Exhibit 10.1

 

Execution Version

 

 

CREDIT AGREEMENT

 

Dated as of August 7, 2012

 

by and among

 

THERMON INDUSTRIES, INC., as the US Borrower,

 

THERMON CANADA INC., as the Canadian Borrower,

 

THE OTHER PERSONS PARTY HERETO THAT ARE

 

DESIGNATED AS CREDIT PARTIES,

 

JPMORGAN CHASE BANK, N.A.,

 

for itself, as a US Lender and US Swingline Lender and as US Agent for all US
Lenders,

 

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, for itself

 

as a Canadian Lender and as Canadian Agent for all Canadian Lenders,

 

THE OTHER FINANCIAL INSTITUTIONS NOW OR HEREAFTER PARTY HERETO

 

as Lenders,

 

and

 

J.P. MORGAN SECURITIES LLC,

 

as Sole Lead Arranger and Sole Bookrunner

 

 

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TABLE OF CONTENTS

 

ARTICLE I - THE CREDITS

2

1.1. Amounts and Terms of Commitments

2

1.2. Notes

15

1.3. Interest

15

1.4. Loan Accounts

18

1.5. Procedure for Revolving Credit Borrowing

19

1.6. Conversion and Continuation Elections

21

1.7. Optional Prepayments

23

1.8. Mandatory Prepayments of Loans and Commitment Reductions

23

1.9. Fees

25

1.10. Payments by the Borrowers

27

1.11. Payments by the Lenders to Appropriate Agent; Settlement

29

ARTICLE II - CONDITIONS PRECEDENT

33

2.1. Conditions of Initial Loans

33

2.2. Conditions to All Borrowings

34

ARTICLE III - REPRESENTATIONS AND WARRANTIES

35

3.1. Corporate Existence and Power

35

3.2. Corporate Authorization; No Contravention

36

3.3. Governmental Authorization

36

3.4. Binding Effect

36

3.5. Litigation

36

3.6. No Default

37

3.7. ERISA and Related Canadian Compliance

37

3.8. Use of Proceeds; Margin Regulations

37

3.9. Title to Properties

38

3.10. Taxes

38

3.11. Financial Condition

38

3.12. Environmental Matters

39

3.13. Regulated Entities

39

3.14. Solvency

40

3.15. Labor Relations

40

3.16. Intellectual Property

40

3.17. Reserved

40

 

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3.18. Insurance

40

3.19. Ventures, Subsidiaries and Affiliates; Outstanding Stock

40

3.20. Jurisdiction of Organization; Chief Executive Office

41

3.21. Deposit Accounts and Other Accounts

41

3.22. Reserved

41

3.23. Reserved

41

3.24. Status of Holdings

41

3.25. Reserved

41

3.26. Full Disclosure

41

3.27. Foreign Assets Control Regulations and Anti-Money Laundering

42

3.28. Patriot Act

42

ARTICLE IV - AFFIRMATIVE COVENANTS

42

4.1. Financial Statements

43

4.2. Certificates; Other Information

44

4.3. Notices

45

4.4. Preservation of Corporate Existence, Etc.

47

4.5. Maintenance of Property

47

4.6. Insurance

48

4.7. Payment of Obligations

49

4.8. Compliance with Laws

49

4.9. Inspection of Property and Books and Records

50

4.10. Use of Proceeds

50

4.11. Cash Management Systems

51

4.12. Landlord Agreements

51

4.13. Further Assurances

51

4.14. Environmental Matters

53

4.15. Post-Closing Obligations

53

ARTICLE V - NEGATIVE COVENANTS

53

5.1. Limitation on Liens

54

5.2. Disposition of Assets

57

5.3. Consolidations and Mergers

58

5.4. Loans and Investments

59

5.5. Limitation on Indebtedness

61

5.6. Transactions with Affiliates

64

 

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5.7. Management Fees and Compensation

64

5.8. Use of Proceeds

65

5.9. Contingent Obligations

65

5.10. Compliance with ERISA, Etc.

66

5.11. Restricted Payments

66

5.12. Change in Business

68

5.13. Change in Structure

68

5.14. Changes in Accounting, Name and Jurisdiction of Organization

68

5.15. Amendments to Second Lien Indebtedness Documents and Subordinated
Indebtedness

69

5.16. No Negative Pledges

69

5.17. OFAC; Patriot Act

69

5.18. Sale-Leasebacks

69

5.19. Hazardous Materials

70

ARTICLE VI - FINANCIAL COVENANTS

70

6.1. Interest Coverage Ratio

70

6.2. Leverage Ratio

70

ARTICLE VII - EVENTS OF DEFAULT

70

7.1. Event of Default

70

7.2. Remedies

73

7.3. Rights Not Exclusive

73

7.4. Cash Collateral for Letters of Credit

73

ARTICLE VIII - AGENT

74

8.1. Appointment and Duties

74

8.2. Binding Effect

77

8.3. Use of Discretion

77

8.4. Delegation of Rights and Duties

78

8.5. Reliance and Liability

78

8.6. Agent Individually

79

8.7. Lender Credit Decision

79

8.8. Expenses; Indemnities

80

8.9. Resignation of Agent or L/C Issuer

81

8.10. Release of Collateral or Guarantors

82

8.11. Additional Secured Parties

83

ARTICLE IX - MISCELLANEOUS

83

 

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9.1. Amendments and Waivers

83

9.2. Notices

85

9.3. Electronic Transmissions

86

9.4. No Waiver; Cumulative Remedies

87

9.5. Costs and Expenses

87

9.6. Indemnity

88

9.7. Marshaling; Payments Set Aside

89

9.8. Successors and Assigns

89

9.9. Assignments and Participations; Binding Effect

90

9.10. Non-Public Information; Confidentiality

93

9.11. Set-off; Sharing of Payments

95

9.12. Counterparts; Facsimile Signature

96

9.13. Severability

96

9.14. Captions

96

9.15. Independence of Provisions

96

9.16. Interpretation

96

9.17. No Third Parties Benefited

96

9.18. Governing Law and Jurisdiction

97

9.19. Waiver of Jury Trial

97

9.20. Entire Agreement; Release; Survival

98

9.21. Patriot Act

98

9.22. Replacement of Lender

99

9.23. Joint and Several

99

9.24. Creditor-Debtor Relationship

99

9.25. Risk Participation

100

ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY

101

10.1. Taxes

101

10.2. Illegality

104

10.3. Increased Costs and Reduction of Return

104

10.4. Funding Losses

105

10.5. Inability to Determine Rates

106

10.6. Reserves on LIBOR Rate Loans

107

10.7. Certificates of Lenders and L/C Issuers

107

ARTICLE XI - DEFINITIONS

107

 

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11.1. Defined Terms

107

11.2. Other Interpretive Provisions

140

11.3. Accounting Terms and Principles

141

11.4. Payments

141

11.5. Judgment Currency

142

 

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SCHEDULES

 

Schedule 1.1(b)

Revolving Loan Commitments

Schedule 3.5

Litigation

Schedule 3.7

ERISA

Schedule 3.10

Taxes

Schedule 3.12

Environmental

Schedule 3.19

Subsidiaries

Schedule 3.20

Jurisdiction of Organization; Chief Executive Office

Schedule 3.21

Deposit Accounts and Other Accounts

Schedule 4.15

Post-Closing Obligations

Schedule 5.1

Liens

Schedule 5.4

Investments

Schedule 5.5

Indebtedness

Schedule 5.5(p)

Foreign Subsidiary Letter of Credit Indebtedness

Schedule 5.5(q)

Foreign Subsidiary Indebtedness

Schedule 5.6

Transactions with Affiliates

Schedule 5.9

Contingent Obligations

 

 

EXHIBITS

 

 

Exhibit 1.1(c)

Form of L/C Request

Exhibit 1.1(d)

Form of Swing Loan Request

Exhibit 1.6

Form of Notice of Conversion/Continuation

Exhibit 4.2(b)

Form of Compliance Certificate

Exhibit 11.1(a)

Form of Assignment

Exhibit 11.1(b)

Form of Borrowing Base Certificate

Exhibit 11.1(c)

Form of Notice of Borrowing

Exhibit 11.1(d)

Form of Revolving Note

Exhibit 11.1(e)

Form of Swingline Note

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (including all exhibits and schedules hereto, as the same
may be amended, modified and/or restated from time to time, this “Agreement”) is
entered into as of August 7, 2012, by and among Thermon Industries, Inc., a
Texas corporation (the “US Borrower”), Thermon Canada Inc., a Nova Scotia
company (the “Canadian Borrower” and, together with the US Borrower, the
“Borrowers” and each individually, a “Borrower”), the other Persons party hereto
that are designated as a “Credit Party”, JPMorgan Chase Bank, N.A., a national
banking association (in its individual capacity, “Chase”), as US Agent for the
several financial institutions from time to time party to this Agreement with a
US Revolving Loan Commitment (collectively, the “US Lenders” and individually
each a “US Lender”) and for itself as a US Lender (including as US Swingline
Lender), JPMorgan Chase Bank, N.A., Toronto Branch (in its individual capacity,
“Chase Canada”) as Canadian Agent for the several financial institutions from
time to time party to this Agreement with a Canadian Revolving Loan Commitment
(collectively, the “Canadian Lenders”, individually, a “Canadian Lender” and
collectively with the US Lenders, the “Lenders”), and such other Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers have requested, and the US Lenders have agreed to make
available to the US Borrower and the Canadian Lenders have agreed to make
available to the Canadian Borrower, a revolving credit facility (including a
letter of credit subfacility) to (a) refinance Prior Indebtedness, (b) provide
for working capital, capital expenditures and other general corporate purposes
of the Borrowers and (c) fund certain fees and expenses associated with the
funding of the Loans and consummation of the transactions contemplated hereby;

 

WHEREAS, the US Borrower desires to secure all of the Obligations under the Loan
Documents by granting to US Agent, for the benefit of the Secured Parties, a
security interest in and lien upon substantially all of its Property, except
real property other than (i) the Headquarters Property and (ii) the Houston
Property until the Houston Property is released by the US Agent at the time of a
sale of the Houston Property by the applicable Credit Party;

 

WHEREAS, the Canadian Borrower desires to secure all of the Canadian Obligations
by granting to Canadian Agent, for the benefit of the Canadian Secured Parties,
a security interest in and lien upon substantially all of its Property, except
real property;

 

WHEREAS, Thermon Holding Corp., a Delaware corporation that directly owns all of
the Stock and Stock Equivalents of the Borrowers (“Holdings”), is, subject to
the terms hereof, willing to guaranty all of the Obligations and to pledge to US
Agent, for the benefit of the Secured Parties, all of the Stock and Stock
Equivalents of the Borrowers and substantially all of its other Property to
secure the Obligations (but only to the extent no 956 Impact exists), excluding
real property;

 

WHEREAS, US Borrower is willing to guaranty the Canadian Obligations and,
subject to the terms hereof, each Subsidiary of (a) US Borrower is willing to
guarantee all of the Obligations of the Borrowers and to grant to US Agent, for
the benefit of the Secured Parties, a security interest in and lien upon
substantially all of its Property to secure the Obligations (but

 

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only to the extent no 956 Impact exists), except real property other than
(i) the Headquarters Property and (ii) the Houston Property until the Houston
Property is released by the US Agent at the time of a sale of the Houston
Property by the applicable Credit Party, and (b) Canadian Borrower is willing to
guarantee all of the Canadian Obligations and to grant to Canadian Agent, for
the benefit of the Canadian Secured Parties, a security interest in and lien on
substantially all of its Property, except real property, to secure the Canadian
Obligations;

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:

 

ARTICLE I -

 

THE CREDITS

 

1.1.                            Amounts and Terms of Commitments.

 

(a)                                 Reserved.

 

(b)                                 The Revolving Credits.

 

(i)                                     Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Credit Parties contained herein, each US Lender severally and not jointly agrees
to make Loans denominated in Dollars to the US Borrower (each such Loan, a “US
Revolving Loan”) from time to time on any Business Day during the period from
the Closing Date through the Final Availability Date, in an aggregate amount not
to exceed at any time outstanding the amount set forth opposite such Lender’s
name in Schedule 1.1(b) under the heading “US Revolving Loan Commitments” (such
amount as the same may be reduced or increased from time to time in accordance
with this Agreement, being referred to herein as such Lender’s “US Revolving
Loan Commitment”); provided, however, that, after giving effect to any Borrowing
of US Revolving Loans, the aggregate principal amount of all outstanding US
Revolving Loans shall not exceed the Maximum US Revolving Loan Balance.  Subject
to the other terms and conditions hereof, amounts borrowed under this subsection
1.1(b)(i) may be repaid and reborrowed from time to time.  The “Maximum US
Revolving Loan Balance” from time to time will be the lesser of:

 

(x)                                 the “US Borrowing Base” (as calculated
pursuant to the US Borrowing Base Certificate) in effect from time to time, or

 

(y)                                 the Aggregate US Revolving Loan Commitment
then in effect;

 

less, in either case, the sum of (i) the aggregate amount of US Letter of Credit
Obligations, (ii) the aggregate principal amount of outstanding US Swing Loans,
(iii) the US Dollar Equivalent of the aggregate principal amount of Canadian
Revolving Loans and Canadian Swing Loans, (iv) the US Dollar Equivalent of the
aggregate amount of Canadian Letter of Credit Obligations and Reserves
established by Canadian Agent and (v) such Reserves as may be imposed by US
Agent

 

2

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in its reasonable credit judgment.  If at any time the then outstanding
principal balance of US Revolving Loans exceeds the Maximum US Revolving Loan
Balance, then the US Borrower shall prepay, or cause to be prepaid, outstanding
Revolving Loans in an amount sufficient to eliminate such excess, within five
(5) Business Days after the occurrence thereof; provided, no such prepayment
shall be required provided such excess (i) does not exceed three percent (3%) of
the Maximum US Revolving Loan Balance, (ii) is solely attributable to a change
in the exchange rate between Dollars and Canadian Dollars, (iii) in no event
causes or results in any US Revolving Loans held by Lender to exceed such
Lender’s US Revolving Loan Commitment and (iv) shall be reduced to zero ($0) in
connection with the recalculation of the US Borrowing Base pursuant to and
concurrently with the delivery of the next Borrowing Base Certificate as
required by subsection 4.2(d) hereof (provided, for purposes of clarity, if such
excess is not reduced to zero ($0) as a result of the such recalculation, such
excess shall be repaid within five (5) Business Days after the required delivery
of such Borrowing Base Certificate).

 

(ii)                                  Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Credit Parties contained herein, each Canadian Lender severally and not jointly
agrees to make Loans denominated in either Dollars or Canadian Dollars to the
Canadian Borrower (each such Loan, a “Canadian Revolving Loan”) from time to
time on any Business Day during the period from the Closing Date through the
Final Availability Date, in an aggregate amount not to exceed at any time
outstanding the US Dollar Equivalent of the amount set forth opposite such
Lender’s name in Schedule 1.1(b) under the heading “Canadian Revolving Loan
Commitments” (such amount as the same may be reduced or increased from time to
time in accordance with this Agreement, being referred to herein as such
Lender’s “Canadian Revolving Loan Commitment”); provided, however, that, after
giving effect to any Borrowing of Canadian Revolving Loans, the aggregate
principal amount of all outstanding Canadian Revolving Loans shall not exceed
the Maximum Canadian Revolving Loan Balance.  Subject to the other terms and
conditions hereof, amounts borrowed under this subsection 1.1(b)(ii) may be
repaid and reborrowed from time to time.  The “Maximum Canadian Revolving Loan
Balance” from time to time will be the lesser of:

 

(x)                                 the “Canadian Borrowing Base” (as calculated
pursuant to the Canadian Borrowing Base Certificate) in effect from time to
time, or

 

(y)                                 the Aggregate Canadian Revolving Loan
Commitment then in effect;

 

less, in either case, the sum of (i) the aggregate amount of the US Dollar
Equivalent of all Canadian Letter of Credit Obligations, (ii) the aggregate
principal amount of outstanding Canadian Swing Loans, (iii)  the amount by which
the sum of (x) the aggregate principal amount of US Revolving Loans and US Swing
Loans, (y) aggregate amount of US Letter of Credit Obligations and (z) Reserves
imposed by US Agent, exceeds $20,000,000 and (iv) such Reserves as may be
imposed by Canadian Agent in its reasonable credit judgment.  If at any time the
then outstanding principal balance of Canadian Revolving Loans exceeds the
Maximum Canadian Revolving Loan Balance, then the Canadian Borrower shall prepay
outstanding Canadian Loans in an amount sufficient to eliminate such excess,
within five (5) Business Days after the occurrence thereof; provided, no such
prepayment shall be required provided such excess (i)

 

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does not exceed three percent (3%) of the Maximum Canadian Revolving Loan
Balance, (ii) is solely attributable to a change in the exchange rate between
Dollars and Canadian Dollars, (iii) in no event causes or results in any
Canadian Revolving Loans held by Lender to exceed such Lender’s Canadian
Revolving Loan Commitment and (iv) shall be reduced to zero ($0) in connection
with the recalculation of the Canadian Borrowing Base pursuant to and
concurrently with the delivery of the next Borrowing Base Certificate as
required by subsection 4.2(d) hereof (provided, for purposes of clarity, if such
excess is not reduced to zero ($0) as a result of the such recalculation, such
excess shall be repaid within five (5) Business Days after the required delivery
of such Borrowing Base Certificate).

 

(c)                                  US Letters of Credit.

 

(i)                                     Conditions.  On the terms and subject to
the conditions contained herein, the US Borrower may request that one or more US
L/C Issuers Issue, in accordance with such US L/C Issuers’ usual and customary
business practices, and for the account of the US Credit Parties, US Letters of
Credit (denominated in Dollars) from time to time on any Business Day during the
period from the Closing Date through the earlier of (x) the Final Availability
Date and (y) seven (7) days prior to the date specified in clause (a) of the
definition of Revolving Termination Date; provided, however, that no US L/C
Issuer shall Issue any US Letter of Credit during the continuance of any of the
following or, if after giving effect to such Issuance:

 

(A)                               (i) US Availability would be less than zero,
or (ii) the US Dollar Equivalent of all Letter of Credit Obligations for all
Letters of Credit would exceed the US Dollar Equivalent of $15,000,000 (the “L/C
Sublimit”);

 

(B)                               the expiration date of such US Letter of
Credit (i) is not a Business Day, (ii) is more than one year after the date of
issuance thereof or (iii) is later than seven (7) days prior to the date
specified in clause (a) of the definition of Revolving Termination Date;
provided, however, that any US Letter of Credit with a term not exceeding one
year may provide for its renewal for additional periods not exceeding one year
as long as (x) each of the US Borrower and such US L/C Issuer have the option to
prevent such renewal before the expiration of such term or any such period and
(y) neither such US L/C Issuer nor the US Borrower shall permit any such renewal
to extend such expiration date beyond the date set forth in clause (iii) above;
or

 

(C)                               (i) any fee due in connection with, and on or
prior to, such Issuance has not been paid, (ii) such US Letter of Credit is
requested to be issued in a form that is not acceptable to such US L/C Issuer or
(iii) such US L/C Issuer shall not have received, each in form and substance
reasonably acceptable to it and duly executed by the US Borrower, the documents
that such US L/C Issuer generally uses in the Ordinary Course of Business for
the Issuance of letters of credit of the type of such US Letter of Credit
(collectively, the “US L/C Reimbursement Agreement”).

 

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Furthermore, Chase, as a US L/C Issuer, may elect only to issue US Letters of
Credit in its own name and may only issue US Letters of Credit to the extent
permitted by Requirements of Law, and such US Letters of Credit may not be
accepted by certain beneficiaries such as insurance companies.  For each
Issuance, the applicable US L/C Issuer may, but shall not be required to,
determine that, or take notice whether, the conditions precedent set forth in
Section 2.2 have been satisfied or waived in connection with the Issuance of any
US Letter of Credit; provided, however, that no US Letters of Credit shall be
Issued during the period starting on the first Business Day after the receipt by
such US L/C Issuer of notice from US Agent or the Required Lenders that any
condition precedent contained in Section 2.2 is not satisfied and ending on the
date all such conditions are satisfied or duly waived.

 

Notwithstanding anything else to the contrary herein, if any US Lender is a
Non-Funding Lender or Impacted Lender, no US L/C Issuer shall be obligated to
Issue any US Letter of Credit unless (w) the Non-Funding Lender or Impacted
Lender has been replaced in accordance with Section 9.9 or 9.22, (x) the Letter
of Credit Obligations of such Non-Funding Lender or Impacted Lender have been
cash collateralized, (y) the US Revolving Loan Commitment of each of the other
US Lenders have been increased by an amount sufficient to satisfy US Agent that
all future US Letter of Credit Obligations will be covered by all US Lenders
that are not Non-Funding Lenders or Impacted Lenders, or (z) the Letter of
Credit Obligations of such Non-Funding Lender or Impacted Lender have been
reallocated to other Lenders in a manner consistent with subsection 1.11(e)(ii).

 

(ii)                                  Notice of Issuance.  The US Borrower shall
give the relevant US L/C Issuer and US Agent a notice of any requested Issuance
of any US Letter of Credit, which shall be effective only if received by such US
L/C Issuer and US Agent not later than 9:00 a.m. (Central time) on the third
Business Day prior to the date of such requested Issuance.  Such notice shall be
made in a writing or Electronic Transmission substantially in the form of
Exhibit 1.1(c) duly completed or in a writing in any other form reasonably
acceptable to the L/C Issuer (an “L/C Request”) or by telephone if confirmed
promptly in writing or Electronic Transmission.

 

(iii)                               Reporting Obligations of US L/C Issuers. 
Each US L/C Issuer agrees to provide US Agent, in form and substance
satisfactory to US Agent, each of the following on the following dates:
(A) (i) on or prior to any Issuance of any US Letter of Credit by such US L/C
Issuer, (ii) immediately after any drawing under any such US Letter of Credit or
(iii) immediately after any payment (or failure to pay when due) by the US
Borrower of any related US L/C Reimbursement Obligation, notice thereof, which
shall contain a reasonably detailed description of such Issuance, drawing or
payment and US Agent shall provide copies of such notices to each US Lender
reasonably promptly after receipt thereof; (B) upon the request of US Agent (or
any US Lender through US Agent), copies of any US Letter of Credit Issued by
such US L/C Issuer and any related US L/C Reimbursement Agreement and such other
documents and information as may reasonably be requested by US Agent; and (C) on
the first Business Day of each calendar week, a schedule of the US Letters of
Credit Issued by such US L/C Issuer, in form and substance reasonably
satisfactory to US Agent, setting forth the US Letter of Credit Obligations for
such US Letters of Credit outstanding on the last Business Day of the previous
calendar week.

 

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(iv)                              Acquisition of Participations.  Upon any
Issuance of a US Letter of Credit in accordance with the terms of this Agreement
resulting in any increase in the US Letter of Credit Obligations, each US Lender
shall be deemed to have acquired, without recourse or warranty, an undivided
interest and participation in such US Letter of Credit and the related US Letter
of Credit Obligations in an amount equal to its Commitment Percentage of such US
Letter of Credit Obligations.

 

(v)                                 Reimbursement Obligations of the US
Borrower.  The US Borrower agrees to pay to the US L/C Issuer of any US Letter
of Credit each US L/C Reimbursement Obligation owing with respect to such US
Letter of Credit no later than the first Business Day after the US Borrower
receives notice from such US L/C Issuer that payment has been made under such US
Letter of Credit or that such US L/C Reimbursement Obligation is otherwise due
(the “US L/C Reimbursement Date”) with interest thereon computed as set forth in
clause (A) below.  In the event that any US L/C Reimbursement Obligation is not
repaid by the US Borrower as provided in this clause (v) (or any such payment by
the US Borrower is rescinded or set aside for any reason), such US L/C Issuer
shall promptly notify US Agent of such failure (and, upon receipt of such
notice, US Agent shall notify each US Lender) and, irrespective of whether such
notice is given, such US L/C Reimbursement Obligation shall be payable on demand
by the US Borrower with interest thereon computed (A) from the date on which
such US L/C Reimbursement Obligation arose to the US L/C Reimbursement Date, at
the interest rate applicable during such period to US Revolving Loans that are
Base Rate Loans and (B) thereafter until payment in full, at the interest rate
specified in subsection 1.3(c) to past due US Revolving Loans that are Base Rate
Loans (regardless of whether or not an election is made under such subsection).

 

(vi)                              Reimbursement Obligations of the US Revolving
Credit Lenders.

 

(1)                                 Upon receipt of the notice described in
clause (v) above from US Agent, each US Lender shall pay to US Agent for the
account of such US L/C Issuer its Commitment Percentage of such US Letter of
Credit Obligations (as such amount may be increased pursuant to subsection
1.11(e)(ii)).

 

(2)                                 By making any payment described in clause
(1) above (other than during the continuation of an Event of Default under
subsection 7.1(f) or 7.1(g)), such US Lender shall be deemed to have made a US
Revolving Loan to the US Borrower, which, upon receipt thereof by such US L/C
Issuer, the US Borrower shall be deemed to have used in whole to repay such US
L/C Reimbursement Obligation.  Any such payment that is not deemed a US
Revolving Loan shall be deemed a funding by such US Lender of its participation
in the applicable US Letter of Credit and the US Letter of Credit Obligation in
respect of the related US L/C Reimbursement Obligations.  Such participation
shall not otherwise be required to be funded.  Following receipt by any US L/C
Issuer of any payment from any US Lender pursuant to this clause (vi) with
respect to any portion of any US L/C Reimbursement Obligation, such US L/C
Issuer shall promptly pay over to such US Lender all duplicate payments received
from Persons other than Lenders making payment on behalf of a Credit Party by

 

6

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such US L/C Issuer with respect to such portion of such US L/C Reimbursement
Obligation.

 

(vii)                           Obligations Absolute.  The obligations of the US
Borrower and the US Lenders pursuant to clauses (iv), (v) and (vi) above shall
be absolute, unconditional and irrevocable and performed strictly in accordance
with the terms of this Agreement irrespective of (A) (i) the invalidity or
unenforceability of any term or provision in any US Letter of Credit, any
document transferring or purporting to transfer a US Letter of Credit, any Loan
Document (including the sufficiency of any such instrument), or any modification
to any provision of any of the foregoing, (ii) any document presented under a US
Letter of Credit being forged, fraudulent, invalid, insufficient or inaccurate
in any respect or failing to comply with the terms of such US Letter of Credit
or (iii) any loss or delay, including in the transmission of any document, (B)
the existence of any setoff, claim, abatement, recoupment, defense or other
right that any Person (including any Credit Party) may have against the
beneficiary of any US Letter of Credit or any other Person, whether in
connection with any Loan Document or any other Contractual Obligation or
transaction, or the existence of any other withholding, abatement or reduction,
(C) in the case of the obligations of any US Lender, (i) the failure of any
condition precedent set forth in Section 2.2 to be satisfied (each of which
conditions precedent the US Lenders hereby irrevocably waive) or (ii) any
adverse change in the condition (financial or otherwise) of any Credit Party and
(D) any other act or omission to act or delay of any kind of either Agent, any
Lender or any other Person or any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this clause (vii), constitute a legal or equitable discharge of
any obligation of the US Borrower or any US Lender hereunder.  No provision
hereof shall be deemed to waive or limit the US Borrower’s right to assert
claims against, or seek repayment of any payment of any US L/C Reimbursement
Obligations from, the US L/C Issuer under the terms of the applicable US L/C
Reimbursement Agreement, any other documentation entered into with respect to
the relevant Letters of Credit or applicable law.

 

(d)                                 US Swing Loans.

 

(i)                                     Availability.  Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Credit Parties contained herein, the US Swingline Lender may,
in its sole discretion, make Loans denominated in Dollars (each a “US Swing
Loan”) available to the US Borrower under the Aggregate US Revolving Loan
Commitment from time to time on any Business Day during the period from the
Closing Date through the Final Availability Date in an aggregate principal
amount at any time outstanding not to exceed its US Swingline Commitment;
provided, however, that the US Swingline Lender may not make any US Swing Loan
(x) to the extent that after giving effect to such US Swing Loan, the aggregate
principal amount of all US Revolving Loans would exceed the Maximum US Revolving
Loan Balance and (y) during the period commencing on the first Business Day
after it receives notice from US Agent or the Required Lenders that one or more
of the conditions precedent contained in Section 2.2 are not satisfied and
ending when such conditions are satisfied or duly waived.  In connection with
the making of any US Swing Loan, the US Swingline Lender

 

7

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may but shall not be required to determine that, or take notice whether, the
conditions precedent set forth in Section 2.2 have been satisfied or waived. 
Each US Swing Loan shall be a Base Rate Loan and must be repaid as provided
herein, but in any event must be repaid in full on the Revolving Termination
Date.  Within the limits set forth in the first sentence of this clause (i),
amounts of US Swing Loans repaid may be reborrowed under this clause (i).

 

(ii)                                  Borrowing Procedures.  In order to request
a US Swing Loan, the US Borrower shall give to US Agent a notice to be received
not later than 10:00 a.m. (Central time) on the day of the proposed Borrowing,
which shall be made in a writing or in an Electronic Transmission substantially
in the form of Exhibit 1.1(d) or in a writing in any other form reasonably
acceptable to the Appropriate Agent duly completed (a “Swingline Request”) or by
telephone if confirmed promptly in writing or Electronic Transmission.  In
addition, if any Notice of Borrowing of US Revolving Loans requests a Borrowing
of Base Rate Loans, the US Swingline Lender may, notwithstanding anything else
to the contrary herein, make a US Swing Loan to the US Borrower in an aggregate
amount not to exceed such proposed Borrowing, and the aggregate amount of the
corresponding proposed Borrowing shall be reduced accordingly by the principal
amount of such US Swing Loan.  US Agent shall promptly notify the US Swingline
Lender of the details of the requested US Swing Loan.  Upon receipt of such
notice and subject to the terms of this Agreement, the US Swingline Lender may
make a US Swing Loan available to the US Borrower by making the proceeds thereof
available to US Agent and, in turn, US Agent shall make such proceeds available
to the US Borrower on the date set forth in the relevant Swingline Request or
Notice of Borrowing.

 

(iii)                               Refinancing US Swing Loans.

 

(1)                                 The US Swingline Lender may at any time (and
shall no less frequently than once each week) forward a demand to US Agent
(which US Agent shall, upon receipt, forward to each US Lender) that each US
Lender pay to US Agent, for the account of the US Swingline Lender, such US
Lender’s Commitment Percentage of the outstanding US Swing Loans (as such amount
may be increased pursuant to subsection 1.11(e)(ii)).

 

(2)                                 Each US Lender shall pay the amount owing by
it to US Agent for the account of the US Swingline Lender on the Business Day
following receipt of the notice or demand therefor.  Payments received by US
Agent after 9:00 a.m. (Central time) may, in US Agent’s discretion, be deemed to
be received on the next Business Day.  Upon receipt by US Agent of such payment
(other than during the continuation of any Event of Default under subsection
7.1(f) or 7.1(g)), such US Lender shall be deemed to have made a US Revolving
Loan to the US Borrower, which, upon receipt of such payment by the US Swingline
Lender from US Agent, the US Borrower shall be deemed to have used in whole to
refinance such US Swing Loan.  In addition, regardless of whether any such
demand is made, upon the occurrence of any Event of Default under subsection
7.1(f) or 7.1(g), each US Lender shall be deemed to have acquired, without
recourse or warranty, an undivided interest and participation in each US Swing
Loan in an amount equal to such US Lender’s Commitment Percentage of such US
Swing Loan.

 

8

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If any payment made by any US Lender as a result of any such demand is not
deemed a US Revolving Loan, such payment shall be deemed a funding by such US
Lender of such participation.  Such participation shall not be otherwise
required to be funded.  Upon receipt by the US Swingline Lender of any payment
from any US Lender pursuant to this clause (iii) with respect to any portion of
any US Swing Loan, the US Swingline Lender shall promptly pay over to such US
Lender all payments of principal (to the extent received after such payment by
such US Lender) and interest (to the extent accrued with respect to periods
after such payment) on account of such US Swing Loan received by the US
Swingline Lender with respect to such portion.

 

(iv)                              Obligation to Fund Absolute.  Each US Lender’s
obligations pursuant to clause (iii) above 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, including (A) the
existence of any setoff, claim, abatement, recoupment, defense or other right
that such Lender, any Affiliate thereof or any other Person may have against the
US Swingline Lender, either Agent, any other Lender or L/C Issuer or any other
Person, (B) the failure of any condition precedent set forth in Section 2.2 to
be satisfied or the failure of the US Borrower to deliver a Notice of Borrowing
(each of which requirements the US Lenders hereby irrevocably waive) and (C) any
adverse change in the condition (financial or otherwise) of any Credit Party.

 

(e)                                  Canadian Letters of Credit.

 

(i)                                     Conditions.  On the terms and subject to
the conditions contained herein, the Canadian Borrower may request that one or
more Canadian L/C Issuers Issue, in accordance with such Canadian L/C Issuers’
usual and customary business practices, and for the account of the Canadian
Credit Parties, Canadian Letters of Credit (denominated in either Dollars or
Canadian Dollars) from time to time on any Business Day during the period from
the Closing Date through the earlier of (x) the Final Availability Date and (y)
seven (7) days prior to the date specified in clause (a) of the definition of
Revolving Termination Date; provided, however, that no Canadian L/C Issuer shall
Issue any Canadian Letter of Credit during the continuance of any of the
following or, if after giving effect to such Issuance:

 

(A)                               (i) US Availability or Canadian Availability
would be less than zero, or (ii) the US Dollar Equivalent of all Letter of
Credit Obligations for all Letters of Credit would exceed the L/C Sublimit;

 

(B)                               the expiration date of such Canadian Letter of
Credit (i) is not a Business Day, (ii) is more than one year after the date of
issuance thereof or (iii) is later than seven (7) days prior to the date
specified in clause (a) of the definition of Revolving Termination Date;
provided, however, that any Canadian Letter of Credit with a term not exceeding
one year may provide for its renewal for additional periods not exceeding one
year as long as (x) each of the Canadian Borrower and such Canadian L/C Issuer
have the option to prevent such renewal before the expiration of such term or
any such period and (y) neither such

 

9

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Canadian L/C Issuer nor the Canadian Borrower shall permit any such renewal to
extend such expiration date beyond the date set forth in clause (iii) above; or

 

(C)                               (i) any fee due in connection with, and on or
prior to, such Issuance has not been paid, (ii) such Canadian Letter of Credit
is requested to be issued in a form that is not acceptable to such Canadian L/C
Issuer or (iii) such Canadian L/C Issuer shall not have received, each in form
and substance reasonably acceptable to it and duly executed by the Canadian
Borrower, the documents that such Canadian L/C Issuer generally uses in the
Ordinary Course of Business for the Issuance of letters of credit of the type of
such Canadian Letter of Credit (collectively, the “Canadian L/C Reimbursement
Agreement”).

 

Furthermore, Chase Canada, as a Canadian L/C Issuer, may elect only to issue
Canadian Letters of Credit in its own name and may only issue Canadian Letters
of Credit to the extent permitted by Requirements of Law, and such Canadian
Letters of Credit may not be accepted by certain beneficiaries such as insurance
companies.  For each Issuance, the applicable Canadian L/C Issuer may, but shall
not be required to, determine that, or take notice whether, the conditions
precedent set forth in Section 2.2 have been satisfied or waived in connection
with the Issuance of any Canadian Letter of Credit; provided, however, that no
Canadian Letters of Credit shall be Issued during the period starting on the
first Business Day after the receipt by such Canadian L/C Issuer of notice from
Canadian Agent or the Required Lenders that any condition precedent contained in
Section 2.2 is not satisfied and ending on the date all such conditions are
satisfied or duly waived.

 

Notwithstanding anything else to the contrary herein, if any Canadian Lender is
a Non-Funding Lender or Impacted Lender, no Canadian L/C Issuer shall be
obligated to Issue any Canadian Letter of Credit unless (w) the Non-Funding
Lender or Impacted Lender has been replaced in accordance with Section 9.9 or
9.22, (x) the Letter of Credit Obligations of such Non-Funding Lender or
Impacted Lender have been cash collateralized, (y) the Canadian Revolving Loan
Commitment of each of the other Canadian Lenders have been increased by an
amount sufficient to satisfy Canadian Agent that all future Canadian Letter of
Credit Obligations will be covered by all Canadian Lenders that are not
Non-Funding Lenders or Impacted Lenders, or (z) the Letter of Credit Obligations
of such Non-Funding Lender or Impacted Lender have been reallocated to other
Lenders in a manner consistent with subsection 1.11(e)(ii).

 

(ii)                                  Notice of Issuance.  The Canadian Borrower
shall give the relevant Canadian L/C Issuer and Canadian Agent a notice of any
requested Issuance of any Canadian Letter of Credit, which shall be effective
only if received by such Canadian L/C Issuer and Canadian Agent not later than
9:00 a.m. (Central time) on the third Business Day prior to the date of such
requested Issuance.  Such notice shall be made in a writing or Electronic
Transmission substantially in the form of an L/C Request or by telephone if
promptly confirmed in writing or Electronic Transmission.

 

(iii)                               Reporting Obligations of Canadian L/C
Issuers.  Each Canadian L/C Issuer agrees to provide Canadian Agent, in form and
substance satisfactory to Canadian Agent, each of the following on the following
dates: (A) (i) on or prior to any Issuance of any Canadian Letter of Credit by
such Canadian L/C Issuer, (ii) immediately after any

 

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drawing under any such Canadian Letter of Credit or (iii) immediately after any
payment (or failure to pay when due) by the Canadian Borrower of any related
Canadian L/C Reimbursement Obligation, notice thereof, which shall contain a
reasonably detailed description of such Issuance, drawing or payment and
Canadian Agent shall provide copies of such notices to each Canadian Lender
reasonably promptly after receipt thereof; (B) upon the request of Canadian
Agent (or any Canadian Lender through Canadian Agent), copies of any Canadian
Letter of Credit Issued by such Canadian L/C Issuer and any related Canadian L/C
Reimbursement Agreement and such other documents and information as may
reasonably be requested by Canadian Agent; and (C) on the first Business Day of
each calendar week, a schedule of the Canadian Letters of Credit Issued by such
Canadian L/C Issuer, in form and substance reasonably satisfactory to Canadian
Agent, setting forth the Canadian Letter of Credit Obligations for such Canadian
Letters of Credit outstanding on the last Business Day of the previous calendar
week and including the currency in which each such Canadian Letter of Credit is
denominated.

 

(iv)                              Acquisition of Participations.  Upon any
Issuance of a Canadian Letter of Credit in accordance with the terms of this
Agreement resulting in any increase in the Canadian Letter of Credit
Obligations, each Canadian Lender shall be deemed to have acquired, without
recourse or warranty, an undivided interest and participation in such Canadian
Letter of Credit and the related Canadian Letter of Credit Obligations in an
amount equal to its Commitment Percentage of such Canadian Letter of Credit
Obligations.

 

(v)                                 Reimbursement Obligations of the Canadian
Borrower.  The Canadian Borrower agrees to pay to the Canadian L/C Issuer of any
Canadian Letter of Credit each Canadian L/C Reimbursement Obligation owing with
respect to such Canadian Letter of Credit, in the currency in which such
Canadian Letter of Credit is denominated, no later than the first Business Day
after the Canadian Borrower receives notice from such Canadian L/C Issuer that
payment has been made under such Canadian Letter of Credit or that such Canadian
L/C Reimbursement Obligation is otherwise due (the “Canadian L/C Reimbursement
Date”) with interest thereon computed as set forth in clause (A) below.  In the
event that any Canadian L/C Reimbursement Obligation is not repaid by the
Canadian Borrower as provided in this clause (v) (or any such payment by the
Canadian Borrower is rescinded or set aside for any reason), such Canadian L/C
Issuer shall promptly notify Canadian Agent of such failure (and, upon receipt
of such notice, Canadian Agent shall notify each Canadian Lender) and,
irrespective of whether such notice is given, such Canadian L/C Reimbursement
Obligation shall be payable on demand by the Canadian Borrower with interest
thereon computed (A) from the date on which such Canadian L/C Reimbursement
Obligation arose to the Canadian L/C Reimbursement Date, at the interest rate
applicable during such period to Canadian Revolving Loans that are Canadian
Prime Rate Loans and (B) thereafter until payment in full, at the interest rate
specified in subsection 1.3(c) to past due (y) Canadian Revolving Loans that are
Canadian Prime Rate Loans, for Canadian L/C Reimbursement Obligations
denominated in Canadian Dollars and (z) Canadian Revolving Loans that are Base
Rate Loans, for Canadian L/C Reimbursement Obligations denominated in Dollars
(in either case, regardless of whether or not an election is made under such
subsection).

 

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(vi)                              Reimbursement Obligations of the Canadian
Revolving Credit Lenders.

 

(1)                                 Upon receipt of the notice described in
clause (v) above from Canadian Agent, each Canadian Lender shall pay to Canadian
Agent for the account of such Canadian L/C Issuer its Commitment Percentage of
such Canadian Letter of Credit Obligations (as such amount may be increased
pursuant to subsection 1.11(e)(ii)) in the currency in which such Canadian
Letter of Credit Obligations are denominated.

 

(2)                                 By making any payment described in clause
(1) above (other than during the continuation of an Event of Default under
subsection 7.1(f) or 7.1(g)), such Canadian Lender shall be deemed to have made
a Canadian Revolving Loan to the Canadian Borrower, in the currency in which the
applicable Canadian L/C Reimbursement Obligation is denominated, which, upon
receipt thereof by such Canadian L/C Issuer, the Canadian Borrower shall be
deemed to have used in whole to repay such Canadian L/C Reimbursement
Obligation.  Any such payment that is not deemed a Canadian Revolving Loan shall
be deemed a funding by such Canadian Lender of its participation in the
applicable Canadian Letter of Credit and the Canadian Letter of Credit
Obligation in respect of the related Canadian L/C Reimbursement Obligations. 
Such participation shall not otherwise be required to be funded.  Following
receipt by any Canadian L/C Issuer of any payment from any Canadian Lender
pursuant to this clause (vi) with respect to any portion of any Canadian L/C
Reimbursement Obligation, such Canadian L/C Issuer shall promptly pay over to
such Canadian Lender all duplicate payments received from Persons other than
Lenders making payment on behalf of a Credit Party by such Canadian L/C Issuer
with respect to such portion of such Canadian L/C Reimbursement Obligation.

 

(vii)                           Obligations Absolute.  The obligations of the
Canadian Borrower and the Canadian Lenders pursuant to clauses (iv), (v) and
(vi) above shall be absolute, unconditional and irrevocable and performed
strictly in accordance with the terms of this Agreement irrespective of (A) (i)
the invalidity or unenforceability of any term or provision in any Canadian
Letter of Credit, any document transferring or purporting to transfer a Canadian
Letter of Credit, any Loan Document (including the sufficiency of any such
instrument), or any modification to any provision of any of the foregoing, (ii)
any document presented under a Canadian Letter of Credit being forged,
fraudulent, invalid, insufficient or inaccurate in any respect or failing to
comply with the terms of such Canadian Letter of Credit or (iii) any loss or
delay, including in the transmission of any document, (B) the existence of any
setoff, claim, abatement, recoupment, defense or other right that any Person
(including any Credit Party) may have against the beneficiary of any Canadian
Letter of Credit or any other Person, whether in connection with any Loan
Document or any other Contractual Obligation or transaction, or the existence of
any other withholding, abatement or reduction, (C) in the case of the
obligations of any Canadian Lender, (i) the failure of any condition precedent
set forth in Section 2.2 to be satisfied (each of which conditions precedent the
Canadian Lenders hereby irrevocably waive), (ii) any adverse change in the
condition (financial or otherwise) of any Credit Party or (iii) the currency in
which the applicable Canadian L/C Reimbursement Obligation and the related
Canadian Revolving Loan are denominated, and (D) any other act or omission to
act or delay of any kind of either Agent, any Lender or any other

 

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Person or any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this clause (vii),
constitute a legal or equitable discharge of any obligation of the Canadian
Borrower or any Canadian Lender hereunder.  No provision hereof shall be deemed
to waive or limit the Canadian Borrower’s right to assert claims, or seek
repayment of any payment of any Canadian L/C Reimbursement Obligations from, the
Canadian L/C Issuer under the terms of the applicable Canadian L/C Reimbursement
Agreement, any other documentation entered into with respect to the relevant
Letters of Credit or applicable law.

 

(f)                                   Canadian Swing Loans.

 

(i)                                     Availability.  Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Credit Parties contained herein, the Canadian Swingline Lender
may, in its sole discretion, make Loans denominated in Dollars or Canadian
Dollars (each a “Canadian Swing Loan”) available to the Canadian Borrower under
the Aggregate Canadian Revolving Loan Commitment from time to time on any
Business Day during the period from the Closing Date through the Final
Availability Date in an aggregate principal amount at any time outstanding not
to exceed its Canadian Swingline Commitment; provided, however, that the
Canadian Swingline Lender may not make any Canadian Swing Loan (x) to the extent
that after giving effect to such Canadian Swing Loan, the aggregate principal
amount of the US Dollar Equivalent of all Canadian Revolving Loans would exceed
the Maximum Canadian Revolving Loan Balance and (y) during the period commencing
on the first Business Day after it receives notice from Canadian Agent or the
Required Lenders that one or more of the conditions precedent contained in
Section 2.2 are not satisfied and ending when such conditions are satisfied or
duly waived.  In connection with the making of any Canadian Swing Loan, the
Canadian Swingline Lender may but shall not be required to determine that, or
take notice whether, the conditions precedent set forth in Section 2.2 have been
satisfied or waived.  Each Canadian Swing Loan shall be a Base Rate Loan for
Canadian Swing Loans denominated in Dollars and a Canadian Prime Rate Loan for
Canadian Swing Loans denominated in Canadian Dollars and must, in either case,
be repaid as provided herein, but in any event must be repaid in full on the
Revolving Termination Date.  Within the limits set forth in the first sentence
of this clause (i), amounts of Canadian Swing Loans repaid may be reborrowed
under this clause (i).

 

(ii)                                  Borrowing Procedures.  In order to request
a Canadian Swing Loan, the Canadian Borrower shall give to Canadian Agent a
notice to be received not later than 9:00 a.m. (Central time) on the day of the
proposed Borrowing, which shall be made in a Swingline Request or by telephone
if promptly confirmed in writing or Electronic Transmission.  In addition, if
any Notice of Borrowing of Canadian Revolving Loans requests a Borrowing of Base
Rate Loans or Canadian Prime Rate Loans, the Canadian Swingline Lender may,
notwithstanding anything else to the contrary herein, make a Canadian Swing
Loan, in the applicable currency, to the Canadian Borrower in an aggregate
amount not to exceed such proposed Borrowing, and the aggregate amount of the
corresponding proposed Borrowing shall be reduced accordingly by the principal
amount of such Canadian Swing Loan.  Canadian Agent shall promptly notify the
Canadian Swingline Lender of the details of the requested Canadian Swing Loan,

 

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including the currency in which such Loan is denominated.  Upon receipt of such
notice and subject to the terms of this Agreement, the Canadian Swingline Lender
may make a Canadian Swing Loan, in the applicable currency, available to the
Canadian Borrower by making the proceeds thereof available to Canadian Agent
and, in turn, Canadian Agent shall make such proceeds available to the Canadian
Borrower, in the applicable currency, on the date set forth in the relevant
Swingline Request or Notice of Borrowing.

 

(iii)                               Refinancing Canadian Swing Loans.

 

(1)                                 The Canadian Swingline Lender may at any
time (and shall no less frequently than once each week) forward a demand to
Canadian Agent (which Canadian Agent shall, upon receipt, forward to each
Canadian Lender) that each Canadian Lender pay to Canadian Agent, for the
account of the Canadian Swingline Lender, such Canadian Lender’s Commitment
Percentage of the outstanding Canadian Swing Loans (as such amount may be
increased pursuant to subsection 1.11(e)(ii)).

 

(2)                                 Each Canadian Lender shall pay the amount
owing by it to Canadian Agent for the account of the Canadian Swingline Lender
on the Business Day following receipt of the notice or demand therefor. 
Payments received by Canadian Agent after 9:00 a.m. (Central time) may, in
Canadian Agent’s discretion, be deemed to be received on the next Business Day. 
Upon receipt by Canadian Agent of such payment (other than during the
continuation of any Event of Default under subsection 7.1(f) or 7.1(g)), such
Canadian Lender shall be deemed to have made a Canadian Revolving Loan
(denominated in the same currency as the applicable Canadian Swing Loan) to the
Canadian Borrower, which, upon receipt of such payment by the Canadian Swingline
Lender from Canadian Agent, the Canadian Borrower shall be deemed to have used
in whole to refinance such Canadian Swing Loan.  In addition, regardless of
whether any such demand is made, upon the occurrence of any Event of Default
under subsection 7.1(f) or 7.1(g), each Canadian Lender shall be deemed to have
acquired, without recourse or warranty, an undivided interest and participation
in each Canadian Swing Loan in an amount equal to such Canadian Lender’s
Commitment Percentage of such Canadian Swing Loan.  If any payment made by any
Canadian Lender as a result of any such demand is not deemed a Canadian
Revolving Loan, such payment shall be deemed a funding by such Canadian Lender
of such participation.  Such participation shall not be otherwise required to be
funded.  Upon receipt by the Canadian Swingline Lender of any payment from any
Canadian Lender pursuant to this clause (iii) with respect to any portion of any
Canadian Swing Loan, the Canadian Swingline Lender shall promptly pay over to
such Canadian Lender all payments of principal (to the extent received after
such payment by such Lender) and interest (to the extent accrued with respect to
periods after such payment) on account of such Canadian Swing Loan received by
the Canadian Swingline Lender with respect to such portion and in the currency
in which such payment was received.

