

Harvey L. Tepner, a member of our board of directors (and a member of our
compensation committee and chairman of our audit committee from August 2004
through September 2, 2005), is a Partner of Compass Advisers, LLP. Mr. Tepner is
also a Managing Director of Compass SRP Associates LLP, a special purpose joint
venture that provided financial advisory and investment banking services to the
Official Committee of Unsecured Creditors of Fleming in connection with
Fleming’s bankruptcy. Compass Advisers, LLP owns a 50% interest in Compass SRP
Associates LLP. Pursuant to the Plan, Compass SRP Associates LLP has received
total fees and expenses of approximately $4,781,000, of which $2,269,930 was
distributed to Compass Advisers, LLP. All fees and expenses paid to Compass SRP
Associates LLP were approved by the United States Bankruptcy Court for the
District of Delaware after submission of applications by Compass SRP Associates
LLP. Harvey L. Tepner is a member of the board of directors of the Post
Confirmation Trust of the Fleming Companies but recused himself from any
discussions regarding the compensation of Compass SRP Associates LLP.
One of our customers, Eureka Management Group LLC, is primarily owned by Ron
McPherson, who is the father of Scott McPherson, one of our Vice Presidents. The
Company recorded net sales to Eureka Management Group LLC of approximately
$190,000 and $825,000 in the first six months of 2005 and 2004, respectively.
These transactions were negotiated at arms-length and in the ordinary course. As
of June 30, 2005, we held a non-recourse note receivable of approximately
$220,000 related to these transactions, which is collateralized by a deed of
trust on a convenience store owned by Eureka Management Group LLC.
Securities Issued Pursuant to Our 2004 and 2005 Long Term Incentive Plans
In August 2004, we approved the grant of options to purchase an aggregate of
1,060,422 shares of our common stock to certain of our officers and employees
under our 2004 Long Term Incentive Plan. The options have an exercise price of
$15.50, the fair value of a share of our common stock as determined pursuant to
the Plan and have a three year vesting period. One third of the shares vested on
August 23, 2005, and the remaining shares vest in equal monthly installments
over the two year period commencing on August 23, 2005, for each consecutive
month of service that individual provides to the Company. Certain members of our
management are entitled to accelerated vesting of their option shares and
restricted stock units in the event that they are terminated without cause or
resign for good reason prior to the expiration of the vesting period or are
terminated without cause or resign for good reason within one year after a
change of control of the company.
In addition in 2004, we issued an aggregate of 190,876 shares of restricted
common stock and restricted stock units to certain of our officers and employees
under our 2004 Long Term Incentive Plan. The transfer restrictions with respect
to one third of the shares of restricted common stock lapsed on August 23, 2005
and the transfer restrictions with respect to the remaining shares of restricted
common stock lapse in equal monthly installments over the two year period
commencing on August 23, 2005 for each month of service provided by the
stockholder to the Company. The restricted stock units vest over a three year
period. One third of the shares vested on August 23, 2005, and the remaining
shares vest in equal monthly installments over the two year period commencing on
August 23, 2005, for each consecutive month of service that the individuals
provide services to Company. If we are acquired by a non-public company, then
all unvested shares will immediately vest. In addition, if we are acquired by a
public company and the holder of the restricted stock is terminated without
cause within one year after we are acquired, then all unvested shares will
immediately vest.

 

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

 

In February 2005, the Compensation Committee and the Board of Directors approved
the grant of restricted stock units to certain of our officers and employees
under our 2005 Long Term Incentive Plan having a value of approximately
$5.0 million with a vesting commencement date of February 1, 2005. It is
anticipated that such grants will be made in the fourth quarter of 2005.
Options Issued Pursuant to Our Directors Equity Incentive Plans

In August, 2004, we issued an option to purchase 7,500 shares to each of our
non-employee directors under our 2004 Directors Equity Incentive Plan. The
options have an exercise price of $15.50, the fair value of a share of our
common stock as determined pursuant to the Plan. The options vest over three
years. One third of the options vested on August 23, 2005, and the remaining
options vest in equal quarterly installments over the two year period commencing
on August 23, 2005, for each consecutive quarter that the grantee remains a
director. Any unvested option shares will immediately vest upon a change of
control of the Company.
In August, 2005, we issued an option to purchase 7,500 shares to two new
non-employee directors under our 2005 Directors Equity Incentive Plan. The
options have an exercise price of $27.03, the fair value of a share of our
common stock as determined by our Board of Directors as provided in the plan on
the basis of the average trading price of our common stock over the twenty
trading days ending two trading days prior to the date of grant. The options
vest over three years and expire after seven years. One third of the options
vest on August 12, 2006, and the remaining options vest in equal quarterly
installments over the two year period commencing on August 12, 2006, for each
consecutive quarter that the grantee remains a director. Any unvested option
shares will immediately vest upon a change of control of the Company.

 

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

 

SCHEDULE 6.01
to
CREDIT AGREEMENT
INDEBTEDNESS
(1) Trust Guarantees (See Schedule 3.12)
The Company guarantees the payment of all Post Confirmation Trust administrative
claims in excess of $56 million. In addition, if the assets of the Reclamation
Creditors Trust are inadequate to satisfy all of the allowed Trade Lien Vendor
claims in the RCT, the Company must pay such claims in full plus any accrued
interest. The Company also guarantees all eligible but unpaid non-TLV claims in
the RCT up to a maximum of $15 million. The Plan of Reorganization limits the
combined RCT guarantee amounts of the TLV and non-TLV claims to no more than
$137 million. Based on the estimates provided by the Trusts and the Company’s
analysis, the assets of the Trusts are sufficient to satisfy the claims against
it; therefore, the Company believes that the fair value of its guarantee
liability as of December 31, 2004 was not significant. However, if the assets of
the Trusts prove insufficient to pay the claims, the Company could be required
to satisfy the guarantees.
(2) Surety Bonds — Please refer to attached schedule of Surety Bonds.
(2) Capital Leases — None.

 

 

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

 

CORE-MARK INTERNATIONAL, INC.
BOND SCHEDULE
U.S. BOND LIABILITY

                                                                               
                      EFFECTIVE     EXPIRATION     RENEWAL   CLOSING PRINCIPAL  
OBLIGEE   BOND NO.     SURETY   LIABILITY     PREMIUM     BOND TYPE   DATE    
DATE     METHOD   METHOD
CORE-MARK MIDCONTINENT, INC.
  STATE OF SOUTH DAKOTA     41010768     PLATTE RIVER     1,000.00       150.00
    CIGARETTE DISTRIBUTOR     8/25/2005       8/25/2006     ANNUAL   60 DAY
CANCELLATION NOTICE
HEAD DISTRIBUTING COMPANY DBA CORE-MARK
  STATE OF FLORIDA     41046887     PLATTE RIVER     992,574.00       14,889.00
    CIGARETTE DISTRIBUTOR     10/1/2005       10/1/2006     ANNUAL   60 DAY
CANCELLATION NOTICE
MINTER WEISMAN CO. DBA COREMARK
  STATE OF WISCONSIN     41046890     PLATTE RIVER     10,000.00       150.00  
  CIGARETTE TAX BOND     9/29/2005       9/25/2006     ANNUAL   60 DAY
CANCELLATION NOTICE
MINTER WEISMAN CO. DBA COREMARK
  STATE OF WISCONSIN     41046891     PLATTE RIVER     150,000.00       2,250.00
    TOBACCO TAX SURETY BOND     9/29/2005       9/29/2006     ANNUAL   60 DAY
CANCELLATION NOTICE
CORE-MARK MIDCONTINENT, INC. DBA CORE-MARK
  STATE OF INDIANA     45035070     AVALON   $ 1,000.00     $ 100.00    
CIGARETTE TAX REGISTRATION CERTIFICATE BOND     6/26/2005       6/26/2006    
ANNUAL   60 DAY CANCELLATION NOTICE
CORE-MARK MIDCONTINENT, INC. DBA CORE-MARK
  STATE OF INDIANA     45035071     AVALON   $ 1,000.00     $ 100.00     OTHER
TOBACCO PRODUCTS DISTRIBUTOR’S LICENSE BOND     6/26/2005       6/26/2006    
ANNUAL   60 DAY CANCELLATION NOTICE
MINTER-WEISMAN CO. DBA CORE-MARK
  IOWA DEPARTMENT OF REVENUE & FINANCE     45035073     AVALON   $ 3,500.00    
$ 100.00     DISTRIBUTION OR SALE OF CIGARETTES AND/OR TOBACCO PRODUCTS    
6/30/2005       6/30/2006     ANNUAL   30 DAY CANCELALTION NOTICE
FLEMING COMPANIES, INC.
  STATE OF NEW YORK     45035076     AVALON   $ 10,000.00     $ 200.00    
WHOLESALE CIGARETTE DEALER’S BOND     11/14/2005       11/14/2006     ANNUAL  
90 DAY CANCELLATION NOTICE
HEAD DISTRIBUTING COMPANY DBA CORE-MARK
  STATE OF FLORIDA     45035079     AVALON   $ 27,000.00     $ 540.00    
TOBACCO PRODUCTS DISTRIBUTOR BOND     10/30/2005       10/30/2006     ANNUAL  
60 DAY CANCELLATION NOTICE
CORE-MARK MIDCONTINENT, INC. DBA CORE-MARK
  STATE OF TENNESSEE, COMMISSIONER OF REVENUE     45035080     AVALON   $
2,000.00     $ 100.00     TABOCCA STAMP AFFIXING AGENT BOND     11/14/2005      
11/14/2006     ANNUAL   60 DAY CANCELLATION NOTICE
FLEMING COMPANIES, INC. DBA CORE-MARK
  TENNESSEE COMMISSIONER OF REVENUE     45035081     AVALON   $ 6,800.00     $
136.00     CIGARETTE AND TOBACCO TAX CREDIT BOND     11/14/2005       11/14/2006
    ANNUAL   30 DAY CANCELALTION NOTICE
HEAD DISTRIBUTING COMPANY
  STATE OF TENNESSEE, COMMISSIONER OF REVENUE     45035082     AVALON   $
10,900.00     $ 218.00     TABOCCA STAMP AFFIXING AGENT BOND     11/14/2005    
  11/14/2006     ANNUAL   60 DAY CANCELLATION NOTICE
HEAD DISTRIBUTING COMPANY DBA CORE-MARK
  STATE OF TENNESSEE, COMMISSIONER OF REVENUE     45035083     AVALON   $
2,000.00     $ 100.00     CIGARETTE AND TOBACCO TAX CREDIT BOND     11/14/2005  
    11/14/2006     ANNUAL   60 DAY CANCELLATION NOTICE
MINTER-WEISMAN-DEBTOR IN POSSESSION DBA CORE-MARK
  STATE OF NEBRASKA     45035085     AVALON   $ 1,000.00     $ 100.00    
WHOLESALE CIGARETTE DEALER’S BOND     12/29/2004       12/29/2005     ANNUAL  
30 DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  KANSAS DEPARTMENT OF REVENUE     45035086     AVALON   $ 1,000.00     $ 100.00
    WHOLESALE CIGARETTE DEALER’S BOND     1/1/2005       1/1/2006     ANNUAL  
30 DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  STATE OF NEBRASKA     45035087     AVALON   $ 1,000.00     $ 100.00    
WHOLESALE CIGARETTE DEALER’S BOND     1/20/2005       1/20/2006     ANNUAL   30
DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  STATE OF LOUISIANA     45035088     AVALON   $ 10,000.00     $ 200.00    
TOBACCO TAX SURETY BOND     3/2/2005       3/2/2006     ANNUAL   30 DAY
CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC. DBA CORE-MARK
  STATE OF MISSOURI, DIRECTOR OF REVENUE     45035089     AVALON   $ 1,000.00  
  $ 100.00     OTHER TOBACCO PRODUCTS FIDELITY BOND     3/2/2005       3/2/2006
    ANNUAL   90 DAY CANCELLATION NOTICE
CORE-MARK INTERNATIONAL, INC. (SPOKANE DIVISION)
  STATE OF WASHINGTON     45035090     AVALON   $ 5,000.00     $ 100.00    
WHOLESALE CIGARETTE DEALER’S BOND     3/5/2005       3/5/2006     ANNUAL   30
DAY CANCELALTION NOTICE
CORE-MARK INTERNATIONAL, INC. (PORTLAND, OR)
  STATE OF WASHINGTON     45035091     AVALON   $ 5,000.00     $ 100.00    
WHOLESALE CIGARETTE DEALER’S BOND     3/5/2005       3/5/2006     ANNUAL   30
DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  STATE OF OKLAHOMA     45035092     AVALON   $ 500.00     $ 100.00    
UNSTAMPED TOBACCO PRODUCT TAX BOND     3/22/2005       3/22/2006     ANNUAL   30
DAY CANCELALTION NOTICE

