Exhibit 10.1
EXECUTION COPY
AMENDMENT AND RESTATEMENT
AMENDMENT AND RESTATEMENT AGREEMENT, dated as of May 13, 2011 (this “Amendment
and Restatement”), to the Revolving Credit Agreement, dated as of December 3,
2009 (as amended, supplemented or otherwise modified from time to time and in
effect as of the date hereof, the “Credit Agreement”), among Easton-Bell Sports,
Inc., a Delaware corporation (the “Company”), 4078624 Canada Inc., All-American
Sports (Canada) Ltd., Bell Sports Canada Inc., and Easton Sports Canada, Inc.,
each organized under the laws of Canada (collectively, the “Canadian Borrowers”,
and together with the Company, the “Borrowers”), the subsidiary guarantors from
time to time party thereto, the lenders from time to time party thereto,
JPMorgan Chase Bank, N.A., as collateral agent (in such capacity, the
“Collateral Agent”), JPMorgan Chase Bank, N.A., as Administrative Agent, and the
other agents parties thereto.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and
have made, certain loans and other extensions of credit to the Borrowers;
WHEREAS, the Borrowers have requested that the Lenders make certain
modifications to the Credit Agreement as described herein; and
WHEREAS, the Lenders are willing to agree to this Amendment and Restatement set
forth on the terms herein;
NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter
set forth, the parties hereto agree as follows:
SECTION 1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
SECTION 2. Amendment and Restatement.
(a) The Credit Agreement (excluding the Schedules and Exhibits thereto to the
extent not expressly amended and restated herein) is hereby amended and
restated, effective as of the Amendment and Restatement Effective Date (as
defined below), to read as set forth in Annex 1.
(b) The Credit Agreement is hereby further amended, effective as of the
Amendment and Restatement Effective Date, by amending and restating Exhibit D to
read as set forth in Exhibit D.
(c) The Credit Agreement is hereby further amended, effective as of the
Amendment and Restatement Effective Date, by amending and restating
Schedule 1.01A to read as set forth in Schedule 1.01A and by reallocating each
Lender’s Revolving Credit Exposure in accordance with Schedule 1.01A, as amended
and restated.
SECTION 3. Effectiveness. This Amendment and Restatement shall become effective
as of the date (the “Amendment and Restatement Effective Date”) on which the
following conditions have been satisfied:
(a) The Administrative Agent (or its counsel) shall have received duly executed
and completed counterparts hereof (in the form provided and specified by the
Administrative Agent) that, when taken together, bear the signatures of each
Loan Party, the Administrative Agent and each Lender.

 

 

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(b) The Administrative Agent shall have received all fees that are required to
be paid to it under the Credit Agreement or the Engagement Letter, dated as of
March 29, 2011, between the Borrowers and the Administrative Agent on or before
the Amendment and Restatement Effective Date.
(c) The Administrative Agent shall have received payment from the Company, for
the account of each Lender that executes and delivers a counterpart signature
page to this Amendment and Restatement prior to 5:00 P.M., New York City time,
on May 13, 2011 (the “Consent Deadline”), a non-refundable upfront fee payable
in Dollars in an amount equal to 0.25% of the aggregate principal amount of the
Commitment of such Lender outstanding or in effect, as applicable, as of the
Consent Deadline.
(d) The Administrative Agent (or its counsel) shall have received:
(i) a certificate of each Loan Party, dated the Amendment and Restatement
Effective Date and executed by its Secretary or Assistant Secretary, certifying
(A) to the effect that (x) attached thereto is a true and complete copy of the
certificate or articles of incorporation or organization of such Loan Party
certified as of a recent date by the relevant authority of the jurisdiction of
its organization and that such certificate or articles are in full force and
effect, or in the alternative, certifying that such certificates or articles of
incorporation or organization have not been amended since December 3, 2009
(y) attached thereto is a true and complete copy of the by-laws or operating
agreements of each Loan Party as in effect on the Amendment and Restatement
Effective Date, or in the alternative, certifying that such by-laws or operating
agreements have not been amended since December 3, 2009, and (z) attached
thereto is a true and complete copy of resolutions duly adopted by the board of
directors, board of managers, member or other body, as the case may be, of each
Loan Party authorizing the execution, delivery and performance of this Amendment
and Restatement and the Credit Agreement as amended hereby, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, and (B) as to the incumbency and specimen signature of each officer
or other authorized person executing this Amendment and Restatement or documents
related thereto on behalf of any Loan Party and signed by another officer of
such Loan Party as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate, or otherwise in such form as the
Administrative Agent shall reasonably agree;
(ii) a certificate as to the good standing/compliance/status (as applicable) of
each Loan Party as of a recent date, from the relevant authority of the
jurisdiction of its organization; and
(iii) an opinion of (A) Ropes & Gray LLP, counsel for the Loan Parties, and (B)
each local counsel for the Loan Parties listed on Schedule 1 hereto, in each
case, dated as of the Amendment and Restatement Effective Date and in form and
substance reasonably satisfactory to the Administrative Agent.
(e) To the extent invoiced, the Administrative Agent shall have received payment
or reimbursement of its reasonable out-of-pocket expenses in connection with
this Amendment and Restatement and any other out-of-pocket expenses of the
Administrative Agent required to be paid or reimbursed pursuant to the Credit
Agreement on or prior to the Amendment and Restatement Effective Date, including
the reasonable fees, charges and disbursements of counsel for the Administrative
Agent.
(f) No Default or Event of Default shall have occurred and be continuing under
the Credit Agreement.

 

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(g) All representations and warranties set forth in Article III of the Credit
Agreement shall be true and correct in all material respects, except to the
extent such representations and warranties expressly relate to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date).
SECTION 4. Representations and Warranties. Each of the Borrowers represents and
warrants to each of the Lenders and the Administrative Agent that as of the
Amendment and Restatement Effective Date:
4.1. This Amendment and Restatement has been duly authorized, executed and
delivered by it and this Amendment and Restatement and the Credit Agreement, as
amended and restated hereby, constitutes its valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors’ rights generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law), and with respect to the Canadian Borrowers, subject to applicable
mandatory Canadian law provisions.
4.2. Each of the representations and warranties set forth in Article III of the
Credit Agreement are true and correct in all material respects (or, in the case
of any representation and warranty qualified by materiality, in all respects) on
and as of the Amendment and Restatement Effective Date with the same effect as
though made on and as of the Amendment and Restatement Effective Date; provided
that to the extent that such representations and warranties expressly relate to
an earlier date, they shall be true and correct in all material respects as of
such earlier date, or, in the case of any representation and warranty qualified
by materiality, in all respects as of such earlier date.
SECTION 5. Effect of Amendment and Restatement.
5.1. Except as expressly set forth herein, this Amendment and Restatement shall
not by implication or otherwise limit, impair, constitute a waiver of or
otherwise affect the rights and remedies of the Lenders or the Administrative
Agent under the Credit Agreement or any other Loan Document, and shall not
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other provision of the Credit Agreement or of any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and affect. Except as expressly set forth herein, nothing herein shall be deemed
to entitle any Loan Party to a consent to, or a waiver, amendment, modification
or other change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document in
similar or different circumstances.
5.2. Each Loan Party agrees that (a) all of its obligations, liabilities and
indebtedness under each Loan Document, including guarantee obligations, shall
remain in full force and effect, in accordance with applicable law, on a
continuous basis after giving effect to this Amendment and Restatement and
(b) except as are otherwise being reconfirmed, amended, restated or otherwise
modified in connection with this Amendment and Restatement, all of the Liens and
security interests created and arising under such Loan Documents remain in full
force and effect on a continuous basis in accordance with applicable law, and
the perfected status and priority of each such Lien and security interest
continues in full force and effect, in accordance with applicable law, on a
continuous basis, unimpaired, uninterrupted and undischarged, after giving
effect to this Amendment and Restatement as collateral security for its
obligations, liabilities and indebtedness under the Credit Agreement and under
its guarantees in the Loan Documents.

 

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5.3. For the avoidance of doubt, the Lenders hereby authorize the Administrative
Agent and the Collateral Agent to take such steps and to execute and deliver
such documents as such Agents deem reasonably necessary or advisable to ensure
or document the effectiveness, perfection and priority of such Liens and
security interests.
5.4. On and after the Amendment and Restatement Effective Date, each reference
in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or
words of like import, and each reference to the Credit Agreement in any other
Loan Document shall be deemed a reference to the Credit Agreement as amended
hereby. This Amendment and Restatement shall constitute a “Loan Document” for
all purposes of the Credit Agreement and the other Loan Documents.
SECTION 6. General.
6.1. GOVERNING LAW. THIS AMENDMENT AND RESTATMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AMENDMENT AND RESTATEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
6.2. Costs and Expenses. The Borrowers agree to reimburse the Administrative
Agent for its reasonable out-of-pocket expenses in connection with this
Amendment and Restatement, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent.
6.3. Counterparts. This Amendment and Restatement may be executed by one or more
of the parties to this Amendment and Restatement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Amendment and Restatement by email or facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
6.4. Headings. The headings of this Amendment and Restatement are used for
convenience of reference only, are not part of this Amendment and Restatement
and shall not affect the construction of, or be taken into consideration in
interpreting, this Amendment and Restatement.
[remainder of page intentionally left blank]

 

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

            EASTON-BELL SPORTS, INC.
      By   /s/ Mark A. Tripp         Name:   Mark A. Tripp        Title:   Chief
Financial Officer   

            4078624 CANADA INC.
ALL-AMERICAN SPORTS (CANADA) LTD.
BELL SPORTS CANADA INC.
EASTON SPORTS CANADA, INC.
      By   /s/ Mark A. Tripp         Name:   Mark A. Tripp        Title:   Chief
Financial Officer   

            ALL AMERICAN SPORTS CORPORATION
BELL CHINA INVESTMENTS, INC.
BELL RACING COMPANY
BELL SPORTS CORP.
BELL SPORTS, INC.
CDT NEVADA, INC.
EASTON SPORTS ASIA, INC.
EASTON SPORTS, INC.
EQUILINK LICENSING, LLC
MACMARK CORPORATION
RIDDELL, INC.
RIDDELL SPORTS GROUP, INC.
RIDMARK CORPORATION
      By   /s/ Mark A. Tripp         Name:   Mark A. Tripp        Title:   Chief
Financial Officer   

 

 

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            JPMORGAN CHASE BANK, N.A., individually, as
Administrative Agent and Collateral Agent
      By:   /s/ Teresa B. Keckler         Name:   Teresa B. Keckler       
Title:   Vice President   

 

 

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            JPMORGAN CHASE BANK, N.A., as lender
      By:   /s/ Teresa B. Keckler         Name:   Teresa B. Keckler       
Title:   Vice President   

 

 

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            BANK OF AMERICA, N.A.
      By:   /s/ Bobby P.S. Bans         Name:   Bobby P.S. Bans        Title:  
Vice President   

 

 

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            U.S. BANK, NATIONAL ASSOCIATION
      By:   /s/ Lynn Gosselin         Name:   Lynn Gosselin        Title:   Vice
President   

 

 

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            U.S. Bank National Association, Canada Branch, as a
Canadian Lender
      By:   /s/ Joseph Ranhala         Name:   Joseph Ranhala        Title:  
Principal Officer   

 

 

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            Union Bank, N.A.,
as a Lender
      By:   /s/ Peter Ehlinger         Name:   Peter Ehlinger        Title:  
Vice President   

            Union Bank, Canada Branch,
as a Lender
      By:   /s/ Anne Collins         Name:   Anne Collins        Title:   Vice
President   

 

 

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            SIEMENS FINANCIAL SERVICES, INC., as a Lender
      By:   /s/ Michael Kunst         Name:   Michael Kunst        Title:   Vice
President   

            By:   /s/ Christine Padula         Name:   Christine Padula       
Title:   VP & Controller   

 

 

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            PNC BANK NATIONAL ASSOCIATION, as a Lender
      By:   /s/ Robin L. Arriola         Name:   Robin L. Arriola       
Title:   Senior Vice President   

 

 

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            PNC BANK CANADA BRANCH, as a Canadian Lender
      By:   /s/ Mike Danby         Name:   Mike Danby        Title:   Assistant
Vice President   

 

 

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            CAPITAL ONE LEVERAGE FINANCE CORPORATION
      By:   /s/ Ron Walker         Name:   Ron Walker        Title:   SVP   

 

 

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            WELLS FARGO CAPITAL FINANCE, LLC
      By:   /s/ Krista Wade         Name:   Krista Wade        Title:   Vice
President   

            WELLS FARGO CAPITAL FINANCE CORPORATION CANADA
      By:   /s/ Domenic Cosentino         Name:   Domenic Cosentino       
Title:   Vice President   

 

 

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            GENERAL ELECTRIC CAPITAL
CORPORATION
      By:   /s/ Rebecca L. Bruch         Name:   Rebecca L. Bruch       
Title:   Duly Authorized Signatory   

 

 

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SCHEDULE 1
List of Local Counsel Opinions to be Delivered on the Amendment and Restatement
Effective Date

1.   Andrews Kurth LLP — Texas Counsel   2.   Borden Ladner Gervais LLP —
Canadian Counsel   3.   DLA Piper LLP — Illinois Counsel   4.   McDonald Carano
Wilson LLP — Nevada Counsel

 

 

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ANNEX 1
[Blackline of Conformed Credit Agreement]

 

 

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ANNEX 1
(J.P. MORGAN LOGO) [c17600c1760000.gif]
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of
May 13, 2011
among
EASTON-BELL SPORTS, INC.,
as U.S. Borrower,
4078624 CANADA INC.
ALL-AMERICAN SPORTS (CANADA) LTD.
BELL SPORTS CANADA INC.
EASTON SPORTS CANADA, INC.
as Canadian Borrowers,
The Subsidiary Guarantors Party Hereto,
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent,
J.P. MORGAN SECURITIES INC., AND
WELLS FARGO CAPITAL FINANCE, LLC,
as Joint Bookrunners and Lead Arrangers,
BANK OF AMERICA, N.A., AND
WELLS FARGO CAPITAL FINANCE, LLC,
as Co-Syndication Agents
and
U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agent

 

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Table of Contents

              Page  
 
       
ARTICLE I Definitions
    1  
SECTION 1.01 Defined Terms
    1  
SECTION 1.02 Classification of Loans and Borrowings
    51  
SECTION 1.03 Terms Generally
    51  
SECTION 1.04 Accounting Terms; GAAP
    51  
SECTION 1.05 Currency Translations
    52  
SECTION 1.06 Pro Forma Calculations
    52  
 
       
ARTICLE II The Credits
    53  
SECTION 2.01 Commitments
    53  
SECTION 2.02 Loans and Borrowings
    54  
SECTION 2.03 Requests for Revolving Borrowings
    55  
SECTION 2.04 Protective Advances
    56  
SECTION 2.05 Swingline Loans
    57  
SECTION 2.06 Letters of Credit
    58  
SECTION 2.07 Funding of Borrowings
    64  
SECTION 2.08 Interest Elections
    65  
SECTION 2.09 Termination and Reduction of Commitments; Increase in Commitments
    66  
SECTION 2.10 Repayment of Loans; Evidence of Debt
    68  
SECTION 2.11 Prepayment of Loans
    69  
SECTION 2.12 Fees
    71  
SECTION 2.13 Interest
    72  
SECTION 2.14 Alternate Rate of Interest
    73  
SECTION 2.15 Increased Costs
    74  
SECTION 2.16 Break Funding Payments
    77  
SECTION 2.17 Taxes
    77  
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs
    80  
SECTION 2.19 Mitigation Obligations; Replacement of Lenders
    84  
SECTION 2.20 Returned Payments
    85  
SECTION 2.21 Defaulting Lenders
    85  
 
       
ARTICLE III Representations and Warranties
    87  
SECTION 3.01 Organization; Powers
    87  
SECTION 3.02 Authorization; Enforceability
    87  
SECTION 3.03 Governmental Approvals; No Conflicts
    88  
SECTION 3.04 Financial Condition; No Material Adverse Change
    88  
SECTION 3.05 Properties
    88  
SECTION 3.06 Litigation and Environmental Matters
    89  
SECTION 3.07 Compliance with Laws and Agreements
    89  
SECTION 3.08 Investment Company Status
    89  
SECTION 3.09 Taxes
    89  
SECTION 3.10 ERISA
    90  

 

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              Page  
 
       
SECTION 3.11 Disclosure
    90  
SECTION 3.12 Margin Regulations
    90  
SECTION 3.13 Indebtedness, Liens
    90  
SECTION 3.14 No Default
    91  
SECTION 3.15 Solvency
    91  
SECTION 3.16 Insurance
    91  
SECTION 3.17 Capitalization and Subsidiaries
    92  
SECTION 3.18 Security Interest in Collateral
    92  
SECTION 3.19 Employment Matters
    93  
SECTION 3.20 Affiliate Transactions
    93  
SECTION 3.21 Common Enterprise
    93  
SECTION 3.22 Canadian Pension Plan and Benefit Plans
    93  
 
       
ARTICLE IV Conditions
    94  
SECTION 4.01 Effective Date
    94  
SECTION 4.02 Each Credit Event
    98  
 
       
ARTICLE V Affirmative Covenants
    98  
SECTION 5.01 Financial Statements; Borrowing Base and Other Information
    98  
SECTION 5.02 Notices of Material Events
    101  
SECTION 5.03 Existence
    102  
SECTION 5.04 Payment of Taxes
    103  
SECTION 5.05 Maintenance of Properties
    103  
SECTION 5.06 Books and Records; Inspection Rights
    103  
SECTION 5.07 Compliance with Laws
    104  
SECTION 5.08 Use of Proceeds
    105  
SECTION 5.09 Insurance
    105  
SECTION 5.10 Casualty and Condemnation
    105  
SECTION 5.11 Governmental Authorizations
    106  
SECTION 5.12 Depository Banks
    106  
SECTION 5.13 Appraisals
    106  
SECTION 5.14 Field Examinations
    106  
SECTION 5.15 Additional Collateral; Further Assurances
    107  
SECTION 5.16 Control Agreements
    109  
SECTION 5.17 Post-Closing Actions
    109  
 
       
ARTICLE VI Negative Covenants
    110  
SECTION 6.01 Indebtedness
    110  
SECTION 6.02 Liens
    113  
SECTION 6.03 Fundamental Changes; Business Activities
    115  
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
    116  
SECTION 6.05 Asset Sales
    118  
SECTION 6.06 Sale and Leaseback Transactions
    119  
SECTION 6.07 Swap Agreements
    119  
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness
    119  
SECTION 6.09 Transactions with Affiliates
    122  
SECTION 6.10 Restrictive Agreements
    123  

 

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              Page  
 
       
SECTION 6.11 Amendment of Material Documents
    123  
SECTION 6.12 Fixed Charge Coverage Ratio
    123  
SECTION 6.13 Changes in Fiscal Periods
    124  
 
       
ARTICLE VII Events of Default and Remedies
    124  
SECTION 7.01 Events of Default
    124  
SECTION 7.02 Company’s Right to Cure
    127  
 
       
ARTICLE VIII The Administrative Agent; Collateral Agent; Other Agents
    128  
SECTION 8.01 The Administrative Agent
    128  
SECTION 8.02 The Collateral Agent
    131  
SECTION 8.03 Appointment of Fondé de Pouvoir
    133  
SECTION 8.04 Other Agents
    133  
 
       
ARTICLE IX Miscellaneous
    134  
SECTION 9.01 Notices
    134  
SECTION 9.02 Waivers; Amendments
    136  
SECTION 9.03 Expenses; Indemnity; Damage Waiver
    139  
SECTION 9.04 Successors and Assigns
    141  
SECTION 9.05 Survival
    144  
SECTION 9.06 Counterparts; Integration; Effectiveness
    145  
SECTION 9.07 Severability
    145  
SECTION 9.08 Right of Setoff
    145  
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process
    145  
SECTION 9.10 WAIVER OF JURY TRIAL
    146  
SECTION 9.11 Headings
    146  
SECTION 9.12 Confidentiality
    147  
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law
    148  
SECTION 9.14 USA PATRIOT Act
    148  
SECTION 9.15 Disclosure
    148  
SECTION 9.16 No Fiduciary Relationship
    148  
SECTION 9.17 Appointment for Perfection
    148  
SECTION 9.18 Interest Rate Limitation
    149  
SECTION 9.19 Intercreditor Arrangements
    149  
SECTION 9.20 Judgment Currency Conversion
    149  
 
       
ARTICLE X Loan Guaranty
    150  
SECTION 10.01 Guaranty
    150  
SECTION 10.02 Guaranty of Payment
    151  
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty
    151  
SECTION 10.04 Defenses Waived
    152  
SECTION 10.05 Rights of Subrogation
    152  
SECTION 10.06 Reinstatement; Stay of Acceleration
    152  
SECTION 10.07 Information
    152  
SECTION 10.08 Taxes
    153  
SECTION 10.09 Maximum Liability
    153  
SECTION 10.10 Contribution
    154  
SECTION 10.11 Liability Cumulative
    154  

 

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      SCHEDULES:    
 
   
Schedule 1.01A
  —   Commitment Schedule
Schedule 1.01B
  —   Excluded Domestic Subsidiaries
Schedule 2.01
  —   Existing Letters of Credit
Schedule 3.05(a)
  —   Owned Properties
Schedule 3.05(b)
  —   Leased Properties
Schedule 3.05(c)
  —   Intellectual Property
Schedule 3.06
  —  Disclosed Matters
Schedule 3.09
  —  Taxes
Schedule 3.13
  —  Indebtedness and Liens
Schedule 3.16
  —  Insurance
Schedule 3.17
  —  Capitalization and Subsidiaries
Schedule 3.20
  —  Affiliate Transactions
Schedule 3.22
  —  Canadian Pension Plans and Benefits Plans
Schedule 4.01(l)
  —  Pledged Stock
Schedule 5.01(g)
  —  Borrowing Base Supplemental Documentation
Schedule 6.01
  —  Existing Indebtedness
Schedule 6.02
  —  Existing Liens
Schedule 6.04(b)
  —  Existing Investments
Schedule 6.09
  —  Transactions with Affiliates
Schedule 6.10
  —  Existing Restrictions

      EXHIBITS:    
 
   
Exhibit A
  —  Form of Assignment and Assumption
Exhibit B
  —  Form of Legal Opinion
Exhibit C-1
  —  Form of Aggregate Borrowing Base Certificate
Exhibit C-2
  —  Form of U.S. Borrowing Base Certificate
Exhibit C-3
  —  Form of Canadian Borrowing Base Certificate
Exhibit D
  —  Form of Compliance Certificate
Exhibit E
  —  Joinder Agreement
Exhibit F
  —  Form of Borrowing Request
Exhibit G
  —  Form of Interest Election Request
Exhibit H
  —  Form of Intercreditor Agreement
Exhibit I
  —  Form of U.S. Tax Compliance Certificate

 

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This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of May 13, 2011
(as it may be amended, supplemented or otherwise modified from time to time,
this “Agreement”), among EASTON-BELL SPORTS, INC., a Delaware corporation (the
“Company”), 4078624 CANADA INC., ALL-AMERICAN SPORTS (CANADA) LTD., BELL SPORTS
CANADA INC., and EASTON SPORTS CANADA, INC., each organized under the laws of
Canada (collectively, the “Canadian Borrowers”, and together with the Company,
the “Borrowers”), the subsidiary guarantors from time to time party hereto, the
lenders from time to time party hereto, JPMORGAN CHASE BANK, N.A., as collateral
agent (in such capacity, the “Collateral Agent”), JPMORGAN CHASE BANK, N.A., as
Administrative Agent, J.P. MORGAN SECURITIES INC. and WELLS FARGO CAPITAL
FINANCE, LLC, as Joint Lead Arrangers, WELLS FARGO CAPITAL FINANCE, LLC and BANK
OF AMERICA, N.A., as Co-Syndication Agents and U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
“ABL First Priority Collateral” means the portion of the Collateral as to which
the Lenders have a first-priority Lien, including, cash and cash equivalents,
deposit accounts, inventory, accounts receivable, other personal property
relating to such inventory and all proceeds of the foregoing, as more fully
described in the Collateral Documents.
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to (a) with respect to Loans or Borrowings denominated
in Dollars, the U.S. Alternate Base Rate and (b) with respect to Loans or
Borrowings denominated in Canadian Dollars, the Canadian Alternate Base Rate.
“Account” has the meaning assigned to such term in the applicable Security
Agreement.
“Account Debtor” means any Person obligated on an Account.
“Accounts Reserves” means, without duplication, the Dilution Reserve and any
other reserves related to Accounts which the Collateral Agent deem necessary, in
their Permitted Discretion.
“Adjusted Eurocurrency Rate” means, with respect to any Eurocurrency Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the Eurocurrency Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

 

 

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“Administrative Agent” means JPMorgan Chase Bank, N.A. or any of its offices and
affiliates (including, without limitation, JPMorgan Chase Bank, N.A., Toronto
Branch), in its capacity as administrative agent for the Lenders hereunder, and
its successors in such capacity as provided in Article VIII.
“Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
“Aggregate Availability” means, with respect to the Borrowers, at any time, an
amount equal to (a) the lesser of (i) the Total Commitment and (ii) the
Aggregate Borrowing Base minus (b) the Aggregate Credit Exposure.
“Aggregate Borrowing Base” means the aggregate amount of the U.S. Borrowing Base
and the Canadian Borrowing Base; provided that the maximum amount of the
Canadian Borrowing Base which may be included as part of the Aggregate Borrowing
Base is the Canadian Facility Commitment.
“Aggregate Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete by a Financial Officer of the Company, in substantially
the form of Exhibit C-1 or another form which is acceptable to the Collateral
Agent in its sole discretion.
“Aggregate Canadian Facility Credit Exposure” means, at any time, the aggregate
Credit Exposure of all the Canadian Facility Lenders.
“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all the Lenders.
“Aggregate Gross Availability” means, with respect to the Borrowers, at any
time, an amount equal to (a) the lesser of (i) the Total Commitment and (ii) the
Aggregate Gross Borrowing Base minus (b) the Aggregate Credit Exposure.
“Aggregate Gross Borrowing Base” means the aggregate amount of the U.S. Gross
Borrowing Base and the Canadian Gross Borrowing Base; provided that the maximum
amount of the Canadian Gross Borrowing Base which may be included as part of the
Aggregate Gross Borrowing Base is the Canadian Facility Commitment.
“Aggregate U.S. Facility Credit Exposure” means, at any time, the aggregate
Credit Exposure of all the U.S. Facility Lenders.
“Agreement” has the meaning assigned to such term in the preamble hereto.
“All-American Sports (Canada) Ltd.” means All-American Sports (Canada) Ltd., a
corporation organized under the laws of Canada.

 

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“All-American Sports Corporation” means All-American Sports Corporation, a
corporation organized under the laws of Delaware.
“Amendment and Restatement Effective Date” has the meaning set forth in the
Amendment and Restatement Agreement, dated as of May 13, 2011, among the
Borrowers, the Administrative Agent and the Lenders party thereto.
“Applicable Commitment Fee Rate” means, for any day, with respect to the
commitment fees payable hereunder, (a) 0.75% per annum until the completion of
two full fiscal quarters after the Effective Date and (b) thereafter, the
applicable rate per annum set forth below, based upon the daily average
Commitment Utilization Percentage during the most recent fiscal quarter of the
Company:

                  Applicable     Commitment Utilization   Commitment Level  
Percentage   Fee Rate           I   > 50%   0.375% II   < 50%   0.50%

For purposes of the foregoing, the Applicable Commitment Fee Rate shall be
determined as of the end of each fiscal month of the Company; provided that the
Commitment Utilization Percentage shall be deemed to be in Level II (A) at any
time that a Specified Event of Default (other than a Specified Event of Default
triggered by non-compliance with the requirements of Section 5.01(g)) has
occurred and is continuing or (B) upon prior written notice to the Company, at
the option of the Administrative Agent or at the request of the Required Lenders
if the Company fails to deliver the annual, quarterly or monthly consolidated
financial statements required to be delivered by it pursuant to Section 5.01(a),
(b) or (c), as applicable, during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered.
“Applicable Canadian Facility Percentage” means, with respect to any Canadian
Facility Lender, the percentage of the Total Canadian Facility Commitment
represented by such Canadian Facility Lender’s Canadian Facility Commitment;
provided, that if the Canadian Facility Commitments have terminated or expired,
the Applicable Canadian Facility Percentages shall be determined based upon the
Total Canadian Facility Commitment most recently in effect, after giving effect
to any assignments.
“Applicable Percentage” means, at any time with respect to any Lender, a
percentage equal to a fraction, the numerator of which is such Lender’s
Commitment and the denominator of which is the Total Commitment, in each case at
such time; provided that for purposes of Section 2.21 when a Defaulting Lender
shall exist, “Applicable Percentage” shall mean the percentage of the Total
Commitment (disregarding any Defaulting Lender’s Commitment) represented by such
Lender’s Commitment. If, however, the Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Total Commitment
most recently in effect, giving effect to any assignments and to any Lender’s
status as a Defaulting Lender at the time of determination.

 

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“Applicable Rate” means, for any day with respect to any ABR Loan, Eurocurrency
Loan or CDOR Rate Loan, as the case may be, the applicable rate per annum set
forth below under the caption “ABR Spread” or “Eurocurrency Spread/CDOR Spread”,
as the case may be, based upon the Total Leverage Ratio of the Company; provided
that until delivery of the financial statements for the quarter ended July 2,
2011 and the related Compliance Certificate, the Applicable Rate for each
Eurocurrency Loan, CDOR Rate Loan and ABR Loan shall be 200 bps and 100 bps,
respectively:

                      Eurocurrency             Spread/CDOR     Level   Total
Leverage Ratio   Rate Spread   ABR Spread I   < 2.75x   150 bps   50 bps II   >
2.75x but < 3.25x   175 bps   75 bps III   > 3.25x but < 4.0x   200 bps   100
bps IV   > 4.0x but < 4.5x   225 bps   125 bps V   > 4.5x   250 bps   150 bps

For purposes of the foregoing, the Applicable Rate shall be determined as of the
end of each fiscal quarter of the Company based upon the Compliance Certificate
that is delivered from time to time pursuant to Section 5.01(d), provided that
the Total Leverage Ratio shall be deemed to be in Level V (A) at any time that a
Specified Event of Default has occurred and is continuing or (B) upon prior
written notice to the Company, at the option of the Administrative Agent or at
the request of the Required Lenders if the Borrowers fail to deliver any
Compliance Certificate that is required to be delivered by them pursuant to
Section 5.01(d), as applicable, during the period from the expiration of the
time for delivery thereof until each such Compliance Certificate is so
delivered. Changes in the Applicable Rate resulting from changes in the Total
Leverage Ratio shall become effective on the first day of the next month
following the delivery of the Compliance Certificate pursuant to Section 5.01(d)
and shall remain in effect until the next change to be effected pursuant to this
paragraph.
“Applicable U.S. Facility Percentage” means, with respect to any U.S. Facility
Lender, the percentage of the Total U.S. Facility Commitment represented by such
U.S. Facility Commitment; provided, that if the U.S. Facility Commitments have
terminated or expired, the Applicable U.S. Facility Percentages shall be
determined based upon the Total U.S. Facility Commitment most recently in
effect, after giving effect to any assignments.
“Approved Fund” has the meaning assigned to such term in Section 9.04.
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any Person whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

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“Availability Period” means the period from and including the Effective Date to
but excluding the Maturity Date.
“Available Commitment” means, at any time, the Total Commitment then in effect
minus the Aggregate Credit Exposure at such time; provided, that in calculating
the Aggregate Credit Exposure for the purpose of determining the Available
Commitment pursuant to Section 2.12(a), the aggregate principal amount of
Swingline Loans and Protective Advances then outstanding shall be deemed to be
zero.
“Banking Services” means each and any of the following bank services provided to
any Loan Party by any Lender or any of its Affiliates: (a) credit cards for
commercial customers (including, without limitation, “commercial credit cards”
and purchasing cards), (b) stored value cards, (c) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services) or any similar transactions, and (d) other banking products or
services requested by a Loan Party.
“Banking Services Obligations” of the Loan Parties means any and all obligations
of the Loan Parties, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.
“Banking Services Reserves” means all Reserves which the Collateral Agent from
time to time establishes, in its Permitted Discretion, for Banking Services then
provided or outstanding.
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America (or any successor thereto).
“Borrowers” has the meaning assigned to such term in the preamble to this
Agreement.
“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans or CDOR Rate
Loans, as to which a single Interest Period is in effect, (b) a Swingline Loan
and (c) a Protective Advance.
“Borrowing Base” means, individually and collectively, each of the Aggregate
Borrowing Base, the U.S. Borrowing Base and the Canadian Borrowing Base.
“Borrowing Base Certificate” means, individually and collectively, each of the
Aggregate Borrowing Base Certificate, the U.S. Borrowing Base Certificate and
the Canadian Borrowing Base Certificate.
“Borrowing Base Supplemental Documentation” means the items described on
Schedule 5.01(g).
“Borrowing Request” means a request by a Borrower for a Borrowing of Revolving
Loans in accordance with Section 2.03.

 

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“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, (a) when used in connection with a Eurocurrency
Loan, the term “Business Day” shall also exclude any day on which banks are not
open for dealings (i) in Dollar deposits in the case of a Eurocurrency Loan
denominated in Dollars and (ii) in Canadian Dollars in the case of a Loan
denominated in Canadian Dollars, in the London interbank market and (b) when
used in connection with any Canadian Facility Loan, the term “Business Day”
shall also exclude any day in which commercial banks in Toronto, Canada are
required or authorized by law to remain closed.
“Canadian Alternate Base Rate” means for any day, a rate per annum determined by
the Administrative Agent to be the greater of (i) the Reference Rate in effect
on such date and (ii) the 30-day CDOR Rate in effect on such date plus 1%. Any
change in the Canadian Alternate Base Rate due to a change in the Reference Rate
or the CDOR Rate shall be effective from and including the effective date of
such change in the Reference Rate or CDOR Rate, respectively.
“Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral
or written, formal or informal, funded or unfunded, insured or uninsured,
providing employee benefits, including medical, hospital care, dental, sickness,
accident, disability, life insurance, pension, retirement or savings benefits,
under which any Loan Party or any Subsidiary of any Loan Party has any liability
with respect to any employee or former employee, but excluding any Canadian
Pension Plans.
“Canadian Borrowers” has the meaning assigned to such term in the preamble to
this Agreement.
“Canadian Borrowing Base” means, at any time, an amount equal to the sum of
(a) the product of (i) 85% multiplied by (ii) the Canadian Loan Parties’
Eligible Accounts at such time minus the Accounts Reserves related to the
Canadian Loan Parties, plus (b) the lesser of (i) the product of (x) 70%
multiplied by (y) the Canadian Loan Parties’ Eligible Inventory, valued at the
lower of cost or market value, determined on a first-in-first-out basis, at such
time and (ii) the product of 85% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered by the
Collateral Agent multiplied by the Canadian Loan Parties Eligible Inventory,
valued at the lower of cost or market value, determined on a first-in-first-out
basis, at such time, plus (c) the lesser of (i) the product of (x) 70%
multiplied by (y) the Canadian Loan Parties’ Eligible Letter of Credit
Inventory, valued at the lower of cost or market value, determined on a
first-in-first-out basis, at such time and (ii) the product of 85% multiplied by
the Net Orderly Liquidation Value percentage identified in the most recent
inventory appraisal ordered by the Collateral Agent multiplied by the Canadian
Loan Parties Eligible Letter of Credit Inventory, valued at the lower of cost or
market value, determined on a first-in-first-out basis, at such time minus
without duplication of any Reserves of the Canadian Loan Parties accounted for
in clause (b) above, Reserves related to the Eligible Letter of Credit Inventory
of the Canadian Loan Parties, plus (d) the Canadian Loan Parties’ cash and cash
equivalents (provided that such cash and cash equivalents shall be subject to
special blocked account arrangements with such accounts to be held at the
Administrative Agent) minus (e) without duplication, Reserves related to the
Canadian Loan Parties established by the Collateral Agent in its Permitted
Discretion.