 

(iv)                              Obligation to Fund Absolute.  Each Canadian
Lender’s obligations pursuant to clause (iii) above 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,
including (A) the existence of any setoff, claim, abatement,

 

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recoupment, defense or other right that such Lender, any Affiliate thereof or
any other Person may have against the Canadian Swingline Lender, either Agent,
any other Lender or L/C Issuer or any other Person, (B) the failure of any
condition precedent set forth in Section 2.2 to be satisfied or the failure of
the Canadian Borrower to deliver a Notice of Borrowing (each of which
requirements the Canadian Lenders hereby irrevocably waive) and (C) any adverse
change in the condition (financial or otherwise) of any Credit Party.

 

1.2.                            Notes.

 

(a)                                 The US Revolving Loans made by each US
Lender shall be evidenced by this Agreement and, if requested by such Lender, a
US Revolving Note payable to such Lender in an amount equal to such Lender’s US
Revolving Loan Commitment.

 

(b)                                 The Canadian Revolving Loans made by each
Canadian Lender shall be evidenced by this Agreement and, if requested by such
Lender, a Canadian Revolving Note payable to such Lender in an amount equal to
such Lender’s Canadian Revolving Loan Commitment.

 

(c)                                  US Swing Loans made by the US Swingline
Lender shall be evidenced by this Agreement and, if requested by such Lender, a
US Swingline Note payable to such Lender in an amount equal to the US Swingline
Commitment.

 

(d)                                 Canadian Swing Loans made by the Canadian
Swingline Lender shall be evidenced by this Agreement and, if requested by such
Lender, a Canadian Swingline Note payable to such Lender in an amount equal to
the Canadian Swingline Commitment.

 

1.3.                            Interest.

 

(a)                                 Subject to subsections 1.3(c) and 1.3(d),
(i) each LIBOR Rate Loan and each CDOR Rate Loan shall bear interest on the
outstanding principal amount thereof from the date when made at a rate per annum
equal to the Adjusted LIBOR Rate or the CDOR Rate, as the case may be, plus the
Applicable Margin, and (ii) each Base Rate Loan and each Canadian Prime Rate
Loan shall bear interest on the outstanding principal amount thereof from the
date when made at a rate per annum equal to the Base Rate or the Canadian Prime
Rate, as the case may be, minus the Applicable Margin; provided Swing Loans may
not be CDOR Rate Loans or LIBOR Rate Loans; provided, for purposes of clarity,
CDN $ Denominated Canadian Loans shall bear interest at the CDOR Rate plus the
Applicable Margin or the Canadian Prime Rate minus the Applicable Margin, as
applicable, and Dollar Denominated Canadian Loans shall bear interest at the
Base Rate minus the Applicable Margin or the Adjusted LIBOR Rate plus the
appropriate Applicable Margin, as applicable.  Each determination of an interest
rate by the Appropriate Agent shall be conclusive and binding on Borrowers and
the Lenders in the absence of manifest error.  All computations of fees and
interest (other than interest on Base Rate Loans, CDN $ Denominated Canadian
Loans and Unused Commitment Fee) payable under this Agreement shall be made on
the basis of a 360-day year and actual days elapsed. All computations of
interest on Base Rate Loans and CDN $ Denominated Canadian Loans under this
Agreement shall be made on the basis of a 365-366 day year and actual days
elapsed.  Interest and fees shall

 

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accrue during each period during which interest or such fees are computed from
the first day thereof to, but excluding, the last day thereof.

 

(b)                                 Interest on each Loan shall be paid in
arrears on each Interest Payment Date.  Interest shall also be paid on the date
of any payment or prepayment of Loans in full.

 

(c)                                  At the election of Required US Lenders with
respect to US Loans or the Required Canadian Lenders with respect to Canadian
Loans (with written notice thereof to be provided to the applicable Borrower)
while any Specified Event of Default exists and is continuing (or automatically
while any Event of Default under subsection 7.1(f) or 7.1(g) exists), the
applicable Borrower (subject to the Interest Act (Canada)) shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the US Loans and/or Canadian Loans, as applicable, from and after the
date of such written notice (or automatically from and after the date of an
Event of Default under subsection 7.1(f) or 7.1(g) until such Specified Event of
Default shall have been cured or waived in accordance with the terms of this
Agreement), at a rate per annum which is determined by adding three percent
(3.0%) per annum to the rate otherwise applicable to such Loans as provided in
the preceding paragraphs of this Section.  All such interest shall be payable on
written demand of the Required US Lenders or Required Canadian Lenders, as
applicable.

 

(d)                                 (i) Anything herein to the contrary
notwithstanding, the obligations of each Borrower hereunder shall be subject to
the limitation that payments of interest shall not be required, for any period
for which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the respective Lender would be
contrary to the provisions of any law applicable to such Lender limiting the
highest rate of interest which may be lawfully contracted for, charged or
received by such Lender, and in such event such Borrower shall pay such Lender
interest at the highest rate permitted by applicable law (“Maximum Lawful
Rate”); provided, however, that if at any time thereafter the rate of interest
payable hereunder is less than the Maximum Lawful Rate, such Borrower shall
continue to pay interest hereunder at the Maximum Lawful Rate until such time as
the total interest received by the Appropriate Agent, on behalf of the
applicable Lenders, is equal to the total interest that would have been received
had the interest payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement.  If the applicable law is ever judicially
interpreted so as to render usurious any amount (x) contracted for, charged,
taken, reserved or received pursuant to this Agreement or any of the other Loan
Documents or any other communication or writing by or between any Borrower and
any Agent or any Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (y) contracted for, charged or received by
reason of any Agent’s exercise of the option to accelerate the maturity of the
Obligations, or (z) any Borrower will have paid or any Agent or any Lender will
have received by reason of any voluntary prepayment by the applicable Borrower
of any Obligations, then it is the express intent of all parties hereto that all
amounts charged in excess of the Maximum Lawful Rate shall be automatically
canceled, ab initio, and all amounts in excess of the Maximum Lawful Rate
theretofore collected by any Agent or any Lender shall be credited on the
principal balance of Obligations (first to the Obligations for which such
payment has been made, and then towards other Obligations in the order and
manner required by Section 1.10(c), and if all Obligations have been or would
thereby be paid in full, refunded to the applicable Borrower), and the

 

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provisions of the Loan Documents shall immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder; provided, however, if the Obligations have
been paid in full before the end of the stated Revolving Termination Date, then
Borrowers, Agents and Lenders agree that Agents and Lenders shall, with
reasonable promptness after any Agent discovers or is advised by any Borrower
that interest was received in an amount in excess of the Maximum Lawful Rate,
either refund such excess interest to the applicable Borrower and/or credit such
excess interest against the Obligations then owing by Borrowers.  All sums
contracted for, charged or received by any Agent or any Lender for the use,
forbearance or detention of any Loans or other Obligations shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial method,
throughout the stated Revolving Termination Date until payment in full so that
the rate or amount of interest on account of the Obligations does not exceed the
Maximum Lawful Rate from time to time in effect and applicable to the
Obligations for so long as the same is outstanding.  In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit loan accounts and revolving triparty accounts) apply to any of
the US Obligations.  To the extent that US Agent is relying on Chapter 303 of
the Texas Finance Code to determine the Maximum Lawful Rate payable on the US
Obligations, US Agent will utilize the weekly ceiling from time to time in
effect as provided in such Chapter 303, as amended.  To the extent United States
federal law permits Lender to contract for, charge, take, receive or reserve a
greater amount of interest than under Texas law, US Agent will rely on United
States federal law instead of such Chapter 303 for the purpose of determining
the Maximum Lawful Rate.  Additionally, to the extent permitted by applicable
law now or hereafter in effect, US Agent may, at its option and from time to
time, utilize any other method of establishing the Maximum Lawful Rate under
such Chapter 303 or under other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in effect.

 

(ii)                                  Without limiting the generality of clause
(i) above, if any provision of this Agreement or of any of the other Loan
Documents would obligate Canadian Borrower or any other Credit Party to make any
payment of interest or other amount payable to any Canadian Lender in an amount
or calculated at a rate which would be prohibited by law or would result in a
receipt by such Canadian Lender of “interest” at a “criminal rate” (as such
terms are construed under the Criminal Code (Canada)) then, notwithstanding such
provisions, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a receipt by such
Canadian Lender of “interest” at a “criminal rate,” such adjustment to be
effected, to the extent necessary, as follows: (1) firstly, by reducing the
amount or rate of interest required to be paid to such Lender under this section
1.3(d), and (2) thereafter, by reducing any fees, commissions, premiums and
other amounts required to be paid to such Canadian Lender which would constitute
“interest” for purposes of Section 347 of the Criminal Code (Canada).  Any
amount or rate of interest referred to in this subsection 1.3(d) shall be
determined in accordance with generally accepted actuarial practices and
principles as an effective annual rate of interest over the term that the
applicable Loan remains outstanding on the assumption that any charges, fees or
expenses that fall within the meaning of “interest” (as defined in the

 

17

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Criminal Code (Canada)) shall, if they relate to a specific period of time, be
pro-rated over that period of time and otherwise be pro-rated over the period
from the Closing Date to the Revolving Termination Date and, in the event of a
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by Canadian Agent shall be conclusive for the purposes of such
determination.

 

(iii)                               For purposes of disclosure pursuant to the
Interest Act (Canada), the annual rates of interest or fees to which the rates
of interest or fees provided in this Agreement and the other Loan Documents (and
stated herein or therein, as applicable, to be computed on the basis of a 360 or
365 day year or any other period of time less than a calendar year) are
equivalent are the rates so determined multiplied by the actual number of days
in the applicable calendar year and divided by 360 or 365 or such other period
of time, as the case may be.

 

1.4.                            Loan Accounts.

 

(a)                                 The Appropriate Agent, on behalf of the
applicable Lenders, shall record on its books and records the amount of each
Loan made, the interest rate applicable, all payments of principal and interest
thereon and the principal balance thereof from time to time outstanding.  The
Appropriate Agent shall deliver to the applicable Borrower on a monthly basis a
loan statement setting forth such record for the immediately preceding calendar
month.  Such record shall, absent manifest error, be conclusive evidence of the
amount of the Loans made by the Lenders to the Borrowers and the interest and
payments thereon.  Any failure to so record or any error in doing so, or any
failure to deliver such loan statement shall not, however, limit or otherwise
affect the obligation of the Borrowers hereunder (and under any Note) to pay any
amount owing with respect to the Loans or provide the basis for any claim
against Agents.

 

(b)                                 US Agent, acting as a non-fiduciary agent of
the US Borrower solely for tax purposes and solely with respect to the actions
described in this subsection 1.4(b), shall establish and maintain at its address
referred to in Section 9.2 (or at such other address as US Agent may give
written notice to the US Borrower) (A) a record of ownership (the “Register”) in
which US Agent agrees to register by book entry the interests (including any
rights to receive payment hereunder) of US Agent, each Lender and each US L/C
Issuer in the US Revolving Loans, US Swing Loans, US L/C Reimbursement
Obligations and US Letter of Credit Obligations, each of their obligations under
this Agreement to participate in each US Loan, US Letter of Credit, US Letter of
Credit Obligations and US L/C Reimbursement Obligations, and any assignment of
any such interest, obligation or right and (B) accounts in the Register in
accordance with its usual practice in which it shall record (1) the names and
addresses of the US Lenders and the US L/C Issuers (and each change thereto
pursuant to Sections 9.9 and 9.22), (2) the Commitments of each US Lender, (3)
the amount of each US Loan (and whether it is a Base Rate or a LIBOR Rate Loan)
and each funding of any participation described in clause (A) above, and for
LIBOR Rate Loans, the Interest Period applicable thereto, (4) the amount of any
principal or interest due and payable or paid, (5) the amount of the US L/C
Reimbursement Obligations due and payable or paid in respect of US Letters of
Credit and (6) any other payment received by US Agent from US Borrower and its
application to the Obligations.

 

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(c)                                  Notwithstanding anything to the contrary
contained in this Agreement, the US Loans (including any Notes evidencing such
Loans and, the corresponding obligations to participate in US Letter of Credit
Obligations and US Swing Loans) and the US L/C Reimbursement Obligations are
registered obligations, the right, title and interest of the US Lenders and the
US L/C Issuers and their assignees in and to such US Loans or US L/C
Reimbursement Obligations, as the case may be, shall be transferable only
pursuant to the terms of this Agreement only upon notation of such transfer in
the Register and no assignment thereof shall be effective until recorded
therein.  This Section 1.4 and Section 9.9 shall be construed so that the US
Loans and US L/C Reimbursement Obligations are at all times maintained in
“registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2)
of the Code.

 

(d)                                 The Credit Parties, US Agent, the US Lenders
and the US L/C Issuers shall treat each Person whose name is recorded in the
Register as a US Lender or US L/C Issuer, as applicable, for all purposes of
this Agreement.  Information contained in the Register with respect to any US
Lender or any US L/C Issuer shall be available for access by the US Borrower, US
Agent, such US Lender or such US L/C Issuer during normal business hours and
from time to time upon at least one Business Day’s prior notice.  No US Lender
or US L/C Issuer shall, in such capacity, have access to or be otherwise
permitted to review any information in the Register other than information with
respect to such US Lender or US L/C Issuer unless otherwise agreed by the US
Agent.

 

1.5.                            Procedure for Revolving Credit Borrowing.

 

(a)                                 (i)  Each Borrowing of a US Revolving Loan
shall be made upon the US Borrower’s irrevocable (subject to Section 10.5)
written notice delivered to US Agent substantially in the form of a Notice of
Borrowing or in a writing in any other form reasonably acceptable to US Agent,
which notice must be received by US Agent prior to 10:00 a.m. (Central time) (1)
on the date which is one (1) Business Day prior to the requested Borrowing date
of each Base Rate Loan, and (2) on the date which is three (3) Business Days
prior to the requested Borrowing date in each case of each LIBOR Rate Loan. 
Such Notice of Borrowing shall specify:

 

(w)                               the amount of the Borrowing (which shall be in
an aggregate minimum principal amount of $100,000);

 

(x)                                 the requested Borrowing date, which shall be
a Business Day;

 

(y)                                 whether the Borrowing is to be comprised of
LIBOR Rate Loans or Base Rate Loans; and

 

(z)                                  if the Borrowing is to be LIBOR Rate Loans,
the Interest Period applicable to such Loans.

 

(ii)                                  Upon receipt of a Notice of Borrowing, US
Agent will promptly notify each US Lender of such Notice of Borrowing and of the
amount of such Lender’s Commitment Percentage of the Borrowing.

 

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(iii)                               Unless US Agent is otherwise directed in
writing by the US Borrower, the proceeds of each requested Borrowing after the
Closing Date will be made available to the US Borrower by US Agent by either (y)
deposit of such amount into a specified deposit account maintained by the US
Borrower with US Agent, if requested and as specified in the applicable Notice
of Borrowing, or (z) wire transfer of such amount to the US Borrower pursuant to
the wire transfer instructions specified on the signature page hereto if funding
such amount into a deposit account maintained by the US Borrower with US Agent
is not specified in the applicable Notice of Borrowing, as such wire
instructions may be updated from time to time by written notice from such
Borrower to such Agent and acknowledged by such Agent.

 

(b)                                 (i)  Each Borrowing of a Canadian Revolving
Loan shall be made upon the Canadian Borrower’s irrevocable (subject to Section
10.5) written notice delivered to Canadian Agent substantially in the form of a
Notice of Borrowing or in a writing in any other form reasonably acceptable to
Canadian Agent, which notice must be received by Canadian Agent prior to 10:00
a.m. (Central time) (1) on the date which is one (1) Business Day prior to the
requested Borrowing date of each Canadian Prime Rate Loan or Base Rate Loan, and
(2) on the date which is three (3) Business Days prior to the requested
Borrowing date in the case of each CDOR Rate Loan or LIBOR Rate Loan.  Such
Notice of Borrowing shall specify:

 

(v)                                 the amount of the Borrowing (which shall be
in an aggregate minimum principal amount of $100,000 or CDN $100,000, as
applicable);

 

(x)                                 the requested Borrowing date, which shall be
a Business Day;

 

(x)                                 whether the Borrowing is to be comprised of
CDOR Rate Loans or Canadian Prime Rate Loans, in the case of CDN $ Denominated
Canadian Loans or LIBOR Rate Loans or Base Rate Loans, in the case of Dollar
Denominated Canadian Loans;

 

(y)                                 whether the Borrowing is to be denominated
in Dollars or Canadian Dollars; and

 

(z)                                  if the Borrowing is to be (A) CDOR Rate
Loans, the CDOR Period applicable to such Loans or (B) LIBOR Rate Loans, the
Interest Period applicable to such Loans.

 

(ii)                                  Upon receipt of a Notice of Borrowing,
Canadian Agent will promptly notify each Canadian Lender of such Notice of
Borrowing and of the amount of such Lender’s Commitment Percentage of the
Borrowing.

 

(iii)                               Unless Canadian Agent is otherwise directed
in writing by the Canadian Borrower, the proceeds of each requested Borrowing
after the Closing Date will be made available to the Canadian Borrower by
Canadian Agent by either (y) deposit of such amount into a specified deposit
account maintained by the Canadian Borrower with

 

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Canadian Agent, if requested and as specified in the applicable Notice of
Borrowing, or (z) wire transfer of such amount to the Canadian Borrower pursuant
to the wire transfer instructions specified on the signature page hereto if
funding such amount into a deposit account maintained by the Canadian Borrower
with Canadian Agent is not specified in the applicable Notice of Borrowing, as
such wire instructions may be updated from time to time by written notice from
such Borrower to such Agent and acknowledged by such Agent.

 

1.6.                            Conversion and Continuation Elections.

 

(a)                                 (i)  The US Borrower shall have the option
to (w) request that any US Revolving Loan be made as a LIBOR Rate Loan, (x)
convert at any time all or any part of outstanding US Revolving Loans (other
than US Swing Loans) from Base Rate Loans to LIBOR Rate Loans, (y) convert any
LIBOR Rate Loan to a Base Rate Loan, subject to Section 10.4 if such conversion
is made prior to the expiration of the Interest Period applicable thereto, or
(z) continue all or any portion of any US Revolving Loan as a LIBOR Rate Loan
upon the expiration of the applicable Interest Period.  Any Loan or group of
Loans having the same proposed Interest Period to be made or continued as, or
converted into, a LIBOR Rate Loan must be in a minimum amount of $1,000,000 and
in integral multiples of $100,000 thereafter.  Any such election must be made by
the US Borrower by 10:00 a.m. (Central time) on the 3rd Business Day prior to
(1) the date of any proposed US Revolving Loan which is to bear interest at the
Adjusted LIBOR Rate plus the Applicable Margin, (2) the end of each Interest
Period with respect to any LIBOR Rate Loans to be continued as such, or (3) the
date on which the US Borrower wishes to convert any Base Rate Loan to a LIBOR
Rate Loan for an Interest Period designated by the US Borrower in such
election.  If no election is received with respect to a LIBOR Rate Loan by 10:00
a.m. (Central time) on the 3rd Business Day prior to the end of the Interest
Period with respect thereto, that LIBOR Rate Loan shall be converted to a Base
Rate Loan at the end of its Interest Period.  The US Borrower must make such
election by notice to US Agent in writing, including by Electronic Transmission
(or by telephone, to be confirmed in writing or Electronic Transmission on such
day). In the case of any conversion or continuation, such election must be made
pursuant to a written notice (a “Notice of Conversion/Continuation”)
substantially in the form of Exhibit 1.6 or in a writing in any other form
reasonably acceptable to the Appropriate Agent.  No Loan shall be made,
converted into or continued as a LIBOR Rate Loan with an Interest Period longer
than one month, if a Specified Event of Default has occurred and is continuing
and Required US Lenders have provided notice to the US Borrower (directly or by
or through the US Agent) indicating that the Required US Lenders have determined
not to make or continue any Loan as a LIBOR Rate Loan as a result thereof.

 

(ii)                                  Upon receipt of a Notice of
Conversion/Continuation, US Agent will promptly notify each US Lender thereof. 
In addition, US Agent will, with reasonable promptness, notify the US Borrower
and the US Lenders of each determination of the Adjusted LIBOR Rate; provided
that any failure to do so shall not relieve the US Borrower of any liability
hereunder or provide the basis for any claim against US Agent.  All conversions
and continuations shall be made pro rata according to the respective outstanding
principal amounts of the US Revolving Loans held by each US Lender with respect
to which the notice was given.

 

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(iii)                               Notwithstanding any other provision
contained in this Agreement, after giving effect to any Borrowing, or to any
continuation or conversion of any Loans, there shall not be more than seven (7)
different Interest Periods in effect at any one time with respect to the US
Revolving Loans.

 

(b)                                 (i)  The Canadian Borrower shall have the
option to (w) request that any CDN $ Denominated Canadian Loan be made as a CDOR
Rate Loan and any Dollar Denominated Canadian Loan be made as a LIBOR Rate Loan,
(x) convert at any time all or any part of outstanding CDN $ Denominated
Canadian Loans (other than Canadian Swing Loans) from Canadian Prime Rate Loans
to CDOR Rate Loans and any Dollar Denominated Canadian Loans (other than
Canadian Swing Loans) from Base Rate Loans to LIBOR Rate Loans, (y) convert any
CDOR Rate Loan to a Canadian Prime Rate Loan and any LIBOR Rate Loan to a Base
Rate Loan, subject to Section 10.4 if such conversion is made prior to the
expiration of the CDOR Period or Interest Period applicable thereto, or (z)
continue all or any portion of any CDN $ Denominated Canadian Loan as a CDOR
Rate Loan upon the expiration of the applicable CDOR Period and any Dollar
Denominated Canadian Loan as a LIBOR Rate Loan upon the expiration of the
applicable Interest Period.  Any Loan or group of Loans having the same proposed
CDOR Period or Interest Period, as applicable, to be made or continued as, or
converted into, a CDOR Rate Loan or LIBOR Rate Loan, as applicable, must, in
each instance, be in a minimum amount of CDN $1,000,000 and in integral
multiples of CDN $100,000 thereafter for CDN $ Denominated Canadian Loans and
$1,000,000 and in integral multiples of $100,000 thereafter for Dollar
Denominated Canadian Loans.  Any such election must be made by the Canadian
Borrower by 10:00 a.m. (Central time) on the 3rd Business Day prior to (1) the
date of any proposed Canadian Revolving Loan which is to bear interest at the
CDOR Rate or the Adjusted LIBOR Rate, (2) the end of each CDOR Period or
Interest Period with respect to any CDOR Rate Loans or LIBOR Rate Loans, as
applicable, to be continued as such, or (3) the date on which the Canadian
Borrower wishes to convert any Canadian Prime Rate Loans to a CDOR Rate Loan for
an CDOR Period designated by the Canadian Borrower in such election or any Base
Rate Loans to a LIBOR Rate Loan for an Interest Period designated by the
Canadian Borrower in such election.  If no election is received with respect to
a CDOR Rate Loan or LIBOR Rate Loan by 10:00 a.m. (Central time) on the 3rd
Business Day prior to the end of the respective CDOR Period or Interest Period,
as applicable, that CDOR Rate Loan or LIBOR Rate Loan shall be converted to a
Canadian Prime Rate Loan or Base Rate Loan, as applicable, at the end of its
CDOR Period or Interest Period, as applicable.  The Canadian Borrower must make
such election by notice to Canadian Agent in writing, including by Electronic
Transmission. In the case of any conversion or continuation, such election must
be made pursuant to a Notice of Conversion/Continuation.  No Loan shall be made,
converted into or continued as a CDOR Rate Loan with an CDOR Period or a LIBOR
Rate Loan with an Interest Period, in either case, longer than one month, if a
Specified Event of Default has occurred and is continuing and Required Canadian
Lenders have provided notice to the Canadian Borrower (directly or by or through
the Canadian Agent) indicating that the Required Canadian Lenders have
determined not to make or continue any Loan as a CDOR Rate Loan or a LIBOR Rate
Loan, as applicable, as a result thereof.

 

(ii)                                  Upon receipt of a Notice of
Conversion/Continuation, Canadian Agent will promptly notify each Canadian
Lender thereof.  In addition, Canadian Agent will, with reasonable promptness,
notify the Canadian Borrower and the Canadian Lenders of

 

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each determination of the CDOR Rate or the Adjusted LIBOR Rate, as applicable;
provided that any failure to do so shall not relieve the Canadian Borrower of
any liability hereunder or provide the basis for any claim against Canadian
Agent.  All conversions and continuations shall be made pro rata according to
the respective outstanding principal amounts of the Canadian Revolving Loans
held by each Canadian Lender with respect to which the notice was given.

 

(iii)                               Notwithstanding any other provision
contained in this Agreement, after giving effect to any Borrowing, or to any
continuation or conversion of any Loans, there shall not be more than seven (7)
different CDOR Periods or Interest Periods, in aggregate, in effect at any one
time with respect to the Canadian Revolving Loans.

 

1.7.                            Optional Prepayments.  The Borrowers may prepay
the Loans in whole or in part, in each instance, without penalty or premium
except as provided in Section 10.4; provided, all prepayments of Canadian
Revolving Loans shall be in the currency in which the applicable Canadian
Revolving Loan is denominated.

 

1.8.                            Mandatory Prepayments of Loans and Commitment
Reductions.

 

(a)                                 Reserved.

 

(b)                                 Revolving Loan.  (i) The US Borrower shall
repay to the US Lenders in full on the “Revolving Termination Date” the
aggregate principal amount of the US Revolving Loans and US Swing Loans
outstanding on the Revolving Termination Date.

 

(ii)                                  The Canadian Borrower shall repay to the
Canadian Lenders in full on the “Revolving Termination Date” the aggregate
principal amount of the Canadian Revolving Loans and Canadian Swing Loans
outstanding on the Revolving Termination Date.

 

(c)                                  Asset Dispositions.  Subject to subsection
1.8(e), if a Credit Party or any Subsidiary of a Credit Party shall at any time
or from time to time:

 

(i)                                     make or agree to make a Disposition
except a Disposition of the Houston Property; or

 

(ii)                                  suffer an Event of Loss;

 

and the aggregate amount of the Net Proceeds received by the Credit Parties and
their Subsidiaries in connection with such Disposition or Event of Loss and all
other Dispositions and Events of Loss occurring during the Fiscal Year exceeds
the US Dollar Equivalent of $2,000,000, then (A) Holdings shall promptly notify
the Agents of such proposed Disposition or Event of Loss (including the amount
of the estimated Net Proceeds to be received by a Credit Party and/or such
Subsidiary in respect thereof) and (B) promptly upon receipt by a Credit Party
and/or such Subsidiary of the Net Proceeds of such Disposition or Event of Loss,
such Credit Party shall deliver, or cause to be delivered, such excess Net
Proceeds to the Appropriate Agent for distribution to the applicable Lenders as
a prepayment of the Loans, which prepayment shall be applied in accordance with
subsection 1.8(e) hereof.  Notwithstanding the foregoing and provided no Event
of Default has occurred and is continuing but subject to the last sentence of

 

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this subsection, such prepayment shall not be required to the extent a Credit
Party or such Subsidiary reinvests the Net Proceeds of such Disposition or Event
of Loss to reinvest in productive or replacement assets (other than Inventory,
except to the extent of Inventory damaged or destroyed in an Event of Loss) of a
kind then used or usable in the business of such Credit Party or such
Subsidiary, within two hundred seventy (270) days after the date of such
Disposition or Event of Loss or enters into a binding commitment thereof within
said two hundred seventy (270) day period and subsequently makes such
reinvestment; provided that Holdings notifies the Appropriate Agent of such
Credit Party’s or such Subsidiary’s intent to reinvest and of the completion of
such reinvestment at the time such proceeds are received and when such
reinvestment occurs, respectively.  Notwithstanding anything in this Agreement
to the contrary, if as a result of any sale, assignment, disposition or other
transfer by any Credit Party of any Property or if as a result of an Event of
Loss, the outstanding principal balance of US Revolving Loans exceeds the
Maximum US Revolving Loan Balance and/or the US Dollar Equivalent of the
outstanding principal balance of Canadian Revolving Loans exceeds the Maximum
Canadian Revolving Loan Balance, Borrowers shall immediately pay or cause to be
paid outstanding Loans in an amount sufficient to eliminate such excess.

 

(d)                                 Issuance of Securities.  Promptly upon the
receipt by any Credit Party or any Subsidiary of any Credit Party of the Net
Issuance Proceeds of the incurrence of Indebtedness or issuance of debt
securities (other than Net Issuance Proceeds from the issuance of debt
securities in respect of Indebtedness permitted hereunder), Holdings shall
deliver, or cause to be delivered, to the Appropriate Agent an amount equal to
such Net Issuance Proceeds, for application to the Loans in accordance with
subsection 1.8(e).

 

(e)                                  Application of Prepayments.

 

(i)                                     Provided no Event of Default has
occurred and is continuing and, subject to the provisions of the last sentence
of subsection 1.8(c), no prepayments shall be required to be made pursuant to
subsections 1.8(c) or (d) if the Leverage Ratio as of the last day of the most
recent Fiscal Quarter for which financial statements and a Compliance
Certificate have been delivered, is less than 3.50 to 1.00.

 

(ii)                                  Subject to subsection 1.10(c), any
prepayments pursuant to subsection 1.8(c) or 1.8(d) by a US Credit Party or a
Subsidiary of a US Credit Party (other than Canadian Borrower or any Subsidiary
thereof) shall be applied first to prepay outstanding US Swing Loans, second to
prepay outstanding US Revolving Loans, third to prepay outstanding Canadian
Swing Loans and fourth to prepay outstanding Canadian Revolving Loans. Any
prepayments pursuant to subsection 1.8(c) or 1.8(d) by a Canadian Credit Party
(other than Holdings, US Borrower or any Subsidiary of US Borrower) shall be
applied first to prepay outstanding Canadian Swing Loans and second to prepay
outstanding Canadian Revolving Loans.

 

(iii)                               Amounts prepaid shall be applied first to
any Base Rate Loans or Canadian Prime Rate Loans, as applicable, then
outstanding and then to outstanding LIBOR Rate Loans with the shortest Interest
Periods or CDOR Rate Loans with the shortest CDOR Periods remaining, as
applicable.  Together with each prepayment under this Section 1.8, the
applicable Borrower shall pay any amounts required pursuant to

 

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Section 10.4 hereof.  Prepayments of Canadian Revolving Loans shall be made in
the currency in which the applicable Canadian Revolving Loan is denominated.

 

(f)                                   No Implied Consent.  Provisions contained
in this Section 1.8 for the application of proceeds of certain transactions
shall not be deemed to constitute consent of the Lenders to transactions that
are not otherwise permitted by the terms hereof or the other Loan Documents.

 

1.9.                            Fees.

 

(a)                                 Reserved.

 

(b)                                 Unused Commitment Fee.  The US Borrower
shall pay to US Agent a fee (the “Unused Commitment Fee”) for the account of
each Lender in an amount equal to

 

(x)                                 the average daily balance of the US
Revolving Loan Commitment of such US Lender during the preceding Fiscal Quarter,
less

 

(y)                                 the sum of (1) the average daily balance of
all outstanding US Revolving Loans held by such US Lender, plus without
duplication, (2) the average daily amount of US Letter of Credit Obligations
held by such US Lender, plus (3) in the case of the US Swingline Lender, the
average daily balance of all outstanding US Swing Loans held by such US
Swingline Lender, plus (iv) the US Dollar Equivalent of the average daily
balance of outstanding Canadian Revolving Loans, Canadian Letter of Credit
Obligations held by such Lender and its Affiliates and Approved Funds and, in
the case of Canadian Swingline Lender, Canadian Swing Loans, in each case,
during the preceding Fiscal Quarter; provided, in no event shall the amount
computed pursuant to clauses (x) and (y) with respect to a Swingline Lender be
less than zero,

 

(z)                                  multiplied by a rate per annum equal to the
Applicable Margin.

 

The total fee paid by the US Borrower will be equal to the sum of all of the
fees due to the Lenders, subject to subsection 1.11(e)(vi).  Such fee shall be
payable quarterly in arrears on the first day of the Fiscal Quarter following
the date hereof and the first day of each Fiscal Quarter thereafter.  The Unused
Commitment Fee provided in this subsection 1.9(b) shall accrue at all times from
and after the execution and delivery of this Agreement.

 

(c)                                  Letter of Credit Fees.

 

(i)                                     The US Borrower agrees to pay to US
Agent for the ratable benefit of the US Lenders, as compensation to such Lenders
for US Letter of Credit Obligations incurred hereunder, (i) without duplication
of costs and expenses otherwise payable to US Agent or US Lenders hereunder or
fees otherwise paid by the US Borrower, all reasonable costs and expenses
incurred by US Agent or any US Lender on account of such US Letter of Credit
Obligations, and (ii) for each Fiscal Quarter during which any US Letter of
Credit Obligation shall remain outstanding, a fee (the “US Letter of Credit

 

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Fee”) in an amount equal to the product of the average daily undrawn face amount
of all US Letters of Credit issued, guaranteed or supported by risk
participation agreements multiplied by a per annum rate equal to the Applicable
Margin with respect to US Revolving Loans which are LIBOR Rate Loans; provided,
however, at Required US Lenders’ option, while a Specified Event of Default
exists (or automatically while an Event of Default under subsection 7.1(f) or
7.1(g) exists), such rate shall be increased by three percent (3.00%) per
annum.  Such fee shall be paid to US Agent for the benefit of the US Lenders in
arrears, on the first day of each Fiscal Quarter and on the date on which all US
L/C Reimbursement Obligations have been discharged.  In addition, the US
Borrower shall pay to US Agent, any US L/C Issuer or any prospective US L/C
Issuer, as appropriate, on demand, such US L/C Issuer’s or prospective US L/C
Issuer’s customary fees at then prevailing rates, without duplication of fees
otherwise payable hereunder (including all per annum fees), charges and expenses
of such US L/C Issuer or prospective US L/C Issuer in respect of the application
for, and the issuance, negotiation, acceptance, amendment, transfer and payment
of, each US Letter of Credit or otherwise payable pursuant to the application
and related documentation under which such US Letter of Credit is issued.

 

(ii)           The Canadian Borrower agrees to pay to Canadian Agent for the
ratable benefit of the Canadian Lenders, as compensation to such Lenders for
Canadian Letter of Credit Obligations incurred hereunder, (i) without
duplication of costs and expenses otherwise payable to Canadian Agent or
Canadian Lenders hereunder or fees otherwise paid by the Canadian Borrower, all
reasonable costs and expenses incurred by Canadian Agent or any Canadian Lender
on account of such Canadian Letter of Credit Obligations, and (ii) for each
Fiscal Quarter during which any Canadian Letter of Credit Obligation shall
remain outstanding, a fee (the “Canadian Letter of Credit Fee” and, together
with the US Letter of Credit Fee, the “Letter of Credit Fees”), denominated in
Canadian Dollars, in an amount equal to the product of the US Dollar Equivalent
of the average daily undrawn face amount of all Canadian Letters of Credit
issued, guaranteed or supported by risk participation agreements multiplied by a
per annum rate equal to the Applicable Margin with respect to Canadian Revolving
Loans which are CDOR Rate Loans; provided, however, at Required Canadian
Lenders’ option, while a Specified Event of Default exists (or automatically
while an Event of Default under subsection 7.1(f) or 7.1(g) exists), such rate
shall be increased by three percent (3.00%) per annum.  Such fee shall be paid,
in Dollars, to Canadian Agent for the benefit of the Canadian Lenders in
arrears, on the first day of each Fiscal Quarter and on the date on which all
Canadian L/C Reimbursement Obligations have been discharged.  In addition, the
Canadian Borrower shall pay to Canadian Agent, any Canadian L/C Issuer or any
prospective Canadian L/C Issuer, as appropriate, on demand, in the currency in
which the applicable Canadian Letter of Credit has been or is to be issued, such
Canadian L/C Issuer’s or prospective Canadian L/C Issuer’s customary fees at
then prevailing rates, without duplication of fees otherwise payable hereunder
(including all per annum fees), charges and expenses of such Canadian L/C Issuer
or prospective Canadian L/C Issuer in respect of the application for, and the
issuance, negotiation, acceptance, amendment, transfer and payment of, each
Canadian Letter of Credit or otherwise payable pursuant to

 

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the application and related documentation under which such Canadian Letter of
Credit is issued.

 

1.10.       Payments by the Borrowers.

 

(a)           All payments (including prepayments) to be made by each Credit
Party on account of principal, interest, fees and other amounts required
hereunder shall be made without set off, recoupment, counterclaim or deduction
of any kind, shall, except as otherwise expressly provided herein, be made to
the Appropriate Agent (for the ratable account of the Persons entitled thereto)
at the address for payment specified in the signature page hereof in relation to
such Agent (or such other address as such the Appropriate Agent may from time to
time specify in accordance with Section 9.2), including payments utilizing the
ACH system, and shall be made in Dollars with respect to US Obligations and CDN
$ or Dollars with respect to Canadian Obligations, based on the currency in
which any particular Canadian Obligation is denominated, and by wire transfer or
ACH transfer in immediately available funds, no later than noon (Central time)
on the date due. Any payment which is received by an Agent later than noon
(Central time) may in such Agent’s discretion be deemed to have been received on
the immediately succeeding Business Day and any applicable interest or fee shall
continue to accrue.  Each Borrower and each other Credit Party hereby
irrevocably waives the right to direct the application during the continuance of
a Specified Event of Default or after the exercise of any remedies by an Agent
after the occurrence of any other Event of Default of any and all payments in
respect of the Obligations of such Borrower and any proceeds of Collateral with
respect thereto.  US Borrower hereby authorizes US Agent and each US Lender to
make a US Revolving Loan (which shall be a Base Rate Loan and which may be a US
Swing Loan) to pay (i) interest, principal (including Swing Loans), L/C
Reimbursement Obligations, agent fees, Unused Commitment Fees and Letter of
Credit Fees, in each instance, on the date due, or (ii) after five (5) days’
prior written notice to the US Borrower, other fees, costs or expenses payable
by a Borrower or any of its Subsidiaries hereunder or under the other Loan
Documents.  Canadian Borrower hereby authorizes Canadian Agent and each Canadian
Lender to make a Canadian Revolving Loan (which shall be a Base Rate Loan and
which may be a Canadian Swing Loan) to pay (i) interest, principal of Canadian
Loans, Canadian L/C Reimbursement Obligations, and Canadian Letter of Credit
Fees, in each instance, on the date due, or (ii) after five (5) days’ prior
written notice to the Canadian Borrower, other fees, costs or expenses payable
by the Canadian Borrower or any of its Subsidiaries hereunder or under the other
Loan Documents; provided, nothing in this subsection 1.10(a) shall be deemed to
limit or impair Borrowers’ rights to dispute any Credit Party’s obligation to
pay fees, costs or expenses pursuant to and in accordance with this Agreement.

 

(b)           Subject to the provisions set forth in the definitions of “CDOR
Period” and “Interest Period” herein, if any payment hereunder shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.

 

(c)           (i)  During the continuance of a Specified Event of Default or
after the exercise of any remedies by an Agent after the occurrence of any other
Event of Default, US Agent may, and shall upon the direction of Required Lenders
apply any and all payments

 

27

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received by US Agent in respect of any Obligation in accordance with clauses
first through ninth below.  Notwithstanding any provision herein to the
contrary, all amounts collected or received by US Agent after any or all of the
Obligations have been accelerated (so long as such acceleration has not been
rescinded), including proceeds of Collateral, shall be applied as follows:

 

first, to payment of costs and expenses, including Attorney Costs, of the Agents
payable or reimbursable by the Credit Parties under the Loan Documents;

 

second, to payment of Attorney Costs of Lenders payable or reimbursable by the
Borrowers under this Agreement;

 

third, to payment of all accrued unpaid interest on the US Obligations and fees
owed to US Agent, US Lenders and US L/C Issuers in respect of the US
Obligations;

 

fourth, to payment of principal of the US Obligations including, without
limitation, US L/C Reimbursement Obligations then due and payable, any
Obligations under any Secured Rate Contract and cash collateralization of
unmatured US L/C Reimbursement Obligations to the extent not then due and
payable;

 

fifth, to payment of any other amounts owing constituting US Obligations;

 

sixth, to payment of all accrued unpaid interest on the Canadian Obligations and
fees owed to Canadian Agent, Canadian Lenders and Canadian L/C Issuers in
respect of the Canadian Obligations;

 

seventh, to payment of principal of the Canadian Obligations including, without
limitation, Canadian L/C Reimbursement Obligations then due and payable, and
cash collateralization of unmatured Canadian L/C Reimbursement Obligations to
the extent not then due and payable;

 

eighth, to payment of any other amounts owing constituting Canadian Obligations;
and

 

ninth, any remainder shall be for the account of and paid to whoever may be
lawfully entitled thereto.

 

In carrying out the foregoing, (x) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to the next
succeeding category and (y) each of the Lenders or other Persons entitled to
payment shall receive an amount equal to its pro rata share of amounts available
to be applied pursuant to clauses third through eighth above.

 

(ii)           During the continuance of an Event of Default, Canadian Agent
may, and shall upon the direction of Required Lenders apply any and all payments
received by

 

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Canadian Agent in respect of any Canadian Obligation in accordance with clauses
first through sixth below.  Notwithstanding any provision herein to the
contrary, all amounts collected or received by Canadian Agent after any or all
of the Canadian Obligations have been accelerated (so long as such acceleration
has not been rescinded)(it being agreed that if the Canadian Agent receives any
amounts from a US Credit Party prior to the time all US Obligations are paid in
full, Canadian Agent shall pay such amounts to US Agent for application in
accordance with subsection 1.10(c)(i)), including proceeds of Collateral, shall
be applied as follows:

 

first, to payment of costs and expenses, including Attorney Costs, of the
Canadian Agent payable or reimbursable by the Credit Parties under the Loan
Documents;

 

second, to payment of Attorney Costs of Canadian Lenders payable or reimbursable
by the Borrowers under this Agreement;

 

third, to payment of all accrued unpaid interest on the Canadian Obligations and
fees owed to Canadian Agent, Canadian Lenders and Canadian L/C Issuers in
respect of the Canadian Obligations;

 

fourth, to payment of principal of the Canadian Obligations including, without
limitation, Canadian L/C Reimbursement Obligations then due and payable, and
cash collateralization of unmatured Canadian L/C Reimbursement Obligations to
the extent not then due and payable;

 

fifth, to payment of any other amounts constituting Canadian Obligations;

 

sixth, any remainder shall be for the account of and paid to whoever may be
lawfully entitled thereto.

 

In carrying out the foregoing, (x) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to the next
succeeding category and (y) each of the Lenders or other Persons entitled to
payment shall receive an amount equal to its pro rata share of amounts available
to be applied pursuant to clauses third, fourth and fifth above.

 

1.11.       Payments by the Lenders to Appropriate Agent; Settlement.

 

(a)           The Appropriate Agent may, on behalf of Lenders, disburse funds to
the applicable Borrower for Loans requested.  Each Lender shall reimburse the
Appropriate Agent on demand for all funds disbursed on its behalf by such Agent,
in the currency in which such funds were disbursed, or if the Appropriate Agent
so requests, each Lender will remit to the Appropriate Agent its Commitment
Percentage of any Loan before the Appropriate Agent disburses same to the
applicable Borrower.  If the Appropriate Agent elects to require that each
Lender make funds available to the Appropriate Agent prior to disbursement by
the Appropriate Agent to the applicable Borrower, the Appropriate Agent shall
advise each Lender by telephone or fax of the amount of such Lender’s Commitment
Percentage of the Loan requested by the

 

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applicable Borrower, and the applicable currency thereof, no later than the
Business Day prior to the scheduled Borrowing date applicable thereto, and each
such Lender shall pay the Appropriate Agent such Lender’s Commitment Percentage
of such requested Loan, in same day funds, in the applicable currency, by wire
transfer to the Appropriate Agent’s account, as set forth on Appropriate Agent’s
signature page hereto, no later than 9:00 a.m. (Central time) on such scheduled
Borrowing date.  Nothing in this subsection 1.11(a) or elsewhere in this
Agreement or the other Loan Documents, including the remaining provisions of
Section 1.11, shall be deemed to require an Agent to advance funds on behalf of
any Lender or to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that the Appropriate Agent, any
Lender or the applicable Borrower may have against any Lender as a result of any
default by such Lender hereunder.

 

(b)           At least once each calendar week or more frequently the
Appropriate Agent’s election (each, a “Settlement Date”), Appropriate Agent
shall advise each Lender by telephone or fax of the amount of such Lender’s
Commitment Percentage of principal, interest, applicable currency and Fees paid
for the benefit of Lenders with respect to each applicable Loan.  Appropriate
Agent shall pay to each Lender such Lender’s Commitment Percentage (except as
otherwise provided in subsection 1.1(c) (vi) and subsection 1.11(e)(iv)) of
principal, interest and fees paid by the applicable Borrower since the previous
Settlement Date for the benefit of such Lender on the Loans held by it. Such
payments shall be made by wire transfer to such Lender not later than 9:00 a.m.
(Central time) on the next Business Day following each Settlement Date.

 

(c)           Availability of Lender’s Commitment Percentage.  Appropriate Agent
may assume that each Lender will make its Commitment Percentage of each
Revolving Loan available to Appropriate Agent on each Borrowing date.  If such
Commitment Percentage is not, in fact, paid to Appropriate Agent by such Lender
when due, Appropriate Agent will be entitled to recover such amount on demand
from such Lender without setoff, counterclaim or deduction of any kind.  If any
Lender fails to pay the amount of its Commitment Percentage forthwith upon the
Appropriate Agent’s demand, Appropriate Agent shall promptly notify the
applicable Borrower and the applicable Borrower shall immediately repay such
amount to the Appropriate Agent in the currency in which such amount was
disbursed.  Nothing in this subsection 1.11(c) or elsewhere in this Agreement or
the other Loan Documents shall be deemed to require Appropriate Agent to advance
funds on behalf of any Lender or to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that the applicable
Borrower may have against any Lender as a result of any default by such Lender
hereunder.  Without limiting the provisions of subsection 1.11(b), to the extent
that Appropriate Agent advances funds to the applicable Borrower on behalf of
any Lender and is not reimbursed therefor on the same Business Day as such
advance is made, Appropriate Agent shall be entitled to retain for its account
all interest accrued on such advance from the date such advance was made until
reimbursed by the applicable Lender.

 

(d)           Return of Payments.

 

(i)            If an Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
such Agent from the applicable Borrower and such related payment is not received
by such Agent, then such

 

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Agent  will be entitled to recover such amount from such Lender on demand
without setoff, counterclaim or deduction of any kind.

 

(ii)           If an Agent determines at any time that any amount received by
such Agent under this Agreement or any other Loan Document must be returned to
any Credit Party or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Loan Document, such Agent will not be required to distribute any
portion thereof to any Lender.  In addition, each Lender will repay to
Appropriate Agent on demand any portion of such amount that such Agent  has
distributed to such Lender, in the applicable currency, together with interest
at such rate, if any, as such Agent  is required to pay to the applicable
Borrower or such other Person, without setoff, counterclaim or deduction of any
kind, and Appropriate Agent will be entitled to set-off against future
distributions to such Lender any such amounts (with interest) that are not
repaid on demand.

 

(e)           Non-Funding Lenders.

 

(i)            Responsibility.  The failure of any Non-Funding Lender to make
any Loan, to fund any purchase of any participation to be made or funded by it,
or to make any payment required by it hereunder on the date specified therefor
shall not relieve any other Lender of its obligations to make such loan, fund
the purchase of any such participation, or make any other payment required
hereunder on such date, and none of the Agents or, other than as expressly set
forth herein, any other Lender shall be responsible for the failure of any
Non-Funding Lender to make a loan, fund the purchase of a participation or make
any other payment required hereunder.

 

(ii)           Reallocation.  If any Lender is a Non-Funding Lender, all or a
portion of such Non-Funding Lender’s Letter of Credit Obligations (unless such
Lender is the L/C Issuer that issued such Letter of Credit) and reimbursement
obligations with respect to Swing Loans shall, at the Appropriate Agent’s
election at any time or upon any L/C Issuer’s or Swingline Lender’s, as
applicable, written request delivered to Agents (whether before or after the
occurrence of any Default or Event of Default), be reallocated to and assumed by
the US Lenders or Canadian Lenders, as applicable, that are not Non-Funding
Lenders or Impacted Lenders pro rata in accordance with their Commitment
Percentages of the US Loans or Canadian Loans, as applicable, (calculated as if
the Non-Funding Lender’s Commitment Percentage was reduced to zero and each
other Lender’s Commitment Percentage had been increased proportionately),
provided that no Lender shall be reallocated any such amounts or be required to
fund any amounts that would cause the sum of its applicable outstanding Loans,
outstanding Letter of Credit Obligations, amounts of its participations in Swing
Loans and its pro rata share of unparticipated amounts in Swing Loans to exceed
its US Revolving Loan Commitment or Canadian Revolving Loan Commitment, as
applicable.