 

Page 1 of 2

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CORE-MARK INTERNATIONAL, INC.
BOND SCHEDULE

                                                                               
                      EFFECTIVE       EXPIRATION     RENEWAL   CLOSING PRINCIPAL
  OBLIGEE   BOND NO.     SURETY   LIABILITY     PREMIUM     BOND TYPE   DATE    
  DATE     METHOD   METHOD
CORE-MARK MIDCONTINENT, INC.
  STATE OF OKLAHOMA     45035093     AVALON   $ 1,000.00     $ 100.00    
CIGARETTE STAMP TAX BOND     3/22/2005       3/22/2006     ANNUAL   30 DAY
CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  STATE OF ARKANSAS     45035094     AVALON   $ 1,500.00     $ 100.00    
CIGARETTE STAMP DEPUTY BOND     3/23/2005       3/23/2006     ANNUAL   60 DAY
CANCELLATION NOTICE
CORE-MARK INTERNATIONAL, INC.
  STATE OF UTAH     45035096     AVALON   $ 500.00     $ 100.00     BOND FOR
CIGARETTES, CIGARETTE PAPERS, SNUFF, CIGARS OR TOBACCO DIST.     3/5/2005      
3/25/2006     ANNUAL   30 DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  STATE OF NEBRASKA     45035097     AVALON   $ 1,000.00     $ 100.00    
CIGARETTE TAX BOND     3/25/2005       3/25/2006     ANNUAL   30 DAY
CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  IOWA DEPARTMENT OF REVENUE & FINANCE     45035098     AVALON   $ 3,500.00    
$ 100.00     DISTRIBUTION OR SALE OF CIGARETTES AND/OR TOBACCO PRODUCTS    
6/30/2005       6/30/2006     ANNUAL   30 DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  STATE OF NORTH DAKOTA     45035099     AVALON   $ 1,000.00     $ 100.00    
BOND FOR CIGARETTES, CIGARETTE PAPERS, SNUFF, CIGARS OR TOBACCO DIST.    
3/25/2005       3/25/2006     ANNUAL   30 DAY CANCELALTION NOTICE
CORE-MARK INTERNATIONAL, INC.
  INTERSTATE COMMERCE COMMISSION     45035100     AVALON   $ 10,000.00     $
200.00     PROPERTY BROKERS SURETY BOND     3/15/2005       3/15/2006     ANNUAL
  30 DAY CANCELALTION NOTICE
HEAD DISTRIBUTING COMPANY DBA CORE-MARK
  GEORGIA DEPARTMENT OF REVENUE     45035103     AVALON   $ 443,000.00     $
8,860.00     CIGAR AND CIGARETTE DISTRIBUTORS LICENSE BOND     7/1/2005      
6/30/2006     ANNUAL   60 DAY CANCELLATION NOTICE
MINTER-WEISMAN CO. DBA CORE-MARK
  STATE OF NORTH DAKOTA     45035104     AVALON   $ 1,000.00     $ 100.00    
BOND FOR CIGARETTES, CIGARETTE PAPERS, SNUFF, CIGARS OR TOBACCO DIST.    
6/30/2005       6/30/2006     ANNUAL   30 DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC.
  US DEPARTMENT OF AGRICULTURE     45035105     AVALON   $ 25,000.00     $
500.00     PERISHABLE AGRICULTUREAL COMMODITIES BOND     7/19/2005      
7/19/2006     ANNUAL   30 DAY CANCELALTION NOTICE
HEAD DISTRIBUTING COMPANY DBA CORE-MARK
  US DEPARTMENT OF AGRICULTURE     45035106     AVALON   $ 25,000.00     $
500.00     PERISHABLE AGRICULTUREAL COMMODITIES BOND     7/19/2005      
7/19/2006     ANNUAL   30 DAY CANCELALTION NOTICE
MINTER-WEISMAN CO. DBA CORE-MARK
  US DEPARTMENT OF AGRICULTURE     45035107     AVALON   $ 30,000.00     $
600.00     PERISHABLE AGRICULTUREAL COMMODITIES BOND     7/19/2005      
7/19/2006     ANNUAL   30 DAY CANCELALTION NOTICE
CORE-MARK INTERNATIONAL, INC.
  US DEPARTMENT OF AGRICULTURE     45035108     AVALON   $ 80,000.00     $
1,600.00     PERISHABLE AGRICULTUREAL COMMODITIES BOND     7/19/2005      
7/19/2006     ANNUAL   30 DAY CANCELALTION NOTICE
CORE-MARK MIDCONTINENT, INC. DBA CORE-MARK
  TENNESSEE COMMISSIONER OF REVENUE     45035109     AVALON   $ 2,000.00     $
100.00     TABACCO TAX STAMP AFFIXING AGENT BOND     8/20/2005       8/20/2006  
  ANNUAL   60 DAY CANCELLATION NOTICE
MINTER-WEISMAN CO. DBA CORE-MARK
  STATE OF MINNESOTA     45035110     AVALON   $ 20,000.00     $ 400.00    
WHOLESALE PRODUCE DEALER     10/26/2005       10/26/2006     ANNUAL   60 DAY
CANCELLATION NOTICE  
TOTAL BOND LIABILITY & PREMIUM:
                  $ 1,886,774.00     $ 33,393.00     COLLATERAL TYPE:     U.S.
COLLATERAL AMOUNT:
 
                                  LOC NO. S856316     $156,000.00
 
                                  CASH     $674,000.00
 
                                  CASH     $160,000.00
 
                                  U.S. TOTAL COLLATERAL AMOUNT:     $990,000.00

 

Page 2 of 2

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Schedule 6.02
to
CREDIT AGREEMENT
PART I – EXISTING LIENS AND REGNS
US debtor liens, notice given by the following UCC financing statements:

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   CA — Secretary of State   0101760233   01/12/01   UCC-1  
Cisco Systems Capital
Corporation   Specific equipment, subject to
capital lease No. 3340                           Core-Mark
International, Inc.   CA — Secretary of State   0106860439   03/06/01   UCC-1  
Ameritech Credit
Corporation   Specific equipment, subject to
capital lease No. 001-0027064-000                           Core-Mark
International, Inc.   CA — Secretary of State   0118060426   06/28/01   UCC-1  
GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-082                           Core-Mark
International, Inc.   CA — Secretary of State   05-7013736153   01/27/05   UCC-1
  Smurfit-Stone Container Enterprises, Inc. dba Smurfit Recycling Company   60
Inch Baler made by Load King Model V6030 placed at this location.

 

1

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

 

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   CA — Secretary of
State   9602260755   01/19/96   UCC-1   MFP Technology
Services Inc.   Specific equipment, subject to
capital lease No. 8166-1                                   96149C0167   05/24/96
  UCC-3 Assignment   Norwest Equipment
Finance, Inc.   Refers to 9602260755
Assignment to Norwest Equipment
Finance, Inc. from MFP Technology
Services Inc.                                   96296C0339   10/21/96   UCC-3
Amendment   Norwest Equipment
Finance, Inc.   Amendment to 9602260755
Amendment to delete Appendix A
and to add Appendix A-1 attached
thereto.                                   96309C0613   10/31/96   UCC-3
Amendment   Norwest Equipment
Finance, Inc.   Amendment to 9602260755
Amendment to delete Appendix A
and to add Appendix A-1 attached
thereto.                                   00300C0401   10/17/00   UCC-3
Assignment   MFP Financial
Services Inc.   Refers to 9602260755
Assignment to MFP Financial
Services Inc. from Norwest
Equipment Finance, Inc.                                   00334C0314   11/14/00
  UCC-3 Continuation   MFP Financial
Services Inc.   Continuation of 9602260755                                  
02028C0265   01/25/02   UCC-3 Amendment   MFP Financial
Services Inc.   Amendment to 9602260755
Changes Secured Party’s address
to 9150 South Hills Blvd., Suite
250, Cleveland, OH 44147                           Core-Mark
International, Inc.   DE — Secretary of
State   1004639 6   01/11/01   UCC-1   Cisco Systems Capital
Corporation   Specific equipment, subject to
capital lease No. 3340                           Core-Mark
International, Inc.   DE — Secretary of
State   1091616 8   08/27/01   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-086                           Core-Mark
International, Inc.   DE — Secretary of
State   1091617 6   08/27/01   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-084                           Core-Mark
International, Inc.   DE — Secretary of
State   1091622 6   08/27/01   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-085                          

 

2

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

 

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   DE — Secretary of
State   2044477 2   01/25/02   UCC-1   MFP Financial
Services Inc.   Specific equipment subject to
capital lease No. 8166-1
In Lieu of the following:                         9602260755 1/19/96 CA, SOS
(Amended 10/31/96 and
Continued 11/14/00)                           Core-Mark
International, Inc.   DE — Secretary of
State   2136947 3   05/10/02   UCC-1   Kyocera Mita America
Incorporated   The equipment described below
and...relating to:
2- KYOCERA MITA VI-7360                         Copier Systems
1- KYOCERA MITA 5530 Copier Systems
1- KYOCERA MITA 2530 Copier Systems                           Core-Mark
International, Inc.   DE — Secretary of
State   2185571 1   07/26/02   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-092                           Core-Mark
International, Inc.   DE — Secretary of
State   2185574 5   07/26/02   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-091                           Core-Mark
International, Inc.   DE — Secretary of
State   2185575 2   07/26/02   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-090                           Core-Mark
International, Inc.   DE — Secretary of
State   2185576 0   07/26/02   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-087                           Core-Mark
International, Inc.   DE — Secretary of
State   2185582 8   07/26/02   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-089                           Core-Mark
International, Inc.   DE — Secretary of
State   2293924 1   11/12/02   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-094                           Core-Mark
International, Inc.   DE — Secretary of
State   3086762 5   04/03/03   UCC-1   GATX Technology
Services Corporation   Specific equipment, subject to
capital lease No. 2858-095                          