 

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The Collateral Agent may, in its Permitted Discretion, adjust Reserves related
to the Canadian Loan Parties or reduce (or eliminate any restrictions it has
imposed on) one or more of the other elements used in determining standards of
eligibility set forth in the respective definitions of “Eligible Accounts”,
“Eligible Inventory” and “Eligible Letter of Credit Inventory”, including
reserves with respect to sums that the respective Canadian Loan Parties are or
will be required to pay (such as sales, excise or similar taxes, assessments,
insurance premiums, or, in the case of leased or subleased assets, rents or
other amounts payable under such leases or subleases as applicable) and have not
yet paid; provided that, the Collateral Agent shall have provided the Company
five Business Days (or, during any Cash Dominion Period, three Business Days)
prior written notice thereof, setting forth in reasonable detail the basis
therefor; and provided, further, that (A) except in respect of taxes, the
Collateral Agent may only establish or increase a reserve or impose additional
restrictions to standards of eligibility after the Effective Date based on an
event, condition or other circumstance arising after the Effective Date, or
based on facts not known to the Collateral Agent as of the Effective Date; (B)
any additional restrictions to standards of eligibility and the amount of any
new or increased reserves established by the Collateral Agent shall have a
reasonable relationship to the event, condition, circumstance or fact that is
the basis therefor; (C) to the extent the Collateral Agent may establish
additional, or revise existing, restrictions to standards of eligibility for
Eligible Accounts, Eligible Inventory or Eligible Letter of Credit Inventory so
as to address any such event, condition, circumstance or fact in a manner
reasonably satisfactory to the Collateral Agent, the Collateral Agent shall not
establish or increase a reserve for the same purpose; (D) any such establishment
or increase in reserves or imposition of additional restrictions to standards of
eligibility shall become effective for purposes of the first Canadian Borrowing
Base Certificate that is delivered pursuant to Section 5.01(g) at least five
Business Days after the date of receipt by the Company of such written notice;
and (E) any such establishment or increase in reserves or imposition of
additional restrictions to standards of eligibility shall be removed if the
Collateral Agent has determined in its Permitted Discretion that the event,
condition or other matter that is the basis for such establishment or increase
in reserves or imposition of additional restrictions to standards of eligibility
no longer exists. The Collateral Agent may, in its Permitted Discretion, adjust
Reserves related to the Canadian Loan Parties or reduce one or more of the other
elements used in computing the Canadian Borrowing Base, with any such changes to
be effective five days (or, during any Cash Dominion Period, three days) after
delivery of notice thereof to the Canadian Borrowers and the Lenders. The
Canadian Borrowing Base shall be determined by reference to the Canadian
Borrowing Base Certificate most recently delivered to the Collateral Agent
pursuant to Section 5.01(g), subject to adjustments and changes made by the
Collateral Agent in its Permitted Discretion as provided above. Upon the
disposition of a Canadian Loan Party, or a sale of all or substantially all of
the assets of a Canadian Loan Party, the Canadian Borrowers shall promptly give
the Collateral Agent written notice of such disposition together with such
information as shall be required for the Collateral Agent to adjust the Canadian
Borrowing Base to reflect such disposition.
“Canadian Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete in all material respects by a Financial Officer of the
Company, in substantially the form of Exhibit C-3 or another form which is
acceptable to the Collateral Agent in its reasonable discretion.

 

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“Canadian Collection Account” has the meaning assigned to such term in the
Canadian Security Agreement.
“Canadian Dollars” refers to the lawful money of Canada.
“Canadian Dollar LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Canadian Dollar Letters of Credit at such time
plus (b) the aggregate amount of all LC Disbursements in respect of Canadian
Dollar Letters of Credit that have not yet been reimbursed by or on behalf of
any Loan Party at such time. The Canadian Dollar LC Exposure of any Canadian
Facility Lender at any time shall be its Applicable Canadian Facility Percentage
of the total Canadian Dollar LC Exposure at such time.
“Canadian Dollar Letter of Credit” means Letters of Credit denominated in
Canadian Dollars.
“Canadian Facility” means the Canadian Facility Commitment and the provisions
herein related to the extensions of credit made thereunder.
“Canadian Facility Availability” means, at any time, the Canadian Facility
Maximum minus the Aggregate Canadian Credit Exposure.
“Canadian Facility Borrowers” means the Canadian Borrowers.
“Canadian Facility Commitment” means, as to each Canadian Facility Lender, the
obligation of such Canadian Facility Lender to make Revolving Loans denominated
in Dollars and Canadian Dollars and to acquire participations in Canadian Dollar
Letters of Credit hereunder, expressed as a Dollar amount representing the
Dollar Equivalent of the maximum aggregate amount of such Lender’s Revolving
Canadian Facility Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04; provided that no Lender shall be permitted to have a Canadian
Facility Commitment in excess of such Lender’s U.S. Facility Commitment. The
initial amount of each Lender’s Canadian Facility Commitment is set forth on the
Commitment Schedule or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Canadian Facility Commitment. The initial
aggregate amount of the Total Canadian Facility Commitment is $30,000,000.
“Canadian Facility Lender” means (a) on the Effective Date, the Lenders
designated as having Canadian Facility Commitments on the Commitment Schedule
under the heading “Canadian Facility Lenders” and (b) thereafter, the Lenders
from time to time holding Loans made pursuant to Canadian Facility Commitments
or holding Canadian Facility Commitments, after giving effect to any assignments
thereof permitted by Section 9.04(b).
“Canadian Facility Loan” means a Revolving Loan under the Canadian Facility.
“Canadian Facility Maximum” means, at any time, the lesser of (a) the Total
Canadian Facility Commitment and (b) the Canadian Borrowing Base.

 

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“Canadian Facility Protective Advance” has the meaning assigned to such term in
Section 2.04.
“Canadian Facility Swingline Exposure” means, at any time, the aggregate
principal amount of all Canadian Facility Swingline Loans outstanding at such
time. The Canadian Facility Swingline Exposure of any Canadian Facility Lender
at any time shall be its Applicable Canadian Facility Percentage of the Canadian
Facility Swingline Exposure at such time.
“Canadian Facility Swingline Loan” means a loan made under Section 2.05(a) that
is denominated in Canadian Dollars.
“Canadian Gross Borrowing Base” means the Canadian Borrowing Base without a
reduction for Specified Reserves related to the Canadian Loan Parties.
“Canadian Guaranteed Obligations” has the meaning assigned to such term in
Section 10.01.
“Canadian Guarantor” means, individually and collectively, any Guarantor
organized under the laws of the Canada.
“Canadian Insolvency Laws” shall mean each of the Bankruptcy and Insolvency Act
(Canada), the Companies’ Creditors Arrangement Act (Canada), and the Winding-Up
and Restructuring Act (Canada), each as now and hereafter in effect, 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.
“Canadian Loan Parties” means, individually and collectively, any Loan Party
organized under the laws of Canada or any province or territory thereof.
“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
Loan Party or any Subsidiary of any Loan 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 Security Agreement” means that certain Canadian Pledge and Security
Agreement, dated as of the Effective Date, between the Loan Parties party
thereto and the Administrative Agent, for the benefit of the Administrative
Agent and the Secured Parties to whom Canadian Secured Obligations are owed, and
any other pledge or security agreement entered into after the date of this
Agreement by any other Canadian Loan Party (as required by this Agreement or any
other Loan Document as the same may be amended, restated or otherwise modified
from time to time).
“Canadian Secured Obligations” means all Secured Obligations of the Canadian
Borrowers and any other Canadian Loan Parties.

 

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“Canadian Subsidiary” means any Subsidiary of the Company that is organized
under the laws of Canada.
“Capital Expenditures” means, for any period, the aggregate of all expenditures
by the Company and its consolidated Subsidiaries for the acquisition or leasing
(pursuant to Capital Lease Obligations) of fixed or capital assets or additions
to equipment (including replacements, capitalized repairs and improvements
during such period) that should be capitalized under GAAP on a consolidated
balance sheet of the Company and its consolidated Subsidiaries, but excluding
any such expenditure which constitute (i) any portion of a Permitted
Acquisition, (ii) a reinvestment of Net Proceeds of an asset sale, casualty,
condemnation or similar event, (iii) expenditures relating to the construction
or acquisition of any property which has been transferred to a Person that is
not a Borrower pursuant to a sale-leaseback transaction permitted under
Section 6.06, (iv) the purchase price of equipment purchased substantially
simultaneously with the trade-in or sale of used or surplus existing equipment
to the extent that the gross amount of such purchase price is reduced by the
credit granted to the seller of such equipment (or for the net proceeds of such
sale) for equipment being traded in or sold at such time, or (v) interest
relating to the construction of any fixed assets to the extent such interest is
required to be capitalized on the balance sheet of the Company and its
Subsidiaries pursuant to GAAP.
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Dominion Period” means each period when a Specified Event of Default has
occurred and is continuing or the period (x) commencing at the conclusion of the
third Business Day out of any period of five Business Days on which Aggregate
Gross Availability is less than the greater of (i) 12.5% of the Aggregate Gross
Borrowing Base (not to exceed 12.5% of the Total Commitment) and (ii) (A) during
September, October and November, $20,000,000 and (B) during any other month,
$25,000,000 and (y) ending on the date thereafter on which the Aggregate Gross
Availability shall have been in excess of the amounts specified in Clauses
(i) and (ii) above for a period of 45 consecutive days, provided further,
however, that a Cash Dominion Period may be discontinued no more than twice in
any period of twelve (12) consecutive months.
“CDOR Rate” means, for the relevant Interest Period, 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 Interest
Period for Canadian Dollar-denominated bankers’ acceptances displayed and
identified as such on the “Reuters Screen CDOR Page” as defined in the
International Swap Dealer Association, Inc. definitions, as modified and amended
from time to time, as of 10:00 a.m. Toronto 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 Administrative 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 Administrative Agent to raise
Canadian dollars for the applicable Interest 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 Administrative Agent on the immediately preceding Business Day.

 

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“CDOR Rate Loan” means a Loan denominated in Canadian Dollars made by the
Canadian Facility Lenders to the Canadian Borrowers which bears interest at a
rate based on the CDOR Rate.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any “person” (as that term is used in
Section 13(d)(3) of the Exchange Act and the rules of the SEC thereunder as in
effect on the Effective Date), other than the Principals and their Related
Parties or a Permitted Group, of Equity Interests representing more than 50% of
the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests in the Company, (b) the occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Company by Persons
who were neither (i) nominated by the board of directors of the Company,
(ii) appointed by directors so nominated nor (iii) otherwise designated by one
or more Principals, Related Parties or members of a Permitted Group, (c) a
Specified Change of Control or (d) the Company shall cease to own directly or
indirectly, free and clear of all Liens other than Permitted Liens, 100% of the
outstanding voting Equity Interests of each Canadian Subsidiary Borrower.
“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule,
regulation, treaty, protocol, practice or concession, (b) any change in any law,
rule, regulation, practice, concession or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority.
“Charges” has the meaning assigned to such term in Section 9.18.
“Chief Financial Officer” means, with respect to any Person, the chief financial
officer of such Person.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline
Loans or Protective Advances.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means any and all property and rights owned, leased, subleased,
licensed or operated by a Person covered by the Collateral Documents and any and
all other property of any Loan Party, now existing or hereafter acquired, that
may at any time be or become subject to a security interest or Lien in favor of
the Administrative Agent, on behalf of itself and the Secured Parties, pursuant
to the Collateral Documents in order to secure the Secured Obligations.

 

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“Collateral Access Agreement” means, individually and collectively, each
“Collateral Access Agreement” referred to in the applicable Security Agreement.
“Collateral Agent” means, JPMCB or any of its offices and affiliates (including,
without limitation, JPMorgan Chase Bank, N.A., Toronto Branch), in its capacity
as collateral agent hereunder, and each of its successors and assigns in such
capacity.
“Collateral Documents” means, collectively, the Security Agreements, the Deposit
Account Control Agreements, the Quebec Security Documents and any other
documents granting a Lien upon the Collateral as security for payment of the
Secured Obligations or perfecting any such Lien.
“Collection Accounts” means the U.S. Collection Account and Canadian Collection
Account collectively.
“Commitment” means, with respect to each Lender, the sum of such Lender’s U.S.
Facility Commitment, if any, and Canadian Facility Commitment, if any, it being
understood that the Canadian Facility Commitment is a sublimit within the Total
Commitment and is not incremental thereto. The initial amount of each Lender’s
Commitment as of the Effective Date is set forth on the Commitment Schedule. The
Total Commitment as of the Effective Date is $250,000,000.
“Commitment Schedule” means Schedule 1.01A. hereto identified as such.
“Commitment Utilization Percentage” means, on any date, the percentage
equivalent to a fraction (a) the numerator of which is the Credit Exposure of
all Lenders and (b) the denominator of which is the Total Commitment.
“Company” has the meaning assigned to such term in the preamble to this
Agreement.
“Consolidated Income Tax Expense” for any period means the provision for taxes
of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies, or the dismissal or
appointment of the management, of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Controlled Deposit Account” has the meaning assigned to such term in the
applicable Security Agreement.
“Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Revolving Loans, LC Exposure, and
Swingline Exposure at such time, plus an amount equal to its Applicable
Percentage of the aggregate principal amount of Protective Advances outstanding
at such time.

 

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“Cure Expiration Date” has the meaning specified in Section 7.02(a).
“Currency” means Dollars or Canadian Dollars.
“Default” means any event or condition that constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
“Defaulting Lender” means any Lender, as reasonably determined by the
Administrative Agent, that has (a) failed to fund its portion of any Borrowing,
or any portion of its participation in any Letter of Credit or Swingline Loan,
within three Business Days of the date on which it shall have been required to
fund the same, unless the subject of a good faith dispute based on a reasonable
determination under the circumstances between the Borrower and such Lender,
(b) notified the Borrowers, the Administrative Agent, any Issuing Bank, the
Swingline Lender or any other Lender in writing that it does not intend to
comply with any of its funding obligations under this Agreement or has made a
public statement to the effect that it does not intend to comply with its
funding obligations under this Agreement or under agreements in which it commits
to extend credit generally, (c) failed, within three Business Days after
reasonable request by the Administrative Agent, to confirm that it will comply
with the terms of this Agreement relating to its obligations to fund prospective
Loans (unless the subject of a good faith dispute based on a reasonable
determination under the circumstances between the Borrower and such Lender) and
participations in then outstanding Letters of Credit, Swingline Loans and
Protective Advances; provided that any such Lender shall cease to be a
Defaulting Lender under this clause (c) upon receipt of such confirmation by the
Administrative Agent, (d) otherwise failed to pay over to the Administrative
Agent or any other Lender any other amount required to be paid by it hereunder
within three Business Days of the date when due, unless the subject of a good
faith dispute, or (e) (i) been (or has a parent company that has been)
adjudicated as, or determined by any Governmental Authority having regulatory
authority over such Person or its assets to be, insolvent or (ii) become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
custodian, appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment or has a parent company that has become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or custodian appointed for
it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment, unless in the
case of any Lender referred to in this clause (e) the Borrowers, the
Administrative Agent, the Swingline Lender and each Issuing Bank shall be
satisfied that such Lender intends, and has all approvals required to enable it,
to continue to perform its obligations as a Lender hereunder. For the avoidance
of doubt, a Lender shall not be deemed to be a Defaulting Lender solely by
virtue of the ownership or acquisition of any Equity Interest in such Lender or
its parent by a Governmental Authority.

 

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“Departing Lender” has the meaning assigned to such term in Section 2.19(b).
“Deposit Account Control Agreement” has the meaning assigned to such term in the
Security Agreements.
“Designated Obligations” means all obligations of the Borrowers with respect to
(a) principal of and interest on the Loans, (b) LC Disbursements and interest
thereon and (c) accrued and unpaid fees under the Loan Documents.
“Dilution Factors” means, without duplication, with respect to any period, the
aggregate amount of all deductions, credit memos, returns, adjustments,
allowances, bad debt write-offs and other non-cash credits (including all volume
discounts, trade discounts and rebates) that are recorded to reduce Accounts of
the Loan Parties in a manner consistent with current and historical accounting
practices of the Loan Parties.
“Dilution Ratio” means, at any time, the amount (expressed as a percentage),
calculated in connection with the delivery of any Borrowing Base Certificate for
the fiscal month most recently ended, equal to (a) the aggregate amount of the
applicable Dilution Factors in respect of the Accounts of the Loan Parties for
the 12 most recently ended fiscal months divided by (b) total gross sales of the
Loan Parties for such 12 most recently ended fiscal months.
“Dilution Reserve” means, at any date, the product of (a) the amount by which
the Dilution Ratio exceeds five percent (but in no event less than zero)
multiplied by (b) the aggregate amount of Eligible Accounts at such time.
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
“Document” has the meaning assigned to such term in the applicable Security
Agreement.
“Dollar Equivalent” means, (a) with respect to any Borrowing or other extension
of credit expressed in Canadian Dollars, the amount of Dollars that would be
required to purchase the amount of such Canadian Dollars of such Borrowing or
extension of credit on the date two Business Days prior to the date of such
Borrowing or extension of credit (or, in the case of any determination made
under Section 2.11(b) or redenomination under Section 2.18, or in the case of a
redenomination of any other amount into Dollars as provided herein, on the date
of determination or redenomination therein referred to), based upon the Spot
Selling Rate, provided, that with respect to the certification to be made by the
Company pursuant to Section 5.01(g), such spot selling rate shall be determined
by reference to the spot selling rate set forth in the Wall Street Journal on
the Business Day immediately preceding the date on which such certification is
to be made and (b) with respect to any amount expressed in Dollars, such amount.
“Dollar LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Dollar Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements in respect of Dollar Letters of Credit
that have not yet been reimbursed by or on behalf of any Loan Party at such
time. The Dollar LC Exposure of any Lender at any time shall be its Applicable
U.S. Facility Percentage of the Dollar LC Exposure of all Lenders at such time.

 

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“Dollar Letter of Credit” means a Letter of Credit that is denominated in U.S.
Dollars.
“Dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means any Subsidiary of the Company that is organized
under the laws of the United States, any State thereof or the District of
Columbia.
“EBITDA” means, for any period, an amount equal to (a) the sum for such period
of Net Income and, to the extent subtracted in determining such Net Income,
provisions for (i) income or franchise tax expense, (ii) total interest expense
and, to the extent not reflected in such total interest expense, any losses on
Swap Agreements or other derivative instruments entered into for the purpose of
hedging interest rate risk, net of interest income and gains on such Swap
Agreements or such derivative instruments, and bank and letter of credit fees
and costs of surety bonds in connection with financing activities,
(iii) depreciation and amortization expense (including amortization of
intangibles and amortization of deferred financing costs (whether or not
classified as interest expense) but excluding amortization of prepaid cash
expenses that were paid in a prior period), (iv) any non-recurring fees, charges
or expenses paid in connection with the Refinancing within 180 days of the
Effective Date, (v) restructuring charges (which, for the avoidance of doubt,
shall include costs related to severance, retention, relocation, contract
termination and consolidation of facilities) and other non-recurring expenses
and charges, provided that the aggregate amount of such fees, charges and other
expenses may not exceed (a) $5,000,000 in any twelve-month period and (b)
$20,000,000 in the aggregate since the Amendment and Restatement Effective Date
and provided further, that the Company may carry over and utilize in subsequent
twelve-month periods, in addition to the amounts permitted for such twelve-month
period, the amount of such fees, charges or other expenses not utilized but
permitted to have been utilized in the immediately preceding twelve-month period
in an amount not to exceed $5,000,000, (vi) any non-recurring fees, charges and
expenses incurred in connection with the issuance of Equity Interests or
Indebtedness (in either case whether or not successful), or the extinguishment
of Indebtedness and any non-recurring fees, charges and expenses related to
Investments (including Permitted Acquisitions), dispositions of assets or
recapitalizations, (vii) any Management Fees paid or accrued to the extent
permitted under Section 6.08(a)(ix) and (viii) any other non-cash charges for
such period (but excluding any non-cash charge in respect of an item that was
included in Net Income in a prior period and any non-cash charge that relates to
the write-down or write-off of inventory) minus (b) without duplication and to
the extent included in Net Income, (i) any cash payments made during such period
in respect of non-cash charges described in clause (a)(iv) taken in a prior
period and (ii) any non-cash items of income for such period (other than the
accrual of revenue or the reversal of reserves in the ordinary course), all
calculated for the Company and its Subsidiaries on a consolidated basis.
The calculation of EBITDA shall also exclude non-cash income or charges
resulting from mark-to-market accounting under FAS No. 52 relating to
Indebtedness denominated in foreign currencies and any unrealized net gains and
losses resulting from Swap Obligations (including, without limitation, the
application of SFAS No. 133 and International Accounting Standard No. 39).

 

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“Effective Date” means the date on which the conditions specified in
Section 4.01 were satisfied (or waived in accordance with Section 9.02).
“Eligible Accounts” means, each Account of any Loan Party that is eligible for
inclusion in the calculation of any Borrowing Base. Without limiting the
Collateral Agent’s Permitted Discretion provided herein, Eligible Accounts shall
not include any Account:
(a) which is not subject to a first priority perfected security interest in
favor of the Collateral Agent (for the benefit of the Secured Parties);
(b) which is subject to any Lien other than (i) a Lien in favor of the
Collateral Agent (for the benefit of the Secured Parties), (ii) a Permitted Lien
which does not have priority over the Lien in favor of the Collateral Agent (for
the benefit of the Secured Parties) and (iii) Prior Claims that are unregistered
and that secure amounts that are not yet due and payable;
(c) (A)(i) with respect to (i) invoices that have terms of Net 0 to Net 30 days,
which is unpaid more than 90 days after the original invoice date or more than
60 days after the due date, (ii) with respect to invoices that have terms of Net
31 to Net 60, which is unpaid more than 120 days after the original invoice date
or more than 60 days after the due date, (iii) with respect to invoices that
have terms of Net 61 to Net 120, which is unpaid more than 150 days after the
original invoice date or more than 60 days after the due date, (iv) with respect
to invoices that have terms of Net 121 to Net 180, which is unpaid more than
180 days after the original invoice date or more than 30 days after the due
date, and (v) with respect to invoices that have terms of greater than Net 180,
which is unpaid more than 180 days after the original invoice, therefor or
(B) which has been written off the books of the applicable Loan Party after
being deemed uncollectible; provided that (C) Accounts owing by Account Debtors
of each of All-American Sports Corporation and All-American Sports (Canada) Ltd.
may be included in Eligible Accounts, so long as such Account is not unpaid more
than 180 days after the date of the original invoice date, regardless of the
payment terms attached to such invoice;
(d) which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible pursuant to
clause (c) above;
(e) (i) which is owing by an Account Debtor, other than an Investment Grade
Account Debtor, to the extent the aggregate amount of Accounts owing from such
Account Debtor and its Affiliates to all Loan Parties exceeds 20% of the
aggregate amount of Eligible Accounts of all Loan Parties, but only to the
extent of such excess or (ii) which is owing by an Investment Grade Account
Debtor, to the extent the aggregate amount of Accounts owing from such
Investment Grade Account Debtor and its Affiliates to all Loan Parties exceeds
25% of the aggregate amount of Eligible Accounts of all Loan Parties, but only
to the extent of such excess;

 

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(f) which (i) does not arise from the sale of goods or performance of services
in the applicable Loan Party’s ordinary course of business, (ii) is not
evidenced by an invoice or other documentation which has been sent to the
Account Debtor, (iii) represents a progress billing, (iv) is contingent upon any
Loan Party’s completion of any further performance, (v) represents a sale on a
bill-and-hold (except with respect to Accounts owing by Account Debtors of
All-American Sports Corporation or All-America Sports (Canada) Ltd.), guaranteed
sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis, (vi) relates solely to payments of interest or
(vii) relates to goods which have not been shipped to the Account Debtor;
(g) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;
(h) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
or similar official for such Account Debtor of its assets, (ii) has had
possession of all or a material part of its property taken by any receiver,
custodian, trustee or liquidator, (iii) filed, or had filed against it, any
assignment, application, request or petition for liquidation, reorganization,
compromise, arrangement, adjustment of debts, stay of proceedings, adjudication
as bankrupt, winding-up or voluntary or involuntary case under any state or
Federal bankruptcy laws or under any Canadian Insolvency Laws (other than
post-petition accounts payable of an Account Debtor that is a
debtor-in-possession under the Bankruptcy Code and reasonably acceptable to the
Collateral Agent), (iv) has admitted in writing its inability, or is generally
unable to, pay its debts as they become due; provided that to the extent such
inability to pay applies to only a portion of the Account, only such portion
shall be excluded from this definition, or (vi) ceased operation of its
business;
(i) (i) which with respect to the U.S. Loan Parties, is owed by an Account
Debtor which (a) does not maintain a significant executive office in the U.S. or
(b) is not organized under the applicable laws of the U.S. or any state of the
U.S., unless such Account is backed by a letter of credit acceptable to the
Collateral Agent which is in the possession of, has been assigned to and is
directly drawable by the Collateral Agent; provided, however, that with respect
to U.S. Loan Parties and the calculation of the U.S. Borrowing Base, Accounts
owed by Account Debtors (i) not satisfying clauses (a) or (b) of this paragraph
(i) and (ii) that are organized or headquartered in Germany, the Netherlands,
Norway, Switzerland, United Kingdom and Australia, in each case, shall be deemed
Eligible Accounts in an aggregate amount (together with amounts included as
Eligible Accounts pursuant to the proviso to clause (k) below) not to exceed
$20,000,000.
(ii) which with respect to the Canadian Loan Parties, is owed by an Account
Debtor which (a) does not maintain a significant executive office in Canada or
(b) is not organized under the applicable laws of Canada or any province
thereof, unless such Account is backed by a letter of credit acceptable to the
Collateral Agent which is in the possession of, has been assigned to and is
directly drawable by the Collateral Agent;
(j) which is owed in any currency (i) other than Dollars with respect to the
U.S. Loan Parties, subject to the proviso in clause (l) of this definition, or
(ii) other than Dollars or Canadian Dollars with respect to the Canadian Loan
Parties;

 

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(k) which is owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the U.S. (for
U.S. Loan Parties) or Canada (for Canadian Loan Parties) unless such Account is
backed by a letter of credit acceptable to the Collateral Agent which is in the
possession of the Collateral Agent or (ii) the government of the U.S. or Canada,
or any department, agency, public corporation, or instrumentality thereof unless
the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et
seq. and 41 U.S.C. § 15 et seq.) or the Financial Administration Act (Canada),
as amended, as applicable, and any other steps necessary to perfect the Lien of
the Collateral Agent in such Account have been complied with to the Collateral
Agent’s satisfaction; provided, however, that with respect to U.S. Loan Parties
and the calculation of the U.S. Borrowing Base, Accounts that otherwise satisfy
the criteria in this definition and are owed by the government of each of
Germany, the Netherlands, Norway, Switzerland, United Kingdom and Australia, in
each case, shall be deemed Eligible Accounts in an aggregate amount (together
with amounts included as Eligible Accounts pursuant to the proviso to clause
(i) above) not to exceed $15,000,000;
(l) which is owed by any Principal or its Affiliate, employee, officer,
director, agent or stockholder, but only to the extent the value of such Account
exceeds $200,000 and only for such excess;
(m) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Loan Party is indebted, but only to the extent of such Indebtedness
or is subject to any security, deposit, progress payment, retainage or other
similar advance made by or for the benefit of an Account Debtor, in each case to
the extent thereof;
(n) which is subject to any counterclaim, deduction, defense, setoff or dispute
but only to the extent of any such counterclaim, deduction, defense, setoff or
dispute, without duplication with any other reserves;
(o) which is evidenced by any promissory note, chattel paper or instrument;
(p) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit such Loan Party to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Loan Party has filed such
report or qualified to do business in such jurisdiction;
(q) with respect to which the applicable Loan Party has made any agreement with
the Account Debtor for any reduction thereof, other than discounts and
adjustments given in the ordinary course of business (but only to the extent of
the reduction thereof), or any Account which was partially paid and such Loan
Party created a new receivable for the unpaid portion of such Account;
(r) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether federal, territorial, provincial, state
or local, including without limitation the Federal Consumer Credit Protection
Act, the Federal Truth in Lending Act and Regulation Z of the Board; or

 

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(s) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than a Loan Party has or has
had an ownership interest in such goods, or which indicates any party other than
any of the Loan Parties as payee or remittance party.
In the event that it becomes known to a Financial Officer of the Loan Parties
that an Account which was previously an Eligible Account ceases to be an
Eligible Account hereunder, the Borrowers shall notify the Collateral Agent
thereof on and at the time of submission to the Collateral Agent of the next
Borrowing Base Certificate. In determining the amount of an Eligible Account,
the face amount of an Account may, in the Collateral Agent’s Permitted
Discretion, be reduced by, without duplication, to the extent not reflected in
such face amount, (i) the amount of all accrued and actual discounts, claims,
credits or credits pending, promotional program allowances, price adjustments,
finance charges or other allowances (including any amount that such Loan Party
may be obligated to rebate to an Account Debtor pursuant to the terms of any
written agreement or understanding and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by such Loan Party to
reduce the amount of such Account. Standards of eligibility may be made more or
less restrictive from time to time by the Collateral Agent in the exercise of
its Permitted Discretion after consultation with the Borrowers, with any such
changes to be effective upon delivery of the next regularly scheduled Borrowing
Base Certificate.
Notwithstanding the foregoing, the establishment or adjustment of any Reserve or
standards of eligibility under this definition of “Eligible Accounts”shall be
carried out in a manner consistent with the provisions of the second paragraph
in the definition of each of “Canadian Borrowing Base” and “U.S. Borrowing
Base”.
“Eligible in Transit Inventory” means, at any time, Inventory in transit from
vendors and suppliers of a Loan Party, so long as (a) such Inventory has been
paid for in full by such Loan Party, (b) the Collateral Agent shall have
received (i) a true and correct copy of the bill of lading and other shipping
documents for such Inventory, (ii) evidence of satisfactory casualty insurance
naming the Collateral Agent as loss payee and which is in form and substance and
issued by an insurance company acceptable to the Collateral Agent and which
otherwise satisfies the insurance requirements of this Agreement and the other
Loan Documents, and (iii) if the bill of lading is (A) non-negotiable and the
Inventory is in transit within the U.S., lien releases and waivers have been
obtained from the applicable customs broker for such Inventory and such customs
broker has granted the Collateral Agent access to the Inventory or
(B) negotiable, confirmation that the bill is issued in the name of the
applicable Loan Party and consigned to the order of the Collateral Agent, and an
acceptable agreement has been executed with such Loan Party’s customs broker, in
which the customs broker agrees that it holds the negotiable bill as agent for
the Collateral Agent and has granted the Collateral Agent access to the
Inventory, (c) such Inventory is in the possession of a common carrier that is
not an Affiliate of the applicable vendor or supplier, a master of a vessel
chartered exclusively by a vendor of the Borrower as a time or voyage charter,
or a master of a vessel chartered exclusively by a Loan Party as a time or
voyage charter (other than a bare boat charter), (d) which Inventory does not
constitute Eligible Letter of Credit Inventory, and (e) such Inventory is
otherwise not deemed ineligible pursuant to the terms of any of the Eligible
Inventory subsections other than subsections (d) and (i).

 

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“Eligible Inventory” means, all Inventory of any Loan Party that is eligible for
inclusion in the calculation of any Borrowing Base. Without limiting the
Collateral Agent’s Permitted Discretion provided herein, Eligible Inventory
shall not include any Inventory:
(a) which is not subject to a first priority perfected Lien in favor of the
Collateral Agent (for the benefit of the Secured Parties);
(b) which is subject to any Lien other than (i) a Lien in favor of the
Collateral Agent (for the benefit of the Secured Parties), (ii) a Permitted Lien
which does not have priority over the Lien in favor of the Collateral Agent (for
the benefit of the Secured Parties); provided that Inventory shall not be deemed
ineligible in respect of landlords’ liens to the extent that a Rent or
Collateral Access Reserve is maintained in respect thereof and (iii) Prior
Claims that are unregistered and secure amounts that are not yet due and
payable;
(c) which, in the Collateral Agent’s Permitted Discretion, is determined to be
slow moving, obsolete, unmerchantable, defective, used, unfit for sale, not
salable at prices approximating at least the cost of such Inventory in the
ordinary course of business or unsalable due to age, type, category and/or
quantity; provided that any such determination under this paragraph (c) shall be
based on the Loan Parties’ methodology for classifying such Inventory as in
effect on the Effective Date;
(d) to the extent any Person other than the applicable Loan Party shall (i) have
any direct or indirect ownership, interest or title to such Inventory or (ii) be
indicated on any purchase order or invoice with respect to such Inventory as
having or purporting to have an interest therein;
(e) which is not finished goods or which constitutes work-in-process,
subassemblies, packaging and shipping material, manufacturing supplies, samples,
prototypes, displays or display items, bill-and-hold goods, goods that are
returned or marked for return, repossessed goods, defective or damaged goods,
goods held on consignment, or goods which are not of a type held for sale in the
ordinary course of business;
(f) which is not located in the U.S. or its territories (with respect to
Inventory owned by any U.S. Loan Party) or Canada or its territories (with
respect to Inventory owned by any Canadian Loan Party) or is with a common
carrier from vendors and suppliers of any Loan Party;
(g) in excess of (x) $200,000 which is located in any location leased or
subleased by/to a Loan Party or (y) $2,500,000 in the aggregate for all leased
and subleased locations, unless (i) the lessor has delivered to the Collateral
Agent a Collateral Access Agreement or (ii) a Rent or Collateral Access Reserve
for rent, charges, and other amounts due or to become due with respect to such
facility has been established by the Collateral Agent in its Permitted
Discretion;

 

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(h) in excess of (x) $200,000 which is located in any third party warehouse or
is in the possession of a bailee (other than a third party processor) and is not
evidenced by a Document or (y) $2,500,000 in the aggregate for all such
warehouses or third party locations, unless (i) such warehouseman or bailee has
delivered to the Collateral Agent a Collateral Access Agreement and such other
documentation as the Collateral Agent may require or (ii) an appropriate Reserve
has been established by the Collateral Agent in its Permitted Discretion;
(i) in excess of (x) $200,000 which is being processed offsite at a third party
location or outside processor, or is in-transit to or from said third party
location or outside processor or (y) $2,500,000 in the aggregate for all such
third party locations, unless (i) such third party has delivered to the
Collateral Agent a Collateral Access Agreement and such other documentation as
the Collateral Agent may require or (ii) an appropriate Reserve has been
established by the Collateral Agent in its Permitted Discretion;
(j) which is the subject of a consignment by a Loan Party as consignor;
(k) which is perishable;
(l) which contains or bears any intellectual property rights licensed to any
Loan Party unless the Collateral Agent is reasonably satisfied that it may sell
or otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;
(m) which is not reflected in a current perpetual inventory report of any Loan
Party; or
(n) for which reclamation rights have been asserted by the seller.
provided that, for purposes of determining “Eligible Inventory” in any
calculation for which the Net Orderly Liquidation Value percentage is then
multiplied against Eligible Inventory, paragraphs (c) and (e) shall not apply.
Notwithstanding the foregoing requirements, Eligible in Transit Inventory shall
be included within Eligible Inventory for Borrowing Base purposes.
In the event that it becomes known to a Financial Officer of the Loan Parties
that Inventory which was previously Eligible Inventory ceases to be Eligible
Inventory hereunder, the Borrowers shall notify the Collateral Agent thereof on
and at the time of submission to the Collateral Agent of the next Borrowing Base
Certificate. Standards of eligibility may be made more or less restrictive from
time to time by the Collateral Agent in the exercise of its Permitted Discretion
after consultation with the Borrowers, with any such changes to be effective
upon delivery of the next regularly scheduled Borrowing Base Certificate.
Notwithstanding the foregoing, the establishment or adjustment of any Reserve or
standards of eligibility under this definition of “Eligible Inventory” shall be
carried out in a manner consistent with the provisions of the second paragraph
in the definition of each of “Canadian Borrowing Base” and “U.S. Borrowing
Base”.