 

(iii)          Voting Rights.  Notwithstanding anything set forth herein to the
contrary, including Section 9.1, a Non-Funding Lender shall not have any voting
or consent rights under or with respect to any Loan Document or constitute a
“Lender” (or be, or have its Loans and Commitments, included in the
determination of “Required Lenders”,

 

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“Required US Lenders”, “Required Canadian Lenders” or “Lenders directly
affected” pursuant to Section 9.1) for any voting or consent rights under or
with respect to any Loan Document, provided that (A) the Commitment of a
Non-Funding Lender may not be increased, extended or reinstated, (B) the
principal of a Non-Funding Lender’s Loans may not be reduced or forgiven, and
(C) the interest rate applicable to Obligations owing to a Non-Funding Lender
may not be reduced.  Moreover, for the purposes of determining Required Lenders,
Required US Lenders and Required Canadian Lenders, the Loans, Letter of Credit
Obligations, and Commitments held by Non-Funding Lenders shall be excluded from
the total Loans and Commitments outstanding.

 

(iv)          Borrower Payments to a Non-Funding Lender.  The Appropriate Agent
shall be entitled to hold, in a non-interest bearing account, all portions of
any payments received by such Agent for the benefit of any Non-Funding Lender
pursuant to this Agreement as cash collateral.  The Appropriate Agent is hereby
authorized to use such cash collateral to pay in full the Aggregate Excess
Funding Amount to the appropriate Secured Parties thereof, and then, to hold as
cash collateral the amount of such Non-Funding Lender’s pro rata share, without
giving effect to any reallocation pursuant to subsection 1.11(e)(ii), of all
funding obligations until the Obligations are paid in full in cash, all Letter
of Credit Obligations have been discharged or cash collateralized and all
Commitments have been terminated.  Upon any such unfunded obligations owing by a
Non-Funding Lender becoming due and payable, the Appropriate Agent shall be
authorized to use such cash collateral to make such payment on behalf of such
Non-Funding Lender.  With respect to such Non-Funding Lender’s failure to fund
Loans or purchase participations in Letters of Credit or Letter of Credit
Obligations, any amounts applied by the Appropriate Agent to satisfy such
funding shortfalls shall be deemed to constitute a Revolving Loan or amount of
the participation required to be funded and, if necessary to effectuate the
foregoing, the other Lenders shall be deemed to have sold, and such Non-Funding
Lender shall be deemed to have purchased, Revolving Loans or Letter of Credit
participation interests from the other Lenders until such time as the aggregate
amount of the Revolving Loans and participations in Letters of Credit and Letter
of Credit Obligations are held by the Lenders in accordance with their
Commitment Percentages.  Any amounts owing by a Non-Funding Lender to an Agent
which are not paid when due shall accrue interest at the interest rate
applicable during such period to Revolving Loans that are Base Rate Loans or
Canadian Prime Rate Loans, as applicable.  In the event that an Agent is holding
cash collateral of a Non-Funding Lender that cures pursuant to clause (v) below
or ceases to be a Non-Funding Lender pursuant to definition of Non-Funding
Lender, such Agent shall return the unused portion of such cash collateral to
such Lender. The “Aggregate Excess Funding Amount” of a Non-Funding Lender shall
be the aggregate amount of (A) all unpaid obligations owing by such Lender to
the Appropriate Agent, L/C Issuers, Swingline Lenders, and other Lenders under
the Loan Documents, including such Lender’s pro rata share of all Revolving
Loans, Letter of Credit Obligations, Swing Loans, plus, without duplication, (B)
all amounts of such Non-Funding Lender reallocated to other Lenders pursuant to
subsection 1.11(e)(ii).

 

(v)           Cure.  A Lender may cure its status as a Non-Funding Lender under
clause (a) of the definition of Non-Funding Lender if such Lender fully pays to
the Appropriate Agent, on behalf of the applicable Secured Parties, the
Aggregate Excess Funding

 

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Amount, plus all interest due thereon, in each case, in the applicable
currency.  Any such cure shall not relieve any Lender from liability for
breaching its contractual obligations hereunder.

 

(vi)          Fees.  A Lender that is a Non-Funding Lender pursuant to clause
(a) of the definition of Non-Funding Lender shall not earn and shall not be
entitled to receive, and no Borrowers shall be required to pay, such Lender’s
portion of the Unused Commitment Fee during the time such Lender is a
Non-Funding Lender pursuant to clause (a) thereof.  In the event that any
reallocation of Letter of Credit Obligations occurs pursuant to subsection
1.11(e)(ii), during the period of time that such reallocation remains in effect,
the Letter of Credit Fee payable with respect to such reallocated portion shall
be payable to (A) all Lenders based on their pro rata share of such reallocation
or (B) to the applicable L/C Issuer for any remaining portion not reallocated to
any other Lenders.

 

(f)            Procedures.  Each Agent is hereby authorized by each Credit Party
and each other Secured Party to establish reasonable procedures (and to amend
such procedures from time to time) to facilitate administration and servicing of
the Loans and other matters incidental thereto.  Without limiting the generality
of the foregoing, each Agent is hereby authorized to establish reasonable
procedures to make available or deliver, or to accept, notices, documents and
similar items on, by posting to or submitting and/or completion, on E-Systems.

 

ARTICLE II -

 

CONDITIONS PRECEDENT

 

2.1.         Conditions of Initial Loans.  The obligation of each Lender to make
its initial Loans and of each L/C Issuer to Issue, or cause to be Issued, the
initial Letters of Credit hereunder is subject to satisfaction of the following
conditions (unless otherwise waived by Lenders):

 

(a)           Loan Documents.  US Agent shall have received on or before the
Closing Date all of the agreements, documents, instruments and other items as
reasonably required by the Agents evidencing the transactions hereunder in form
satisfactory to Agents;

 

(b)           Substitution of US Agent as “First Lien Collateral Agent” under
Intercreditor Agreement.  US Agent shall have received a written acknowledgment
from the Second Lien Agent (as defined in the Intercreditor Agreement) in a form
reasonably acceptable to the US Agent that US Agent has, or concurrently on the
Closing Date will have, replaced General Electric Capital Corporation as the
successor “First Lien Collateral Agent” under the Intercreditor Agreement.

 

(c)           Repayment of Prior Lender Obligations; Satisfaction of Outstanding
L/Cs.  (i) US Agent shall have received a fully executed pay-off letter
reasonably satisfactory to US Agent confirming that all obligations owing by any
Credit Party to Prior Lenders (other than obligations relating to Existing
Letters of Credit) will be repaid in full from the proceeds of the initial Loans
and, subject to clause (ii) below, all Liens upon any of the Property of the
Credit Parties or any of their Subsidiaries in favor of Prior Lenders shall be
terminated by Prior Lenders

 

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immediately upon such payment, and (ii) all Existing Letters of Credit issued or
guaranteed by Prior Lenders shall have been cash collateralized, or supported by
a Letter of Credit issued pursuant hereto;

 

(d)           Representations and Warranties.  The representations and
warranties (i) of the Borrowers and the other Credit Parties contained in
Sections 3.1(a), 3.1(b) (solely as it relates to the Loan Documents), 3.2
(solely as it relates to the Loan Documents), 3.3 (solely as it relates to the
Loan Documents), 3.4 (solely as it relates to the Loan Documents), 3.8, 3.11(b),
3.11(d), 3.13, 3.14, 3.17, 3.22, 3.27 and 3.28 of this Agreement and Section 4.2
of each Guaranty and Security Agreement shall be true and correct in all
material respects (without duplication of any materiality qualifier contained
therein);

 

(e)           Material Adverse Change.  Since March 31, 2012, there shall not
have been any Material Adverse Effect; and

 

(f)            No Default.  No Default or Event of Default has occurred and is
continuing or would arise after giving effect to any such Loan or Letter of
Credit.

 

The funding by each Lender of its initial Loans hereunder and the Issuance by
each L/C Issuer of the initial Letters of Credit to be Issued hereunder shall
evidence such Lender’s and/or such L/C Issuer’s satisfaction that the conditions
set forth in this Section 2.1 have been satisfied.

 

2.2.         Conditions to All Borrowings.  Except as otherwise expressly
provided herein, no Lender or L/C Issuer shall be obligated to fund any Loan or
incur any Letter of Credit Obligation after the Closing Date, if, as of the date
thereof:

 

(a)           any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect (without duplication of any materiality qualifier contained therein) as
of such date, except to the extent that such representation or warranty
expressly relates to an earlier date (in which event such representations and
warranties were untrue or incorrect in any material respect (without duplication
of any materiality qualifier contained therein) as of such earlier date), and
(i) US Agent or Required US Lenders have determined not to make such US
Revolving Loan or incur such US Letter of Credit Obligation as a result of the
fact that such warranty or representation is untrue or incorrect in any material
respect (without duplication of any materiality qualifier contained therein) and
have so notified the applicable Borrower or (ii) Canadian Agent or Required
Canadian Lenders have determined not to make such Canadian Revolving Loan or
incur such Canadian Letter of Credit Obligation as a result of the fact that
such warranty or representation is untrue or incorrect in any material respect
(without duplication of any materiality qualifier contained therein) and have so
notified the applicable Borrower;

 

(b)           any Default or Event of Default has occurred and is continuing
prior to or immediately after giving effect to any Loan (or the incurrence of
any Letter of Credit Obligation), and (i) US Agent or Required US Lenders shall
have determined not to make any US Revolving Loan or incur any US Letter of
Credit Obligation as a result of that Default or Event of Default and have so
notified such Borrower or (ii) Canadian Agent or Required Canadian Lenders shall
have determined not to make any Canadian Revolving Loan or incur any

 

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Canadian Letter of Credit Obligation as a result of that Default or Event of
Default and have so notified such Borrower; and

 

(c)           after giving effect to any Loan (or the incurrence of any Letter
of Credit Obligations), the aggregate outstanding amount of the US Revolving
Loans would exceed the Maximum US Revolving Loan Balance or the US Dollar
Equivalent of the aggregate outstanding amount of Canadian Revolving Loans would
exceed the Maximum Canadian Revolving Loan Balance.

 

The request by a Borrower and acceptance by a Borrower of the proceeds of any
Loan or the incurrence of any Letter of Credit Obligations shall be deemed to
constitute, as of the date thereof, (i) a representation and warranty by such
Borrower that the conditions in this Section 2.2 have been satisfied (except, in
the case of clauses (a) and (b) above, where the Agent has received written
notification from the applicable Borrower of such Borrower’s inability to
satisfy such conditions and the Lenders have continued to fund Loans (or the
applicable L/C Issuer has continued to incur Letter of Credit Obligations)
notwithstanding such failure to satisfy such conditions) and (ii) a
reaffirmation by each Credit Party of the granting and continuance of the
Appropriate Agent’s Liens, on behalf of itself and the applicable Secured
Parties, pursuant to the Collateral Documents.

 

ARTICLE III -

 

REPRESENTATIONS AND WARRANTIES

 

The Credit Parties, jointly and severally, represent and warrant to Agent and
each Lender that the following are true, correct and complete:

 

3.1.         Corporate Existence and Power.

 

(a)           Except to the extent permitted by Section 5.3, each Credit Party
and each of their respective Subsidiaries: is a corporation, company, limited
liability company or limited partnership, as applicable, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, organization or formation, as applicable;

 

(b)           has the power and authority and all material governmental
licenses, authorizations, Permits, consents and approvals to own its assets,
carry on its business and execute, deliver, and perform its obligations under
the Loan Documents to which it is a party;

 

(c)           is duly qualified as a foreign corporation, limited liability
company or limited partnership, as applicable, and licensed and in good standing
(to the extent applicable with respect to the subject jurisdiction), under the
laws of each jurisdiction where its ownership, lease or operation of Property or
the conduct of its business requires such qualification or license; and

 

(d)           is in compliance with all Requirements of Law; except, in each
case referred to in clauses (b)(ii), (c) or (d), to the extent that the failure
to do so would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

 

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3.2.         Corporate Authorization; No Contravention.  The execution, delivery
and performance by each of the Credit Parties of this Agreement and by each
Credit Party and each of their respective Subsidiaries of any other Loan
Document, have been duly authorized by all necessary action, and do not and will
not:

 

(a)           contravene the terms of any of that Person’s Organization
Documents;

 

(b)           conflict with or result in any material breach or contravention
of, or result in the creation of any Lien (other than Permitted Liens) under,
any document evidencing any material Contractual Obligation to which such Person
is a party or any material order, injunction, writ or decree of any Governmental
Authority to which such Person or its Property is subject; or

 

(c)           violate any material Requirement of Law in any material respect.

 

3.3.         Governmental Authorization.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Credit Party
of this Agreement or any other Loan Document except (a) for recordings and
filings in connection with the Liens granted to the Appropriate Agent under the
Collateral Documents, (b) those obtained or made on or prior to the Closing Date
or in the Ordinary Course of Business and (c) as may be required in connection
with the disposition of any portion of the Pledged Collateral (as defined in the
Guaranty and Security Agreement) by laws affecting the offering and sale of
securities (including, but not limited to, membership interests in a limited
liability company) generally, other than those which, if not obtained or made,
would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

 

3.4.         Binding Effect.  This Agreement and each other Loan Document to
which any Credit Party is a party constitute the legal, valid and binding
obligations of each such Person which is a party thereto, enforceable against
such Person in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.

 

3.5.         Litigation.  There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of each Credit Party, threatened or
contemplated in writing, at law, in equity, in arbitration or before any
Governmental Authority, against any Credit Party, any Subsidiary of any Credit
Party or any of their respective material Properties which:

 

(a)           purport to affect or pertain to this Agreement, any other Loan
Document or any Second Lien Indebtedness Document; or

 

(b)           would reasonably be expected to have or result in, a Material
Adverse Effect.

 

No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, purporting to enjoin or

 

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restrain the performance of any Second Lien Indebtedness Document or directing
that the transactions provided for herein not be consummated as herein
provided.  Except as specifically disclosed on Schedule 3.5, as of the Closing
Date, no Credit Party or any Subsidiary of any Credit Party is the subject of
any audit or, to each Credit Party’s knowledge, any review or investigation by
any Governmental Authority (excluding the IRS and other taxing authorities)
concerning the violation or possible violation of any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.

 

3.6.         No Default.  No Default or Event of Default exists or would result
from the incurring of any Obligations by any Credit Party or the grant or
perfection of the Appropriate Agent’s Liens on the Collateral.

 

3.7.         ERISA and Related Canadian Compliance.

 

(a)           Each Benefit Plan, and each trust thereunder, intended to qualify
for tax exempt status under Section 401 or 501 of the Code or other Requirements
of Law so qualifies except for such failures to so qualify that would not
reasonably be expected to have a Material Adverse Effect.  Except for those that
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect, (x) each Benefit Plan is in compliance with applicable provisions of
ERISA, the Code and other Requirements of Law, (y) there are no existing or
pending (or to the knowledge of any Credit Party, threatened) claims (other than
routine claims for benefits in the normal course), sanctions, actions, lawsuits
or other proceedings or investigation involving any Benefit Plan to which any
Credit Party incurs or otherwise has or could reasonably be expected to have an
obligation or any Liability and (z) no ERISA Event is reasonably expected to
occur.  On the Closing Date, no ERISA Event has occurred in connection with
which obligations and liabilities (contingent or otherwise) remain outstanding.

 

(b)           The Canadian Pension Plans are duly registered under the ITA and
all other applicable laws which require registration.  Each Credit Party has
complied with and performed all of its obligations in all material respects
under and in respect of the Canadian Pension Plans and Canadian Benefit Plans
under the terms thereof, any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration obligations). 
All employer and employee payments, contributions or premiums to be remitted,
paid to or in respect of each Canadian Pension Plan or Canadian Benefit Plan
have been paid in a timely fashion in accordance with the terms thereof, any
funding agreement and all applicable laws.  There have been no improper
withdrawals or applications of the assets of the Canadian Pension Plans or the
Canadian Benefit Plans.  Except as set forth on Schedule 3.7, as of the Closing
Date, there are no outstanding disputes concerning the assets of the Canadian
Pension Plans or the Canadian Benefit Plans.  Except as set forth on Schedule
3.7, each of the Canadian Pension Plans is fully funded on a solvency basis
(using actuarial methods and assumptions which are consistent with the
valuations last filed with the applicable Governmental Authorities and which are
consistent with generally accepted actuarial principles).

 

3.8.         Use of Proceeds; Margin Regulations.  The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8.  No Credit Party and no Subsidiary of any Credit
Party is engaged in the business of purchasing or selling Margin Stock

 

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or extending credit for the purpose of purchasing or carrying Margin Stock. 
Proceeds of the Loans shall not be used for the purpose of purchasing or
carrying Margin Stock.

 

3.9.         Title to Properties.  Each of the Credit Parties and each of their
respective Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in, all Real Estate, and good and valid title to
all owned personal property and valid leasehold interests in all leased personal
property, in each instance, material to the ordinary conduct of their respective
businesses or where the failure to so own or possess would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. 
None of the Property of any Credit Party or any Subsidiary of any Credit Party
is subject to any Liens other than Permitted Liens.  All material permits
required to have been issued or appropriate to enable the Headquarters Property
to be lawfully occupied and used for all of the purposes for which it is
currently occupied and used have been lawfully issued and are in full force and
effect.

 

3.10.       Taxes.  All material federal, Canadian, provincial, territorial,
state, local and other material tax returns, reports and statements
(collectively, the “Tax Returns”) required to be filed by any Tax Affiliate have
been filed with the appropriate Governmental Authorities, all such Tax Returns
are true and correct in all material respects, and all taxes, assessments and
other governmental charges and impositions reflected therein or otherwise due
and payable have been paid prior to the date on which any Liability may be added
thereto for non-payment thereof except for those contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves are
maintained on the books of the appropriate Tax Affiliate in accordance with
GAAP.  As of the Closing Date, except as set forth on Schedule 3.10, no Tax
Return is under audit or examination by any Governmental Authority and no notice
of any audit or examination or any assertion of any claim for Taxes has been
given or made by any Governmental Authority.

 

3.11.       Financial Condition.

 

(a)           The audited consolidated balance sheet of Holdings and its
Subsidiaries dated March 31, 2012, and the related audited consolidated
statements of income or operations, shareholders’ equity and cash flows for the
Fiscal Year ended on that date:

 

(x)           were prepared in accordance with GAAP consistently applied
throughout the respective periods covered thereby, except as otherwise expressly
noted therein, subject to, in the case of the unaudited interim financial
statements, normal year-end adjustments and the lack of footnote disclosures;
and

 

(y)           present fairly in all material respects the consolidated financial
condition of Holdings and its Subsidiaries as of the dates thereof and results
of operations for the periods covered thereby.

 

(b)           Reserved.

 

(c)           Since March 31, 2012, there has been no Material Adverse Effect.

 

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(d)           All financial performance projections delivered to Agents,
including the financial performance projections delivered on or prior to the
Closing Date, represent the Borrowers’ best good faith estimate of future
financial performance and are based on assumptions believed by the Borrowers to
be fair and reasonable in light of current market conditions, it being
acknowledged and agreed by Agents and Lenders that  projections as to future
events are inherently uncertain and are not to be viewed as facts and that the
actual results during the period or periods covered by such projections may
materially differ from the projected results.

 

3.12.       Environmental Matters.  The representations and warranties in this
Section 3.12 are the sole and exclusive representations and warranties in this
Agreement concerning environmental matters, including, without limitation,
matters arising under Environmental Laws and Environmental Permits.  Except as
set forth in Schedule 3.12 and except where any failures to comply would not
reasonably be expected to have or result in, either individually or in the
aggregate, a Material Adverse Effect to the Credit Parties and their
Subsidiaries, (a) the operations of each Credit Party and each Subsidiary of
each Credit Party are and have been in compliance with all applicable
Environmental Laws, including obtaining, maintaining and complying with all
Permits required by any applicable Environmental Law, (b) no Credit Party and no
Subsidiary of any Credit Party is party to, and no Credit Party and no
Subsidiary of any Credit Party and no Real Estate currently (or to the knowledge
of any Credit Party previously) owned, leased, subleased, operated or otherwise
occupied by or for any such Person is subject to or the subject of, any
Contractual Obligation or any pending (or, to the knowledge of any Credit Party,
threatened in writing) order, action, investigation, suit, proceeding, audit,
claim, demand, dispute or notice of violation or of potential liability or
similar notice relating in any manner to any Environmental Law, (c) no Lien in
favor of any Governmental Authority securing, in whole or in part, Environmental
Liabilities has attached to any property of any Credit Party or any Subsidiary
of any Credit Party and, to the knowledge of any Credit Party, no facts,
circumstances or conditions exist that could reasonably be expected to result in
any such Lien attaching to any such property, (d) no Credit Party and no
Subsidiary of any Credit Party has caused or suffered to occur a Release of
Hazardous Materials at, to or from any Real Estate, (e) all Real Estate
currently (or to the knowledge of any Credit Party previously) owned, leased,
subleased, operated or otherwise occupied by or for any such Credit Party and
each Subsidiary of each Credit Party is free of contamination by any Hazardous
Materials and (f) no Credit Party and no Subsidiary of any Credit Party (i) is
or has been engaged in, or has permitted any current or former tenant to engage
in, operations in violation of any Environmental Law or (ii) knows of any facts,
circumstances or conditions reasonably constituting notice of a violation of any
Environmental Law, including receipt of any information request or notice of
potential responsibility under the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. §§ 9601 et seq.) or similar
Environmental Laws.

 

3.13.       Regulated Entities.  None of any Credit Party, any Person
controlling any Credit Party, or any Subsidiary of any Credit Party, is (a)
required to be registered as an “investment company” within the meaning of the
Investment Company Act of 1940 or (b) subject to regulation under the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal, Canadian, state, provincial or territorial statute, rule or
regulation limiting its ability to incur Indebtedness, pledge its assets or
perform its Obligations under the Loan Documents.

 

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3.14.       Solvency.  Both before and after giving effect to (a) the Loans made
and Letters of Credit Issued on or prior to the date this representation and
warranty is made or remade, (b) the disbursement of the proceeds of such Loans
to or as directed by the applicable Borrower and (c) the payment and accrual of
all transaction costs in connection with the foregoing, the Credit Parties taken
as a whole are Solvent.

 

3.15.       Labor Relations.  There are no strikes, work stoppages, slowdowns or
lockouts existing, pending (or, to the knowledge of any Credit Party, threatened
in writing) against or involving any Credit Party or any Subsidiary of any
Credit Party, except for those that would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

3.16.       Intellectual Property.  Each Credit Party and each Subsidiary of
each Credit Party owns, or is licensed to use, all Intellectual Property
necessary to conduct its business as currently conducted except for such
Intellectual Property the failure of which to own or license would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.  To the knowledge of each Credit Party, (a) the conduct
and operations of the businesses of each Credit Party and each Subsidiary of
each Credit Party does not infringe, misappropriate, dilute, violate or
otherwise impair any Intellectual Property owned by any other Person and (b) no
other Person has contested any right, title or interest of any Credit Party or
any Subsidiary of any Credit Party in, or relating to, any Intellectual
Property, other than, in each case with respect to clauses (a) and (b), as
cannot reasonably be expected to affect the Loan Documents and the transactions
contemplated therein and would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

3.17.       Reserved.

 

3.18.       Insurance.  Each of the Credit Parties and each of their respective
Subsidiaries and their respective material Properties are insured with
financially sound and reputable insurance companies which are not Affiliates of
the Borrower, in such amounts, with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar Properties in localities where such Person operates.  As of the Closing
Date, a true and complete listing in all material respects of such insurance,
including issuers, coverages and deductibles, has been provided to US Agent.

 

3.19.       Ventures, Subsidiaries and Affiliates; Outstanding Stock.  Except as
set forth in Schedule 3.19, as of the Closing Date, no Credit Party and no
Subsidiary of any Credit Party has any Subsidiaries.  All issued and outstanding
Stock and Stock Equivalents of each of the Credit Parties and each of their
respective Subsidiaries are duly authorized and validly issued, fully paid,
non-assessable, and free and clear of all Liens other than, with respect to the
Stock and Stock Equivalents of the Borrowers and Subsidiaries of the Borrower,
those in favor of the Appropriate Agent, for the benefit of the Secured Parties,
and the Subordinated Second Lien.  All such securities were issued in compliance
with all applicable state, provincial and federal laws concerning the issuance
of securities.  All of the issued and outstanding Stock of each Credit Party
(other than Holdings), each  Subsidiary of each Credit Party and, as of the
Closing Date, Holdings is owned by each of the Persons and in the amounts set
forth in Schedule 3.19.  Except as set forth in Schedule 3.19 as of the Closing
Date, there are no pre-emptive or other outstanding rights to purchase, options,
warrants or similar rights or agreements pursuant to

 

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which any Credit Party may be required to issue, sell, repurchase or redeem any
of its Stock or Stock Equivalents or any Stock or Stock Equivalents of its
Subsidiaries.

 

3.20.       Jurisdiction of Organization; Chief Executive Office.  Schedule 3.20
lists each Credit Party’s jurisdiction of organization, legal name and
organizational identification number, if any, and the location of such Credit
Party’s chief executive office or sole place of business, in each case as of the
date hereof.

 

3.21.       Deposit Accounts and Other Accounts.  Schedule 3.21 lists all banks
and other financial institutions at which any Credit Party maintains deposit or
other accounts (including Exempted Accounts identified as such in such Schedule)
as of the Closing Date, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.

 

3.22.       Reserved.

 

3.23.       Reserved.

 

3.24.       Status of Holdings.  Holdings has not engaged in any business
activities and does not own any Property other than (i) ownership of the Stock
and Stock Equivalents of the Borrowers and activities incidental thereto (ii)
activities and contractual rights incidental to maintenance of its corporate
existence (including the incurrence of corporate overhead), (iii) the hiring and
employment of the management of the Borrower’s and activities reasonably related
thereto, (iv) performance of its obligations under the Loan Documents and the
Second Lien Indebtedness Documents to which it is a party, (v) finding potential
Targets for Acquisitions, negotiating the acquisition thereof and being a party
to the applicable acquisition agreement (and performing its obligations
thereunder), and (vi) activities of Holdings expressly permitted hereunder.

 

3.25.       Reserved.

 

3.26.       Full Disclosure.  None of the representations or warranties made by
any Credit Party or any of their Subsidiaries in the Loan Documents as of the
date such representations and warranties are made or deemed made, and none of
the written statements contained in each exhibit, report, statement or
certificate (other than any statement which constitutes projections, forward
looking statements, budgets, estimates or general market data) required to be
furnished by or on behalf of any Credit Party or any of their Subsidiaries in
connection with the Loan Documents (including the offering and disclosure
materials, if any, delivered by or on behalf of any Credit Party to an Agent or
the Lenders prior to the Closing Date, and, in such case, as supplemented prior
to the Closing Date, excluding information of a general or industry specific
nature), when taken as a whole as of the date furnished, contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein taken as a whole, in
light of the circumstances under which they are made, not materially misleading
as of the time when made or delivered, it being acknowledged and agreed by the
Agents and Lenders that, to the extent included in any of the foregoing,
projections, budgets, forward looking statements or estimates as to future
events are inherently

 

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uncertain and are not to be viewed as facts and that the actual results during
the period or periods covered by such projections, budgets, forward looking
statements or estimates may materially differ from the projected results.

 

3.27.       Foreign Assets Control Regulations and Anti-Money Laundering.  Each
Credit Party and each Subsidiary of each Credit Party is and will remain in
compliance in all material respects with all U.S. and Canadian economic
sanctions laws, Executive Orders and implementing regulations as promulgated by
the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the
Criminal Code (Canada), the United Nations Act (Canada) and all applicable
anti-money laundering and counter-terrorism financing provisions of the Bank
Secrecy Act and all regulations issued pursuant to any of the foregoing.  No
Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person
designated by the U.S. government on the list of the Specially Designated
Nationals and Blocked Persons (the “SDN List”) with which a U.S. Person cannot
deal with or otherwise engage in business transactions, (ii) is a Person who is
otherwise the target of U.S. economic sanctions laws such that a U.S. Person
cannot deal or otherwise engage in business transactions with such Person or
(iii) is controlled by (including without limitation by virtue of such person
being a director or owning voting shares or interests), or acts, directly or
indirectly, for or on behalf of, any person or entity on the SDN List or a
foreign government that is the target of U.S. economic sanctions prohibitions
such that the entry into, or performance under, this Agreement or any other Loan
Document would be prohibited under U.S. law.

 

3.28.       Patriot Act.  To the extent applicable, the Credit Parties, each of
their Subsidiaries and each of their Affiliates are in compliance with (a) the
Trading with the Enemy Act, and each of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B Chapter V, as
amended) and any other enabling legislation or executive order relating thereto,
(b) the Patriot Act and (c) other US federal, state, Canadian, provincial and
territorial laws relating to “know your customer” and anti-money laundering
rules and regulations.  No part of the proceeds of any Loan will be used
directly or indirectly for any payments to any government official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977.-

 

ARTICLE IV -

 

AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than (i)
contingent indemnification Obligations to the extent no claim giving rise
thereto has been asserted and (ii) Letter of Credit Obligations collateralized
in the manner set forth in Section 7.4) shall remain unpaid or unsatisfied,
unless Required Lenders waive compliance in writing:

 

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4.1.         Financial Statements.  Each Credit Party shall maintain, and shall
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
financial statements delivered pursuant to this Agreement (other than those
delivered pursuant to Section 4.1(a)), shall not be required to have footnote
disclosures and are subject to normal year-end adjustments) (or the applicable
foreign equivalent in the case of Foreign Subsidiaries).  The Borrowers shall
deliver to US Agent by Electronic Transmission and in detail reasonably
satisfactory to Agents:

 

(a)           for each Fiscal Year, as soon as available, but not later than the
date (such date, the “Annual Reporting Deadline”) that is the earliest of (I)
ninety (90) days after the end of such Fiscal Year, (II) two Business Days after
the filing by Holdings with the SEC of an annual report on Form 10-K for such
Fiscal Year, and (III) the deadline for Holdings’ filing with the SEC of such
annual report on Form 10-K for such Fiscal Year (without giving effect to any
extensions that may be permitted pursuant to Rule 12b-25 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), a copy of the audited
consolidated balance sheets of Holdings and each of its Subsidiaries as at the
end of such Fiscal Year and the related consolidated and consolidating
statements of income or operations and consolidated statements of shareholders’
equity and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, and accompanied by
the report of any “Big Four” or other independent public accounting firm
reasonably acceptable to Agent (the “Auditors”), which report shall (i) contain
an unqualified opinion of the Auditors, stating that such consolidated financial
statements present fairly in all material respects the financial position for
the periods indicated and are in conformity with GAAP applied on a basis
consistent with prior years (an “Unqualified Opinion”) and (ii) not include any
explanatory paragraph expressing substantial doubt as to going concern status (a
“Going Concern Qualifier”); provided, it is expressly acknowledged and agreed,
that, for any Fiscal Year, delivery to US Agent by the Annual Reporting Deadline
of an annual report on Form 10-K of Holdings for such Fiscal Year, containing
the required financial statements and an Unqualified Opinion thereon (without a
Going Concern Qualifier) and all of the other financial and other information
required to be included therein, and otherwise in compliance with applicable
rules of the SEC, as filed with the SEC, shall be deemed to constitute the
Credit Parties’ compliance with this subsection 4.1(a) in detail satisfactory to
the Agents; and

 

(b)           for each Fiscal Quarter (including the last Fiscal Quarter of each
Fiscal Year), as soon as available, but not later than the date (such date, the
“Quarterly Reporting Deadline”) that is the earliest of (I) forty-five (45) days
after the end of such Fiscal Quarter, or (II) unless such Fiscal Quarter is the
last Fiscal Quarter of the Fiscal Year, the earlier of (A) two Business Days
after the filing by the Company with the SEC of a quarterly report on Form 10-Q
for such Fiscal Quarter, and (III) the deadline for the Company’s filing with
the SEC of such quarterly report on Form 10-Q for such Fiscal Quarter (without
giving effect to any extensions that may be permitted pursuant to Rule 12b-25
under the Exchange Act), a copy of the unaudited consolidated and consolidating
balance sheets of Holdings and each of its Subsidiaries as of the end of such
Fiscal Quarter, and the related consolidated and consolidating statements of
income and consolidated statements of shareholders’ equity and cash flows for 
such Fiscal Quarter and for the portion of the Fiscal Year then ended, all
certified on behalf of the Borrowers by an appropriate Responsible Officer of
Holdings as being complete and correct and fairly presenting,

 

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in all material respects, in accordance with GAAP, the financial position and
the results of operations of Holdings and its Subsidiaries, subject to normal
year-end adjustments and absence of footnote disclosures; provided, it is
expressly acknowledged and agreed, that, for any Fiscal Quarter other than the
last Fiscal Quarter of any Fiscal Year, delivery to US Agent by the Quarterly
Reporting Deadline of a quarterly report on Form 10-Q of Holdings, containing
the required financial statements reviewed by the Auditors in accordance with
SAS 100 and all of the other financial and other information required to be
included therein, and otherwise in compliance with applicable rules of the SEC,
as filed with the SEC, shall be deemed to constitute the Credit Parties’
compliance with this subsection 4.1(b).

 

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this
Section 4.1 may be satisfied with respect to financial information of Holdings
and each of its Subsidiaries by furnishing, in each case, by the Annual
Reporting Deadline or Quarterly Reporting Deadline, as applicable, the
applicable consolidated financial statements of Parent and its Subsidiaries, or
Parent’s Form 10-K or Form 10-Q, as applicable, each as filed with the SEC,
accompanied in each case by consolidating financial information that explains in
detail reasonably satisfactory to US Agent the differences between the
information relating to Parent, on the one hand, and the information relating to
Holdings and each of its Subsidiaries on a standalone basis, on the other hand,
and, in any event, to the extent such information is in lieu of information
required to be provided under Section 4.1(a), such financial statements are
accompanied by an Unqualified Opinion thereon (without a Going Concern
Qualifier).

 

4.2.         Certificates; Other Information.

 

(a)           To the extent such information is not already included within the
financial statements delivered pursuant to subsections 4.1(a) and 4.1(b), then
concurrently with each delivery of financial statements pursuant to subsections
4.1(a) and 4.1(b), the Borrowers shall furnish to US Agent by Electronic
Transmission, a report setting forth in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year;

 

(b)           concurrently with the delivery of the financial statements
referred to in subsections 4.1(a) and 4.1(b) above, a fully and properly
completed Compliance Certificate in the form of Exhibit 4.2(b), certified on
behalf of the Credit Parties by a Responsible Officer of Holdings;

 

(c)           reserved;

 

(d)           as soon as available and in any event (i) within fifteen (15) days
after the end of each Fiscal Quarter, (ii) concurrently with delivery to any
Agent of a Notice of Borrowing if the effective date of the most recent
Borrowing Base Certificate previously furnished to the US Agent is more than
thirty (30) days prior to the date of such Notice of Borrowing, and (iii) at
such other times as either Agent may reasonably require, a Borrowing Base
Certificate, certified on behalf of the applicable Borrower by a Responsible
Officer of Borrowers and Holdings, setting forth the Borrowing Base of each
Borrower as at the end of such Fiscal Quarter or as at such other date as Agent
may reasonably require;

 

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(e)           upon the request of an Agent if a Specified Event of Default shall
have occurred and be continuing, the Borrowers will obtain and deliver to Agents
and Lenders a report of an independent collateral auditor satisfactory to Agents
with respect to the Accounts, Inventory, Equipment and the Headquarters Property
of the Credit Parties;

 

(f)            as soon as available and in any event no later than forty-five
(45) days after the beginning of each Fiscal Year of the Borrowers, projections
of the Credit Parties (and their Subsidiaries’) consolidated and consolidating
financial performance for such Fiscal Year on a Fiscal Quarter by Fiscal Quarter
basis;

 

(g)           promptly after any request by the Agents, copies of any detailed
audit reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrowers by
independent accountants in connection with the accounts or books of the
Borrowers or any Subsidiary, or any audit of any of them;

 

(h)           from time to time, if an Agent determines in good faith that
obtaining appraisals is necessary in order for such Agent or any Lender to
comply with applicable laws or regulations (including any appraisals required to
comply with FIRREA), and at any time if a Specified Event of Default shall have
occurred and be continuing, either Agent may, or may require the Borrowers to,
in either case at the Borrowers’ expense, obtain appraisals in form and
substance and from appraisers reasonably satisfactory to Agents stating the then
current fair market value of all or any portion of the personal property of any
Credit Party or any Subsidiary of any Credit Party and the fair market value or
such other value as determined by an Agent (for example, replacement cost for
purposes of Flood Insurance) of the Headquarters Property;

 

(i)            to US Agent, at the time of delivery of each of the Fiscal
Quarter financial statements delivered pursuant to subsection 4.1(b), a report
providing consolidating Borrowing Base details regarding the fixed assets,
accounts receivable and inventory of the Borrowers and their applicable
Subsidiaries, in form and substance reasonably satisfactory to US Agent,
together with such other information and detail as shall be reasonably requested
by US Agent in its reasonable discretion; and

 

(j)            promptly, such additional business, financial, corporate affairs,
perfection certificates and other information as either Agent may from time to
time reasonably request.

 

4.3.         Notices.  The Borrowers shall notify promptly US Agent of each of
the following (and in no event later than three (3) Business Days after a
Responsible Officer becoming aware thereof):

 

(a)           the occurrence or existence of any Default or Event of Default;

 

(b)           any breach or non performance of, or any default under, any
Contractual Obligation of any Credit Party or any Subsidiary of any Credit
Party, or any violation of, or non-compliance with, any Requirement of Law,
which would reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect, including a description of such breach,
non-performance, default, violation or non-compliance and the steps, if any,
such Person has taken, is taking or proposes to take in respect thereof;

 

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(c)                                  any dispute, litigation, investigation,
proceeding or suspension which may exist at any time between any Credit Party or
any Subsidiary of any Credit Party and any Governmental Authority which would
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect;

 

(d)                                 the commencement of, or any material
development in, any litigation or proceeding against or directly involving any
Credit Party or any Subsidiary of any Credit Party (i) in which the amount of
damages claimed is the US Dollar Equivalent of $2,000,000 (or its equivalent in
another currency or currencies) or more, (ii) in which injunctive or similar
relief is sought and which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect, or (iii) in which the relief sought
is an injunction or other stay of the performance of this Agreement, any other
Loan Document or any Second Lien Indebtedness Document;

 

(e)                                  except which would not reasonably be
expected to have or result in, either individually or in the aggregate, Material
Environmental Liabilities:  (i) the receipt by any Credit Party of any notice of
violation of or potential liability or similar notice under Environmental Law,
(ii)(A) unpermitted Releases, (B) the existence of any condition that could
reasonably be expected to result in violations of or Liabilities under, any
Environmental Law or (C) the commencement of, or any material change to, any
action, investigation, suit, proceeding, audit, claim, demand, dispute alleging
a violation of or Liability under any Environmental Law, (iii) the receipt by
any Credit Party of notification that any property of any Credit Party is
subject to any Lien in favor of any Governmental Authority securing, in whole or
in part, Environmental Liabilities, and (iv) any lease of Real Estate;

 

(f)                                   (i) on or prior to any filing by any ERISA
Affiliate of any notice of any reportable event under Section 4043 of ERISA or
intent to terminate any Title IV Plan, a copy of such notice, (ii) promptly, and
in any event within ten (10) days, after any officer of any ERISA Affiliate
knows or has reason to know that a request for a minimum funding waiver under
Section 412 of the Code has been filed with respect to any Title IV Plan or
Multiemployer Plan, a notice (which may be made by telephone if promptly
confirmed in writing) describing such waiver request and any action that any
ERISA Affiliate proposes to take with respect thereto, together with a copy of
any notice filed with the PBGC or the IRS pertaining thereto, and
(iii) promptly, and in any event within ten (10) days after any officer of any
ERISA Affiliate knows or has reason to know that an ERISA Event will or has
occurred, a notice describing such ERISA Event, and any action that any ERISA
Affiliate proposes to take with respect thereto, together with a copy of any
notices received from or filed with the PBGC, IRS, Multiemployer Plan or other
Benefit Plan pertaining thereto;

 

(g)                                  any Material Adverse Effect subsequent to
the date of the most recent audited financial statements delivered to Agents and
Lenders pursuant to this Agreement;

 

(h)                                 Reserved;

 

(i)                                     any labor controversy resulting in or
threatening to result in any strike, work stoppage, boycott, shutdown or other
labor disruption against or involving any Credit Party

 

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or any Subsidiary of any Credit Party if the same would reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect; and

 

(j)                                    the creation, establishment or
acquisition of any Subsidiary or the issuance by or to any Credit Party of any
Stock or Stock Equivalent (other than issuances by Holdings of Stock or Stock
Equivalents not requiring a mandatory prepayment hereunder), which such notice
will constitute an update of Schedule 3.19.

 

Each notice pursuant to this Section shall be in electronic form accompanied by
a statement by a Responsible Officer of the Borrowers, setting forth reasonable
details of the occurrence referred to therein, and stating what action the
Borrowers or other Person propose to take with respect thereto and at what
time.  Each notice under subsection 4.3(a) shall describe with particularity any
and all clauses or provisions of this Agreement or other Loan Document that have
been breached or violated.

 

4.4.                            Preservation of Corporate Existence, Etc.  Each
Credit Party shall, and shall cause each of its Subsidiaries to:

 

(a)                                 preserve and maintain in full force and
effect its organizational existence and good standing under the laws of its
jurisdiction of incorporation, organization or formation, as applicable, except
in connection with transactions permitted by Section 5.3;

 

(b)                                 preserve and maintain in full force and
effect all rights, privileges, qualifications, permits, licenses and franchises
necessary in the normal conduct of its business except in connection with
transactions permitted by Section 5.3 and sales of assets permitted by
Section 5.2 and except as would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect;

 

(c)                                  preserve or renew all of its registered
trademarks, trade names and service marks, the non preservation of which would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect; and

 

(d)                                 conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any respect and shall comply in all respects with the terms of its IP
Licenses except in each instance as would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.

 

4.5.                            Maintenance of Property.  Each Credit Party
shall, and shall cause each of its Subsidiaries to (a) maintain, and preserve
all its tangible Property which is used or useful in its business in good
working order and condition, ordinary wear and tear, casualty and condemnation
(subject to the applicable Credit Party’s obligation to repair or restore the
asset if it has elected to do so pursuant to subsection 1.8(c)) excepted and
(b) make all necessary repairs thereto and renewals and replacements thereof
except, in the case of each of clauses (a) and (b), where the failure to do so
would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.

 

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4.6.                            Insurance.  Each Credit Party shall, and shall
cause each of its Subsidiaries to, (i) maintain or cause to be maintained in
full force and effect all policies of insurance of any kind with respect to the
property and businesses of the Credit Parties and such Subsidiaries with
financially sound and reputable insurance companies or associations (in each
case that are not Affiliates of the Borrowers) of a nature and providing such
coverage as is sufficient and as is customarily carried by businesses of the
size and character of the business of the Credit Parties as reasonably
determined by the Borrowers and (ii) cause all such insurance relating to any
property or business of any Credit Party to name the Appropriate Agent as
additional insured or loss payee, as appropriate.  All policies of insurance on
real and personal property of the Credit Parties will contain an endorsement, in
form and substance reasonably acceptable to US Agent, showing loss payable to
Appropriate Agent (Form CP 1218 or equivalent) and extra expense and business
interruption endorsements.  Such endorsement, or an independent instrument
furnished to US Agent, will provide that the insurance companies will give US
Agent at least thirty (30) days’ prior written notice before any such policy or
policies of insurance shall be altered or canceled and that no act or default of
the Credit Parties or any other Person shall affect the right of either Agent to
recover under such policy or policies of insurance in case of loss or damage. 
Each Credit Party shall direct all present and future insurers under its “All
Risk” policies of property insurance to pay all proceeds payable thereunder
directly to the Appropriate Agent.  If any insurance proceeds are paid by check,
draft or other instrument payable to any Credit Party and an Agent jointly, such
Agent may endorse such Credit Party’s name thereon and do such other things as
Agent may deem advisable to reduce the same to cash.  Notwithstanding the
requirement in subsection (i) above, Federal Flood Insurance shall only be
required to the extent required by Requirements of Law of any Governmental
Authority having jurisdiction over any Lender.

 

To the extent that any Credit Party fails to provide Agents with evidence of the
insurance coverage required by this Agreement, Agents may, upon one (1) Business
Day’s prior notice to the Borrowers, purchase insurance at the Credit Parties’
expense to protect Agents’ and Lenders’ interests, including interests in the
Credit Parties’ and their Subsidiaries’ properties.  This insurance may, but
need not, protect the Credit Parties’ and their Subsidiaries’ interests.  The
coverage that Agents purchase may not pay any claim that any Credit Party or any
Subsidiary of any Credit Party makes or any claim that is made against such
Credit Party or any Subsidiary in connection with said Property.  The Borrowers
may later cancel any insurance purchased by Agents, but only after providing
Agents with evidence that there has been obtained insurance as required by this
Agreement (and, to the extent the Borrowers have complied with the provisions of
this sentence and are entitled to cancel any such insurance obtained by Agent,
Agent agrees, to the extent necessary, to promptly cancel such insurance at the
written direction of the Borrowers).  If an Agent purchases insurance, the
Credit Parties will be responsible for the actual costs of that insurance until
the effective date of the cancellation or expiration of the insurance.  The
costs of the insurance shall be added to the Obligations.  The costs of the
insurance may be more than the cost of insurance the Credit Parties may be able
to obtain on its own.

 

COLLATERAL PROTECTION INSURANCE NOTICE.  (I) CREDIT PARTIES ARE REQUIRED TO: 
(A) KEEP THE COLLATERAL INSURED AGAINST DAMAGE IN THE AMOUNT THE APPROPRIATE
AGENT SPECIFIES; (B) WITH RESPECT TO US CREDIT PARTIES, PURCHASE THE INSURANCE
FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN
ELIGIBLE SURPLUS LINES

 

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INSURER; AND (C) NAME THE APPROPRIATE AGENT AS THE PERSON TO BE PAID UNDER THE
POLICY IN THE EVENT OF A LOSS; (II) CREDIT PARTIES MUST, IF REQUIRED BY THE
APPROPRIATE AGENT, DELIVER TO THE APPROPRIATE AGENT A COPY OF THE POLICY AND
PROOF OF THE PAYMENT OF PREMIUMS THEREFOR; AND (III) IF ANY CREDIT PARTY FAILS
TO MEET ANY REQUIREMENT LISTED IN CLAUSES (I) OR (II) HEREOF, THE APPROPRIATE
AGENT MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF THE APPLICABLE
CREDIT PARTY AT CREDIT PARTIES’ EXPENSE.

 

4.7.                            Payment of Obligations.  Such Credit Party
shall, and shall cause each of its Subsidiaries to, pay, discharge and perform
as the same shall become due and payable or required to be performed, all their
respective obligations and liabilities, including:

 

(a)                                 all material tax liabilities, assessments
and governmental charges or levies upon it or its Property, unless the same are
being contested in good faith by appropriate proceedings diligently prosecuted
which stay the enforcement of any Lien and for which adequate reserves in
accordance with GAAP are being maintained by such Person;

 

(b)                                 all material lawful claims which, if unpaid,
would by law become a Lien (other than a Permitted Lien) upon any of its
material Property unless the same are being contested in good faith by
appropriate proceedings diligently prosecuted which stay the imposition or
enforcement of any Lien and for which adequate reserves in accordance with GAAP
are being maintained by such Person;

 

(c)                                  the performance of all obligations under
any Contractual Obligation to such Credit Party or any of its Subsidiaries is
bound, or to which it or any of its Property is subject, including the Second
Lien Indebtedness Documents, except where the failure to perform would not
reasonably be expected to have, either individually or in the aggregate,  a
Material Adverse Effect; and

 

(d)                                 payments to the extent necessary to avoid
the imposition of a Lien with respect to, or the involuntary termination of any
underfunded Benefit Plan.

 

4.8.                            Compliance with Laws.

 

(a)                                 Each Credit Party shall, and shall cause
each of its Subsidiaries to, comply with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its business, except where
the failure to comply would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

(b)                                 For each existing, or hereafter adopted,
Canadian Pension Plan and Canadian Benefit Plan, each Credit Party shall in a
timely fashion comply with and perform in all material respects all of its
obligations under and in respect of such Canadian Pension Plan or Canadian
Benefit Plan, including under any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration obligations),
except where the failure to comply would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.

 

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(c)                                  Reserved.

 

(d)                                 Canadian Borrowers shall deliver to Canadian
Agent (i) if requested by Canadian Agent, copies of each annual and other
return, report or valuation with respect to each Canadian Pension Plan as filed
with any applicable Governmental Authority; (ii) promptly after receipt thereof,
a copy of any direction, order, notice, ruling or opinion that any Credit Party
may receive from any applicable Governmental Authority with respect to any
Canadian Pension Plan; (iii) notification within 30 days of any increases having
a cost to one or more of the Credit Parties in excess of CDN $500,000 per annum
in the aggregate, in the benefits of any existing Canadian Pension Plan or
Canadian Benefit Plan, or the establishment of any new Canadian Pension Plan or
Canadian Benefit Plan, or the commencement of contributions to any such plan to
which any Credit Party was not previously contributing; and (iv) on or prior to
any filing by any Credit Party of any notice to terminate or partially terminate
any Canadian Pension Plan, a copy of such notice and promptly, any in any event
within 10 days, after any officer of a Credit Party knows or has reason to know
that a request for a funding waiver under any Canadian Pension Plan has been
filed, a notice (which may be made by telephone if promptly confirmed in
writing) describing such waiver request and any action that such Credit Party
proposes to take with respect thereto, together with a copy of any notice filed
with any Governmental Authority pertaining thereto.