 

3

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

 

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   DE — Secretary of
State   3311461 1   11/25/03   UCC-1   Winkler, Inc.   Purchase money security
interest all of Debtor’s interest in personal property of every kind and nature
including all receivables, contract rights...                                  
4234228 7   08/19/04   UCC-3 Amendment   Winkler, Inc.   Refers to 3311461 1
Restated Collateral Description - All goods purchased from Secured Party by
Debtor...which goods shall constitute inventory of Debtor (including those types
of goods described in Schedule A attached...)                          
Core-Mark
International, Inc.   DE — Secretary of
State   4021209 4   01/27/04   UCC-1   Raymond Leasing
Corporation   Freight/Install RAYMOND R45TT 25018 Hawker 1812513 X3286          
                Core-Mark
International, Inc.   DE — Secretary of
State   4043212 2   02/17/04   UCC-1   Raymond Leasing
Corporation   Freight/Install...Rentals Raymond OPC30TT 32454 HAWKER 12125F15
XL289355, XB391925, XB391235, XB391627, XB392723, XB392488 Raymond OPC30TT
Freight/Install...HAWKER PH3R12865 39161E03, 39162E03, 3916E03                  
        Core-Mark
International, Inc.   DE — Secretary of
State   5001946 4   01/04/05   UCC-1   CIT Technologies
Corporation   Specific equipment, subject to
capital lease No. 096                           Core-Mark
International, Inc.   DE — Secretary of
State   5066035 8   03/02/05   UCC-1   CIT Technologies
Corporation   Specific equipment, subject to
capital lease No. 097                           Core-Mark
International, Inc.   KY — Secretary of
State   2004-1993170-96   03/09/04   UCC-1   Winkler, Inc.   Purchase money
security interest all of Debtor’s interest in personal property of every kind
and nature including all receivables, contract rights, inventory...            
                          08/16/04   UCC-3 Amendment   Winkler, Inc.   Refers to
2004-1993170-96 Restated Collateral Description - All goods purchased from
Secured Party by Debtor...which goods shall constitute inventory of Debtor
(including those types of goods described in Schedule A attached...)

 

4

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                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   OR — Secretary of
State   297278   01/25/96   UCC-1   MFP Technology
Services Inc.   Specific equipment, subject to
capital lease No. 8166-1                                       05/29/96   UCC-3
Assignment   Norwest Equipment
Finance, Inc.   Refers to 297278
Assignment to Norwest Equipment
Finance, Inc. from MFP Technology
Services, Inc.                                       07/16/96   UCC-3 Amendment
  Norwest Equipment
Finance, Inc.   Refers to 297278
Amendment to delete Appendix A
and to add Appendix A-1 attached
thereto.                                       10/17/00   UCC-3 Assignment   MFP
Financial
Services Inc.   Refers to 297278
Assignment to MFP Financial
Services Inc. from Norwest
Equipment Finance, Inc.                                       11/14/00   UCC-3
Continuation   MFP Financial
Services Inc.   Continuation of 297278                           Core-Mark
International, Inc.   OR — Secretary of
State   596395   08/16/02   UCC-1   Les Schwab Tire
Centers of Portland   Contractual Security Agreement in all present and future
products and goods and proceeds thereof...                           Core-Mark
International, Inc.   OR — Secretary of
State   482694   09/08/99   UCC-1   El Camino Resources
Ltd.   Specific equipment, subject to
capital lease No. 2858-062                           Core-Mark
International, Inc.   TX — Secretary of
State   00-566197

05-00102499   08/16/00

04/04/05   UCC-1

UCC-3 Continuation   SierraCities.com

SierraCities.com   Specific equipment, subject to
capital lease No.244269/273537

Continuation of 00-566197                           Core-Mark
International, Inc.   WA — Department of
Licensing   2000-257-0316   09/13/00   UCC-1   El Camino Resources
Ltd.   Specific equipment, subject to
capital lease 2858-073                          

 

5

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                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
Interrelated
Companies Inc.
(Debtor Tradename:
American
Merchandiser)   CA — Secretary of
State   91109021   05/17/91   UCC-1   General Electric
Company, GE Lighting   Inventory consisting of lamps and light bulbs, ballasts,
wiring devices, and portable lighting products...Accounts receivable, contract
rights, chattel paper, and any other right to the payment of money and
security...arising from the sale, consignment or other transfer by the Debtor of
said inventory.                                   96032C0211   01/31/96   UCC-3
Continuation   General Electric
Company, GE Lighting   Continuation of 91109021                                
  96094C0232   04/02/96   UCC-3 Amendment   General Electric
Company, GE Lighting   Refers to 91109021 Deletes the tradename American
Merchandiser. Amends Debtor’s Address. Amends Secured Party’s Address.          
                        01023C0008   01/16/01   UCC-3 Continuation   General
Electric
Company, GE Lighting   Continuation of 91109021                          
Core-Mark Mid
Continent, Inc.   CO — Secretary of
State   962030527   04/22/96   UCC-1   Advanta Business
Services Corp.   9 — Elmo 1/3” B&W Chip Cameras, 9 — Pelco Wall/Ceiling Mounts,
6MM Auto Iris Lenses                                   962092630   12/11/96  
UCC-3 Continuation   Advanta Business
Services Corp.   Continuation of 962030527                                  
19972126300   12/30/97   UCC-3 Continuation   Advanta Business
Services Corp.   Continuation of 962030527

 

6

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US judgment liens, notice given by the following filings:

                          Debtor   Jurisdiction   File Number   Filing Date  
Type Of Filing   Secured Party   Judgment Amount                          
Core-Mark
International, Inc.   TX — Denton County
Clerk   2000-R0111437   11/17/00   Judgment Lien   Rayatparsar, Reza   $1,338.28
                          Core-Mark
International, Inc.   OR — Secretary of
State, County of
Multnomah   303338 (former file
no. S91331)   Filed: 03/20/96
Warrant Date:
01/31/96   Warrant and Writ of
Execution   Employment Department   $2,275.87 (plus interest)

US tax liens, notice given by the following filings:

                          Debtor   Jurisdiction   File Number   Filing Date  
Type Of Filing   Secured Party   Tax Amount                           Head
Distributing
Company   GA — Cobb County
Superior Court   2004-0027059   02/12/04   State Tax Lien, Writ
of Fieri Facias   Wheels Inc.   $1,078.55                           Core-Mark
International, Inc.   NM — Bernalillo
County Clerk   1996122649   11/12/96   State Tax Lien   New Mexico Department
of Labor   $360.66

Canada regns, notice given by the following filings:

                                      Filing   Type Of         Debtor  
Jurisdiction   Regn Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   Ontario   088182- 900881829   05/19/98   CSRA   National
Trust Company   Trust Indenture in the amount of
$20,000,000.00                           Core-Mark
International, Inc.   Ontario   895088286- 20030605
1316 1590 7166   06/05/03   PPSA   JPMorgan Chase Bank   Inventory, Equipment,
Accounts,
Other, Motor Vehicles                           Core-Mark
International, Inc.   BC   6529487   08/06/96   PPSA   The Chase Manhattan
Bank, as Admin Agent   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   BC   8232387   04/30/99   PPSA   Inland Kenworth  
Kenworth T300                           Core-Mark
International, Inc.   BC   8486064   09/29/99   PPSA   Inland Kenworth  
Kenworth T300                          

 

7

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                                      Filing   Type Of         Debtor  
Jurisdiction   Regn Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.
Inland Kenworth   BC   8869850   05/15/00   PPSA   Paccar Leasing a
division of Paccar of Canada Ltd.   2001 Kenworth T300                          
Core-Mark
International, Inc.   BC   8955952   07/05/00   PPSA   Inland Kenworth  
Kenworth T300                           Core-Mark
International, Inc.   BC   8971386   07/13/00   PPSA   Telecom Leasing Canada
(TLC) Limited   Telecommunications Equipment
Lease #2010000414                           Core-Mark
International, Inc.   BC   9152139   11/01/00   PPSA   Ensign Pacific Lease Ltd.
  2001 Dodge Grand Caravan Sport                           Core-Mark
International, Inc.
Inland Kenworth   BC   9539288   07/03/01   PPSA   Paccar Leasing a
division of Paccar of Canada Ltd.   3 — 2001 Kenworth T800s                    
      Core-Mark
International, Inc.   BC   9696226   10/02/01   PPSA   Paclease, a division of
Inland Kenworth Ltd.   Kenworth T300                           Core-Mark
International, Inc.   BC   150022A   01/03/02   PPSA   IBM Canada Limited  
Office machines and other
equipment                           Core-Mark
International, Inc.   BC   192737A   01/25/02   PPSA   Paclease, a division of
Inland Kenworth Ltd.   Kenworth T800B                           Core-Mark
International, Inc.   BC   192743A   01/25/02   PPSA   Paclease, a division of
Inland Kenworth Ltd.   2 — Kenworth T800Bs                           Core-Mark
International, Inc.   BC   950618A   03/24/03   PPSA   Tele-Mobile Company  
Wireless communications handsets
and accessories                           Core-Mark
International Inc.
  BC   975855A   04/04/03   Miscellaneous Registrations Act   Her Majesty the
Queen in the Right of the Province of British Columbia   All the debtor’s
present and after-acquired personal property, including but not restricted to
machinery, equipment, furniture, fixtures, inventory and receivables.          
                Core-Mark
International Inc.
Inland Kenworth   BC   000670B   04/21/03   PPSA   Paccar Leasing, a division of
Paccar of Canada Ltd.   2004 Kenworth T300 Straight                          
Core-Mark
International Inc.   BC   062854B   05/23/03   PPSA   Paclease, a division of
Inland Kenworth Ltd.   Kenworth T300                           Core-Mark
International Inc   BC   087183B   06/05/03   PPSA   JPMorgan Chase Bank   All
present and after-acquired
personal property of the debtor.                           Core-Mark
International Inc.   BC   099061C   12/17/04   PPSA   Xerox Canada Ltd.   Xerox
equipment

 

8

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                                      Filing   Type Of         Debtor  
Jurisdiction   Regn Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International Inc.   BC   133853C   01/12/05   PPSA   Konica Minolta Business
Solutions (Canada) Ltd.
Solutions D’Affaires
Konica Minolta (Canada)
Ltee   1 — Minolta DI5510 photocopier
1 — PI7200 print controller
1 — Minolta C350 photocopier
1 — Minolta DI1610 photocopier
with all attachments, accessories
and proceeds thereof                           Core-Mark
International Inc.   BC   482397C   07/25/05   PPSA   Ryder Truck Rental
Canada Ltd.   2004 FRTL                           Core-Mark
International Inc.   BC   482398C   07/25/05   PPSA   Ryder Truck Rental
Canada Ltd.   2004 FRTL                           Core-Mark
International, Inc.
Core-Mark
Internation (sic)
Inc.   BC   554730C   09/31/05   Repairers Lien Act   Lions Gate Trailers Ltd.  
1995 Trailmobile Van
Amount: $1,932.51                           Core-Mark
International, Inc.   BC   573717C   09/12/05   Repairers Lien Act   Lions Gate
Trailers Ltd.   1995 Trailmobile Van
Amount: $2,275.61                           Core-Mark
International Inc   BC   599911C   09/26/05   PPSA   JPMorgan Chaser Bank,
N.A., as Admin. Agent   All of the debtor’s present and
after acquired personal property.                           Core Mark
International Inc.   BC   610705C   09/30/05   Repairers Lien Act   Kal Tire a
Corporate
Partnership   1995 Trlmbl Vanpup
Amount: $2,534.28                           Core Mark
International Inc   Alberta   00110810413   11/08/00   PPSA   Xerox Canada Ltd.
  Xerox equipment                           Core Mark
International Inc
C.T.S. Lease &
Rental   Alberta   04053107746   05/31/04   PPSA   Paccar Leasing a
Division of Paccar of Canada Ltd.   2004 Wabash Trlr/Semi-Trailer              
            Core-Mark
International Inc   Alberta   03031023603   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   1998 Intl 8100                           Core-Mark
International Inc   Alberta   03031023652   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   199 Intl F4900 (SBA)                           Core-Mark
International Inc   Alberta   03031023678   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   1999 Intl F4900 (SBA)                           Core-Mark
International Inc   Alberta   03031023785   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   2002 Intl 8100                           Core-Mark
International Inc   Alberta   03031023793   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   2002 Intl 8100                           Core-Mark
International Inc   Alberta   03031023827   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   2002 Intl 8100                          