 

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“Eligible Letter of Credit Inventory” means, at any time, Inventory (a) which
has not yet been delivered to any Loan Party, (b) the purchase of which is
supported by a commercial Letter of Credit issued under the Facility having an
expiration date within 90 days of the initial issuance of such Letter of Credit,
which Letter of Credit provides that it may be drawn only after the applicable
Inventory is completed and delivered to a common carrier that is not an
Affiliate of any Loan Party, a master of a vessel chartered exclusively by a
vendor of any Loan Party as a time or voyage charter or a master of a vessel
chartered exclusively by any Loan Party as a time or voyage charter (other than
a bare boat charter) in accordance with the underlying purchase order or
contract, and after documents of title have been issued for such Inventory
reflecting the applicable Loan Party or, if requested by the Collateral Agent,
the Collateral Agent, as consignee of such Inventory, (c) which is insured
against risk of loss pursuant to an insurance policy in form and substance and
issued by an insurance company reasonably acceptable to the Collateral Agent,
with respect to which the Collateral Agent has been named loss payee and which
otherwise satisfies the insurance requirements of this Agreement and the other
Loan Documents, (d) for which no documents of title have been issued and
(e) which is otherwise not excluded from the definition of “Eligible Inventory”.
Notwithstanding the foregoing, the establishment or adjustment of any Reserve or
standards of eligibility under this definition of “Eligible Letter of Credit
Inventory” shall be carried out in a manner consistent with the provisions of
the second paragraph in the definition of each of “Canadian Borrowing Base” and
“U.S. Borrowing Base”.
“Environmental Laws” means all treaties, statutes, laws (including common law),
rules, regulations, codes, ordinances, orders, decrees, writs, judgments,
injunctions, or binding agreements issued, promulgated or entered into by or
with any Governmental Authority, relating to: the protection of the environment;
the preservation or reclamation of natural resources; the generation,
management, use, presence, release or threatened release of, or exposure to, any
Hazardous Materials; or health and safety matters.
“Environmental Liability” means any liability or other obligation, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary
resulting from or based upon any actual or alleged (a) violation of any
Environmental Law or permit, license or approval issued thereunder,
(b) generation, use, handling, transportation, storage, treatment, disposal or
arrangement for disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) release or threatened release of any Hazardous
Materials or (e) contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Loan Party, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414(m) of the Code.

 

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“ERISA Event” means (a) any Reportable Event; (b) any failure by any Plan to
satisfy the minimum funding standards (within the meaning of Sections 412 or 430
of the Code or Section 302 of ERISA) applicable to such Plan, whether or not
waived; (c) the filing pursuant to Section 412 of the Code or Section 303 of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan, the failure to make by its due date a required installment
under Section 430(j) of the Code with respect to any Plan or the failure by any
Loan Party or any of its ERISA Affiliates to make any required contribution to a
Multiemployer Plan; (d) the incurrence by any Loan Party or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan, including but not limited to the imposition of any Lien
in favor of the PBGC or any Plan; (e) the receipt by any Loan Party or any of
its ERISA Affiliates from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or to appoint a trustee to
administer any Plan under Section 4042 of ERISA; (f) the incurrence by any Loan
Party or any of its ERISA Affiliates of any withdrawal liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by any Loan Party or any of its ERISA Affiliates of any notice,
or the receipt by any Multiemployer Plan from any Loan Party or any of its ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, Insolvent, in
Reorganization or in endangered or critical status, within the meaning of
Section 432 of the Code or Section 305 or Title IV of ERISA.
“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted Eurocurrency Rate.
“Eurocurrency Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, the rate appearing on the applicable Reuters Screen (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to deposits in the applicable currency in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for deposits in the relevant
currency 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 “Eurocurrency
Rate” with respect to such Eurocurrency Borrowing for such Interest Period shall
be the rate at which deposits of $1,000,000, and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
“Event of Default” has the meaning assigned to such term in Section 7.01.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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“Excluded Accounts” means the accounts listed in sub clauses (i) through
(iii) of Section 5.16(b), and any other accounts the aggregate balance of which
does not exceed $5,000,000 on a daily average basis over a 30-day period.
“Excluded Domestic Subsidiary” means any Subsidiary listed on Schedule 1.01B.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of any Loan Party hereunder or any other Loan
Document, (a) any Other Connection Taxes, (b) any United States federal
withholding Tax (which, for the avoidance of doubt, shall include any back-up
withholding) that is imposed by a Requirement of Law in effect at the time such
Lender becomes a party to this Agreement other than an assignee pursuant to a
request by the Borrowers under Section 2.19(b) (or designates a new lending
office other than designating a new office pursuant to a request by the Borrower
under Section 2.19(a)), with respect to any payment made by or on account of any
obligation of the Borrowers to such Lender, except to the extent that such
Lender was entitled, at the time of designation of a new lending office to
receive additional amounts with respect to such withholding Tax pursuant to
Section 2.17(a), (c) Taxes imposed on or measured by such recipient’s net income
or profits (however denominated) and franchise (and similar) Taxes imposed on it
in lieu of net income Taxes, (d) any branch profits Taxes imposed by the United
States or any similar Tax imposed by any other jurisdiction in which such
recipient is located, or (e) Taxes attributable to a Lender’s failure to comply
with Section 2.17(f).
“Existing Credit Agreement” means the Credit and Guaranty Agreement, dated as of
March 16, 2006, among the Company, certain Canadian subsidiaries of the Company,
RBG, the U.S. guarantors, the Canadian guarantors, the various lenders from time
to time party thereto, Wachovia Bank, National Association, as administrative
agent and collateral agent, and the other agents party thereto.
“Existing Letters of Credit” means any letters of credit which have been issued
pursuant to the Existing Credit Agreement and are listed on Schedule 2.01
hereto. The Company shall be deemed to have requested the issuance of each
Existing Letter of Credit for purposes hereof.
“Existing Senior Subordinated Notes” means the Company’s $140,000,000 8.375%
Series Subordinated Notes due 2012.
“Facility” means the U.S. Facility or the Canadian Facility; collectively, the
“Facilities.”
“Facility Commitment” shall refer, as applicable, to a U.S. Facility Commitment
or a Canadian Facility Commitment.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

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“Financial Officer” means the chief financial officer, principal financial
officer, treasurer, financial vice president or controller of a Loan Party.
“Fixed Charge Coverage Ratio” means, for any Test Period, the ratio, determined
as of the end of such Test Period, of (a) EBITDA for such Test Period minus the
sum of (i) Capital Expenditures paid in cash by the Company and its Subsidiaries
during such Test Period (other than those financed with Indebtedness (other than
Loans) or Net Proceeds of issuances of Equity Interests (or capital
contributions in respect thereof)), (ii) cash contributions to any qualified
defined benefit pension Plan in excess of the amount of such contributions that
was expensed and (iii) the aggregate amount of income Taxes paid in cash by the
Company and the Subsidiaries during such Test Period to (b) Fixed Charges for
such Test Period, all calculated for the Company and its Subsidiaries on a
consolidated basis.
“Fixed Charge Coverage Ratio Commencement Date” has the meaning assigned to such
term in Section 6.12.
“Fixed Charge Coverage Ratio Trigger Termination Event” has the meaning assigned
to such term in Section 6.12.
“Fixed Charges” means, with reference to any Test Period, without duplication,
(i) cash Interest Expense (excluding arrangement and upfront fees and deal costs
related to the Refinancing and the incurrence of Indebtedness related thereto),
plus (ii) scheduled principal payments on Indebtedness for borrowed money made
during such Test Period, plus (iii) Restricted Payments paid in cash and
ultimately received by one or more equity holders of the ultimate Parent or paid
to service interest expense on Indebtedness of a Parent plus (iv) Capital Lease
Obligation payments, all calculated for the Company and its Subsidiaries on a
consolidated basis.
“Flood Insurance Laws” means, collectively, (i) the National Flood Insurance Act
of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994
as now or hereafter in effect or any successor statute thereto and (iv) the
Flood Insurance Reform Act of 2004 as now or hereafter in effect or any
successor statute thereto.
“Foreign Lender” means any Lender or Issuing Bank, (a) with respect to any
Borrower other than the Company and any Tax, that is treated as foreign by the
jurisdiction imposing such Tax, or (b) with respect to the U.S. Borrowers, that
(1) is not a “United States Person” as defined by Section 7701(a)(30) of the
Code (a “U.S. Person”), or (2) is a partnership or other entity treated as a
partnership for United States federal income tax purposes which is a U.S.
Person, but only to the extent the beneficial owners (including indirect
partners if its direct partners are partnerships or other entities treated as
partnerships for United States federal income tax purposes are U.S. Persons) are
not U.S. Persons.

 

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“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary;
provided, however, that the definition of “Foreign Subsidiary” shall not include
Canadian Subsidiaries.
“Funded Debt” means, as to any Person on any Test Date, the aggregate
outstanding principal amount of all Indebtedness of such Person and its
Subsidiaries that is of the kind referred to in clauses (a) through (c) and
clause (h) of the definition of Indebtedness, determined on a consolidated basis
in accordance with GAAP; provided, however (x) in the case of Indebtedness
incurred under this Agreement or under any other revolving credit facility,
using the average of the aggregate outstanding principal amount of such
Indebtedness as of the last day of each calendar month for the most recently
ended twelve consecutive months for which internal financial statements are
available and (y) in the case of any other Indebtedness, as of the last day of
the most recent fiscal quarter for which internal financial statements are
available.
“Funding Accounts” has the meaning assigned to such term in Section 4.01(g).
“GAAP” means generally accepted accounting principles in the United States of
America.
“Governmental Authority” means the government of the United States of America,
Canada, any other nation or any political subdivision thereof, whether
provincial, territorial, state, provisional, territorial or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank)
having jurisdiction over the Company, any Subsidiary or any Lender as the
context may require.
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

 

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“Guarantor” means, at any time, collectively and individually, (a) with respect
to the U.S. Facility Loans, Dollar LC Exposure, U.S. Facility Swingline Loans
and U.S. Facility Protective Advances outstanding at such time, the Company and
each material Wholly-Owned Domestic Subsidiary that is not an Excluded Domestic
Subsidiary that has executed this Agreement or has executed a Joinder Agreement
and has not been released from the Loan Guaranty and (b) with respect to the
Canadian Facility Loans, Canadian Dollar LC Exposure, Canadian Facility
Swingline Loans and Canadian Facility Protective Advances outstanding at such
time, the Canadian Facility Borrowers, each entity specified in paragraph (a) of
this definition and each Wholly-Owned Subsidiary that is a Canadian Subsidiary
that has executed this Agreement or has executed a Joinder Agreement and has not
been released from the Loan Guaranty.
“Hazardous Materials” means all explosive or radioactive substances or wastes;
and all hazardous or toxic substances, contaminants or wastes and all other
pollutants, including any petroleum products or byproducts and all other
hydrocarbons, radon gas, molds, asbestos or asbestos-containing materials, urea
formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and
all other ozone-depleting substances, infectious or medical wastes, odors or
odor-causing substances; and all other substances or wastes that are prohibited,
limited or regulated pursuant to, or that could give rise to liability under,
any Environmental Law.
“Holdings” means EB Sports Corp., a Delaware corporation.
“Holdings Credit Agreement” means the Credit Agreement, dated as of December 3,
2009, among Holdings, RBG, the various lenders from time to time party thereto,
Wachovia Investment Holdings, LLC, as administrative agent, and the other agents
party thereto, as such agreement may be amended, supplemented or modified from
time to time and any renewal, extension, refunding, restructuring, replacement
or refinancing thereof (whether with the original administrative agent and
lenders or another administrative agent or trustee or one or more other lenders
and whether provided under the original credit agreement or one or more other
credit or other agreements or indentures, in each case exclusively issued or
entered into by one or more parent entities of the Company).
“Holdings Credit Facilities” means the Holdings Existing Credit Agreement and
the Holdings Credit Agreement.
“Holdings Existing Credit Agreement” means the Credit Agreement, dated as of
November 17, 2006 (as amended by Amendment No. 1, dated as of November 15, 2009
and Amendment No.2, dated as of November 19, 2009), among Holdings, the various
lenders from time to time party thereto, Wachovia Investment Holdings, LLC, as
administrative agent, and the other agents party thereto, as such agreement may
be amended, supplemented or modified from time to time and any renewal,
extension, refunding, restructuring, replacement or refinancing thereof (whether
with the original administrative agent and lenders or another administrative
agent or trustee or one or more other lenders and whether provided under the
original credit agreement or one or more other credit or other agreements or
indentures, in each case exclusively issued or entered into by one or more
parent entities of the Company).

 

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“Incur” means create, incur, assume, Guarantee or otherwise become responsible
for, and “incurred” and “incurrence” shall have correlative meanings.
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business,
obligations incurred under ERISA and any earn-out obligation or purchase price
adjustment until such obligation becomes a liability on the balance sheet of
such Person in accordance with GAAP), (f) all Indebtedness (excluding prepaid
interest thereon) of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit, letters of guaranty or similar arrangements,
(j) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances, (k) obligations under any liquidated earn-out and (l) any
other Off-Balance Sheet Liability. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitee” has the meaning assigned to such term in Section 9.03(b).
“Information Memorandum” means the Confidential Information Memorandum dated
November 5, 2009 relating to the Loan Parties and the Transactions.
“Infringe” has the meaning assigned to such term in Section 3.05(b).
“Initial Period” has the meaning assigned to such term in Section 7.02(d).
“Initial Period Minimum Availability” has the meaning assigned to such term in
Section 7.02(d).
“Insolvent” with respect to any Multiemployer Plan, means the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
“Intellectual Property” has the meaning assigned to such term in
Section 3.05(b).
“Intercreditor Agreement” means the Intercreditor Agreement, substantially in
the form of Exhibit H, between the Administrative Agent on behalf of the Secured
Parties and the trustee under the Note Documents on behalf of the holders of the
Senior Secured Notes, as in effect on the Effective Date, and as amended,
modified, restated or supplemented from time to time.

 

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“Interest Election Request” means a request by a Borrower to convert or continue
a Revolving Borrowing in accordance with Section 2.08.
“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations), net of interest
income, of the Company and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Company and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Swap Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP), calculated on a consolidated basis for the
Company and its Subsidiaries for such period in accordance with GAAP. For
purposes of calculating the foregoing, Interest Expense shall be determined on
the basis of net payments made or received or accruals in accordance with GAAP
by the Company and its Subsidiaries in respect of interest rate Swap Agreements.
“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the first Business Day of each fiscal month of the Company,
(b) with respect to any Eurocurrency Loan or CDOR Rate Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurocurrency Borrowing or a CDOR Rate Borrowing with an Interest
Period of more than three months duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months duration after the
first day of such Interest Period, (c) with respect to any Swingline Loan, the
day that such Loan is required to be repaid and (d) with respect to any Loan,
the Maturity Date.
“Interest Period” means (a) with respect to any Eurocurrency Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or nine or twelve months if each affected Lender consents) thereafter, as the
Company may elect and (b) with respect to any CDOR Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the date which is 30, 60
or 90 days thereafter; provided, that (i) if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, in the case of a Eurocurrency Borrowing
only, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (ii) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
“Inventory” has the meaning assigned to such term in the applicable Security
Agreement.
“Investment” has the meaning set forth in Section 6.04.

 

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“Investment Grade Account Debtor” means an Account Debtor that, at the time of
determination, has a corporate credit rating and/or family rating, as
applicable, of BBB- or higher by S&P or Baa3 or higher by Moody’s
“Issuing Bank” means JPMCB and each other Lender approved by the Administrative
Agent and the Company (such approval not to be unreasonably withheld or delayed)
that has agreed in its sole discretion to act as an “Issuing Bank” hereunder, in
each case in its capacity as the issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 2.06(j), in each case so long
as such Person shall remain an Issuing Bank hereunder. Any Issuing Bank may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of such Issuing Bank, in which case the term “Issuing Banks” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
“ITA” means the Income Tax Act (Canada), as amended.
“Joinder Agreement” has the meaning assigned to such term in Section 5.15.
“Joint Lead Arrangers” means J.P. Morgan Securities Inc. and Wells Fargo Capital
Finance, LLC.
“Judgment Currency” has the meaning assigned to such term in Section 9.20(a).
“Judgment Currency Conversion Date” has the meaning assigned to such term in
Section 9.20(a).
“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.
“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(k).
“LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter
of Credit.
“LC Exposure” means, at any time, the sum of the Dollar LC Exposure and the
Canadian Dollar LC Exposure.
“Lenders” means (a) on the Effective Date, the Persons listed on the Commitment
Schedule and (b) thereafter, any other Person that shall have become a party
hereto pursuant to an Assignment and Assumption or pursuant to Section 2.09,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender.
“Letter of Credit” means (i) any letter of credit issued pursuant to this
Agreement and (ii) the Existing Letters of Credit.

 

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“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities; provided, that,
in no event shall Liens be deemed to include (x) an operating lease or
(y) customary rights of first refusal and tag, drag and similar rights in joint
venture agreements.
“Loan Documents” means, collectively, this Agreement, any promissory notes
issued pursuant to this Agreement, any Letter of Credit applications, the
Collateral Documents, the Loan Guaranty, the Intercreditor Agreement and all
other agreements, instruments, documents and certificates identified in
Section 4.01 executed and delivered to, or in favor of, the Administrative Agent
or any Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, letter of credit agreements and all other
written matter whether heretofore, now or hereafter executed by or on behalf of
any Loan Party, or any employee of any Loan Party, and delivered to the
Administrative Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby. Any reference in this Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to this Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes
operative.
“Loan Guaranty” means Article X of this Agreement.
“Loan Parties” means, individually and collectively, (i) the Borrowers, (ii) the
Company’s Domestic Subsidiaries and Canadian Subsidiaries, in each case, that
are Guarantors, and (iii) any other Person who becomes a party to this Agreement
pursuant to a Joinder Agreement and their respective successors and assigns.
“Loans” means the loans and advances made by the Lenders to the Borrowers
pursuant to this Agreement, including Revolving Loans, Swingline Loans and
Protective Advances.
“Management Agreement” means, collectively, (i) that certain amended and
restated management advisory agreement, dated as of September 30, 2004, and as
amended by Amendment No. 1 thereto, dated as of March 16, 2006, and Amendment
No. 2 thereto, dated as of the Effective Date, by and among Easton-Bell Sports
LLC, RBG, the other subsidiaries of RBG party thereto, and Fenway Partners, LLC
and (ii) that certain management advisory agreement, dated as of September 30,
2004, and as amended by Amendment No. 1 thereto, dated as of March 16, 2006, and
Amendment No. 2 thereto, dated as of the Effective Date, by and among
Easton-Bell Sports LLC, RBG, the other subsidiaries of RBG party thereto and
Fenway Partners Resources, Inc., in each case, as in effect on the Effective
Date.
“Management Fees” means fees in respect of any Significant Transaction and
out-of-pocket expenses and indemnification obligations payable under the
Management Agreement (as in effect on the Effective Date) to the Principals;
provided, that the aggregate amount of any fees (exclusive of any expense
reimbursement or payments under indemnification obligations) paid in connection
with any Significant Transaction shall not exceed the greater of (i)
$1,000,000.00 and (ii) 1.5% of the gross transaction value of such Significant
Transaction.

 

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“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole, (b) the ability of the Loan Parties, taken as a
whole, to perform their obligations under the Loan Documents, (c) any Collateral
in excess of $5,000,000, or the Administrative Agent’s Liens (on behalf of
itself and the Secured Parties) on Collateral in excess of $5,000,000 or the
priority of such Liens, or (d) the rights of or benefits available to the
Administrative Agent, any Issuing Bank or the Lenders thereunder.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Company and its Subsidiaries in an aggregate outstanding principal
amount exceeding $10,000,000. For purposes of determining Material Indebtedness,
the “obligations” of the Company or any Subsidiary in respect of any Swap
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Company or such Subsidiary would be required to
pay if such Swap Agreement were terminated at such time.
“Maturity Date” means (a) May 13, 2016 or (b) any earlier date on which the
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof; provided, however, if the Holdings Credit Agreement has not been repaid
or refinanced with a New Holdings Credit Agreement prior to July 1, 2015, the
“Maturity Date” shall be July 1, 2015.
“Maximum Liability” has the meaning assigned to such term in Section 10.09.
“Maximum Rate” has the meaning assigned to such term in Section 9.18.
“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net Funded Debt” means, with respect to any specific Person on any Test Date,
(i) the aggregate outstanding principal amount of Funded Debt of such Person
minus (ii) the aggregate amount of Unrestricted Cash and Cash Equivalents of
such Person.
“Net Income” means, for any Test Period, the consolidated net income (or loss)
of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded from Net Income
(a) the income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Company or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which the Company or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Company or such Subsidiary in the form of dividends or similar distributions,
(c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary, (d) any gains or losses realized upon the sale or disposition of
assets that are not sold or otherwise disposed of in the ordinary course of
business, (e) any extraordinary gain or loss, (f) any impairment charge or asset
write-off pursuant to FAS 142 and FAS 144 and the amortization of intangibles
arising pursuant to FAS 141, (g) any increase in cost of sales as a result of
the step-up in inventory valuation and any increase in amortization or
depreciation or other non-cash charges resulting from the application of
purchase accounting in relation to any acquisition that is consummated after the
Effective Date, and (h) so long as the specified Person and its Subsidiaries
file a consolidated tax return, or are part of a consolidated group for tax
purposes with a parent entity, the excess of (x) the Consolidated Income Tax
Expense for such period over (y) all tax payments payable for such period by
such Person and its Subsidiaries, including without duplication any such tax
payments payable for such period by such Person and its Subsidiaries to such
parent entity under a tax sharing agreement or arrangement.

 

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“Net Orderly Liquidation Value” means, with respect to Inventory of any Person,
the orderly liquidation value thereof as determined in a manner reasonably
acceptable to the Collateral Agent by an appraiser reasonably acceptable to the
Collateral Agent, net of all costs of liquidation thereof.
“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
by or on behalf of any Loan Party in respect of such event including (i) any
cash received in respect of any non-cash proceeds (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
excluding any interest payments), but only as and when received, (ii) in the
case of a casualty, insurance proceeds and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid to third parties
(other than Affiliates) in connection with such event, (ii) in the case of a
sale, transfer or other disposition of an asset (including pursuant to a sale
and leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made as a result of such
event to repay Indebtedness (other than Loans) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event and
(iii) the amount of all taxes paid (or reasonably estimated to be payable) and
the amount of any reserves established to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by a Financial Officer of the Company).
“New Holdings Credit Agreement” means any credit agreement or indenture pursuant
to which the Holdings Credit Agreement is renewed, extended, refunded,
restructured, replaced or refinanced, so long as (i) such renewal, extension,
refunding, restructuring, replacement or refinancing does not result in the
principal amount borrowable thereunder being in excess of the sum of (x) the
then-outstanding principal amount of and accrued interest on the Holdings Credit
Agreement and (y) an amount necessary to pay to unrelated third parties any fees
and expenses, including premiums, related to such renewal, extension, refunding,
restructuring, replacement or refinancing and (ii) the final stated maturity
date of the obligations incurred under such credit agreement or indenture
(without giving effect to any contingent obligations to repay, redeem or
repurchase any indebtedness incurred thereunder prior to the date originally
scheduled for payment thereof) is at least 91 days after the maturity date of
the Senior Secured Notes.

 

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“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(e).
“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.10.
“Note Documents” means any agreement or instrument governing or evidencing the
Senior Secured Notes.
“Note Obligations” has the meaning assigned to such term in the Intercreditor
Agreement.
“Note Obligations Payment Date” has the meaning assigned to such term in the
Intercreditor Agreement.
“Note Priority Collateral” has the meaning assigned to such term in the
Intercreditor Agreement.
“Note Representative” has the meaning assigned to such term in the Intercreditor
Agreement.
“Notice of Intent to Cure” has the meaning specified in Section 5.01(d).
“Obligated Party” has the meaning assigned to such term in Section 10.02.
“Obligation Currency” has the meaning assigned to such term in Section 9.20(a).
“Obligations” means all unpaid principal of and accrued and unpaid interest on
(including interest accruing after the maturity of the Loans and reimbursement
obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to any Loan Party, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, all LC
Exposure, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Loan Parties to the Lenders or to any
Lender, the Administrative Agent, the Issuing Bank or any indemnified party
arising under the Loan Documents.
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person (other than operating leases).
“Offering Memorandum” means the Offering Memorandum dated as of November 20,
2009, with respect to the Senior Secured Notes.

 

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“Operating Agreement” means the Fifth Amended and Restated Limited Liability
Company Agreement of Easton-Bell Sports, LLC, dated as of December 3, 2009, by
and among Easton-Bell Sports, LLC and its Members (as defined therein), as in
effect on the Effective Date.
“Other Connection Taxes” means, with respect to the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of any Loan Party hereunder or under any other Loan
Document, Taxes imposed as a result of a present or former connection between
such recipient and the jurisdiction imposing such Tax (other than connections
arising from such recipient having executed, delivered, or become a party to,
performed its obligations or received payments under, received or perfected a
security interest under, sold or assigned an interest in any Loan or Loan
Document, engaged in any other transaction pursuant to, or enforced, any Loan
Documents).
“Other Taxes” means any and all present or future recording, stamp, court or
documentary Taxes and any other excise, transfer, sales, property, intangible,
filing or similar Taxes, charges or similar levies arising from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, or from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document.
“Parent” means any direct or indirect parent company of Company.
“Participant” has the meaning assigned to such term in Section 9.04.
“Participant Register” has the meaning assigned to such term in Section 9.04(c).
“Paying Guarantor” has the meaning assigned to such term in Section 10.10.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
“Permitted Acquisition” means the purchase or other acquisition (whether by
merger, amalgamation or otherwise) by the Company or any other Subsidiary of
substantially all of the Equity Interests in, or all or substantially all the
assets of (or all or substantially all the assets constituting a business unit,
division, product line or line of business of), any other Person; provided that
(i) such purchase or acquisition was not preceded by, or consummated pursuant
to, an unsolicited tender offer or proxy contest initiated by or on behalf of
the Company or any Subsidiary, (ii) all transactions related thereto are
consummated in accordance with applicable law, (iii) the business of such
Person, or such assets, as the case may be, constitute a business permitted by
Section 6.03(b), (iv) with respect to each such purchase or other acquisition,
all actions required to be taken with respect to such newly created or acquired
Subsidiary or assets in order to satisfy the requirements of Section 5.15 shall
have been taken (or arrangements for the taking of such actions satisfactory to
the Administrative Agent shall have been made) and (v) at the time of and
immediately after giving effect to any such purchase or other acquisition on a
Pro Forma Basis, (A) no Default or Event of Default shall have occurred and be
continuing, (B) a Cash Dominion Period shall not be continuing, (C) either
(I)(x) the Fixed Charge Coverage Ratio for the Test Period then in effect shall
be, pro forma for the Permitted Acquisition, not less than 1.20 to 1.00 and
(y) Aggregate Gross Availability shall not have been less than 25% of the
Aggregate Gross Borrowing Base at any time during the prior 90-day period or
(II) Aggregate Gross Availability shall not have been less than 50% of the
Aggregate Gross Borrowing Base at any time during the prior 90-day period and
(D) for each Permitted Acquisition in which the Company or any Subsidiary is
paying aggregate consideration exceeding $40,000,000, the Company shall have
delivered to the Administrative Agent substantially concurrently with such
purchase or acquisition (I) a certificate of its Chief Financial Officer, in
form and substance reasonably satisfactory to the Administrative Agent,
certifying that all the requirements set forth in this definition have been
satisfied with respect to such purchase or other acquisition, together with
reasonably detailed calculations demonstrating satisfaction of the requirement
set forth in clause (v)(C) above and (II) revised projections incorporating the
effects of the Permitted Acquisition through the longer of either 12 months from
the date of such purchase or acquisition or the period extending from the date
of such purchase or acquisition to the Maturity Date.

 

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“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment; provided that any standard of eligibility or reserve
established or modified by the Collateral Agent shall have a reasonable
relationship to circumstances, conditions, events or contingencies which are the
basis for such standard of eligibility or reserve, as reasonably determined,
without duplication, by the Collateral Agent in good faith.
“Permitted Encumbrances” means:
(a) Liens imposed by law for Taxes, assessments or governmental charges that are
not yet due and payable, or are being contested in compliance with Section 5.04;
(b) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.04, but excluding, for
greater certainty, any landlord hypothecs registered in the province of Quebec;
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations or undetermined and inchoated liens (for amounts not due) in
connection with such regulations;
(d) deposits to secure (A) the performance of bids, trade contracts, leases,
statutory obligations, surety and customs bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business
and (B) stay and appeal bonds;
(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Section 7.01;
(f) easements, survey exceptions, zoning restrictions, rights-of-way,
encroachments, other minor defects or irregularities in title, and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not materially detract from the value of the affected
property, secure any monetary obligations or materially interfere with the
ordinary conduct of business of any of the Loan Parties or any of their
Subsidiaries;

 

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(g) banker’s liens, rights of setoff or similar rights and remedies as to
deposit accounts or other funds maintained with depository institutions;
provided that, except with respect to any deposit account or funds subject to
the Lien of a Loan Document, such deposit accounts or funds are not established
or deposited for the purpose of providing collateral for any Indebtedness and
are not subject to restrictions on access by Loan Parties or any of their
Subsidiaries in excess of those required by applicable banking regulations; and
(h) Liens arising by virtue of precautionary Uniform Commercial Code financing
statement filings (or PPSA or similar filings under applicable law) regarding
operating leases entered into by the Loan Parties and their Subsidiaries in the
ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising by operation of
law to secure payment of custom duties in connection with the importation of
goods;
(j) Leases, licenses, subleases or sublicenses entered into in accordance with
the terms of Section 6.05 to others which do not (i) interfere in any material
respect with the business of the Company and its Subsidiaries, taken as a whole,
or (ii) secure any Indebtedness;
(k) Any interest or title of a lessor, sublessor, licensor or sublicensor or
secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under
leases or licenses entered into by the Company or any of its Subsidiaries in the
ordinary course of business which could not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect;
(l) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into by the Company or any of its
Subsidiaries in the ordinary course of business;
(m) Liens solely on any cash earnest money deposits made by Company or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
permitted hereunder;
(n) Liens that are contractual rights of setoff (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness or (ii) pertaining to pooled deposit and/or sweep
accounts of the Company and/or any Subsidiary of the Company to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Company and the Subsidiaries of the Company;
(o) Liens on documents of title and the property covered thereby securing
Indebtedness in respect of commercial letters of credit;

 

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(p) Liens upon specific items of inventory or other goods and proceeds of the
Company or any of its Subsidiaries securing such Person’s obligations in respect
of bankers’ acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;
(q) reservations and exceptions contained in or implied by statute in the
original disposition from a Governmental Authority of a property and grants made
by a Governmental Authority of interests so reserved or excepted which are not
in the aggregate materially adverse to the use, operation or value of such
property; and
(r) all rights reserved to or vested in any Governmental Authority by the terms
of any lease, license, franchise, grant or permit, or by any statutory
provisions to terminate any such lease, license, franchise, grant or permit or
to require annual or periodic payments as a condition of the continuance thereof
or to distrain against or to obtain a lien on any property in the event of a
failure to make such annual or periodic payments,
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
“Permitted Group” means any group of investors that is deemed to be a “person”
(as that term is used in Section 13(d)(3) of the Exchange Act and the rules of
the SEC thereunder as in effect on the Effective Date), by virtue of the
Operating Agreement; provided, that, no single Person (other than the Principals
and their Related Parties) beneficially owns (together with its Affiliates) more
of the Equity Interests representing ordinary voting power represented by the
issued and outstanding Equity Interests in the Company that is beneficially
owned by such group of investors than is then collectively beneficially owned by
the Principals and their Related Parties in the aggregate.
“Permitted Investments” means:
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (with respect to
investments made by the Company or any Domestic Subsidiary) or Canada (with
respect to investments made by any Canadian Subsidiary) (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of such government), in each case maturing within one year from the date of
acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;
(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America (with respect to investments made by the Company
or any Domestic Subsidiary), Canada (with respect to investments made by any
Canadian Subsidiary) or any state or province thereof, as applicable, in each
case, which has a combined capital and surplus and undivided profits of not less
than $500,000,000;

 

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(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;
(e) money market funds that (i) (x) either comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940 or (y) are money market mutual funds (as defined in National Instrument
81-102 Mutual Funds) that are reporting issuers (as defined in Ontario
securities law) in the Province of Ontario, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and
(f) in the case of any Foreign Subsidiary or Canadian Subsidiary, other
short-term investments that are liquid and are customarily used by companies in
the jurisdiction of such Foreign Subsidiary or Canadian Subsidiary for cash
management purposes.
“Permitted Liens” means Liens permitted by Section 6.02.
“Permitted Payments to Parent” means, without duplication as to amounts:
(a) payments to any Parent to permit any Parent to pay reasonable accounting,
legal and administrative expenses of any Parent when due, to the extent such
expenses are attributable to the ownership and operation of the Company and its
Subsidiaries;
(b) for any taxable period in which the Company is a member of a group filing a
consolidated, combined, unitary or similar tax return with any Parent, payments
to any Parent in respect of any income Taxes that are due and payable by such
group; provided that such payments shall not exceed the lesser of (i) the amount
of the relevant tax (including any penalties and interest) that the Company
would owe if the Company were filing a separate tax return (or a separate
consolidated or combined return with its Subsidiaries that are members of the
consolidated or combined group), taking into account any usable carryovers and
carrybacks of tax attributes (such as net operating losses) of the Company and
such Subsidiaries from other taxable years and (ii) the net amount of the
relevant tax that any Parent actually owes to the appropriate taxing authority;
provided, further, that any Tax payments received from the Company shall be paid
over to the appropriate taxing authority within 60 days of that Parent’s receipt
of such Tax Payments or shall be refunded to the Company; and
(c) payments to any Parent to permit that Parent to pay the professional fees
and expenses of any unsuccessful equity or debt offerings by that Parent or to
permit a Parent to pay the professional fees and expenses associated with the
restructuring of its equity ownership or employee based equity incentive or
equity compensation programs.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

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“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Loan Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4062 or
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.
“PPSA” means the Personal Property Security Act (Ontario), including the
regulations thereto, provided that, if perfection or the effect of perfection or
non-perfection or the priority of any Lien created hereunder on the Collateral
is governed by the personal property security legislation or other applicable
legislation with respect to personal property security in effect in a
jurisdiction other than Ontario, “PPSA” means the Personal Property Security Act
or such other applicable legislation in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMCB as its prime rate at its principal offices in New York City;
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.
“Principals” means Fenway Partners, LLC, Ontario Teacher’s Pension Plan Board
and their respective affiliated investment partnerships.
“Prior Claims” shall mean all Liens created by applicable law (in contrast with
Liens voluntarily granted) which rank or are capable of ranking prior or pari
passu with the Liens created by the Collateral Documents (or interests similar
thereto under applicable law) including for amounts owing for employee source
deductions, vacation pay, goods and services taxes, sales taxes, harmonized
sales taxes, municipal taxes, workers’ compensation, Quebec corporate taxes,
pension fund obligations and overdue rents.
“Pro Forma Basis” means, with respect to the particular test, such test shall be
calculated in accordance with Section 1.06.
“Prohibited Transaction” has the meaning assigned to such term in Section 406 of
ERISA and Section 4975(f)(3) of the Code.
“Protective Advance” has the meaning assigned to such term in Section 2.04.
“Quebec Security Documents” means a deed of hypothec executed by any Loan Party
from time to time, and any other related documents, bonds, debentures or pledge
agreements required to perfect a Lien in favour of the Administrative Agent in
the Province of Quebec.
“RBG” means RBG Holdings Corp., a Delaware corporation.
“Reference Rate” means the rate of interest most recently publicly announced or
established by JPMCB as its reference rate in effect for determining interest
rates on Canadian Dollar denominated commercial loans made in Canada and
commonly known as “prime rate”; each change in the Reference Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

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“Refinancing” means the issuance of the Senior Secured Notes, the Transactions,
the payment in full of all obligations of under the Existing Credit Agreement
and Existing Senior Subordinated Notes, the issuance by Holdings of additional
Equity Interests and the use of the proceeds of such issuance to repay
Indebtedness of Holdings under the Holdings Existing Credit Agreement, the
exchange of certain Indebtedness of Holdings under the Holdings Existing Credit
Agreement for Indebtedness under the Holdings Credit Agreement, the consummation
of any other transactions in connection with the foregoing, and the payment of
fees and expenses incurred in connection with any of the foregoing, each as in
effect on the Effective Date, and the application of proceeds therefrom.
“Reinstated Borrower” has the meaning assigned to such term in Section 9.02(f).
“Register” has the meaning assigned to such term in Section 9.04.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
“Removed Borrower” has the meaning assigned to such term in Section 9.02(f).
“Rent or Collateral Access Reserve” means with respect to any facility,
warehouse, distribution center, regional distribution center or depot where any
Inventory with a book value in excess of $200,000 subject to Liens arising by
operation of law is located and with respect to which no Collateral Access
Agreement is in effect, a reserve equal to (a) in the case of any leased or
subleased locations, three months’ rent at such facility, warehouse,
distribution center, regional distribution center or depot, and (b) in the case
of any other such location, an amount determined by the Collateral Agent in its
Permitted Discretion in respect of the liabilities owed to the applicable bailee
or warehouseman.
“Reorganization” means, with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
“Report” means reports prepared by the Collateral Agent or another Person
showing the results of appraisals, field examinations or audits with respect to
the assets of any Loan Party from information furnished by or on behalf of any
Loan Party, after the Collateral Agent has exercised its rights of inspection
pursuant to this Agreement, which Reports may be distributed to the Lenders by
the Administrative Agent.
“Reporting Frequency Increase Period” means any period (x) commencing at the
conclusion of the third Business Day out of five Business Days on which
Aggregate Gross Availability is less than the greater of (i) 12.5% of the
Aggregate Gross Borrowing Base (not to exceed 12.5% of the Total Commitment) and
(ii) (A) during September, October and November, $20,000,000 and (B) during any
other month, $25,000,000 and (y) ending on the date thereafter on which the
Aggregate Gross Availability has been in excess of the amounts specified in
clauses (i) and (ii) above for a period of 30 consecutive days; provided,
however, that a Reporting Frequency Increase Period may be discontinued no more
than twice in any period of twelve (12) consecutive months.