 

4.9.                            Inspection of Property and Books and Records. 
Each Credit Party shall maintain and shall cause each of its Subsidiaries to
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP (or the applicable foreign equivalent in the
case of Foreign Subsidiaries) consistently applied shall be made of all
financial transactions and matters involving the assets and business of such
Person.  Each Credit Party shall, and shall cause each of its Subsidiaries to,
with respect to each owned, leased, or controlled property, during normal
business hours and upon reasonable advance notice (unless an Event of Default
shall have occurred and be continuing, in which event no notice shall be
required and each Agent shall have access at any and all times during the
continuance thereof): (a) provide access to such property to each Agent and any
of its Related Persons, as frequently as such Agent determines to be
appropriate; and (b) permit each Agent and any of its Related Persons to conduct
field examinations, audit, inspect, and make extracts and copies (or take
originals if reasonably necessary) from all of such Credit Party’s books and
records, and evaluate and make physical verifications and appraisals of the
Inventory and other Collateral in any manner and through any medium that such
Agent considers advisable, in each instance, at the Credit Parties’ expense;
provided the Credit Parties shall only be obligated to reimburse Agents for the
expenses of one such field examination, audit and inspection per calendar year
per Agent or more frequently if an Event of Default has occurred and is
continuing.  Any Lender may accompany an Agent or its Related Persons in
connection with any inspection at such Lender’s expense.  Each Credit Party
which keeps records relating to Collateral in the Province of Quebec shall at
all times keep a duplicate copy thereof at a location outside the Province of
Quebec, as listed in Schedule 3.21.

 

4.10.                     Use of Proceeds.  The Borrowers shall use the proceeds
of the Loans solely as follows: (a) to refinance on the Closing Date the Prior
Indebtedness, (b) to pay costs and expenses required to be paid pursuant to
Section 2.1, and (c) for working capital, capital expenditures and other general
corporate purposes not in contravention of any Requirement of Law and not in
violation of this Agreement.

 

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4.11.                     Cash Management Systems.  Each Credit Party shall
enter into, and cause each depository, securities intermediary or commodities
intermediary to enter into, Control Agreements with respect to each deposit,
securities, commodity or similar account maintained by such Person (other than
Exempted Accounts) as of or after the Closing Date.

 

4.12.                     Landlord Agreements.  Canadian Borrower shall obtain
and deliver to Canadian Agent on or prior to the Closing Date a landlord
agreement from the lessor of 9, 3110-14 Avenue NE, Calgary, Alberta T2A 6J4,
which agreement shall be reasonably satisfactory in form and substance to US
Agent.

 

4.13.                     Further Assurances.

 

(a)                                 Each Credit Party shall ensure that all
written information, exhibits and reports furnished to Agent or the Lenders
(excluding information of a general or industry specific nature) do not and will
not contain any materially untrue statement of a material fact (provided, to the
extent any such information, exhibits or reports contain projections, budgets,
forward looking statements or estimates Agents and the Lenders acknowledge and
agree that projections, budgets, forward looking statements or estimates as to
future events are inherently uncertain and are not to be viewed as facts and
that the actual results during the period or periods covered by such
projections, budgets, forward looking statements or estimates may materially
differ from the projected results) do not and will not contain any materially
untrue statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein,
taken as a whole, not materially misleading in light of the circumstances in
which made, and will promptly disclose to Agents and the Lenders and correct any
defect or error that may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.

 

(b)                                 Promptly upon written request by the
Appropriate Agent, the Credit Parties shall (and, subject to the limitations
hereinafter set forth, shall cause each of their Subsidiaries to) take such
additional actions and execute such documents as the Appropriate Agent may
reasonably require from time to time in order (i) to carry out more effectively
the purposes of this Agreement or any other Loan Document, (ii) to subject to
the Liens created by any of the Collateral Documents any of the Properties,
rights or interests covered by any of the Collateral Documents, (iii) to perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby, and (iv) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the
Secured Parties the rights granted or now or hereafter intended to be granted to
the Secured Parties under any Loan Document; provided that, notwithstanding the
foregoing, it is understood among the parties hereto that the only Real Estate
that will secure the Obligations is (i) the Headquarters Property and (ii) the
Houston Property until the Houston Property is released by the US Agent at the
time of a sale of the Houston Property by the applicable Credit Party.  To the
extent a 956 Impact exists with respect to a Foreign Subsidiary, (1) such
Foreign Subsidiary shall not be required to guaranty the US Obligations and
(2) Stock and Stock Equivalents of such Foreign Subsidiary in excess of
sixty-five percent (65%) of the outstanding voting Stock and Stock Equivalents
thereof shall not be required to be pledged to secure the US Obligations;
provided, however, notwithstanding the foregoing or anything to the contrary set
forth in any Loan Document, in no event shall (i) a Foreign Subsidiary that is
not (y) a First Tier Foreign Subsidiary of a domestic

 

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US Credit Party (i.e., a US Credit Party that is incorporated, organized or
otherwise formed under the laws of the United States, any state thereof or the
District of Columbia) or (z) a Canadian Subsidiary be required to guaranty the
Obligations or (ii) the Stock or Stock Equivalents of a Foreign Subsidiary that
is not a First Tier Foreign Subsidiary or a Canadian Subsidiary be pledged as
security for the Obligations (provided, further, First Tier Foreign Subsidiaries
of Credit Parties that are not US Credit Parties shall not be pledged as
security for the US Obligations).

 

(c)                                  Without limiting the generality of the
foregoing and except as otherwise approved in writing by Required Lenders, the
US Credit Parties shall cause each of their Domestic Subsidiaries and, to the
extent no 956 Impact exists, Canadian Subsidiaries and Domestic Subsidiaries
owned indirectly through a Canadian Subsidiary to guaranty the Obligations and
to cause each such Subsidiary to grant to US Agent, for the benefit of the
Secured Parties, a security interest in, subject to the limitations hereinafter
set forth, all of such Subsidiary’s Property (other than real property) to
secure such guaranty.  Furthermore and except as otherwise approved in writing
by Required Lenders, each US Credit Party shall, and shall cause (x) each of its
Domestic Subsidiaries to, pledge all of the Stock and Stock Equivalents of each
of its Domestic Subsidiaries and First Tier Foreign Subsidiaries which are
Canadian Subsidiaries (provided that with respect to any such First Tier Foreign
Subsidiary, if a 956 Impact exists such pledge shall be limited to sixty-five
percent (65%) of such Canadian Subsidiary’s outstanding voting Stock and Stock
Equivalents and one hundred percent (100%) of such Canadian Subsidiary’s
outstanding non-voting Stock and Stock Equivalents) and (y) to the extent no 956
Impact exists, each of its Canadian Subsidiaries to, pledge all of the Stock and
Stock Equivalent of each of its Subsidiaries, in each instance, to US Agent, for
the benefit of the Secured Parties, to secure the Obligations.  In connection
with each pledge of Stock and Stock Equivalents, the Credit Parties shall
deliver, or cause to be delivered, to US Agent, irrevocable proxies and stock
powers and/or assignments, as applicable, duly executed in blank.  A “956
Impact” will be deemed to exist to the extent the issuance of a guaranty by,
grant of a Lien by, or pledge of greater than two-thirds of the voting Stock and
Stock Equivalents of, a Foreign Subsidiary, would result in material incremental
income tax liability as a result of the application of Section 956 of the Code,
taking into account actual anticipated repatriation of funds, foreign tax
credits and other relevant factors.

 

(d)                                 Without limiting the generality of the
foregoing and except as otherwise approved in writing by Required Lenders, the
Credit Parties shall cause each of their Canadian Subsidiaries to guaranty the
Canadian Obligations and to cause each such Subsidiary to grant to Canadian
Agent, for the benefit of the Canadian Secured Parties, a security interest in,
subject to the limitations hereinafter set forth, all of such Subsidiary’s
Property (other than real property) to secure such guaranty.  Furthermore and
except as otherwise approved in writing by Required Lenders, each Canadian
Credit Party shall, and shall cause each of its Canadian Subsidiaries to, pledge
all of the Stock and Stock Equivalent of each of its Subsidiaries, in each
instance, to Canadian Agent, for the benefit of the Canadian Secured Parties, to
secure the Canadian Obligations.  In connection with each pledge of Stock and
Stock Equivalents, the Credit Parties shall deliver, or cause to be delivered,
to Canadian Agent, irrevocable proxies and stock powers and/or assignments, as
applicable, duly executed in blank.

 

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4.14.                     Environmental Matters.  Each Credit Party shall, and
shall cause each of its Subsidiaries to, comply with, and maintain all of its
Real Estate, whether owned, leased, subleased or otherwise operated or occupied,
in compliance with, all applicable Environmental Laws (including by implementing
any Remedial Action necessary to achieve such compliance) or that is required by
orders and directives of any Governmental Authority except where the failure to
comply would not reasonably be expected to, individually or in the aggregate,
result in a Material Environmental Liability.  Without limiting the foregoing,
if an Event of Default is continuing or if an Agent at any time has a reasonable
basis to believe that there exist violations of Environmental Laws by any Credit
Party or any Subsidiary of any Credit Party or that there exist any
Environmental Liabilities, except where the failure to comply would not
reasonably be expected to, individually or in the aggregate, result in a
Material Environmental Liability, then each Credit Party shall, promptly upon
receipt of request from such Agent, cause the performance of, and allow such
Agent and its Related Persons access to such Real Estate for the purpose of
conducting, such environmental audits and assessments, including subsurface
sampling of soil and groundwater, and cause the preparation of such reports, in
each case as such Agent may from time to time reasonably request.  Such audits,
assessments and reports, to the extent not conducted by an Agent or any of its
Related Persons, shall be conducted and prepared by reputable environmental
consulting firms reasonably acceptable to such Agent and shall be in form and
substance reasonably acceptable to such Agent.

 

4.15.                     Post-Closing Obligations.  Notwithstanding the
conditions precedent set forth in Article II above, the Borrowers have informed
Agents and the Lenders that certain of such items required to be delivered to US
Agent or otherwise satisfied as conditions precedent to the effectiveness of
this Agreement will not be delivered to US Agent as of the date hereof. 
Therefore, with respect to the items set forth on Schedule 4.15 (collectively,
the “Outstanding Items”), and notwithstanding anything to the contrary contained
herein or in any other Loan Document, the Borrowers shall deliver or otherwise
satisfy each Outstanding Item to US Agent in the form, manner and time set forth
thereon for such Outstanding Item or within such other time as US Agent may
reasonably agree; provided, each Borrower and each other Credit Party hereby
expressly consent, acknowledge and agree, irrespective of the Borrowers’
satisfaction or completion of any or all of the conditions to funding any Loan
or issuing any Letter of Credit set forth in Section 2.2 hereof, neither Agent
nor any Lender shall have any obligation to make or fund any Loans or issue any
Letters of Credit hereunder until such time as the Credit Parties have complied
in full with the requirements regarding, and otherwise delivered, the
Outstanding Items set forth in part 2 of Schedule 4.15.

 

ARTICLE V -

 

NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than
(i) contingent indemnification Obligations to the extent no claim giving rise
thereto has been asserted and (ii) Letter of Credit Obligations collateralized
in the manner set forth in Section 7.4) shall remain unpaid or unsatisfied,
unless the Required Lenders waive compliance in writing:

 

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5.1.                            Limitation on Liens.  No Credit Party shall, and
no Credit Party shall suffer or permit any of its Subsidiaries to, directly or
indirectly, make, create, incur, assume or suffer to exist any Lien upon or with
respect to any part of its Property, whether now owned or hereafter acquired,
other than the following (“Permitted Liens”):

 

(a)                                 any Lien existing on the Property of a
Credit Party or a Subsidiary of a Credit Party on the Closing Date and, to the
extent any such existing Lien is securing Indebtedness in excess of $1,000,000,
as set forth in Schedule 5.1 securing Indebtedness outstanding on such date and
permitted by subsection 5.5(c), including replacement Liens on the Property
currently subject to such Liens securing Indebtedness permitted by subsection
5.5(c);

 

(b)                                 any Lien created under any Loan Document;

 

(c)                                  Liens for taxes, fees, assessments or other
governmental charges (i) which are not past due or remain payable without
penalty, or (ii) the non payment of which is permitted by Section 4.7;

 

(d)                                 carriers’, warehousemen’s, suppliers’,
mechanics’, landlords’, materialmen’s, repairmen’s or other similar Liens
arising in the Ordinary Course of Business which are not delinquent for more
than ninety (90) days or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings diligently prosecuted,
which proceedings have the effect of preventing the forfeiture or sale of the
Property subject thereto and for which adequate reserves in accordance with GAAP
are being maintained;

 

(e)                                  Liens (other than any Lien imposed by
ERISA) consisting of pledges or deposits or bonds required in the Ordinary
Course of Business in connection with workers’ compensation, unemployment
insurance and other social security legislation or to secure the performance of
tenders, statutory, regulatory, contractual or warranty obligations, surety
bonds, stay, customs and appeals bonds, bids, leases, governmental contract,
trade contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money) or to
secure liability to insurance carriers;

 

(f)                                   Liens consisting of judgment or judicial
attachment liens (other than for payment of taxes, assessments or other
governmental charges), the existence of which do not constitute an Event of
Default provided that the enforcement of such Liens is effectively stayed;

 

(g)                                  easements, rights of way, reservations,
conditions, title exceptions, zoning and other restrictions, building codes,
land use laws, minor defects or other irregularities in title, and other similar
encumbrances incurred in the Ordinary Course of Business or imposed by law
which, either individually or in the aggregate, do not in any case materially
detract from the value of the Property subject thereto or interfere in any
material respect with the ordinary conduct of the businesses of any Credit Party
or any Subsidiary of any Credit Party;

 

(h)                                 Liens on any Property acquired or held by
any Credit Party or any Subsidiary of any Credit Party securing Indebtedness
incurred or assumed for the purpose of financing (or refinancing) all or any
part of the cost of acquiring such Property and permitted under subsection
5.5(d); provided that (i) any such Lien attaches to such Property concurrently

 

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with or within ninety (90) days after the acquisition thereof, (ii) such Lien
attaches solely to the Property so acquired in such transaction and the proceeds
thereof, and (iii) the principal amount of the debt secured thereby does not
exceed 100% of the cost (including any out-of-pocket expenses associated with
the acquisition of such Property) of such Property;

 

(i)                                     Liens securing Capital Lease Obligations
permitted under subsection 5.5(d);

 

(j)                                    any interest or title of a lessor,
sublessor, licensor or sublicensor under any lease or license not prohibited by
this Agreement or the other Loan Documents;

 

(k)                                 Liens arising from precautionary uniform
commercial code and PPSA financing statements filed under any lease permitted by
this Agreement;

 

(l)                                     non-exclusive licenses and sublicenses
granted by a Credit Party or any Subsidiary of a Credit Party and leases and
subleases (by a Credit Party or any Subsidiary of a Credit Party as lessor or
sublessor) to third parties in the Ordinary Course of Business not interfering
in any material respect with the business of the Credit Parties or any of their
Subsidiaries;

 

(m)                             Liens in favor of collecting banks arising under
Section 4-210 of the Uniform Commercial Code or, with respect to collecting
banks located in the State of New York, under Section 4-208 of the Uniform
Commercial Code;

 

(n)                                 Liens (i) in favor of a banking or other
depositary institution arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters
customary to the banking industry, (ii) in favor of a financial institution
arising as a matter of law encumbering financial assets on deposit in securities
accounts (including the right of set-off) and which are within the general
parameters customary to the securities industry and (iii)  that are contractual
rights of set-off relating to the establishment of depository and cash
management relations with banks not given in connection with the issuance of
Indebtedness for borrowed money and which are within the general parameters
customary to the banking industry;

 

(o)                                 Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods entered
into by a Borrower or any Subsidiary of a Borrower in the Ordinary Course of
Business;

 

(p)                                 Liens in favor of customs and revenue
authorities arising as a matter of law which secure payment of customs duties in
connection with the importation of goods in the Ordinary Course of Business;

 

(q)                                 Liens arising by operation of law or
contract on insurance policies and proceeds thereof to secure premiums payable
thereunder;

 

(r)                                    Subordinated Second Liens;

 

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(s)                                   Liens attaching solely to cash earnest
money deposits in connection with Investments permitted under Section 5.4;

 

(t)                                    Liens on Property, and only such
Property, which is the subject of an unconsummated asset purchase agreement in
connection with an asset disposition permitted hereunder, which Liens secure the
obligation of a Credit Party or any Subsidiary of a Credit Party under such
agreement;

 

(u)                                 Liens arising under Section 2-507 of the
UCC;

 

(v)                                 Liens consisting of prepayments and security
deposits in connection with leases, subleases, licenses, sublicenses, use and
occupancy agreements, utility services and similar transactions entered into by
the applicable Credit Party or Subsidiary of a Credit Party in the Ordinary
Course of Business and not required as a result of any breach of any agreement
or default in payment of any obligation;

 

(w)                               Liens granted by Foreign Subsidiaries
(i) encumbering cash collateral provided by such Foreign Subsidiaries to issuers
of letters of credit as security for letters of credit permitted pursuant to
subsection 5.5(p), (ii) encumbering cash collateral provided by Foreign
Subsidiaries as security for their obligations under performance and surety
bonds permitted pursuant to subsection 5.5(r) and (iii) as security for
Indebtedness permitted pursuant to subsection 5.5(q);

 

(x)                                 Liens encumbering the assets of a Target to
the extent securing Indebtedness permitted pursuant to subsection 5.5(o)(ii),
solely to the extent such Liens encumber no assets other than the assets of the
Target encumbered by such Liens immediately prior to the Acquisition of such
Target;

 

(y)                                 to the extent not included above, Prior
Claims that are unregistered and secure amounts that are not yet due and
payable;

 

(z)                                  with respect to Canadian Borrower or any
Canadian Subsidiary, reservations in any original grants from the Crown of any
land or interest therein, statutory exceptions to title, and reservations of
mineral rights (including coal, oil and natural gas) in any grants from the
Crown or from any other predecessor in title;

 

(aa)                          other Liens not described above securing
obligations other than Indebtedness for borrowed money, provided the aggregate
outstanding amount of the obligations secured thereby does not exceed the US
Dollar Equivalent of $5,000,000;

 

(bb)                          Liens on Cafeteria Plan Flex Accounts; and

 

(cc)                            Liens on cash collateral securing obligations
under Existing Letters of Credit.

 

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5.2.                            Disposition of Assets.  No Credit Party shall,
and no Credit Party shall suffer or permit any of its Subsidiaries to, directly
or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of transactions) any Property (including the Stock
of any Subsidiary of any Credit Party, whether in a public or private offering
or otherwise, and accounts and notes receivable, with or without recourse),
except:

 

(a)                                 dispositions of inventory, or used, worn out
uneconomical, obsolete, or surplus equipment, all in the Ordinary Course of
Business; provided the mandatory prepayment, if any, required pursuant to
subsection 1.8(c) is made;

 

(b)                                 dispositions not otherwise permitted
hereunder which are made for fair market value and the mandatory prepayment in
the amount of the Net Proceeds of such disposition is made if and to the extent
required by Section 1.8; provided, that (i) at the time of any disposition, no
Specified Event of Default shall be continuing or shall result from such
disposition, (ii) not less than 75% of the aggregate sales price from such
disposition shall be paid in cash, and (iii) the aggregate fair market value of
all assets so sold by the Credit Parties and their Subsidiaries, together, shall
not exceed in any Fiscal Year the US Dollar Equivalent of $3,000,000;

 

(c)                                  dispositions of Cash Equivalents;

 

(d)                                 transactions permitted under subsection
5.1(k);

 

(e)                                  sales or discounting, on a non-recourse
basis and in the Ordinary Course of Business, past due Accounts in connection
with the collection or compromise thereof, provided the mandatory prepayment, if
any, required pursuant to subsection 1.8(c) is made;

 

(f)                                   transactions permitted by Section 5.3,
issuances of Stock and Stock Equivalents by Holdings pursuant to transactions
permitted by Section 5.6(d) and Investments permitted by Section 5.4;

 

(g)                                  sales, transfers, leases and other
dispositions by (i) any US Credit Party to any other US Credit Party (other than
Holdings), (ii) any US Credit Party to a Canadian Credit Party (other than a US
Credit Party) of property and assets (other than the Stock and Stock Equivalents
of any US Credit Party or any Domestic Subsidiary thereof) with a fair market
value not to exceed the US Dollar Equivalent of $2,000,000 during the term of
this Agreement, (iii) any Canadian Credit Party to a US Credit Party of property
and assets with a fair market value not to exceed the US Dollar Equivalent of
$2,000,000 during the term of this Agreement, and (iv) by a Canadian Credit
Party (other than a US Credit Party) to any other Canadian Credit Party (other
than a US Credit Party), provided, in no event, shall any Borrower transfer all
or substantially all of its assets to any other Person;

 

(h)                                 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 Credit Party
provided the proceeds thereof are applied in accordance with subsection 1.8(c);

 

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(i)                                     the abandonment or other disposition of
Intellectual Property that is, in the reasonable good faith judgment of a Credit
Party, no longer economically practicable or commercially desirable to maintain
or useful in the conduct of the business of such Credit Party;

 

(j)                                    Liens permitted under Section 5.1 (to the
extent constituting a transfer of Property);

 

(k)                                 terminations of leases, subleases, licenses,
sublicenses or similar use and occupancy agreements by the applicable Credit
Party or Subsidiary of a Credit Party in the Ordinary Course of Business that do
not interfere in any material respect with the business of the Credit Parties or
their Subsidiaries;

 

(l)                                     trade-ins and exchanges of equipment
with third parties conducted in the Ordinary Course of Business to the extent
substantially comparable (or better) equipment useful in the operation of the
business of any Credit Party is obtained in exchange therefor; provided the
mandatory prepayment if any, required pursuant to subsection 1.8(c) is made;

 

(m)                             dispositions of non-core assets (“non-core
assets” to be determined by Holdings in the exercise of its reasonable good
faith business judgment and to consist only of those assets designated as
“non-core assets” pursuant to written notification by Holdings delivered to US
Agent prior to the time the Permitted Acquisition pursuant to which such assets
are acquired is consummated) acquired in connection with any Permitted
Acquisition, provided that all of the following conditions are satisfied (unless
otherwise agreed to by US Agent in writing):  (i) in the event an Event of
Default shall have occurred and be continuing at the time of such disposition
or, to the extent the purchase price therefor was paid with proceeds of Loans,
the sales price from such disposition shall be paid in cash, (ii) the mandatory
prepayment in the amount of the Net Proceeds of such disposition is made if and
to the extent required by Section 1.8 and (iii) the EBITDA generated by such
non-core assets shall not have been included in the calculation of EBITDA (as
defined in Exhibit 4.2(b)) in respect of the applicable Permitted Acquisition;

 

(n)                                 sales, assignments or other transfers by US
Borrower or any Subsidiary of US Borrower of the Stock and Stock Equivalents of
Foreign Subsidiaries to Canadian Borrower or any Subsidiary thereof; and

 

(o)                                 dispositions of the Houston Property.

 

5.3.                            Consolidations and Mergers.  No Credit Party
shall, and no Credit Party shall suffer or permit any of its Subsidiaries to,
amalgamate, merge, consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to or in favor of any Person, except Permitted Acquisitions and except upon not
less than five (5) Business Days prior written notice to Agents, (a) any
Subsidiary of the US Borrower may amalgamate or merge with, or dissolve or
liquidate into, the US Borrower or a Wholly-Owned Subsidiary of the US Borrower,
provided that such Borrower or such Wholly-Owned Subsidiary shall be the
continuing or surviving entity; provided further that if a Credit Party is party
to any such merger, dissolution or liquidation, a Credit Party shall be the
surviving or continuing entity

 

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and all actions reasonably required by US Agent, including actions required to
maintain perfected Liens on the Stock of the surviving entity and other
Collateral in favor of US Agent, shall have been completed, (b) any Subsidiary
of the Canadian Borrower may amalgamate or merge with, or dissolve or liquidate
into, the Canadian Borrower or a Wholly-Owned Subsidiary of the Canadian
Borrower, provided that such Borrower or such Wholly-Owned Subsidiary shall be
the continuing or surviving entity; provided further that if a Credit Party is
party to any such amalgamation or merger, dissolution or liquidation, a Credit
Party shall be the surviving or continuing entity and all actions reasonably
required by Canadian Agent, including actions required to maintain perfected
Liens on the Stock of the surviving entity and other Collateral in favor of
Canadian Agent, shall have been completed, and (c) any Foreign Subsidiary (other
than Canadian Borrower) may amalgamate or merge with or dissolve or liquidate
into another Foreign Subsidiary provided if a First Tier Foreign Subsidiary or
Canadian Subsidiary is a constituent entity in such amalgamation, merger,
dissolution or liquidation, such First Tier Foreign Subsidiary or Canadian
Subsidiary shall be the continuing or surviving entity.

 

5.4.                            Loans and Investments.  No Credit Party shall
and no Credit Party shall suffer or permit any of its Subsidiaries to
(i) purchase or acquire, or make any commitment to purchase or acquire any Stock
or Stock Equivalents, or any obligations or other securities of, or any interest
in, any Person, including the establishment or creation of a Subsidiary, or
(ii) make or commit to make any Acquisitions, or any other acquisition of all or
substantially all of the assets of another Person, or of any business or
division of any Person, including without limitation, by way of amalgamation,
merger, consolidation or other combination or (iii) make or purchase or commit
to make or purchase, any advance, loan, extension of credit or capital
contribution to or any other investment in, any Person including a Borrower, any
Affiliate of a Borrower or any Subsidiary of a Borrower (the items described in
clauses (i), (ii) and (iii) are referred to as “Investments”), except for:

 

(a)                                 Investments in cash and Cash Equivalents;

 

(b)                                 extensions of credit by (i) any US Credit
Party (other than Holdings) to any other US Credit Party (other than Holdings)
or by any Canadian Credit Party (other than a US Credit Party) to any other
Canadian Credit Party (other than a US Credit Party), (ii) the US Borrower or
any Domestic Subsidiary of the US Borrower to Foreign Subsidiaries of the US
Borrower other than Canadian Subsidiaries not to exceed, when combined with
outstanding extensions of credit permitted pursuant to subsection
5.4(b)(v) below and outstanding Contingent Obligations permitted pursuant to
subsection 5.9(j), the US Dollar Equivalent of $7,500,000 in the aggregate at
any time outstanding for all such extensions of credit, (iii) Canadian Borrower
to a US Credit Party (other than Holdings), (iv) a US Credit Party (other than
Holdings) to Canadian Borrower provided at the time of such extension of credit,
Canadian Availability is zero and in no event in excess of the US Dollar
Equivalent of $2,000,000 at any time outstanding for all such extensions of
credit,  (v) the Canadian Borrower or any Subsidiary of the Canadian Borrower
which is a Canadian Credit Party to Subsidiaries of the Canadian Borrower which
are not a Canadian Credit Party not to exceed, when combined with outstanding
extensions of credit permitted pursuant to subsection 5.4(b)(ii) above and
outstanding Contingent Obligations permitted pursuant to subsection 5.9(j), the
US Dollar Equivalent of $7,500,000 in the aggregate at any time outstanding for
all such extensions of credit; provided, if the extensions of credit described
in foregoing clauses (i), (ii), (iii), (iv) and (v) are evidenced by notes, such
notes shall

 

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be pledged to the Appropriate Agent, for the benefit of the Secured Parties,
(vi) a Foreign Subsidiary (other than a Canadian Credit Party) of the US
Borrower to another Foreign Subsidiary (other than a Canadian Credit Party) of
the US Borrower; (vii) a Foreign Subsidiary of the Canadian Borrower (which is
not a Canadian Credit Party) to another Foreign Subsidiary of the Canadian
Borrower (which is not a Canadian Credit Party); and (viii) a Foreign Subsidiary
of Holdings (other than a Canadian Credit Party) to a Credit Party provided such
Indebtedness is unsecured and subordinated to the Obligations in a manner
satisfactory to US Agent;

 

(c)                                  loans and advances to employees, officers
and directors in the Ordinary Course of Business not to exceed the US Dollar
Equivalent of $1,000,000 in the aggregate at any time outstanding;

 

(d)                                 Investments received as the non-cash portion
of consideration received in connection with transactions permitted pursuant to
subsection 5.2;

 

(e)                                  Investments acquired in connection with the
settlement of delinquent Accounts in the Ordinary Course of Business or in
connection with the bankruptcy or reorganization of suppliers or customers;

 

(f)                                   Investments consisting of non-cash loans
made by Holdings to officers, directors and employees of a Credit Party which
are used by such Persons to purchase simultaneously Stock or Stock Equivalents
of Holdings;

 

(g)                                  Investments (including Investments among
the Credit Parties) existing on the Closing Date, which such Investments are set
forth on Schedule 5.4 if such existing Investment is not among the Credit
Parties and the amount of the initial investment was in excess of $1,000,000;

 

(h)                                 (i) capital contributions by Holdings to
each of US Borrower and Canadian Borrower, (ii) creation of, and capital
contributions to, Wholly-Owned Subsidiaries of (x) the US Borrower which are US
Credit Parties and (y) the Canadian Borrower which are Canadian Credit Parties,
(iii) reserved, (iv) creation of and capital contributions to, (x) Foreign
Subsidiaries (other than the Canadian Subsidiaries) that are Wholly-Owned
Subsidiaries of the US Credit Parties, by the US Credit Parties (y) Foreign
Subsidiaries that are Wholly-Owned Subsidiaries of the Canadian Credit Parties,
by the Canadian Credit Parties, provided, in either case, such capital
contributions are funded with the proceeds of Excluded Equity Issuances, and
(v) creation of and capital contributions to Foreign Subsidiaries (other than
Canadian Subsidiaries) that are Wholly-Owned Subsidiaries of other Foreign
Subsidiaries of the Credit Parties, by such other Foreign Subsidiaries;

 

(i)                                     to the extent constituting an
Investment, Capital Expenditures and Contingent Obligations permitted hereunder;

 

(j)                                    extensions of trade credit in the
Ordinary Course of Business;

 

(k)                                 to the extent constituting Investments,
pledges and deposits in the Ordinary Course of Business to the extent permitted
by subsection 5.1(e) or subsection 5.1(v);

 

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(l)                                     reserved;

 

(m)                             Investments in deposit accounts and securities
accounts opened in the Ordinary Course of Business and in compliance with the
terms of the Loan Documents, in each case to the extent subject to a Control
Agreement as required pursuant to Section 4.11;

 

(n)                                 to the extent constituting an Investment,
the capitalization or forgiveness by any Credit Party or any of its Subsidiaries
of Indebtedness owed to it by another Credit Party or any of its Subsidiaries
(provided no Credit Party shall forgive any such Indebtedness while a Specified
Event of Default has occurred and is continuing without the consent of US
Agent);

 

(o)                                 the holding of accounts receivable owing to
such Person if created in the Ordinary Course of Business and payable or
dischargeable in accordance with customary terms;

 

(p)                                 to the extent constituting an Investment,
prepayments and deposits to suppliers made in the Ordinary Course of Business;

 

(q)                                 Permitted Acquisitions (including, in each
case, earnest money deposits in connection therewith);

 

(r)                                    reserved; and

 

(s)                                   other Investments (valued at cost at the
time of each Investment) made after the Closing Date not to exceed the US Dollar
Equivalent of $10,000,000 in the aggregate at any time outstanding (it being
agreed that upon a return of all or any portion of such Investment, such
Investment shall no longer be considered outstanding to the extent so returned).

 

Notwithstanding anything to the contrary set forth above, (i) the Credit Parties
and their Subsidiaries may hold Investments to the extent such Investments
reflect an increase in the value of Investments otherwise permitted under this
Section 5.4 and (ii) the Credit Parties and their Subsidiaries may make any
Investments with the Net Issuance Proceeds of an Excluded Equity Issuance so
long as (x) after giving effect to any such Investment, a Default or Event of
Default would not otherwise exist, (y) such Investment does not constitute an
Acquisition unless (I) Target has EBITDA, subject to pro forma adjustments
acceptable to the US Agent for the most recent four quarters prior to the
acquisition date for which financial statements are available, greater than zero
and (II) the Target’s line of business would not violate the provisions of
Section 5.12 and (z) such Investment does not constitute a joint venture.

 

5.5.                            Limitation on Indebtedness.  No Credit Party
shall, and no Credit Party shall suffer or permit any of its Subsidiaries to,
create, incur, assume, permit to exist, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness, except:

 

(a)                                 the Obligations;

 

(b)                                 Indebtedness consisting of Contingent
Obligations described in clause (a) of the definition thereof and permitted
pursuant to Section 5.9;

 

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(c)                                  Indebtedness (including Indebtedness among
the Credit Parties) existing on the Closing Date which such Indebtedness is set
forth on Schedule 5.5 if such existing Indebtedness is not among the Credit
Parties and the amount of such outstanding indebtedness was in excess of
$1,000,000, including Permitted Refinancings thereof;

 

(d)                                 Indebtedness not to exceed the US Dollar
Equivalent of $3,000,000 in the aggregate at any time outstanding, consisting of
Capital Lease Obligations or secured by Liens permitted by subsection 5.1(h) and
Permitted Refinancings thereof;

 

(e)                                  unsecured intercompany Indebtedness
permitted pursuant to subsection 5.4(b);

 

(f)                                   Second Lien Indebtedness not to exceed
$210,000,000 in the aggregate principal amount at any time outstanding issued
pursuant to the Second Lien Indebtedness Documents, as such amount may be
increased pursuant to and in accordance with the terms of the Intercreditor
Agreement and, subject to the provisions of Section 5.11 hereof, Permitted
Refinancings thereof;

 

(g)                                  Indebtedness consisting of the financing of
insurance premiums in the Ordinary Course of Business;

 

(h)                                 Indebtedness for bank overdrafts or returned
items incurred in the Ordinary Course of Business that are promptly repaid;

 

(i)                                     Indebtedness of Holdings incurred
pursuant to Holdings Loans;

 

(j)                                    reserved;

 

(k)                                 Indebtedness incurred pursuant to the last
paragraph of Section 5.7 hereof;

 

(l)                                     unsecured Indebtedness of Holdings
evidencing the purchase price of Stock of Holdings or options or warrants
thereof purchased by Holdings from current or former officers, directors and
employees, provided such Indebtedness is subordinated to the Obligations on
terms acceptable to US Agent;

 

(m)                             unsecured Subordinated Indebtedness issued to
sellers to satisfy a portion of the purchase price of a Permitted Acquisition so
long as such Subordinated Indebtedness provides for no cash payment during the
term of the Credit Agreement on account of principal, interest, fees or other
amounts owing in respect thereof, such Subordinated Indebtedness has a maturity
date no earlier than six (6) months after the Revolving Termination Date and
such Subordinated Indebtedness is otherwise subject to subordination terms in
favor of Agents, Lenders and L/C Issuers on terms and conditions acceptable to
US Agent;

 

(n)                                 unsecured earnouts not to exceed the US
Dollar Equivalent of $5,000,000 in the aggregate at any time outstanding
incurred in connection with a Permitted Acquisition; provided, for purposes of
this clause (n) earnouts shall be measured at the maximum amount thereof.

 

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(o)                                 (i) unsecured Indebtedness of a Target
existing at the time the Target becomes a Subsidiary of a Borrower (or is
amalgamated, merged into or consolidated with a Credit Party (other than
Holdings)) pursuant to a Permitted Acquisition or Indebtedness assumed by a
Borrower or its Subsidiaries in respect of assets acquired by such Person
pursuant to a Permitted Acquisition, but only to the extent that such
Indebtedness was not incurred in connection with, as a result of, or in
contemplation of, such Permitted Acquisition; provided, however, that in no
event shall the aggregate amount of such Indebtedness outstanding at any time
under this clause (o)(i) exceed the US Dollar Equivalent of 5,000,000 and
(ii) secured Indebtedness of a Target existing at the time the Target becomes a
Subsidiary of a Borrower (or is amalgamated, merged into or consolidated with a
Credit Party (other than Holdings)) pursuant to a Permitted Acquisition or
Indebtedness assumed by a Borrower or its Subsidiaries in respect of assets
acquired by such Person pursuant to a Permitted Acquisition; provided, such
Indebtedness (A) was not incurred in connection with, as a result of, or in
contemplation of, such Permitted Acquisition, (B) is secured solely by assets of
the Target so acquired and not by any assets of any Credit Party, (C) is not
guaranteed by any Credit Party and (D) the aggregate amount of such Indebtedness
outstanding at any time under this clause (o)(ii) does not exceed the US Dollar
Equivalent of $5,000,000;

 

(p)                                 Indebtedness consisting of (i) letter of
credit and/or revolving credit facilities (other than the ABN LC Facility) of
Foreign Subsidiaries (other than Canadian Credit Parties) existing on the
Closing Date and set forth on Schedule 5.5(p), (ii) one or more letter of credit
and/or revolving credit facilities of Foreign Subsidiaries organized under the
laws of the Republic of Korea obtained after the Closing Date provided the
aggregate commitments of all such letter of credit facilities do not exceed the
US Dollar Equivalent of $1,500,000, (iii) one or more letter of credit and/or
revolving credit facilities of Foreign Subsidiaries organized under the laws of
Japan obtained after the Closing Date provided the aggregate commitments of all
such letter of credit and revolving credit facilities do not exceed the US
Dollar Equivalent of $1,500,000, (iv) the ABN LC Facility and increases thereto
representing additional Indebtedness thereunder not in excess of the US Dollar
Equivalent of $5,000,000, (v) increases to any of the foregoing letter of credit
and/or revolving credit facilities or new letter of credit and/or revolving
credit facilities, in either case, made available to such Foreign Subsidiaries
representing additional Indebtedness thereof not in excess of the US Dollar
Equivalent of $10,000,000 in aggregate, and (vi) Permitted Refinancings thereof;

 

(q)                                 Indebtedness (not otherwise described in
subsection 5.5(p)) of Foreign Subsidiaries (other than Canadian Credit Parties)
(i) existing on the Closing Date and set forth on Schedule 5.5(q),
(ii) increases to such Indebtedness in an aggregate amount not to exceed the US
Dollar Equivalent of $1,500,000, (iii) incurred after the Closing Date in an
aggregate amount not to exceed the US Dollar Equivalent of $4,000,000, and
(iv) Permitted Refinancings of the foregoing; provided, in no event shall any
such Indebtedness be guaranteed by any Credit Party or shall any Credit Party
have any obligation in respect thereof or grant any security therefor (except,
solely with respect to guarantees by Credit Parties of such Indebtedness, to the
extent expressly permitted pursuant to subsection 5.9(j));

 

(r)                                    Indebtedness consisting of performance
and surety bonds in favor of Indian tax and port authorities with respect to the
importation of goods into India in the Ordinary

 

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Course of Business by the Credit Parties and their Subsidiaries, to the extent
required by such tax and port authorities;

 

(s)                                   other unsecured Indebtedness not exceeding
in the aggregate at any time outstanding the US Dollar Equivalent of $5,000,000;
and

 

(t)                                    Indebtedness under and in connection with
Existing Letters of Credit.

 

5.6.                            Transactions with Affiliates.  No Credit Party
shall, and no Credit Party shall suffer or permit any of its Subsidiaries to,
enter into any transaction with any Affiliate of Borrower or of any such
Subsidiary, except:

 

(a)                                 as expressly permitted by this Agreement or
the other Loan Documents;

 

(b)                                 upon fair and reasonable terms materially no
less favorable to such Credit Party or such Subsidiary than would be obtained in
a comparable arm’s length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary and if a Responsible Officer of Holdings or any of
its Subsidiaries has actual knowledge that such Person is an Affiliate and the
value or consideration payable in such transaction exceeds the US Dollar
Equivalent of $500,000 in the aggregate, which are disclosed in writing to
Agent; provided, further, that in no event shall a Credit Party or any
Subsidiary of a Credit Party perform or provide any management, consulting,
administrative or similar services to or for any Person other than another
Credit Party, a Subsidiary of a Credit Party or a customer who is not an
Affiliate in the Ordinary Course of Business;

 

(c)                                  as set forth in Schedule 5.6; and

 

(d)                                 any issuances by Holdings of awards or
grants of equity securities, employments agreements, stock options and stock
ownership plans approved by Holdings’ or any Credit Party’s board of directors,
board of managers or similar governing body, as applicable.

 

5.7.                            Management Fees and Compensation.  No Credit
Party shall, and no Credit Party shall permit any of its Subsidiaries to, pay
any management, consulting or similar fees to any Affiliate of any Credit Party
or to any officer, director or employee of any Credit Party or any Affiliate of
any Credit Party except:

 

(a)                                 for the items referred to in
Section 5.6(d) above, compensation and any employee benefit allowance paid or
provided to officers, directors and employees for actual services rendered to
the Credit Parties (including severance) and their Subsidiaries, including the
maintenance of benefit programs or arrangements for employees, officers or
directors, including, without limitation, vacation plans, health and life
insurance plans, deferred compensation plans, and retirement or savings plans
and similar plans and indemnification of officers and employees, in each case,
in the Ordinary Course of Business; and

 

(b)                                 payment of directors’ fees and reimbursement
of actual out-of-pocket expenses and indemnities incurred by Persons in their
capacities as directors and in connection

 

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with attending board of director meetings not to exceed in the aggregate, with
respect to all such items, $250,000 in any Fiscal Year of the Borrower.

 

5.8.                            Use of Proceeds.  No Credit Party shall, and no
Credit Party shall suffer or permit any of its Subsidiaries to, use any portion
of the Loan proceeds, directly or indirectly, to purchase or carry Margin Stock
or repay or otherwise refinance Indebtedness of any Credit Party or others
incurred to purchase or carry Margin Stock, or otherwise in any manner which is
in contravention of any Requirement of Law or in violation of this Agreement.

 

5.9.                            Contingent Obligations.  No Credit Party shall,
and no Credit Party shall suffer or permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Contingent Obligations except in respect of
the Obligations and except:

 

(a)                                 endorsements for collection or deposit in
the Ordinary Course of Business;

 

(b)                                 Rate Contracts and Commodity Hedge
Contracts, in each case, entered into in the Ordinary Course of Business for
bona fide hedging purposes and not for speculation, with prior written notice to
US Agent;

 

(c)                                  Contingent Obligations of the Credit
Parties and their Subsidiaries existing as of the Closing Date and listed in
Schedule 5.9, including extension and renewals thereof which do not increase the
amount of such Contingent Obligations or impose materially more restrictive or
adverse terms on the Credit Parties or their Subsidiaries as compared to the
terms of the Contingent Obligation being renewed or extended;

 

(d)                                 Contingent Obligations arising under
indemnity agreements to title insurers to cause such title insurers to issue to
Agent title insurance policies;

 

(e)                                  Contingent Obligations arising with respect
to customary indemnification obligations in favor of (i) sellers in connection
with the Second Lien Indebtedness and Permitted Acquisitions and (ii) purchasers
in connection with dispositions permitted under subsection 5.2;

 

(f)                                   Contingent Obligations arising under
Letters of Credit;

 

(g)                                  Contingent Obligations arising under
guarantees made in the Ordinary Course of Business of obligations of any Credit
Party (other than Holdings), which obligations are otherwise permitted
hereunder; provided that if such obligation is subordinated to the Obligations,
such guarantee shall be subordinated to the same extent;

 

(h)                                 Contingent Obligations incurred in the
Ordinary Course of Business with respect to surety and appeals bonds,
performance bonds, performance guarantees and other similar obligations;

 

(i)                                     product warranties provided by a Credit
Party or Subsidiary of a Credit Party in the Ordinary Course of Business;

 

(j)                                    guarantees by US Credit Parties of
Indebtedness of Foreign Subsidiaries (other than Canadian Foreign Subsidiaries)
of the US Borrower in an aggregate amount not to

 

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exceed, when combined with the US Dollar Equivalent of the intercompany
extensions of credit permitted pursuant to subsections 5.4(b)(ii) and
5.4(b)(v) outstanding at such time, the US Dollar Equivalent of $10,000,000;

 

(k)                                 reserved; and

 

(l)                                     other Contingent Obligations not
exceeding the US Dollar Equivalent of $1,500,000 in the aggregate at any time
outstanding.

 

5.10.                     Compliance with ERISA, Etc.  (a) No Credit Party shall
permit its unfunded pension fund and other employee benefit plan obligation and
liabilities to remain unfunded other than in accordance with applicable law and
(b) no ERISA Affiliate shall cause or suffer to exist (a) any event that could
reasonably be expected to result in the imposition of a Lien on any asset of a
Credit Party or a Subsidiary of a Credit Party with respect to any Title IV Plan
or Multiemployer Plan or (b) any other ERISA Event, that could reasonably be
expected to result, in the aggregate, have a Material Adverse Effect.  No Credit
Party shall cause or suffer to exist any event that would result in the
imposition of a Lien with respect to any Benefit Plan.

 

5.11.                     Restricted Payments.  No Credit Party shall, and no
Credit Party shall suffer or permit any of its Subsidiaries to, (i) declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any Stock or Stock Equivalent,
(ii) purchase, redeem or otherwise acquire for value any Stock or Stock
Equivalent now or hereafter outstanding or (iii) make any payment or prepayment
of principal of, premium, if any, interest, fees, redemption, exchange,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, Subordinated Indebtedness or (iv) make any cash prepayment, redemption,
purchase, retirement, defeasance, sinking fund or similar payment, of principal
of the Second Lien Indebtedness (the items described in clauses (i), (ii),
(iii) and (iv) above are referred to as “Restricted Payments”); except that any
Wholly-Owned Subsidiary of a Borrower may declare and pay dividends to a
Borrower or any Wholly-Owned Subsidiary of a Borrower, and except that:

 

(a)                                 Holdings may declare and make dividend
payments or other distributions payable solely in its Stock or Stock
Equivalents; and

 

(b)                                 the Borrowers may make distributions to
Holdings which are promptly used by Holdings to redeem or repurchase, or to make
distributions to Parent which are promptly used by Parent to redeem or
repurchase, from current or former officers, directors and employees (or their
current or former spouses, their estates, their estate planning vehicles or
their family members) Stock and Stock Equivalents provided all of the following
conditions are satisfied:

 

(i)                                     no Specified Event of Default has
occurred and is continuing or would arise as a result of such Restricted
Payment;

 

(ii)                                  the aggregate Restricted Payments
permitted during the term of this Agreement (excluding Restricted Payments
permitted under Section 5.11(k) shall not exceed the US Dollar Equivalent of
$3,000,000; provided the foregoing limits shall not

 

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apply to the extent of any redemption or repurchase funded with the proceeds of
any Excluded Equity Issuance; and

 

(iii)                               after giving effect to such Restricted
Payments, US Availability is not less than $5,000,000 and Canadian Availability
is not less than the US Dollar Equivalent of $2,500,000; provided the foregoing
limits shall not apply to the extent of any redemption or repurchase funded with
the proceeds of any Excluded Equity Issuance; and

 

(iv)                              such Restricted Payments and redemption is
permitted under the Second Lien Indebtedness Documents;

 

(c)                                  in the event US Borrower files a
consolidated, combined, unitary or similar type income tax return with Holdings,
the US Borrower may make distributions to Holdings to permit Holdings to pay
federal and state income taxes then due and payable, franchise taxes and other
similar licensing expenses incurred in the Ordinary Course of Business provided,
that the amount of such distribution shall not be greater than the amount of
such taxes or expenses that would have been due and payable by the US Borrower
and its relevant Subsidiaries had the US Borrower not filed a consolidated,
combined, unitary or similar type return with Holdings;

 

(d)                                 the Credit Parties may make distributions to
Holdings which are promptly used by Holdings to pay, or to make distributions to
Parent which are promptly used by Parent to pay, overhead expenses, professional
fees and expenses and directors fees and expenses, in any case, incurred in the
Ordinary Course of Business;

 

(e)                                  Holdings may repurchase shares of Stock or
Stock Equivalents issued by Holdings to current or former officers, directors
and employees of Holdings or any of its Subsidiaries (or its current or former
spouses, their estates, their estate planning vehicles or their family members)
by cancellation of notes permitted pursuant to subsection 5.4(f) and/or by
issuance of notes permitted pursuant to subsection 5.5(l);

 

(f)                                   reserved;

 

(g)                                  the Credit Parties may make distributions
to Holdings to allow (i) Holdings to make cash payments of compensation and
other items described in Section 5.7(a) owing to or in respect of members of
management employed by Holdings or (ii) Holdings to make distributions to Parent
to allow Parent promptly to make cash payments of compensation and other items
described in Section 5.7(a) owing to or in respect of members of management
employed by Parent to the extent such amounts are attributable to the ownership
and operation of Holdings and its Subsidiaries;

 

(h)                                 Holdings may make distributions to Parent
which are promptly used by Parent to repurchase fractional shares of its
respective Stock and Stock Equivalents from officers, directors and employees of
Holdings or any of its Subsidiaries or Parent not to exceed $100,000 in the
aggregate during the duration of this Agreement;

 

(i)                                     reserved;

 

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(j)                                    the Credit Parties may pay, as and when
due and payable, regularly scheduled non-accelerated payments of principal and
interest on account of Subordinated Indebtedness subject to the terms hereof and
the subordination provisions with respect thereto;

 

(k)                                 US Credit Parties may make Restricted
Payments of Second Lien Indebtedness to the extent constituting (i) mandatory
prepayments (including offers to redeem) under Sections 5.10 and 5.14 of the
Second Lien Indenture, in each case, pursuant to and in accordance with the
terms and conditions of the Second Lien Indenture as in effect on the date
hereof or in any corresponding provision in connection with a Permitted
Refinancing thereof; provided, such mandatory prepayments shall be made only so
long as any corresponding mandatory prepayment of the Loans required pursuant to
Section 1.8 hereof has been made, to the extent required by such section or any
prepayment required as a result of an Event of Default under Section 7.1(k), and
(ii) voluntary prepayments thereof so long as before and after giving effect to
such voluntary prepayment, (1) no Specified Event of Default shall have occurred
and be continuing or arise as a result of such prepayment and (2) the sum of
(y) Aggregate Availability and (z) the aggregate amount of unrestricted cash of
the US Credit Parties and the Canadian Credit Parties, in each instance,
maintained in deposit accounts which are subject to a deposit account control
agreement in favor of the applicable Agent, equals an amount not less than
$10,000,000; and

 

(l)                                     Holdings may make Restricted Payments of
the kind described in items (i) and (ii) of the definition thereof set forth in
the lead in to this Section 5.11 and not otherwise described in clauses
(a) through (k) above with the Net Issuance Proceeds of an Excluded Equity
Issuance by Holdings so long as, after giving effect to any such Restricted
Payment, no Event of Default otherwise would exist.