 

9

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                                      Filing   Type Of         Debtor  
Jurisdiction   Regn Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International Inc   Alberta   03031023835   03/10/03   PPSA   Ryder Truck Rental
Canada Ltd.   2002 Intl 8100                           Core-Mark
International Inc   Alberta   05030829849   03/08/05   PPSA   Ryder Truck Rental
Canada Ltd.   2005 International 8600                           Core-Mark
International Inc   Alberta   05030829872   03/08/05   PPSA   Ryder Truck Rental
Canada Ltd.   2005 International 8600                           Core-Mark
International Inc   Alberta   05030829914   03/08/05   PPSA   Ryder Truck Rental
Canada Ltd.   2005 International F9400I                           Core-Mark
International, Inc.   Alberta   96080616228   08/06/96   PPSA   The Chase
Manhattan
Bank, as Admin. Agent   All of the debtor’s present and
after acquired personal property.                           Core-Mark
International, Inc.   Alberta   02022705590   02/27/02   PPSA   Danka Canada
Inc.   All goods supplied by the secured
party.                           Core-Mark
International, Inc.   Alberta   03032503017   03/25/03   PPSA   Tele-Mobile
Company   Wireless communications handsets
and accessories                           Core-Mark
International, Inc.   Manitoba   200305641404   03/24/03   PPSA   Tele-Mobile
Company   Wireless communications handsets
and accessories                           Core-Mark
International, Inc.   Manitoba   200409496007   05/31/04   PPSA   Paccar Leasing
a
division of Paccar of Canada Ltd.   2005 Kenworth T800 Tractor                  
        Core-Mark
International, Inc.   Manitoba   200421037409   11/23/04   PPSA   Paccar Leasing
a
division of Paccar of Canada Ltd.   2005 Kenworth T300 Straight Truck          
                Core-Mark
Internation (sic)
Inc.   Manitoba   960808109194   08/08/96   PPSA   Paccar of Canada Ltd.   1997
Kenworth T300                           Core-Mark
International Inc   Manitoba   980401109620   04/01/98   PPSA   The Chase
Manhattan Bank   All Assets.                           Coremark (sic)   Manitoba
  200121834501   06/13/01   PPSA   Paccar Leasing a
Division of Paccar of Canada Ltd.   2001 Hino FB1817                          
Coremark
International   Manitoba   200213346708   06/21/02   PPSA   Paccar Leasing a
Division of Paccar of Canada Ltd.   2003 Kenworth T300                          
Coremark
International   Manitoba   200118047701   04/27/01   PPSA   Paccar Leasing a
Division of Paccar of Canada Ltd.   2001 Kenworth T800 Tractor

 

10

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PART II — LIENS AND REGNS TO BE RELEASED AT CLOSING
US debtor liens to be released on or about October  _____, 2005, notice given by
the following UCC financing statements:

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark Holding Company, Inc.   DE —
Secretary of
State   4239255 5   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark Holding Company, Inc.
  DE — Secretary of
State   4239319 9   08/24/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Core-Mark Holdings I,
Inc.   DE — Secretary of
State   4239244 9   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark Holdings I, Inc.   DE
— Secretary of
State   4239317 3   08/24/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Core-Mark Holdings II,
Inc.   DE — Secretary of
State   4239248 0   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark Holdings II, Inc.  
DE — Secretary of
State   4239316 5   08/24/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Core-Mark Holdings III,
Inc.   DE — Secretary of
State   4239250 6   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark Holdings III, Inc.  
DE — Secretary of
State   4239314 0   08/24/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Core-Mark International,
Inc   DE — Secretary of
State   4239253 0   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark International, Inc  
DE — Secretary of
State   4239318 1   08/24/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Core-Mark Interrelated
Companies Inc.   CA — Secretary of
State   04-1002344583   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark Interrelated
Companies Inc.   CA — Secretary of
State   04-1002430155   08/24/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.

 

11

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                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark Midcontinent, Inc.   AR —
Secretary of
State   41265220678   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Core-Mark Midcontinent, Inc.  
AR — Secretary of
State   41265247960   08/25/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Core-Mark Midcontinent,
Inc.   KY — Grayson County Clerk   Book 4,
Page 116;
91166   10/08/04   UCC-1 Fixture Filing   General Electric
Capital Corporation   Certain land and
improvements located in
Grayson County,
Kentucky, more
specifically described
in Exhibit A thereto.                           Head Distributing Company   GA —
UCC Central
Indexing System   0332004008386   08/25/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Head Distributing Company   GA
— UCC Central
Indexing System   0332004008407   08/25/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.                           Minter-Weisman Co.   MN —
Secretary
of State   200412997595   08/24/04   UCC-1   General Electric
Capital Corporation,
as Agent   All assets.                           Minter-Weisman Co.   MN —
Secretary
of State   200413011848   08/25/04   UCC-1   Wells Fargo Bank,
N.A., as Agent   All assets.

Canada regns to be released on or about October  _____, 2005, notice given by
the following filings:

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   Ontario   608244858- 20040818
0956 1590 6218   08/18/04   PPSA   Wells Fargo Bank,
N.A., as Agent   Inventory, Equipment, Accounts,
Other, Motor Vehicles                           Core-Mark
International, Inc.   Ontario   608162499- 20040816
0943 1590 6099   08/16/04   PPSA   General Electric
Capital Corporation,
as Agent   Inventory, Equipment, Accounts,
Other, Motor Vehicles                           Core-Mark
International, Inc.   BC   880037B   08/16/04   PPSA   General Electric
Capital Corporation   All present and after-acquired
personal property of the debtor.                          

 

12

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                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark
International, Inc.   BC   890556B   08/20/04   PPSA   Wells Fargo Bank, N.A.  
All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Alberta   04081309629   08/13/04   PPSA   General Electric
Capital Corporation   All personal property and other
assets.                           Core-Mark
International, Inc.   Alberta   04081310536   08/13/04   PPSA   General Electric
Capital Corporation   All intellectual property                          
Core-Mark
International, Inc.   Alberta   04081730022   08/17/04   PPSA   Wells Fargo
Bank, N.A.   All personal property and other
assets.                           Core-Mark
International, Inc.   Alberta   04081731053   08/17/04   PPSA   Wells Fargo
Bank, N.A.   All intellectual property                           Core-Mark
International, Inc.   Saskatchewan   121139572   08/13/04   PPSA   General
Electric
Capital Corporation,
as Agent   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Saskatchewan   121139598   08/13/04   PPSA   General
Electric
Capital Corporation,
as Agent   All intellectual property.                           Core-Mark
International, Inc.   Saskatchewan   121164111   08/19/04   PPSA   Wells Fargo
Bank, N.A.   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Manitoba   200414938000   08/19/04   PPSA   General
Electric
Capital Corporation,
as Agent   All intellectual property.                           Core-Mark
International, Inc.   Manitoba   200414937003   08/19/04   PPSA   Wells Fargo
Bank,
N.A. as Agent   All intellectual property.                           Core-Mark
International, Inc.   Manitoba   200414935906   08/19/04   PPSA   Wells Fargo
Bank,
N.A., as Agent   All personal property and other
assets.                           Core-Mark
International, Inc.   Manitoba   200414576809   08/13/04   PPSA   General
Electric
Capital Corporation,
as Agent   All personal property and other
assets.                           Core-Mark
International, Inc.   Northwest Territories   279810   08/13/04   PPSA   General
Electric
Capital Corporation   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Northwest Territories   281477   08/20/04   PPSA   Wells
Fargo Bank,
N.A., as Agent   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Nunavut   59402   08/13/04   PPSA   General Electric
Capital Corporation   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Nunavut   59992   08/20/04   PPSA   Wells Fargo Bank,
N.A., as Agent   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Yukon   24348   08/17/04   PPSA   General Electric
Capital Corporation,
as Agent   All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Yukon   24355   08/17/04   PPSA   General Electric
Capital Corporation,
as Agent   All intellectual property.                           Core-Mark
International, Inc.   Yukon   25515   08/19/04   PPSA   Wells Fargo Bank, N.A.  
All present and after-acquired
personal property of the debtor.                           Core-Mark
International, Inc.   Yukon   25523   08/19/04   PPSA   Wells Fargo Bank, N.A.  
All intellectual property.

 

13

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PART III — EXISTING LIENS, SUBORDINATED OR PAID-OFF
The following financing statements give notice of liens given by debtor that are
contractually subordinate to all liens granted under the Pledge and Security
Agreement (as it may be amended or modified from time to time, the “Security
Agreement”) dated as of October  _____, 2005 by and among the Grantors (as
defined in the Security Agreement) and JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the lenders party to this Agreement:

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Core-Mark Holding
Company, Inc.   DE — Secretary of State   4241931 7   08/26/04   UCC-1  
Reclamations
Creditors’ Trust   All assets.                           Core-Mark Holding
Company, Inc.   DE — Secretary of State   4241933 3   08/26/04   UCC-1  
Reclamations
Creditors’ Trust   All assets.

PART IV — FILINGS OF RECORD TO BE TERMINATED
The following financing statement gives notice of a lien given by debtor
pursuant to a credit facility that has been terminated. All loans and other
obligations previously secured by such lien have been discharged in full. The
Borrowers acknowledge and agree that notwithstanding any other provision of this
Agreement (a) this filing shall be terminated no later than December 1, 2005 and
(b) at no time shall the Borrower or any of its Subsidiaries create any lien
that would be perfected by this filing:

                                      Filing   Type Of         Debtor  
Jurisdiction   File Number   Date   Filing   Secured Party   Description Of
Collateral                           Cardinal Wholesale, Inc.   MN — Secretary
of State   20024457058   6/20/02   UCC-1   Deutsche Bank Trust
Company Americas   All assets.