 

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“Reportable Event” means any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder, other than those events as to which
the notice requirement referred to in Section 4043 of ERISA has been waived,
with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that
is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
“Required Lenders” means, at any time, Lenders having Credit Exposures and
unused Commitments representing more than 50% of the Aggregate Credit Exposures
and unused Commitments at such time.
“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person and (b) any statute, law
(including common law), treaty, rule, regulation, code, ordinance, order,
decree, writ, judgment, injunction or determination of any arbitrator or court
or other Governmental Authority (including Environmental Laws), 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, without duplication, the Rent or Collateral Access Reserve and
any other reserves which the Collateral Agent deems necessary, in its Permitted
Discretion, to maintain (including, without limitation, reserves for accrued and
unpaid interest on the Secured Obligations, Banking Services Reserves, reserves
for consignee’s, warehousemen’s mortgages and bailee’s charges, reserves for
unpaid and accrued sales taxes, reserves for banker’s liens, rights of setoff or
similar rights and remedies as to deposit accounts, reserves for Swap
Obligations, reserves for contingent liabilities of any Loan Party, reserves for
uninsured losses of any Loan Party, reserves for uninsured, underinsured,
un-indemnified or under-indemnified liabilities or potential liabilities with
respect to any litigation and reserves for taxes, fees, assessments, and other
governmental charges and Prior Claims) with respect to the Collateral or any
Loan Party.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Company or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Company or any Subsidiary or any option,
warrant or other right to acquire any such Equity Interests in the Company or
any Subsidiary, or any other payment that has a substantially similar effect to
any of the foregoing.
“Revolving Canadian Facility Credit Exposure” means, with respect to any
Canadian Facility Lender at any time, the sum of the outstanding principal
amount of such Canadian Facility Lender’s Canadian Facility Loans, its Canadian
LC Exposure, its Applicable Canadian Facility Percentage of the Canadian
Facility Swingline Exposure and its Applicable Canadian Facility Percentage of
the Canadian Facility Protective Advances at such time.

 

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“Revolving Credit Exposure” means the Revolving U.S. Facility Credit Exposure
and the Revolving Canadian Facility Credit Exposure, collectively.
“Revolving Loan” means a Loan made pursuant to Section 2.01(a) or 2.01(b).
“Revolving U.S. Facility Credit Exposure” means, with respect to any U.S.
Facility Lender at any time, the sum of the outstanding principal amount of such
U.S. Facility Lender’s U.S. Facility Loans, its Dollar LC Exposure, its
Applicable U.S. Facility Percentage of the U.S. Facility Swingline Exposure and
its Applicable U.S. Facility Percentage of the U.S. Facility Protective Advances
at such time.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.
“SEC” means the Securities and Exchange Commission or any Governmental Authority
succeeding to any of its principal functions.
“Secured Indebtedness” means, with respect to any specified Person on any Test
Date, the sum of the aggregate outstanding amount of Indebtedness of such Person
and its Subsidiaries secured by a Lien, determined on a consolidated basis and
in accordance with GAAP as of the last day of the most recent fiscal quarter for
which internal financial statements are available immediately preceding the Test
Date.
“Secured Leverage Ratio” means, with respect to any specified Person on any Test
Date, the ratio, on a pro forma basis, of Secured Indebtedness to EBITDA of such
Person and its Subsidiaries for the most recently ended four fiscal quarters for
which internal financial statements are available immediately proceeding the
Test Date.
“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Obligations owing to one or more
counterparties that are Lenders or Affiliates of Lenders at the time that such
Swap Obligations are incurred; provided that (a) within 15 days of the later of
the Effective Date and the time that any transaction relating to such Swap
Obligation is executed, the Lender party thereto (other than JPMCB) shall have
delivered written notice to the Administrative Agent that such a transaction has
been entered into and that it constitutes a Secured Obligation entitled to the
benefits of the Collateral Documents and (b) Banking Services Obligations and
Swap Obligations (relating to interest rates or currencies) will constitute
Secured Obligations only to the extent such obligations, at the time of
incurrence, are not prohibited by the terms of the Intercreditor Agreement.
“Secured Parties” has the meaning assigned to such term in the U.S. Security
Agreement.
“Security Agreement” means, as the context may require, any U.S. Security
Agreement, any Canadian Security Agreement or any Quebec Security Documents, and
“Security Agreements” means all U.S. Security Agreements, Canadian Security
Agreements and Quebec Security Documents.

 

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“Senior Secured Notes” means (a) the senior secured notes due 2016 issued by the
Company on the Effective Date in a public offering or in a Rule 144A or other
private placement and (b) any substantially identical senior notes that are
registered under the Securities Act of 1933, as amended, and issued in exchange
for the senior notes described in clause (a) of this definition.
“Settlement” has the meaning assigned to such term in Section 2.05(d).
“Settlement Date” has the meaning assigned to such term in Section 2.05(d).
“Significant Transaction” means any recapitalization, restructuring,
refinancing, financing, merger, acquisition, consolidation or disposition
(including the sale of all or a substantial portion of the assets or equity of
any Person).
“Specified Change of Control” means a “Change of Control” (or other defined term
having a similar purpose) as defined in the Note Documents.
“Specified Event of Default” means (a) any Event of Default pursuant to clauses
(a), (b), (h), (i) or (j) of Section 7.01 or (b) an Event of Default triggered
by non-compliance with the requirements of Section 5.01(g) or Section 6.12.
“Specified Reserves” means the Dilution Reserve and Rent or Collateral Access
Reserve.
“Specified Transactions” means (a) asset dispositions with an aggregate fair
market value equal to or in excess of $10,000,000, (b) an Investment (by merger
or otherwise) in any Subsidiary (or any Person which becomes a Subsidiary) or
(c) an acquisition of Property which constitutes all or substantially all of an
operating unit of a business.
“Spot Selling Rate” means, on any date, as determined by the Administrative
Agent, the spot selling rate posted by Reuters on its website for the sale of
the applicable currency for Dollars at approximately 11:00 a.m., London time,
two Business Days prior to such date (the “Applicable Quotation Date”); provided
that if, for any reason, no such spot rate is being quoted, the spot selling
rate shall be determined by reference to such publicly available service for
displaying exchange rates as may be selected by the Administrative Agent, or, in
the event no such service is selected, such spot selling rate shall instead be
the rate determined by the Administrative Agent as the spot rate of exchange in
the market where its foreign currency exchange operations in respect of the
applicable currency are then being conducted, at or about 11.00 a.m. London
time, on the Applicable Quotation Date for the purchase of the relevant currency
for delivery two Business Days later.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted Eurocurrency Rate, for eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

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“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Administrative Agent.
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or
held, or (b) the management of which is, as of such date, otherwise controlled,
by the parent or one or more subsidiaries of the parent or by the parent and one
or more subsidiaries of the parent. Unless otherwise specified, “Subsidiary”
means any direct or indirect subsidiary of the Company.
“Successor Collateral Agent” has the meaning assigned to such term in
Section 8.02.
“Supermajority Lenders” means, at any time, Lenders having Credit Exposures and
unused Commitments representing at least 66 2/3% of the Aggregate Credit
Exposure and unused Commitments at such time.
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Company or the
Subsidiaries shall be a Swap Agreement.
“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.
“Swingline Exposure” means, the U.S. Facility Swingline Exposure and Canadian
Facility Swingline Exposure, collectively.

 

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“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.
“Swingline Loan” means a Loan made pursuant to Section 2.05.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
“Test Date” means the last day of the most recently ended Test Period.
“Test Period” means, at any time, the most recent period of 12 consecutive
fiscal months of the Company ended on or prior to such time (taken as one
accounting period) in respect of which financial statements for each fiscal
month, fiscal quarter or fiscal year in such period have been (or were required
to have been) delivered pursuant to Section 5.01(a), 5.01(b) or 5.01(c), as
applicable.
“Title Company” means a title insurer or title insurance agent which shall be
reasonably acceptable to the Administrative Agent and qualified to issue title
insurance as required by the Administrative Agent.
“Total Canadian Facility Commitment” means, at any time, the aggregate amount of
the Canadian Facility Commitments as in effect at such time.
“Total Commitment” means, at any time, the aggregate amount of the Commitments
as in effect at such time.
“Total Indebtedness” means, with respect to any specific Person on any Test
Date, the sum of the aggregate outstanding amount of Indebtedness of such Person
and its Subsidiaries, determined on a consolidated basis in accordance with GAAP
as of the last day of the most recent fiscal quarter for which internal
financial statements are available immediately preceding the Test Date.
“Total Leverage Ratio” means, with respect to any specified Person on any Test
Date, the ratio, on a pro forma basis, of (a) Total Indebtedness; provided that
solely for purposes of calculating the Total Leverage Ratio in connection with
the Applicable Rate, Net Funded Debt, to (b) EBITDA, of such Person and its
Subsidiaries for the most recently ended four fiscal quarter period for which
internal financial statements are available immediately preceding the Test Date.
“Total U.S. Facility Commitment” means, at any time, the aggregate amount of the
U.S. Facility Commitments as in effect at such time.
“Transactions” means the execution, delivery and performance by the Loan Parties
of this Agreement and the other Loan Documents to which they are party, the
borrowing of Loans and other credit extensions, the use of the proceeds thereof,
the continuation or issuance of Letters of Credit hereunder and the creation and
perfection of the Liens created by the Collateral Documents.

 

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“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted Eurocurrency Rate, U.S. Alternate Base
Rate, CDOR Rate or Canadian Alternate Base Rate.
“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.
“Unrestricted Cash and Cash Equivalents” means, as to any Person on any Test
Date, the average aggregate amount of cash and Permitted Investments of such
Person and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP as of the last day of each calendar month for the most recently ended
twelve-consecutive months for which internal financial statements are available,
that (i) do not appear or would not be required to be listed as “restricted” on
a consolidated balance sheet of such Person and its Subsidiaries, unless such
appearance or requirement is related to one or more non-consensual Liens
permitted by Section 6.02 or Liens permitted by Sections 6.02(a), (c) or (g) or
clauses (g) or (n) of the definition of “Permitted Encumbrances”, and (ii) are
not subject to a Lien in favor of any Person other than one or more of the Liens
described in clause (i) above.
“U.S.” means the United States of America.
“U.S. Alternate Base Rate” means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted
Eurocurrency 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 1%, provided
that, for the avoidance of doubt, the Adjusted Eurocurrency Rate for any day
shall be based on the rate appearing on the Libor Reuters Screen LIBOR01 Page
(or on any successor or substitute page of such page) at approximately
11:00 a.m. London time on such day. Any change in the U.S. Alternate Base Rate
due to a change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted Eurocurrency Rate shall be effective from and including the effective
date of such change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted Eurocurrency Rate, respectively.

 

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“U.S. Borrowing Base” means, at any time, an amount equal to the sum of (a) the
product of (i) 85% multiplied by (ii) the U.S. Loan Parties’ Eligible Accounts
at such time minus the Accounts Reserves related to the U.S. Loan Parties, plus
(b) the lesser of (i) the product of (x) 70% multiplied by (y) the U.S. Loan
Parties’ Eligible Inventory, valued at the lower of cost or market value,
determined on a first-in-first-out basis, at such time and (ii) the product of
85% multiplied by the Net Orderly Liquidation Value percentage identified in the
most recent inventory appraisal ordered by the Collateral Agent multiplied by
the U.S. Loan Parties Eligible Inventory, valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time plus (c) the
lesser of (i) the product of (x) 70% multiplied by (y) the U.S. Loan Parties’
Eligible Letter of Credit Inventory, valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time and (ii) the
product of 85% multiplied by the Net Orderly Liquidation Value percentage
identified in the most recent inventory appraisal ordered by the Collateral
Agent multiplied by the U.S. Loan Parties Eligible Letter of Credit Inventory,
valued at the lower of cost or market value, determined on a first-in-first-out
basis, at such time minus without duplication of any Reserves of the U.S. Loan
Parties accounted for in clause (b) above, Reserves related to the Eligible
Letter of Credit Inventory of the U.S. Loan Parties, plus (d) U.S. Loan Parties’
cash and cash equivalents (provided that such cash and cash equivalents shall be
subject to special blocked account arrangements with such accounts to be held at
the Administrative Agent) minus (e) without duplication, Reserves related to the
U.S. Loan Parties established by the Collateral Agent in its Permitted
Discretion.
The Collateral Agent may, in its Permitted Discretion, adjust Reserves related
to the U.S. Loan Parties or reduce (or eliminate any restrictions it has imposed
on) one or more of the other elements used in determining standards of
eligibility set forth in the respective definitions of “Eligible Accounts”,
“Eligible Inventory” and “Eligible Letter of Credit Inventory”, including
reserves with respect to sums that the respective U.S. Loan Parties are or will
be required to pay (such as sales, excise or similar taxes, assessments,
insurance premiums, or, in the case of leased or subleased assets, rents or
other amounts payable under such leases or subleases as applicable) and have not
yet paid; provided, that, the Collateral Agent shall have provided the Company
five Business Days (or, during any Cash Dominion Period, three Business Days)
prior written notice thereof, setting forth in reasonable detail the basis
therefor; and provided, further, that (A) except in respect of taxes, the
Collateral Agent may only establish or increase a reserve or impose additional
restrictions to standards of eligibility after the Effective Date based on an
event, condition or other circumstance arising after the Effective Date, or
based on facts not known to the Collateral Agent as of the Effective Date;
(B) any additional restrictions to standards of eligibility and the amount of
any new or increased reserves established by the Collateral Agent shall have a
reasonable relationship to the event, condition, circumstance or fact that is
the basis therefor; (C) to the extent the Collateral Agent may establish
additional, or revise existing, restrictions to standards of eligibility for
Eligible Accounts, Eligible Inventory or Eligible Letter of Credit Inventory so
as to address any such event, condition, circumstance or fact in a manner
reasonably satisfactory to the Collateral Agent, the Collateral Agent shall not
establish or increase a reserve for the same purpose; (D) any such establishment
or increase in reserves or imposition of additional restrictions to standards of
eligibility shall become effective for purposes of the first U.S. Borrowing Base
Certificate that is delivered pursuant to Section 5.01(g) at least five Business
Days after the date of receipt by the Company of such written notice; and
(E) any such establishment or increase in reserves or imposition of additional
restrictions to standards of eligibility shall be removed if the Collateral
Agent has determined in its Permitted Discretion that the event, condition or
other matter that is the basis for such establishment or increase in reserves or
imposition of additional restrictions to standards of eligibility no longer
exists. The Collateral Agent may, in its Permitted Discretion, adjust Reserves
related to the U.S. Loan Parties or reduce one or more of the other elements
used in computing the U.S. Borrowing Base, with any such changes to be effective
five days (or, during any Cash Dominion Period, three days) after delivery of
notice thereof to the Company and the Lenders. The U.S. Borrowing Base shall be
determined by reference to the U.S. Borrowing Base Certificate most recently
delivered to the Collateral Agent pursuant to Section 5.01(g), subject to
adjustments and changes made by the Collateral Agent in its Permitted Discretion
as provided above. Upon the disposition of a U.S. Loan Party, or a sale of all
or substantially all of the assets of a U.S. Loan Party, the Company shall
promptly give the Collateral Agent written notice of such disposition together
with such information as shall be required for the Collateral Agent to adjust
the U.S. Borrowing Base to reflect such disposition.

 

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“U.S. Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Company, in substantially
the form of Exhibit C-2 or another form which is acceptable to the Collateral
Agent in its reasonable discretion.
“U.S. Collection Account” has the meaning assigned to such term in the U.S.
Security Agreement.
“U.S. Facility” means the U.S. Facility Commitment and the provisions herein
related to the extensions of credit made thereunder.
“U.S. Facility Availability” means, at any time, the U.S. Facility Maximum minus
the Aggregate U.S. Facility Credit Exposure.
“U.S. Facility Commitment” means, as to each U.S. Facility Lender, the
obligation of such U.S. Facility Lender to make Revolving Loans and to acquire
participations in Dollar Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving U.S.
Facility Credit Exposure hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.09, (b) increased from time to time pursuant
to Section 2.09 and (c) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s U.S. Facility Commitment is set forth on the Commitment Schedule
or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its U.S. Facility Commitment. The initial aggregate amount of the Total
U.S. Facility is $250,000,000.
“U.S. Facility Lender” means (a) on the Effective Date, the Lenders designated
as having U.S. Facility Commitments on the Commitment Schedule under the heading
“U.S. Facility Lenders” and (b) thereafter, the Lenders from time to time
holding Loans made pursuant to U.S. Facility Commitments or holding U.S.
Facility Commitments, after giving effect to any assignments thereof permitted
by Section 9.04(b).
“U.S. Facility Loan” means a Revolving Loan under the U.S. Facility.
“U.S. Facility Maximum” means, at any time, the lesser of (a) the U.S. Facility
Commitment minus the Aggregate Canadian Facility Credit Exposure and (b) the
U.S. Borrowing Base.
“U.S. Facility Protective Advance” has the meaning assigned to such term in
Section 2.04.

 

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“U.S. Facility Swingline Exposure” means, at any time, the aggregate principal
amount of all U.S. Facility Swingline Loans outstanding at such time. The U.S.
Facility Swingline Exposure of any U.S. Facility Lender at any time shall be its
Applicable U.S. Facility Percentage of the U.S. Facility Swingline Exposure at
such time.
“U.S. Facility Swingline Loan” means a loan made under Section 2.05(a) that is
denominated in U.S. Dollars.
“U.S. Gross Availability” means, at any time, the U.S. Gross Facility Maximum
minus the Aggregate U.S. Facility Credit Exposure.
“U.S. Gross Borrowing Base” means the U.S. Borrowing Base without a reduction
for Specified Reserves related to the U.S. Loan Parties.
“U.S. Gross Facility Maximum” means, at any time, the lesser of (a) the U.S.
Facility Commitment minus the Aggregate Canadian Facility Credit Exposure and
(b) the U.S. Gross Borrowing Base.
“U.S. Guaranteed Obligations” has the meaning assigned to such term in
Section 10.01.
“U.S. Guarantor” means, individually and collectively, any Guarantor (including
the Company) organized under the laws of the United States.
“U.S. Loan Party” means, individually and collectively, any Loan Party
(including the Company) organized under the laws of the United States.
“U.S. Person” has the meaning assigned to such term by Section 7701(a)(30) of
the Code.
“U.S. Security Agreement” means that certain U.S. Pledge and Security Agreement,
dated as of the Effective Date, among the U.S. Loan Parties, the Company and the
Administrative Agent, for the benefit of the Administrative Agent and the
Secured Parties, and any other pledge or security agreement entered into, after
the date of this Agreement by any other U.S. Loan Party (as required by this
Agreement or any other Loan Document), or any other Person, as the same may be
amended, restated or otherwise modified from time to time.
“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f).
“Wholly-Owned Subsidiary” means, when qualifying a Subsidiary, a Subsidiary of a
Person of which securities or other ownership interests representing 100% of the
Equity Interests (other than (i) directors’ or managers’ qualifying shares or
(ii) shares issued to foreign nationals to the extent required by applicable
law) are, as of such date, owned, controlled or held by such Person or one or
more wholly-owned Subsidiaries of such Person or by such Person and one or more
wholly-owned Subsidiaries of such Person. Unless otherwise specified,
“Wholly-Owned Subsidiary” means a wholly-owned Subsidiary of the Company.

 

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“Withdrawal Liability” means withdrawal liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”), by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing” or “Borrowing of Revolving Loans”),
by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a
“Eurocurrency Revolving Borrowing” or a “Eurocurrency Borrowing of Revolving
Loans”).
SECTION 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
amended and restated, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time, provided that, if the
Borrowers notify the Administrative Agent that the Borrowers request an
amendment to any provision (including any definition) hereof to eliminate the
effect of any change occurring after the Effective Date in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrowers that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. In the event that the historical accounting practices, systems or
reserves relating to the components of the Aggregate Borrowing Base or the
Borrowing Base of any Borrower are modified in a manner that is adverse to the
Lenders in any material respect, the Borrowers will agree to maintain such
additional reserves (for purposes of computing the Aggregate Borrowing Base and
the Borrowing Base of each Borrower) in respect to the components of the
Aggregate Borrowing Base and the Borrower Base of each Borrower and make such
other adjustments (which may include maintaining additional reserves, modifying
the advance rates or modifying the eligibility criteria for the components of
the Aggregate Borrowing Base and the Borrowing Base of each Borrower) as may be
appropriate to eliminate the adverse effects thereof. 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 herein shall be made, without giving effect to any election under Statement
of Financial Accounting Standards 159 (or any other Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of the Company or any Subsidiary at “fair value”, as defined
therein.

 

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SECTION 1.05 Currency Translations. (a) For purposes of this Agreement and the
other Loan Documents, where the permissibility of a transaction or
determinations of required actions or circumstances depend upon compliance with,
or are determined by reference to, amounts stated in Dollars, such amounts shall
be deemed to refer to Dollars or Dollar Equivalents (but determined according to
the spot selling rates set forth in the Wall Street Journal on the Business Day
immediately preceding the date on which the transaction is consummated);
provided that no Default or Event of Default shall arise as a result of any
limitation set forth in Dollars in Section 6.01, 6.02 or 6.06 being exceeded
solely as a result of changes in currency exchange rates from those rates
applicable at the time or times Indebtedness, Liens or sale and leaseback
transactions were initially consummated in reliance on the exceptions under such
Sections. For purposes of any determination under Section 6.04 or 6.05, the
amount of each Investment, disposition or other applicable transaction
denominated in a currency other than Dollars shall be translated into Dollars at
the Spot Selling Rate on the date such Investment, disposition or other
transaction is consummated.
(b) The Administrative Agent shall determine the Dollar Equivalent of (x) the
Credit Exposure (i) as of the end of each fiscal quarter of the Company, (ii) on
or about the date of the related notice requesting any extension of credit
hereunder and (iii) on any other date, in its reasonable discretion and (y) any
other amount to be converted into Dollars in accordance with the provisions
hereof at the time of such conversion.
SECTION 1.06 Pro Forma Calculations. (a) Notwithstanding anything to the
contrary herein, the Fixed Charge Coverage Ratio, Total Leverage Ratio and
Secured Leverage Ratio for purposes of any covenant herein shall be calculated
in the manner prescribed by this Section 1.06 (regardless whether any such
covenant references that such test shall be calculated on a “Pro Forma Basis”).
(b) In the event that since the beginning of the most recent 12-month period for
which internal financial statements of the Company are then available the
Company or any Subsidiary since the beginning of such period has incurred any
Indebtedness that remains outstanding or repaid, prepaid or redeemed any
Indebtedness (other than ordinary working capital borrowings), or the
transaction giving rise to the need to calculate the Fixed Charge Coverage
Ratio, Total Leverage Ratio or Secured Leverage Ratio is an incurrence or
repayment, prepayment or redemption of Indebtedness, Interest Expense, Total
Indebtedness, Secured Indebtedness and EBITDA for such period shall be
calculated after giving effect on a pro forma basis to such incurrence or
repayment, prepayment or redemption as if such Indebtedness was incurred or
repaid on the first day of such period, provided that, in the event of any such
repayment of Indebtedness, EBITDA for such period shall be calculated as if the
Company or such Subsidiary had not earned any interest income actually earned
during such period in respect of the funds used to repay such Indebtedness.

 

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(c) In the event that since the beginning of the most recent 12-month period for
which internal financial statements of the Company are then available (1) a
Specified Transaction has occurred, (2) the transaction giving rise to the need
to calculate the Fixed Charge Coverage Ratio, Total Leverage Ratio or Secured
Leverage Ratio is such a Specified Transaction, or (3) since the beginning of
such period any Person (that subsequently became a Subsidiary or was merged with
or into the Company or any Subsidiary since the beginning of such period) shall
have made such a Specified Transaction, EBITDA for such period shall be
calculated after giving pro forma effect to such Specified Transactions as if
such Specified Transactions occurred on the first day of such period.
(d) If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness shall be calculated as
if the interest rate in effect for such floating rate of interest on the date of
determination had been the applicable interest rate for the entire period
(taking into account any Swap Agreement applicable to such Indebtedness if such
Swap Agreement has a remaining term in excess of 12 months). In the event the
Equity Interests of any Subsidiary is sold during the period, the Company shall
be deemed, for purposes of clause (b) above, to have repaid during such period
the Indebtedness of such Subsidiary to the extent the Borrower and its
continuing Subsidiaries are no longer liable for such Indebtedness after such
sale.
(e) Whenever pro forma effect is to be given to a Specified Transaction, the pro
forma calculations shall be determined in good faith by the Chief Financial
Officer of the Company and may include operating expense reductions for such
period attributable to the transaction to which pro forma effect is being given
(including, without limitation, operating expense reductions attributable to
execution or termination of any contract, reduction of costs related to
administrative functions, the termination of any employees or the closing (or
the approval by the Board of Directors of the closing) of any facility) that
have been realized or for which all steps necessary for the realization of which
have been taken or are reasonably expected to be taken following such
transaction, provided, that such adjustments are set forth in an officers’
certificate which states (i) the amount of such adjustment or adjustments and
(ii) that such adjustment or adjustments are based on the reasonable good faith
beliefs of the Chief Financial Officer.
ARTICLE II
The Credits
SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein:
(a) each U.S. Facility Lender agrees to make Revolving Loans to the Company in
Dollars from time to time during the Availability Period in an aggregate
principal amount that will not result in (i) such Lender’s Revolving U.S.
Facility Credit Exposure exceeding such Lender’s U.S. Facility Commitment or
(ii) the Aggregate U.S. Facility Credit Exposure exceeding the lesser of (x) the
Total U.S. Facility Commitment and (y) the U.S. Borrowing Base, subject to the
Administrative Agent’s authority, in its sole discretion, to make Protective
Advances pursuant to the terms of Section 2.04; and

 

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(b) each Canadian Facility Lender agrees to make Revolving Loans to the Canadian
Facility Borrowers in Dollars or Canadian Dollars from time to time during the
Availability Period in an aggregate principal amount that will not result in
(i) such Lender’s Revolving Canadian Facility Credit Exposure exceeding such
Lender’s Canadian Facility Commitment or (ii) the Aggregate Canadian Facility
Credit Exposure exceeding the lesser of (x) the Total Canadian Facility
Commitment and (y) the Canadian Borrowing Base plus U.S. Facility Availability,
subject to the Administrative Agent’s authority, in its sole discretion, to make
Protective Advances pursuant to the terms of Section 2.04.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02 Loans and Borrowings. (a) Each Loan (other than a Swingline Loan or
Protective Advance) shall be made as part of a Borrowing consisting of Revolving
Loans of the same Class, Currency and Type made by the applicable Lenders
ratably in accordance with their respective applicable Facility Commitments of
the applicable Class. Any Protective Advance and any Swingline Loan shall be
made in accordance with the procedures set forth in Sections 2.04 and 2.05,
respectively. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing denominated in Dollars
shall be comprised entirely of ABR Loans or Eurocurrency Loans and each
Revolving Borrowing denominated in Canadian Dollars shall be comprised entirely
of ABR Loans or CDOR Rate Loans as the Borrowers may request in accordance
herewith; provided that all Borrowings made on the Effective Date must be made
as ABR Borrowings but may be converted into Eurocurrency Borrowings or CDOR Rate
Borrowings, as applicable, in accordance with Section 2.08. Each Swingline Loan
and each Protective Advance shall be an ABR Loan. Each Lender at its option may
make any Eurocurrency Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurocurrency Revolving
Borrowing or CDOR Rate Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $100,000 or C$100,000, as applicable and not
less than $1,000,000 or C$1,000,000, as applicable. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $100,000 or C$100,000, as applicable and not less
than $500,000 or C$500,000, as applicable; provided that an ABR Borrowing may be
in an aggregate amount that is equal to the entire unused balance of the
applicable Facility Commitment or that is required to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.06(f). Each Swingline Loan
shall be in an amount that is an integral multiple of $25,000 or C$25,000, as
applicable and not less than $100,000 or C$100,000, as applicable; provided that
a Swingline Loan may be in an aggregate amount that is equal to the entire
unused amount of the applicable Facility. Borrowings of more than one Type,
Class and Currency may be outstanding at the same time; provided that there
shall not at any time be more than a total of ten Eurocurrency Borrowings or
CDOR Rate Borrowings outstanding.

 

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(d) Notwithstanding any other provision of this Agreement, the Borrowers shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.
SECTION 2.03 Requests for Revolving Borrowings. To request a Revolving
Borrowing, the applicable Borrower shall notify the Administrative Agent of such
request either in writing (delivered by hand or facsimile) in substantially the
form of Exhibit F and signed by such Borrower or by telephone (i) in the case of
a CDOR Rate Borrowing denominated in Canadian Dollars, not later than 1:00 p.m.,
New York City time, three Business Days before the date of the proposed
Borrowing, (ii) in the case of a Eurocurrency Borrowing denominated in Dollars,
not later than 1:00 p.m., New York City time, three Business Days before the
date of the proposed Borrowing or (iii) in the case of an ABR Borrowing, not
later than 11:00 a.m., New York City time, on the day of the proposed Borrowing.
Each such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or facsimile to the Administrative Agent of
a written Borrowing Request substantially in the form of Exhibit F and signed by
the applicable Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.01:
(i) the aggregate amount and Currency of the requested Borrowing and a breakdown
of the separate wires comprising such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be denominated in Dollars or Canadian
Dollars;
(iv) whether such Borrowing is to be an ABR Borrowing, a Eurocurrency Borrowing
or a CDOR Rate Borrowing;
(v) whether such Borrowing shall constitute a utilization of the U.S. Facility
Commitment or Canadian Facility Commitment;
(vi) in the case of a Eurocurrency Borrowing or CDOR Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term “Interest Period”;
(vii) the location and number of the applicable Borrowers’ account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.07; and
(viii) that as of such date the conditions set forth in Sections 4.02(a),
(b) and (c) are satisfied.