 

5.12.                     Change in Business.  No Credit Party shall, and no
Credit Party shall permit any of its Subsidiaries to, engage in any material
line of business substantially different from those lines of business carried on
by it on the date hereof or related, complementary or ancillary thereto. 
Holdings shall not engage in any business activities or own any Property other
than (i) ownership of the Stock and Stock Equivalents of the Borrowers and
activities ancillary thereto, (ii) activities and contractual rights incidental
to maintenance of its corporate existence, (including the incurrence of any
corporate overhead), (iii) the hiring and employment of members of the
management of Borrower and activities reasonably related thereto,
(iv) performance of Holding’s obligations under the Second Lien Indebtedness
Documents to which it is a party, (v) finding potential Targets for
Acquisitions, negotiating the acquisition thereof and being a party to the
applicable acquisition agreement (and performing its obligations thereunder);
and (vi) activities of Holdings expressly permitted hereunder.

 

5.13.                     Change in Structure.  Except as expressly permitted
under Section 5.3, no Credit Party shall, and no Credit Party shall permit any
of its Subsidiaries to amend any of its Organization Documents in any respect
materially adverse to an Agent (in its capacity as such) or Lenders (in their
capacities as such).

 

5.14.                     Changes in Accounting, Name and Jurisdiction of
Organization.  No Credit Party shall, and no Credit Party shall suffer or permit
any of its Subsidiaries to, (i) make any significant change in accounting
treatment or reporting practices, except as required by GAAP,

 

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(ii) change the Fiscal Year or method for determining Fiscal Quarters of any
Credit Party or of any consolidated Subsidiary of any Credit Party; provided,
the fiscal year of a Target of a Permitted Acquisition may be changed so as to
conform such fiscal year with that of the Credit Parties, (iii) change its name
as it appears in official filings in its jurisdiction of organization or
(iv) change its jurisdiction of organization or domicile (within the meaning of
the Civil Code of Quebec), in the case of clauses (iii) and (iv), without at
least twenty (20) days’ prior written notice to Agents and the acknowledgement
of Agents that all actions required by the Appropriate Agent, including those to
continue the perfection of its Liens, have been completed.

 

5.15.                     Amendments to Second Lien Indebtedness Documents and
Subordinated Indebtedness.  No Credit Party shall and no Credit Party shall
permit any of its Subsidiaries, to amend, supplement, waive or otherwise modify
any provision of (i) any Subordinated Indebtedness except to the extent
permitted by the subordination terms with respect thereto, and (ii) any Second
Lien Indebtedness Document except to the extent permitted by the Intercreditor
Agreement.

 

5.16.                     No Negative Pledges.  No Credit Party shall, and no
Credit Party shall permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any consensual
restriction or encumbrance of any kind on the ability of any Credit Party or
Subsidiary to pay dividends or make any other distribution on any of such Credit
Party’s or Subsidiary’s Stock or Stock Equivalents or to pay fees, including
management fees, or make other payments and distributions to the Borrower or any
other Credit Party, other than as set forth in this Agreement or the other Loan
Documents and except for customary restrictions and conditions contained in any
agreement relating to the sale of any Property permitted under Section 5.2
pending the consummation of such sale.  No Credit Party shall, and no Credit
Party shall permit any of its Subsidiaries to, directly or indirectly, enter
into, assume or become subject to any Contractual Obligation prohibiting or
otherwise restricting the existence of any Lien upon any of its assets in favor
of an Agent, whether now owned or hereafter acquired except (a) in connection
with any document or instrument governing Liens permitted pursuant to
subsections 5.1(h), 5.1(i) and 5.1(w) provided that any such restriction
contained therein relates only to the asset or assets subject to such permitted
Liens, (b) with respect to operating leases and other third-party contracts,
customary limitations on the ability of a party thereto to assign its interests
in the underlying contract without the consent of the other party thereto
(provided nothing therein limits the ability of a party thereto to assign its
interests in and to all proceeds derived from or in connection with such
contract) and (c) customary restrictions and conditions contained in any
agreement relating to the sale of any Property permitted under Section 5.2
pending the consummation of such sale.

 

5.17.                     OFAC; Patriot Act.  No Credit Party shall, and no
Credit Party shall permit any of its Subsidiaries to fail to comply with the
laws, regulations and executive orders referred to in Section 3.27 and
Section 3.28.

 

5.18.                     Sale-Leasebacks.  No Credit Party shall, and no Credit
Party shall permit any of its Subsidiaries to, engage in a sale leaseback,
synthetic lease or similar transaction involving any of its assets.

 

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5.19.                     Hazardous Materials.  No Credit Party shall, and no
Credit Party shall permit any of its Subsidiaries to, cause or suffer to exist
any Release of any Hazardous Material at, to or from any Real Estate in
violation of Environmental Law which would reasonably be expected to give rise
to Environmental Liabilities or otherwise adversely affect the value or
marketability of any Real Estate (whether or not owned by any Credit Party or
any Subsidiary of any Credit Party), other than such violations, Environmental
Liabilities and effects that would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

ARTICLE VI -

 

FINANCIAL  COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than
(i) contingent indemnification Obligations to the extent no claim giving rise
thereto has been asserted and (ii) Letter of Credit Obligations collateralized
in the manner set forth in Section 7.4) shall remain unpaid or unsatisfied,
unless the Required Lenders waive compliance in writing:

 

6.1.                            Interest Coverage Ratio.  As of the last day of
the Fiscal Quarter ending June 30, 2012 and any Fiscal Quarter thereafter, the
Credit Parties shall not permit the Interest Coverage Ratio for the twelve
fiscal month period ending on such date to be less 2.50 to 1.00.  “Interest
Coverage Ratio” shall be calculated in the manner set forth in Exhibit 4.2(b).

 

6.2.                            Leverage Ratio.  As of the last day of the
Fiscal Quarter ending June 30, 2012 and any Fiscal Quarter thereafter, the
Credit Parties shall not permit the Leverage Ratio for the twelve fiscal month
period ending on such date to be greater than 3.25 to 1.00.  “Leverage Ratio”
shall be calculated in the manner set forth in Exhibit 4.2(b).

 

ARTICLE VII -

 

EVENTS OF DEFAULT

 

7.1.                            Event of Default.  Any of the following shall
constitute an “Event of Default”:

 

(a)                                 Non-Payment.  Any Credit Party fails (i) to
pay when and as required to be paid herein, any amount of principal of any Loan,
including after maturity of the Loans, or to pay any L/C Reimbursement
Obligation or (ii) to pay within three (3) Business Days after the same shall
become due, interest on any Loan, any fee or any other amount payable hereunder
or pursuant to any other Loan Document; or

 

(b)                                 Representation or Warranty.  Any
representation, warranty or certification by or on behalf of any Credit Party or
any of its Subsidiaries made or deemed made herein, in any other Loan Document,
or which is contained in any certificate, document or financial or other written
statement by any such Person, or their respective Responsible Officers,
furnished at any time under this Agreement, or in or under any other Loan
Document, shall prove to have been incorrect in any material respect (without
duplication of other materiality qualifiers contained therein) on or as of the
date made or deemed made; or

 

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(c)                                  Specific Defaults.  Any Credit Party fails
to perform or observe any term, covenant or agreement contained in any of
(i) subsection 4.3(a) or 9.10(d), Sections 4.6, 4.9, Article V or Article VI
hereof or (ii) Section 4.1, 4.2(a), 4.2(b) or 4.2(d) and, solely with respect to
this clause (ii), such failure shall not have been cured within five
(5) Business Days; or

 

(d)                                 Other Defaults.  Any Credit Party or
Subsidiary of any Credit Party fails to perform or observe any other term,
covenant or agreement contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of thirty (30) days
after the earlier to occur of (i) the date upon which a Responsible Officer of
any Credit Party becomes aware of such default and (ii) the date upon which
written notice thereof is given to the Borrower by an Agent or Required Lenders;
or

 

(e)                                  Cross Default.  Any Credit Party or any
Subsidiary of any Credit Party (i) fails to make any payment in respect of any
Indebtedness (other than the Obligations) or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
document relating thereto on the date of such failure; or (ii) fails to perform
or observe any other condition or covenant (after all applicable grace periods),
or any other event shall occur or condition exist (after all applicable grace
periods), under any agreement or instrument relating to any such Indebtedness or
Contingent Obligation, if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, after giving effect
to any cure or waiver of such failure, event or condition actually made or
obtained, such Indebtedness to be declared to be due and payable prior to its
stated maturity (without regard to any subordination terms with respect
thereto), or such Contingent Obligation to become payable or cash collateral in
respect thereof to be demanded; or

 

(f)                                   Insolvency; Voluntary Proceedings.  Any
Credit Party or any Subsidiary of any Credit Party: (i) generally fails to pay,
or admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) except as expressly permitted pursuant to Section 5.3, voluntarily ceases
to conduct its business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action to effectuate or
authorize any of the foregoing; or

 

(g)                                  Involuntary Proceedings.  (i) Any
involuntary Insolvency Proceeding is commenced or filed against any Credit Party
or any Subsidiary of any Credit Party, or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of any such Person’s Properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within sixty (60) days after commencement, filing or levy; (ii) any Credit Party
or any Subsidiary of any Credit Party admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) any Credit Party or any Subsidiary of any Credit Party acquiesces in the
appointment of a receiver, trustee, custodian,

 

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conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its Property or business;
or

 

(h)                                 Monetary Judgments.  One or more judgments,
non-interlocutory orders, decrees or arbitration awards shall be entered against
any one or more of the Credit Parties or any of their respective Subsidiaries
involving in the aggregate a liability of $5,000,000 or more (excluding amounts
covered by insurance to the extent the relevant independent third-party insurer
has not denied coverage therefor or amounts covered by third party
indemnification obligations of a third person acceptable to US Agent), and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of forty-five (45) days after the entry thereof; or

 

(i)                                     Non Monetary Judgments.  One or more
non-monetary judgments, orders or decrees shall be rendered against any one or
more of the Credit Parties or any of their respective Subsidiaries which has or
would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, and there shall be any period of ten (10) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or

 

(j)                                    Collateral.  Any material provision of
any Loan Document shall for any reason cease to be valid and binding on or
enforceable against any Credit Party or any Subsidiary of any Credit Party
thereto or any Credit Party or any Subsidiary of any Credit Party shall so state
in writing or bring an action to limit its obligations or liabilities
thereunder; or any Collateral Document shall for any reason (other than pursuant
to the terms thereof) cease to create a valid security interest in any material
portion of the Collateral purported to be covered thereby or such security
interest shall for any reason (other than the failure of Agent to take any
action within its control) cease to be a perfected and first priority security
interest subject only to Permitted Liens; or

 

(k)                                 Ownership.  (i) any person or group of
persons (within the meaning of Section 13(d) or Section 14(d) of the Securities
Exchange Act of 1934, as amended) other than Sponsor, Sponsor’s Controlled
Investment Affiliates or the Additional Management Advisors shall have acquired
(or have the right to acquire) beneficial ownership (within the meaning of
Rules 13d-3 and 13d-5 promulgated by the SEC under said Act) of thirty-five
percent (35%) or more of the outstanding shares (or of the combined voting
power) of the Stock of Parent entitled to vote generally in the election of
directors of Parent; or (ii) Parent ceases to own, directly or indirectly, one
hundred percent (100%) of the issued and outstanding Stock and Stock Equivalents
of Holdings; or (iii) Holdings ceases to own one hundred percent (100%) of the
issued and outstanding Stock and Stock Equivalents of each Borrower, in each
instance in clauses (ii) and (iii), free and clear of all Liens, rights,
options, warrants or other similar agreements or understandings, other than
Liens in favor of Agents, for the benefit of the Secured Parties, Subordinated
Second Liens and other Permitted Liens; or (iv) a “Change of Control” (as
defined in the Second Lien Indebtedness Documents) shall occur; or

 

(l)                                     Invalidity of Subordination Provisions. 
The lien subordination provisions of the Intercreditor Agreement or the
subordination provisions of any agreement or instrument governing any
Subordinated Indebtedness shall for any reason be revoked or invalidated, or

 

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otherwise cease to be in full force and effect, or any Credit Parties shall
contest in any manner the validity or enforceability thereof or deny that it has
any further liability or obligation thereunder, or the Obligations, for any
reason shall not have the priority contemplated by this Agreement or such
subordination provisions.

 

7.2.                            Remedies.  Upon the occurrence and during the
continuance of any Event of Default, Agents may, and shall at the request of the
Required Lenders:

 

(a)                                 declare all or any portion of the Commitment
of each Lender to make Loans or of the L/C Issuer to issue Letters of Credit to
be suspended or terminated, whereupon such Commitments shall forthwith be
suspended or terminated;

 

(b)                                 declare all or any portion of the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable; without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
each Credit Party; and/or

 

(c)                                  exercise on behalf of itself and the
Lenders all rights and remedies available to it and the Lenders under the Loan
Documents or applicable law;

 

provided, however, that upon the occurrence of any event specified in subsection
7.1(f) or 7.1(g) above (in the case of clause (i) of subsection 7.1(g) upon the
expiration of the sixty (60) day period mentioned therein), the obligation of
each Lender to make Loans and the obligation of the L/C Issuer to issue Letters
of Credit shall automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of either Agent, any
Lender or the L/C Issuer.

 

7.3.                            Rights Not Exclusive.  The rights provided for
in this Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies provided by law or
in equity, or under any other instrument, document or agreement now existing or
hereafter arising.

 

7.4.                            Cash Collateral for Letters of Credit.  If a
Specified Event of Default has occurred and is continuing, this Agreement (or
the Commitment of each Lender) shall be terminated for any reason or if
otherwise required by the terms hereof, either Agent may, and upon request of
Required US Lenders or Required Canadian Lenders, shall, demand (which demand
shall be deemed to have been delivered automatically upon any acceleration of
the Loans and other obligations hereunder pursuant to Section 7.2), and the
applicable Borrowers shall thereupon deliver to the Appropriate Agent, to be
held for the benefit of the L/C Issuer, Agent and the Lenders entitled thereto,
an amount of cash equal to 102% of the amount of Letter of Credit Obligations,
or a letter of credit on terms and conditions, in form and substance and issued
by an issuer reasonably acceptable to the Appropriate Agent, in either instance,
as additional collateral security for Obligations in respect of any outstanding
Letter of Credit.  The Appropriate Agent may at any time apply any or all of
such cash and cash collateral to the payment of any or all of the Credit
Parties’ Obligations in respect of any Letters of Credit in respect thereof. 
Pending

 

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such application, the Appropriate Agent may (but shall not be obligated to)
invest the same in an interest bearing account in such Agent’s name, for the
benefit of the L/C Issuer, Agent and the Lenders entitled thereto, under which
deposits are available for immediate withdrawal, at such bank or financial
institution as the L/C Issuer and Agent may, in their discretion, select.  If
the Specified Event of Default for which cash collateral or a backstop letter of
credit was required hereunder is cured or waived, and no other Specified Event
of Default has occurred and is continuing, then the Appropriate Agent shall
promptly return to the applicable Borrower such cash collateral or backstop
letter of credit upon such Borrower’s written request and instruction.

 

ARTICLE VIII -

 

AGENT

 

8.1.                            Appointment and Duties.

 

(a)                                 Appointment of Agent.

 

(i)                                     Each Lender and each L/C Issuer hereby
appoints Chase (together with any successor US Agent pursuant to Section 8.9) as
US Agent hereunder and authorizes US Agent to (x) execute and deliver the Loan
Documents and accept delivery thereof on its behalf from any Credit Party,
(y) take such action on its behalf and to exercise all rights, powers and
remedies and perform the duties as are expressly delegated to US Agent under
such Loan Documents and (z) exercise such powers as are reasonably incidental
thereto.  Without limiting the generality of the foregoing, each Lender
acknowledges that it has received a copy of the Intercreditor Agreement,
consents to and authorizes the Agents’ execution thereof on behalf of such
Lender and agrees to be bound by the terms and provisions thereof.

 

(ii)                                  Each Lender and each L/C Issuer hereby
appoints Chase Canada (together with any successor Canadian Agent pursuant to
Section 8.9) as Canadian Agent hereunder and authorizes Canadian Agent to
(x) execute and deliver the Loan Documents and accept delivery thereof on its
behalf from any Credit Party, (y) take such action on its behalf and to exercise
all rights, powers and remedies and perform the duties as are expressly
delegated to Canadian Agent under such Loan Documents and (z) exercise such
powers as are reasonably incidental thereto.

 

(b)                                 Duties as Collateral and Disbursing Agent.

 

(i)                                     Without limiting the generality of
clause (a) above, US Agent shall have the sole and exclusive right and authority
(to the exclusion of the Lenders and L/C Issuers), and is hereby authorized, to
(i) act as the disbursing and collecting agent for the US Lenders and the US L/C
Issuers with respect to all payments and collections arising in connection with
the Loan Documents (including in any proceeding described in subsection
7.1(g) or any other bankruptcy, insolvency or similar proceeding), and each
Person making any payment in connection with any Loan Document to any Secured
Party is hereby authorized to make such payment to Agents, (ii) file and prove
claims and file other documents necessary or desirable to allow the claims of
the Secured Parties

 

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with respect to any Obligation in any proceeding described in subsection
7.1(f) or (g) or any other bankruptcy, insolvency or similar proceeding (but not
to vote, consent or otherwise act on behalf of such Person), (iii) act as
collateral agent for each Secured Party for purposes of the perfection of all
Liens created by such agreements and all other purposes stated therein,
(iv) manage, supervise and otherwise deal with the Collateral, (v) take such
other action as is necessary or desirable to maintain the perfection and
priority of the Liens created or purported to be created by the Loan Documents,
(vi) except as may be otherwise specified in any Loan Document, exercise all
remedies given to US Agent and the other Secured Parties with respect to the
Credit Parties and/or the Collateral, whether under the Loan Documents,
applicable Requirements of Law or otherwise and (vii) execute any amendment,
consent or waiver under the Loan Documents on behalf of any Lender that has
consented in writing to such amendment, consent or waiver; provided, however,
that US Agent hereby appoints, authorizes and directs each Lender and L/C Issuer
to act as collateral sub-agent for Agent, the Lenders and the L/C Issuers for
purposes of the perfection of all Liens with respect to the Collateral,
including any deposit account maintained by a Credit Party with, and cash and
Cash Equivalents held by, such Lender or L/C Issuer, and may further authorize
and direct the Lenders and the L/C Issuers to take further actions as collateral
sub-agents for purposes of enforcing such Liens or otherwise to transfer the
Collateral subject thereto to Agent, and each Lender and L/C Issuer hereby
agrees to take such further actions to the extent, and only to the extent, so
authorized and directed.

 

(ii)                                  Without limiting the generality of clause
(a) above, Canadian Agent shall have the sole and exclusive right and authority
(to the exclusion of the Lenders and L/C Issuers), and is hereby authorized, to
(i) act as the disbursing and collecting agent for the Canadian Lenders and the
Canadian L/C Issuers with respect to all payments and collections arising in
connection with the Loan Documents (including in any proceeding described in
subsection 7.1(g) or any other bankruptcy, insolvency or similar proceeding),
and each Person making any payment in connection with any Loan Document to any
Secured Party is hereby authorized to make such payment to Agent, (ii) file and
prove claims and file other documents necessary or desirable to allow the claims
of the Secured Parties with respect to any Obligation in any proceeding
described in subsection 7.1(f) or (g) or any other bankruptcy, insolvency or
similar proceeding (but not to vote, consent or otherwise act on behalf of such
Person), (iii) act as collateral agent for each Secured Party for purposes of
the perfection of all Liens created by such agreements and all other purposes
stated therein, (iv) manage, supervise and otherwise deal with the Collateral,
(v) take such other action as is necessary or desirable to maintain the
perfection and priority of the Liens created or purported to be created by the
Loan Documents, (vi) except as may be otherwise specified in any Loan Document,
exercise all remedies given to Canadian Agent and the other Secured Parties with
respect to the Credit Parties and/or the Collateral, whether under the Loan
Documents, applicable Requirements of Law or otherwise and (vii) execute any
amendment, consent or waiver under the Loan Documents on behalf of any Lender
that has consented in writing to such amendment, consent or waiver; provided,
however, that Canadian Agent hereby appoints, authorizes and directs each Lender
and L/C Issuer to act as collateral sub-agent for Agent, the Lenders and the L/C
Issuers for purposes of the perfection of all Liens with

 

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respect to the Collateral, including any deposit account maintained by a Credit
Party with, and cash and Cash Equivalents held by, such Lender or L/C Issuer,
and may further authorize and direct the Lenders and the L/C Issuers to take
further actions as collateral sub-agents for purposes of enforcing such Liens or
otherwise to transfer the Collateral subject thereto to Agent, and each Lender
and L/C Issuer hereby agrees to take such further actions to the extent, and
only to the extent, so authorized and directed.

 

(c)                                  Limited Duties.  Under the Loan Documents,
Agents  (i) are acting solely on behalf of the Lenders and the L/C Issuers
(except to the limited extent provided in subsection 1.4(b) with respect to the
Register), with duties that are entirely administrative in nature,
notwithstanding the use of the defined term “Agent”, “US Agent” or “Canadian
Agent” the terms “agent”, “Agent”, “US Agent”, “Canadian Agent” and “collateral
agent” and similar terms in any Loan Document to refer to the Appropriate Agent,
which terms are used for title purposes only, (ii) is not assuming any
obligation under any Loan Document other than as expressly set forth therein or
any role as agent, fiduciary or trustee of or for any Lender, L/C Issuer or any
other Person and (iii) shall have no implied functions, responsibilities,
duties, obligations or other liabilities under any Loan Document, and each
Secured Party, by accepting the benefits of the Loan Documents, hereby waives
and agrees not to assert any claim against any Agent based on the roles, duties
and legal relationships expressly disclaimed in clauses (i) through (iii) above.

 

(d)                                 Quebec Collateral.

 

(i)                                     For greater certainty, and without
limiting the powers of Canadian Agent, each of the Secured Parties (and each
subsequent maker of any Loan by its making thereof) hereby irrevocably
constitutes Chase Canada as the holder of an irrevocable power of attorney
(fondé de pouvoir within the meaning of Article 2692 of the Civil Code of
Québec) in order to hold hypothecs and security granted by any Credit Party on
property pursuant to the laws of the Province of Québec in order to secure
obligations of any Credit Party under any bond, debenture or similar title of
indebtedness, issued by any Credit Party, and hereby agrees that Chase Canada,
as Canadian Agent, may act as the bondholder and mandatary (i.e. agent) with
respect to any shares, capital stock or other securities or any bond, debenture
or similar title of indebtedness that may be issued by any Credit Party and
pledged in favour of Chase Canada, as Canadian Agent, for the benefit of the
Secured Parties. To the extent necessary, each Secured Party appoints and
authorizes Chase Canada, as Canadian Agent, to act as agent and custodian for
and on behalf of the Secured Parties to hold any bond, debenture and or similar
titles of indebtedness issued under any hypothec and pledged in favor of the
Secured Parties and to execute the related pledge agreement.  The execution by
Chase Canada, acting as fondé de pouvoir and mandatary, prior to the Agreement
of any deeds of hypothec or other security documents is hereby ratified and
confirmed.

 

(ii)                                  Notwithstanding the provisions of
Section 32 of An Act respecting the special powers of legal persons (Québec),
Chase Canada may acquire and be the holder of any bond or debenture issued by
any Credit Party (i.e. the fondé de pouvoir may acquire and hold the first bond
issued under any deed of hypothec by any Credit Party).

 

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(iii)                               The constitution of Chase Canada as fondé de
pouvoir and as bondholder and mandatary with respect to any bond, debenture,
shares, capital stock or other securities that may be issued and pledged from
time to time to Canadian Agent for the benefit of the Secured Parties, shall be
deemed to have been ratified and confirmed by each Person accepting an
assignment of, a participation in or an arrangement in respect of, all or any
portion of any Secured Parties’ rights and obligations under the Agreement by
the execution of an assignment, including an Assignment or other agreement
pursuant to which it becomes such assignee or participant, and by each successor
Canadian Agent by the execution of an Assignment or other agreement, or by the
compliance with other formalities, as the case may be, pursuant to which it
becomes a successor Agent under the Agreement.

 

(iv)                              Chase Canada acting as fondé de pouvoir shall
have the same rights, powers, immunities, indemnities and exclusions from
liability as are prescribed in favour of Canadian Agent in the Agreement, which
shall apply mutatis mutandis to Chase Canada acting as fondé de pouvoir.

 

(v)                                 The parties hereto confirm that it is their
wish that this Agreement and any other document executed in connection with the
transactions contemplated herein be drawn up in the English language only and
that all other documents contemplated thereunder or relating thereto, including
notices, may also be drawn up in the English language only.  Les parties aux
présentes confirment que c’est leur volonté que cette convention et les autres
documents de crédit soient rédigés en langue anglaise seulement et que tous les
documents, y compris tous avis, envisagés par cette convention et les autres
documents peuvent être rédigés en langue anglaise seulement.

 

8.2.                            Binding Effect.  Each Secured Party, by
accepting the benefits of the Loan Documents, agrees that (i) any action taken
by an Agent, Required US Lenders, Required Canadian Lenders or the Required
Lenders (or, if expressly required hereby, a greater proportion of the Lenders)
in accordance with the provisions of the Loan Documents, (ii) any action taken
by an Agent in reliance upon the instructions of Required US Lenders, Required
Canadian Lenders or Required Lenders (or, where so required, such greater
proportion) and (iii) the exercise by an Agent, Required US Lenders, Required
Canadian Lenders or the Required Lenders (or, where so required, such greater
proportion) of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Secured Parties.

 

8.3.                            Use of Discretion.

 

(a)                                 No Action without Instructions.  No Agent
shall be required to exercise any discretion or take, or to omit to take, any
action, including with respect to enforcement or collection, except any action
it is required to take or omit to take (i) under any Loan Document or
(ii) pursuant to instructions from the Required Lenders, Required US Lenders or
Required Canadian Lenders (or, where expressly required by the terms of this
Agreement, a greater proportion of the Lenders).

 

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(b)                                 Right Not to Follow Certain Instructions. 
Notwithstanding clause (a) above, no Agent shall be required to take, or to omit
to take, any action (i) unless, upon demand, such Agent receives an
indemnification satisfactory to it from the Lenders (or, to the extent
applicable and acceptable to such Agent, any other Person) against all
Liabilities that, by reason of such action or omission, may be imposed on,
incurred by or asserted against such Agent or any Related Person thereof or
(ii) that is, in the opinion of such Agent or its counsel, contrary to any Loan
Document or applicable Requirement of Law.

 

8.4.                            Delegation of Rights and Duties.  Each Agent
may, upon any term or condition it specifies, delegate or exercise any of its
rights, powers and remedies under, and delegate or perform any of its duties or
any other action with respect to, any Loan Document by or through any trustee,
co-agent, employee, attorney-in-fact and any other Person (including any Secured
Party).  Any such Person shall benefit from this Article VIII to the extent
provided by such Agent.

 

8.5.                            Reliance and Liability.

 

(a)                                 Each Agent may, without incurring any
liability hereunder, (i) treat the payee of any Note as its holder until such
Note has been assigned in accordance with Section 9.9, (ii) rely on the Register
to the extent set forth in Section 1.4, (iii) consult with any of its Related
Persons and, whether or not selected by it, any other advisors, accountants and
other experts (including advisors to, and accountants and experts engaged by,
any Credit Party) and (iv) rely and act upon any document and information
(including those transmitted by Electronic Transmission) and any telephone
message or conversation, in each case believed by it to be genuine and
transmitted, signed or otherwise authenticated by the appropriate parties.

 

(b)                                 None of the Agents or its Related Persons
shall be liable for any action taken or omitted to be taken by any of them under
or in connection with any Loan Document, and each Secured Party, Holdings, the
Borrower and each other Credit Party hereby waive and shall not assert (and each
of Holdings and the Borrower shall cause each other Credit Party to waive and
agree not to assert) any right, claim or cause of action based thereon, except
to the extent of liabilities resulting from the gross negligence, bad faith or
willful misconduct of such Agent or, as the case may be, such Related Person
(each as determined in a final, non-appealable judgment by a court of competent
jurisdiction) in connection with the duties expressly set forth herein.  Without
limiting the foregoing, no Agent:

 

(i)                                     shall be responsible or otherwise incur
liability for any action or omission taken in reliance upon the instructions of
the Required Lenders, Required US Lenders or Required Canadian Lenders or for
the actions or omissions of any of its Related Persons selected with reasonable
care (other than employees, officers and directors of such Agent, when acting on
behalf of such Agent);

 

(ii)                                  shall be responsible to any Lender, L/C
Issuer or other Person for the due execution, legality, validity,
enforceability, effectiveness, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, any Loan Document;

 

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(iii)                               makes any warranty or representation, and
shall not be responsible, to any Lender, L/C Issuer or other Person for any
statement, document, information, representation or warranty made or furnished
by or on behalf of any Credit Party or any Related Person of any Credit Party in
connection with any Loan Document or any transaction contemplated therein or any
other document or information with respect to any Credit Party, whether or not
transmitted or (except for documents expressly required under any Loan Document
to be transmitted to the Lenders) omitted to be transmitted by such Agent,
including as to completeness, accuracy, scope or adequacy thereof, or for the
scope, nature or results of any due diligence performed by such Agent in
connection with the Loan Documents; and

 

(iv)                              shall have any duty to ascertain or to inquire
as to the performance or observance of any provision of any Loan Document,
whether any condition set forth in any Loan Document is satisfied or waived, as
to the financial condition of any Credit Party or as to the existence or
continuation or possible occurrence or continuation of any Default or Event of
Default and shall not be deemed to have notice or knowledge of such occurrence
or continuation unless it has received a notice from the Borrower, any Lender or
L/C Issuer describing such Default or Event of Default clearly labeled “notice
of default” (in which case such Agent shall promptly give notice of such receipt
to the other Agent and all Lenders); and, for each of the items set forth in
clauses (i) through (iv) above, each Lender, L/C Issuer, Holdings and the
Borrower hereby waives and agrees not to assert (and each of Holdings and the
Borrower shall cause each other Credit Party to waive and agree not to assert)
any right, claim or cause of action it might have against Agents based thereon.

 

8.6.                            Agent Individually.  Each Agent and its
Affiliates may make loans and other extensions of credit to, acquire Stock and
Stock Equivalents of, engage in any kind of business with, any Credit Party or
Affiliate thereof as though it were not acting as an Agent and may receive
separate fees and other payments therefor.  To the extent either Agent or any of
its Affiliates makes any Loan or otherwise becomes a Lender hereunder, it shall
have and may exercise the same rights and powers hereunder and shall be subject
to the same obligations and liabilities as any other Lender and the terms
“Lender”, “Required Lender”, “Required US Lender”, “Required Canadian Lender”
and any similar terms shall, except where otherwise expressly provided in any
Loan Document, include, without limitation, such Agent or such Affiliate, as the
case may be, in its individual capacity as Lender, or as one of the Required US
Lenders or Required Canadian Lenders, respectively.

 

8.7.                            Lender Credit Decision.

 

(a)                                 Each Lender and each L/C Issuer acknowledges
that it shall, independently and without reliance upon either Agent, any Lender
or L/C Issuer or any of their Related Persons or upon any document (including
any offering and disclosure materials in connection with the syndication of the
Loans) solely or in part because such document was transmitted by an Agent or
any of its Related Persons, conduct its own independent investigation of the
financial condition and affairs of each Credit Party and make and continue to
make its own credit decisions in connection with entering into, and taking or
not taking any action under, any Loan Document or with respect to any
transaction contemplated in any Loan Document, in each

 

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case based on such documents and information as it shall deem appropriate. 
Except for documents expressly required by any Loan Document to be transmitted
by an Agent to the Lenders or L/C Issuers, no Agent shall have any duty or
responsibility to provide any Lender or L/C Issuer with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any Credit Party or any Affiliate of
any Credit Party that may come in to the possession of such Agent or any of its
Related Persons.

 

(b)                                 If any Lender or L/C Issuer has elected to
abstain from receiving MNPI concerning the Credit Parties or their Affiliates,
such Lender or L/C Issuer acknowledges that, notwithstanding such election,
Agents and/or the Credit Parties will, from time to time, make available
syndicate-information (which may contain MNPI) as required by the terms of, or
in the course of administering the Loans to the credit contact(s) identified for
receipt of such information on the Lender’s administrative questionnaire who are
able to receive and use all syndicate-level information (which may contain MNPI)
in accordance with such Lender’s compliance policies and contractual obligations
and applicable law, including federal and state securities laws; provided, that
if such contact is not so identified in such questionnaire, the relevant Lender
or L/C Issuer hereby agrees to promptly (and in any event within one
(1) Business Day) provide such a contact to an Agent and the Credit Parties upon
request therefor by Agents or the Credit Parties. Notwithstanding such Lender’s
or L/C Issuer’s election to abstain from receiving MNPI, such Lender or L/C
Issuer acknowledges that if such Lender or L/C Issuer chooses to communicate
with an Agent, it assumes the risk of receiving MNPI concerning the Credit
Parties or their Affiliates.

 

8.8.                            Expenses; Indemnities.

 

(a)                                 Each Lender agrees to reimburse each Agent
and each of its Related Persons (to the extent not reimbursed by any Credit
Party) promptly upon demand, severally and ratably, for any costs and expenses
(including fees, charges and disbursements of financial, legal and other
advisors and Other Taxes paid in the name of, or on behalf of, any Credit Party)
that may be incurred by such Agent or any of its Related Persons in connection
with the preparation, syndication, execution, delivery, administration,
modification, consent, waiver or enforcement (whether through negotiations,
through any work-out, bankruptcy, restructuring or other legal or other
proceeding or otherwise) of, or legal advice in respect of its rights or
responsibilities under, any Loan Document.

 

(b)                                 Each Lender further agrees to indemnify each
Agent and each of its Related Persons (to the extent not reimbursed by any
Credit Party), severally and ratably, from and against Liabilities (including
taxes, interests and penalties imposed for not properly withholding or backup
withholding on payments made to or for the account of any Lender) that may be
imposed on, incurred by or asserted against such Agent or any of its Related
Persons in any matter relating to or arising out of, in connection with or as a
result of any Loan Document, any related Document or any other act, event or
transaction related, contemplated in or attendant to any such document, or, in
each case, any action taken or omitted to be taken by such Agent or any of its
Related Persons under or with respect to any of the foregoing; provided,
however, that no Lender shall be liable to an Agent or any of its Related
Persons to the extent such liability has resulted primarily from the gross
negligence or willful misconduct of Agent or, as the case may

 

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be, such Related Person, as determined by a court of competent jurisdiction in a
final non-appealable judgment or order.

 

(c)                                  To the extent required by any applicable
law, each Agent may withhold from any payment to any Lender under a Loan
Document an amount equal to any applicable withholding tax.  If the Internal
Revenue Service or any other Governmental Authority asserts a claim that an
Agent did not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate certification form was not delivered, was
not properly executed, or fails to establish an exemption from, or reduction of,
withholding tax with respect to a particular type of payment, or because such
Lender failed to notify an Agent or any other Person of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), or such Agent reasonably determines
that it was required to withhold taxes from a prior payment but failed to do so,
such Lender shall promptly indemnify such Agent fully for all amounts paid,
directly or indirectly, by such Agent as tax or otherwise, including penalties
and interest, and together with all expenses incurred by such Agent, including
legal expenses, allocated internal costs and out-of-pocket expenses.  Each Agent
may offset against any payment to any Lender under a Loan Document, any
applicable withholding tax that was required to be withheld from any prior
payment to such Lender but which was not so withheld, as well as any other
amounts for which such Agent is entitled to indemnification from such Lender
under this Section 8.8(c).

 

8.9.                            Resignation of Agent or L/C Issuer.

 

(a)                                 Either Agent may resign at any time by
delivering notice of such resignation to the other Agent, Lenders and the
Borrowers, effective on the date set forth in such notice or, if no such date is
set forth therein, upon the date of such notice shall be effective.  If an Agent
delivers any such notice, the Required Lenders shall have the right to appoint a
successor Agent.  If, within 30 days after the retiring Agent having given
notice of resignation, no successor Agent has been appointed by the Required
Lenders that has accepted such appointment, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent from among the Lenders.  Each
appointment under this clause (a) shall be subject to the prior written consent
of Holdings, which may not be unreasonably withheld but shall not be required
during the continuance of a Specified Event of Default.  Notwithstanding
anything to the contrary set forth herein, each Agent may resign concurrently
with, and effective upon, the consummation by the Second Lien Lenders of the
purchase option set forth in the Intercreditor Agreement in accordance with the
terms and conditions thereof.

 

(b)                                 Effective immediately upon the effectiveness
of its resignation, (i) the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents, (ii) the Lenders shall assume and
perform all of the duties of the retiring Agent until a successor Agent shall
have accepted a valid appointment hereunder, (iii) the retiring Agent and its
Related Persons shall no longer have the benefit of any provision of any Loan
Document other than with respect to any actions taken or omitted to be taken
while such retiring Agent was, or because such Agent had been, validly acting as
Agent under the Loan Documents and (iv) subject to its rights under Section 8.3,
the retiring Agent shall take such action as may be reasonably necessary to
assign to the successor Agent its rights as Agent under the Loan Documents. 
Effective immediately upon its acceptance of a valid appointment as Agent, a
successor Agent shall

 

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succeed to, and become vested with, all the rights, powers, obligations,
privileges and duties of the retiring Agent under the Loan Documents.

 

(c)                                  Any L/C Issuer may resign at any time by
delivering notice of such resignation to Agents, effective on the date set forth
in such notice or, if no such date is set forth therein, on the date such notice
shall be effective.  Upon such resignation, the L/C Issuer shall remain an L/C
Issuer and shall retain its rights and obligations in its capacity as such
(other than any obligation to Issue Letters of Credit but including the right to
receive fees or to have Lenders participate in any L/C Reimbursement Obligation
thereof) with respect to Letters of Credit issued by such L/C Issuer prior to
the date of such resignation and shall otherwise be discharged from all other
duties and obligations under the Loan Documents.

 

8.10.                     Release of Collateral or Guarantors.  Each Lender and
L/C Issuer hereby consents to the release and hereby directs the Appropriate
Agent to release (or, in the case of clause (b)(ii) below, release or
subordinate) the following:

 

(a)                                 any Subsidiary of a Borrower from its
guaranty of any Obligation if all of the Stock and Stock Equivalents of such
Subsidiary owned by any Credit Party are sold or transferred in a transaction
permitted under the Loan Documents (including pursuant to a waiver or consent),
to the extent that, after giving effect to such transaction, such Subsidiary
would not be required to guaranty any Obligations pursuant to Section 4.13; and

 

(b)                                 any Lien held by the Appropriate Agent for
the benefit of the Secured Parties against (i) any Collateral that is sold,
transferred, conveyed or otherwise disposed of by a Credit Party in a
transaction permitted by the Loan Documents (including pursuant to a valid
waiver or consent), to the extent all Liens required to be granted in such
Collateral pursuant to Section 4.13 after giving effect to such transaction have
been granted, (ii) any property subject to a Lien permitted hereunder in
reliance upon subsection 5.1(h) or (i) and (iii) all of the Collateral and all
Credit Parties, upon (A) termination of the Commitment of each Lender,
(B) payment and satisfaction in full of all Loans, all L/C Reimbursement
Obligations and all other Obligations (other than unasserted contingent
indemnification obligations) under the Loan Documents and all Obligations
arising under Secured Rate Contracts, that the Appropriate Agent has theretofore
been notified in writing by the holder of such Obligation are then due and
payable, (C) deposit of cash collateral with respect to all contingent
Obligations (or, as an alternative to cash collateral, in the case of any Letter
of Credit Obligation, receipt by the Appropriate Agent of a back-up letter of
credit) in amounts and on terms and conditions and with parties satisfactory to
such Agent and each Indemnitee that is, or may be, owed such Obligations
(excluding contingent Obligations (other than L/C Reimbursement Obligations) as
to which no claim has been asserted) and (D) to the extent requested by an
Agent, receipt by such Agent and the Secured Parties of liability releases from
the Credit Parties each in form and substance acceptable to such Agent.

 

Each Lender and L/C Issuer hereby directs each Agent, and each Agent hereby
agrees, upon receipt of reasonable advance notice from the appropriate Borrower,
to execute and deliver or file such documents and to perform other actions
reasonably necessary to release the guaranties and Liens when and as directed in
this Section 8.10.

 

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8.11.                     Additional Secured Parties.  The benefit of the
provisions of the Loan Documents directly relating to the Collateral or any Lien
granted thereunder shall extend to and be available to any Secured Party that is
not a Lender or L/C Issuer party hereto as long as, by accepting such benefits,
such Secured Party agrees, as among Agents and all other Secured Parties, that
such Secured Party is bound by (and, if requested by an Agent, shall confirm
such agreement in a writing in form and substance acceptable to such Agent) this
Article VIII, Section 9.3, Section 9.9, Section 9.10, Section 9.11,
Section 9.17, Section 9.24 and Section 10.1 (and, solely with respect to L/C
Issuers, subsection 1.1(c)) and the decisions and actions of Agents, the
Required Lenders, the Required US Lenders or the Required Canadian Lenders (or,
where expressly required by the terms of this Agreement, a greater proportion of
the Lenders or other parties hereto as required herein) to the same extent a
Lender is bound; provided, however, that, notwithstanding the foregoing,
(a) such Secured Party shall be bound by Section 8.8 only to the extent of
Liabilities, costs and expenses with respect to or otherwise relating to the
Collateral held for the benefit of such Secured Party, in which case the
obligations of such Secured Party thereunder shall not be limited by any concept
of pro rata share or similar concept, (b) each of Agents, the Lenders and the
L/C Issuers party hereto shall be entitled to act at its sole discretion,
without regard to the interest of such Secured Party, regardless of whether any
Obligation to such Secured Party thereafter remains outstanding, is deprived of
the benefit of the Collateral, becomes unsecured or is otherwise affected or put
in jeopardy thereby, and without any duty or liability to such Secured Party or
any such Obligation and (c) except as otherwise set forth herein, such Secured
Party shall not have any right to be notified of, consent to, direct, require or
be heard with respect to, any action taken or omitted in respect of the
Collateral or under any Loan Document.

 

ARTICLE IX -

 

MISCELLANEOUS

 

9.1.                            Amendments and Waivers.  (a) No amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by any Credit Party therefrom, shall be
effective unless the same shall be in writing and signed by the Agent, the
Required Lenders (or by Agents with the consent of the Required Lenders), and
the Borrowers and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Lenders directly affected thereby (or by Agents with the consent of all the
Lenders directly affected thereby), in addition to Agents, the Required Lenders
(or by Agents with the consent of the Required Lenders) and the Borrowers, do
any of the following:

 

(i)                                     increase or extend the Commitment of any
Lender (or reinstate any Commitment terminated pursuant to subsection 7.2(a));

 

(ii)                                  postpone or delay any date fixed for, or
reduce or waive, any payment of principal on the Revolving Termination Date or
any payment of interest, fees or other amounts (other than principal) due to the
Lenders (or any of them) or any L/C Issuer hereunder or under any other Loan
Document (for the avoidance of doubt, mandatory

 

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prepayments pursuant to Section 1.8 (other than under subsection 1.8(b)) may be
postponed, delayed, reduced, waived or modified with the consent of Required
Lenders);

 

(iii)                               reduce the principal of, or the rate of
interest specified herein (it being agreed that waiver of the default interest
margin shall only require the consent of Required Lenders) or the amount of
interest payable in cash specified herein on any Loan, or of any fees or other
amounts payable hereunder or under any other Loan Document, including L/C
Reimbursement Obligations;

 

(iv)                              change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Loans which shall be required for
the Lenders or any of them to take any action hereunder;

 

(v)                                 amend this Section 9.1 or the definition of
Required Lenders or any provision providing for consent or other action by all
Lenders; or

 

(vi)                              discharge any material Credit Party from its
respective payment Obligations under the Loan Documents, or release all or
substantially all of the Collateral, except as otherwise may be provided in this
Agreement or the other Loan Documents; it being agreed that all Lenders shall be
deemed to be directly affected by an amendment or waiver of the type described
in the preceding clauses (iv), (v) and (vi).

 

(b)                                 No amendment, waiver or consent shall,
unless in writing and signed by the Appropriate Agent, the applicable Swingline
Lender or the applicable L/C Issuer, as the case may be, in addition to the
Required Lenders or all Lenders directly affected thereby, as the case may be
(or by Agents with the consent of the Required Lenders or all the Lenders
directly affected thereby, as the case may be), affect the rights or duties of
such Agent, such Swingline Lender or such L/C Issuer, as applicable, under this
Agreement or any other Loan Document.  No amendment, modification or waiver of
this Agreement or any Loan Document altering the ratable treatment of
Obligations arising under Secured Rate Contracts resulting in such Obligations
being junior in right of payment to principal on the Loans or resulting in
Obligations owing to any Secured Swap Provider becoming unsecured (other than
releases of Liens permitted in accordance with the terms hereof), in each case
in a manner adverse to any Secured Swap Provider, shall be effective without the
written consent of such Secured Swap Provider or, in the case of a Secured Rate
Contract provided or arranged by Chase or an Affiliate of Chase.

 

(c)                                  No amendment or waiver shall, unless signed
by US Agent and Required US Lenders (or by US Agent with the consent of Required
US Lenders) in addition to the Required Lenders (or by US Agent with the consent
of the Required Lenders): (i) amend or waive compliance with the conditions
precedent to the obligations of Lenders to make any US Revolving Loan (or of any
US L/C Issuer to issue any Letter of Credit) in Section 2.2; (ii) waive any
Default or Event of Default for the purpose of satisfying the conditions
precedent to the obligations of US Lenders to make any US Revolving Loan (or of
any US L/C Issuer to issue any Letter of Credit) in Section 2.2; (iii) amend or
waive this subsection 9.1(c) or the definitions of the terms used in this
subsection 9.1(c) insofar as the definitions affect the substance of this
subsection 9.1(c); and (iv) change the definition of the term Required US
Lenders.

 

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(d)                                 No amendment or waiver shall, unless signed
by Canadian Agent and Required Canadian Lenders (or by Canadian Agent with the
consent of Required Canadian Lenders) in addition to the Required Lenders (or by
Canadian Agent with the consent of the Required Lenders): (i) amend or waive
compliance with the conditions precedent to the obligations of Lenders to make
any Canadian Revolving Loan (or of any Canadian L/C Issuer to issue any Letter
of Credit) in Section 2.2; (ii) waive any Default or Event of Default for the
purpose of satisfying the conditions precedent to the obligations of Canadian
Lenders to make any Canadian Revolving Loan (or of any Canadian L/C Issuer to
issue any Letter of Credit) in Section 2.2; (iii) amend or waive this subsection
9.1(d) or the definitions of the terms used in this subsection 9.1(d) insofar as
the definitions affect the substance of this subsection 9.1(d); and (iv) change
the definition of the term Required Canadian Lenders.

 

(e)                                  Notwithstanding anything to the contrary
contained in this Section 9.1, (x) the Borrower may amend Schedules 3.19 and
3.21 upon notice to Agents, (y) each Agent may amend Schedule 1.1(b) to reflect
Sales entered into pursuant to Section 9.9, and (z) Agents and the Borrowers may
amend or modify this Agreement and any other Loan Document to (1) cure any
ambiguity, omission, defect or inconsistency therein, or (2) grant a new Lien
for the benefit of the Secured Parties, extend an existing Lien over additional
property for the benefit of the Secured Parties or join additional Persons as
Credit Parties.

 

9.2.                            Notices.

 

(a)                                 Addresses.  All notices and other
communications required or expressly authorized to be made by this Agreement
shall be given in writing, unless otherwise expressly specified herein, and
(i) addressed to the address set forth on the applicable signature page hereto,
(ii) posted to Intralinks® (to the extent such system is available and set up by
or at the direction of Agents prior to posting) in an appropriate location by
uploading such notice, demand, request, direction or other communication to
www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-code fax
coversheet or using such other means of posting to Intralinks® as may be
available and reasonably acceptable to Agents prior to such posting,
(iii) posted to any other E-System approved by or set up by or at the direction
of an Agent or (iv) addressed to such other address as shall be notified in
writing (A) in the case of the Borrowers, Agents and the Swingline Lenders, to
the other parties hereto and (B) in the case of all other parties, to the
Borrowers and Agents; provided, notices sent to the Borrowers of the existence
of an Event of Default, the imposition of default interest, the election of
Agents and/or Required Lenders to suspend the making of Revolving Loans and the
issuance of Letters of Credit in accordance with Section 2.2 and the exercise by
either Agent and/or Required Lenders of their respective enforcement rights and
remedies hereunder shall not be provided solely via Intralinks®.  Transmissions
made by electronic mail or E-Fax to an Agent shall be effective only (x) for
notices where such transmission is specifically authorized by this Agreement,
(y) if such transmission is delivered in compliance with procedures of such
Agent applicable at the time and previously communicated to Borrowers, and
(z) if receipt of such transmission is acknowledged by such Agent.