 

14

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Schedule 6.04 to Credit Agreement
Existing Investments
Stock Holdings
1) Investments

                                      Number     Estimated Share     Holdings  
        Company Name   Shares     Price     Value     Exchange   Holder
 
                               
ILD Holdings, Inc.
    600     $ 120.00     $ 72,000     Non-Public   Head Distributing Company
 
                               
Prudential Financial
    51     $ 65.87     $ 3,359     NYSE   Minter - Weisman Co. Can
 
                               
Altria Group, Inc. Direct Stock Purchase and Dividend Reinvestment Plan
    6.084     $ 71.94     $ 438     NYSE   Minter - Weisman Co. Can
Altria Group, Inc. Direct Stock Purchase and Dividend Reinvestment Plan
    6.102     $ 71.94     $ 439     NYSE   Adel Grocery Company
Altria Group, Inc. Direct Stock Purchase and Dividend Reinvestment Plan
    6.148     $ 71.94     $ 442     NYSE   Core-Mark Distribution Inc
 
                               
Duckwall-Alco Stores
    262     $ 23.73     $ 6,217     NASDAQ   Core-Mark International, Inc.
Duckwall-Alco Stores
    482     $ 23.73     $ 11,438     NASDAQ    
 
                               
Ames Department Stores
    3,654     $ 0.0015     $ 5     Pink Sheet   Core-Mark Distributors
 
                               
Affiliated Foods, Inc.
    169     $ 207.10     $ 35,000         Core-Mark Midcontinent
Affiliated Foods, Inc.
    6     $ 206.00     $ 1,236          
Affiliated Foods, Inc.
    25     $ 100.00     $ 2,500          
 
                             
 
                               
 
                  $ 133,075          

2) Notes Receivable

                  Customer Name   Original Date     Note Receivable  
 
               
BLUE CHIP (Eureka Management Group)
    2/18/2003       218,510  
 
               
MLK
    11/10/1991       40,224  
 
               
LOGANVILLE CHEVRON
    11/1/2000       15,568  

3) Guarantees
Include by reference Schedule 6.01, item (1) to the Credit Agreement

 

 

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SCHEDULE 6.10
to
CREDIT AGREEMENT
Restrictive Agreements
1.) Restricted Cash Agreement
Agreement made as of the 29th day of July, 2003, between: Her Majesty the Queen
in Right of the Province of Alberta, as represented by the Minister of Revenue
and Core-Mark International, Inc., a Delaware Corporation, carrying on business
in the Provinces of British Columbia and Alberta.

 

 

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EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit, guarantees, and swingline
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

             
1.
  Assignor:        
 
     
 
   
2.
  Assignee:        
 
     
 
            [and is an Affiliate/Approved Fund of [identify Lender]1]
 
           
3.
  Borrower(s):        
 
     
 
   
4.
  Administrative Agent:                       , as the administrative agent
under the Credit Agreement
 
            5.   Credit Agreement:   [The $250,000,000 Credit Agreement dated as
of October [__], 2005 among Core-Mark Holding Company, Inc., certain of its
Affiliates, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents and lenders parties thereto]

      1   Select as applicable.

Exhibit A

 

 

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      6.   Assigned Interest:

                              Aggregate Amount of     Amount of            
Commitment/Loans for     Commitment/Loans     Percentage Assigned of   Facility
Assigned   all Lenders     Assigned     Commitment/Loans2  
 
                       
Revolving Commitment
  $       $         %  
 
  $       $         %  
 
  $       $         %  

Effective Date:                       _____, 20_____ [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:

            ASSIGNOR

[NAME OF ASSIGNOR]
      By:           Title:                ASSIGNEE

[NAME OF ASSIGNEE]
      By:           Title:     

      2   Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

Exhibit A

 

 

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          [Consented to and]3 Accepted:

[NAME OF ADMINISTRATIVE AGENT],
as Administrative Agent
    By:           Title:              [Consented to:]4

[NAME OF RELEVANT PARTY]
    By:             Title:     

      3   To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.   4   To be added only if the
consent of the Administrative Borrower and/or other parties (e.g. Swingline
Lender, Issuing Bank) is required by the terms of the Credit Agreement.

Exhibit A

 

 

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ANNEX 1
[                    ]5
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of any
Borrower, any of their respective Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by any Borrower, any of their respective Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative 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 Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender. If the Assignee will be a Canadian Lender under the
Credit Agreement, the Assignee certifies that it is an “authorized foreign bank”
as defined in the Income Tax Act (Canada) and it will hold its interest in the
Canadian Loans in the course of its “Canadian banking business” as defined in
the Income Tax Act (Canada).
2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

      5   Describe Credit Agreement at option of Administrative Agent.

Exhibit A

 

 

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3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by facsimile shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption
shall be governed by, and construed in accordance with, the law of the State of
New York.
Exhibit A

 

 

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EXHIBIT B
OPINION OF COUNSEL FOR THE BORROWERS
October __, 2005
To the Lenders and the Administrative
Agent Referred to Below
c/o JP Morgan Chase Bank, N.A.,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We have acted as counsel to Core-Mark Holding Company, Inc., Core-Mark
International, Inc., Core-Mark Holdings I, Inc., Core-Mark Holdings II, Inc.,
and Core-Mark Holdings III, Inc., each a Delaware corporation (collectively, the
“Delaware Corporate Opinion Parties”), Core-Mark Interrelated Companies, Inc., a
California corporation (the “California Corporate Opinion Party” and together
with the Delaware Corporate Opinion Parties, the “Corporate Opinion Parties”),
and Core-Mark Midcontinent, Inc., an Arkansas corporation, Head Distributing
Company, a Georgia corporation, and Minter-Weisman Co., a Minnesota corporation
(collectively, the “Designated Companies” and together with the Corporate
Opinion Parties, the “Credit Parties”) in connection with the preparation,
execution and delivery of, and the consummation of the transactions contemplated
by, the Credit Agreement dated as of September ____, 2005 (the “Credit
Agreement”). Capitalized terms defined in the Credit Agreement and used (but not
otherwise defined) herein are used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of (a) (i) the Credit Agreement, (ii) the
Security Agreement, (iii) the Deposit Account Control Agreements listed on
Schedule 1 hereto (collectively, the “Transaction Documents”) and (b) such
corporate records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and
representatives of the Credit Parties, and have made such inquiries of such
officers and representatives, as we have deemed relevant and necessary as a
basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to these opinions that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Credit Parties and upon the representations and
warranties of the Credit Parties contained in the Agreement. We have also
assumed (i) the valid existence of the Designated Companies, (ii) that the
Designated Companies have the requisite corporate power and authority to enter
into and perform the Transaction Documents and (iii) the due authorization,
execution and delivery of the Transaction Documents by the Designated Companies.
As used herein, “to our knowledge” and “of which we are aware” mean the
conscious awareness of facts or other information by any lawyer in our firm
actively involved in the transactions contemplated by the Credit Agreement.
Exhibit B

 

 

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October _____, 2005
Page 2
Based on the foregoing, and subject to the qualifications stated herein, we are
of the opinion that:
1. Each Delaware Corporate Opinion Party is a corporation validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Each Delaware Corporate Opinion
Party is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction identified in Schedule 2 hereto.
2. The California Corporate Opinion Party is a corporation validly existing and
in good standing under the laws of the State of California and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. The California Corporate Opinion
Party is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction identified in Schedule 2 hereto.
3. Each Corporate Opinion Party has all requisite corporate power and authority
to execute and deliver each Transaction Document and to perform its respective
obligations thereunder. The execution, delivery and performance by each of the
Corporate Opinion Parties of each Transaction Document to which it is a party
have been duly authorized by all necessary corporate action on the part of each
Corporate Opinion Party. Each of the Transaction Documents has been duly and
validly executed and delivered by each such Corporate Opinion Party. Assuming
the due authorization, execution and delivery thereof by the other parties
thereto, each of the Transaction Documents constitutes the legal, valid and
binding obligation of each Credit Party party thereto, enforceable against each
such Credit Party in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
(A) rights to indemnification and contribution thereunder may be limited by
federal or state securities laws or public policy relating thereto, (B) no
opinion is expressed with respect to rights of set-off under the Transaction
Documents, (C) certain remedial provisions of the Transaction Documents are or
may be unenforceable in whole or in part under the laws of the State of New
York, but the inclusion of such provisions does not affect the validity of the
Transaction Documents, and the Transaction Documents contain adequate provisions
for the practical realization of the rights and benefits afforded thereby,
(D) no opinion is expressed with respect to any provision of any Transaction
Document providing for liquidated damages and (E) no opinion is expressed with
respect to the enforceability of Section 9.09(e) of the Credit Agreement or the
enforceability under the laws of the State of California of any provision of any
Transaction Document providing for waiver of jury trial or reference to a
referee. No opinion is expressed in this paragraph as to the attachment,
perfection or priority of any liens granted pursuant to the Transaction
Documents.
Exhibit B

 

 

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October ___, 2005
Page 3
4. The execution and delivery by each Credit Party of the Transaction Documents
to which such Credit Party is a party and the performance by such Credit Party
of its respective obligations thereunder will not conflict with, constitute a
default under or violate (i) with respect to each Credit Party, any of the
terms, conditions or provisions of the corporate charter or by-laws of such
Credit Party, (ii) any of the terms, conditions or provisions of any material
document, agreement or other instrument listed on Schedule 3 hereto, (iii) any
New York, California, Delaware corporate or federal law or regulation (other
than federal and state securities or blue sky laws, as to which we express no
opinion in this paragraph), including without limitation, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System or (iv) any judgment, writ, injunction, decree, order or ruling of any
court or governmental authority binding on any Credit Party of which we are
aware.
5. No consent, approval, waiver, license or authorization or other action by or
filing with any New York, California, Delaware corporate or federal governmental
authority is required in connection with the execution and delivery by any
Credit Party of the Transaction Documents, the consummation by any Credit Party
of the transactions contemplated thereby or the performance by any Credit Party
of its respective obligations thereunder, except for (i) filings in connection
with perfecting security interests created by the Transaction Documents,
(ii) federal and state securities or blue sky laws, as to which we express no
opinion in this paragraph, (iii) those already obtained and (iv) immaterial
consents, approvals, waivers, license or authorizations or other actions.
6. [Except as set forth in                     ], to our knowledge, there is no
litigation, proceeding or governmental investigation pending or overtly
threatened against any Credit Party that relates to any of the transactions
contemplated by the Transaction Documents or which, if adversely determined,
would have a material adverse effect on the business, assets or financial
condition of such Credit Parties and their respective subsidiaries taken as a
whole.
7. (a) The execution and delivery of the Security Agreement creates a valid
security interest in the Collateral (as defined in the Security Agreement), as
security for the Obligations. Assuming the filing of the financing statements on
Form UCC 1 attached hereto as Exhibit A with the Secretary of State of the
States of Delaware and California, as applicable, such security interest is
perfected, to the extent a security interest in the Collateral may be perfected
by the filing of a financing statement under the Uniform Commercial Code in
effect in the State of Delaware (the “DE UCC”) and the Uniform Commercial Code
in effect in the State of California (the “CA UCC”).
(b) The execution and delivery of the Security Agreement creates a valid lien on
and security interest in the Pledged Collateral (as defined in the Security
Agreement), as security for the Obligations. Assuming (i) delivery in the State
of New York to the Administrative Agent (the “Pledgee”) of all certificates that
represent the Pledged Collateral, together with stock powers properly executed
in blank with respect thereto, and (ii) that the Pledgee was without notice of
any adverse claim (as such phrase is defined in Section 8-105 of the Uniform
Commercial Code in effect in the State of New York (the “NY UCC” and, together
with the DE UCC and the CA UCC, the “UCC”) with respect to the Pledged
Collateral, such security interest is perfected and is free of any adverse
claim.
Exhibit B