 

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If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurocurrency Revolving Borrowing or
CDOR Rate Borrowing, then the Company shall be deemed to have selected an
Interest Period of one month’s duration (or 30 days for a CDOR Rate Borrowing).
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
SECTION 2.04 Protective Advances. (a) Subject to the limitations set forth
below, the Administrative Agent is authorized by the Borrowers and the Lenders,
from time to time in the Administrative Agent’s sole discretion (but shall have
absolutely no obligation to), to make (i) Loans to the Company, on behalf of the
U.S. Facility Lenders (each such Loan, a “U.S. Facility Protective Advance”) and
(ii) Loans to the Canadian Facility Borrowers, on behalf of the Canadian
Facility Lenders (each such Loan, a “Canadian Facility Protective Advance”),
which, in each case, the Administrative Agent, in its Permitted Discretion,
deems necessary or desirable (i) to preserve or protect the Collateral, or any
portion thereof, (ii) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (iii) to pay any other amount
chargeable to or required to be paid by the Borrowers pursuant to the terms of
this Agreement, including payments of reimbursable expenses (including costs,
fees, and expenses as described in Section 9.03) and other sums payable under
the Loan Documents (any of such Loans are herein referred to collectively as
“Protective Advances”); provided that, the aggregate amount of Protective
Advances outstanding at any time shall not at any time exceed 5% of the Total
Commitment (excluding the Commitment of any Defaulting Lender); provided,
further, that (A) the aggregate Revolving U.S. Facility Credit Exposure of all
U.S. Facility Lenders shall not exceed the Total U.S. Facility Commitment,
(B) the aggregate Revolving Canadian Facility Credit Exposure of all Canadian
Facility Lenders shall not exceed the Total Canadian Facility Commitment and
(C) the Credit Exposure of any Lender shall not excede such Lender’s Commitment.
Protective Advances may be made even if the conditions precedent set forth in
Section 4.02 have not been satisfied. The Protective Advances shall be secured
by the Liens in favor of the Administrative Agent in and to the Collateral and
shall constitute Obligations hereunder. All Protective Advances shall be ABR
Borrowings. For the avoidance of doubt, the Administrative Agent may elect to
make Protective Advances from either the U.S. Facility Commitments or the
Canadian Facility Commitments in its discretion and shall not be obligated to
make Protective Advances ratably as between the Facility Commitments. The
Administrative Agent’s authorization to make Protective Advances may be revoked
at any time by the Required Lenders. Any such revocation must be in writing and
shall become effective prospectively upon the Administrative Agent’s receipt
thereof. At any time that there is sufficient Canadian Facility Availability or
U.S. Facility Availability, as applicable, and the conditions precedent set
forth in Section 4.02 have been satisfied, the Administrative Agent may request
the Lenders to make a Revolving Loan to repay a Protective Advance. At any other
time the Administrative Agent may require the Lenders to fund their risk
participations described in Section 2.04(b).

 

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(b) Upon the making of a Protective Advance by the Administrative Agent (whether
before or after the occurrence of a Default), each U.S. Facility Lender or
Canadian Facility Lender, as applicable, shall be deemed, without further action
by any party hereto, to have unconditionally and irrevocably purchased from the
Administrative Agent without recourse or warranty, an undivided interest and
participation in such U.S. Facility Protective Advance or Canadian Facility
Protective Advance, as applicable, in proportion to its Applicable U.S. Facility
Percentage or Applicable Canadian Facility Percentage, as applicable. From and
after the date, if any, on which any Lender is required to fund its
participation in any Protective Advance purchased hereunder, the Administrative
Agent shall promptly distribute to such Lender, such Lender’s Applicable U.S.
Facility Percentage or Applicable Canadian Facility Percentage, as applicable,
of all payments of principal and interest and all proceeds of Collateral
received by the Administrative Agent in respect of such Protective Advance.
SECTION 2.05 Swingline Loans. (a) Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers,
from time to time during the Availability Period, in Dollars from the U.S.
Facility Commitments and Canadian Dollars from the Canadian Facility
Commitments, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of all outstanding Swingline
Loans exceeding $25,000,000, (ii) the aggregate principal amount of outstanding
Swingline Loans denominated in Canadian Dollars exceeding the U.S. Dollar
equivalent of $5,000,000, (iii) the sum of the total Revolving U.S. Facility
Credit Exposures of all U.S. Facility Lenders exceeding the Total U.S. Facility
Commitment, (iv) the sum of total Revolving Canadian Facility Credit Exposures
of all Canadian Facility Lenders exceeding the Total Canadian Facility
Commitment, (v) the sum of total Revolving Credit Exposure of all Lenders
exceeding the Total Commitment, (vi) the sum of Aggregate U.S. Facility Credit
Exposure exceeding the lesser of (x) the Total U.S. Facility Commitment and
(y) the U.S. Borrowing Base, (vii) the sum of Aggregate Canadian Facility Credit
Exposure exceeding the lesser of (x) the Total Canadian Facility Commitment and
(y) the Canadian Borrowing Base plus U.S. Facility Availability, or (viii) the
sum of Aggregate Credit Exposure exceeding the lesser of (x) the Total
Commitment and (y) the Aggregate Borrowing Base; provided that the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrowers may borrow, prepay and reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrowers shall notify the Administrative
Agent of such request by telephone (confirmed by facsimile), not later than 1:00
p.m., New York City time, on the day of a proposed Swingline Loan. Each such
notice shall be irrevocable and shall specify the requested date (which shall be
a Business Day) and amount and Currency of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrowers. The Swingline Lender shall make each
Swingline Loan available to the Borrowers by means of a credit to the general
deposit account of the applicable Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC Disbursement
as provided in Section 2.06(e), by remittance to the relevant Issuing Bank, and
in the case of repayment of another Loan or fees or expenses as provided by
Section 2.18(d), by remittance to the Administrative Agent to be distributed to
the Lenders) by 4:00 p.m., New York City time, on the requested date of such
Swingline Loan.

 

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(c) Upon the making of a Swingline Loan in Dollars (whether before or after the
occurrence of a Default and regardless of whether a Settlement has been
requested with respect to such Swingline Loan), each U.S. Facility Lender shall
be deemed, without further action by any party hereto, to have unconditionally
and irrevocably purchased from the Swingline Lender without recourse or
warranty, an undivided interest and participation in such Swingline Loan in
proportion to its Applicable Percentage. Upon the making of a Swingline Loan in
Canadian Dollars (whether before or after the occurrence of a Default and
regardless of whether a Settlement has been requested with respect to such
Swingline Loan), each Canadian Facility Lender shall be deemed, without further
action by any party hereto, to have unconditionally and irrevocably purchased
from the Swingline Lender without recourse or warranty, an undivided interest
and participation in such Swingline Loan in proportion to its Applicable
Percentage. The Swingline Lender may, at any time, require the Lenders to fund
their participations. From and after the date, if any, on which any Lender is
required to fund its participation in any Swingline Loan purchased hereunder,
the Administrative Agent shall promptly distribute to such Lender, such Lender’s
Applicable Percentage of all payments of principal and interest and all proceeds
of Collateral received by the Administrative Agent in respect of such Loan;
provided that any such payment so remitted shall be repaid to the Swingline
Lender if and to the extent such payment is required to be refunded to the
Borrowers for any reason.
(d) The Administrative Agent, on behalf of the Swingline Lender, shall request
settlement (a “Settlement”) of all outstanding Swingline Loans with the
applicable Lenders on at least a weekly basis or on any earlier date that the
Administrative Agent elects, by notifying such Lenders of such requested
Settlement by facsimile, telephone, or e-mail no later than 12:00 noon, New York
City time on the date of such requested Settlement (the “Settlement Date”). Each
applicable Lender (other than the Swingline Lender, in the case of the Swingline
Loans) shall transfer the amount of such Lender’s Applicable Percentage of the
outstanding principal amount of the applicable Swingline Loan or Swingline Loans
with respect to which Settlement is requested to the Administrative Agent, to
such account of the Administrative Agent as the Administrative Agent may
designate, not later than 2:00 p.m., New York City time, on such Settlement
Date. Settlements may occur during the existence of a Default and whether or not
the applicable conditions precedent set forth in Section 4.02 have then been
satisfied. Such amounts transferred to the Administrative Agent shall be applied
against the amounts of the Swingline Lender’s Swingline Loans and, together with
Swingline Lender’s Applicable Percentage of such Swingline Loan, shall
constitute U.S. Facility Loans or Canadian Facility Loans, as applicable, of
such Lenders, respectively. If any such amount is not transferred to the
Administrative Agent by any applicable Lender on such Settlement Date, the
Swingline Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon as specified in Section 2.07.
SECTION 2.06 Letters of Credit. (a) General. Subject to the terms and conditions
set forth herein, the Borrowers may request the issuance of standby and
documentary letters of credit denominated in either Dollars or Canadian Dollars
by an Issuing Bank for their own account or for the account of any Subsidiary
(provided, that Borrowers shall be a co-applicant, and be jointly and severally
liable, with respect to each such Letter of Credit issued for the account of
such Subsidiary) in a form reasonably acceptable to the Administrative Agent and
the Issuing Bank, at any time and from time to time during the Availability
Period, either under the U.S. Facility Commitments or under the Canadian
Facility Commitments, it being understood that all Canadian Dollar Letters of
Credit shall be issued under the Canadian Facility Commitments. For the
avoidance of doubt, Letters of Credit issued hereunder, including the Dollar
Equivalent of Letters of Credit denominated in Canadian Dollars, shall
constitute utilization under the Commitments.

 

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(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
(i) To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrowers shall deliver by
hand or facsimile (or transmit by electronic communication, if arrangements for
doing so have been approved by the relevant Issuing Bank of such Letter of
Credit) to the relevant Issuing Bank and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (d) of this Section), the Currency (which shall be Dollars or Canadian
Dollars), the amount of such Letter of Credit, the name of the account party
(which shall be the one of the Borrowers or a Subsidiary and a Borrower as
co-applicants), the name and address of the beneficiary thereof, whether such
Letter of Credit is to be made under the U.S. Facility Commitments or the
Canadian Facility Commitments and such other information as shall be necessary
to prepare, amend, renew or extend such Letter of Credit. It is understood that
the reinstatement of all or a portion of a Letter of Credit in accordance with
the terms thereof following a drawing thereunder shall not constitute an
amendment, renewal or extension of such Letter of Credit. If requested by such
Issuing Bank, the Borrowers also shall submit a letter of credit application on
such Issuing Bank’s standard form in connection with any request for a Letter of
Credit. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrowers to, or entered into by
the Borrowers with, any Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
(ii) On the Effective Date, each Issuing Bank that has issued an Existing Letter
of Credit shall be deemed, without further action by any party hereto, to have
granted to each Lender and each Lender shall be deemed to have purchased from
such Issuing Bank a participation in such Existing Letter of Credit in
accordance with paragraph (e) below. The applicable Issuing Banks and the
Lenders that were also party to the Existing Credit Agreement agree that
concurrently with such grant, the participations in the Existing Letters of
Credit granted to such lenders under the Existing Credit Agreement shall be
automatically canceled without further action by any of the parties thereto. On
and after the Effective Date, each Existing Letter of Credit shall constitute a
Letter of Credit for all purposes hereof.
(c) Limitations on Amounts. A Letter of Credit shall be issued, amended, renewed
or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the
aggregate LC Exposure shall not exceed $25,000,000, (ii) the Canadian Dollar LC
Exposure shall not exceed the Dollar Equivalent of $5,000,000, (iii) the
aggregate amount of standby Letters of Credit shall not exceed $15,000,000,
(iv) the total Revolving U.S. Facility Credit Exposures shall not exceed the
Total U.S. Facility Commitment, (v) the total Revolving Canadian Facility Credit
Exposures shall not exceed the Total Canadian Facility Commitment, (vi) the
Aggregate Credit Exposure shall not exceed the Total Commitment, (vii) the
Aggregate U.S. Facility Credit Exposure would not exceed the lesser of (x) the
U.S. Borrowing Base and (y) the Total U.S. Facility Commitment, (viii) the
Aggregate Canadian Facility Credit Exposure would not exceed the lesser of
(x) the Canadian Borrowing Base plus U.S. Facility Availability and (y) the
Total Canadian Facility Commitment and (ix) the Aggregate Credit Exposure would
not exceed the lesser of (x) the Aggregate Borrowing Base and (y) the Total
Commitment.

 

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(d) Expiration Date. No Letter of Credit shall have a stated expiry date that is
later than the close of business on the earlier of (i) the date twelve months
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, twelve months after the then-current expiration
date of such Letter of Credit, so long as such renewal or extension occurs
within three months of such then-current expiration date) and (ii) the date that
is five Business Days prior to the Maturity Date; provided that any Letter of
Credit with a one-year tenor may provide for the renewal thereof for additional
one year periods (which shall in no event extend beyond the date referred to in
clause (ii) above) under customary “evergreen” provisions.
(e) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof), and without any further action
on the part of any Issuing Bank or the Lenders, (i) in the case of a Dollar
Letter of Credit, the relevant Issuing Bank hereby grants to each U.S. Facility
Lender (other than the relevant Issuing Bank), and each U.S. Facility Lender
hereby acquires from such Issuing Bank, a participation in such Letter of Credit
equal to such Lender’s Applicable U.S. Facility Percentage, and (ii) in the case
of a Canadian Dollar Letter of Credit, the relevant Issuing Bank hereby grants
to each Canadian Facility Lender (other than the relevant Issuing Bank), and
each Canadian Facility Lender hereby acquires from such Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Canadian Facility Percentage, of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of each relevant Issuing Bank, such
Lender’s Applicable U.S. Facility Percentage (in the case of a Dollar Letter of
Credit) and such Lender’s Applicable Canadian Facility Percentage (in the case
of a Canadian Dollar Letter of Credit) of each LC Disbursement made by such
Issuing Bank and not reimbursed by the Borrowers on the date due as provided in
paragraph (f) of this Section 2.06, or of any reimbursement payment required to
be refunded to the Borrowers for any reason. Each U.S. Facility Lender and each
Canadian Facility Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or Event of Default or
reduction or termination of the U.S. Facility Commitment or Canadian Facility
Commitment, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

 

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(f) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the relevant Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrowers shall have received notice of
such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or,
if such notice has not been received by the Borrowers prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrowers receive such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrowers receive such notice, if such
notice is not received prior to such time on the day of receipt; provided, that
the Borrowers may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or Section 2.05 that such payment be
financed with an ABR Revolving Borrowing or Swingline Loan of the Currency in
which such Letter of Credit is issued in an equivalent amount and, to the extent
so financed, each Borrower’s obligation to make such payment shall be discharged
and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrowers fail to make such payment when due, the Administrative Agent shall
notify each applicable Lender of the applicable LC Disbursement, the payment
then due from the Borrowers in respect thereof and such Lender’s Applicable
Percentage thereof. Promptly following receipt of such notice, each applicable
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrowers, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the relevant Issuing Bank, the
amounts so received by it from the applicable Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrowers pursuant
to this paragraph, the Administrative Agent shall distribute such payment to the
relevant Issuing Bank or, to the extent that Lenders have made payments pursuant
to this paragraph to reimburse such Issuing Bank, then to such Lenders and such
Issuing Bank, as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement
(other than the funding of an ABR Revolving Loan or a Swingline Loan as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrowers of their obligation to reimburse such LC Disbursement.
(g) Obligations Absolute. Each Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Banks under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, such Borrower’s obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Banks, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any

 

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Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Banks; provided that the foregoing
shall not be construed to excuse the Issuing Banks from liability to the
Borrowers to the extent of any direct damages (as opposed to consequential or
special damages, claims in respect of which are hereby waived by the Borrowers
to the extent permitted by applicable law) suffered by the Borrowers that are
caused by the Issuing Banks’ failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Banks (as finally
determined by a court of competent jurisdiction), the Issuing Banks shall be
deemed to have exercised the requisite standard of care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Banks may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(h) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the applicable Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrowers of their obligation
to reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(i) Interim Interest. If any Issuing Bank shall make any LC Disbursement, then,
unless the Borrowers shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to, but
excluding, the date that the Borrowers reimburse such LC Disbursement, at the
rate per annum then applicable to ABR Loans in the applicable currency; provided
that, if the Borrowers fail to reimburse such LC Disbursement when due pursuant
to paragraph (f) of this Section 2.06, then Section 2.13(d) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of such
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (f) of this Section 2.06 to reimburse such
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(j) Replacement of the Issuing Bank. An Issuing Bank may be added, or an
existing Issuing Bank may be replaced or terminated, under this Agreement at any
time by written agreement among the Company, the Administrative Agent, the
replaced or terminated Issuing Bank and the new or successor Issuing Bank, as
applicable. The Administrative Agent shall notify the Lenders of any such
addition, replacement or termination. At the time any such replacement or
termination shall become effective, the Company shall pay all unpaid fees
accrued for the account of the Issuing Bank being replaced or terminated. From
and after the effective date of any such replacement or addition, the new or
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter. References herein to the term “Issuing Bank” shall be deemed to
refer to each new Issuing Bank or to any previous Issuing Bank, or to such new
Issuing Bank and all previous Issuing Banks, as the context shall require. After
the replacement or termination of an Issuing Bank hereunder, the replaced or
terminated Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to any outstanding Letters of Credit issued by it prior to such
replacement or termination, but shall not be required to issue any new Letters
of Credit or to renew or extend any such outstanding Letters of Credit.

 

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(k) Cash Collateralization. If either (i) an Event of Default shall have
occurred and be continuing and the Borrowers receive notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing more than 50% of the
total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, (ii) the aggregate amount of Revolving U.S. Facility Credit Exposure
of all U.S. Facility Lenders hereunder exceeds the Total U.S. Facility
Commitment, (iii) the aggregate amount of Revolving Canadian Facility Credit
Exposure of all Canadian Facility Lenders hereunder exceeds the Total Canadian
Facility Commitment, or (iv) any of the other provisions of this Agreement
require cash collateralization, the Borrowers shall deposit within one Business
Day after notice from the Administrative Agent of the requirement thereof into
an account established and maintained on the books and records of the
Administrative Agent, which account may be a “securities account” (within the
meaning of Section 8-501 of the UCC as in effect in the State of New York), in
the name of the Administrative Agent and for the benefit of the applicable
Lenders (the “LC Collateral Account”), an amount in immediately available funds
in Dollars equal to 105% of the LC Exposure as of such date, converting the
aggregate Canadian Dollar LC Exposure into the Dollar Equivalent thereof as of
such date, plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such amount shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default described in paragraph
(h) or (i) of Section 7.01. Such deposits shall be held by the Administrative
Agent as collateral for the LC Exposure under this Agreement and for the payment
and performance of the Secured Obligations, and for this purpose the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over the LC Collateral Account, the LC Collateral
Account shall be subject to a Deposit Account Control Agreement and the
Borrowers hereby grant a security interest to the Administrative Agent for the
benefit of the Secured Parties in the LC Collateral Account and in any financial
assets (as defined in the UCC) or other property held therein. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Administrative Agent and at the
Borrowers’ risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in the LC Collateral
Account. Moneys and financial assets in the LC Collateral Account shall be
applied by the Administrative Agent to reimburse the applicable Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing more than 50% of the total LC Exposure), be applied to satisfy
other Secured Obligations. The Administrative Agent shall cause all such cash
collateral (to the extent not applied as aforesaid) to be returned to the
Borrowers within three Business Days after (A) in the case of clause (i) above,
the applicable Event of Default shall have been cured or waived (so long as no
other Event of Default has occurred and is continuing at such time), (B) in the
case of clauses (ii) and (iii) above, the aggregate amount of Revolving U.S.
Facility Credit Exposure of all U.S. Facility Lenders or the aggregate amount of
Revolving Canadian Facility Credit Exposure of all Canadian Facility Lenders
hereunder ceases to exceed the Total U.S. Facility Commitment or the Total
Canadian Facility Commitment, as applicable, for five consecutive Business Days
or (C) in the case of clause (iv) above, such cash collateral shall no longer be
required pursuant to the applicable provision hereof.

 

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(l) Reporting. Unless otherwise requested by the Administrative Agent, each
Issuing Bank shall (i) provide to the Administrative Agent copies of any notice
received from the Borrowers pursuant to Section 2.06(b) no later than the
Business Day after receipt thereof and (ii) report in writing to the
Administrative Agent (A) on the first Business Day of each week, the activity
for each day during the immediately preceding week in respect of Letters of
Credit issued by it, including all issuances, extensions, amendments and
renewals, all expirations and cancellations and all disbursements and
reimbursements, (B) on or prior to each Business Day on which such Issuing Bank
expects to issue, amend, renew or extend any Letter of Credit, the date of such
issuance, amendment, renewal or extension, whether such Letter of Credit is a
trade, financial or performance Letter of Credit, whether such Letter of Credit
is a Dollar Letter of Credit or a Canadian Dollar Letter of Credit and the
aggregate face amount and Currency of the Letters of Credit to be issued,
amended, renewed or extended by it and outstanding after giving effect to such
issuance, amendment, renewal or extension (and whether the amount thereof
changed), and no Issuing Bank shall be permitted to issue, amend, renew or
extend such Letter of Credit without first obtaining written confirmation from
the Administrative Agent that such issuance, amendment, renewal or extension is
then permitted by the terms of this Agreement, (C) on each Business Day on which
such Issuing Bank makes any LC Disbursement, the date of such LC Disbursement
and the amount and Currency of such LC Disbursement and (D) on any other
Business Day, such other information as the Administrative Agent shall
reasonably request, including but not limited to prompt verification of such
information as may be requested by the Administrative Agent.
SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 3:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders in an amount equal to such Lender’s Applicable U.S.
Facility Percentage or Applicable Canadian Facility Percentage, as the case may
be; provided that, Swingline Loans shall be made as provided in Section 2.05.
The Administrative Agent will make such Loans available to the applicable
Borrower by promptly crediting the amounts so received, in like funds, to the
Funding Account(s) or such other account as may be specified in a Borrowing
Request; provided that ABR Revolving Loans made to finance the reimbursement of
(i) an LC Disbursement as provided in Section 2.06(f) shall be remitted by the
Administrative Agent to the Issuing Bank and (ii) a Protective Advance shall be
retained by the Administrative Agent.

 

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(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption and in its sole discretion, make available to the
Borrowers a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the applicable Borrower agree (severally
and not jointly) to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to such Borrower, to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of either the Federal Funds Effective Rate (in the case of
Dollar-denominated amounts) or the Administrative Agent’s cost of funds (in the
case of Canadian Dollar-denominated amounts) and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrowers, the interest rate applicable
to ABR Loans in the applicable currency. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.
SECTION 2.08 Interest Elections. (a) Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurocurrency Revolving Borrowing or CDOR Rate Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request or as otherwise provided
in Section 2.03. Thereafter, the Borrowers may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurocurrency Borrowing or a CDOR Rate Borrowing, may elect Interest Periods
therefor, all as provided in this Section; provided, however, that a Borrowing
denominated in one Currency may not be converted to a Borrowing in a different
Currency. Subject to the foregoing, the Borrowers may elect different options
with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section shall not apply to Swingline
Borrowings or Protective Advances, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrowers shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if such Borrower was requesting a
Revolving Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Interest Election Request
substantially in the form of Exhibit G signed by the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrower and the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);

 

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(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing, a Eurocurrency
Borrowing or a CDOR Rate Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing or a CDOR Rate
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term “Interest Period” and permitted under Section 2.02(d).
If any such Interest Election Request requests a Eurocurrency Borrowing or a
CDOR Rate Borrowing but does not specify an Interest Period, then the applicable
Borrower shall be deemed to have selected an Interest Period of one month’s
duration for a Eurocurrency Borrowing or 30 days for a CDOR Rate Borrowing.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
(e) If the applicable Borrower fails to deliver a timely Interest Election
Request with respect to a Eurocurrency Revolving Borrowing prior to the end of
the Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid,
each Eurocurrency Revolving Borrowing shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto.
(f) If the Borrower fails to deliver a timely Interest Election Request with
respect to a CDOR Rate Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a CDOR Rate Borrowing and (ii) unless repaid, each CDOR Rate
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.09 Termination and Reduction of Commitments; Increase in Commitments.
(a) Unless previously terminated, all Commitments shall terminate on the
Maturity Date.

 

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(b) The Borrowers may at any time terminate the Commitments upon (i) the payment
in full of all outstanding Loans, together with accrued and unpaid interest
thereon and on any Letters of Credit, (ii) the cancellation and return of all
outstanding Letters of Credit (or alternatively, with respect to each such
Letter of Credit, the furnishing to the Administrative Agent of a cash deposit
(or at the discretion of the Administrative Agent a back up standby letter of
credit reasonably satisfactory to the Administrative Agent) equal to 105% of the
LC Exposure as of such date), (iii) the payment in full of the accrued and
unpaid fees, and (iv) the payment in full of all reimbursable expenses and other
Obligations (other than Unliquidated Obligations) together with accrued and
unpaid interest thereon.
(c) The Borrowers may from time to time reduce the Commitments (and each
Facility Commitment); provided, that (i) each reduction of the Commitments (and
of either Facility Commitment) shall be in an amount that is an integral
multiple of $1,000,000 and not less than $10,000,000, (ii) each reduction of the
Commitments shall be pro rata as between the Facilities and (iii) the Borrowers
shall not reduce the Commitments (or either Facility Commitment) if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.10 or Section 2.11, (A) the Aggregate Credit Exposure would exceed the
lesser of the Total Commitment and the Aggregate Borrowing Base, (B) the sum of
the Revolving U.S. Facility Credit Exposure would exceed the Total U.S. Facility
Commitment or (C) the sum of the Revolving Canadian Facility Credit Exposures
would exceed the Total Canadian Facility Commitment.
(d) The Borrowers shall notify the Administrative Agent of (i) any election to
terminate or reduce the Commitments under paragraph (b) or (c) of this
Section 2.09, and (ii) in the case of a reduction, the amount of such reduction
(if any) to be allocated to the U.S. Facility Commitment and/or Canadian
Facility Commitment hereunder, in each case, at least three Business Days prior
to the effective date of such termination or reduction, specifying such
election, the aggregate amount of a reduction and any allocation as aforesaid,
and the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrowers pursuant to this Section 2.09(d) shall be
irrevocable; provided, that a notice of termination of the Commitments delivered
by the Borrowers may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by such Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments (and of Facility Commitments) shall
be permanent. Each reduction of the Commitments and Facility Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments and Facility Commitments, as the case may be.
(e) The Company shall have the right to increase the U.S. Facility Commitment by
obtaining additional U.S. Facility Commitments, either from one or more of the
Lenders or another lending institution, in an aggregate amount not to exceed
$50,000,000; provided that (i) any such request for an increase shall be in a
minimum amount of $10,000,000, (ii) the Company may make a maximum of five such
requests, (iii) the Administrative Agent has approved the identity of any such
new Lender, such approval not to be unreasonably withheld, (iv) any such new
Lender assumes all of the rights and obligations of a “Lender” hereunder, and
(v) the procedures described in Section 2.09(f) have been satisfied.

 

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(f) Any amendment hereto for such an increase of U.S. Facility Commitments shall
be in form and substance reasonably satisfactory to the Administrative Agent and
shall only require the written signatures of the Administrative Agent, the
Company and the Lender(s) being added or increasing their U.S. Facility
Commitment. As a condition precedent to such an increase, (i) the Company shall
deliver to the Administrative Agent a certificate of each U.S. Loan Party (in
sufficient copies for each Lender) signed by an authorized officer of such Loan
Party certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, (ii) before and after giving effect to
such increase, (x) the representations and warranties contained in Article III
and the other Loan Documents shall be true and correct in all material respects
(except that any representation and warranty that is qualified as to
“materiality” or “Material Adverse Effect” shall be true and correct in all
respects), except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date and (y) no Default or Event of Default shall have
occurred and be continuing and (iii) if requested by the Administrative Agent,
the Company shall deliver to the Administrative Agent customary legal opinions,
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(g) Within a reasonable time after the effective date of any increase, the
Administrative Agent shall, and is hereby authorized and directed to, revise the
Commitment Schedule to reflect such increase and shall distribute such revised
Commitment Schedule to each of the Lenders and the Company, whereupon such
revised Commitment Schedule shall replace the old Commitment Schedule and become
part of this Agreement. On the Business Day following any such increase, all
outstanding ABR Loans shall be reallocated among the U.S. Facility Lenders
(including any newly added Lenders) in accordance with the U.S. Facility
Lenders’ respective revised Applicable U.S. Facility Percentages. Eurocurrency
Advances shall not be reallocated among the U.S. Facility Lenders prior to the
expiration of the applicable Interest Period in effect at the time of any such
increase.
SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) Each Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan of such
Lender extended to such Borrower on the Maturity Date, (ii) to the
Administrative Agent the then unpaid amount of each Protective Advance extended
to such Borrower on the earliest of the Maturity Date and demand by the
Administrative Agent and (iii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan extended to such Borrrower on the earlier of the
Maturity Date and the date that is the seventh day (or if such day is not a
Business Day, the next succeeding Business Day) after such Swingline Loan is
made, provided that on each date that a Revolving Borrowing is made by the
Company, the Company shall repay all Swingline Loans then outstanding.
(b) During any Cash Dominion Period, on each Business Day, the Administrative
Agent shall (i) apply all funds credited to the U.S. Collection Account as of
4:00 p.m., New York City time, on such Business Day (whether or not immediately
available) first to prepay any U.S. Facility Protective Advances that may be
outstanding, pro rata, second to prepay U.S. Facility Swingline Loans, third to
prepay the U.S. Facility Revolving Loans and fourth, to cash collateralize
outstanding Dollar LC Exposure and (ii) apply all funds credited to the Canadian
Collection Account as of 4:00 p.m., Toronto time, on such Business Day (whether
or not immediately available) first to prepay any Canadian Facility Protective
Advances that may be outstanding, pro rata, second to prepay Canadian Facility
Swingline Loans, third to prepay the Canadian Facility Revolving Loans and
fourth, to cash collateralize outstanding Canadian Dollar LC Exposure; provided
that if the proceeds from the Canadian Collections Account are inadequate to
repay the Loans under the Canadian Facility, the Administrative Agent shall
apply any excess balance in the U.S. Collections Account, after the application
of proceeds in accordance with clause (i) above, to the repayment of Loans under
the Canadian Facility in accordance with this clause (ii). If the Company is
required to provide (and has provided the required amount of) cash collateral
pursuant to this Section 2.10(b), at the end of any Cash Dominion Period, the
amount of such cash collateral shall be returned to the Company within two
Business Days.

 

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(c) Each Lender shall maintain in accordance with its usual practice records
evidencing the indebtedness of the Borrowers to such Lender resulting from each
Loan made by such Lender, including the amounts and Currency of principal and
interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain records in which it shall record
(i) the amount and Currency of each Loan made hereunder, the Facility
Commitment, Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount and Currency of any principal or interest due and payable or to
become due and payable from the Borrowers to each Lender hereunder and (iii) the
amount and Currency of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.
(e) The entries made in the records maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such records or any error therein shall not
in any manner affect the obligation of the Borrowers to repay the Loans and pay
interest thereon in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the applicable Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent and the Company. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.11 Prepayment of Loans. (a) Optional Prepayments. The Borrowers shall
have the right at any time and from time to time to prepay any Borrowing in
whole or in part, without premium or penalty, subject to Section 2.16, and prior
notice in accordance with paragraph (c) of this Section.
(b) Mandatory Prepayments. In the event and on such occasion that:
(i) the Credit Exposure of any Lender exceeds such Lender’s Commitment;

 

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(ii) the Aggregate Credit Exposures (including the Dollar Equivalent of any
Revolving Canadian Facility Credit Exposure denominated in Canadian Dollars)
exceeds the lesser of (x) the Total Commitment or (y) the Aggregate Borrowing
Base, including as a result of any currency exchange fluctuation;
(iii) the Aggregate U.S. Facility Credit Exposure exceeds the lesser of (x) the
U.S. Facility Commitment or (y) the U.S. Borrowing Base;
(iv) the Aggregate Canadian Facility Credit Exposure exceeds the lesser of
(x) the Canadian Facility Commitment or (y) the Canadian Borrowing Base plus
U.S. Facility Availability; or
(v) the Dollar Equivalent of the aggregate Revolving Canadian Facility Credit
Exposure of all Canadian Facility Lenders exceeds (x) 105% of the Total Canadian
Facility Commitment as then in effect at any point in time or (y) 100% but less
than 105% of the Total Canadian Facility Commitment as then in effect for a
period of ten (10) consecutive Business Days;
the Borrowers shall promptly prepay the Revolving Loans and/or Swingline Loans
(and/or provide cash collateral for LC Exposure as specified in Section 2.06(k))
in an aggregate amount equal to (1) in the case of clauses (b)(i), (b)(ii),
(b)(iii) and (b)(iv) of this Section, such excess and (2) in the case of clause
(b)(v) of this Section, the amount by which the Dollar Equivalent of the
aggregate Revolving Canadian Facility Credit Exposure of all Canadian Facility
Lenders exceeds the Total Canadian Facility Commitment as then in effect. If the
Company is required to provide (and has provided the required amount of) cash
collateral pursuant to this Section 2.11(b) and such excess is subsequently
reduced, cash collateral in an amount equal to the lesser of (x) any such
reduction and (y) the amount of such cash collateral (to the extent not applied
as set forth in Section 2.06(k)) shall be returned to the Company within five
Business Days after any such reduction.
(c) The Company or Canadian Facility Borrowers, as applicable, shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by facsimile or by other electronic
transmission) of any prepayment hereunder (i) in the case of prepayment of a
Eurocurrency Borrowing or a CDOR Rate Borrowing, not later than 1:00 p.m., New
York City time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Borrowing, not later than 1:00 p.m., New York City
time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 1:00 p.m., New York City time, on
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid (specifying the Currency thereof) and, in the case of a
mandatory prepayment, set forth a reasonably detailed calculation of the amount
of such prepayment, provided that a notice of optional prepayment may state that
such notice is conditioned upon the effectiveness of other credit facilities or
the receipt of the proceeds from the issuance of other Indebtedness or any other
event, in which case such notice of prepayment may be revoked by the Company (by
notice to the Administrative Agent on or prior to the specified date) if such
condition is not satisfied. Promptly following receipt of any such notice (other
than a notice relating solely to Swingline Loans) the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial optional prepayment of
any Revolving Borrowing shall be in an amount that would be permitted in the
case of an advance of a Revolving Borrowing of the same Type and Currency as
provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Revolving Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.13.

 

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SECTION 2.12 Fees. (a) The Company agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
Applicable Commitment Fee Rate on the average daily amount of the Available
Commitment of such Lender during the period from and including the Effective
Date to but excluding the Maturity Date. Accrued commitment fees shall be
payable in arrears on the first Business Day of each fiscal month of the Company
and on the Maturity Date, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed.
(b) The Company agrees to pay to the Administrative Agent for the account of
each U.S. Facility Lender and Canadian Facility Lender a participation fee with
respect to its participations in Dollar Letters of Credit and Canadian Dollar
Letters of Credit, respectively, which shall accrue at the same Applicable Rate
used to determine the interest rate applicable to Eurocurrency Revolving Loans
(in the case of Dollar Letters of Credit) or CDOR Rate Loans (in the case of
Canadian Dollar Letters of Credit) on the average daily amount of such Lender’s
LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the Maturity Date and the date on which such Lender
ceases to have any LC Exposure.
(c) The Company agrees to pay to each Issuing Bank (i) a fronting fee, which
shall accrue at the rate or rates per annum separately agreed upon between the
Company and the applicable Issuing Bank on the average daily amount of the LC
Exposure attributable to Letters of Credit issued by it (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the Maturity Date
and the date on which there ceases to be any LC Exposure under such Letters of
Credit and (ii) such Issuing Bank’s standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit issued by it or
processing of drawings thereunder.
(d) Participation fees and fronting fees accrued through and including the last
day of each fiscal month shall be payable on the first Business Day of each
fiscal month; provided that all such fees shall be payable on the Maturity Date
and any such fees accruing after the Maturity Date shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed.
(e) The Company agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Company and the Administrative Agent.