 

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(b)                                 Effectiveness.

 

(i)                                     All communications described in clause
(a) above and all other notices, demands, requests and other communications made
in connection with this Agreement shall be effective and be deemed to have been
received (i) if delivered by hand, upon personal delivery, (ii) if delivered by
overnight courier service, one (1) Business Day after delivery to such courier
service, (iii) if delivered by mail, when deposited in the mail, (iv) if
delivered by facsimile (other than to post to an E-System pursuant to clause
(a)(ii) or (a)(iii) above), upon sender’s receipt of confirmation of proper
transmission, and (v) if delivered by posting to any E-System, on the later of
the Business Day of such posting and the Business Day access to such posting is
given to the recipient thereof in accordance with the standard procedures
applicable to such E-System; provided, however, that no communications to an
Agent pursuant to Article I shall be effective until received by such Agent.

 

(ii)                                  The posting, completion and/or submission
by any Credit Party of any communication pursuant to an E-System shall
constitute a representation and warranty by the Credit Parties that any
representation, warranty, certification or other similar statement required by
the Loan Documents to be provided, given or made by a Credit Party in connection
with any such communication is true, correct and complete except as expressly
noted in such communication or E-System.

 

(c)                                  Each Lender shall notify Agents in writing
of any changes in the address to which notices to such Lender should be
directed, of addresses of its Lending Office, of payment instructions in respect
of all payments to be made to it hereunder and of such other administrative
information as an Agent shall reasonably request.

 

9.3.                            Electronic Transmissions.

 

(a)                                 Authorization.  Subject to the provisions of
subsection 9.2(a), each of Agents, Lenders, each Credit Party and each of their
Related Persons, is authorized (but not required) to transmit, post or otherwise
make or communicate, in its sole discretion, Electronic Transmissions in
connection with any Loan Document and the transactions contemplated therein. 
Each Credit Party and each Secured Party hereto acknowledges and agrees that the
use of Electronic Transmissions is not necessarily secure and that there are
risks associated with such use, including risks of interception, disclosure and
abuse and each indicates it assumes and accepts such risks by hereby authorizing
the transmission of Electronic Transmissions.

 

(b)                                 Signatures.  Subject to the provisions of
subsection 9.2(a), (i)(A) no posting to any E-System shall be denied legal
effect merely because it is made electronically, (B) each E Signature on any
such posting shall be deemed sufficient to satisfy any requirement for a
“signature” and (C) each such posting shall be deemed sufficient to satisfy any
requirement for a “writing”, in each case including pursuant to any Loan
Document, any applicable provision of any UCC, the PPSA, the Electronic Commerce
Act, 2000 (Ontario), the federal Uniform Electronic Transactions Act, the
Electronic Signatures in Global and National Commerce Act and any substantive or
procedural Requirement of Law governing such subject matter, (ii) each such
posting that is not readily capable of bearing either a signature or a
reproduction of a

 

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signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which each Agent,
each other Secured Party and each Credit Party may rely and assume the
authenticity thereof, (iii) each such posting containing a signature, a
reproduction of a signature or an E-Signature shall, for all intents and
purposes, have the same effect and weight as a signed paper original and (iv)
each party hereto or beneficiary hereto agrees not to contest the validity or
enforceability of any posting on any E-System or E-Signature on any such posting
under the provisions of any applicable Requirement of Law requiring certain
documents to be in writing or signed; provided, however, that nothing herein
shall limit such party’s or beneficiary’s right to contest whether any posting
to any E-System or E-Signature has been altered after transmission.

 

(c)                                  Separate Agreements.  All uses of an
E-System shall be governed by and subject to, in addition to Section 9.2 and
this Section 9.3, the separate terms, conditions and privacy policy posted or
referenced in such E-System (or such terms, conditions and privacy policy as may
be updated from time to time, including on such E-System) and related
Contractual Obligations executed by an Agent and Credit Parties in connection
with the use of such E-System.

 

(d)                                 LIMITATION OF LIABILITY.  ALL E-SYSTEMS AND
ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”.  NONE OF
AGENTS, ANY LENDER OR ANY OF THEIR RELATED PERSONS WARRANTS THE ACCURACY,
ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION AND
DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN.  NO WARRANTY OF ANY
KIND IS MADE BY AGENTS, ANY LENDER OR ANY OF THEIR RELATED PERSONS IN CONNECTION
WITH ANY E SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF
THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS.  Each of the
Borrowers, each other Credit Party executing this Agreement and each Secured
Party agrees that no Agent has responsibility for maintaining or providing any
equipment, software, services or any testing required in connection with any
Electronic Transmission or otherwise required for any E-System.

 

9.4.                            No Waiver; Cumulative Remedies.  No failure to
exercise and no delay in exercising, on the part of an Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  No course of dealing
between any Credit Party, any Affiliate of any Credit Party, an Agent or any
Lender shall be effective to amend, modify or discharge any provision of this
Agreement or any of the other Loan Documents.

 

9.5.                            Costs and Expenses.  Any action taken by any
Credit Party under or with respect to any Loan Document, even if required under
any Loan Document or at the request of an Agent, Required Lenders, Required US
Lenders or Required Canadian Lenders shall be at the expense of such Credit
Party, and neither an Agent nor any other Secured Party shall be required under
any Loan Document to reimburse any Credit Party or any Subsidiary of any Credit
Party therefor

 

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except as expressly provided therein.  In addition, the Borrowers agree to pay
or reimburse upon demand (a) each Agent for all reasonable, documented
out-of-pocket costs and expenses incurred by it or any of its Related Persons,
in connection with the investigation, development, preparation, negotiation,
syndication, execution or administration of, any modification of any term of or
termination of, any Loan Document, any commitment or proposal letter therefor,
any other document prepared in connection therewith or the consummation and
administration of any transaction contemplated therein, in each case including
Attorney Costs of Agents, the cost of environmental audits, Collateral audits
and appraisals, background checks and similar expenses, to the extent permitted
hereunder, (b) each Agent for all reasonable costs and out-of-pocket expenses
incurred by it or any of its Related Persons in connection with internal audit
reviews, field examinations and Collateral examinations (which shall be
reimbursed, in addition to the reasonable, documented out-of-pocket costs and
expenses of such examiners, at the per diem rate per individual charged by such
Agent for its examiners) to the extent required by the terms hereof, (c) each of
each Agent, its Related Persons, and L/C Issuer for all reasonable, documented
costs and out-of-pocket expenses incurred in connection with (i) any refinancing
or restructuring of the credit arrangements provided hereunder in the nature of
a “work-out”, (ii) the enforcement or preservation of any right or remedy under
any Loan Document, any Obligation, with respect to the Collateral or any other
related right or remedy or (iii) the commencement, defense, conduct of,
intervention in, or the taking of any other action with respect to, any
proceeding (including any bankruptcy or insolvency proceeding) related to any
Credit Party, any Subsidiary of any Credit Party, Loan Document, Obligation or
Second Lien Indebtedness Document (or the response to and preparation for any
subpoena or request for document production relating thereto), including
Attorney Costs and (d) ees and disbursements of Attorney Costs of one law firm
on behalf of all Lenders (other than Agent) incurred in connection with any of
the matters referred to in clause (c) above.

 

9.6.                            Indemnity.

 

(a)                                 Each Credit Party agrees to indemnify, hold
harmless and defend each Agent, each Lender, each L/C Issuer and each of their
respective Related Persons (each such Person being an “Indemnitee”) from and
against all Liabilities (including brokerage commissions, fees and other
compensation) that may be imposed on, incurred by or asserted against any such
Indemnitee in any matter relating to or arising out of, in connection with or as
a result of (i) any Loan Document, any Second Lien Indebtedness Document, any
Obligation (or the repayment thereof), any Letter of Credit, the use or intended
use of the proceeds of any Loan or the use of any Letter of Credit or any
securities filing of, or with respect to, any Credit Party, (ii) any commitment
letter, proposal letter or term sheet with any Person or any Contractual
Obligation, arrangement or understanding with any broker, finder or consultant,
in each case entered into by or on behalf of any Credit Party or any Affiliate
of any of them in connection with any of the foregoing and any Contractual
Obligation entered into in connection with any E-Systems or other Electronic
Transmissions, (iii) any actual or prospective investigation, litigation or
other proceeding, whether or not brought by any such Indemnitee or any of its
Related Persons, any holders of securities or creditors (and including
attorneys’ fees in any case), whether or not any such Indemnitee, Related
Person, holder or creditor is a party thereto, and whether or not based on any
securities or commercial law or regulation or any other Requirement of Law or
theory thereof, including common law, equity, contract, tort or otherwise or
(iv) any other act, event or transaction related, contemplated in or attendant
to any of the foregoing

 

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(collectively, the “Indemnified Matters”).  WITHOUT LIMITATION OF THE FOREGOING,
IT IS THE INTENTION OF EACH CREDIT PARTY AND EACH CREDIT PARTY AGREES THAT THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES,
CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES (INCLUDING, WITHOUT
LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN WHOLE
OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY
OTHER) INDEMNITEE; provided, however, that notwithstanding the foregoing, no
Credit Party shall have any liability under this Section 9.6 to any Indemnitee
with respect to any Indemnified Matter, and no Indemnitee shall have any
liability with respect to any Indemnified Matter other than (to the extent
otherwise liable), to the extent such liability has resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee, as determined by
a court of competent jurisdiction in a final non-appealable judgment or order. 
Furthermore, each of the Borrowers and each other Credit Party executing this
Agreement waives and agrees not to assert against any Indemnitee, and shall
cause each other Credit Party to waive and not assert against any Indemnitee,
any right of contribution with respect to any Liabilities that may be imposed
on, incurred by or asserted against any Related Person, to the extent such
liability has resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.

 

(b)                                 Without limiting the foregoing, “Indemnified
Matters” includes all Environmental Liabilities, including those arising from,
or otherwise involving, any property of any Credit Party or any Related Person
of any Credit Party or any actual, alleged or prospective damage to property or
natural resources or harm or injury alleged to have resulted from any Release of
Hazardous Materials on, upon or into such property or natural resource or any
property on or contiguous to any Real Estate of any Credit Party or any Related
Person of any Credit Party, whether or not, with respect to any such
Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any
leasehold mortgage, a mortgagee in possession, the successor-in-interest to any
Credit Party or any Related Person of any Credit Party or the owner, lessee or
operator of any property of any Related Person through any foreclosure action,
in each case except to the extent such Environmental Liabilities (i) are
incurred solely following foreclosure by Agent or following Agent or any Lender
having become the successor-in-interest to any Credit Party or any Related
Person of any Credit Party and (ii) are attributable solely to acts of such
Indemnitee.

 

9.7.                            Marshaling; Payments Set Aside.  No Secured
Party shall be under any obligation to marshal any property in favor of any
Credit Party or any other Person or against or in payment of any Obligation.  To
the extent that any Secured Party receives a payment from Borrower, from any
other Credit Party, from the proceeds of the Collateral, from the exercise of
its rights of setoff, any enforcement action or otherwise, and such payment is
subsequently, in whole or in part, invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not occurred.

 

9.8.                            Successors and Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided

 

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that any assignment by any Lender shall be subject to the provisions of Section
9.9, and provided further that no Borrower may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Agent and each Lender.

 

9.9.                            Assignments and Participations; Binding Effect.

 

(a)                                 Binding Effect.  This Agreement shall become
effective when it shall have been executed by Holdings, the Borrowers, the other
Credit Parties signatory hereto and Agents and when US Agent shall have been
notified by each Lender that such Lender has executed it.  Thereafter, it shall
be binding upon and inure to the benefit of, but only to the benefit of,
Holdings, the Borrowers, the other Credit Parties hereto (in each case except
for Article VIII), each Agent, each Lender and each L/C Issuer party hereto and,
to the extent provided in Section 8.11, each other Secured Party and, in each
case, their respective successors and permitted assigns.  Except as expressly
provided in any Loan Document (including in Section 8.9), none of Holdings, the
Borrowers, any other Credit Party, any L/C Issuer or Agents shall have the right
to assign any rights or obligations hereunder or any interest herein.

 

(b)                                 Right to Assign.  Each Lender may sell,
transfer, negotiate or assign (a “Sale”) all or a portion of its rights and
obligations hereunder (including all or a portion of its Commitments and its
rights and obligations with respect to Loans and Letters of Credit) to (i) any
existing Lender (other than a Non-Funding Lender or Impacted Lender), (ii) any
Affiliate or Approved Fund of any existing Lender (other than a Non-Funding
Lender or Impacted Lender) or (iii) any other Person acceptable (which
acceptance shall not be unreasonably withheld or delayed) to Agents and each L/C
Issuer that is a Lender and, as long as no Specified Event of Default is
continuing, the Borrowers (which acceptances of L/C Issuer and the Borrowers
shall be deemed to have been given unless an objection is delivered to US Agent
within five (5) Business Days after notice of a proposed Sale is delivered to
the Borrowers); provided, however, that (v) such Sales must be ratable among the
obligations owing to and owed by such Lender (and its Affiliates and Approved
Funds) with respect to US Revolving Loans and Canadian Revolving Loans (and the
Commitments with respect thereto), (w) for each Loan, the aggregate outstanding
principal amount (determined as of the effective date of the applicable
Assignment) of the Loans, Commitments and Letter of Credit Obligations subject
to any such Sale shall be in a minimum amount of $1,000,000 with respect to each
of the US Revolving Loan Commitment and the Canadian Revolving Loan Commitment,
unless such Sale is made to an existing Lender or an Affiliate or Approved Fund
of any existing Lender, is of the assignor’s (together with its Affiliates and
Approved Funds) entire interest in such facility or is made with the prior
consent of the Borrowers (to the extent Borrowers’ consent is otherwise
required) and Agents, (x) interest accrued prior to and through the date of any
such Sale may not be assigned, (y) such Sales by Lenders who are Non-Funding
Lenders due to clause (a) of the definition of Non-Funding Lenders shall be
subject to Agents’ prior written consent in all instances, unless in connection
with such sale, such Non-Funding Lender cures, or causes the cure of, its
Non-Funding Lender status as contemplated in subsection 1.11(e)(v) and (z) the
Borrowers’ consent shall be required (and may be withheld in the Borrowers’
discretion notwithstanding the foregoing) with respect to an assignment to (I)
any Person identified on the List of Identified Financial Institutions prepared
by Borrowers and delivered to US Agent prior to the Closing Date (as such list
is in effect on the Closing Date without any revision or update thereto not
consented to in writing by US Agent in its sole discretion), which List of
Identified Financial

 

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Institutions shall be provided to any Lender (or prospective Lender) upon such
Lender’s (or prospective Lender’s) request and (II) a Person (A) who is set
forth on the List of Competitors (which List of Competitors shall be provided to
any Lender (or prospective Lender) upon such Lender’s (or prospective Lender’s)
request) prepared by Borrowers and delivered to US Agent prior to the Closing
Date (as such list may be updated not more than two (2) times during any twelve
(12) consecutive month period; provided any new Person added to such list shall
be reasonably determined by US Agent and Borrowers to be in direct competition
with the business of the Borrowers as conducted on the date hereof) (each Person
included on such List of Competitors, a “Competitor”), (B) a Person who owns,
directly or indirectly, a majority of the equity securities of a Competitor
(such Person, a “Competitor Owner”), (C) a Person who is controlled by a
Competitor Owner (for the purposes hereof, “control” being the power to direct
or cause the direction of management and policies of a person, whether by
contract or otherwise) or (D) a direct or indirect Subsidiary of a Competitor;
provided, further, that the List of Identified Financial Institutions shall not
be permitted to be updated more than one (1) time during any twelve (12)
consecutive month period or, in any event, without the consent of US Agent. 
Neither any Agent nor any assigning Lender shall have any duty to inquire as to
whether any prospective Lender is a Person described in the preceding clauses
(I) or (II), nor shall any Agent or any assigning Lender incur any liability to
any Credit Party or any other Person for consummating a Sale to a Person
described in the preceding clauses (I) or (II), it being agreed to and
understood that the applicable Assignment shall contain representations and
warranties by the assignee Lender that it is not a Person described in the
preceding clauses (I) or (II) and such assignee Lender shall be solely liable
for any breach of such representation and warranty.  An Agent’s refusal to
accept a Sale to a Credit Party, an Affiliate of a Credit Party, a holder of
Subordinated Indebtedness or an Affiliate of such a holder, or to a Person that
would be a Non-Funding Lender or an Impacted Lender, or the imposition of
conditions or limitations (including limitations on voting) upon Sales to such
Persons, shall not be deemed to be unreasonable.

 

(c)                                  Procedure.  The parties to each Sale made
in reliance on clause (b) above (other than those described in clause (e) or (f)
below) shall execute and deliver to the Appropriate Agent an Assignment via an
electronic settlement system designated by Agents (or, if previously agreed with
Agents, via a manual execution and delivery of the Assignment) evidencing such
Sale, together with any existing Note subject to such Sale (or any affidavit of
loss therefor acceptable to Agents), any tax forms required to be delivered
pursuant to Section 10.1 and payment of an assignment fee in the amount of
$3,500 to the Appropriate Agent, unless waived or reduced by such Agent;
provided that (i) if a Sale by a Lender is made to an Affiliate or an Approved
Fund of such assigning Lender, then no assignment fee shall be due in connection
with such Sale, and (ii) if a Sale by a Lender is made to an assignee that is
not an Affiliate or Approved Fund of such assignor Lender, and concurrently to
one or more Affiliates or Approved Funds of such assignee, then only one
assignment fee of $3,500 shall be due in connection with such Sale (unless
waived or reduced by Agent).  Upon receipt of all the foregoing, and conditioned
upon such receipt and, if such Assignment is made in accordance with clause
(iii) of subsection 9.9(b), upon Agents (and the Borrowers, if applicable)
consenting to such Assignment, from and after the effective date specified in
such Assignment, Agent shall record or cause to be recorded in the Register the
information contained in such Assignment to the extent applicable.

 

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(d)                                 Effectiveness.  Subject to the recording of
an Assignment by US Agent in the Register pursuant to subsection 1.4(b) to the
extent applicable, (i) the assignee thereunder shall become a party hereto and,
to the extent that rights and obligations under the Loan Documents have been
assigned to such assignee pursuant to such Assignment, shall have the rights and
obligations of a Lender, (ii) any applicable Note shall be transferred to such
assignee through such entry and (iii) the assignor thereunder shall, to the
extent that rights and obligations under this Agreement have been assigned by it
pursuant to such Assignment, relinquish its rights (except for those surviving
the termination of the Commitments and the payment in full of the Obligations)
and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment covering all or the remaining portion of an assigning
Lender’s rights and obligations under the Loan Documents, such Lender shall
cease to be a party hereto).

 

(e)                                  Grant of Security Interests.  In addition
to the other rights provided in this Section 9.9, each Lender may grant a
security interest in, or otherwise assign as collateral, any of its rights under
this Agreement, whether now owned or hereafter acquired (including rights to
payments of principal or interest on the Loans), to (A) any federal reserve bank
(pursuant to Regulation A of the Federal Reserve Board), without notice to Agent
or (B) any holder of, or trustee for the benefit of the holders of, such
Lender’s Indebtedness or equity securities, by notice to Agents; provided,
however, that no such holder or trustee, whether because of such grant or
assignment or any foreclosure thereon (unless such foreclosure is made through
an assignment in accordance with clause (b) above), shall be entitled to any
rights of such Lender hereunder and no such Lender shall be relieved of any of
its obligations hereunder.

 

(f)                                   Participants and SPVs.  In addition to the
other rights provided in this Section 9.9, each Lender may, (x) with notice to
Agents, grant to an SPV the option to make all or any part of any Loan that such
Lender would otherwise be required to make hereunder (and the exercise of such
option by such SPV and the making of Loans pursuant thereto shall satisfy the
obligation of such Lender to make such Loans hereunder) and such SPV may assign
to such Lender the right to receive payment with respect to any Obligation and
(y) without notice to or consent from Agents or the Borrowers, sell
participations to one or more Persons in or to all or a portion of its rights
and obligations under the Loan Documents (including all its rights and
obligations with respect to the Revolving Loans and Letters of Credit);
provided, however, that, whether as a result of any term of any Loan Document or
of such grant or participation, (i) no such SPV or participant shall have a
commitment, or be deemed to have made an offer to commit, to make Loans
hereunder, and, except as provided in the applicable option agreement, none
shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s
rights and obligations, and the rights and obligations of the Credit Parties and
the Secured Parties towards such Lender, under any Loan Document shall remain
unchanged and each other party hereto shall continue to deal solely with such
Lender, which shall remain the holder of the Obligations in the Register, except
that (A) each such participant and SPV shall be entitled to the benefit of
Article X, but, with respect to Section 10.1, only to the extent such
participant or SPV delivers the tax forms such Lender is required to collect
pursuant to subsection 10.1(f) and then only to the extent of any amount to
which such Lender would be entitled in the absence of any such grant or
participation and (B) each such SPV may receive other payments that would
otherwise be made to such Lender with respect to Loans funded by such SPV to the
extent provided in the applicable option agreement and set forth in a notice
provided to Agent by such SPV and such

 

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Lender, provided, however, that in no case (including pursuant to clause (A) or
(B) above) shall an SPV or participant have the right to enforce any of the
terms of any Loan Document, and (iii) the consent of such SPV or participant
shall not be required (either directly, as a restraint on such Lender’s ability
to consent hereunder or otherwise) for any amendments, waivers or consents with
respect to any Loan Document or to exercise or refrain from exercising any
powers or rights such Lender may have under or in respect of the Loan Documents
(including the right to enforce or direct enforcement of the Obligations),
except for those described in clauses (ii) and (iii) of subsection 9.1(a) with
respect to amounts, or dates fixed for payment of amounts, to which such
participant or SPV would otherwise be entitled and, in the case of participants,
except for those described in clause (vi) of subsection 9.1(a).  No party hereto
shall institute (and the Borrowers and Holdings shall cause each other Credit
Party not to institute) against any SPV grantee of an option pursuant to this
clause (f) any bankruptcy, reorganization, insolvency, liquidation or similar
proceeding, prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper of such SPV; provided, however, that
each Lender having designated an SPV as such agrees to indemnify each Indemnitee
against any Liability that may be incurred by, or asserted against, such
Indemnitee as a result of failing to institute such proceeding (including a
failure to get reimbursed by such SPV for any such Liability).  The agreement in
the preceding sentence shall survive the termination of the Commitments and the
payment in full of the Obligations.

 

9.10.                     Non-Public Information; Confidentiality.

 

(a)                                 Non-Public Information.  Each Agent, each
Lender and each L/C Issuer acknowledges and agrees that it may receive material
non-public information (“MNPI”) hereunder concerning the Credit Parties and
their Affiliates and agrees to use such information in compliance with all
relevant policies, procedures and applicable Requirements of Laws (including
United States federal and state securities laws and regulations).

 

(b)                                 Confidential Information.  Each Lender, each
L/C Issuer and each Agent agrees to use all reasonable efforts to maintain, in
accordance with its customary practices, the confidentiality of information
obtained by it pursuant to any Loan Document and designated in writing by any
Credit Party as confidential, except that such information may be disclosed (i)
with the Borrowers’ consent, (ii) to Related Persons of such Lender, L/C Issuer
or Agent, as the case may be, or to any Person that any L/C Issuer causes to
issue Letters of Credit hereunder, that are advised of the confidential nature
of such information and are instructed to keep such information confidential in
accordance with the terms hereof, (iii) to the extent such information presently
is or hereafter becomes (A) publicly available other than as a result of a
breach of this Section 9.10 or (B) available to such Lender, L/C Issuer or Agent
or any of their Related Persons, as the case may be, from a source (other than
any Credit Party) not known by them to be subject to disclosure restrictions,
(iv) to the extent disclosure is required by applicable Requirements of Law or
other legal process or requested or demanded by any Governmental Authority, (v)
to the extent necessary or customary for inclusion in league table measurements,
(vi) (A) to the National Association of Insurance Commissioners or any similar
organization, any examiner or any nationally recognized rating agency or (B)
otherwise to the extent consisting of general portfolio information that does
not identify Credit Parties, (vii) to current or prospective assignees, SPVs
(including the investors or prospective investors therein) or participants,
direct or contractual counterparties to any Secured Rate Contracts and to their
respective Related

 

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Persons, in each case to the extent such assignees, investors, participants,
counterparties or Related Persons agree to be bound by provisions substantially
similar to the provisions of this Section 9.10 (and such Person may disclose
information to their respective Related Persons in accordance with clause (ii)
above), (viii) to any other party hereto, and (ix) in connection with the
exercise or enforcement of any right or remedy under any Loan Document, in
connection with any litigation or other proceeding to which such Lender, L/C
Issuer or Agent or any of their Related Persons is a party or bound, or to the
extent necessary to respond to public statements or disclosures by Credit
Parties or their Related Persons referring to a Lender, L/C Issuer or Agent or
any of their Related Persons.  In the event of any conflict between the terms of
this Section 9.10 and those of any other Contractual Obligation entered into
with any Credit Party (whether or not a Loan Document), the terms of this
Section 9.10 shall govern.

 

(c)                                  Tombstones.  Each Credit Party consents to
the publication by Agents or any Lender of advertising material relating to the
financing transactions contemplated by this Agreement using a Borrower’s or any
other Credit Party’s name, product photographs, logo or trademark.  An Agent or
such Lender shall provide a draft of any advertising material to Borrowers
within a reasonable period of time prior to publication for review and consent
(which consent shall not be unreasonably withheld) prior to the publication
thereof.

 

(d)                                 Press Release and Related Matters.  No
Credit Party shall, and no Credit Party shall permit any of its Affiliates to,
issue any press release or other public disclosure (other than any document
filed with any Governmental Authority relating to a public offering of
securities of any Credit Party) using the name, logo or otherwise referring to
Chase, Chase Canada or of any of their Affiliates, the Loan Documents or any
transaction contemplated therein to which Agent is party without the prior
consent of Chase or Chase Canada, as applicable, except to the extent required
to do so under applicable Requirements of Law and then, only after consulting
with Chase or Chase Canada, as applicable.

 

(e)                                  Distribution of Materials to Lenders and
L/C Issuers.  The Credit Parties acknowledge and agree that the Loan Documents
and all reports, notices, communications and other information or materials
provided or delivered by, or on behalf of, the Credit Parties hereunder
(collectively, the “Borrower Materials”) may be disseminated by, or on behalf
of, Agents, and made available, to the Lenders and the L/C Issuers by posting
such Borrower Materials on an E-System. The Credit Parties authorize Agents to
download copies of their logos from its website and post copies thereof on an
E-System.

 

(f)                                   Material Non-Public Information.  The
Credit Parties hereby agree that if either they, any parent company or any
Subsidiary of the Credit Parties has publicly traded equity or debt securities
in the United States, they shall (and shall cause such parent company or
Subsidiary, as the case may be, to) (i) identify in writing, and (ii) to the
extent reasonably practicable, clearly and conspicuously mark such Borrower
Materials that contain only information that is publicly available or that is
not material for purposes of United States federal and state securities laws as
“PUBLIC”. The Credit Parties agree that by identifying such Borrower Materials
as “PUBLIC” or publicly filing such Borrower Materials with the Securities and
Exchange Commission, then Agents, the Lenders and the L/C Issuers shall be
entitled to treat such Borrower Materials as not containing any MNPI for
purposes of United States federal and state securities laws. The Credit Parties
further represent, warrant, acknowledge and agree

 

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that the following documents and materials shall be deemed to be PUBLIC, whether
or not so marked, and do not contain any MNPI: (A) the Loan Documents, including
the schedules and exhibits attached thereto, and (B) administrative materials of
a customary nature prepared by the Credit Parties or Agents (including, Notices
of Borrowing, Notices of Conversion/Continuation, L/C Requests, Swing Loan
requests and any similar requests or notices posted on or through an E-System).
Before distribution of any Borrower Materials, the Credit Parties agree to
execute and deliver to Agent a letter authorizing distribution of the evaluation
materials to prospective Lenders and their employees willing to receive MNPI,
and a separate letter authorizing distribution of evaluation materials that do
not contain MNPI and represent that no MNPI is contained therein.

 

9.11.                     Set-off; Sharing of Payments.

 

(a)                                 Right of Setoff.  Each of each Agent, each
Lender, each L/C Issuer and each Affiliate (including each branch office
thereof) of any of them is hereby authorized, without notice or demand (each of
which is hereby waived by each Credit Party), at any time and from time to time
during the continuance of any Event of Default and to the fullest extent
permitted by applicable Requirements of Law, to set off and apply any and all
deposits (whether general or special, time or demand, provisional or final) at
any time held and other Indebtedness, claims or other obligations at any time
owing by such Agent, such Lender, such L/C Issuer or any of their respective
Affiliates to or for the credit or the account of a Borrower or any other Credit
Party against any Obligation of any Credit Party now or hereafter existing,
whether or not any demand was made under any Loan Document with respect to such
Obligation and even though such Obligation may be unmatured.  No Lender or L/C
Issuer shall exercise any such right of setoff without the prior consent of
Agents or Required Lenders.  Each of each Agent, each Lender and each L/C Issuer
agrees promptly to notify the Borrowers and Agents after any such setoff and
application made by such Lender or its Affiliates; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application.  The rights under this Section 9.11 are in addition to any other
rights and remedies (including other rights of setoff) that Agents, the Lenders,
the L/C Issuer, their Affiliates and the other Secured Parties, may have.

 

(b)                                 Sharing of Payments, Etc.  If any Lender,
directly or through an Affiliate or branch office thereof, obtains any payment
of any Obligation of any Credit Party (whether voluntary, involuntary or through
the exercise of any right of setoff or the receipt of any Collateral or
“proceeds” (as defined under the applicable UCC) of Collateral) other than
pursuant to Section 9.9 or Article X and such payment exceeds the amount such
Lender would have been entitled to receive if all payments had gone to, and been
distributed by, Agents in accordance with the provisions of the Loan Documents,
such Lender shall purchase for cash from other Lenders such participations in
their Obligations as necessary for such Lender to share such excess payment with
such Lenders to ensure such payment is applied as though it had been received by
Agents and applied in accordance with this Agreement (or, if such application
would then be at the discretion of the Borrowers, applied to repay the
Obligations in accordance herewith); provided, however, that (a) if such payment
is rescinded or otherwise recovered from such Lender or L/C Issuer in whole or
in part, such purchase shall be rescinded and the purchase price therefor shall
be returned to such Lender or L/C Issuer without interest and (b) such Lender
shall, to the fullest extent permitted by applicable Requirements of Law, be
able to exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if

 

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such Lender were the direct creditor of the applicable Credit Party in the
amount of such participation.  If a Non-Funding Lender receives any such payment
as described in the previous sentence, such Lender shall turn over such payments
to the Appropriate Agent in an amount that would satisfy the cash collateral
requirements set forth in subsection 1.11(e).

 

9.12.                     Counterparts; Facsimile Signature.  This Agreement may
be executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. 
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart.  Delivery of an executed signature page of this
Agreement by facsimile transmission or Electronic Transmission shall be as
effective as delivery of a manually executed counterpart hereof.

 

9.13.                     Severability.  The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder.

 

9.14.                     Captions.  The captions and headings of this Agreement
are for convenience of reference only and shall not affect the interpretation of
this Agreement.

 

9.15.                     Independence of Provisions.  The parties hereto
acknowledge that this Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters, and that such limitations, tests and measurements are cumulative and
must each be performed, except as expressly stated to the contrary in this
Agreement.

 

9.16.                     Interpretation.  This Agreement is the result of
negotiations among and has been reviewed by counsel to Credit Parties, Agents,
each Lender and other parties hereto, and is the product of all parties hereto. 
Accordingly, this Agreement and the other Loan Documents shall not be construed
against the Lenders or Agents merely because of Agents’ or Lenders’ involvement
in the preparation of such documents and agreements.  Without limiting the
generality of the foregoing, each of the parties hereto has had the advice of
counsel with respect to Sections 9.18 and 9.19.

 

9.17.                     No Third Parties Benefited.  This Agreement is made
and entered into for the sole protection and legal benefit of the Borrowers, the
Lenders, the L/C Issuers party hereto, Agents and, subject to the provisions of
Section 8.11, each other Secured Party, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary of,
or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.  None of the Agents or any Lender
shall have any obligation to any Person not a party to this Agreement or the
other Loan Documents.

 

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9.18.                     Governing Law and Jurisdiction.

 

(a)                                 Governing Law.  The laws of the State of
Texas shall govern all matters arising out of, in connection with or relating to
this Agreement, including, without limitation, its validity, interpretation,
construction, performance and enforcement.

 

(b)                                 Submission to Jurisdiction.  Any legal
action or proceeding with respect to any Loan Document shall be brought
exclusively in the courts of the State of Texas, City of Austin, Texas, or of
the United States of America sitting in Austin, Texas and, by execution and
delivery of this Agreement, the Borrowers and each other Credit Party executing
this Agreement hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts;
provided that nothing in this Agreement shall limit the right of Agents to
commence any proceeding in the federal or state courts of any other jurisdiction
to the extent an Agent determines that such action is necessary or appropriate
to exercise its rights or remedies under the Loan Documents.  The parties hereto
(and, to the extent set forth in any other Loan Document, each other Credit
Party) hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of
them may now or hereafter have to the bringing of any such action or proceeding
in such jurisdictions.

 

(c)                                  Service of Process.  Each Credit Party
hereby irrevocably waives personal service of any and all legal process,
summons, notices and other documents and other service of process of any kind
and consents to such service in any suit, action or proceeding brought in the
United States of America with respect to or otherwise arising out of or in
connection with any Loan Document by any means permitted by applicable
Requirements of Law, including by the mailing thereof (by registered or
certified mail, postage prepaid) to the address of the Borrowers specified
herein (and shall be effective when such mailing shall be effective, as provided
therein).  Each Credit Party agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

 

(d)                                 Non-Exclusive Jurisdiction.  Nothing
contained in this Section 9.18 shall affect the right of an Agent or any Lender
to serve process in any other manner permitted by applicable Requirements of Law
or commence legal proceedings or otherwise proceed against any Credit Party in
any other jurisdiction.

 

9.19.                     Waiver of Jury Trial.  THE PARTIES HERETO, TO THE
EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, IN CONNECTION WITH OR
RELATING TO, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION
CONTEMPLATED HEREBY AND THEREBY.  THIS WAIVER APPLIES TO ANY ACTION, SUIT OR
PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE. EACH PARTY HERETO
(A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON 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

 

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BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

9.20.                     Entire Agreement; Release; Survival.  THE LOAN
DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDE ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER THEREOF AND ANY
PRIOR LETTER OF INTEREST, COMMITMENT LETTER, CONFIDENTIALITY AND SIMILAR
AGREEMENTS INVOLVING ANY CREDIT PARTY AND ANY LENDER OR ANY L/C ISSUER OR ANY OF
THEIR RESPECTIVE AFFILIATES RELATING TO A FINANCING OF SUBSTANTIALLY SIMILAR
FORM, PURPOSE OR EFFECT. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENT, THE TERMS OF THIS AGREEMENT SHALL GOVERN
(UNLESS SUCH TERMS OF SUCH OTHER LOAN DOCUMENTS ARE NECESSARY TO COMPLY WITH
APPLICABLE REQUIREMENTS OF LAW, IN WHICH CASE SUCH TERMS SHALL GOVERN TO THE
EXTENT NECESSARY TO COMPLY THEREWITH).

 

(a)                                 NOTICE UNDER TEXAS LAW - THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.  THIS INSTRUMENT MAY BE AMENDED ONLY BY AN INSTRUMENT IN WRITING
EXECUTED BY THE PARTIES HERETO.

 

(b)                                 Execution of this Agreement by the Credit
Parties constitutes a full, complete and irrevocable release of any and all
claims which each Credit Party may have at law or in equity in respect of all
prior discussions and understandings, oral or written, relating to the subject
matter of this Agreement and the other Loan Documents.  In no event shall any
Indemnitee be liable on any theory of liability for any special, indirect,
consequential or punitive damages (including any loss of profits, business or
anticipated savings).  Each of the Borrowers and each other Credit Party
signatory hereto hereby waives, releases and agrees (and shall cause each other
Credit Party to waive, release and agree) not to sue upon any such claim for any
special, indirect, consequential or punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.

 

(c)                                  (i) Any indemnification or other protection
provided to any Indemnitee pursuant to this Section 9.20, Sections 9.5 (Costs
and Expenses), and 9.6 (Indemnity), and Articles VIII (Agent) and X (Taxes,
Yield Protection and Illegality), and (ii) the provisions of Section 8.1 of the
Guaranty and Security Agreement, in each case, shall (x) survive the termination
of the Commitments and the payment in full of all other Obligations and (y) with
respect to clause (i) above, inure to the benefit of any Person that at any time
held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its
successors and permitted assigns.

 

9.21.                     Patriot Act.  Each Lender that is subject to the
Patriot Act and Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) hereby notifies the Credit Parties that pursuant to the requirements of
such laws, it is required to obtain, verify and record information

 

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that identifies each Credit Party, which information includes the name and
address of each Credit Party and other information that will allow such Lender
to identify each Credit Party in accordance with each such Act.

 

9.22.                     Replacement of Lender.  Within forty-five days after:
(i) receipt by the a Borrower of written notice and demand from any Lender (an
“Affected Lender”) for payment of additional costs as provided in Sections 10.1,
10.3 and/or 10.6; or (ii) any failure by any Lender (other than an Agent or an
Affiliate of an Agent) to consent to a requested amendment, waiver or
modification to any Loan Document in which Required Lenders have already
consented to such amendment, waiver or modification but the consent of each
Lender (or each Lender directly affected thereby, as applicable) is required
with respect thereto, such Borrower may, at its option, notify Agents and such
Affected Lender (or such non-consenting Lender) of such Borrower’s intention to
obtain, at such Borrower’s expense, a replacement Lender (“Replacement Lender”)
for such Affected Lender (or such non-consenting Lender), which Replacement
Lender shall be reasonably satisfactory to Agents.  In the event such Borrower
obtains a Replacement Lender within forty-five (45) days following notice of its
intention to do so, the Affected Lender (or such non-consenting Lender) shall
sell and assign its Loans and Commitments to such Replacement Lender, at par,
provided that such Borrower has reimbursed such Affected Lender for its
increased costs for which it is entitled to reimbursement under this Agreement
through the date of such sale and assignment.  In the event that a replaced
Lender does not execute an Assignment pursuant to Section 9.9 within five (5)
Business Days after receipt by such replaced Lender of notice of replacement
pursuant to this Section 9.22 and presentation to such replaced Lender of an
Assignment evidencing an assignment pursuant to this Section 9.22, such Borrower
shall be entitled (but not obligated) to execute such an Assignment on behalf of
such replaced Lender, and any such Assignment so executed by such Borrower, the
Replacement Lender and the Appropriate Agent, shall be effective for purposes of
this Section 9.22 and Section 9.9.  Notwithstanding the foregoing, with respect
to a Lender that is a Non-Funding Lender or an Impacted Lender, an Agent or a
Borrower may, but shall not be obligated to, obtain a Replacement Lender and
execute an Assignment on behalf of such Non-Funding Lender or Impacted Lender at
any time with three (3) Business Days prior notice to such Lender or an Impacted
Lender (unless notice is not practicable under the circumstances) and cause such
Lender’s Loans and Commitments to be sold and assigned, in whole or in part, at
par; provided, such Replacement Lender identified by a Borrower shall be
reasonably acceptable to the Agents.  Upon any such assignment and payment and
compliance with the other provisions of Section 9.9, such replaced Lender shall
no longer constitute a “Lender” for purposes hereof; provided, any rights of
such replaced Lender to indemnification hereunder shall survive.

 

9.23.                     Joint and Several.  The obligations of (a) the Credit
Parties hereunder and under the other Loan Documents are joint and several with
respect to such Credit Parties in accordance and to the extent set forth herein
and in the other Loan Documents and (b) the Canadian Credit Parties are joint
and several with respect to such Credit Parties in accordance and to the extent
set forth herein and in the other Loan Documents.  Without limiting the
generality of the foregoing, reference is hereby made to Article II of the
Guaranty and Security Agreement, to which the obligations of Borrower and the
other Credit Parties are subject.

 

9.24.                     Creditor-Debtor Relationship.  The relationship
between each Agent, each Lender and the L/C Issuer, on the one hand, and the
Credit Parties, on the other hand, is solely that of

 

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creditor and debtor.  No Secured Party has any fiduciary relationship or duty to
any Credit Party arising out of or in connection with, and there is no agency,
tenancy or joint venture relationship between the Secured Parties and the Credit
Parties by virtue of, any Loan Document or any transaction contemplated therein.

 

9.25.                     Risk Participation.

 

(a)                                 Prior to the occurrence of a Reallocation
Event, all payments of principal, accrued interest and fees, including all
optional and mandatory prepayments of principal made pursuant to Section 1.7 and
1.8 of this Agreement, shall be applied in accordance with the terms of this
Agreement (other than this Section 9.25).

 

(b)                                 On the date of a Reallocation Event, the
Lenders shall automatically be deemed to have purchased and sold (without any
obligation to advance funds), effective as of the date of such Reallocation
Event, sufficient participations in the other Loans so that, as a result of such
purchases and sales, all of the Lenders of each Loan will hold an interest in
each of the Revolving Loans in proportion to their respective Reallocation
Percentages.

 

(c)                                  After the occurrence of a Reallocation
Event, subject to subsection 1.10(c), all payments made with respect to the
Loans and proceeds of Collateral securing the Loans shall be applied by the
Agents to each Loan and distributed by the Agents to all of the Lenders in
accordance with their respective Reallocation Percentages (it being understood
that neither payments made by the Canadian Borrower nor proceeds of the Canadian
Borrower’s or any of its Subsidiary’s shall be applied to the US Loans; it being
understood and agreed, however, that in the case of any such Foreign Subsidiary
all of the outstanding voting equity interest of which are owned by a Credit
Party that is incorporated or otherwise organized under the laws of a State of
the United States of America, payments with respect to or proceeds of 65% of
such Subsidiary’s outstanding voting equity interest and 100% of such Foreign
Subsidiary’s outstanding non-voting equity interest may be applied to the US
Loans).

 

(d)                                 Each Lender holding a participation acquired
pursuant to this Section 9.25 shall be deemed to be a holder of such
participation for all purposes of this Agreement.

 

(e)                                  Each Lender’s obligations to purchase
participations or to make post-Reallocation Event advances under this Agreement
are, subject to all applicable laws, absolute and unconditional, shall be made
without setoff, counterclaim or deduction of any kind, and shall not be subject
to the defense of commercial frustration or failure of performance by any Credit
Party or any so-called suretyship or similar equitable or legal discharges or
defenses, including, without limitation, (i) the financial condition of any
Credit Party at any time, (ii) the insolvency or bankruptcy of any Credit Party
or the inability of any Credit Party to pay its debts as they accrue, (iii) the
discharge of any obligations of any Credit Party in any bankruptcy or other
insolvency proceeding, (iv) the invalidity of any documents evidencing or
securing any obligations of any Credit Party under any of the Loan Documents,
(v) any action or inaction of any Agent or any other Lenders under any of the
Loan Documents, including the release or other disposition of Collateral or lack
of diligence in collection or realization for any obligations of any Credit
Party, (vi) the dissolution or non-existence of any Credit Party as a legal
entity, (vii) any amendment, renewal or extension in respect of any of the Loan
Documents, (viii) the

 

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adequacy of the Collateral to satisfy all or any of the Obligations, (ix) the
loss or non-existence of any subrogation rights on behalf of any Lender, or (x)
any fraud or misappropriation of funds or property by or on behalf of any Credit
Party.

 

(f)                                   All purchases of participations pursuant
to this Section 9.25 shall be without recourse or warranty of any kind or nature
to the Lenders selling such participations, other than warranties of title and
non-encumbrance with respect to the participations being purchased and sold. 
For the avoidance of doubt in respect of any participation transferred under
this Section 9.25, subject to clause (d) of this Section 9.25, the transferor of
such participation shall, for purposes of this Agreement, remain the Lender of
record.

 

(g)                                  The Credit Parties shall have no
obligations under this Section 9.25.

 

ARTICLE X -

 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

10.1.                     Taxes.

 

(a)                                 Except as otherwise provided in this Section
10.1, each payment by any Credit Party under any Loan Document shall be made
free and clear of all present or future taxes, levies, imposts, deductions,
charges or withholdings and all liabilities with respect thereto (and without
deduction for any of them) (collectively, but excluding the taxes set forth in
clauses (i), (ii) and (iii) below, the “Taxes”) other than for (i) taxes
measured by net income (including branch profits taxes) and franchise taxes
imposed in lieu of net income taxes, in each case imposed on any Secured Party
as a result of a present or former connection between such Secured Party and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than such connection
arising solely from any Secured Party having executed, delivered or performed
its obligations or received a payment under, or enforced, any Loan Document),
(ii) taxes that are directly attributable to the failure (other than, as a
result of a change in any Requirement of Law) by any Secured Party to deliver
the documentation required to be delivered pursuant to clause (f) below, or
(iii) any taxes imposed as a result of the failure (other than, as a result of a
change in any Requirement of Law) of any Non-U.S. Lender Party to satisfy the
information gathering and reporting requirements as set forth in sections 1471
through 1474 of the Code.

 

(b)                                 If any Taxes shall be required by law to be
deducted from or in respect of any amount payable under any Loan Document to any
Secured Party (i) such amount shall be increased as necessary to ensure that,
after all required deductions for Taxes are made (including deductions
applicable to any increases to any amount under this Section 10.1), such Secured
Party receives the amount it would have received had no such deductions been
made, (ii) the relevant Credit Party shall make such deductions, (iii) the
relevant Credit Party shall timely pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable Requirements
of Law and (iv) within 30 days after such payment is made, the relevant Credit
Party shall deliver to the Appropriate Agent an original or certified copy of a
receipt evidencing such payment; provided, however, that no such increase shall
be made with respect to, and no Credit Party shall be required to indemnify any
Secured Party pursuant to clause (d)

 

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below for, withholding taxes to the extent that the obligation to withhold
amounts existed on the date that such Person became a “Secured Party” under this
Agreement in the capacity under which such Person makes a claim under this
clause (b), except in each case to the extent such Person is a direct or
indirect assignee (other than pursuant to Section 9.22) of any other Secured
Party and to the extent such Secured Party was entitled, at the time the
assignment to such Person became effective, to receive additional amounts under
this clause (b).

 

(c)                                  In addition, the Borrowers agree to pay,
and authorize each Agent to pay in their name, any stamp, documentary, excise or
property tax, charges or similar levies imposed by any applicable Requirement of
Law or Governmental Authority and all Liabilities with respect thereto
(including by reason of any delay in payment thereof), in each case arising from
the execution, delivery or registration of, or otherwise with respect to, any
Loan Document or any transaction contemplated therein (collectively, “Other
Taxes”).  The Swingline Lenders may, without any need for notice, demand or
consent from the Borrowers, by making funds available to the Appropriate Agent
in the amount equal to any such payment, make a Swing Loan to the applicable
Borrower in such amount, the proceeds of which shall be used by such Agent in
whole to make such payment.  Within 30 days after the date of any payment of
Taxes or Other Taxes by any Credit Party, the Borrowers shall furnish to Agents,
at its address referred to in Section 9.2, the original or a certified copy of a
receipt evidencing payment thereof.

 

(d)                                 The Borrowers shall reimburse and indemnify,
within 30 days after receipt of demand therefor (with copy to Agents), each
Secured Party for all Taxes and Other Taxes (including any Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section 10.1) paid by
such Secured Party and any Liabilities arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted.  A certificate of the Secured Party (or of an Agent on behalf of such
Secured Party) claiming any compensation under this clause (d), setting forth
the amounts to be paid thereunder and delivered to the Borrowers with copy to
Agents, shall be conclusive, binding and final for all purposes, absent manifest
error.  In determining such amount, such Agent and such Secured Party may use
any reasonable averaging and attribution methods.

 

(e)                                  Any Lender claiming any additional amounts
payable pursuant to this Section 10.1 shall use its reasonable efforts
(consistent with its internal policies and Requirements of Law) to change the
jurisdiction of its lending office if such a change would reduce any such
additional amounts (or any similar amount that may thereafter accrue) and would
not, in the sole determination of such Lender, be otherwise disadvantageous to
such Lender.