 

 

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October ___, 2005
Page 4
The opinions in subparagraph (a) and, with respect to subclause A below,
subparagraph (b) are subject to the following exceptions:
A. that with respect to rights in the Collateral of any Grantor (as defined in
the Security Agreement), we express no opinion, and have assumed that such
Grantor has rights in the Collateral;
B. that with respect to any Collateral as to which the perfection of a lien or
security interest is governed by the laws of any jurisdiction other than the
States of New York, Delaware or California, we express no opinion;
C. that with respect to security interests in real property leases or insurance
policies, we express no opinion;
D. that with respect to any Collateral which is or may become fixtures (as
defined in Section 9-102(a)(41) of the UCC) or a commercial tort claim (as
defined in Section 9-102(a)(13) of the UCC), we express no opinion; and
E. that with respect to transactions excluded from Article 9 of the UCC by
Section 9-109 thereof, we express no opinion.
The opinion set forth in subparagraph (b) is also subject to the following
exceptions:
F. that with respect to (i) federal tax liens accorded priority under law and
(ii) liens created under Title IV of the Employee Retirement Income Security Act
of 1974 which are properly filed after the date hereof, we express no opinion as
to the relative priority of such liens and the security interests created by the
Security Agreement or as to whether such liens may be adverse claims; and
G. that with respect to any claim (including for taxes) in favor of any state or
any of its respective agencies, authorities, municipalities or political
subdivisions which claim is given lien status and/or priority under any law of
such state, we express no opinion as to the relative priority of such liens and
the security interests created by the Security Agreement or as to whether such
liens may be adverse claims.
In addition, the opinions in subparagraphs (a) and (b) are subject to (i) the
limitations on perfection of security interests in proceeds resulting from the
operation of Section 9-315 of the UCC; (ii) the limitations with respect to
buyers in the ordinary course of business imposed by Sections 9-318 and 9-320 of
the UCC; (iii) the limitations with respect to documents, instruments and
securities imposed by Sections 8-302, 9-312 and 9-331 of the UCC; (iv) the
provisions of Section 9-203 of the UCC relating to the time of attachment; and
(v) Section 552 of Title 11 of the United States Code (the “Bankruptcy Code”)
with respect to any Collateral acquired by a Grantor subsequent to the
commencement of a case against or by a Grantor under the Bankruptcy Code.
We further assume that all filings will be timely made and duly filed as
necessary (i) in the event of a change in the name, identity or corporate
structure of a Grantor, (ii) in the event of a change in the location of a
Grantor and (iii) to continue to maintain the effectiveness of the original
filings.
Exhibit B

 

 

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October ___, 2005
Page 5
(c) The execution and delivery by the Grantors of the Security Agreement creates
in favor of the Administrative Agent a valid security interest in each Deposit
Account described therein. Upon the execution and delivery of the Deposit
Account Control Agreements listed on Schedule 1 hereto by the Grantors, the
Administrative Agent and the bank at which such Deposit Account referenced in
Schedule 1 is maintained, the security interest granted to the Administrative
Agent in such Deposit Account will be perfected.
The opinion set forth in this paragraph (c) is subject to the following
exceptions:
A. that with respect to rights in or title to the Collateral of the Grantors (as
such term is defined in the Security Agreement), we express no opinion, and have
assumed that the Grantors have rights in the Collateral; and
B. that with respect to any Collateral as to which the perfection of a lien or
security interest is governed by the laws of any jurisdiction other than the
States of New York, Delaware or California, we express no opinion.
In addition, the opinion in paragraph (c) is subject to (i) the limitations on
perfection of security interests in proceeds resulting from the operation of
Section 9-315 of the UCC; (ii) the limitations with respect to securities
imposed by Sections 8-302 and 9-312 of the UCC; (iii) the provisions of
Section 9-203 of the UCC relating to the time of attachment; and
(iv) Section 552 of Title 11 of the United States Code (the “Bankruptcy Code”)
with respect to any Collateral acquired by a Grantor subsequent to the
commencement of a case against or by a Grantor under the Bankruptcy Code.
8. No Credit Party is an “investment company” and none of the Credit Parties is
a company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
9. None of the Credit Parties is a “holding company” or “subsidiary company” as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.
The opinions expressed herein are limited to the laws of the State of New York,
the laws of the State of California, the corporate laws of the State of
Delaware, Article 9 of the DE UCC, Article 9 of the CA UCC and the federal laws
of the United States, and we express no opinion as to the effect on the matters
covered by this letter of the laws of any other jurisdiction. The opinions
expressed herein are rendered solely for your benefit in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies hereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent.
Very truly yours,
Exhibit B

 

 

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Schedule 1 to Form of Legal Opinion
Deposit Account Control Agreements
Schedule 1-1

 

 

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Schedule 2 to Form of Legal Opinion
Foreign Jurisdictions
Schedule 2-1

 

 

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Schedule 3 to Form of Legal Opinion
Material Agreements
Schedule 3-1

 

 

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Exhibit A to Form of Legal Opinion
UCC-1 Financing Statements

 

 

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EXHIBIT C
BORROWING BASE CERTIFICATE
See attached.
Exhibit C

 

 

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

 

Credit Agreement
Core-Mark International Inc. Consolidated
Borrowing Base Certificate Smmary

                              Consolidated               Core-Mark  
Gross A/R as of
    7/31/2005     $ 0  
Inter-company A/R
            0  
Net A/R as of
    7/31/2005     $ 0  
 
             
 
               
Less:
               
Past Due Accounts > 60 Days from Due Date
            —  
Credit Balances >60 Days from Due Date
            —  
Past Due Accounts > 90 Days from Invoice Date
            —  
Employee Receivables (status 79)
            —  
Cash & Carry Customers (status 81)
            —  
Factory Representatives (status 87)
            —  
Government Accounts (status 88)
            —  
Notes Receivable (status 91)
            —  
Bankruptcy/Collection/Court Action (status 92-94)
            —  
Cross-Age (=>50.0%)
            —  
COD Customers
            —  
Chargebacks
            —  
Contra Accounts
            —  
Unapplied Cash
            —  
Customer Rebates
            —  
Customer Deposits
            —  
Unreconciled Aging to G/L Variance (Jul)
            —  
Pre-Bill Reserve
            —  
Overconcentration 20%, 10%
            —  
Dilution Reserve > 5%
            —  
Clean Invoices
            —  
Others
            —  
 
             
Total Ineligible A/R
            —  
 
             
Eligible Accounts Receivable
            —  
Accounts Receivable Advance Rate
            85.0 %
 
             
(A) Available Accounts Receivable
            —  
 
             
 
               
Inventory as of
    7/31/2005     $ 0  
 
             
 
               
Less:
               
Dry-room Inventory (35.0%)
            —  
Equipment/Displays
            —  
Shrink Reserve
            —  
Non-Cigs Inventory on Hand 180 Days (50.0%)
            —  
Non-Cigs Inventory on Hand 360 Days (100.0%)
            —  
Cigs Inventory on Hand 180 Days (25.0%)
            —  
U.S. Tobacco Stamps Reserve
            —  
Merchandise Income Reserve (PEI) as of Jun-05 (50.0%)
            —  
Perishable Reserve
            —  
Unreconciled Perpetual to G/L Variance
            —  
Inter-Company Profits
            —  
Outside Dryroom (processed offsite by 3rd party only)
            —  
Other Ineligibles
            —  
 
             
Total Ineligible Inventory
            —  
 
             
Eligible Inventory
            —  
 
             
 
               
Available Inventory
            —  
 
             
 
               
Plus:
               
Unaffixed Stamps Add-in (90%)
            —  
 
             
 
               
(B) Net Available Inventory
            —  
 
             
 
               
(C) Total Revolver Availability (A+B)
          $ 0  
 
             
 
               
100% Unrestricted Cash
          $ 0  
PP&E Component
          $ 0  
 
             
(D) Plus: Total Unrestricted Cash and PP&E Component
          $ 0  
 
               
Inventory Overadvance — lesser of
               

 

 

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

 

Credit Agreement
Core-Mark International Inc. Consolidated
Borrowing Base Certificate Smmary

                              Consolidated               Core-Mark  
(E) Plus: (I) $5000000 or (II) (90% of 78.4% NOLV)
  NO     $ 0  
 
             
 
               
(F) Less: Collateral Reserves
               
 
               
U.S. Tobacco Stamps Liability In Excess of Stamps
            —  
Landlord Lien Reserve
            —  
Canadian Priority Claims
            —  
Canadian Tax Liability
            —  
Cash Reserves to Offset Canadian Tax Liability
            —  
 
             
Total Reserves
            —  
 
             
 
               
Borrowing Base — Net of Collateral Reserves
            —  
 
               
Lesser of Borrowing Base (Net of Reserves) and Commitment
            —  
 
               
Less Exposure Reserves
               
Withholding Taxes
            —  
Banking Services
            —  
Canadian Priority Claims — Employee Related
            —  
 
             
Total Reserves
            —  
 
             
 
               
Availability after Exposure Reserves
            —  
 
               
Outstanding US Revolving Loan Balance as of
    7/31/2005       —  
Outstanding Canadian Revolving (US$) Loan Balance as of
    7/31/2005       —  
Outstanding US First Funded Revolving Loan Balance as of
    7/31/2005       —  
 
             
Total Loan Balance
            —  
Letter Of Credit Obligations
            —  
 
           
 
               
Excess Borrowing Base Availability
          $ 0  
 
             

 

 

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

 

Core-Mark Inc.
Borrowing Base
7/31/2005

                                  (000)’s   U.S.     Canada (US$)     Total    
 
Gross A/R
  $ —     $ —     $ —      
Inter-company A/R
    —     $ —       —      
Net A/R
  $ —     $ —     $ —      
Ineligibles
                        c  
Past Due Accounts > 60 Days from Due Date
    —       —       —   c  
Credit Balances >60 Days from Due Date
    —       —       —   c  
Past Due Accounts > 90 Days from Invoice Date
    —       —       —   o  
Employee Receivables (status 79)
    —       —       —   x  
Cash & Carry Customers (status 81)
    —       —       —   r  
Factory Representatives (status 87)
    —       —       —   n  
Federal Government Accounts (status 88)
    —       —       —   s  
Notes Receivable (status 91)
    —       —       —   j  
Bankruptcy/Collection/Court Action (status 92-94)
    —       —       —   d  
Cross-Age (=>50.0%)
    —       —       —   x  
COD Customers
    —       —       —   cc  
Chargebacks
    —       —       —   q  
Contra Accounts
    —       —       —   bb  
Unapplied Cash (Jul)
    —       —       —   dd  
Customer Rebates (Jul)
    —       —       —   h  
Customer Deposits (Jul)
    —       —       —   aa  
Unreconciled Aging to G/L Variance (Jul)
    —       —       —   z  
Pre-Bill Reserve
    —       —       —   e  
Overconcentration 20%, 10%
    —       —       —      
Dilution Reserve > 5%
    —       —       —      
Clean Invoice
    —       —       —      
Others
                    —      
 
                     
Total Ineligibles
  $ —     $ —     $ —      
 
                     
Eligible Accounts Receivable
  $ —     $ —     $ —      
Advance Rate
    85.0 %     85.0 %     85.0 %    
 