 

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(f) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to any Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13 Interest.
(a) The Loans comprising each ABR Borrowing (including each Swingline Loan)
shall bear interest at the U.S. Alternate Base Rate (for ABR Borrowings and
Swingline Loans denominated in Dollars) or the Canadian Alternate Base Rate (for
ABR Borrowings and Swingline Loans denominated in Canadian Dollars) plus, in
each case, the Applicable Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the
Adjusted Eurocurrency Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Each Protective Advance shall bear interest at the U.S. Alternate Base Rate
(for Protective Advances denominated in Dollars) or the Canadian Alternate Base
Rate (for Protective Advances denominated in Canadian Dollars) plus, in each
case, the Applicable Rate for Revolving Loans plus 2%.
(d) Notwithstanding the foregoing, if any principal of or interest on any Loan
(other than a Protective Advance) or any fee or other amount payable by the
Borrowers hereunder is not paid when due, whether at stated maturity, by
mandatory prepayment, upon acceleration or otherwise, such overdue amount shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Revolving Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (c) or (d) of this Section shall
be payable on demand, (ii) in the event of any repayment or prepayment of any
Loan (other than a prepayment of an ABR Revolving Loan prior to the Maturity
Date), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurocurrency Loan or any CDOR Rate Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Canadian Alternate Base Rate
or CDOR Rate and interest computed by reference to the U.S. Alternate Base Rate
at times when the U.S. Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable U.S. Alternate Base Rate,
Canadian Alternate Base Rate, CDOR Rate, Adjusted Eurocurrency Rate or
Eurocurrency Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

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(g) Interest Act (Canada). 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 360 days
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 such other period of time, respectively.
(h) Limitation on Interest. If any provision of this Agreement or of any of the
other Loan Documents would obligate any Loan Party to make any payment of
interest or other amount payable to the Lenders in an amount or calculated at a
rate which would be prohibited by law or would result in a receipt by the
Lenders 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 the Lenders 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 the Lenders under this Section 2.13, and (2) thereafter, by reducing any
fees, commissions, premiums and other amounts required to be paid to the Lenders
which would constitute “interest” for purposes of Section 347 of the Criminal
Code (Canada). Notwithstanding the foregoing, and after giving effect to all
adjustments contemplated thereby, if the Lenders shall have received an amount
in excess of the maximum permitted by that section of the Criminal Code
(Canada), the Loan Parties shall be entitled, by notice in writing to the
Administrative Agent, to obtain reimbursement from the Lenders in an amount
equal to such excess and, pending such reimbursement, such amount shall be
deemed to be an amount payable by the Lenders to the Borrower. Any amount or
rate of interest referred to in this Section 2.13(h) 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 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 Effective
Date to the Maturity Date and, in the event of a dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by the Administrative
Agent shall be conclusive for the purposes of such determination.
SECTION 2.14 Alternate Rate of Interest. (a) If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing:
(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted Eurocurrency Rate or the Eurocurrency Rate, as
applicable, for such Interest Period; or
(ii) the Administrative Agent is advised by the Required Lenders that the
Adjusted Eurocurrency Rate or the Eurocurrency Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(or Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;

 

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then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or facsimile or by other electronic transmission as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Borrowers and the Lenders that the circumstances giving rise to such notice
no longer exist, (i) any Interest Election Request that requests the conversion
of any Borrowing to, or continuation of any such Borrowing as, a Eurocurrency
Borrowing shall be ineffective and such Borrowing (unless prepaid) shall be
converted to, or continued as, an ABR Borrowing and (ii) if any Borrowing
Request requests a Eurocurrency Revolving Borrowing, such Borrowing shall be
made as an ABR Borrowing.
(b) If prior to the commencement of any Interest Period for a CDOR Rate
Borrowing:
(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the CDOR Rate for such Interest Period; or
(ii) the Administrative Agent is advised by the Required Lenders that the CDOR
Rate for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (or Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a CDOR Rate Borrowing shall be ineffective and
such Borrowing (unless prepaid) shall be converted to, or continued as an ABR
Borrowing, and (ii) if any Borrowing Request requests a CDOR Rate Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan 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 Eurocurrency Rate) or any Issuing Bank;
(ii) subject any Lender or any Issuing Bank to any (or any increase in any)
Other Connection Taxes with respect to this Agreement or any other Loan
Document, any Letter of Credit, or any participation in a Letter of Credit or
any Loan made or Letter of Credit issued by it, except any such Taxes imposed on
or measured by its net income or profits (however denominated) or franchise (or
similar) Taxes imposed in lieu of net income or profits Taxes; or
(iii) impose on any Lender or any Issuing Bank or the London interbank market
any other condition, cost, or expense affecting this Agreement or Eurocurrency
Loans or CDOR Rate Loans made by such Lender or any Letter of Credit or
participation therein;

 

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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan or CDOR Rate Loan, (or in
the case of clause (ii), any Loan, any Letter of Credit, or any participation in
a Letter of Credit or any Loan made or a Letter of Credit issued by it) or to
increase the cost to such Lender or such Issuing Bank of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or such Issuing Bank hereunder (whether of
principal, interest or otherwise), then the Borrowers, subject to Section 2.19,
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or such Issuing Bank’s policies and the
policies of such Lender’s or such Issuing Bank’s holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or such Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers shall pay such Lender or such Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or such Issuing Bank’s right to demand such compensation, provided that
the Borrowers shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies the Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

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(e) Notwithstanding any other provision of this Agreement, if, after the
Effective Date, (x) any Change in Law shall make it unlawful for any Canadian
Facility Lender to make or maintain any CDOR Rate Loan denominated in Canadian
Dollars or to give effect to its obligations as contemplated hereby with respect
to any CDOR Rate Loan denominated in Canadian Dollars, or (y) there shall have
occurred any change in national or international financial, political or
economic conditions (including the imposition of or any change in exchange
controls, but excluding conditions otherwise covered by this Section 2.15) or
currency exchange rates which would make it impracticable for the Canadian
Facility Lenders to make or maintain any CDOR Rate Loan denominated in Canadian
Dollars to, or for the account of, the Canadian Facility Borrowers, then, by
written notice to the Company and to the Administrative Agent and subject to
Section 2.19:
(i) such Canadian Facility Lender or Canadian Facility Lenders may declare that
such CDOR Rate Loan will not thereafter (for the duration of such unlawfulness)
be made by such Canadian Facility Lender or Canadian Facility Lenders hereunder
(or be continued for additional Interest Periods), whereupon any request for a
CDOR Rate Loan or to continue a CDOR Rate Loan, as the case may be, for an
additional Interest Period shall, as to such Canadian Facility Lender or
Canadian Facility Lenders only, be of no force and effect, unless such
declaration shall be subsequently withdrawn; and
(ii) such Canadian Facility Lender may require that any outstanding CDOR Rate
Loan, made by it be converted to a Eurocurrency Loan or ABR Loan denominated in
Dollars, as the case may be (unless repaid by the Canadian Facility Borrowers as
described below), in which event any such CDOR Rate Loan, shall be converted to
a Eurocurrency Loan or ABR Loan denominated in Dollars, as the case may be, as
of the effective date of such notice as provided in Section 2.15(f) and at the
Spot Selling Rate on the date of such conversion or, at the option of the
Canadian Facility Borrowers, repaid on the last day of the then current Interest
Period with respect thereto or, if earlier, the date on which the applicable
notice becomes effective.
If any Canadian Facility Lender shall exercise its rights under (i) or
(ii) above, all payments and prepayments of principal that would otherwise have
been applied to repay such converted CDOR Rate Loan shall instead be applied to
repay the Eurocurrency Loans or ABR Loans denominated in Dollars, as the case
may be, made by such Lender resulting from such conversion.
(f) For purposes of Section 2.15(e), a notice to the Canadian Facility Borrowers
by any Canadian Facility Lender shall be effective as to each CDOR Rate Loan
made by such Canadian Facility Lender, if lawful, on the last day of the
Interest Period, if any, currently applicable to such Revolving Loan; in all
other cases such notice shall be effective on the date of receipt thereof by the
Canadian Facility Borrowers.

 

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SECTION 2.16 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan or CDOR Rate Loan prior to the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurocurrency Loan or CDOR Rate Loan prior to
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurocurrency Loan (or to convert any ABR
Loan into a Eurocurrency Loan or a CDOR Rate Loan, as applicable) on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.09(d) and is revoked in accordance
therewith) or (d) the assignment of any Eurocurrency Loan or CDOR Rate Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrowers to replace a Lender pursuant to Section 2.19(b),
then, in any such event, the Borrowers shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurocurrency
Loan or a CDOR Rate Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be equal to the excess,
if any, of (i) the amount of interest that would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted Eurocurrency
Rate or the CDOR Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest that would accrue on such principal amount for such
period at the interest rate that such Lender would bid were it to bid, at the
commencement of such period, for Dollar deposits of a comparable amount and
period to such Eurocurrency Loan from other banks in the eurocurrency market, or
for Canadian Dollar deposits of a comparable amount and period to such CDOR Rate
Loan from other banks in the Canadian bankers’ acceptance market. A certificate
of any Lender setting forth any amount or amounts that such Lender is entitled
to receive pursuant to this Section shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.17 Taxes.
(a) Except as provided in this Section 2.17, any and all payments made by or on
account of any obligation of any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes; provided that if any applicable law
(as determined in the good faith discretion of an applicable Loan Party or the
Administrative Agent) requires the deduction or withholding of any Indemnified
Tax or Other Tax from any such payment (including, for the avoidance of doubt,
any such deduction or withholding required to be made by the applicable Loan
Party or the Administrative Agent), such Loan Party or the Administrative Agent
shall make such deductions and timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender, any Issuing Bank or its beneficial owner, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made.
(b) Without limiting the provisions of paragraph (a) above but without
duplicating any payment obligation by the Loan Parties in either paragraph
(a) above or paragraph (c) below, the Loan Parties shall timely pay, or at the
option of the Administrative Agent timely reimburse it for the payment of any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

 

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(c) The Loan Parties shall jointly and severally indemnify the Administrative
Agent, each Lender and each Issuing Bank, within 30 days after receipt of the
certificate described below, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) payable by the
Administrative Agent, such Lender (for its beneficial owner) or each Issuing
Bank, as the case may be, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority,
provided that such Agent or Lender, as the case may be, provides the Loan Party
with a certificate, setting forth in reasonable detail calculations of the
amount of such payment or liability delivered to the Borrowers by a Lender or an
Issuing Bank (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender or the Issuing Bank.
(d) Each Lender shall indemnify the Administrative Agent within 10 days after
demand therefor, for the full amount of any Excluded Taxes attributable to such
Lender that are payable or paid by the Administrative Agent, and reasonable
expenses arising therefrom or with respect thereto, whether or not such Excluded
Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Administrative Agent shall be conclusive absent manifest
error.
(e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Loan Parties to a Governmental Authority, the Borrowers shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(f) All Lenders, to the extent they are legally entitled to do so, shall deliver
to the Company (with a copy to the Administrative Agent), on or prior to the
Closing Date and at the time or times reasonably requested by the Borrowers or
the Administrative Agent, such properly completed and duly executed
documentation prescribed by applicable law as will permit payments hereunder or
under any other Loan Document to be made without withholding or at a reduced
rate of withholding. Each such Lender shall, whenever a lapse in time or change
in circumstances renders such documentation obsolete or inaccurate in any
material respect, deliver promptly to the Borrower such updated or other
documentation as is reasonably requested by the Loan Parties or Administrative
Agent or promptly notify the Loan Parties or Administrative Agent of its legal
inability to do so. In addition, any Lender, if requested by the Loan Parties or
the Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Loan Parties or the Administrative
Agent as will enable the Loan Parties or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.

 

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Notwithstanding anything to the contrary in the preceding two sentences, in the
case of any withholding tax other than the U.S. federal withholding tax, the
completion, execution and submission of such forms shall not be required if in
the Foreign Lender’s judgment such completion, execution or submission would
subject such Foreign Lender to any material unreimbursed cost or expense or
would materially prejudice the legal or commercial position of such Foreign
Lender. Without limiting the foregoing:
(i) Any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrowers or the Administrative Agent),
whichever of the following is applicable:
(A) properly completed and duly executed copies of Internal Revenue Service Form
W-8BEN claiming eligibility for benefits of an income tax treaty to which the
United States of America is a party,
(B) properly completed and duly executed copies of Internal Revenue Service Form
W-8ECI,
(C) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate
substantially in the Form of Exhibit I to the effect that such Foreign Lender is
not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a
“10 percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code and (D) the interest payments in question are
not effectively connected with the United States trade or business conducted by
such Lender (a “U.S. Tax Compliance Certificate”) and (y) duly completed copies
of Internal Revenue Service Form W-8BEN,
(D) to the extent a Foreign Lender is not the beneficial owner (for example,
where the Foreign Lender is a partnership or participating Lender granting a
typical participation), an Internal Revenue Service Form W-8IMY, accompanied by
a Form W-8ECI, W-8BEN, U.S. Tax Compliance Certificate, Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided
that, if the Foreign Lender is a partnership (and not a participating Lender)
and one or more beneficial owners of such Foreign Lender are claiming the
portfolio interest exemption, such Foreign Lender may provide a U.S. Tax
Compliance Certificate on behalf of each such beneficial owner, or
(E) any other form, including Form W-8EXP, prescribed by applicable law as a
basis for claiming exemption from United States federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrowers to determine the withholding or deduction
required to be made.
(ii) Any Lender that is a United States person (as defined in
Section 7701(a)(30) of the Code) shall deliver to the Loan Parties and
Administrative Agent on or before the date on which it becomes a party to this
Agreement two properly completed and duly signed original copies of Internal
Revenue Service Form W-9 certifying that such Lender is exempt from federal
backup withholding.

 

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(g) If the Administrative Agent, a Lender or an Issuing Bank determines, in its
sole discretion, that it has received a refund of any Indemnified Taxes or Other
Taxes as to which it has been indemnified pursuant to this Section (including
additional amounts paid by any Loan Party pursuant to this Section), it shall
pay to the indemnifying party an amount equal to such refund (but only to the
extent of indemnity payments made under this Section with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses (including any Taxes) of the Administrative
Agent, such Lender or such Issuing Bank, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that such indemnifying party, upon the
request of the Administrative Agent, such Lender or such Issuing Bank, agrees to
repay the amount paid over pursuant to this Section 2.17(g) (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or such Issuing Bank in the event the
Administrative Agent, such Lender or such Issuing Bank is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will any Issuing Bank or Lender be required
to pay any amount to any Loan Party the payment of which would place such
Issuing Bank or such Lender in a less favorable net after-Tax position than such
Issuing Bank or such Lender would have been in if the indemnification payments
or additional amounts giving rise to such refund had never been paid. This
paragraph shall not be construed to require the Administrative Agent, any
Issuing Bank or any Lender to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the Borrowers
or any other Person.
(h) Each party’s obligations under this Section 2.17 shall survive termination
of the Loan Documents and payment of any obligations thereunder.
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs.
(a) The Borrowers shall make each payment required to be made by them hereunder
(whether of principal, interest, fees or reimbursements of LC Disbursements, or
of amounts payable under Section 2.15, 2.16, 2.17 or 9.03, or otherwise) at or
prior to the time expressly required hereunder or under any other Loan Document
for such payment (or, if no such time is expressly required, prior to 12:00
noon, New York City time), on the date when due, in immediately available funds,
without set off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent or
at such other address that the Administrative Agent shall advise the Borrowers
in writing, except payments to be made directly to an Issuing Bank or the
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under any Loan Document shall be made in
Dollars, except that unless otherwise specified herein or in any other Loan
Document, all payments in respect of Loans (and interest thereon) and LC
Exposures shall be made in the same Currency in which such Loan was made or such
Letter of Credit was issued. At all times during a Cash Dominion Period, solely
for purposes of determining the amount of Loans available for borrowing
purposes, checks (in addition to immediately available funds applied pursuant to
Section 2.10(b)) from collections of items of payment and proceeds of any
Collateral shall be applied in whole or in part against the Obligations on the
Business Day after receipt, subject to actual collection.

 

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(b) Any proceeds of Collateral from the U.S. Loan Parties or any other amounts
received by the Administrative Agent (i) not constituting either (A) a specific
payment of principal, interest, fees or other sum payable under the Loan
Documents (which shall be applied as specified by the Borrowers), (B) a
mandatory prepayment (which shall be applied in accordance with Section 2.11),
(C) amounts to be used to cash collateralize LC Exposures or (D) amounts to be
applied from the Collection Accounts during any Cash Dominion Period (which
shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of
Default has occurred and is continuing and the Administrative Agent so elects or
the Required Lenders so direct, such funds shall be applied, subject to the
Intercreditor Agreement, ratably first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Administrative Agent, any
Issuing Bank or the Swingline Lender under any Loan Document (other than in
connection with Banking Services or Swap Obligations), second, to pay any fees
or expense reimbursements then due to the U.S. Facility Lenders from the U.S.
Loan Parties (other than in connection with Banking Services or Swap
Obligations), third, to pay interest due in respect of the U.S. Facility
Protective Advances, fourth, to pay the principal of the U.S. Facility
Protective Advances, fifth, to pay interest then due and payable on the U.S.
Facility Loans (other than the U.S. Facility Protective Advances) and
unreimbursed Dollar LC Disbursements along with any amounts due under
Section 2.16 in connection with the foregoing ratably, sixth, to prepay
principal on the U.S. Facility Loans (other than the U.S. Facility Protective
Advances) and unreimbursed Dollar LC Disbursements ratably, seventh, to pay an
amount to the Administrative Agent equal to one hundred five percent (105%) of
the aggregate undrawn face amount of all outstanding Dollar Letters of Credit
and the aggregate amount of any unpaid Dollar LC Disbursements, to be held as
cash collateral for such Obligations, eighth, to payment of any amounts owing
with respect to Banking Services and Swap Obligations (in each case, to the
extent constituting Secured Obligations), and ninth, to the payment of any other
Secured Obligation due to the Administrative Agent or any Lender by the U.S.
Loan Parties; provided that any remaining funds shall be applied in the manner
detailed in the immediately following sentence. Any proceeds of Collateral from
the Canadian Loan Parties or any other amounts received by the Administrative
Agent (i) not constituting either (A) a specific payment of principal, interest,
fees or other sum payable under the Loan Documents (which shall be applied as
specified by the Borrowers), (B) a mandatory prepayment (which shall be applied
in accordance with Section 2.11), (C) amounts to be used to cash collateralize
LC Exposures or (D) amounts to be applied from the Collection Accounts during
any Cash Dominion Period (which shall be applied in accordance with
Section 2.10(b)) or (ii) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct, such funds shall be applied, subject to the Intercreditor Agreement,
ratably first, to pay any fees, indemnities, or expense reimbursements including
amounts then due to the Administrative Agent, any Issuing Bank or the Swingline
Lender under any Loan Document (other than in connection with Banking Services
or Swap Obligations), second, to pay any fees or expense reimbursements then due
to the Lenders

 

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from the Loan Parties (other than in connection with Banking Services or Swap
Obligations), third, to pay interest due in respect of the Canadian Facility
Protective Advances, fourth, to pay the principal of the Canadian Facility
Protective Advances, fifth, to pay interest then due and payable on the Canadian
Facility Loans (other than the Canadian Facility Protective Advances) and
unreimbursed Canadian Dollar LC Disbursements along with any amounts due under
Section 2.16 in connection with the foregoing ratably, sixth, to prepay
principal on the Canadian Facility Loans (other than the Canadian Facility
Protective Advances) and unreimbursed Canadian Dollar LC Disbursements ratably,
seventh, to pay an amount to the Administrative Agent equal to one hundred five
percent (105%) of the aggregate undrawn face amount of all outstanding Canadian
Dollar Letters of Credit and the aggregate amount of any unpaid Canadian Dollar
LC Disbursements, to be held as cash collateral for such Obligations, eighth, to
payment of any amounts owing with respect to Banking Services and Swap
Obligations (in each case, to the extent constituting Secured Obligations owed
by the Canadian Loan Parties), and ninth, to the payment of any other Secured
Obligation owed by the Canadian Loan Parties due to the Administrative Agent or
any Lender by the Canadian Loan Parties. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Borrowers, or
unless a Default has occurred and is continuing, neither the Administrative
Agent nor any Lender shall apply any payment which it receives to any
Eurocurrency Loan or any CDOR Rate Loan of a Class, except (a) on the expiration
date of the Interest Period applicable to any such Eurocurrency Loan or such
CDOR Rate Loan or (b) in the event, and only to the extent, that there are no
outstanding ABR Loans of the same Class and, in any such event, the Borrowers
shall pay the break funding payment required in accordance with Section 2.16.
The Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.
(c) Except to the extent otherwise provided herein: (i) each Borrowing of U.S.
Facility Loans or Canadian Facility Loans in a particular Currency from the
Lenders under Section 2.01 hereof shall be made from the relevant Lenders, each
payment of Commitment Fees or of participation fees under Section 2.12 hereof in
respect of the U.S. Facility Commitment or the Canadian Facility Commitment
shall be made for account of the relevant Lenders, and each termination or
reduction of the amount of the Commitment, U.S. Facility Commitment or Canadian
Facility Commitment under Section 2.09 hereof shall be applied to the respective
Commitments and Facility Commitments of the relevant Lenders, pro rata according
to the amounts of their respective Commitments or Facility Commitments, as
applicable; (ii) the making, conversion and continuation of Loans of a
particular Type and Currency (other than conversions provided for by
Section 2.14 hereof) shall be made pro rata among the relevant Lenders according
to the amounts of their respective Facility Commitments (in the case of the
making of Loans) or their respective Loans (in the case of conversions and
continuations of Loans) and the then current Interest Period for each
Eurocurrency Loan, as applicable, shall be coterminous; and (iii) each payment
or prepayment of principal of U.S. Facility Loans or of Canadian Facility Loans,
or interest thereon, by the Borrowers shall be made for the account of the U.S.
Facility Lenders or the Canadian Facility Lenders, as applicable, pro rata in
accordance with their respective Applicable U.S. Facility Percentages or
Applicable Canadian Facility Percentages, as the case may be.

 

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(d) At the election of the Administrative Agent, all payments of principal,
interest, LC Disbursements, fees, premiums, reimbursable expenses (including,
without limitation, all reimbursement for fees and expenses pursuant to
Section 9.03), and other sums payable under the Loan Documents that are not paid
when due (after any applicable grace period) in accordance with the Loan
Documents, subject to five Business Days prior written notice to the Borrower,
may be paid from the proceeds of Borrowings made hereunder whether made
following a request by the Borrowers pursuant to Section 2.03 or a deemed
request as provided in this Section or may be deducted from any deposit account
of the any Borrower maintained with the Administrative Agent. Each Borrower
hereby irrevocably authorizes, solely to the extent a payment is not paid by a
Loan Party by the required time set forth in the Loan Documents (after any
applicable grace period) (i) the Administrative Agent to make a Borrowing in the
name of such Borrower for the purpose of paying each payment of principal,
interest and fees payable by such Borrower due hereunder or any other amount due
under the Loan Documents and agrees that all such amounts charged shall
constitute Loans (including Swingline Loans and Protective Advances, but such a
Borrowing may only constitute a Protective Advance if it is to reimburse costs,
fees and expenses as described in Section 9.03) and that all such Borrowings
shall be deemed to have been requested pursuant to Sections 2.03, 2.04 or 2.05,
as applicable and (ii) the Administrative Agent to charge any deposit account of
the any Borrower maintained with the Administrative Agent for each payment of
principal, interest and fees due hereunder or any other amount due under the
Loan Documents.
(e) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans or participations in LC Disbursements, Swingline Loans or
Protective Advances resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans, participations in LC
Disbursements, Swingline Loans and Protective Advances and accrued interest
thereon then due than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans and participations in LC Disbursements,
Swingline Loans and Protective Advances of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans and participations in LC Disbursements,
Swingline Loans and Protective Advances, provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrowers pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans, Commitments or
participations in any LC Disbursements to any assignee or participant, other
than to the Borrowers or any Subsidiary or other Affiliate thereof (as to which
the provisions of this paragraph shall apply). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.

 

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(f) Unless the Administrative Agent shall have received notice from the
Borrowers, prior to the date on which any payment is due to the Administrative
Agent for the account of a Lender or an Issuing Bank hereunder, that the
Borrowers will not make such payment, the Administrative Agent may assume that
the Borrowers have made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to such Lender or such Issuing
Bank, as the case may be, the amount due. In such event, if the Borrowers has
not in fact made such payment, then each of the Lenders and the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or such Issuing Bank with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
(g) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations hereunder until all such unsatisfied obligations are fully paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender or any Issuing Bank
requests compensation under Section 2.15, or if the Borrowers are required to
pay any additional amount to any Lender, Issuing Bank or any Governmental
Authority for the account of any Lender or any Issuing Bank pursuant to
Section 2.17, then such Lender or such Issuing Bank shall use reasonable efforts
to designate a different lending office for funding or booking its Loans, LC
Disbursements or participations in LC Disbursements hereunder (as applicable) or
to assign its rights and obligations hereunder to another of its offices,
branches or Affiliates, if, in the judgment of such Lender or such Issuing Bank,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii)
would not subject such Lender or such Issuing Bank to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or such
Issuing Bank; provided that, upon any such change in any lending office or
assignment, such Lender or such Issuing Bank shall provide or cause to be
delivered to the Administrative Agent and the Borrowers the appropriate forms
specified in and to the extent required by Section 2.17. The Borrowers hereby
agree to pay all reasonable costs and expenses incurred by any Lender or any
Issuing Bank in connection with any such designation or assignment.
(b) Replacement of Lenders or Issuing Banks. If any Lender or any Issuing Bank
requests compensation under Section 2.15, or if the Borrowers are required to
pay any additional amount to any Lender, any Issuing Bank or any Governmental
Authority for the account of any Lender or any Issuing Bank pursuant to
Section 2.17, then the Company may, at its sole expense and effort, require such
Lender or such Issuing Bank or any Lender that becomes a Defaulting Lender (each
a “Departing Lender”), upon notice to such Departing Lender and the
Administrative Agent, to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender or another Issuing Bank, if a Lender or Issuing Bank accepts such
assignment); provided that (i) the Borrowers shall have received the prior
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the Administrative Agent, each Issuing Bank and the Swingline Lender (which
consent in each case shall not unreasonably be withheld), (ii) the Departing
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, LC Disbursements and participations in LC Disbursements
and Swingline Loans (as applicable and to the extent funded), accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A
Departing Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or such
Issuing Bank or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
SECTION 2.20 Returned Payments. If after receipt of any payment which is applied
to the payment of all or any part of the Obligations, the Administrative Agent
or any Lender is for any reason compelled to surrender such payment or proceeds
to any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Administrative Agent
or such Lender. The provisions of this Section 2.20 shall be and remain
effective notwithstanding any contrary action which may have been taken by the
Administrative Agent or any Lender in reliance upon such payment or application
of proceeds. The provisions of this Section 2.20 shall survive the termination
of this Agreement.
SECTION 2.21 Defaulting Lenders. Notwithstanding any provision of this Agreement
to the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees set forth in Section 2.12(a) shall cease to accrue on the unfunded
portion of the Commitment of such Defaulting Lender;
(b) to the extent permitted by applicable law, (i) any voluntary prepayment of
Revolving Loans shall, if the Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving
Credit Exposure of such Defaulting Lender were zero, and (ii) any mandatory
prepayment of the Revolving Loans shall, if the Company so directs at the time
of making such mandatory prepayment, be applied to the Revolving Loans of other
Lenders, but not to the Revolving Loans of such Defaulting Lender, it being
understood and agreed that the Company shall be entitled to retain any portion
of any mandatory prepayment of the Revolving Loans that is not paid to such
Defaulting Lender solely as a result of the operation of the provisions of this
clause (b);
(c) the Commitment and Credit Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders or the Required Lenders have taken
or may take any action hereunder (including any consent to any amendment or
waiver pursuant to Section 9.02), provided that any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender;

 

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(d) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes
a Defaulting Lender then:
(i) (A) all or any part of such U.S. Facility Swingline Exposure and Dollar LC
Exposure shall be reallocated among the U.S. Facility Lenders that are not
Defaulting Lenders in accordance with their respective Applicable U.S. Facility
Percentages and (B) all or any part of such Canadian Facility Swingline Exposure
and Canadian Dollar LC Exposure shall be reallocated among the Canadian Facility
Lenders that are not Defaulting Lenders in accordance with their respective
Applicable Canadian Facility Percentages but, in any case, only to the extent
(x) the sum of the Revolving U.S. Facility Credit Exposures of all U.S. Facility
Lenders that are not Defaulting Lenders plus such Defaulting Lender’s U.S.
Facility Swingline Exposure and Dollar LC Exposure does not exceed the total of
the U.S. Facility Commitments of all U.S. Facility Lenders that are not
Defaulting Lenders, (y) the sum of the Revolving Canadian Facility Credit
Exposures of all Canadian Facility Lenders that are not Defaulting Lenders plus
such Defaulting Lender’s Canadian Facility Swingline Exposure and Canadian
Dollar LC Exposure does not exceed the total of the Canadian Facility
Commitments of all Canadian Facility Lenders that are not Defaulting Lenders and
(z) the conditions set forth in Section 4.02 are satisfied at such time; and
(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrowers shall within one Business Day following
notice by the Administrative Agent (A) prepay such Swingline Exposure and
(B) cash collateralize such Defaulting Lender’s LC Exposure (after giving effect
to any partial reallocation pursuant to clause (i) above) in accordance with the
procedures set forth in Section 2.06(k) for so long as such LC Exposure is
outstanding;
(iii) if the Borrowers cash collateralize any portion of such Defaulting
Lender’s LC Exposure pursuant to this paragraph (d), the Borrowers shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;
(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
this paragraph (d), then the fees payable to the Lenders pursuant to
Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or
(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to this paragraph (d), then, without prejudice to any
rights or remedies of the Issuing Banks or any Lender hereunder, all commitment
fees that otherwise would have been payable to such Defaulting Lender (solely
with respect to the portion of such Defaulting Lender’s Commitment that was
utilized by such LC Exposure) and letter of credit fees payable under
Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be
payable to the applicable Issuing Banks until such LC Exposure is cash
collateralized and/or reallocated; and

 

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(e) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not
be required to fund any Swingline Loan and no Issuing Bank shall be required to
issue, amend or increase any Letter of Credit, unless it is satisfied that the
related exposure will be 100% covered by the Commitments of the non-Defaulting
Lenders and/or cash collateral will be provided by the Borrowers in accordance
with paragraph (d) of this Section, and participating interests in any such
newly issued or increased Letter of Credit or newly made Swingline Loan shall be
allocated among non-Defaulting Lenders in a manner consistent with paragraph
(d)(i) of this Section (and Defaulting Lenders shall not participate therein).
(f) In the event that each of the Administrative Agent, the Borrowers, the
Issuing Banks and the Swingline Lender agree that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date
such Lender shall purchase at par such of the Loans of the other Lenders (other
than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
Applicable U.S. Facility Percentage and Applicable Canadian Facility Percentage,
as applicable.
ARTICLE III
Representations and Warranties
Each Loan Party represents and warrants to the Lenders that:
SECTION 3.01 Organization; Powers. Each of the Loan Parties and each of its
Subsidiaries (a) is duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to carry on its business as now conducted and,
(c) is qualified to do business and in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.
SECTION 3.02 Authorization; Enforceability. The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
The Loan Documents to which each Loan Party is a party have been duly executed
and delivered by such Loan Party and constitute a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

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SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents, (b) do not violate any Requirement
of Law applicable to any Loan Party or any of its Subsidiaries, (c) do not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Loan Party or any of its Subsidiaries, or give rise
to a right thereunder to require any payment to be made by any Loan Party or any
of its Subsidiaries, and (d) do not result in the creation or imposition of any
Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens
created pursuant to the Loan Documents and, in each case, except as could not be
reasonably expected to have a Material Adverse Effect.
SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The Company
has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended January 3, 2009, reported on by Ernst & Young, LLP,
independent public accountants and (ii) as of and for the fiscal quarter and the
portion of the fiscal year ended October 3, 2009, certified by its Chief
Financial Officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Company and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) No Material Adverse Change. No event, change or condition has occurred that
has had, or could reasonably be expected to have, a Material Adverse Effect,
since January 3, 2009.
(c) No Material Undisclosed Liabilities. On the date of this Agreement, no Loan
Party has any contingent liabilities, unusual forward or long-term commitments
or unrealized or anticipated losses from any unfavorable commitments in each
case that are material, except as referred to or reflected in the balance sheets
as at October 3, 2009.
SECTION 3.05 Properties. (a) Title to Properties. As of the date of this
Agreement, Schedules 3.05(a) and (b) set forth the address of (i) each parcel of
real property that is owned by each Loan Party and (ii) each parcel of real
property that is leased or subleased by/to each Loan Party, respectively, in
each case located in the United States or Canada. To the knowledge of the Loan
Parties, each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors’ rights generally and subject to general
principles of equity and except certain of the leases and subleases for which
the term has expired are continuing on a month to month basis, and, to the
knowledge of the Loan Parties, no default by any Loan Party or default by any
other party to any such lease or sublease exists. Each of the Loan Parties and
its Subsidiaries has good and indefeasible title to, or valid leasehold
interests in, all its real property, fixtures and personal property free of all
Liens other than Permitted Liens.

 

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(b) Intellectual Property. Except, in each case, as could not reasonably be
expected, either individually, or in the aggregate, to have a Material Adverse
Effect, (i) each Loan Party and its Subsidiaries owns, or is licensed to use,
all issued patents, patent applications, trademarks, service marks, trade names,
trade dress, internet domain names, copyright, trade secrets, and know how
(collectively, “Intellectual Property”) necessary to its business as currently
conducted, (ii) the conduct of each of the Loan Parties and its Subsidiaries’
business does not infringe, dilute, misappropriate, or otherwise violate
(“Infringe”) upon the rights of any other Person, and (iii) to the knowledge of
the Loan Parties, there are no claims asserted by the Loan Parties in writing
(including cease and desist letters) against third parties asserting that the
Loan Parties’ Intellectual Property rights are being Infringed. A correct and
complete list of all U.S. and material foreign registered trademarks, trade
names, copyrights, patents, and pending applications thereof, and domain names
owned by each Loan Party as of the date of the Agreement is set forth on
Schedule 3.05(c).
SECTION 3.06 Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of any Loan Party, threatened against or
affecting the Loan Parties or any of their Subsidiaries (i) as to which there is
a reasonable possibility of an adverse determination that could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters), or (ii) that involve this Agreement,
the other Loan Documents or the Transactions.
(b) Except for the Disclosed Matters (i) no Loan Party nor any of its
Subsidiaries has received notice of any claim with respect to any Environmental
Liability or knows of any basis for any Environmental Liability and (ii) except
with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, no Loan Party
nor any of its Subsidiaries (1) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law or (2) has become subject to any
Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in a
Material Adverse Effect.
SECTION 3.07 Compliance with Laws and Agreements. Each Loan Party and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.08 Investment Company Status. No Loan Party nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.
SECTION 3.09 Taxes. Except as set forth in Schedule 3.09, each Loan Party and
its Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes
exceeding $7,500,000 in the aggregate required to have been paid by it, except
those Taxes that are being contested in good faith by appropriate proceedings
and for which such Loan Party or such Subsidiary, as applicable, has set aside
on its books adequate reserves in accordance with GAAP. No tax liens have been
filed and no claims are being asserted with respect to any such taxes other than
those liens or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings and for which a Loan Party or Subsidiary,
as applicable, has set aside on its books adequate reserves in accordance with
GAAP.