 

(f)                                   (i) Each Non-U.S. Lender Party that, at
any of the following times, is entitled to an exemption from United States
withholding tax or, after a change in any Requirement of Law, is subject to such
withholding tax at a reduced rate under an applicable tax treaty, shall (w) on
or prior to the date such Non-U.S. Lender Party becomes a “Non-U.S. Lender
Party” hereunder, (x) on or prior to the date on which any such form or
certification expires or becomes obsolete, (y) after the occurrence of any event
requiring a change in the most recent form or certification previously delivered
by it pursuant to this clause (i) and (z) from time to time if requested by the
US Borrower or US Agent (or, in the case of a participant or SPV, the relevant
Lender), provide US Agent and the US Borrower (or, in the case of a participant
or

 

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SPV, the relevant Lender) with two completed originals of each of the following,
as applicable:  (A) Forms W-8ECI (claiming exemption from U.S. withholding tax
because the income is effectively connected with a U.S. trade or business),
W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under
an income tax treaty) and/or W-8IMY or any successor forms, (B) in the case of a
Non-U.S. Lender Party claiming exemption under Sections 871(h) or 881(c) of the
Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the
portfolio interest exemption) or any successor form and a certificate in form
and substance acceptable to US Agent that such Non-U.S. Lender Party is not (1)
a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code or (3) a “controlled foreign corporation” described in Section
881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the
IRS certifying as to the entitlement of such Non-U.S. Lender Party to such
exemption from United States withholding tax or reduced rate with respect to all
payments to be made to such Non-U.S. Lender Party under the Loan Documents. 
Unless the Borrowers and Agents have received forms or other documents
satisfactory to them indicating that payments under any Loan Document to or for
a Non-U.S. Lender Party are not subject to United States withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, the Credit
Parties and Agents shall withhold amounts required to be withheld by applicable
Requirements of Law from such payments at the applicable statutory rate.

 

(ii)                                  Each U.S. Lender Party shall (A) on or
prior to the date such U.S. Lender Party becomes a “U.S. Lender Party”
hereunder, (B) on or prior to the date on which any such form or certification
expires or becomes obsolete, (C) after the occurrence of any event requiring a
change in the most recent form or certification previously delivered by it
pursuant to this clause (f) and (D) from time to time if requested by the US
Borrower or an Agent (or, in the case of a participant or SPV, the relevant
Lender), provide Agents and the Borrowers (or, in the case of a participant or
SPV, the relevant Lender) with two completed originals of Form W-9 (certifying
that such U.S. Lender Party is entitled to an exemption from U.S. backup
withholding tax) or any successor form.

 

(iii)                               Each Lender having sold a participation in
any of its Obligations or identified an SPV as such to the Appropriate Agent
shall collect from such participant or SPV the documents described in this
clause (f) and provide them to Appropriate Agent.

 

(g)                                  If an Agent or any Lender receives a refund
of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers
or with respect to which the Borrowers have paid additional amounts pursuant to
this Section 10.1 and provided no Event of Default shall have occurred and be
continuing, such Agent or such Lender, as applicable, shall pay to the
applicable Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrowers under this
section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Agent or such Lender, as the case may
be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, the Borrowers,
upon the request of an Agent or such Lender, shall repay the amount paid over to
the Borrowers (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Appropriate Agent or such Lender in the
event such Agent or such Lender is required to repay such refund to such
Governmental Authority.  This paragraph shall not be construed to require

 

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the Agents or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrower
or any other Person.

 

10.2.                     Illegality.  If after the date hereof any Lender shall
determine that any Change in Law has made it unlawful, or that any central bank
or other Governmental Authority has asserted that it is unlawful, for any Lender
or its Lending Office to make LIBOR Rate Loans, then, on notice thereof by such
Lender to the US Borrower through US Agent, the obligation of that Lender to
make LIBOR Rate Loans shall be suspended until such Lender shall have notified
US Agent and the US Borrower that the circumstances giving rise to such
determination no longer exists.

 

(a)                                 Subject to clause (c) below, if any Lender
shall determine that it is unlawful to maintain any LIBOR Rate Loan, the US
Borrower shall prepay in full all LIBOR Rate Loans of such Lender then
outstanding, together with interest accrued thereon, either on the last day of
the Interest Period thereof if such Lender may lawfully continue to maintain
such LIBOR Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such LIBOR Rate Loans, together with any amounts
required to be paid in connection therewith pursuant to Section 10.4.

 

(b)                                 If the obligation of any Lender to make or
maintain LIBOR Rate Loans has been terminated, the US Borrower may elect, by
giving notice to such Lender through US Agent that all Loans which would
otherwise be made by any such Lender as LIBOR Rate Loans shall be instead Base
Rate Loans.

 

(c)                                  Before giving any notice to US Agent
pursuant to this Section 10.2, the affected Lender shall designate a different
Lending Office with respect to its LIBOR Rate Loans if such designation will
avoid the need for giving such notice or making such demand and will not, in the
judgment of the Lender, be illegal or otherwise disadvantageous to the Lender.

 

10.3.                     Increased Costs and Reduction of Return.

 

(a)                                 If any Lender or L/C Issuer shall determine
that 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 LIBOR Rate) or any L/C Issuer;

 

(ii)                                  impose on any Lender or any L/C Issuer or
the London interbank market any other condition affecting this Agreement or CDOR
Rate Loans or LIBOR Rate Loans made by such Lender or any Letter of Credit or
participation therein; or

 

(iii)                               subject any Lender or any L/C Issuer to any
Taxes on its loans, loan principal, letters of credit, commitments, or other
obligations, or its deposits, reserves, other liabilities or capital
attributable thereto (other than Taxes or Other Taxes as to which such Lender or
L/C Issuer has been indemnified by the Borrowers pursuant to Section 10.1);

 

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and the result of any of the foregoing shall be to increase the cost to such
Lender or L/C Issuer of making, funding or maintaining any CDOR Rate Loan or
LIBOR Rate Loan (or of maintaining its obligation to make any such CDOR Rate
Loan or LIBOR Rate Loan) or to increase the cost to such Lender or such L/C
Issuer 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 such L/C
Issuer hereunder (whether of principal, interest or otherwise), then the
Borrowers shall be liable for, and shall from time to time, within thirty (30)
days of demand therefor by such Lender or L/C Issuer (with a copy of such demand
to Agents), pay to the Appropriate Agent for the account of such Lender or L/C
Issuer, additional amounts as are sufficient to compensate such Lender or L/C
Issuer for such increased costs; provided, that the Borrowers shall not be
required to compensate any Lender or L/C Issuer pursuant to this subsection
10.3(a) for any increased costs incurred more than 180 days prior to the date
that such Lender or L/C Issuer notifies the Borrowers, in writing of the
increased costs and of such Lender’s or L/C Issuer’s intention to claim
compensation thereof; provided, further, that if the circumstance giving rise to
such increased costs is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.

 

(b)                                 If any Lender or L/C Issuer shall have
determined that:

 

(i)                                     any Change in Law regarding any Capital
Adequacy Regulation; or

 

(ii)                                  compliance by such Lender or L/C Issuer
(or its Lending Office) or any entity controlling the Lender or L/C Issuer, with
any Capital Adequacy Regulation;

 

affects the amount of capital required or expected to be maintained by such
Lender or L/C Issuer or any entity controlling such Lender or L/C Issuer and
(taking into consideration such Lender’s or such entities’ policies with respect
to capital adequacy and such Lender’s or L/C Issuer’s desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment(s), loans, credits or obligations under this Agreement, then, within
thirty (30) days of demand of such Lender or L/C Issuer (with a copy to Agents),
the Borrowers shall pay to such Lender or L/C Issuer, from time to time as
specified by such Lender or L/C Issuer, additional amounts sufficient to
compensate such Lender or L/C Issuer (or the entity controlling the Lender or
L/C Issuer)  for such increase; provided, that the Borrowers shall not be
required to compensate any Lender or L/C Issuer pursuant to this subsection
10.3(b) for any amounts incurred more than 180 days prior to the date that such
Lender or L/C Issuer notifies the Borrowers, in writing of the amounts and of
such Lender’s or L/C Issuer’s intention to claim compensation thereof; provided,
further, that if the event giving rise to such increase is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

10.4.                     Funding Losses.  The Borrowers agree to reimburse each
Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of:

 

(a)                                 the failure of a Borrower to make any
payment or mandatory prepayment of principal of any LIBOR Rate Loan or CDOR Rate
Loan (including payments made after any acceleration thereof);

 

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(b)                                 the failure of a Borrower to borrow,
continue or convert a Loan after a Borrower has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/Continuation;

 

(c)                                  the failure of the Borrower to make any
prepayment after the Borrower has given a notice in accordance with Section 1.7;

 

(d)                                 the prepayment (including pursuant to
Section 1.8) of a LIBOR Rate Loan on a day which is not the last day of the
Interest Period with respect thereto, or a CDOR Rate Loan on a day which is not
the last day of the CDOR Period with respect thereto; or

 

(e)                                  the conversion pursuant to Section 1.6 of
any LIBOR Rate Loan to a Base Rate Loan, or of any CDOR Rate Loan to a Canadian
Prime Rate Loan, on a day that is not the last day of the applicable Interest
Period or CDOR Period, as applicable;

 

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained; provided
that, with respect to the expenses described in clauses (d) and (e) above. 
Solely for purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 10.4 and under subsection 10.3(a): each LIBOR Rate
Loan made by a Lender (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the Adjusted
LIBOR Rate used in determining the interest rate for such LIBOR Rate Loan by a
matching deposit or other borrowing in the interbank Eurodollar market for a
comparable amount and for a comparable period, whether or not such LIBOR Rate
Loan is in fact so funded.  The Borrowers shall pay the applicable Lender any
amount required to be paid to such Lender under this Section within fifteen (15)
days after receipt by the Borrowers of a certificate from such Lender of the
type described in Section 10.7 showing the amount so due and payable by the
Borrower.

 

10.5.                     Inability to Determine Rates.

 

(a)                                 If US Agent shall have determined in good
faith that for any reason adequate and reasonable means do not exist for
ascertaining the Adjusted LIBOR Rate for any requested Interest Period with
respect to a proposed LIBOR Rate Loan or that the Adjusted LIBOR Rate applicable
pursuant to subsection 1.3(a) for any requested Interest Period with respect to
a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to
the applicable Lenders of funding or maintaining such Loan, US Agent will
forthwith give notice of such determination to the US Borrower and each US
Lender.  Thereafter, the obligation of the Lenders to make or maintain LIBOR
Rate Loans hereunder shall be suspended until US Agent revokes such notice in
writing.  Upon receipt of such notice, the US Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it.  If the US
Borrower does not revoke such notice, the applicable Lenders shall make, convert
or continue the applicable Loans, as proposed by the US Borrower, in the amount
specified in the applicable notice submitted by the US Borrower, but such Loans
shall be made, converted or continued as Base Rate Loans.

 

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(b)                                 If Canadian Agent shall have determined in
good faith that for any reason adequate and reasonable means do not exist for
ascertaining the CDOR Rate for any requested CDOR Period with respect to a
proposed CDOR Rate Loan or that the CDOR Rate applicable pursuant to subsection
1.3(a) for any requested CDOR Period with respect to a proposed CDOR Rate Loan
does not adequately and fairly reflect the cost to the applicable Lenders of
funding or maintaining such Loan, Canadian Agent will forthwith give notice of
such determination to the Canadian Borrower and each Canadian Lender. 
Thereafter, the obligation of the Lenders to make or maintain CDOR Rate Loans
hereunder shall be suspended until Canadian Agent revokes such notice in
writing.  Upon receipt of such notice, the Canadian Borrower may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. 
If the Canadian Borrower does not revoke such notice, the applicable Lenders
shall make, convert or continue the applicable Loans, as proposed by the
Canadian Borrower, in the amount specified in the applicable notice submitted by
the Canadian Borrower, but such Loans shall be made, converted or continued as
Canadian Prime Rate Loans.

 

10.6.                     Reserves on LIBOR Rate Loans.  The Borrowers shall pay
to each Lender, as long as such Lender shall be required under regulations of
the Federal Reserve Board to maintain reserves (except any such reserve
requirement reflected in the Adjusted LIBOR Rate) with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as “Eurocurrency liabilities”), additional costs on the unpaid principal
amount of each LIBOR Rate Loan equal to actual costs of such reserves allocated
to such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent manifest error), payable on each date
on which interest is payable on such Loan provided the Borrower shall have
received at least fifteen (15) days’ prior written notice (with a copy to US
Agent) of such additional interest from the Lender.  If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest shall be payable fifteen (15) days from receipt of such
notice.

 

10.7.                     Certificates of Lenders and L/C Issuers.  Any Lender
or L/C Issuer claiming reimbursement or compensation pursuant to this Article X
shall deliver to the applicable Borrower (with a copy to the Appropriate Agent)
a certificate setting forth in reasonable detail the amount payable to such
Lender or L/C Issuer hereunder and such certificate shall be conclusive and
binding on the Borrowers in the absence of manifest error.-

 

ARTICLE XI -

 

DEFINITIONS

 

11.1.                     Defined Terms.  The following terms are defined in the
Sections or subsections referenced opposite such terms:

 

“Affected Lender”

 

9.22

“Aggregate Excess Funding Amount”

 

1.1(c)

“Borrower”

 

Preamble

“Borrower Materials”

 

9.10(d)

“Borrowing Base”

 

Exhibit 11.1(b)

“Canadian Borrower”

 

Preamble

 

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“Canadian Borrowing Base”

 

1.1(b)

“Canadian L/C Reimbursement Agreement”

 

1.1(e)

“Canadian L/C Reimbursement Date”

 

1.1(e)

“Canadian Lender”

 

Preamble

“Canadian Revolving Loan”

 

1.1(b)

“Canadian Revolving Loan Commitment”

 

1.1(b)

“Canadian Swing Loan”

 

1.1(f)

“Capital Expenditures

 

Exhibit 4.2(b)

“EBITDA”

 

Exhibit 4.2(b)

“Event of Default”

 

7.1

“Fixed Charge Coverage Ratio”

 

Exhibit 4.2(b

“Holdings”

 

Recitals

“Indemnified Matters”

 

9.6

“Indemnitee”

 

9.6

“Interest Coverage Ratio”

 

Exhibit 4.2(b)

“Interest Expense”

 

Exhibit 4.2(b)

“Investments”

 

5.4

“L/C Request”

 

1.1(c)

“L/C Sublimit”

 

1.1(c)

“Lender”

 

Preamble

“Letter of Credit Fee”

 

1.9(c)

“Leverage Ratio”

 

Exhibit 4.2(b)

“Management Advisor”

 

5.7(d)

“Maximum Lawful Rate”

 

1.3(d)

“Maximum Canadian Revolving Loan Balance”

 

1.1(b)

“Maximum US Revolving Loan Balance

 

1.1(b)

“MNPI”

 

9.10(a)

“Notice of Conversion/Continuation”

 

1.6(a)

“Other Taxes”

 

10.1(c)

“Permitted Liens”

 

5.1

“Register”

 

1.4(b)

“Restricted Payments”

 

5.11

“Replacement Lender”

 

9.22

“Revolving Loan Commitment”

 

1.1(b)

“Revolving Loan”

 

1.1(b)

“Sale”

 

9.9(a)

“Settlement Date”

 

1.11(b)

“Swingline Request”

 

1.1(c)

“Taxes”

 

10.1(a)

“Unused Commitment Fee”

 

1.9(b)

“US Borrower”

 

Preamble

“US Borrowing Base”

 

1.1(b)

“US L/C Reimbursement Agreement”

 

1.1(c)

“US L/C Reimbursement Date”

 

1.1(c)

“US Lender”

 

Preamble

“US Revolving Loan”

 

1.1(b)

 

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“US Revolving Loan Commitment”

 

1.1(b)

“US Swing Loan”

 

1.1(d)

 

In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:

 

“ABN LC Facility” means that certain Credit Agreement Letter dated as of
December 15, 2005 by and among Thermon Europe B.V., Thermon Benelux B.V. and ABN
AMRO Bank N.V. (including its successor, New HBU II N.V.), together with any new
letter of credit and/or revolving credit facilities made available to such
Foreign Subsidiaries by ABN AMRO Bank N.V. or another comparable bank or
financial institution that replace or refinance such Credit Agreement and that
do not provide for (i) a maximum principal amount of Indebtedness in excess of
that available under such Credit Agreement, (ii) interest rates and fees that,
in the reasonable, good faith business judgment of the Borrowers, materially
exceed then-prevailing market rates and fees or (ii) terms and conditions
(including, but not limited to, representations and warranties, covenants and
events of default) materially more burdensome for or restrictive upon such
Foreign Subsidiaries, in each case, as agreements may be amended, restated,
supplemented or otherwise modified from time to time to the extent not
prohibited hereunder.

 

“Account” means, as at any date of determination, all “accounts” (as such term
is defined in the UCC or PPSA) of a Borrower and its Subsidiaries, including,
without limitation, the unpaid portion of the obligation of a customer of such
Borrower or any of its Subsidiaries in respect of Inventory purchased by and
shipped to such customer and/or the rendition of services by such Borrower or
such Subsidiary, as stated on the respective invoice of such Borrower or such
Subsidiary, net of any credits, rebates or offsets owed to such customer.

 

“Account Debtor” means the customer of a Borrower or any of its Subsidiaries who
is obligated on or under an Account.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of fifty percent (50%) of the
Stock and Stock Equivalents of any Person or otherwise causing any Person to
become a Subsidiary of the Borrower, or (c) a merger, amalgamation or
consolidation or any other combination with another Person.

 

“Adjusted LIBOR Rate” means, with respect to any LIBOR Rate Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBOR Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

 

“Additional Management Advisors” means, collectively, Thompson Street Capital
Manager LLC, a Delaware limited liability company, Crown Investment Series LLC —
Series 4, a Delaware series limited liability company, and Star Investment
Series LLC — Series 1, a Delaware series limited liability company.

 

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“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person.  A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise.  Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the Stock (either directly or through ownership of Stock
Equivalents) of a Person shall for the purposes of this Agreement, be deemed to
be an Affiliate of such Person.  Notwithstanding the foregoing, neither any
Agent nor any Lender shall be deemed an “Affiliate” of any Credit Party or of
any Subsidiary of any Credit Party solely by reason of the provisions of the
Loan Documents.

 

“Agent” means the US Agent or the Canadian Agent.

 

“Aggregate Availability” means, as of any date of determination, the amount by
which (a) the lesser of (i) the Aggregate US Revolving Loan Commitment and
(ii) the sum of, without duplication, the US Dollar Equivalent of the aggregate
Borrowing Bases of the Borrowers, exceeds (b) the sum of the US Dollar
Equivalent of (i) the aggregate outstanding principal of all Loans, (ii) the
aggregate amount of all Letter of Credit Obligations, plus (iii) aggregate
Reserves as established by the Agents.

 

“Aggregate Canadian Revolving Loan Commitment” means the combined Canadian
Revolving Loan Commitment of each of the Canadian Lenders, which shall initially
be in the amount of $20,000,000, as such amount may be reduced from time to time
pursuant to this Agreement.

 

“Aggregate US Revolving Loan Commitment” means the combined US Revolving Loan
Commitment of each of the US Lenders, which shall initially be in the amount of
$40,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.

 

“Aggregate US Revolving Loan Commitment Usage” means, with respect to any Fiscal
Quarter, a percentage equal to the quotient of (a) the average daily US Dollar
Equivalent of the sum of (i) the aggregate outstanding principal of all Loans
during such Fiscal Quarter and (ii) the aggregate amount of all Letter of Credit
Obligations during such Fiscal Quarter, divided by (b) the average daily balance
of the Aggregate US Revolving Loan Commitment during such Fiscal Quarter.

 

“Applicable Margin” means, for any day, with respect to any LIBOR Rate Loan,
CDOR Rate Loan, Base Rate Loan or Canadian Prime Rate Loan, or with respect to
the Unused Commitment Fee, as the case may be, the applicable rate per annum set
forth below under the caption “Adjusted LIBOR Rate Spread/CDOR Rate Spread”,
“Base Rate Spread/Canadian Prime Rate Spread” or “Unused Commitment Fee Rate”,
as the case may be, based upon the Aggregate US Revolving Loan Commitment Usage
during each Fiscal Quarter, provided that until the effective date of the first
adjustment in the Applicable Margin occurring after the Closing Date in
accordance with the terms set forth below, the “Applicable Margin” shall be the
applicable rate per annum set forth below in Category 1.

 

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Aggregate US Revolving
Loan Commitment Usage
(For each Fiscal Quarter)

 

Adjusted LIBOR Rate
Spread/CDOR Rate
Spread

 

Base Rate Spread/
Canadian Prime Rate
Spread

 

Unused Commitment Fee
Rate

 

Category 1
Less than fifty percent (50%)

 

2.50

%

0.25

%

0.40

%

Category 2
Greater than or equal to fifty percent (50%)

 

2.25

%

0.50

%

0.375

%

 

For purposes of the foregoing, (a) the Applicable Margin shall be determined as
of the end of each Fiscal Quarter (commencing with the first Fiscal Quarter
which occurs and ends in its entirety after closing) based upon the Aggregate US
Revolving Loan Commitment Usage during the most recently ended Fiscal Quarter
and (b) each change in the Applicable Margin shall be effective on and including
the fifteenth day (15th) after the end of the applicable Fiscal Quarter for
which the Aggregate US Revolving Loan Commitment Usage is calculated.
Notwithstanding the foregoing, the “Applicable Margin” shall be the applicable
rate per annum set forth above in Category 1 during the period that any
Specified Event of Default exists.

 

“Applicable Minimum Availability Threshold” means the minimum Aggregate
Availability set forth opposite the aggregate Borrowing Bases (expressed as the
US Dollar Equivalent thereof) of the Credit Parties as of the most recent Fiscal
Quarter for which a Borrowing Base Certificate has been provided pursuant to
Section 4.2(d) in the table below:

 

Aggregate Borrowing Bases of the Credit
Parties

 

Minimum Aggregate Availability

 

Less than $30,000,000

 

$

5,000,000

 

Greater than or equal to $30,000,000 but less than $35,000,000

 

$

7,500,000

 

Greater than or equal to $35,000,000

 

$

10,000,000

 

 

“Appropriate Agent” means (a) the US Agent with respect to advances, payments,
enforcement and administration of US Revolving Loans, US Swing Loans, US
Revolving Loan Commitments, US Letters of Credit and any Collateral Documents in
favor of US Agent and any communications with US Lenders and US Borrower, and
(b) the Canadian Agent with respect to advances, payments, enforcement and
administration of Canadian Revolving Loans, Canadian Swing Loans, Canadian
Revolving Loan Commitments, Canadian Letters of Credit and any Collateral
Documents in favor of Canadian Agent and any communications with Canadian
Borrowers and Canadian Lenders.

 

“Approved Fund” means, with respect to any Lender, any Person (other than a
natural Person) that (a) (i) is or will be engaged in making, purchasing,
holding or otherwise investing in

 

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commercial loans and similar extensions of credit in the Ordinary Course of
Business or (ii) temporarily warehouses loans for any Lender or any Person
described in clause (i) above and (b) is advised or managed by (i) such Lender,
(ii) any Affiliate of such Lender or (iii) any Person (other than an individual)
or any Affiliate of any Person (other than an individual) that administers or
manages such Lender.

 

“Assignment” means an assignment agreement entered into by a Lender, as
assignor, and any Person, as assignee, pursuant to the terms and provisions of
Section 9.9 (with the consent of any party whose consent is required by
Section 9.9) and accepted by the Appropriate Agent, substantially in the form of
Exhibit 11.1(a) or any other form approved by Agents.

 

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel.

 

“Banking Services” means each and any of the following bank services provided to
any Credit Party by Chase or any of its Affiliates: (a) commercial credit cards,
(b) stored value cards and (c) treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions,
return items, overdrafts and interstate depository network services).

 

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.).

 

“Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the US Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of one percent (0.50%) and (c) the Adjusted
LIBOR Rate for a one month interest period on such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus one percent (1%),
provided that, for the avoidance of doubt, the Adjusted LIBOR Rate for any day
shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on
any successor or substitute page) at approximately 11:00 a.m. London time on
such day (without any rounding).  Any change in the Base Rate due to a change in
the US Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBOR Rate
shall be effective from and including the effective date of such change in the
US Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBOR Rate,
respectively.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
any Credit Party incurs or otherwise has any obligation or liability, contingent
or otherwise.

 

“Borrowing” means a borrowing hereunder consisting of Loans made to or for the
benefit of a Borrower on the same day by the Lenders pursuant to Article I.

 

“Borrowing Base Certificate” means a certificate of Holdings and the Borrowers,
on behalf of the Credit Parties, in substantially the form of
Exhibit 11.1(b) hereto, duly completed.

 

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“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Toronto and New York City are authorized or required
by law to remain closed; provided that, when used in connection with a LIBOR
Rate Loan, the term “Business Day” shall also exclude any day on which banks are
not open for dealings in US Dollar deposits in the London interbank market.

 

“Cafeteria Plan Flex Account” means the bank deposit account (or if more than
one, the aggregate of all such accounts) established and maintained by the US
Borrower from time to time to serve as collateral for stored value card
transactions under the health and/or dependent care flexible spending account
components of the US Borrower’s cafeteria plan for employees, as such plan
exists now or may be amended in the future, but in each case only to the extent
such accounts are established and maintained in accordance with applicable laws
and qualify under Section 125 of the Code.

 

“Canadian Agent” means Chase Canada, in its capacity as administrative agent for
the Canadian Lenders hereunder, and any successor administrative agent.

 

“Canadian Availability” means, as of any date of determination, the amount by
which (a) the Maximum Canadian Revolving Loan Balance, exceeds (b) the US Dollar
Equivalent of the aggregate outstanding principal balance of all Canadian
Revolving Loans.

 

“Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral
or written, formal or informal, funded or unfunded, insured or uninsured,
providing material employee benefits, including medical, hospital care, dental,
sickness, accident, disability, life insurance, pension, retirement or savings
benefits, under which any Credit Party has any liability with respect to any
employee or former employee, but excluding any Canadian Pension Plans.

 

“Canadian Credit Parties” means Holdings, the Borrowers and each other Person
(other than a US Credit Party) (i) which executes a guaranty of the Canadian
Obligations, (ii) which grants a Lien on all or substantially all of its assets
to secure payment of the Canadian Obligations and (iii) all of the Stock of
which is pledged to Canadian Agent for the benefit of the Canadian Secured
Parties.

 

“Canadian Dollars” or “CDN $” means lawful currency of Canada.

 

“Canadian L/C Issuer” means any Canadian Lender or an Affiliate thereof or a
bank or other legally authorized Person, in each case, reasonably acceptable to
Canadian Agent, in such Person’s capacity as an issuer of Canadian Letters of
Credit hereunder.

 

“Canadian L/C Reimbursement Obligations” means, for any Canadian Letter of
Credit, the obligation of the Canadian Borrower to the Canadian L/C Issuer
thereof or to Canadian Agent, as and when matured, to pay all amounts drawn
under such Canadian Letter of Credit.

 

“Canadian Letter of Credit” means documentary or standby letters of credit
issued for the account of the Canadian Borrower by Canadian L/C Issuers, and
bankers’ acceptances issued by Canadian Borrower, for which Canadian Agent and
Lenders have incurred Canadian Letter of Credit Obligations.

 

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“Canadian Letter of Credit Obligations” means all outstanding obligations
incurred by Canadian Agent and Canadian Lenders at the request of the Canadian
Borrower, whether direct or indirect, contingent or otherwise, due or not due,
in connection with the issuance of Canadian Letters of Credit by Canadian L/C
Issuers or the purchase of a participation as set forth in subsection 1.1(e)
with respect to any Canadian Letter of Credit.  The amount of such Canadian
Letter of Credit Obligations shall equal the maximum amount that may be payable
by Canadian Agent and Canadian Lenders thereupon or pursuant thereto.

 

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

 

“Canadian Obligations” means all Canadian Loans, and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owing by any
Credit Party to any Canadian Lender, Canadian Agent, any Canadian L/C Issuer or
any other Person required to be indemnified, that arises under any Loan Document
or under any Banking Services, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.

 

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

 

“Canadian Prime Rate” means, for any day, the rate per annum determined by
Canadian Agent to be the greater of (i) the rate of interest per annum most
recently announced or established by Chase Canada as its reference rate in
effect on such day for determining interest rates for Canadian Dollar
denominated commercial loans in Canada and commonly known as “prime rate” (or
its equivalent or analogous such rate), such rate not being intended to be the
lowest rate of interest charged by Chase Canada and (ii) the sum of (a) the
yearly interest rate to which the one-month CDOR Rate is equivalent plus (b) one
percent (1.0%).  Any change in any interest rate provided for in the Agreement
based upon the Canadian Prime Rate shall take effect at the time of such change
in the Canadian Prime Rate.  No adjustments shall be made to account for the
difference between the number of days in a year on which the rates referred to
in this definition are based and the number of days in a year on the basis of
which interest is calculated in this Agreement.

 

“Canadian Prime Rate Loan” means a Loan that bears interest based on the
Canadian Prime Rate.

 

“Canadian Revolving Note” means a promissory note of the Canadian Borrower
payable to a Canadian Lender in substantially the form of
Exhibit 11.1(d) hereto, evidencing Indebtedness of the Canadian Borrower under
the Canadian Revolving Loan Commitment of such Lender.

 

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“Canadian Secured Parties” means Canadian Agent, each Canadian Lender, each
Canadian L/C Issuer and each other holder of a Canadian Obligation.

 

“Canadian Subsidiaries” means Canadian Borrower (as the context may require) and
any Subsidiary incorporated, organized or otherwise formed under the laws of
Canada or any province or territory thereof.

 

“Canadian Swingline Commitment” means $5,000,000.

 

“Canadian Swingline Lender” means, each in its capacity as Canadian Swingline
Lender hereunder, Chase Canada or, upon the resignation of Chase Canada as
Canadian Agent hereunder, any Lender (or Affiliate or Approved Fund of any
Lender) that agrees, with the approval of Canadian Agent (or, if there is no
such successor Canadian Agent, the Required Canadian Lenders) and the Canadian
Borrower, to act as the Canadian Swingline Lender hereunder.

 

“Canadian Swingline Note” means a promissory note of the Canadian Borrower
payable to the Canadian Swingline Lender, in substantially the form of
Exhibit 11.1(e) hereto, evidencing the Indebtedness of the Canadian Borrower to
the Canadian Swingline Lender resulting from the Swing Loans made to the
Canadian Borrower by the Canadian Swingline Lender.

 

“Capital Adequacy Regulation” means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.

 

“Capital Lease” means any leasing or similar arrangement which, in accordance
with GAAP, is classified as a capital lease; provided, for purposes of clarity,
such classification shall be in accordance with GAAP as in effect on the date
hereof unless and to the extent the requisite parties hereto agree otherwise
pursuant to and in accordance with Section 11.3.

 

“Capital Lease Obligations” means the capitalized amount of all monetary
obligations of any Credit Party or any Subsidiary of any Credit Party under any
Capital Leases.

 

“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or
directly, unconditionally and fully guaranteed or insured by the Canadian or US
federal government or (ii) issued by any agency of the Canadian or US federal
government the obligations of which are fully backed by the full faith and
credit of the Canadian federal government or the US federal government, as
applicable, (b) any readily-marketable direct obligations issued by any other
agency of the Canadian or US federal government, any province, territory or
state thereof or any political subdivision of any such province, territory or
state or any public instrumentality thereof, in each case having a rating of at
least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial paper
rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person
organized under the laws of Canada or any province or territory thereof or any
state of the United States, (d) any Dollar- or Canadian Dollar-denominated time
deposit, insured certificate of deposit, overnight bank deposit or bankers’
acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that
is (A) organized under the laws of Canada, the United States, any

 

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province or state thereof or the District of Columbia and (B) having combined
capital, surplus and undivided profits in excess of $250,000,000, and (e) shares
of any Canadian or United States money market fund that (i) has substantially
all of its assets invested continuously in the types of investments referred to
in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso
below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from
either S&P or Moody’s the highest rating obtainable for money market funds in
Canada or the United States; provided, however, that the maturities of all
obligations specified in any of clauses (a), (b), (c) or (d) above shall not
exceed 365 days.

 

“CDN $ Denominated Canadian Loans” means Canadian Revolving Loans denominated in
CDN $.

 

“CDOR Period” means with respect to any CDOR Rate Loan, the period commencing on
the Business Day such Loan is disbursed or continued or on the Conversion Date
on which a Canadian Prime Rate Loan is converted to a CDOR Rate Loan and ending
on the date one, two, three or six months thereafter, as selected by the
Canadian Borrower in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that:

 

(a)                                 if any CDOR Period pertaining to a CDOR Rate
Loan would otherwise end on a day which is not a Business Day, that CDOR Period
shall be extended to the next succeeding Business Day unless the result of such
extension would be to carry such CDOR Period into another calendar month, in
which event such CDOR Period shall end on the immediately preceding Business
Day; and

 

(b)                                 any CDOR Period pertaining to a CDOR Rate
Loan that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such CDOR Period) shall end on the last Business Day of the calendar month at
the end of such CDOR Period.

 

“CDOR Rate” means, in respect of any CDOR Period applicable to a CDOR Rate Loan,
the Canadian deposit offered rate which, in turn means on any day the sum of
(a) the annual rate of interest determined with reference to the arithmetic
average of the discount rate quotations of all institutions listed in respect of
the relevant CDOR 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 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 Agent after 10:00 a.m. Toronto local time to
reflect any error in the posted rate of interest or in the posted average annual
rate of interest) plus (b) 0.10% per annum; provided that if such rates are not
available on the Reuters Screen CDOR Page on any particular day, then the
Canadian deposit offered rate component of such rate on that day shall be
calculated as the cost of funds quoted by the Canadian Agent to raise Canadian
dollars for the applicable CDOR Period as of 10:00 a.m. Toronto 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 Agent on the immediately preceding Business Day.

 

“CDOR Rate Loan” means a Loan that bears interest based on the CDOR Rate.

 

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“Change in Law” means (a) the adoption of any law, rule, regulation or treaty
(including any rules or regulations issued under or implementing any existing
law) after the date of this Agreement, (b) any change in any law, rule,
regulation or treaty or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by any
Lender or any L/C Issuer (or, for purposes of Section 10.3(b), by any Lending
Office of such Lender or by such Lender’s or the L/C Issuer’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; provided that notwithstanding anything herein to the contrary,
(i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder, issued in connection
therewith or in implementation thereof, and (ii) all requests, rules, guidelines
and directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted, issued or
implemented.

 

“Closing Date” means August 7, 2012.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all Property and interests in Property and proceeds thereof
now owned or hereafter acquired by any Credit Party, any of their respective
Subsidiaries and any other Person who has granted a Lien to an Agent, in or upon
which a Lien is granted or purported to be granted now or hereafter exists in
favor of any Lender or an Agent for the benefit of Agents, Lenders and other
Secured Parties, whether under this Agreement or under any other documents
executed by any such Persons and delivered to the Appropriate Agent in
connection with the Loan Documents.

 

“Collateral Documents” means, collectively, the Guaranty and Security
Agreements, the Mortgages, each Control Agreement and all other security
agreements, pledge agreements, patent and trademark security agreements, lease
assignments, guarantees and other similar agreements, and all amendments,
restatements, modifications or supplements thereof or thereto, by or between any
one or more of any Credit Party, any of their respective Subsidiaries or any
other Person pledging or granting a lien on Collateral or guaranteeing the
payment and performance of the Obligations, and any Lender or an Agent for the
benefit of Agents, the Lenders and other Secured Parties now or hereafter
delivered to the Lenders or an Agent pursuant to or in connection with the
transactions contemplated hereby, and all financing statements (or comparable
documents now or hereafter filed in accordance with the UCC, the PPSA or
comparable law) against any such Person as debtor in favor of any Lender or an
Agent for the benefit of Agents, the Lenders and the other Secured Parties, as
secured party, as any of the foregoing may be amended, restated and/or modified
from time to time.

 

“Commitment” means, for each Lender, the sum of its US Revolving Loan Commitment
and Canadian Revolving Loan Commitment provided in no event shall the sum of all
Commitments exceed $40,000,000.

 

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“Commitment Percentage” means, as to any Lender, the percentage equivalent of
such Lender’s US Revolving Loan Commitment or Canadian Revolving Loan
Commitment, as applicable, divided by the Aggregate US Revolving Loan Commitment
or Aggregate Canadian Revolving Loan Commitment, as applicable; provided, that
following acceleration of the Loans, such term means, as to any Lender, the
percentage equivalent of the US Dollar Equivalent of the principal amount of the
Loans held by such Lender, divided by the US Dollar Equivalent of the aggregate
principal amount of the Loans held by all Lenders.

 

“Commodity Hedge Contract” means any futures or forward purchase contracts for
raw materials such as copper.

 

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person:  (a) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (b) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (c) under
any Rate Contracts or under any Commodity Hedge Contract; (d) to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement; or (e) for the obligations of another
Person through any agreement to purchase, repurchase or otherwise acquire such
obligation or any Property constituting security therefor, to provide funds for
the payment or discharge of such obligation or to maintain the solvency,
financial condition or any balance sheet item or level of income of another
Person.  The amount of any Contingent Obligation shall be equal to the amount of
the obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed or supported.

 

“Contractual Obligations” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its Property is bound.

 

“Control Agreement” means a deposit account, securities account or commodities
account control agreement by and among the applicable Credit Party, the
Appropriate Agent, the agent/trustee under the Second Lien Indenture and the
depository, securities intermediary or commodities intermediary, and each in
form and substance reasonably satisfactory to the Appropriate Agent and in any
event providing to the Appropriate Agent “control” of such deposit account,
securities or commodities account within the meaning of Articles 8 and 9 of the
UCC and the Securities Transfer Act, 2006 (Ontario) or the comparable statutes
in provinces and territories of Canada other than Ontario for such accounts
located in those jurisdictions.  For certainty, for a Canadian bank account,
such term shall also refer to a “blocked account” agreement with respect to such
bank account, notwithstanding that the execution and delivery of such agreement
is not a perfection requirement.

 

“Controlled Investment Affiliates” means, with respect to the Sponsor, any fund
or investment vehicle that (i) is organized by the Sponsor for the purpose of
making equity or debt

 

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investments in one or more companies and (ii) is controlled by Sponsor.  For
purposes of this definition “control” means the power to direct or cause the
direction of management and policies of a Person, whether by contract or
otherwise.

 

“Conversion Date” means any date on which a Borrower converts (a) a Base Rate
Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan or (b) a
Canadian Prime Rate Loan to a CDOR Rate Loan or a CDOR Rate Loan to a Canadian
Prime Rate Loan.

 

“Copyrights” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to copyrights and
all mask work, database and design rights, whether or not registered or
published, all registrations and recordations thereof and all applications in
connection therewith.

 

“Credit Parties” means the US Credit Parties and the Canadian Credit Parties.

 

“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute an Event of Default.

 

“Disposition” means (a) the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
Section 5.2 other than subsections 5.2(b), 5.2(h) and 5.2(m), and (b) the sale
or transfer by a Borrower or any Subsidiary of a Borrower of any Stock or Stock
Equivalent issued by a Subsidiary of such Borrower and held by such transferor
Person.

 

“Dollar Denominated Canadian Loans” means Canadian Revolving Loans denominated
in Dollars.

 

“Dollars”, “dollars” and “$” each mean lawful money of the United States of
America.

 

“Domestic Subsidiary” means any Subsidiary incorporated, organized or otherwise
formed under the laws of the United States, any state thereof or the District of
Columbia.

 

“Electronic Transmission” means each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made or
communicated by e-mail or E-Fax, or otherwise to or from an E-System or other
equivalent service.

 

“Environmental Laws” means all Requirements of Law and Permits imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the workplace, the environment and natural
resources, and including public notification requirements and environmental
transfer of ownership, notification or approval provisions relating thereto.

 

“Environmental Liabilities” means all Liabilities (including costs of Remedial
Actions, natural resource damages and costs and expenses of investigation and
feasibility studies) that may be imposed on, incurred by or asserted against any
Credit Party or any Subsidiary of any Credit Party as a result of, or related
to, any claim, suit, action, investigation, proceeding or demand by any Person,
whether based in contract, tort, implied or express warranty, strict

 

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liability, criminal or civil statute or common law or otherwise, arising under
any Environmental Law or in connection with any environmental, health or safety
condition or with any Release and resulting from the ownership, lease, sublease
or other operation or occupation of property by any Credit Party or any
Subsidiary of any Credit Party, whether on, prior or after the date hereof.

 

“Equipment” means all “equipment” (as defined in the UCC or PPSA), now owned or
hereafter acquired by a Credit Party, wherever located.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means, collectively, any Credit Party and any Person under
common control or treated as a single employer with, any Credit Party, within
the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“ERISA Event” means any of the following:  (a) a reportable event described in
Section 4043(b) of ERISA (or, unless the 30-day notice requirement has been duly
waived under the applicable regulations, Section 4043(c) of ERISA) with respect
to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of
reorganization, insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA; (e) the filing of a notice of intent
to terminate a Title IV Plan (or treatment of a plan amendment as termination)
under Section 4041 of ERISA; (f) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan when due;
(h) the imposition of a lien under Section 412 or 430(k) of the Code or
Section 303 or 4068 of ERISA on any property (or rights to property, whether
real or personal) of any ERISA Affiliate; (i) the failure of a Benefit Plan or
any trust thereunder intended to qualify for tax exempt status under Section 401
or 501 of the Code or other Requirements of Law to qualify thereunder; (j) a
Title IV plan is in “at risk” status within the meaning of Code Section 430(i);
(k) a Multiemployer Plan is in “endangered status” or “critical status” within
the meaning of Section 432(b) of the Code; and (l) any other event or condition
that might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or for the imposition of any material
liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC
premiums due but not delinquent.

 

“Event of Loss” means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property; or (b) any actual
condemnation, seizure or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.

 

“Excluded Equity Issuance” means Net Issuance Proceeds resulting from the
issuance of (a) Stock or Stock Equivalents by Holdings to directors, management
or employees of a Credit Party, (b) Stock or Stock Equivalents by a Subsidiary
of a Borrower to such Borrower or another Subsidiary of such Borrower
constituting an Investment permitted hereunder, (c) Stock or Stock Equivalents
by a Borrower to Holdings constituting an Investment permitted hereunder, (d)

 

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Stock or Stock Equivalents by a Foreign Subsidiary of such Foreign Subsidiary to
qualify directors where required pursuant to a Requirement of Law or to satisfy
other requirements of applicable law, in each instance, with respect to the
ownership of Stock of Foreign Subsidiaries and (e) Stock or Stock Equivalents of
Holdings, to the extent the proceeds thereof are used to finance Capital
Expenditures or Permitted Acquisitions.

 

“Exempted Accounts” means (i) any payroll account so long as amounts on deposit
therein do not exceed the reasonably estimated payroll obligations of such
Person and such amounts are deposited therein immediately prior to any required
payroll date, (ii) any withholding tax, benefits, escrow, customs, trust or any
other fiduciary account, (iii) zero balance deposit account provided the amount
on deposit therein does not exceed the amount necessary to cover outstanding
checks, amounts necessary to maintain minimum deposit requirements and amounts
necessary to pay the depositary institution’s fees and expenses, (iv) any
deposit account maintained with a foreign bank (other than a foreign bank
located in Canada), (v) Cafeteria Plan Flex Accounts and (vi) any petty cash
deposit accounts maintained at a financial institution for which a Control
Agreement has not otherwise been obtained, so long as, with respect to this
clause (vi), the aggregate amount on deposit in each such petty cash account
does not exceed the US Dollar Equivalent of $500,000 at any one time and the
aggregate amount on deposit in all such petty cash accounts does not exceed the
US Dollar Equivalent of $1,000,000 at any one time.

 

“Existing Letters of Credit” means all letters of credit issued or guaranteed by
any of the Prior Lenders constituting Prior Indebtedness outstanding on the
Closing Date, but which will survive the Closing Date and continue to remain
outstanding.

 

“E-Fax” means any system used to receive or transmit faxes electronically.

 

“E-Signature” means the process of attaching to or logically associating with an
Electronic Transmission an electronic symbol, encryption, digital signature or
process (including the name or an abbreviation of the name of the party
transmitting the Electronic Transmission) with the intent to sign, authenticate
or accept such Electronic Transmission.

 

“E-System” means any electronic system approved by an Agent, including
Intralinks® and ClearPar® and any other Internet or extranet-based site, whether
such electronic system is owned, operated or hosted by an Agent, any of its
Related Persons or any other Person, providing for access to data protected by
passcodes or other security system.

 

“Federal Flood Insurance” means Federally backed Flood Insurance available under
the National Flood Insurance Program to owners of real property improvements
located in Special Flood Hazard Areas in a community participating in the
National Flood Insurance Program.

 

“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

 

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necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the US Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“FEMA” means the Federal Emergency Management Agency, a component of the U.S.
Department of Homeland Security that administers the National Flood Insurance
Program.

 

“Final Availability Date” means the earlier of the Revolving Termination Date
and one (1) Business Day prior to the date specified in clause (a) of the
definition of Revolving Termination Date.

 

“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended.

 

“First Tier Foreign Subsidiary” means a Foreign Subsidiary held by a Credit
Party (i) directly or (ii) indirectly through a Foreign Subsidiary that is a
disregarded entity for purposes of the Code.

 

“Fiscal Quarter” means any of the quarterly accounting periods of the Credit
Parties ending on March 31, June 30, September 30 and December 31 of each
calendar year.

 

“Fiscal Year” means any of the annual accounting periods of the Credit Parties
ending on March 31 of each calendar year.

 

“Flood Insurance” means, for any Real Estate located in a Special Flood Hazard
Area, Federal Flood Insurance or private insurance that meets the requirements
set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines. 
Flood Insurance shall be in an amount equal to the full, unpaid balance of the
Loans and any prior liens on the Real Estate up to the maximum policy limits set
under the National Flood Insurance Program, or as otherwise required by Agent,
with deductibles not to exceed $50,000.

 

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such
Person, which Subsidiary is not a Domestic Subsidiary.

 

“Funded Indebtedness” means, as of any date of measurement, all Indebtedness of
Holdings and its Subsidiaries as of the date of measurement (other than
Indebtedness of the type described in clauses (c) (except with respect to
amounts drawn on letters of credit not constituting Letters of Credit to the
extent (y) such letters of credit are not supported by cash collateral and
(z) Holdings and its Subsidiaries have not reimbursed the issuer thereof for
such drawn amount), (e), (g), (h), (i) and (j) (other than with respect to
clause (j), guarantees of Indebtedness of others of the type not described in
clauses (e), (g), (h) and (i) of the definition of Indebtedness) of the
definition of Indebtedness).

 

“GAAP” means generally accepted accounting principles in the United States set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of

 

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the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), including,
without limitation, the FASB Accounting Standards Codification™, which are
applicable to the circumstances as of the date of determination, subject to
Section 11.3 hereof.

 

“Governmental Authority” means any nation or government, any state, provincial
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

 

“Guaranty and Security Agreement” means (a) that certain Guaranty and Security
Agreement, dated as of even date herewith, in form and substance reasonably
acceptable to US Agent and the US Borrower, made by the US Credit Parties in
favor of US Agent, for the benefit of the Secured Parties, as the same may be
amended, restated and/or modified from time to time and (b) that certain
Guaranty and Security Agreement, dated as of even date herewith, in form and
substance reasonably acceptable to Canadian Agent and the Canadian Borrower,
made by the Canadian Credit Parties in favor of Canadian Agent, for the benefit
of the Canadian Secured Parties, as the same may be amended, restated and/or
modified from time to time.

 

“Hazardous Materials” means any substance, material or waste that is regulated
or otherwise gives rise to liability under any Environmental Law, including but
not limited to any “Hazardous Waste” as defined by the Resource Conservation and
Recovery Act (RCRA) (42 U.S.C. § 6901 et seq. (1976)), any “Hazardous Substance”
as defined under the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) (42 U.S.C. §9601 et seq. (1980)), any contaminant,
pollutant, petroleum or any fraction thereof, asbestos, asbestos containing
material, polychlorinated biphenyls, mold, and radioactive substances or any
other substance that is toxic, ignitable, reactive, corrosive, caustic, or
dangerous.

 

“Headquarters Property” means that certain real property located at (a) 100,
100-5, 200, 202, 204, 206, 208 and 209 Thermon Drive, San Marcos, Texas 78666,
and (b) 100, 250 and 300 Barnes Drive, San Marcos, Texas 78666.

 

“Holdings Loans” means intercompany loans made by a Borrower to Holdings to the
extent that, at the time such loan is made, a Restricted Payment from such
Borrower to Holdings would be permitted under Section 5.11 and provided that
(i) the proceeds of such loans are used for the purposes specified in
Section 5.11, (ii) at the request of the Appropriate Agent, such loans are
evidenced by promissory notes, the sole originally executed copy of which shall
be pledged to the Appropriate Agent, for the benefit of the applicable Secured
Parties, as security for the Obligations and (iii) such Holdings Loan shall be
treated as a Restricted Payment for purposes of this Agreement, including,
without limitation, determining compliance with Section 5.11.

 

“Houston Property” means that certain real property located at 2810 Mowery Road,
Houston, Texas 77045.

 

“Impacted Lender” means any Lender that fails to provide Agents, within three
(3) Business Days following an Agent’s written request, satisfactory assurance
that such Lender will

 

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not become a Non-Funding Lender, or any Lender that has a Person that directly
or indirectly controls such Lender and such Person (a) becomes subject to a
voluntary or involuntary case under the Bankruptcy Code, any Insolvency Law or
any similar bankruptcy laws, (b) has appointed a custodian, conservator,
receiver or similar official for such Person or any substantial part of such
Person’s assets, or (c) makes a general assignment for the benefit of creditors,
is liquidated, or is otherwise adjudicated as, or determined by any Governmental
Authority having regulatory authority over such Person or its assets to be,
insolvent or bankrupt, and for each of clauses (a) through (c), the Appropriate
Agent has determined that such Lender is reasonably likely to become a
Non-Funding Lender.  For purposes of this definition, control of a Person shall
have the same meaning as in the second sentence of the definition of Affiliate.