                     
Available Accounts Receivable
  $ 0     $ 0     $ 0  

                                                      U.S.     Canada (US$)    
            Cigs & Affx Stamps     Non-Cigarettes     Cigarettes    
Non-Cigarettes     Total      
Inventory
  $ —     $ —     $ —     $ —     $ 0      
Ineligibles
                                        p  
Dry-room Inventory (35.0%)
    —       —       —       —       —   e  
Equipment/Displays
            —               —       —   q  
Shrink Reserve (Jul)
    —       —       —       —       —   r  
Non-Cigs Inventory on Hand 180 Days (50.0%) — Jul
            —               —       —   r  
Non-Cigs Inventory on Hand 360 Days (100.0%) — Jul
            —               —       —   r  
Cigs Inventory on Hand 180 Days (25.0%)- Jul
    —               —               —   v  
U.S. Tobacco Stamps Reserve
    —                               —   u  
Merchandise Income Reserve (PEI) as of Jun-05 (50.0%)
    —       —       —       —       —   l  
Perishable — Ju1
            —               —       —   t  
Inter-Company Profits Jul
            —                       —   i  
Outside Dryroom (processed offsite by 3rd party only)
                                    —   x  
Unreconciled Aging to GL Variance
                                    —   z  
Others
                                    —      
 
                                 
Total Ineligible
  $ —     $ —     $ —     $ —     $ —      
 
                                 
Eligible Inventory
  $ —     $ —     $ —     $ —     $ 0      
 
                                           
Advance Rate — Lesser Of
    65.0 %     65.0 %     65.0 %     65.0 %            
(I) 65% of eligible Inventory or
  $ 0     $ 0     $ 0     $ 0     $ 0      
 
                                           
(II) (85% of 78.4% NOLV)
                                  $ 0  
 
                                   
 
                                  $ 0      
 
                                           
Unaffixed Stamps Add-in (90%)
  $ 0       —       —       —     $ 0      
 
                                 
Available Inventory
  $ 0     $ 0     $ 0     $ 0     $ 0      
 
                                 
 
                                           
100% Unrestricted Cash
                                  $ 0      
PP&E Component
                                  $ 0      
 
                                         
Total Unrestricted Cash and PP&E Component
                                  $ 0      
 
                                           
Inventory Overadvance
                                           
less of (I) $5000000 or (II) (90% of 78.4% NOLV)
  NO   Overadvance not included           $ 0      
 
                                   
 
                                  $ 0      
 
                                           
Collateral Reserves
                                        v  
U.S. Tobacco Stamps Liability In Excess of Stamps
                                    0      
Landlord Lien Reserve (Jul)
                                    —      
GST Tax
                                    —      
Canadian Tax Liability (Jul)
                                    —      
Cash Reserves to Offset Canadian Tax Liability (Jul)
                                    —  
 
                                   
Total Reserves
                                  $ 0  
 
                                   
 
                                           
Borrowing Base — Net of Collateral Reserves
                                  $ 0      
 
                                         
 
                                           
Availability before Exposure Reserves
                                  $ 0      
 
                                         
 
                                           
Exposure Reserves
                                           
Witholding Taxes
                                           
Banking Services
                                           
Canadian Priority Claims — Employee Related
                                  $ 0  
 
                                   
Availability after Exposure Reserves
                                  $ 0      
 
                                     

 

 

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

 

Schedule 2 to Borrowing Base
Canadian Priority Claims as of
July 31, 2005

                                                          Canadian Exchange Rate
                          25%     50%     75%     100%                          
                    Account Name   GL #     CDN$     US$     Week 1     Week 2  
  Week 3     Week 4                               percentages only applicable
for GST  
Goods and Services Taxes Collected and Not Yet Remitted
    1186000                       —       —       —       —  
 
                                                       
Employer Taxes Accrued and Not Yey Submitted
    1175000                       —       —       —       —  
 
                                                       
Accrued Quebec Pension Plan & Canada Pension Plan Employer Contributions and
Employee Contribution Withholdings Not Yet Remitted (Accrued Medical)
    1181001                       —       —       —       —  
 
                                                   
 
                                                       
Accrued Workers Compensation Premiums Not Yet Remitted
    1180002                       —       —       —       —  
 
                                                   
 
                                                       
Employee Stock Purchase Plan
    1181004                       —       —       —       —  
 
                                                   
 
                                                       
Accrued Workers Compensation Premiums Not Yet Remitted
    1181002                       0       0       0       0  
 
                                                   
 
                                                       
Accrued Wages Payable Not Yet Remitted
    1180004                       0       0       0       0  
 
                                                   
 
                                                       
Other Employee Benefits Not Yet Remitted (Nest Egg 401K)
    1181005                       0       0       0       0  
 
                                                   
 
                                                       
Accrued Vacation Pay Not Yet Remitted
    1180000                       —       —       —       —  
 
                                                   
 
                                                       
Accrued Employee Income Tax Withholdings Not Yet Remitted
    1171000                       —       —       —       —  
 
                                                   
 
                                                       
 
                                                   
Total Canadian Reserves
            0       0       —       —       —       -  
 
                                                   

 

 

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

 

Schedule 3 to Borrowing Base Certificate
Letters Of Credit
July 31, 2005
Canadian Exchange Rate
1.2259
Description

                                      Canadian L/Cs (000)     US L/C’s (000)    
Total L/C’s       CDN$     US$     US$     US$  
 
                               
Svenska — Old Republic
    0       0       0.0000       0.0000  
ABN — Zurich
    0       0       0.0000       0.0000  
ABN — Hartford
    0       0       0.0000       0.0000  
ABN — St. Paul ABN — Greenwich
    0       0       0.0000       0.0000  
JPM — National Union Fire
    0       0       0.0000       0.0000  
JPM — Reliance
    0       0       0.0000       0.0000  
JPM — Travelers
    0       0       0.0000       0.0000  
WACHOVIA — Liberty Mutual Insurance
    0       0       0.0000       0.0000  
WACHOVIA — Affiliated Foods
    0       0       0.0000       0.0000  
RBC — Alberta Used Oil Mgmt
    0.000       0.000       0       0.0000  
RBC — Manitoba Finance
    0.000       0.000               0.0000  
RBC — Ontario Minister of Finance
    0.000       0.0000       0       0.0000  
RBC — Saskatchewan Finance
    0.000       0.0000       0       0.0000  
RBC — Imperial Tobacco Company
    0.000       0.000       0       0.0000  
 
                       
 
                               
Total L/C Reserve
    0.000       0.000       0.000          
 
                         

 

 

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

 

          Accounts Receivable   Internal use only support to Schedule 1 Source
AROR46C     As of   07/31/05     WSJ — FX rate   1.2259     noon rate        

                                      US     Canada (CD$)     Canada (US$)    
Total  
Gross A/R
                    —       —  
 
                               
Intercompany
                    —       —  
 
                               
Other Ineligibles:
                               
A/R >60 days
                    —       —  
Credits >60 days
                    —       —  
Employee (79)
                    —       —  
Cash and carry (81)
                    —       —  
Factory Reps (87)
                    —       —  
Government (88)
                    —       —  
Notes Rec (91)
                    —       —  
Bankruptcy (92)
                    —       —  
Collection (93)
                    —       —  
Court Action (94)
                    —       —  
Pct over 60 days>=50% (P)
                    —       —  
O/T COD (T)
                    —       —  
A/R chgbks (H)
                    —       —  
 
                           
Total Ineligible
    —       —       —       —  
 
                               
Ineligibles excl credits
    —       —                  
Per AROR46C
                               
Difference
    —       —                  
 
                               
Source: AROD11D
                               
Clean invoices
                    —       —  

 

 

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

 

Inventory Balances -— Internal use only support to Schedule 1
As of            07/31/05

                                              Cigs     Stamps     Cigars & Tob  
  Other     Total  
US
                                       
Inside
                                    0  
PM Buydown
                                    0  
Outside
                                    0  
X-Dock
                                    0  
Dry Room 1
                                    0  
 
                             
Total US
    0       0       0       0       0  
 
  #DIV/0!   #DIV/0!   #DIV/0!   #DIV/0!     100 %
 
          #DIV/0!           #DIV/0!        
Less Unaffixed Stamps
                                       
 
                                       
Net US
    0       0       0       0       0  
 
                                       
Canada ( C$ )
                                       
Inside
                                    0  
Outside
                                    0  
X-Dock
                                    0  
Dry Room 1
                                    0  
 
                             
Total CD Inventory
    0       0       0       0       0  
Excise Taxes 2
            0               0          
 
                             
Total Canadian (CD$)
    0       0       0       0       0   Noon F/X 3     1.2259  
--------------------------------------------------------->
Total Canadian (US$)
    0       0       0       0       0  
 
  #DIV/0!                   #DIV/0!        
 
                                       
Total Company (US$)
    0       0       0       0       0  
 
                             
per BB
                                       

      1  
US and Canadian dry rooom inventory based on Jul 05 GL.
  2  
Excise Taxes (GL# S01405) as of Jul 2005
(n:\t\bb\ge\morptg\moinelig\month\CDexcisetaxes.xls)
  3  
Noon F/X as of            07/31/05

OTHER RESERVES
Intercompany Profits

                                              Year-to-date             July-05  
  Total I/C       Sales1     Gross Profit1             Inventory2     Profits  
AMI
                                       
ARTIC
                                       
 
                                 
Total I/C
    —       —     #DIV/0!     —     #DIV/0!

      1  
Income Statement from White Book
  2  
Asset Analysis — Inventory

 

 

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EXHIBIT D
COMPLIANCE CERTIFICATE

To:   The Lenders parties to the
Credit Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of,                      (as amended, modified, renewed or
extended from time to time, the “Agreement”) among                      (each a
“Borrower” and collectively the “Borrowers”), the other Loan Parties, the
Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for
the Lenders and as the Issuing Bank. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed
thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected                      of each of the Borrowers;
2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of the Borrowers and their respective Subsidiaries during the
accounting period covered by the attached financial statements [for quarterly or
monthly financial statements add: and such financial statements present fairly
in all material respects the financial condition and results of operations of
Holdings and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes];
3. The examinations described in paragraph 2 did not disclose, except as set
forth below, and I have no knowledge of (i) the existence of any condition or
event which constitutes a Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements referred to in
Section 3.04 of the Agreement;
4. I hereby certify that no Loan Party has changed (i) its name, (ii) its chief
executive office, (iii) principal place of business, (iv) the type of entity it
is or (v) its state of incorporation or organization without having given the
Agent the notice required by Section 4.15 of the Security Agreement;
5. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrowers’ compliance with Section 6.13 of the Agreement (if
applicable under the terms of Section 6.13), all of which data and computations
are true, complete and correct; and
6. Schedule II hereto sets forth the computations necessary to determine the
Applicable Rate commencing on the Business Day this certificate is delivered.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the (i) nature of the condition or event, the period during which it has
existed and the action which the Borrowers have taken, is taking, or proposes to
take with respect to each such condition or event or (i) the change in GAAP or
the application thereof and the effect of such change on the attached financial
statements:

         
 
 
 
   
 
       
 
 
 
   
 
       
 
 
 
   

Exhibit D

 

 

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The foregoing certifications, together with the computations set forth in
Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this  _____ day of
                    ,  _______.