 

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SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events from which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
the fair market value of the assets of all such underfunded Plans, such that it
is reasonably expected, that such underfunding will result in a Material Adverse
Effect.
SECTION 3.11 Disclosure. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
delivered, it being understood that such projections may vary from actual
results and that such variances may be material.
SECTION 3.12 Margin Regulations. No Loan Party or any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
“buying” or “carrying” “margin stock” within the meaning of each of the quoted
terms under Regulation U as now and from time to time hereafter in effect, and
no part of the proceeds of any extension of credit hereunder will be used to
“buy” or “carry” any “margin stock”.
SECTION 3.13 Indebtedness, Liens. (a) Indebtedness. Part A of Schedule 3.13
hereto is a complete and correct list, as of the Effective Date after giving
effect to the Refinancing, of each credit agreement, loan agreement, indenture,
note purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, any Loan
Party or any of its Subsidiaries (including the Note Documents) the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$10,000,000 and the aggregate principal or face amount outstanding or that may
become outstanding under each such arrangement as in effect on the Effective
Date is correctly described in Part A of said Schedule.

 

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(b) Liens. Part B of Schedule 3.13 hereto is a complete and correct list, as of
the Effective Date after giving effect to the Refinancing, of each Lien securing
Indebtedness described in Part A of Schedule 3.13 of any Person covering any
property of any Loan Party or any of its Subsidiaries, and the aggregate
Indebtedness secured (or which may be secured) by each such Lien and the
property covered by each such Lien is correctly described in Part B of said
Schedule 3.13.
SECTION 3.14 No Default. No Loan Party nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound in any respect that could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 3.15 Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
the Loan Parties, on a consolidated basis, at a fair valuation, will exceed
their debts and liabilities, subordinated, contingent (to the extent
constituting identified contingent liabilities) or otherwise; (ii) the present
fair saleable value of the property of the Loan Parties will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent (to the extent constituting
identified contingent liabilities) or otherwise, as such debts and other
liabilities become absolute and matured; (iii) the Loan Parties, on a
consolidated basis, will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) the Loan Parties will, on a consolidated basis,
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
after the Effective Date.
(b) The Loan Parties, on a consolidated basis, do not intend to or believe that
they will, incur debts beyond their ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by them and
the timing of the amounts of cash to be payable on or in respect of their
Indebtedness.
(c) With respect to the Canadian Loan Parties, immediately after the
consummation of the Transactions to occur on the Effective Date, (i) the
property of the Canadian Loan Parties, on a consolidated basis, at a fair
valuation, is greater than the total amount of their debts and liabilities,
subordinated, contingent or otherwise; (ii) the Canadian Loan Parties’ property,
on a consolidated basis, is sufficient, if disposed of at a fairly conducted
sale under legal process, to enable payment of all their obligations, due and
accruing due; (iii) the Canadian Loan Parties, on a consolidated basis, will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities generally become due; and (iv) the Canadian Loan
Parties, on a consolidated basis, have not ceased paying their current
obligations in the ordinary course of business as they generally become due.
SECTION 3.16 Insurance. Schedule 3.16 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties and its Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Company believes that the insurance maintained by
or on behalf of the Company and its Subsidiaries is adequate.

 

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SECTION 3.17 Capitalization and Subsidiaries. (a) Subsidiaries. As of the
Effective Date, Schedule 3.17 sets forth (a) a correct and complete list of the
name and relationship to the Company of each and all of the Company’s
Subsidiaries, (b) a true and complete listing of each class of each of the
Borrowers’ authorized Equity Interests, of which all of such issued shares are
validly issued, outstanding, fully paid and non-assessable, and, in the case of
each Loan Party other than the Company, owned beneficially and of record by the
Persons identified on Schedule 3.17, and (c) the type of entity of the Company
and each of its Subsidiaries. All of the issued and outstanding Equity Interests
owned by any Loan Party in any Subsidiary (other than any Subsidiary that is a
shell entity that does not own any material assets) has been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and is fully paid and non-assessable.
(b) Investments. Set forth in Part B of Schedule 3.17 hereto is a complete and
correct list, as of the Effective Date after giving effect to the Refinancing,
of all Investments (other than Investments disclosed in Part A of said
Schedule 3.17 hereto and Investments permitted pursuant to clauses (a), (g),
(h), (i), (l) and (m) of Section 6.04) held by any Loan Party in a Person and,
for each such Investment, (x) the identity of the Person or Persons holding such
Investment and (y) the nature of such Investment. Except as disclosed in Part B
of Schedule 3.17 hereto, each Loan Party owns, free and clear of all Liens
(other than non-consensual Liens arising by operation of law and Permitted
Liens), all such Investments.
SECTION 3.18 Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the Administrative Agent, for the benefit of the Administrative
Agent and the Secured Parties, and, upon filing of UCC financing statements and
the taking of any other actions or making of filings required for perfection
under the laws of the relevant Collateral Documents and specified herein or in
such Collateral Documents, as, and when necessary and required (including but
not limited to the filing of financing statements under the PPSA, in the case of
collateral located in Quebec, Canada, upon filings of the required forms of
registrations in the Register of Personal Property and movable real rights and
with respect to cash and Permitted Investments, as and when required pursuant to
Section 5.16 and the Collateral Documents), and, if applicable, the taking of
actions or making of filings with respect to Intellectual Property registrations
or applications issued or pending as specified, such Liens constitute perfected
and continuing Liens on the Collateral, securing the Secured Obligations,
enforceable against the applicable Loan Party and all third parties (subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law),
and having priority over all other Liens on the Collateral except in the case of
(a) Permitted Liens, to the extent any such Permitted Liens would have priority
over the Liens in favor of the Administrative Agent pursuant to any applicable
law, (b) Liens perfected only by possession (including possession of any
certificate of title or bond) to the extent the Administrative Agent has not
obtained or does not maintain possession of such Collateral, or (c) Liens or
minor defects in title that are not reasonably expected to present a continuing,
material encumbrance on the Collateral.

 

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SECTION 3.19 Employment Matters. As of the Effective Date, except as in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
(a) there are no strikes, lockouts or slowdowns against any Loan Party or any
Subsidiary pending or, to the knowledge of the Borrowers, threatened; (b) the
terms and conditions of employment, the hours worked by and payments made to
employees of the Loan Parties and the Subsidiaries have not been in violation of
the Fair Labor Standards Act, the Employee Standards Act (Ontario) or any other
applicable federal, state, provincial, territorial, local or foreign law dealing
with such matters; (c) all payments due from any Loan Party or any Subsidiary,
or for which any claim may be made against any Loan Party or any Subsidiary, on
account of wages, vacation pay and employee health and welfare insurance and
other benefits including without limitation, on account of the Canada and Quebec
pension plans, have been paid or accrued as a liability on the books of the Loan
Party or such Subsidiary; and (d) the consummation of the Transactions will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which any Loan Party or
any of its Subsidiaries are bound.
SECTION 3.20 Affiliate Transactions. Except as set forth on Schedule 3.20, as of
the date of this Agreement, there are no existing or proposed agreements,
arrangements, understandings, or transactions between any Loan Party and any of
the officers, members, managers, directors, stockholders, parents, other
interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan
Party or any members of their respective immediate families, and none of the
foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership, or voting interest in any Affiliate of any Loan
Party or any Person with which any Loan Party has a business relationship or
which competes with any Loan Party.
SECTION 3.21 Common Enterprise. Each Loan Party expects to derive benefit (and
its board of directors or other governing body has determined that it may
reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its best
interest.
SECTION 3.22 Canadian Pension Plan and Benefit Plans. Schedule 3.22 lists all
Canadian Benefit Plans and Canadian Pension Plans currently maintained or
contributed to by the Loan Parties and their Subsidiaries. The Canadian Pension
Plans are duly registered under the ITA and all other applicable laws which
require registration. Each Loan Party and each of their Subsidiaries has
complied with and performed all of its obligations 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
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Pension Plans or the Canadian Benefit Plans. No promises of benefit improvements
under the Canadian Pension Plans or the Canadian Benefit Plans have been made
except where such improvement could not be reasonably expected to have a
Material Adverse Effect and, in any event, no such improvements will result in a
solvency deficiency or going concern unfunded liability in the affected Canadian
Pension Plans. The pension fund under each Canadian Pension Plan is exempt from
the payment of any income tax and there are no taxes, penalties or interest
owing in respect of any such pension fund. All material reports and disclosures
relating to the Canadian Pension Plans required by such plans and any
Requirement of Law to be filed or distributed have been filed or distributed.
There has been no partial termination of any Canadian Pension Plan and no facts
or circumstances have occurred or existed that could result, or be reasonably
anticipated to result, in the declaration of a partial termination of any
Canadian Pension Plan under Requirements of Law. Except as set forth on
Schedule 3.22, there are no outstanding disputes concerning the assets of the
Canadian Pension Plans or the Canadian Benefit Plans. Except as set forth on
Schedule 3.22, each of the Canadian Pension Plans is fully funded on both a
going concern and 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).
ARTICLE IV
Conditions
SECTION 4.01 Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):
(a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile
transmission or by other electronic transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement,
(ii) duly executed copies of the other Loan Documents (or written evidence
reasonably satisfactory to the Administrative Agent (which may include facsimile
or by other electronic transmission of a signed signature page) that such party
has signed a counterpart of such Loan Documents) and such other certificates,
documents, instruments and agreements as the Administrative Agent shall
reasonably request in connection with the transactions contemplated by this
Agreement and the other Loan Documents, including any promissory notes requested
by a Lender pursuant to Section 2.10 payable to the order of each such
requesting Lender, and (iii) a written opinion of the Loan Parties’ counsel,
addressed to the Administrative Agent, the Issuing Banks and the Lenders in
substantially the form of Exhibit B.
(b) Financial Statements. The Lenders shall have received (i) audited
consolidated financial statements of the Company for the fiscal year which ended
on January 3, 2009 and (ii) unaudited interim consolidated financial statements
of the Company for each fiscal month ended after the date of the latest
applicable financial statements delivered pursuant to clause (i) of this
paragraph to the extent such financial statements are available.

 

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(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent and the Collateral Agent shall have
received (i) a certificate of each Loan Party, dated the Effective Date and
executed by its Secretary or Assistant Secretary, which shall (A) certify the
resolutions of its Board of Directors, members or other body authorizing the
execution, delivery and performance of the Loan Documents to which it is a
party, (B) identify by name and title and bear the signatures of the Financial
Officers and any other officers of such Loan Party authorized to sign the Loan
Documents to which it is a party, and (C) contain appropriate attachments,
including the certificate or articles of incorporation or organization of each
Loan Party certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a true and correct copy of its by-laws or
operating, management or partnership agreement, and (ii) a certificate of good
standing/compliance/status (as applicable) for each Loan Party from its
jurisdiction of organization and each jurisdiction in which it carries on
business.
(d) No Default Certificate. The Administrative Agent and the Collateral Agent
shall have received a certificate, signed by the Chief Financial Officer of each
of the Borrowers, on the initial Borrowing date (i) stating that no Default has
occurred and is continuing and (ii) stating that the representations and
warranties contained in Article III are true and correct in all respects (for
representations and warranties qualified by materiality, true and correct in all
respects) as of such date.
(e) Fees. The Lenders, the Joint Lead Arrangers, the Administrative Agent and
the Collateral Agent shall have received all fees required to be paid, and all
out-of-pocket expenses for which invoices have been presented (including the
reasonable fees and out-of-pocket expenses of legal counsel), on or before the
Effective Date.
(f) Lien Searches. The Administrative Agent and the Collateral Agent shall have
received the results of a recent lien search in each of the jurisdictions where
assets constituting Collateral of the Loan Parties are located, and such search
shall reveal no liens on any of the assets constituting Collateral of the Loan
Parties except for Permitted Liens or discharged on or prior to the Effective
Date pursuant to a pay-off letter or other documentation reasonably satisfactory
to the Administrative Agent.
(g) Funding Accounts. The Administrative Agent shall have received a notice
setting forth the deposit account(s) of the Borrowers (the “Funding Accounts”)
to which the Lender is authorized by the Borrowers to transfer the proceeds of
any Borrowings requested or authorized pursuant to this Agreement.
(h) [Reserved].
(i) Solvency. The Administrative Agent and the Collateral Agent shall have
received a solvency certificate from a Financial Officer of the Company.

 

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(j) Borrowing Base Certificate. The Administrative Agent and the Collateral
Agent shall have received (i) an Aggregate Borrowing Base Certificate, a U.S.
Borrowing Base Certificate and a Canadian Borrowing Base Certificate, each of
which calculates such Borrowing Base as of October 28, 2009 and (ii) all
Borrowing Base Supplemental Documentation with respect thereto. The Aggregate
Borrowing Base Certificate delivered on the Effective Date shall show
Availability of not less than $75,000,000 after giving effect to all Borrowings
to be made as of the Effective Date as if made on October 28, 2009 and the
issuance of any Letters of Credit on the Effective Date and payment of all fees
and expenses due hereunder.
(k) Senior Secured Notes. The Company shall have received proceeds of at least
$350,000,000 in consideration of the issuance of the Senior Secured Notes, upon
terms and conditions reasonably satisfactory to the Administrative Agent.
(l) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received, subject to the Intercreditor Agreement (i) the certificates, if
any, representing the shares of Equity Interests pledged pursuant to the
Security Agreements, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof, except as set forth on Schedule 4.01(l) and (ii) each promissory note
(if any) pledged to the Administrative Agent pursuant to the Security Agreements
endorsed (without recourse) in blank (or accompanied by an executed transfer
form in blank) by the pledgor thereof.
(m) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code and PPSA financing statement) required by the Collateral
Documents or under law or reasonably requested by the Collateral Agent to be
filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Permitted Liens expressly permitted by
Section 6.02), shall be in proper form for filing, registration or recordation.
(n) Appraisals and Field Exams. The Collateral Agent shall have received and be
reasonably satisfied with (i) appraisals of Inventory of the Loan Parties and
(ii) field exams of the Accounts, Inventory, related working capital matters,
financial information, equipment and related data processing and other systems
of the Loan Parties, in each case from appraisers and/or examiners reasonably
satisfactory to the Collateral Agent.
(o) Evidence of Insurance. The Administrative Agent and the Collateral Agent
shall have received evidence of insurance coverage in form, scope, and substance
reasonably satisfactory to the Administrative Agent and otherwise in compliance
with the terms of Section 5.09 hereof and Section 4.12 of the U.S. Security
Agreement (or any similar provision of any other Security Agreement).

 

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(p) Filings, Registrations and Recordings. All governmental and third party
approvals necessary in connection with the Transactions, the continuing
operations of the Loan Parties shall have been obtained and be in full force and
effect.
(q) [Reserved].
(r) “Know Your Customer” Requirements. The Lenders shall have received all
documentation and other information requested by the Administrative Agent
required under applicable “know your customer” and anti-money laundering rules
and regulations, including all information required to be delivered pursuant to
Section 9.14.
(s) Letter of Credit Application. The Administrative Agent shall have received a
properly completed letter of credit application if the issuance of a Letter of
Credit will be required on the Effective Date.
(t) Projections. The Administrative Agent shall have received and shall be
reasonably satisfied with (i) the Company’s most recent projected income
statement, balance sheet and cash flows for (A) each fiscal quarter through
fiscal year-end 2010 and (B) fiscal years 2011 and 2012 and (ii) the Company’s
quarterly liquidity analysis for each of the four fiscal quarters following the
Effective Date (commencing with the first full fiscal quarter after the
Effective Date).
(u) Existing Senior Subordinated Notes Payoff. The Administrative Agent shall
have received evidence reasonably satisfactory to it that the Company has given
notice for the redemption in full of the Existing Senior Subordinated Notes
pursuant to the indenture governing the Existing Senior Subordinated Notes.
(v) Existing Credit Agreement Payoff. The Administrative Agent shall have
received evidence reasonably satisfactory to it that (i) all principal, interest
and fees owing under the Existing Credit Agreement have been paid, or
simultaneously with the closing of the Transactions will be prepaid and (ii) all
Liens granted in favor of the lenders under the Existing Credit Agreement shall
have been released, or simultaneously with the closing of the Transactions will
be released or such other arrangements with the Administrative Agent shall have
been agreed.
(w) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent, the Collateral Agent, any Issuing Bank or
their respective counsel may reasonably request.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of any Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 3:00 p.m., New York City time, on December 31, 2009 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

 

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SECTION 4.02 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing and of any Issuing Bank to issue, amend, renew or
extend any Letter of Credit is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct in all material respects (or, in the case of
any representation and warranty qualified by materiality, in all respects) on
and as of the date of such Borrowing or the date of issuance, amendment, renewal
or extension of such Letter of Credit, as applicable, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date, or, in the case of any representation
and warranty qualified by materiality, in all respects as of such earlier date).
(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall have occurred and be
continuing.
(c) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, (i) the Aggregate U.S. Facility Credit Exposure shall not exceed the
lesser of (x) the U.S. Facility Commitment or (y) the U.S. Borrowing Base then
in effect, (ii) the Aggregate Canadian Facility Credit Exposure shall not exceed
the lesser of (x) the Canadian Facility Commitment or (y) the Canadian Borrowing
Base plus U.S. Availability then in effect and (iii) the Aggregate Credit
Exposure shall not exceed the lesser of (x) the Total Commitment or (y) the
Aggregate Borrowing Base then in effect.
Each Borrowing (provided that a conversion or continuation of a Borrowing shall
not constitute a “Borrowing” for purposes of this Section 4.02) and each
issuance, amendment, renewal or extension of a Letter of Credit shall be deemed
to constitute a representation and warranty by the Borrowers on the date thereof
as to the matters specified in paragraphs (a), (b) and (c) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated or been cash
collateralized and all LC Disbursements shall have been reimbursed, each Loan
Party executing this Agreement covenants and agrees, jointly and severally with
all of the Loan Parties, with the Lenders that:
SECTION 5.01 Financial Statements; Borrowing Base and Other Information. The
Borrowers will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Company (or such
later date if the Company has obtained an extension for filing its audited
financials, but in no event later than 105 days after the end of each fiscal
year of the Company), its audited consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by independent public accountants
of recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, accompanied by any management letter
prepared by said accountants;

 

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(b) within 45 days after the end of each of the first three fiscal quarters of
the Company, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by the Chief Financial Officer of the Company as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each fiscal month (other than the last month
of any fiscal quarter of the Company or the last month of any fiscal year of the
Company), the Company’s consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal month and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by the Chief Financial Officer of the Company as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under paragraphs (a),
(b) or (c) above, a certificate of the Chief Financial Officer of the Company
substantially in the form of Exhibit D (a “Compliance Certificate”) certifying
(i) in the case of the financial statements delivered pursuant to paragraphs
(b) or (c) above as presenting fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes, (ii) as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (iii) in the case of the financial statements
delivered pursuant to paragraphs (a) or (b) above, setting forth

 

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reasonably detailed calculations of the Total Leverage Ratio, (iv) to the extent
required, setting forth the Fixed Charge Coverage Ratio and demonstrating
compliance with the covenant contained in Section 6.12, and, if such certificate
demonstrates an Event of Default under Section 6.12, the Company may deliver,
prior to or together with such certificate, notice of the intent to cure (a
“Notice of Intent to Cure”) such Event of Default pursuant to Section 7.02
(provided that, except as otherwise expressly set forth herein, the delivery of
a Notice of Intent to Cure shall in no way affect or alter the occurrence,
existence or continuation of any such Event of Default or the rights, benefits,
powers and remedies of the Administrative Agent and the Lenders under any Loan
Document) and (v) stating whether any change in GAAP or in the application
thereof that applies to the Company or any of its consolidated Subsidiaries has
occurred since the later of the date of the audited financial statements
referred to in Section 3.04 and the date of the prior certificate delivered
pursuant to this paragraph (d) indicating such a change and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(e) concurrently with any delivery of financial statements under paragraph
(a) of this Section, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(f) as soon as available, but in any event not more than 30 days after the end
of each fiscal year of the Company, detailed consolidated financial projections
for the next fiscal year (including projected monthly consolidated balance
sheets, income statements and cash flow statements and the corresponding
liquidity analyses in a form reasonably acceptable to the Administrative Agent
and setting forth the assumptions used for purposes of preparing such budget);
(g) as soon as available (but in any event within 30 days of the end of each of
the first three full fiscal months commencing on the Effective Date and within
15 Business Days of the end of each fiscal month thereafter (or, during any
Reporting Frequency Increase Period, within three Business Days of the end of
each week), (i) an Aggregate Borrowing Base Certificate, a U.S. Borrowing Base
Certificate and a Canadian Borrowing Base Certificate and supporting information
in connection therewith, together with any additional reports with respect to
the Borrowing Bases as the Collateral Agent may reasonably request and (ii) all
Borrowing Base Supplemental Documentation;
(h) promptly after the filing thereof, copies of all reports on Form 10-K, Form
10-Q and Form 8-K and all proxy statements filed by any Loan Party with the SEC,
or any Governmental Authority succeeding to any or all of the functions of the
SEC, or with any national securities exchange, as the case may be;
(i) promptly following receipt thereof, copies of any documents described in
Sections 101(k) or 101(l) of ERISA that any Loan Party or any ERISA Affiliate
may request with respect to any Multiemployer Plan, provided that if the Loan
Parties or any of the ERISA Affiliates have not requested such documents or
notices from the administrator or sponsor of the applicable Multiemployer Plan,
then, upon reasonable request of the Administrative Agent, the Loan Parties
and/or the ERISA Affiliates shall promptly make a request for such documents or
notices from such administrator or sponsor and the Borrowers shall provide
copies of such documents and notices promptly to the Administrative Agent after
receipt thereof;

 

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(j) concurrently with the delivery of each Borrowing Base Certificate (or at
such other times as the Administrative Agent may reasonably request), a
certificate from a Financial Officer of the applicable Borrower setting forth
the Aggregate Availability, U.S. Facility Availability and Canadian Facility
Availability, as applicable, as of the period then ended, together with
supporting information in connection therewith;
(k) promptly upon obtaining knowledge of any such event, circumstance or change,
a written notice of any event, circumstance or change that has occurred since
the delivery of the most recent Borrowing Base Certificate in accordance with
the terms of this Agreement that would materially reduce the aggregate amount of
the Eligible Accounts or result in a material portion of the Eligible Accounts
ceasing to be Eligible Accounts, in each case, other than a result of payments
thereof; and
(l) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Loan Party or
any of its Subsidiaries, or compliance with the terms of this Agreement and the
other Loan Documents, as the Administrative Agent or the Required Lenders
(through the Administrative Agent) may reasonably request.
Information required to be delivered pursuant to Sections 5.01(a), (b), and
(h) shall be deemed to have been delivered on the date on which the Company
provides notice to the Administrative Agent that such information has been
posted on the SEC website on the Internet at www.sec.gov, or at another website
identified in such notice and accessible by the Lenders without charge, provided
that such notice may be included in a certificate delivered pursuant to
Section 5.01(d).
SECTION 5.02 Notices of Material Events. The Borrowers will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) receipt of any notice of any governmental investigation or any litigation or
proceeding commenced or threatened against any Loan Party that (i) seeks damages
in excess of $20,000,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, any Canadian Benefit Plan, any Canadian Pension
Plan its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan
Party, (v) alleges the violation of any law regarding, or seeks remedies in
connection with, any Environmental Laws, (vi) contests any Tax, fee, assessment,
or other governmental charge in excess of $20,000,000, or (vii) involves any
material product recall; provided, that with respect to any product liability
case, the Company shall be required to furnish such notices only (x)
contemporaneously with the delivery of the financial statements under
Section 5.01(b) and (y) to the extent not covered by insurance;

 

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(c) any Lien (other than Permitted Liens) or claim made or asserted against any
portion of the Collateral with a fair market value in the amount of $10,000,000
or more;
(d) any loss, damage, or destruction to any portion of the Collateral with a
fair market value in the amount of $10,000,000 or more, to the extent not
covered by insurance;
(e) any and all default notices received under or with respect to any leased or
subleased location or public warehouse where any portion of the Collateral with
a fair market value in the amount of $10,000,000 or more is located (which shall
be delivered within two Business Days after receipt thereof);
(f) all material amendments to the Note Documents, together with a copy of each
such amendment;
(g) the fact that a Loan Party has entered into a Swap Agreement or an amendment
to a Swap Agreement, together with copies of all agreements evidencing such Swap
Agreement or amendments thereto that extend the term thereof or materially
increase the Loan Parties’ exposure thereunder (which shall be delivered within
two Business Days);
(h) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(i) any event, notice or circumstance or any correspondence with any
Governmental Authority (including with respect to any release into the indoor or
outdoor environment of any Hazardous Material that is required by any applicable
Environmental Law to be reported to a Governmental Authority) which could
reasonably be expected to result in a Material Adverse Effect; and
(j) any other development including that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a written
statement of a Financial Officer or other executive officer of the applicable
Borrower setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03 Existence. Each Loan Party will, and will cause each Subsidiary to,
(a) do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, qualifications,
licenses, permits, franchises, governmental authorizations, intellectual
property rights, licenses and permits material to the conduct of its business
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted; except where the failure to do
so could not be reasonably expected to have a Material Adverse Effect; provided,
however, that the Loan Party shall not be required to preserve any such right,
franchise, licenses and permits if the preservation thereof is no longer
desirable in the conduct of the business of such Person and the loss thereof is
not adverse in any material respect to such Person or the Lenders; provided,
further, that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.

 

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SECTION 5.04 Payment of Taxes. Each Loan Party will, and will cause each
Subsidiary to, pay or discharge all Taxes, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05 Maintenance of Properties Except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect, each Loan Party
will, and will cause each Subsidiary to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear and casualty excepted; provided, however, that the Loan Party
shall not be required to maintain any property if the preservation thereof is no
longer desirable in the conduct of the business of such Person and the loss
thereof is not adverse in any material respect to such Person or the Lenders.
SECTION 5.06 Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (i) keep proper books of record and account in
which full, true and correct entries in all material respects are made of all
dealings and transactions in relation to its business and activities and
(ii) permit any representatives designated by the Administrative Agent
(including employees of the Administrative Agent, or any consultants,
accountants, lawyers and appraisers retained by the Administrative Agent), upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records (including environmental assessment
reports and Phase I or Phase II studies (with respect to such environmental
reports and studies, subject to any limitations of any lease, sublease or other
agreement with, or other obligations to, any third party by which any Loan Party
is bound with respect to the property at issue; and, with respect to any Phase
II study, subject to execution of a customary access agreement reasonably
acceptable to the Administrative Agent and the relevant Loan Party) and to
discuss its affairs, finances and condition with its officers and independent
accountants, (provided that the Company shall be provided the opportunity to
participate in any such discussions with its independent accountants), all at
such reasonable times and as often as reasonably requested. The Loan Parties
acknowledge that the Administrative Agent, after exercising its rights of
inspection, may prepare and distribute to the Lenders certain Reports pertaining
to the Loan Parties’ assets for internal use by the Administrative Agent and the
Lenders.

 

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SECTION 5.07 Compliance with Laws. (a) Each Loan Party will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
(b) Canadian Pension Plans and Benefit Plans.
(i) For each existing, or hereafter adopted, Canadian Pension Plan and Canadian
Benefit Plan, each Loan Party will, and will cause each Subsidiary to, 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).
(ii) All employer or employee payments, contributions or premiums required to be
remitted, paid to or in respect of each Canadian Pension Plan or Canadian
Benefit Plan shall be paid or remitted by each Loan Party and each Subsidiary of
each Loan Party in a timely fashion in accordance with the terms thereof, any
funding agreements and all applicable laws.
(iii) The Loan Parties shall deliver to Lender (i) if requested by Lender,
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 Loan Party or any Subsidiary of any Loan 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 Loan Parties and their Subsidiaries in excess of
$10,000,000 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 Loan Party was not previously contributing; and
(iv) notification within 30 days of any voluntary or involuntary termination of,
or participation in, a Canadian Pension Plan or a Canadian Benefit Plan.
(c) Except as could not reasonably be expected to have a Material Adverse
Effect, the Loan Parties and each of their respective Subsidiaries: (i) shall be
at all times in compliance with all applicable Environmental Laws, and take
commercially reasonable efforts to ensure compliance by all tenants and
subtenants and invitees with all applicable Environmental Laws, and (ii) shall
generate, use, treat, store, release, transport, dispose of, and otherwise
manage all Hazardous Materials in a manner that would not reasonably be expected
to result in a liability to any Loan Party or any of its Subsidiaries or to
adversely affect any real property owned or operated by any of them, and take
reasonable efforts to prevent any other Person from generating, using, treating,
storing, releasing, transporting, disposing of, or otherwise managing Hazardous
Materials in a manner that could reasonably be expected to result in a liability
to, or adversely affect any real property owned or operated by, any Loan Party
or any of its Subsidiaries; it being understood that this clause (c) shall be
deemed not breached by a noncompliance with (i) or (ii) above provided that,
upon learning of such noncompliance or any condition that results from such
noncompliance, which, in either case, could reasonably be considered material,
any affected Loan Parties and Subsidiaries promptly develop and diligently
implement a response to such noncompliance and any such condition that is
consistent with principles of prudent environmental management and all
applicable Environmental Laws, and provided that such response and condition, in
the aggregate with any other such responses and conditions, could not reasonably
be expected to have a Material Adverse Effect.

 

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SECTION 5.08 Use of Proceeds. The proceeds of the Loans will be used, and
Letters of Credit will be issued, to refinance certain existing Indebtedness of
the Company and for other general corporate purposes (including Permitted
Acquisitions) of the Company and the Subsidiaries. No part of the proceeds of
any Loan and no Letter of Credit will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X as in effect from time to time.
SECTION 5.09 Insurance. (a) Each Loan Party will maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of the Loans Parties as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. The Borrowers will furnish to the Administrative Agent, upon the
request of the Administrative Agent, information in reasonable detail as to the
insurance so maintained.
(b) All insurance policies required under paragraph (a) of this Section 5.09, to
the extent such insurance policies by their terms insure any portion of the
Collateral, shall name the Administrative Agent (for the benefit of the Secured
Parties) as an additional insured or as a loss payee, as applicable, and shall
contain loss payable clauses or mortgagee clauses, through endorsements in form
and substance reasonably satisfactory to the Administrative Agent, that provide
that (i) all proceeds thereunder with respect to any Collateral shall be payable
to the Administrative Agent, the Note Representative or the Borrowers and
(ii) such policy and loss payable clauses may be canceled or terminated only
upon at least 30 days’ prior written notice given to the Administrative Agent.
For the avoidance of doubt the application of any insurance proceeds will be
subject to the terms of the Intercreditor Agreement.
(c) All premiums on any such insurance shall be paid when due by the Borrowers
and their Subsidiaries, and summaries of the policies shall be delivered
annually upon renewal of such insurance policy. If the Borrowers or any of their
Subsidiaries shall fail to obtain any insurance as required by this
Section 5.09, the Administrative Agent may obtain such insurance at the
Borrowers’ expense. By purchasing such insurance, the Administrative Agent shall
not be deemed to have waived any Default arising from the applicable Borrower’s
or such Subsidiary’s failure to maintain such insurance or pay any premiums
therefor.
SECTION 5.10 Casualty and Condemnation. The Borrowers (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any portion of the Collateral with a fair market value
in the amount of $10,000,000 or more or the commencement of any action or
proceeding for the taking of any material portion of the Collateral with a fair
market value in the amount of $10,000,000 or more or interest therein under
power of eminent domain or by condemnation or similar proceeding and (b) will
ensure that the Net Proceeds of any such event (whether in the form of insurance
proceeds, condemnation awards or otherwise) are collected and applied in
accordance with the applicable provisions of this Agreement, the Collateral
Documents and the Intercreditor Agreement.

 

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SECTION 5.11 Governmental Authorizations. Each Loan Party will, and will cause
each Subsidiary to, promptly from time to time obtain or make and maintain in
full force and effect all material licenses, consents, authorizations and
approvals of, and filings and registrations with, any Governmental Authority
from time to time necessary under the laws of the jurisdiction in which each
Loan Party is located for the making and performance in all material respects by
each such Loan Parties of the Loan Documents.
SECTION 5.12 Depository Banks.
The Borrowers and their Subsidiaries will maintain one or more of the Lenders as
its principal depository bank, including for the maintenance of operating,
administrative, cash management, collection activity, and other deposit accounts
for the conduct of its business.
SECTION 5.13 Appraisals. Once in each twelve month period, at the request of the
Collateral Agent, the Loan Parties will cooperate with an appraiser selected and
engaged by the Collateral Agent to provide Inventory appraisals or updates
thereof, prepared on a basis reasonably satisfactory to the Collateral Agent,
such appraisals and updates to include, without limitation, information required
by applicable law and regulations; provided, however that (a) if an Event of
Default has occurred and is continuing, there shall be no limitation on the
number or frequency of such appraisals and (b) if Aggregate Gross Availability
is less than the greater of (i) 20% of the Aggregate Gross Borrowing Base (not
to exceed 20% of the Total Commitment) and (ii)(A) during September, October and
November, $35,000,000 and (B) during any other month, $40,000,000, for any
period of five consecutive Business Days in any calendar year, then two times
during the twelve month period commencing with any month during which clause
(b) is triggered, at the request of the Collateral Agent, the Loan Parties will
cooperate with the Collateral Agent to provide such appraisals. For purposes of
this Section 5.13, it is understood and agreed that a single appraisal may
consist of appraisals conducted at multiple relevant sites and involve one or
more relevant Loan Parties and their assets. All such appraisals shall be at the
sole expense of the Loan Parties.
SECTION 5.14 Field Examinations. Once in each twelve month period, at the
request of the Collateral Agent, the Loan Parties will permit, upon reasonable
notice, the Collateral Agent to conduct a field examination to ensure the
adequacy of Collateral included in any Borrowing Base and related reporting and
control systems; provided, however that (a) if an Event of Default has occurred
and is continuing, there shall be no limitation on the number or frequency of
field examinations and (b) if Aggregate Gross Availability is less than the
greater of (i) 20% of the Aggregate Gross Borrowing Base (not to exceed 20% of
the Total Commitment) and (ii) (A) during September, October and November,
$35,000,000 and (B) during any other month, $40,000,000, for any period of five
consecutive Business Days in any calendar year, then two times during the twelve
month period commencing with any month during which clause (b) is triggered, at
the request of the Collateral Agent, the Loan Parties will permit the Collateral
Agent to conduct such examinations. For purposes of this Section 5.14, it is
understood and agreed that a single field examination may be conducted at
multiple relevant sites and involve one or more relevant Loan Parties and their
assets. All such field examinations shall be at the sole expense of the Loan
Parties.