 

“Indebtedness” of any Person means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of Property or services, including earnouts (other than
trade payables entered into in the Ordinary Course of Business); (c) the face
amount of all letters of credit issued for the account of such Person and
without duplication, all drafts drawn thereunder and all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments issued by such Person; (d) all payment obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of Property, assets or
businesses; (e) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to Property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such Property); (f) all Capital Lease
Obligations; (g) the principal balance outstanding under any synthetic lease,
off-balance sheet loan or similar off balance sheet financing product; (h) all
obligations, whether or not contingent, to purchase, redeem, retire, defease or
otherwise acquire for value any of its own Stock or Stock Equivalents (or any
Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior
to the date that is 180 days after the final scheduled installment payment date
for the Second Lien Indebtedness, valued at, in the case of redeemable preferred
Stock, the greater of the voluntary liquidation preference and the involuntary
liquidation preference of such Stock plus accrued and unpaid dividends; (i) all
indebtedness referred to in clauses (a) through (h) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in Property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness; and (j) all
Contingent Obligations described in clause (a) of the definition thereof in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (a) through (i) above.

 

“Insolvency Law” means any of the Bankruptcy and Insolvency Act (Canada), the
Companies’ Creditors Arrangement Act (Canada), the Winding-Up and Restructuring
Act (Canada), or the reorganization arrangement provisions of the Canada
Business Corporations Act or similar provincial legislation, each as now and
hereafter in effect, any successors to such statutes and any other applicable
insolvency or other similar law of any jurisdiction, including any law of any
jurisdiction permitting a debtor to obtain a stay or a compromise of the claims
of its creditors against it.

 

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“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
arrangement, insolvency, liquidation, receivership, dissolution, winding-up or
relief of debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case in (a) and (b) above, undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code and any Insolvency Law.

 

“Intellectual Property” means all rights, title and interests in or relating to
intellectual property and industrial property arising under any Requirement of
Law and all IP Ancillary Rights relating thereto, including all Copyrights,
Patents, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses.

 

“Intercreditor Agreement” means that certain Intercreditor Agreement dated
April 30, 2010, by and among General Electric Capital Corporation, as the
original First Lien Agent thereunder (with the US Agent having replaced General
Electric Capital Corporation as the First Lien Agent thereunder in accordance
with the terms of Section 4.3(a) of said Intercreditor Agreement), the Credit
Parties and the Second Lien Collateral Agent, as the same may be amended,
restated and/or modified from time to time subject to the terms thereof.

 

“Interest Payment Date” means, (a) with respect to any LIBOR Rate Loan or CDOR
Rate Loan (other than a LIBOR Rate Loan or a CDOR Rate Loan having an Interest
Period or CDOR Period, as applicable, of six (6) months) the last day of each
Interest Period or CDOR Period, as applicable, applicable to such Loan, (b) with
respect to any LIBOR Rate Loan or CDOR Rate Loan having an Interest Period or
CDOR Period, as applicable, of six (6) months, the last day of each three
(3) month interval and, without duplication, the last day of such Interest
Period or CDOR Period, as applicable, and (c) with respect to Base Rate Loans
and Canadian Prime Rate Loans (including Swing Loans) the first day of each
Fiscal Quarter.

 

“Interest Period” means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Loan is disbursed or continued or on the
Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by
the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:

 

(a)                                 if any Interest Period pertaining to a LIBOR
Rate Loan would otherwise end on a day which is not a Business Day, that
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day; and

 

(b)                                 any Interest Period pertaining to a LIBOR
Rate Loan that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period.

 

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“Internet Domain Name” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
internet domain names.

 

“Inventory” means all of the “inventory” (as such term is defined in the UCC or
PPSA) of a Borrower and its Subsidiaries, including, but not limited to, all
merchandise, raw materials, parts, supplies, work in process and finished goods
intended for sale, together with all the containers, packing, packaging,
shipping and similar materials related thereto, and including such inventory as
is temporarily out of such Borrower’s or such Subsidiary’s custody or
possession, including inventory on the premises of others and items in transit.

 

“IP Ancillary Rights” means, with respect to any other Intellectual Property, as
applicable, all foreign counterparts to, and all divisionals, reversions,
continuations, continuations-in-part, reissues, reexaminations, renewals and
extensions of, such Intellectual Property and all income, royalties, proceeds
and Liabilities at any time due or payable or asserted under or with respect to
any of the foregoing or otherwise with respect to such Intellectual Property,
including all rights to sue or recover at law or in equity for any past, present
or future infringement, misappropriation, dilution, violation or other
impairment thereof, and, in each case, all rights to obtain any other IP
Ancillary Right.

 

“IP License” means all Contractual Obligations (and all related IP Ancillary
Rights), whether written or oral, granting any right, title and interest in or
relating to any Intellectual Property.

 

“IRS” means the Internal Revenue Service of the United States and any successor
thereto.

 

“Issue” means, with respect to any Letter of Credit, to issue, extend the
expiration date of, renew (including by failure to object to any automatic
renewal on the last day such objection is permitted), increase the face amount
of, or reduce or eliminate any scheduled decrease in the face amount of, such
Letter of Credit, or to cause any Person to do any of the foregoing.  The terms
“Issued” and “Issuance” have correlative meanings.

 

“ITA” means the Income Tax Act (Canada).

 

“L/C Issuer” means a US L/C Issuer or Canadian L/C Issuer.

 

“L/C Reimbursement Obligation” means a US L/C Reimbursement Obligation or a
Canadian L/C Reimbursement Obligation.

 

“Lending Office” means, with respect to any Lender, the office or offices of
such Lender specified as its “Lending Office” beneath its name on the applicable
signature page hereto, or such other office or offices of such Lender as it may
from time to time notify the Borrower and Agent.

 

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

 

“Letter of Credit Obligations” means US Letter of Credit Obligations and
Canadian Letter of Credit Obligations.

 

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“Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, taxes, commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest accrued thereon or as a result thereto
and fees, charges and disbursements of financial, legal and other advisors and
consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.

 

“LIBOR Rate” means, with respect to any LIBOR Rate Loan for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 Page (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 US 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
(2) 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 LIBOR Rate Loan 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 US
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period.  Notwithstanding the above, to the extent
that “LIBOR” or “Adjusted LIBOR Rate” is used in connection with a Base Rate
Loan, such rate shall be determined as modified by the definition of Base Rate.

 

“LIBOR Rate Loan”  means a Loan that bears interest based on the Adjusted LIBOR
Rate.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, encumbrance, lien (statutory or otherwise) or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC, the PPSA or any comparable law) and any contingent or
other agreement to provide any of the foregoing, but not including the interest
of a lessor under a lease which is not a Capital Lease.

 

“Loan” means an extension of credit by a Lender to a Borrower pursuant to
Article I, and may be a Base Rate Loan, a LIBOR Rate Loan, a CDOR Rate Loan or a
Canadian Prime Rate Loan.

 

“Loan Documents” means this Agreement, the Notes, the Collateral Documents, the
Master Agreement for Standby Letters of Credit, the Master Agreement for
Documentary Letters of Credit, the Intercreditor Agreement and all documents
delivered to Agent and/or any Lender in connection with any of the foregoing.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the Federal Reserve Board.

 

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“Material Adverse Effect” means: (a) a material adverse change in, or a material
adverse effect upon, the operations, business, Properties, or financial
condition of the Credit Parties taken as a whole; (b) a material impairment of
the ability of any Credit Party, any Subsidiary of any Credit Party or any other
Person (other than Agents or Lenders) to perform in any material respect its
material obligations under any Loan Document; or (c) a material adverse effect
upon (i) the legality, validity, binding effect or enforceability of any
material Loan Document, or (ii) the perfection or priority of any Lien granted
to the Lenders or to an Agent for the benefit of the Secured Parties or any
material portion of the Collateral under any of the Collateral Documents.

 

“Material Environmental Liabilities” means Environmental Liabilities exceeding
the US Dollar Equivalent of $5,000,000 in the aggregate.

 

“Minor Acquisition” means an Acquisition in respect of which the total
consideration paid or payable (including without limitation, all transaction
costs, assumed Indebtedness and Liabilities incurred, assumed or reflected on a
consolidated balance sheet of the Credit Parties and their Subsidiaries after
giving effect to such Acquisition and the maximum amount of all deferred
payments, including earnouts) does not exceed the US Dollar Equivalent of
$3,000,000.

 

“Moody’s” means Moody’s Investors Services Inc.

 

“Mortgage” means any deed of trust, leasehold deed of trust, mortgage, leasehold
mortgage, deed to secure debt, leasehold deed to secure debt or other document
creating a Lien on Real Estate or any interest in Real Estate.

 

“Multiemployer Plan” means any multiemployer plan, subject to Title IV of ERISA,
as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA
Affiliate incurs or otherwise has any obligation or liability, contingent or
otherwise.

 

“National Flood Insurance Program” means the program created by the U.S.
Congress pursuant to the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as revised by the National Flood Insurance
Reform Act of 1994, that mandates the purchase of flood insurance to cover real
property improvements located in Special Flood Hazard Areas in participating
communities and provides protection to property owners through a Federal
insurance program.

 

“Net Issuance Proceeds” means, in respect of any issuance of debt or equity,
cash proceeds (including cash proceeds as and when received in respect of
non-cash proceeds received or receivable in connection with such issuance), net
of underwriting discounts, transaction taxes paid or payable as a result thereof
and reasonable out-of-pocket costs, fees and expenses (including commissions,
professional and transaction fees) paid or incurred in connection therewith in
favor of any Person not an Affiliate of a Borrower.

 

“Net Proceeds” means proceeds in cash (including cash proceeds as and when
received in respect of non-cash proceeds received or receivable in connection
with such Disposition, including, without limitation, cash proceeds generated
from checks or other cash equivalent financial instruments (including Cash
Equivalents)) as and when received by the Person making a Disposition and
insurance proceeds received on account of an Event of Loss, net of: (a) in the

 

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event of a Disposition (i) the direct costs relating to such Disposition
excluding amounts payable to the Credit Parties or their Subsidiaries,
(ii) sale, gain, use or other transaction taxes paid or payable as a result
thereof, (iii) amounts required to be applied to repay principal, interest and
prepayment premiums and penalties on Indebtedness secured by a Lien on the asset
which is the subject of such Disposition and (iv) the amount of cash reserves or
escrows established in connection with purchase price adjustments and retained
liabilities; provided however, when such cash or escrow is released to a Credit
Party or one of its Subsidiaries, the amount so released shall be deemed to be
Net Proceeds hereunder at such time and (b) in the event of an Event of Loss,
(i) all money actually applied to repair, reconstruct or replace the damaged
Property or Property affected by the condemnation or taking, (ii) all of the
costs and expenses reasonably incurred in connection with the collection of such
proceeds, award or other payments, (iii) any amounts retained by or paid to
parties having superior rights to such proceeds, awards or other payments and
(iv) the amount of cash reserves established to fund contingent liabilities
reasonably estimated to be payable; provided however, when such cash, if any, as
may remain after the satisfaction of such contingent liability is released from
such reserve, it shall be deemed to be Net Proceeds hereunder at such time. 
After netting out the items in clauses (a) and (b) of the foregoing definition,
as applicable, if the amount of Net Proceeds would be less than zero, such
amount shall be deemed to equal zero.

 

“Non-Funding Lender” means any Lender that has (a) failed to fund any payments
required to be made by it under the Loan Documents within two (2) Business Days
after any such payment is due (excluding expense and similar reimbursements that
are subject to good faith disputes), (b) given written notice (and Agents have
not received a revocation in writing), to a Borrower, an Agent, any Lender, or
the L/C Issuer or has otherwise publicly announced (and Agents have not received
notice of a public retraction) that such Lender believes it will fail to fund
payments or purchases of participations required to be funded by it under the
Loan Documents or one or more other syndicated credit facilities, (c) failed to
fund, and not cured, loans, participations, advances, or reimbursement
obligations under one or more other syndicated credit facilities, unless subject
to a good faith dispute, or (d) any Lender that has (i) become subject to a
voluntary or involuntary case under the Bankruptcy Code, any Insolvency Law or
any similar bankruptcy laws, (ii) a custodian, conservator, receiver or similar
official appointed for it or any substantial part of such Person’s assets, or
(iii) made a general assignment for the benefit of creditors, been liquidated,
or otherwise been adjudicated as, or determined by any Governmental Authority
having regulatory authority over such Person or its assets to be, insolvent or
bankrupt, and for clause (d), and an Agent has determined that such Lender is
reasonably likely to fail to fund any payments required to be made by it under
the Loan Documents.  For purposes of this definition, control of a Person shall
have the same meaning as in the second sentence of the definition of Affiliate.

 

“Non-U.S. Lender Party” means each of US Agent, each US Lender, each US L/C
Issuer, each SPV and each participant, in each case that is not a United States
person as defined in Section 7701(a)(30) of the Code.

 

“Note” means any Revolving Note or Swingline Note and “Notes” means all such
Notes.

 

“Notice of Borrowing” means a notice given by a Borrower to the Appropriate
Agent pursuant to Section 1.5, in substantially the form of
Exhibit 11.1(c) hereto.

 

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“Obligations” means US Obligations and Canadian Obligations.

 

“Ordinary Course of Business” means, in respect of any transaction involving any
Person, the ordinary course of such Person’s business, as conducted by any such
Person in accordance with past practice and undertaken by such Person in good
faith and not for purposes of evading any covenant or restriction in any Loan
Document.

 

“Organization Documents” means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
and any shareholder rights agreement, (b) for any partnership, the partnership
agreement and, if applicable, certificate of limited partnership, (c) for any
limited liability company, the operating agreement and articles or certificate
of formation or (d) any other document setting forth the manner of election or
duties of the officers, directors, managers or other similar persons, or the
designation, amount or relative rights, limitations and preference of the Stock
of a Person.

 

“Parent” means Thermon Group Holdings, Inc., a Delaware corporation.

 

“Patents” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to letters patent
and applications therefor.

 

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended.

 

“PBGC” means the United States Pension Benefit Guaranty Corporation any
successor thereto.

 

“Permits” means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, any Governmental Authority, in each case whether or
not having the force of law and applicable to or binding upon such Person or any
of its property or to which such Person or any of its property is subject.

 

“Permitted Acquisition” means any Acquisition by (i) a US Credit Party (other
than Holdings) of substantially all of the assets or line or division of a
Target, other than a Target whose assets are located in Canada, (ii) Canadian
Borrower or a Canadian Subsidiary of Canadian Borrower of substantially all of
the assets of a Target, other than a Target whose assets are located in the
United States, (iii) a US Credit Party (other than Holdings) or a Subsidiary of
a US Credit Party of 100% of the Stock and Stock Equivalents of a Target other
than a target organized under the laws of Canada or any province thereof, or
(iv) Canadian Borrower or a Subsidiary of Canadian Borrower of 100% of the Stock
and Stock Equivalents of a Target other than a target organized under the laws
of the United States or any state thereof, in each case, to the extent that each
of the following conditions shall have been satisfied:

 

(a)                                 the US Borrowers shall have furnished to the
Agents and Lenders at least ten (10) Business Days prior to the consummation of
such Acquisition (or such shorter period to which US Agent may consent) (1) an
executed term sheet and/or commitment letter (setting forth

 

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in reasonable detail the terms and conditions of such Acquisition) and, at the
request of the US Agent and to the extent available, such other information and
documents that the US Agent may reasonably request, including, without
limitation, executed counterparts of the respective agreements, documents or
instruments pursuant to which such Acquisition is to be consummated (including,
without limitation, any related management, non-compete, employment, option or
other material agreements), any schedules to such agreements, documents or
instruments and all other material ancillary agreements, instruments and
documents to be executed or delivered in connection therewith, (2) to the extent
available, copies of the Target’s three (3) most recent annual income statements
and balance sheets, audited by the Target’s independent accountants, if
available, together with the most recent interim financial statements then
available, (3) pro forma financial statements of Borrowers and their
Subsidiaries after giving effect to the consummation of such Acquisition, (4) a
certificate of a Responsible Officer of the Borrowers demonstrating that the
Leverage Ratio of the Credit Parties as in effect on the date of consummation of
such Permitted Acquisition (after giving effect thereto and using Adjusted
EBITDA computed for the twelve month period ending on the last day of the most
recent Fiscal Quarter for which financial statements have been delivered to
Agents) after giving effect to the consummation of such Acquisition is less than
or equal to 4.50 to 1.00, and (5) to the extent available, copies of such other
agreements, instruments and other documents (including, without limitation, the
Loan Documents required by Section 4.13) as the US Agent reasonably shall
request; provided, the deliveries set forth in clauses (3) and (4) above shall
not be required for Minor Acquisitions;

 

(b)                                 the Borrowers and their Subsidiaries
(including any new Subsidiary) shall execute and deliver the agreements,
instruments and other documents as and to the extent required by Section 4.13;

 

(c)                                  such Acquisition shall not be hostile and
shall have been approved by the board of directors (or other similar body)
and/or the stockholders or other equity holders of the Target;

 

(d)                                 no Default or Event of Default shall then
exist or would exist after giving effect thereto;

 

(e)                                  after giving effect to such Acquisition,
the sum of (y) Aggregate Availability and (z) the aggregate amount of
unrestricted cash of the US Credit Parties and the Canadian Credit Parties, in
each instance, maintained in deposit accounts which are subject to a deposit
account control agreement in favor of the applicable Agent, equals an amount not
less than $7,500,000;

 

(f)                                   the total consideration paid or payable
(including without limitation, all transaction costs, assumed Indebtedness and
Liabilities incurred, assumed or reflected on a consolidated balance sheet of
the Credit Parties and their Subsidiaries after giving effect to such
Acquisition and the maximum amount of all deferred payments, including earnouts,
but excluding any such amounts paid or funded with the Net Issuance Proceeds of
an Excluded Equity Issuance) for all Acquisitions consummated during the term of
this Agreement shall not exceed the US Dollar Equivalent of $75,000,000 in the
aggregate for all such Acquisitions; and

 

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(g)                                  the Target has EBITDA, subject to pro forma
adjustments acceptable to US Agent, for the most recent four quarters prior to
the acquisition date for which financial statements are available, greater than
zero.

 

“Permitted Refinancing” means Indebtedness constituting a refinancing or
extension of Indebtedness permitted under subsection 5.5(c), 5.5(d), 5.5(p) or
5.5(q) that (a) has an aggregate outstanding principal amount not greater than
the aggregate principal amount of the Indebtedness being refinanced or extended,
(b) has a weighted average maturity (measured as of the date of such refinancing
or extension) and maturity no shorter than that of the Indebtedness being
refinanced or extended, (c) is not entered into as part of a sale leaseback
transaction, (d) is not secured by a Lien on any assets other than the
collateral securing the Indebtedness being refinanced or extended, (e) the
obligors of which are the same as the obligors of the Indebtedness being
refinanced or extended and (f) is otherwise on terms no less favorable to the
Credit Parties or their Subsidiaries, taken as a whole, than those of the
Indebtedness being refinanced or extended.

 

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

 

“Pledged Collateral” has the meaning specified in the Guaranty and Security
Agreement and shall include any other Collateral required to be delivered to an
Agent pursuant to the terms of any Collateral Document.

 

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

 

“Prior Claims” means all Liens created by applicable law (in contrast with Liens
voluntarily granted) which rank or are capable of ranking prior or pari passu
with Canadian Agent’s security interests (or interests similar thereto under
applicable law) against all or part of the Collateral, including for amounts
owing for employee source deductions, goods and services taxes, sales taxes,
harmonized sales taxes, municipal taxes, workers’ compensation, Quebec corporate
taxes, pension fund obligations, Wage Earner Protection Program Act obligations
and overdue rents.

 

“Prior Indebtedness” means the Indebtedness and obligations under that certain
Credit Agreement, dated as of April 30, 2010, by and among the US Borrower, the
Canadian Borrower, other credit parties thereunder, other lenders from time to
time party thereto, and General Electric Capital Corporation, as the U.S. lender
and GE Canada Finance Holding Company as the Canadian lender, and the related
loan documentation.

 

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“Prior Lenders” means, collectively, General Electric Capital Corporation, as US
administrative agent, GE Canada Finance Holding Company, as Canadian
administrative agent, and each lender under the Credit Agreement described in
Prior Indebtedness.

 

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.

 

“Rate Contracts” means swap agreements (as such term is defined in Section 101
of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.

 

“Real Estate” means any real property owned, leased, subleased or otherwise
operated or occupied by any Credit Party or any Subsidiary of any Credit Party.

 

“Reallocation Event” means the acceleration of all or part of the Obligations.

 

“Reallocation Percentage” means, as to each Lender in connection with a given
Reallocation Event, a fraction, expressed as a decimal, the numerator of which
shall be the principal amount of all Loans held by such Lender immediately prior
to such Reallocation Event and the denominator shall be the aggregate principal
amount of all Loans held by all Lenders.  For purposes of computing each
Lender’s Reallocation Percentage, all Obligations shall be expressed in US
Dollar Equivalents based on currency exchange rates as in effect on the Closing
Date.  Agents’ determination of each Lender’s Reallocation Percentage shall be
conclusive on all parties absent manifest error.

 

“Related Persons” means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article II) and other
consultants and agents of or to such Person or any of its Affiliates.

 

“Releases” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into
or through the environment.

 

“Remedial Action” means all actions required to (a) clean up, remove, treat or
in any other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a Hazardous Material
does not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment or (c) perform pre remedial studies and
investigations and post-remedial monitoring and care with respect to any
Hazardous Material.

 

“Required Canadian Lenders” means at any time (a) Canadian Lenders then holding
more than fifty percent (50%) of the sum of the Aggregate Canadian Revolving
Loan Commitments then in effect, or (b) if the Aggregate Canadian Revolving Loan
Commitments have terminated, Canadian Lenders then holding more than fifty
percent (50%) of the sum of the US Dollar Equivalent of the aggregate
outstanding amount of Canadian Revolving Loans, the US Dollar

 

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Equivalent of outstanding Canadian Letter of Credit Obligations, the US Dollar
Equivalent of amounts of participations in Canadian Swing Loans and the US
Dollar Equivalent of the principal amount of unparticipated portions of Canadian
Swing Loans.

 

“Required Lenders” means at any time (a) Lenders then holding more than fifty
percent (50%) of the US Dollar Equivalent of the Aggregate US Revolving Loan
Commitment then in effect, or (b) if the Aggregate US Revolving Loan Commitment
has terminated, Lenders then holding more than fifty percent (50%) of the US
Dollar Equivalent of sum of the aggregate unpaid principal amount of Loans
(other than Swing Loans) then outstanding, outstanding Letter of Credit
Obligations, amounts of participations in Swing Loans and the principal amount
of unparticipated portions of Swing Loans.

 

“Required US Lenders” means at any time (a) US Lenders then holding more than
fifty percent (50%) of the Aggregate US Revolving Loan Commitment then in
effect, or (b) if the Aggregate US Revolving Loan Commitment has terminated, US
Lenders then holding more than fifty percent (50%) of the sum of the aggregate
outstanding amount of US Revolving Loans, outstanding US Letter of Credit
Obligations, amounts of participations in US Swing Loans and the principal
amount of unparticipated portions of US Swing Loans.

 

“Requirement of Law” means, as to any Person, any law (statutory or common),
ordinance, treaty, rule, regulation, order, policy, other legal requirement or
determination of an arbitrator or of a 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, with respect to the Borrowing Base, (a) reserves established
by an Agent from time to time against eligible Accounts, eligible Inventory,
eligible Equipment and eligible Real Estate pursuant to Exhibit 11.1(b), and
(b) such other reserves against eligible Accounts, eligible Inventory eligible
Equipment and eligible Real Estate or Availability that the Appropriate Agent
may, in its reasonable credit judgment, establish from time to time.  Without
limiting the generality of the foregoing, Reserves established to ensure the
payment of accrued interest expenses, Indebtedness or real property lease
obligations shall be deemed to be a reasonable exercise of an Agent’s credit
judgment.

 

“Responsible Officer” means the chief executive officer, corporate controller or
the president of a Borrower or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants or delivery of financial information, the chief financial officer or
the treasurer of a Borrower or any other officer having substantially the same
authority and responsibility.

 

“Revolving Loans” mean US Revolving Loans and Canadian Revolving Loans.

 

“Revolving Notes” mean each US Revolving Note and each Canadian Revolving Note.

 

“Revolving Termination Date” means the earlier to occur of: (a) August 7, 2015;
and (b) the date on which the Aggregate US Revolving Loan Commitment and the
Aggregate Canadian Revolving Loan Commitment shall terminate in accordance with
the provisions of this Agreement.

 

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“S&P” means Standard & Poor’s Corporation.

 

“SEC” means the Securities and Exchange Commission, or any successor agency
thereto.

 

“Second Lien Collateral Agent” means The Bank of New York Mellon Trust Company,
N.A., in its capacity as the collateral agent for the Second Lien Lenders.

 

“Second Lien Indebtedness” means Indebtedness of US Borrower, as successor by
merger to Thermon Finance, Inc., evidenced by the Second Lien Notes issued
pursuant to the Second Lien Indenture.

 

“Second Lien Indebtedness Documents” means (i) the Second Lien Indenture,
(ii) the Second Lien Notes, and (iii) the “Collateral Documents” as defined in
the Second Lien Indenture.

 

“Second Lien Indenture” means that certain Indenture dated as of April 30, 2010
by and between Thermon Finance, Inc. and The Bank of New York Mellon Trust
Company, N.A., as trustee for the benefit of the Second Lien Lenders and as
Second Lien Collateral Agent, as supplemented by the First Supplemental
Indenture dated as of April 30, 2010, by and among US Borrower, as successor by
merger to Thermon Finance, Inc., certain of US Borrower’s affiliates party
thereto as guarantors and The Bank of New York Mellon Trust Company, N.A., as
trustee for the benefit of the Second Lien Lenders and as Second Lien Collateral
Agent, pursuant to which US Borrower issued the Second Lien Notes.

 

“Second Lien Lenders” means holders and/or lenders from time to time of (or in
respect of) the Second Lien Notes.

 

“Second Lien Notes” means those certain 9.500% Senior Secured Notes due 2017
issued by US Borrower, as successor by merger to Thermon Finance, Inc., to the
holders thereof on the Closing Date, together with all other notes, loans,
advances or other extension of credit outstanding from time to time under the
Second Lien Indebtedness Documents, including any notes issued in exchange
therefor pursuant to the Second Lien Indenture.

 

“Secured Party” means each Agent, each Lender, each L/C Issuer, each other
Indemnitee and each other holder of any Obligation of a Credit Party including
each Secured Swap Provider.

 

“Secured Rate Contract” means any Rate Contract (a) between a Borrower and a
Secured Swap Provider or (b) between a Borrower and the counterparty thereto,
which has been provided or arranged by Chase or an Affiliate of Chase.

 

“Secured Swap Provider” means (i) a Lender or an Affiliate of a Lender (or a
Person who was a Lender or an Affiliate of a Lender at the time of execution and
delivery of a Rate Contract) who has entered into a Rate Contract with a
Borrower, or (ii) a Person with whom a Borrower has entered into a Rate Contract
provided or arranged by Chase or an Affiliate of Chase, and any assignee
thereof.

 

“Software” means (a) all computer programs, including source code and object
code versions, (b) all data, databases and compilations of data, whether machine
readable or

 

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otherwise, and (c) all documentation, training materials and configurations
related to any of the foregoing.

 

“Solvent” means, with respect to any Person as of any date of determination,
that, as of such date, (a) the value of the assets of such Person (both at fair
value and present fair saleable value) is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person,
(b) such Person is able to pay all liabilities of such Person as such
liabilities mature in the normal course of business and (c) such Person does not
have unreasonably small capital.  In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities shall be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Special Flood Hazard Area” means an area that FEMA’s current flood maps
indicate has at least a one percent (1%) chance of a flood equal to or exceeding
the base flood elevation (a 100-year flood) in any given year.

 

“Specified Event of Default” means an Event of Default under subsections
7.1(a) (other than a Credit Party’s failure to reimburse the costs and expenses
of an Agent or any Lender as required by this Agreement that are the subject of
a bona fide dispute), 7.1(c) (as a result of a failure to perform or comply with
any covenant contained in subsection 4.1, 4.2(b), 4.2(d), 4.3(a), 5.11 or
Article VI), 7.1(e) (as it relates to the Second Lien Indebtedness), 7.1(f),
7.1(g), 7.1(j) or 7.1(k); provided, however, that notwithstanding the foregoing,
for purposes of Section 5.11(k) only, a Specified Event of Default shall mean
(i) an Event of Default under subsections 7.1(a) (other than a Credit Party’s
failure to reimburse the costs and expenses of an Agent or any Lender as
required by this Agreement that are the subject of a bona fide dispute),
7.1(c) (as a result of a failure to perform or comply with any covenant
contained in subsection 4.1, 4.2(b), 4.2(d), 4.3(a) or 5.11), 7.1(e) (as it
relates to the Second Lien Indebtedness), 7.1(f), 7.1(g), 7.1(j) or 7.1(k), or
(ii) if, as of the last day of any Fiscal Quarter (commencing with the Fiscal
Quarter ending June 30, 2012), average daily Aggregate Availability for the
thirty (30) day period ending on such date is less than the Applicable Minimum
Availability Threshold and the Fixed Charge Coverage Ratio for the twelve fiscal
month period ending on such date (as calculated in the manner set forth in
Exhibit 4.2(b) hereto) is less than 1.10 to 1.00.

 

“Sponsor” means CHS Private Equity V LP, a Delaware limited partnership.

 

“SPV” means any special purpose funding vehicle identified as such in a writing
by any Lender to Agent.

 

“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 Federal Reserve Board to which the US Agent is subject with
respect to the Adjusted LIBOR Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board). 
Such reserve percentages shall include those imposed pursuant to such Regulation
D.  LIBOR Rate Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve

 

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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.

 

“Stock” means all shares of capital stock (whether denominated as common stock
or preferred stock), equity interests, beneficial, partnership or membership
interests, joint venture interests, participations or other ownership or profit
interests in or equivalents (regardless of how designated) of or in a Person
(other than an individual), whether voting or non-voting.

 

“Stock Equivalents” means all securities convertible into or exchangeable for
Stock or any other Stock Equivalent and all warrants, options or other rights to
purchase, subscribe for or otherwise acquire any Stock or any other Stock
Equivalent, whether or not presently convertible, exchangeable or exercisable.

 

“Subordinated Indebtedness” means Indebtedness of any Credit Party or any
Subsidiary of any Credit Party which is subordinated to all or any portion of
the Obligations as to right and time of payment and as to other rights and
remedies thereunder and having such other terms as are, in each case, reasonably
satisfactory to Agents.

 

“Subordinated Second Lien” means Liens in favor of the Second Lien Collateral
Agent second in priority to the Liens granted to the US Agent under the Loan
Documents (but in any event subject to Permitted Liens), for the benefit of the
Second Lien Collateral Agent and the Second Lien Lenders on the assets and Stock
of the US Credit Parties (other than the Stock of Holdings) and their
Subsidiaries with respect to which US Agent shall have a prior perfected Lien as
security for the US Obligations.

 

“Subsidiary” of a Person means any corporation, association, limited liability
company, partnership, joint venture or other business entity of which more than
fifty percent (50%) of the voting Stock is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof.

 

“Swingline Lender” means either or both, as the context requires, of the US
Swingline Lender and the Canadian Swingline Lender.

 

“Swing Loan” means a US Swing Loan or a Canadian Swing Loan.

 

“Swingline Request” has the meaning specified in clause (ii) of subsection
1.1(d).

 

“Target” means any other Person or business unit or asset group of any other
Person acquired or proposed to be acquired in an Acquisition.

 

“Tax Affiliate” means, (a) each Borrower and its Subsidiaries and (b) any
Affiliate of a Borrower with which such Borrower files or is required to file
tax returns on a consolidated, combined, unitary or similar group basis.

 

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“Title IV Plan” means a pension plan subject to Title IV of ERISA, other than a
Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has any
obligation or liability, contingent or otherwise.

 

“Trade Secrets” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to trade
secrets.

 

“Trademark” means all rights, title and interests (and all related IP Ancillary
Rights) arising under any Requirement of Law in or relating to trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and other source or business
identifiers and, in each case, all goodwill associated therewith, all
registrations and recordations thereof and all applications in connection
therewith.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Texas.

 

“United States” and “U.S.” each means the United States of America.

 

“US Agent” means Chase, in its capacity as administrative agent for the Lenders
hereunder, and any successor administrative agent.

 

“US Availability” means, as of any date of determination, the amount by which
(a) the Maximum US Revolving Loan Balance, exceeds (b) the aggregate outstanding
principal balance of US Revolving Loans.

 

“US Credit Parties” means Holdings, the US Borrower and each other Person
(i) which executes a guaranty of the Obligations, (ii) which grants a Lien on
all or substantially all of its assets to secure payment of the Obligations and
(iii) all of the Stock of which is pledged to US Agent for the benefit of the
Secured Parties.

 

“US Dollar Equivalent” means, with respect to any amount denominated in Dollars,
such amount of Dollars, and with respect to any amount denominated in a currency
other than Dollars, the amount of US Dollars, as of any date of determination,
into which such other currency can be converted in accordance with prevailing
exchange rates, as determined in accordance with Section 11.4.

 

“US L/C Issuer” means any US Lender or an Affiliate thereof or a bank or other
legally authorized Person, in each case, reasonably acceptable to US Agent, in
such Person’s capacity as an issuer of Letters of Credit hereunder.

 

“US L/C Reimbursement Obligation” means, for any US Letter of Credit, the
obligation of the US Borrower to the US L/C Issuer thereof or to US Agent, as
and when matured, to pay all amounts drawn under such US Letter of Credit.

 

“US Letter of Credit” means documentary or standby letters of credit issued for
the account of the US Borrower by US L/C Issuers, and bankers’ acceptances
issued by US Borrower, for which US Agent and Lenders have incurred US Letter of
Credit Obligations.

 

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“US Letter of Credit Obligations” means all outstanding obligations incurred by
US Agent and US Lenders at the request of the US Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of US Letters of Credit by US L/C Issuers or the purchase of a
participation as set forth in subsection 1.1(c) with respect to any US Letter of
Credit.  The amount of such US Letter of Credit Obligations shall equal the
maximum amount that may be payable by US Agent and US Lenders thereupon or
pursuant thereto.

 

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

 

“US Obligations” means all US Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by any Credit Party to any
US Lender, US Agent, any US L/C Issuer, any Secured Swap Provider or any other
Person required to be indemnified, that arises under any Loan Document, any
Secured Rate Contract or any Banking Services, whether or not for the payment of
money, whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired.

 

“US Prime Rate” (a) in the case of Base Rate Loans made available in Canada, the
rate of interest per annum publicly announced from time to time by Chase as its
prime rate for US Dollar-denominated commercial loans made in Canada, and (b) in
the case of Base Rate Loans made available in the United States of America, 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, New York City; each change in the
US Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

 

“US Revolving Note” means a promissory note of the US Borrower payable to a US
Lender in substantially the form of Exhibit 11.1(d) hereto, evidencing
Indebtedness of the US Borrower under the US Revolving Loan Commitment of such
Lender.

 

“US Secured Parties” means the US Agent, each US Lender, each US L/C Issuer and
each other holder of a US Obligation.

 

“US Swingline Commitment” means $5,000,000.

 

“US Swingline Lender” means, each in its capacity as US Swingline Lender
hereunder, Chase or, upon the resignation of Chase as US Agent hereunder, any
Lender (or Affiliate or Approved Fund of any Lender) that agrees, with the
approval of US Agent (or, if there is no such successor US Agent, the Required
US Lenders) and the US Borrower, to act as the US Swingline Lender hereunder.

 

“US Swingline Note” means a promissory note of the US Borrower payable to the US
Swingline Lender, in substantially the form of Exhibit 11.1(e) hereto,
evidencing the Indebtedness of the US Borrower to the US Swingline Lender
resulting from the Swing Loans made to the US Borrower by the US Swingline
Lender.

 

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“Wholly-Owned Subsidiary” means any Subsidiary in which (other than directors’
qualifying shares required by law) one hundred percent (100%) of the Stock and
Stock Equivalents, at the time as of which any determination is being made, is
owned, beneficially and of record, by any Credit Party, or by one or more of the
other Wholly-Owned Subsidiaries, or both.

 

11.2.                     Other Interpretive Provisions.

 

(a)                                 Defined Terms.  Unless otherwise specified
herein or therein, all terms defined in this Agreement or in any other Loan
Document shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto.  The meanings of defined terms shall
be equally applicable to the singular and plural forms of the defined terms. 
Terms (including uncapitalized terms) not otherwise defined herein and that are
defined in the UCC or PPSA, as applicable shall have the meanings therein
described.

 

(b)                                 The Agreement.  The words “hereof”,
“herein”, “hereunder” and words of similar import when used in this Agreement or
any other Loan Document shall refer to this Agreement or such other Loan
Document as a whole and not to any particular provision of this Agreement or
such other Loan Document; and subsection, section, schedule and exhibit
references are to this Agreement or such other Loan Documents unless otherwise
specified.

 

(c)                                  Certain Common Terms.  The term “documents”
includes any and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.  The term “including”
is not limiting and means “including without limitation.”

 

(d)                                 Performance; Time.  Whenever any performance
obligation hereunder or under any other Loan Document (other than a payment
obligation) shall be stated to be due or required to be satisfied on a day other
than a Business Day, such performance shall be made or satisfied on the next
succeeding Business Day.  In the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and including”; the
words “to” and “until” each mean “to but excluding”, and the word “through”
means “to and including.”  If any provision of this Agreement or any other Loan
Document refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking, or not taking, such
action.

 

(e)                                  Contracts.  Unless otherwise expressly
provided herein or in any other Loan Document, references to agreements and
other contractual instruments, including this Agreement and the other Loan
Documents, shall be deemed to include all subsequent amendments, thereto,
restatements and substitutions thereof and other modifications and supplements
thereto which are in effect from time to time, but only to the extent such
amendments and other modifications are not prohibited by the terms of any Loan
Document.

 

(f)                                   Laws.  References to any statute or
regulation are to be construed as including all statutory and regulatory
provisions related thereto or consolidating, amending, replacing, supplementing
or interpreting the statute or regulation.

 

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11.3.                     Accounting Terms and Principles.  All accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in accordance with GAAP.  No change in the
accounting principles used in the preparation of any financial statement
hereafter adopted by Holdings shall be given effect for purposes of measuring
compliance with any provision of Article V or VI unless the Borrowers, Agents
and the Required Lenders agree to modify such provisions to reflect such changes
in GAAP and, unless such provisions are modified, all financial statements,
Compliance Certificates and similar documents provided hereunder shall be
provided together with a reconciliation between the calculations and amounts set
forth therein before and after giving effect to such change in GAAP. 
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to in Article V and Article VI shall be made,
without giving effect to any election under Accounting Standards Codification
825-10 (or any other Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of any Credit Party or
any Subsidiary of any Credit Party at “fair value.”  A breach of a financial
covenant contained in Article VI shall be deemed to have occurred as of any date
of determination by Agent or as of the last day of any specified measurement
period, regardless of when the financial statements reflecting such breach are
delivered to Agent.  For purposes of determining (i) the US Dollar Equivalent of
any Loan and any other amount used in connection with the calculation of the
Maximum US Revolving Loan Balance and the Maximum Canadian Revolving Loan
Balance in connection with (y) any proposed Borrowing (or upon any request for
conversion or continuation of any Loan), shall be based upon the US Dollar
Equivalent as in effect two (2) Business Days prior to such Borrowing,
conversion or continuation or (z) the delivery of a duly completed Borrowing
Base Certificate as required by subsection 4.2(d) (including the calculation of
Aggregate Availability set forth therein), shall be based upon the US Dollar
Equivalent as in effect on the date as of which the Borrowing Bases are
calculated pursuant to such Borrowing Base Certificate, (ii) the US Dollar
Equivalent of any Loan and any other amount used in connection with the
calculation of the Maximum US Revolving Loan Balance and the Maximum Canadian
Revolving Loan Balance in connection with any proposed issuance of a Letter of
Credit (or upon any request for the amendment, renewal or extension thereof),
shall be based upon the US Dollar Equivalent as in effect on the date of such
issuance, amendment, renewal or extension, and (iii) compliance under each of
Articles IV, V and VI, any amount in a currency other than US Dollars will be
converted, on the last Business Day of each Fiscal Quarter or, more frequently
as US Agent may require upon the occurrence and during the continuance of an
Event of Default.

 

11.4.                     Payments.

 

(a)                                 Agents may set up standards and procedures
to determine or redetermine, in their reasonable discretion, the equivalent in
Dollars of any amount expressed in any currency other than Dollars and otherwise
may, but shall not be obligated to, rely on any determination made by any Credit
Party or any L/C Issuer.  Any such determination or redetermination by Agents
shall be conclusive and binding for all purposes, absent manifest error.  No
determination or redetermination by any Secured Party or any Credit Party and no
other currency conversion shall change or release any obligation of any Credit
Party or of any Secured Party (other than Agents and their Related Persons)
under any Loan Document, each of which agrees to pay separately for any
shortfall remaining after any conversion and payment of the amount as

 

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converted.  Agents may round up or down, and may set up appropriate mechanisms
to round up or down, any amount hereunder to nearest higher or lower amounts and
may determine reasonable de minimis payment thresholds.

 

(b)                                 Interest and principal on all Loans funded
in a particular currency will be paid or repaid in that same currency; provided
that all expense reimbursements hereunder shall be paid in Dollars.  For
purposes of preparing financial statements, amounts in any currency other than
Dollars will be converted to Dollars based on GAAP, consistently applied, for
the purposes of preparing cash flow statements and income statements.  If the
Appropriate Agent receives any payment from or on behalf of any Credit Party in
a currency other than the currency in which the relevant Obligation is
denominated, the Appropriate Agent may convert the payment (including the
monetary proceeds of realization upon any Collateral and any funds held in a
cash collateral account) into the currency in which the relevant Obligation is
payable at the exchange rate published in the Wall Street Journal on the
Business Day closest in time to the date on which such payment was due (or if
such reference is not available, by such other method reasonably determined by
Appropriate Agent).  The relevant Obligations shall be satisfied only to the
extent of the amount actually received by the Appropriate Agent upon such
conversion.  Unless otherwise specified herein, all determinations of US Dollar
Equivalents (calculating financial covenants and determining compliance with
covenants expressed in Dollars) shall be determined by reference to the Wall
Street Journal published on the Business Day closest in time to the relevant
date of determination or for the relevant period of determination or by such
other method reasonably determined by the Appropriate Agent in accordance with
such Appropriate Agent’s customary practice for commercial loans being
administered by it.

 

11.5.                     Judgment Currency.

 

(a)                                 If, for the purpose of obtaining or
enforcing judgment against any Credit Party in any court in any jurisdiction, it
becomes necessary to convert into any other currency (such other currency being
hereinafter in this Section 11.5 referred to as the “Judgment Currency”) an
amount due under any Loan Document in any currency (the “Obligation Currency”)
other than the Judgment Currency, the conversion shall be made at the rate of
exchange prevailing on the Business Day immediately preceding the date of actual
payment of the amount due, in the case of any proceeding in the courts of the
Province of Ontario or in the courts of any other jurisdiction that will give
effect to such conversion being made on such date, or the date on which the
judgment is given, in the case of any proceeding in the courts of any other
jurisdiction (the applicable date as of which such conversion is made pursuant
to this Section 11.5 being hereinafter in this Section 11.5 referred to as the
“Judgment Conversion Date”).

 

(b)                                 If, in the case of any proceeding in the
court of any jurisdiction referred to in Section 11.5(a), there is a change in
the rate of exchange prevailing between the Judgment Conversion Date and the
date of actual receipt for value of the amount due, the applicable Credit Party
or Credit Parties shall pay such additional amount (if any, but in any event not
a lesser amount) as may be necessary to ensure that the amount actually received
in the Judgment Currency, when converted at the rate of exchange prevailing on
the date of payment, will produce the amount of the Obligation Currency which
could have been purchased with the amount of the Judgment Currency stipulated in
the judgment or judicial order at the rate of

 

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exchange prevailing on the Judgment Conversion Date.  Any amount due from any
Credit Party under this Section 11.5(b) shall be due as a separate debt and
shall not be affected by judgment being obtained for any other amounts due under
or in respect of any of the Loan Documents.

 

(c)                                  The term “rate of exchange” in this
Section 11.5 means the rate of exchange at which the Appropriate Agent, on the
relevant date at or about 12:00 noon (Toronto time), would be prepared to sell,
in accordance with Agent’s normal course foreign currency exchange practices,
the Obligation Currency against the Judgment Currency.

 

[Signature Pages Follow.]

 

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

 

 

US BORROWER:

 

 

 

 

THERMON INDUSTRIES, INC.

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

President

 

 

 

 

 

Address for notices:

 

 

 

 

 

100 Thermon Drive

 

 

San Marcos, Texas 78666

 

 

Attn:  General Counsel

 

 

Facsimile: (512) 396-3627

 

 

 

 

 

Address for wire transfers:

 

 

 

 

 

JPMorgan Chase Bank, N.A.

 

 

Houston, Texas, USA 77002

 

 

ABA No. 021000021

 

 

Account Number # 09922912109

 

 

Reference: Thermon

 

 

Signature Page of Credit Agreement

 

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

 

 

CANADIAN BORROWER:

 

 

 

 

THERMON CANADA INC.

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

Treasurer

 

 

 

 

 

 

 

Address for notices:

 

 

 

 

333 28 Street NE

 

Calgary, Alberta

 

Canada T2A 7P4

 

Attn: Finance Manager

 

Facsimile: (403) 207-0092

 

 

 

 

 

 

 

Address for wire transfers:

 

 

 

 

TD Canada Trust

 

Calgary Place Branch

 

Calgary, Alberta

 

Canada T2P 0L3

 

Branch # 80609

 

Institution# 004

 

CAD Account # 5215472

 

SWIFT Code: TDOMCATTTOR

 

Signature Page of Credit Agreement

 

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

 

 

OTHER CREDIT PARTIES:

 

 

 

 

THERMON HOLDING CORP.

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

President

 

 

 

 

 

 

 

Address for notices:

 

 

 

 

100 Thermon Drive

 

San Marcos, Texas 78666

 

Attn:  General Counsel

 

Facsimile: (512) 396-3627

 

Signature Page of Credit Agreement

 

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

 

 

THERMON MANUFACTURING COMPANY

 

 

 

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

President

 

 

 

 

 

 

 

THERMON HEAT TRACING SERVICES, INC.

 

 

 

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

President

 

 

 

 

 

 

 

THERMON HEAT TRACING SERVICES-II, INC.

 

 

 

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

President

 

 

 

 

 

 

 

THERMON HEAT TRACING SERVICES-I, INC.

 

 

 

 

 

 

 

By:

/s/ Rodney Bingham

 

Name:

Rodney Bingham

 

Title:

President

 

Signature Page of Credit Agreement

 

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

 

 

JPMORGAN CHASE BANK, N.A., as US Agent,

 

US Swingline Lender and as a US Lender

 

 

 

_

By:

/s/ Joe Carroll

 

Name:

Joe Carroll

 

Title:

Its Duly Authorized Signatory

 

 

 

 

Address for Notices:

 

 

 

 

JPMorgan Chase Bank, N.A.

 

Mail Code TX3-8211

 

221 West 6th Street, 2nd Floor

 

Austin, Texas 78701

 

Attention: Manager/Commercial Lending Group

 

Facsimile: (512) 479-2239

 

 

 

 

Address for payments:

 

 

 

 

ABA No. 021000021

 

Account Number # 9008104671

 

JPMorgan Chase Bank, N.A.

 

Account Name:

Thermon Industries, Inc., Obligor

 

 

#80976981

 

Reference: Thermon

 

Signature Page of Credit Agreement

 

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

 

 

JPMORGAN CHASE BANK, N.A., TORONTO

 

BRANCH, as Canadian Agent, Canadian

 

Swingline Lender and as a Canadian Lender

 

 

 

 

By:

/s/ Michael N. Tam

 

Name:

Michael N. Tam

 

Title:

Senior Vice President

 

 

 

 

 

 

 

Address for notices:

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

TORONTO BRANCH

 

200 Bay Street, SouthTower, Suite 1800

 

Toronto, Ontario M5J 2J2

 

Attention: Michael Tam, Senior Vice President

 

Facsimile No:  416-981-2375

 

 

 

 

 

 

 

Address for payments:

 

 

 

 

Dollar Fundings

 

 

 

 

SWIFT BIC:

CHASUS33

 

JPMorgan Chase Bank, N.A. New York
ABA Number : 021000021

 

 

 

 

JPMorgan Chase Bank, N.A., Toronto Branch

 

200 Bay Street, RBC Plaza, 18th floor

 

South Tower, Toronto M5J 2J2

 

Ref: Thermon Canada Inc.

 

Attention: Lucy Cano, Loan Servicer III

 

 

 

 

(continued below)

 

Signature Page of Credit Agreement

 

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Canadian Dollar Fundings

 

 

 

SWIFT BIC: ROYCCAT2

 

Royal Bank of Canada, Toronto

 

 

 

JPMorgan Chase Bank, N.A., Toronto Bank

 

Account No. 07172 -1016294
200 Bay Street, RBC Plaza, 18th floor
South Tower, Toronto M5J 2J2
Ref: Thermon Canada

 

Attention: Lucy Cano, Loan Servicer III

 

Signature Page of Credit Agreement

 

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