                        By:           Name:           Title:      

Exhibit D

 

 

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SCHEDULE I
Compliance as of                     ,                      with
Provisions of                      and                      of
the Agreement
Exhibit D

 

 

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SCHEDULE II
Borrowers’ Applicable Rate Calculation
Exhibit D

 

 

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EXHIBIT E-1
LOAN PARTY JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”), dated as of                     ,
___, 200_, is entered into between                                         , a
                     (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., in
its capacity as administrative agent (the “Administrative Agent”) under that
certain Credit Agreement, dated as of                     , _____, 200___ among
                     (each a “Borrower” and collectively the “Borrowers”), the
Loan Parties party thereto, the Lenders party thereto and the Administrative
Agent (as the same may be amended, modified, extended or restated from time to
time, the “Credit Agreement”). All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.
The New Subsidiary and the Administrative Agent, for the benefit of the Lenders,
hereby agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Loan
Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the
Credit Agreement and shall have all of the obligations of a Loan Party and a
Loan Guarantor thereunder as if it had executed the Credit Agreement. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Credit Agreement,
including without limitation (a) all of the representations and warranties of
the Loan Parties set forth in Article III of the Credit Agreement, *[and]*
(b) all of the covenants set forth in Articles V and VI of the Credit Agreement
*[and (c) all of the guaranty obligations set forth in Article X of the Credit
Agreement. Without limiting the generality of the foregoing terms of this
paragraph 1, the New Subsidiary, subject to the limitations set forth in
Section 10.10 of the Credit Agreement, hereby guarantees, jointly and severally
with the other Loan Guarantors, to the Administrative Agent and the Lenders, as
provided in Article X of the Credit Agreement, the prompt payment and
performance of the Guaranteed Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in
accordance with the terms thereof and agrees that if any of the Guaranteed
Obligations are not paid or performed in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise), the New
Subsidiary will, jointly and severally together with the other Loan Guarantors,
promptly pay and perform the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.]* *[The New
Subsidiary has delivered to the Administrative Agent an executed Loan
Guaranty.]*
2. If required, the New Subsidiary is, simultaneously with the execution of this
Agreement, executing and delivering such Collateral Documents (and such other
documents and instruments) as requested by the Administrative Agent in
accordance with the Credit Agreement.
3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit
Agreement is as follows:

         
 
 
 
   
 
       
 
 
 
   
 
       
 
 
 
   
 
       
 
 
 
   

Exhibit E

 

 

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4. The New Subsidiary hereby waives acceptance by the Administrative Agent and
the Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.
5. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument.
6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

            [NEW SUBSIDIARY]
      By:           Name:           Title:           Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
      By:           Name:           Title:      

Exhibit E

 

 

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EXHIBIT E-2
BORROWER JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”), dated as of _____,  _____, 200_, is
entered into between                                         , a
                     (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., in
its capacity as administrative agent (the “Administrative Agent”) under that
certain Credit Agreement, dated as of                     ,  _____, 200_____
among                      (each a “Borrower” and collectively the “Borrowers”),
the Loan Parties party thereto, the Lenders party thereto and the Administrative
Agent (as the same may be amended, modified, extended or restated from time to
time, the “Credit Agreement”). All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.
The New Subsidiary and the Administrative Agent, for the benefit of the Lenders,
hereby agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a
“Borrower” for all purposes of the Credit Agreement and shall have all of the
obligations of a Borrower thereunder as if it had executed the Credit Agreement.
The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be
bound by, all of the terms, provisions and conditions contained in the Credit
Agreement, including without limitation (a) all of the representations and
warranties of the Borrowers set forth in Article III of the Credit Agreement,
(b) all of the covenants set forth in Articles V and VI of the Credit Agreement
and (c) all of the multiple borrower provisions of Article XI of the Credit
Agreement, including, without limitation, the appointment of Holdings as
Administrative Borrower. Without limiting the generality of the foregoing terms
of this paragraph 1, the New Subsidiary, subject to the limitations set forth in
Section 10.10 of the Credit Agreement, hereby agrees, jointly and severally with
the other Borrowers, that it is responsible for the prompt payment and
performance of the Obligations in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration or otherwise) strictly in accordance
with the terms thereof.
2. If required, the New Subsidiary is, simultaneously with the execution of this
Agreement, executing and delivering such Collateral Documents (and such other
documents and instruments) as requested by the Administrative Agent in
accordance with the Credit Agreement.
3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit
Agreement is as follows:

         
 
 
 
   
 
       
 
 
 
   
 
       
 
 
 
   
 
       
 
 
 
   

4. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument.
6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
Exhibit E

 

 

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IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

            [NEW SUBSIDIARY]
      By:           Name:           Title:           Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
      By:           Name:           Title:      

Exhibit E

 

 

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EXHIBIT F
FORM OF BORROWING REQUEST
Reference is made to that certain Credit Agreement, dated as of October
[                    ], 2005, by and among Core-Mark Holding Company, Inc. and
certain of its Affiliates, as borrowers (collectively, the “Borrowers”); the
other Loan Parties signatory thereto; JPMorgan Chase Bank., N.A., as
administrative agent for the Lenders (the “Administrative Agent”), and the other
Lenders signatory thereto from time to time (including all annexes, exhibits or
schedules thereto, as from time to time amended, restated, supplemented or
otherwise modified, the “Credit Agreement”). Capitalized terms used herein
without definition are so used as defined in the Credit Agreement.
The undersigned hereby gives irrevocable notice, pursuant to Section 2.03 of the
Credit Agreement, of a request hereby for a Revolving Borrowing as follows:

             
 
  Aggregate Amount of Borrowing:   [$][Cdn.]    
 
           
 
  Date of Borrowing:        

          Amount of Borrowing   Type of Revolving Loan   Interest Period        
  [$][Cdn.$]                       [ABR][LIBOR][CDOR]
[Canadian Prime Rate] Loan    _____ Months

The requested Revolving Borrowing is to be wired as follows:
[Name of Bank]
[City of Bank]
Beneficiary:                         
Account No.:                     
ABA No.:                           
Attn:                                   
The undersigned hereby certifies (as Administrative Borrower on behalf of each
of the Borrowers) that on the date hereof and on the Date of Borrowing set forth
above, and after giving effect to the Borrowings requested hereby: (i) there
exists and there shall exist no Default or Event of Default under the Credit
Agreement; (ii) the proceeds of the Revolving Borrowings will be used in
accordance with Section 5.08 of the Credit Agreement; (iii) each of the
representations and warranties contained in the Credit Agreement and the other
Loan Documents is true and correct in all material respects (except in the case
of representations and warranties that relate by their terms to a specified
date); and (iv) after giving effect to the requested Revolving Borrowings,
Availability is not less than zero.
Exhibit F

 

 

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IN WITNESS WHEREOF, the Administrative Borrower has caused this Notice of
Borrowing Request to be executed and delivered by its duly authorized officer to
the Administrative Agent and the Canadian Funding Bank as of the date first set
forth above.

            CORE-MARK INTERNATIONAL, INC.
      By:           Name:           Title:      

Exhibit F

 

 

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EXHIBIT G
FORM OF REVOLVING NOTE
[                    , 20__]
Each of the undersigned (each a “Borrower” and, collectively, the “Borrowers”),
promises to pay to the order of [                    ] (the “Lender”) the
aggregate unpaid principal amount of all Revolving Loans made by the Lender to
the Borrowers pursuant to Article II of the Agreement (as hereinafter defined),
in immediately available funds at the main office of JPMorgan Chase Bank, N.A.,
as Administrative Agent, located at [                    ] or at such other
location as the Administrative Agent may designate from time to time in writing,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement. The Borrowers shall pay the principal of
and accrued and unpaid interest on the Revolving Loans and LC Disbursements in
full on the Maturity Date.
The Lender shall, and is hereby authorized to, record on the schedule attached
hereto, or to otherwise record in accordance with its usual practice, the date
and amount of each Loan and the date and amount of each principal payment
hereunder.
This Revolving Note is one of the promissory notes referred to in, and issued
pursuant to, Section 2.10(f) of the Agreement, and is entitled to the benefits
of, the Credit Agreement, dated as of October [_____], 2005 (which, as it may be
amended, restated or modified and in effect from time to time, is herein called
the “Agreement”), among the Borrowers, the other Loan Parties, the lenders party
thereto, including the Lender, the Issuing Bank and JPMorgan Chase Bank, N.A.,
as Administrative Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Revolving Note, including
the terms and conditions under which this Revolving Note may be prepaid or its
maturity date accelerated. This Revolving Note is secured pursuant to the
Collateral Documents. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
Demand, presentment, protest and notice of nonpayment of this Revolving Note are
waived by the Borrowers to the extent set forth in the Agreement. Upon and after
the occurrence of any Default or Event of Default, this Revolving Note may, to
the extent set forth in the Agreement, and without demand or notice of legal
process of any kind except as provided for in the Agreement, be declared and
immediately shall become due and payable.
THIS REVOLVING NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
Exhibit G

 

 

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            BORROWERS:

CORE-MARK HOLDING COMPANY, INC.
      By:           Name:           Title:           CORE-MARK INTERNATIONAL,
INC.
      By:           Name:           Title:           CORE-MARK HOLDINGS I, INC.
      By:           Name:           Title:           CORE-MARK HOLDINGS II, INC.
      By:           Name:           Title:           CORE-MARK HOLDINGS III,
INC.
      By:           Name:           Title:           CORE-MARK MIDCONTINENT,
INC.
      By:           Name:           Title:           CORE-MARK INTERRELATED
COMPANIES, INC.
      By:           Name:           Title:      

Exhibit G

 

 

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            HEAD DISTRIBUTING COMPANY
      By:           Name:           Title:           MINTER-WEISMAN CO.
      By:           Name:           Title:      

Exhibit G

 

 

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EXHIBIT H
FORM OF INTEREST ELECTION REQUEST
Reference is made to that certain Credit Agreement, dated as of October [_____],
2005, by and among Core-Mark Holding Company, Inc. and certain of its
Affiliates, as borrowers (collectively, the “Borrowers”); the other Loan Parties
signatory thereto; JPMorgan Chase Bank., N.A., as administrative agent for the
Lenders (the “Administrative Agent”), and the other Lenders signatory thereto
from time to time (including all annexes, exhibits or schedules thereto, as from
time to time amended, restated, supplemented or otherwise modified, the “Credit
Agreement”). Capitalized terms used herein without definition are so used as
defined in the Credit Agreement.
The undersigned hereby gives irrevocable notice, pursuant to Section 2.08(b) of
the Credit Agreement, of a request hereby that the Revolving Borrowing set forth
below be converted to the Type set forth below as follows:

             
 
  Aggregate Amount of Borrowing:   [$][Cdn.]    
 
           
 
  Date of Borrowing:      
 
           
 
  Date of Conversion      

          Amount of Borrowing   Type of Revolving Loan   Interest Period        
  [$][Cdn.$]                       [ABR][LIBOR][CDOR]
[Canadian Prime Rate] Loan   _____ Months

Exhibit H

 

 

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IN WITNESS WHEREOF, the Administrative Borrower has caused this Notice of
Borrowing Request to be executed and delivered by its duly authorized officer to
the Administrative Agent and the Canadian Funding Bank as of the date first set
forth above.

            CORE-MARK INTERNATIONAL, INC.
      By:           Name:           Title:      

Exhibit H