 

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SECTION 5.15 Additional Collateral; Further Assurances. (a) Subject to
applicable law, the Borrowers and each of their Subsidiaries that are Loan
Parties shall promptly cause any Wholly-Owned Domestic Subsidiary or
Wholly-Owned Canadian Subsidiary created or acquired after the Effective Date to
(A) become a Loan Party by executing the Joinder Agreement set forth as
Exhibit E hereto (the “Joinder Agreement”) and (B) to execute and deliver such
amendments, supplements or documents of accession to any Collateral Documents as
the Administrative Agent reasonably deems necessary for such Subsidiary to grant
to the Administrative Agent (for the benefit of the Secured Parties) a perfected
security interest (with the priority required by the Intercreditor Agreement) in
the Collateral described in such Collateral Document with respect to such
Subsidiary, subject only to Permitted Liens. Upon execution and delivery of such
documents and agreements, each such Person (i) shall automatically become a
Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents and (ii) will
grant Liens to the Administrative Agent, for the benefit of the Secured
Parties), in any property of such Loan Party which constitutes Collateral, other
than any real property owned or leased.
(b) Each U.S. Loan Party will, to the extent required under the applicable
Collateral Documents, cause (i) 100% of the issued and outstanding Equity
Interests of each of its Wholly-Owned Domestic Subsidiaries and (ii) 65% of the
issued and outstanding Equity Interests in each Wholly-Owned Foreign Subsidiary
and Wholly-Owned Canadian Subsidiary directly owned by such Loan Party to be
subject at all times to a perfected Lien (with the priority required by the
Intercreditor Agreement and subject to Permitted Liens) in respect of the
Secured Obligations (other than the Canadian Secured Obligations) in favor of
the Administrative Agent pursuant to the terms and conditions of the Loan
Documents or other security documents as the Administrative Agent shall
reasonably request. Each Canadian Loan Party will, to the extent required under
the applicable Collateral Agreement cause 100% of the issued and outstanding
Equity Interests of each of its Wholly-Owned Subsidiaries directly owned by such
Loan Party to be subject at all times to a perfected Lien (with the priority
required by the Intercreditor Agreement and subject to Permitted Liens) in
respect of the Canadian Secured Obligations.
(c) Each Loan Party will, to the extent required under the applicable Collateral
Documents, cause 100% of the issued and outstanding Equity Interests of each of
its Wholly-Owned Subsidiaries directly owned by such Loan Party to be subject at
all times to a perfected Lien (with the priority required by the Intercreditor
Agreement and subject to Permitted Liens) in respect of the Canadian Secured
Obligations in favor of the Administrative Agent pursuant to the terms and
conditions of the Loan Documents or other security documents as the
Administrative Agent shall reasonably request.
(d) Without limiting the foregoing, each Loan Party will execute and deliver, or
cause to be executed and delivered, to the Administrative Agent such documents,
agreements and instruments, and will take or cause to be taken such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents and such other actions or
deliveries of the type required by Section 4.01, as applicable), which may be
required by law or which the Administrative Agent may, from time to time,
reasonably request to carry out the terms and conditions of this Agreement and
the other Loan Documents and to ensure perfection and priority of the Liens
created or intended to be created by the Collateral Documents, all at the
expense of the Loan Parties. In addition, each Loan Party will execute and
deliver, or cause to be executed and delivered, to the Administrative Agent
filings with any governmental recording or registration office in any
jurisdiction required by the Administrative Agent, in the exercise of its
Permitted Discretion, in order to perfect or protect the Liens of the
Administrative Agent granted under any Collateral Document in any Intellectual
Property, all at the expense of the Loan Parties.

 

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(e) If any material assets (other than any real property) are acquired by the
Company or any other Loan Party after the Effective Date (other than assets
constituting Collateral under any of the Security Agreements that become subject
to the Lien in favor of the Administrative Agent pursuant to the applicable
Security Agreement upon acquisition thereof), the Company will notify the
Administrative Agent and, if requested by the Administrative Agent or the
Required Lenders, the Company will cause such assets to be subjected to a Lien
securing the Secured Obligations and will take, and cause the Loan Parties to
take, such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (d) of this Section, all at the expense of the Loan
Parties.
Notwithstanding the foregoing, neither the Company nor any Subsidiary shall be
required to grant a security interest in any property to the extent that such
grant of a security interest is prohibited by any requirement of law of a
governmental authority, requires a consent not obtained of any governmental
authority pursuant to such requirement of law or is prohibited by, or
constitutes a breach or default under or results in the termination of or gives
rise to a right on the part of the parties thereto other than the Company and
its Subsidiaries to terminate (or materially modify) or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any investment
property, pledged stock or pledged note, any applicable shareholder or similar
agreement, except to the extent that such requirement of law or the term in such
contract, license, agreement, instrument or other document or shareholder or
similar agreement providing for such prohibition, breach, default or right of
termination or modification or requiring such consent is ineffective under
applicable law.
Additionally, the parties hereto agree that, notwithstanding anything to the
contrary contained herein or in the Loan Documents, neither the Company nor any
subsidiary shall be required to provide any guarantee, pledge or asset support
arrangement that, in the reasonable judgment of the Company, would subject the
Company to any adverse tax consequence due to the application of Section 956 of
the Code.
In addition, and notwithstanding anything else to the contrary contained in this
Section or elsewhere in the Agreement, perfection of Collateral (including the
pledge of any Equity Interests) shall not be required where either the burden or
costs of perfecting a security interest, lien or mortgage is reasonably
determined (in consultation with the Borrowers) by the Administrative Agent to
be excessive in relation to the benefit afforded to the Lenders thereby. For the
avoidance of doubt, it is understood and agreed that limitations under
applicable law regarding the pledge of Equity Interests in any Subsidiary shall
be considered a basis for the exclusion of such pledge from the requirements of
perfection pursuant to this Section.

 

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SECTION 5.16 Control Agreements. (a) The Borrowers will, and the Borrowers will
cause each applicable Loan Party to, (i) enter into the Deposit Account Control
Agreements required to be provided pursuant to the Security Agreements and
(ii) open the Collection Accounts with the Administrative Agent, in each case
within 60 days of the Effective Date (or such later date as the Administrative
Agent shall agree in its Permitted Discretion). In connection with the
foregoing, the Borrowers shall, if requested by the Administrative Agent,
promptly deliver to the Administrative Agent a written opinion (addressed to the
Administrative Agent and the Lenders) of counsel for the Borrowers and the other
Loan Parties, in form and substance reasonably satisfactory to the
Administrative Agent and covering customary matters relating to such Deposit
Account Control Agreements.
(b) The Borrowers shall determine the aggregate balance of cash and Permitted
Investments of all Loan Parties in accounts located in the United States or
Canada (other than (i) each deposit account, the funds in which are used, in the
ordinary course of business, solely for the payment of salaries and wages,
workers’ compensation, pension benefits and similar expenses or taxes related
thereto, (ii) each deposit account used, in the ordinary course of business,
solely for daily accounts payable and that has an ending daily balance of zero
and (iii) each account, all the cash and Permitted Investments contained in
which consist of (A) proceeds from the issuance of Indebtedness; (B) proceeds
from the sale or other disposition of assets (other than ABL First Priority
Collateral), or (C) proceeds of insurance and condemnation awards (and payments
in lieu thereof) relating to any assets (other than ABL First Priority
Collateral), in each case, to the extent such cash or Permitted Investments is
required to be deposited in such account pursuant to the documentation governing
any Indebtedness having a first-priority lien on any assets (other than ABL
First Priority Collateral)) not subject to Deposit Account Control Agreements or
other appropriate control agreements in favor of the Administrative Agent in
form and substance reasonably satisfactory to the Administrative Agent at each
time when the Borrowers deliver any Borrowing Base reports pursuant to
Section 5.01(g), and, if during any Cash Dominion Period the aggregate balance
on a daily average basis over a 30-day period of cash and Permitted Investments
not subject to a perfected first-priority lien as described above is equal to or
greater than $5,000,000, the Borrowers shall promptly eliminate such excess from
such accounts or shall within 30 days enter, or cause the applicable Loan
Parties to enter, into one or more Deposit Account Control Agreements or other
appropriate control agreements in favor of the Administrative Agent in form and
substance reasonably satisfactory to the Administrative Agent so that there
shall not thereafter be any such excess.
SECTION 5.17 Post-Closing Actions. Subject to the terms of the Security
Agreement, the Loan Parties shall use commercially reasonable efforts to deliver
to the Administrative Agent, within 90 days of the Effective Date (or such later
date as the Administrative Agent may agree in its reasonable discretion),
Collateral Access Agreements required to be provided pursuant to Section 4.13 of
the Security Agreement; provided that the Loan Parties shall not be required to
make payments to obtain such Collateral Access Agreements, except for any
payments already required pusuant to the underlying lease agreements (together
with any renewals, extensions, amendments, modifications, substitutions or
replacements thereof) and minimum processing fees not to exceed $500.

 

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ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under any
Loan Document have been paid in full and all Letters of Credit have expired or
been terminated and all LC Disbursements shall have been reimbursed, each of the
Loan Parties covenants and agrees, jointly and severally, with the Lenders that:
SECTION 6.01 Indebtedness. No Loan Party will, nor will it permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Indebtedness, except:
(a) the Secured Obligations;
(b) the Senior Secured Notes and Guarantees thereof by the Guarantors in an
initial aggregate principal amount not to exceed $350,000,000;
(c) Indebtedness existing on the Effective Date and set forth on Schedule 6.01
and any extensions, renewals and replacements of any such Indebtedness in
accordance with clause (g) hereof;
(d) Indebtedness of any Borrower to any Subsidiary or any other Borrower and of
any Subsidiary to any Borrower or any other Subsidiary; provided that
(i) Indebtedness of any Subsidiary that is not a Loan Party to the Company or
any Subsidiary that is a Loan Party shall be subject to Section 6.04 and
(ii) Indebtedness of the Company to any Subsidiary and Indebtedness of any
Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall
be subordinated to the Secured Obligations on terms reasonably satisfactory to
the Administrative Agent;
(e) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of any Borrower or any other Subsidiary; provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by any Borrower or any Subsidiary that is a Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject to
Section 6.04 and (iii) Guarantees permitted under this clause (e) shall be
subordinated to the Secured Obligations of the applicable Subsidiary on the same
terms as the Indebtedness so Guaranteed is subordinated to the Secured
Obligations;
(f) Indebtedness of any Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (g) hereof; provided that (i) such Indebtedness is
incurred prior to or within 120 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (f) shall not exceed $5,000,000 at any
time outstanding;

 

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(g) Indebtedness which represents an extension, refinancing, replacement or
renewal (collectively, “Refinancing”) of any of the Indebtedness described in
clauses (b), (c), (f), (g), (j), (k), (l), (m) and (n) hereof; provided that,
(i) the principal amount (or accreted value, if applicable) of such Indebtedness
is not increased, except by an amount equal to unpaid accrued interest and
premium thereon plus other reasonable amounts paid, and fees and expenses
reasonably incurred, in connection with such Refinancing, (ii) any Liens
securing such Indebtedness are not extended to any additional property of any
Loan Party, (iii) no Loan Party that is not originally obligated with respect to
repayment of such Indebtedness is required to become obligated with respect
thereto, (iv) such Refinancing does not result in a shortening of the average
weighted maturity of the Indebtedness so extended, refinanced or renewed,
(v) the terms of any such Refinancing are, taken as a whole, not materially less
favorable to the obligor thereunder than the original terms of such Indebtedness
and (iv) if the Indebtedness that is Refinanced was subordinated in right of
payment to the Secured Obligations, then the terms and conditions of the
Refinancing Indebtedness must include subordination terms and conditions that
are at least as favorable to the Administrative Agent and the Lenders as those
that were applicable to the Indebtedness subject to the Refinancing;
(h) Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;
(i) Indebtedness of the Company or any Subsidiary in respect of performance
bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each
case provided in the ordinary course of business;
(j) Indebtedness of Foreign Subsidiaries and Canadian Subsidiaries; provided,
that, the aggregate principal amount of Indebtedness permitted by this paragraph
(j) shall not exceed $20,000,000 at any time outstanding;
(k) Indebtedness of any Person that becomes a Subsidiary after the Effective
Date; provided that (i) such Indebtedness exists at the time such Person becomes
a Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (k) shall not exceed $10,000,000 at any
time outstanding; and
(l) other Indebtedness in an aggregate principal amount not exceeding
$20,000,000 at any time outstanding;

 

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(m) (x) the incurrence or assumption by the Company or a Subsidiary of
Indebtedness to finance or assumed in connection with a Permitted Acquisition or
(y) the incurrence or assumption by the Company or a Subsidiary of Indebtedness
of Persons that are acquired by the Company or any Subsidiary or merged into the
Company or a Subsidiary; provided that in the case of (x) and (y) after giving
effect to such acquisition or merger on a pro forma basis (A) (1) the Fixed
Charge Coverage Ratio is (i) greater than 1.20 to 1.00 and (ii) greater than the
Fixed Charge Coverage Ratio immediately prior to such acquisition or merger or
(2) the Fixed Charge Coverage Ratio is greater than 1.20 to 1.00 and such
Indebtedness is incurred or assumed on an unsecured subordinated basis, in each
case, the Fixed Charge Coverage Ratio shall be calculated in a manner set forth
in the first sentence of this covenant and (B) the Aggregate Gross Availability
is not less than 20% of the Aggregate Gross Borrowing Base;
(n) the incurrence by the Company or any of its Subsidiaries of Indebtedness,
the net proceeds of which are used to fund scheduled cash interest payments on,
or repay, prepay, repurchase, redeem, defease or retire, any Indebtedness under
the Holdings Credit Facilities or to pay to unrelated third parties any fees,
expenses or premiums, if any, related thereto; provided, however, that (A) after
giving pro forma effect thereto (i) the Total Leverage Ratio would be no greater
than 5.00 to 1.00 as of the end of the Company’s most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding such incurrence and (ii) the Aggregate Gross Availability
would be not less than 20% of the Aggregate Gross Borrowing Base and, (B) any
Indebtedness the proceeds of which are used to repay, prepay, repurchase,
redeem, defease or retire Indebtedness under the Holdco Credit Facilities is
incurred on an unsecured senior or unsecured subordinated basis; provided that
the principal amount of such Indebtedness matures no earlier than 91 days after
the maturity date of the Senior Secured Notes and (C) the amount of Indebtedness
incurred pursuant to this Section 6.01(n) does not exceed the sum of
(x) Indebtedness under the Holdings Credit Facilities outstanding on the
Effective Date plus any accrued and capitalized interest thereon, (y) the
aggregate amount of accrued but unpaid interest thereon and (z) fees, expenses
and premiums, if any, relating to such transaction;
(o) Indebtedness in respect of Swap Agreements permitted under Section 6.07;
(p) Indebtedness of the Company or any Subsidiary supported by a Letter of
Credit, in a principal amount not to exceed the face amount of such Letter of
Credit;
(q) Indebtedness which may be deemed to exist pursuant to any guaranties,
performance, surety, statutory, appeal or similar obligations incurred in the
ordinary course of business;
(r) Indebtedness in respect of netting services, overdraft protections and
otherwise in connection with deposit accounts;
(s) Indebtedness representing deferred compensation to employees of the Company
or any of its Subsidiaries incurred in the ordinary course of business;
(t) Indebtedness consisting of obligations of the Company or any Subsidiary
under deferred compensation or similar arrangements incurred by such Person in
connection with Permitted Acquisitions or any other Investment expressly
permitted hereunder;

 

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(u) Indebtedness consisting of (a) financing of insurance premiums or
(b) take-or-pay obligations contained in supply arrangements, in each case, in
the ordinary course of business;
(v) Indebtedness incurred by the Company or any of its Subsidiaries in respect
of letters of credit, bank guarantees, bankers’ acceptances, or similar
instruments issued or created in the ordinary course of business, including in
respect of workers compensation claims, health, disability or other employee
benefits or property, casualty, or liability insurance or self-insurance or
other Indebtedness with respect to reimbursement-type obligations regarding
workers compensation claims; and
(w) Promissory notes issued in connection with the repurchase, redemption or
other acquisition or retirement of Equity Interests held by any current or
former officer, director or employee of any Parent, the Company or any of its
Subsidiaries; provided, that, such repurchase, redemption, or other acquisition
or retirement is permitted by Section 6.08(a)(iii).
SECTION 6.02 Liens. No Loan Party will, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens securing the Secured Obligations;
(b) Permitted Encumbrances;
(c) Liens on the Collateral securing Indebtedness incurred pursuant to
Section 6.01(b), and any extensions, renewals and replacements of any such
Indebtedness in respect thereof in accordance with Section 6.01(g), in each
case, to the extent subject to the Intercreditor Agreement;
(d) any Lien on any property or asset of any Borrower or any Subsidiary existing
on the Effective Date and set forth on Schedule 6.02; provided that (i) such
Lien shall not apply to any other property or asset of any Borrower or any
Subsidiary and (ii) such Lien shall secure only (A) those obligations that it
secures on the Effective Date, or (B) obligations that shall have been extended,
renewed, replaced or refinanced in accordance with Section 6.01(g);
(e) Liens on fixed or capital assets acquired, constructed or improved by any
Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by Section 6.01 (or any Refinancing of such Indebtedness
permitted under clause (g) of Section 6.01) and (ii) such security interests
shall not apply to any other property or assets of such Borrower or Subsidiary
or any other Borrower or Subsidiary;

 

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(f) any Lien existing on any property or asset (other than Accounts and
Inventory of any Loan Party) prior to the acquisition thereof by any Borrower or
any Subsidiary or existing on any property or asset (other than Accounts and
Inventory of any Loan Party) of any Person that becomes a Subsidiary or is
merged or consolidated with any Borrower or any Subsidiary after the Effective
Date prior to the time such Person becomes a Subsidiary or is so merged or
consolidated securing Indebtedness permitted under Section 6.01(k); provided
that (A) such Lien is not created in contemplation of or in connection with such
acquisition, merger or consolidation or such Person becoming a Subsidiary, as
the case may be, (B) such Lien shall not apply to any other property or asset of
such Borrower or Subsidiary or any other Borrower or Subsidiary and (C) such
Lien shall secure only those obligations that it secures on the date of such
acquisition, merger or consolidation or the date such Person becomes a
Subsidiary, as the case may be, or, with respect to any such obligations that
shall have been subject to a Refinancing in accordance with Section 6.01, such
Refinancing in respect thereof;
(g) Liens (i) of a collecting bank arising in the ordinary course of business
under Section 4-210 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon, (ii) attaching to a
commodity trading account or other commodities brokerage account incurred in the
ordinary course of business and (iii) in favor of banking or other financial
institutions arising as a matter of law or under customary contractual
provisions encumbering deposits or other funds maintained with such banking or
other financial institutions (including the right of set off and grants of
security interests in deposits and/or securities held by such banking or other
financial institution) and that are within the general parameters customary in
the banking industry;
(h) Liens arising out of sale and leaseback transactions permitted by
Section 6.06;
(i) Liens granted by a Subsidiary that is not a Loan Party in favor of the a
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary;
(j) Liens securing Indebtedness permitted by Section 6.01(j), provided that such
Lien shall only cover the property of Foreign Subsidiaries and Canadian
Subsidiaries; and
(k) Liens securing Indebtedness of the Company or any of its Subsidiaries the
proceeds of which are used to finance a Permitted Acquisition, so long as after
giving pro forma effect to such acquisition, (i) the Secured Leverage Ratio of
the Company would be no greater than 3.50 to 1.00 as of the end of the Company’s
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding such incurrence and (ii) the
Aggregate Gross Availability would be equal to or greater than 20% of the
Aggregate Gross Borrowing Base;
(l) other Liens so long as the aggregate outstanding principal amount of the
obligations secured thereby does not exceed $50,000,000;

 

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Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrance and
clauses (a) and (c) above and, in the case of Liens junior in priority to the
Liens securing the Secured Obligations and subject to an intercreditor agreement
reasonably acceptable to the Collateral Agent, clauses (k) and (l) above and
(2) Inventory, other than those permitted under clauses (a), (b) and (i) of the
definition of Permitted Encumbrance and clauses (a) and (c) above and, in the
case of Liens junior in priority to the Liens securing the Secured Obligations
and subject to an intercreditor agreement reasonably acceptable to the
Collateral Agent, clauses (k) and (l) above. Notwithstanding anything to the
contrary contained in this Agreement or any Collateral Document (including any
provision for, reference to, or acknowledgement of, any Lien or Permitted Lien),
nothing herein and no approval by the Administrative Agent or Lenders of any
Lien or Permitted Lien (whether such approval is oral or in writing) shall be
construed as or deemed to constitute a subordination by the Administrative Agent
or the Lenders of any security interest or other right, interest or Lien in or
to the Collateral or any part thereof in favour of any Lien or Permitted Lien or
any holder of any Lien or Permitted Lien.
Furthermore, it is understood and agreed that except for Liens permitted by
Section 6.02(c) and Section 6.02(f) above, no Loan Party will, nor will it
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Lien (other than Permitted Encumbrances) on any real property now owned or
hereafter acquired that is pledged as collateral security for the Senior Secured
Notes unless a mortgage is delivered in connection with such real property to
the Administrative Agent for the benefit of the Secured Parties.
SECTION 6.03 Fundamental Changes; Business Activities. (a) Mergers, Sales of
Assets, Etc. No Loan Party will, nor will it permit any of its Subsidiaries to,
amalgamate with, merge into or consolidate with any other Person, or permit any
other Person to amalgamate with, merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing (i) any Subsidiary of any Borrower
may merge into a Borrower in a transaction in which the Borrower is the
surviving corporation, (ii) any U.S. Loan Party (other than the Company) may
merge into any U.S. Loan Party in a transaction in which the surviving entity is
a U.S. Loan Party, (iii) any Canadian Loan Party may merge into any other
Canadian Loan Party in a transaction in which the surviving entity is a Canadian
Loan Party, (iv) any Subsidiary may liquidate or dissolve if (x) the Borrower
which owns such Subsidiary determines in good faith that such liquidation or
dissolution is in the best interests of such Borrower and is not materially
disadvantageous to the Lenders and (y) in connection with any such dissolution
or a Loan Party, all the assets of such Loan Party are transferred to another
Loan Party; and (v) any non-Loan Party may merge into, amalgamate with, or
consolidate with another non-Loan Party; provided that any such merger involving
a Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04.
(b) Line of Business. No Loan Party will, nor will it permit any of its
Subsidiaries to, engage in any business other than businesses of the type
conducted by the Company and the Subsidiaries on the date of execution of this
Agreement and businesses reasonably related or similar thereto or reasonable
extensions thereof.

 

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SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any of its Subsidiaries to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a Loan
Party and a Wholly-Owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) all or
substantially all of the assets of any Person or any assets of any other Person
constituting a business unit (whether through purchase of assets, merger or
otherwise) (each such transaction, an “Investment”), except:
(a) Permitted Investments, subject to, in the case of Loan Parties, control
agreements in favor of the Administrative Agent for the benefit of the Lenders
to the extent required under Section 5.16, or otherwise subject to a perfected
security interest in favor of the Administrative Agent for the benefit of the
Lenders (other than (i) Permitted Investments maintained in Excluded Accounts
and (ii) Permitted Investments held by any Foreign Subsidiary or other non-Loan
Party;
(b) Investments (i) in existence on the date of this Agreement and (with respect
to any Investment held by any Loan Party) described in Schedule 6.04(b);
(c) Investments by the Loan Parties and their Subsidiaries in Equity Interests
in their respective Subsidiaries, provided that (A) any such Equity Interests
held by a Loan Party shall be pledged pursuant to the applicable Security
Agreement (subject to the limitations applicable to common stock of a Foreign
Subsidiary or Canadian Subsidiary, as applicable referred to in Section 5.15(b))
and (B) the aggregate amount of investments by Loan Parties in Subsidiaries that
are not Loan Parties (together with outstanding intercompany loans permitted
under clause (B) to the proviso to Section 6.04(d) and outstanding Guarantees
permitted under the proviso to Section 6.04(e)) shall not exceed $20,000,000 at
any time outstanding (in each case determined without regard to any write-downs
or write-offs);
(d) loans or advances made by any Borrower to any Subsidiary and made by any
Subsidiary to any other Borrower or any other Subsidiary, provided that the
amount of such loans and advances made by Loan Parties to Subsidiaries that are
not Loan Parties (together with outstanding investments permitted under clause
(B) to the proviso to Section 6.04(c) and outstanding Guarantees permitted under
the proviso to Section 6.04(e)) shall not exceed $20,000,000 at any time
outstanding (in each case determined without regard to any write-downs or
write-offs);
(e) Guarantees constituting Indebtedness permitted by Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party shall (together with
outstanding investments permitted under clause (B) to the proviso to
Section 6.04(c) and outstanding intercompany loans permitted under clause (B) to
the proviso to Section 6.04(d)) shall not exceed $20,000,000 at any time
outstanding (in each case determined without regard to any write-downs or
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(f) Permitted Acquisitions;
(g) loans or advances made to directors, officers and employees of a Parent, the
Company or any Subsidiary (x) on an arms length basis in the ordinary course of
business consistent with past practices for travel and entertainment expenses,
relocation costs and similar purposes and (y) to finance the purchase by such
person of Equity Interests of the Parent, Company or any Subsidiary or otherwise
in an aggregate principal amount not to exceed $250,000 at any one time
outstanding;
(h) subject to Sections 4.2(a) and 4.4 of the U.S. Security Agreement (or any
similar provision of any other Security Agreement), notes payable, or stock or
other securities issued by Account Debtors to a Loan Party pursuant to
negotiated agreements with respect to settlement of such Account Debtor’s
Accounts in the ordinary course of business, consistent with past practices;
(i) Investments in the form of Swap Agreements permitted by Section 6.07;
(j) Investments of any Person existing at the time such Person becomes a
Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the
Subsidiaries (including in connection with a Permitted Acquisition) so long as
such Investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;
(k) Investments received in connection with the dispositions of assets permitted
by Section 6.05;
(l) Investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances.”
(m) Guarantees by a Borrower or any of its Subsidiaries of leases (other than
Capital Leases) or of other obligations of a Borrower or any of its Subsidiaries
that do not constitute Indebtedness, in each case, entered into in the ordinary
course of business;
(n) Investments consisting of stock, obligations, securities or other property
received in settlement of accounts receivable (created in the ordinary course of
business) from bankrupt obligors of any Loan Party or Subsidiary;
(o) other Investments in an aggregate amount not to exceed $10,000,000 at any
time outstanding plus, so long as both immediately before and immediately after
giving effect thereto on a Pro Forma Basis (i) no Default or Event of Default
shall have occurred and be continuing and (ii) Aggregate Gross Availability
shall not have been less than 20% of the Aggregate Gross Borrowing Base at any
time during the prior 90-day period, any other Investments.

 

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SECTION 6.05 Asset Sales. No Loan Party will, nor will it permit any of its
Subsidiaries to, sell, transfer, license, assign, lease or otherwise dispose of
any asset, including any Equity Interest owned by it, nor will any Borrower
permit any Subsidiary to issue any additional Equity Interest in such Subsidiary
(other than to another Borrower or another Subsidiary in compliance with
Section 6.04), except:
(a) dispositions of cash and Permitted Investments;
(b) leases, subleases, licenses and sublicenses, in each case which do not
materially interfere with the business of the Company and its Subsidiaries;
(c) sales, transfers and dispositions of (i) inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property
(including intellectual property) in the ordinary course of business;
(d) sales, transfers, leases, licenses and dispositions to any Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Loan Party shall be made in compliance with
Sections 6.04 and 6.09;
(e) sales, transfers, dispositions and discounts of accounts receivable in
connection with the compromise, settlement or collection thereof in the ordinary
course of business;
(f) sales, transfers and dispositions of Permitted Investments in the ordinary
course of business;
(g) sale and leaseback transactions permitted by Section 6.06;
(h) Restricted Payments permitted by Section 6.08, Investments permitted by
Section 6.04, Liens permitted by Section 6.02;
(i) dispositions resulting from any casualty or other damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any
property or asset of any Borrower or any Subsidiary;
(j) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other paragraph of this Section; provided
that the aggregate fair market value of all assets sold, transferred or
otherwise disposed of in reliance upon this paragraph (j) shall not exceed
$20,000,000 during any fiscal year of the Company and $50,000,000 in the
aggregate since the Effective Date;
(k) dispositions of property listed on Schedule 6.05(k); and
(l) any merger, amalgamation, consolidation, liquidation, wind-up or
dissolution, the purpose of which is to effect a disposition otherwise permitted
in this Section 6.05;

 

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provided that all sales, transfers, leases, licenses and other dispositions
permitted hereby (i) (other than those permitted by paragraphs (d), (h) and
(i) above) shall be made for fair value and (ii) in the case of paragraphs
(j) and (k), shall be for at least 75% cash consideration, provided, further,
that the following shall be deemed to be cash: (x) the repayment or assumption
of Indebtedness secured by Liens with a priority to the Liens in favor of the
Secured Parties and (y) any securities, notes or other obligations received by
the Company or any such Subsidiary from such transferee that are, within
180 days of the disposition of Collateral, converted by the Company or such
Subsidiary into cash or Permitted Investments.
SECTION 6.06 Sale and Leaseback Transactions. No Loan Party will, nor will it
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease or license such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred, except for any such sale of any fixed or capital assets by
any Borrower or any Subsidiary that is made for cash consideration in an amount
not less than the fair value of such fixed or capital asset and is consummated
within 120 days after such Borrower or Subsidiary acquires or completes the
construction of such fixed or capital asset, provided that the aggregate amount
of sale and leaseback transactions consummated in reliance on this Section 6.06
shall not exceed $10,000,000.
SECTION 6.07 Swap Agreements. No Loan Party will, nor will it permit any of its
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which any Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of any
Subsidiary of the Company), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) or foreign
exchange contract, currency swap agreement, currency option or other similar
agreement or arrangement for the purpose of fixing, hedging or swapping currency
exchange rates with respect to any interest-bearing liability or investment of
any Borrower or any Subsidiary.
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness. (a)
Restricted Payments. No Loan Party will, nor will it permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except
(i) each Loan Party and its Subsidiaries may declare and pay dividends with
respect to its common stock payable solely in additional shares of its common
stock, and, with respect to its preferred stock, payable solely in additional
shares of such preferred stock or in shares of its common stock,
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
Equity Interests,

 

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(iii) the Borrowers may make Restricted Payments, not exceeding (x) $2,000,000
during any 12-month period (plus the Net Proceeds from the issuance of Equity
Interests to officers, directors or employees) or (y) $10,000,000 (plus the Net
Proceeds from the issuance of Equity Interests to officers, directors or
employees) in the aggregate since the Effective Date, pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of a Parent, the Company and the Subsidiaries; provided, that, the
Company may carry over and make in subsequent 12-month periods, in addition to
the amounts permitted for such 12-month period, the amount of such Restricted
Payments permitted to have been made but not made in any preceding 12-month
period;
(iv) Restricted Payments in an amount not to exceed $5,000,000 plus, so long as
both immediately before and immediately after giving effect thereto on a Pro
Forma Basis (i) no Default or Event of Default shall have occurred and be
continuing, (ii) no Cash Dominion Period shall be continuing, (iii) the Fixed
Charge Coverage Ratio for the Test Period then in effect is at least 1.20 to
1.00 and (iv) Aggregate Gross Availability shall not have been less than 20% of
the Aggregate Gross Borrowing Base at any time during the prior 90-day period,
any other Restricted Payment;
(v) from and after May 1, 2012 the Company may make Restricted Payments to RBG
to enable RBG to make Restricted Payments to Holdings to make scheduled payments
of interest or principal or mandatory “AHYDO catch-up” or similar payment in
cash under the Holdings Credit Agreement so long as immediately before and
immediately after giving effect thereto on a Pro Forma Basis, (y) Aggregate
Gross Availability is greater than or equal to the greater of (i) 20% of the
Aggregate Gross Borrowing Base (not to exceed 20% of the Total Commitments) and
(ii)(A) during September, October and November, $35,000,000 and (B) during any
other month, $40,000,000, and (z) the Fixed Charge Coverage Ratio is greater
than or equal to 1.00 to 1.00;
(vi) pay dividends or make distributions or advances to Parent to repay, prepay,
repurchase, redeem, defease or retire Indebtedness under the Holdings Credit
Facilities, and to pay to unrelated third parties related fees and expenses;
provided, however, that after giving pro forma effect thereto (x) no Default or
Event of Default shall have occurred and be continuing and (y) the Total
Leverage Ratio would be no greater than 5.00 to 1.00 as of the end of the
Company’s most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding such payment and
(z) other than in connection with Restricted Payments made with the proceeds of
Indebtedness incurred pursuant to Section 6.01(n), (i) Aggregate Gross
Availability would be equal to or greater than 20% of the Aggregate Gross
Borrowing Base, (ii) the Fixed Charge Coverage Ratio would be equal to or
greater than 1.00 to 1.00 (without giving effect to such dividends,
distributions or advances in calculating the Fixed Charge Coverage Ratio) and
(iii) any Indebtedness the proceeds of which are used to repay, prepay,
repurchase, redeem, defease or retire Indebtedness under the Holding Credit
Facilities is incurred on an unsecured senior or unsecured subordinated basis;
provided further that the principal amount of such Indebtedness matures no
earlier than 91 days after the Maturity Date;

 

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(vii) Restricted Payments made on the Effective Date in connection with the
Refinancing or made in connection with expenses arising out of the Refinancing
paid within 180 days after the Effective Date;
(viii) Permitted Payments to Parent;
(ix) Restricted Payments related to the payment of Management Fees pursuant to
the Management Agreement in effect on the Effective Date, provided, both
immediately before and immediately after giving effect to the payment of such
Management Fee (except for the reimbusement of costs and out-of-pocket expenses
and indemnification obligations) on a Pro Forma Basis (i) no Default or Event of
Default shall have occurred and be continuing (ii) Aggregate Gross Availability
shall not be less than 20% of the Aggregate Gross Borrowing Base and (iii) the
Fixed Charge Coverage Ratio shall not be less than 1.20 to 1.00; and
(x) The repurchase of Equity Interests deemed to occur upon the exercise of
stock options to the extent such Equity Interests represent a portion of the
exercise price of those stock options.
(xi) payments made or expected to be made by the Company or any Subsidiary in
respect of withholding or similar Taxes payable by any future, present or former
employee, director, officer, manager or consultant and any repurchases of Equity
Interests in consideration of such payments including deemed repurchases in
connection with the exercise of stock options; and
(xii) the proceeds of which shall be used to pay customary salary, bonus and
other benefits payable to officers and employees of a Parent to the extent such
salaries, bonuses and other benefits are attributable to the ownership or
operation of the Company and its Subsidiaries.
(b) Payments of Indebtedness. No Loan Party will, nor will it permit any of its
Subsidiaries to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of (A) regularly scheduled interest and principal payments as and
when due (including at maturity) in respect of any Indebtedness, other than
payments in respect of Subordinated Indebtedness prohibited by the subordination
provisions thereof, and (B) Indebtedness owing to the Company or any Subsidiary
that is otherwise permitted hereunder;
(iii) refinancings of Indebtedness to the extent permitted by Section 6.01;

 

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(iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) Payment of Indebtedness owed to the Company or any Subsidiary of the Company
in accordance with the terms of any subordination provisions thereof;
(vi) Payment of Indebtedness owed by non-Loan Parties to the Company or its
Subsidiaries;
(vii) other payments of Indebtedness in an amount not to exceed $5,000,000 plus,
other payments of Indebtedness so long as both immediately before and
immediately after giving effect thereto on a Pro Forma Basis (i) no Default or
Event of Default shall have occurred and be continuing, (ii) no Cash Dominion
Period shall be continuing, (iii) the Fixed Charge Coverage Ratio for the Test
Period then in effect is at least 1.20 to 1.00 and (iv) Aggregate Gross
Availability shall not have been less than 20% of the Aggregate Gross Borrowing
Base at any time during the prior 90-day period;
(viii) the conversion (or exchange) of any Indebtedness to (or with) Equity
Interests of a Parent or Indebtedness of a Parent; and
(ix) the prepayment of Indebtedness of the Company or any Subsidiary with the
proceeds of any issuance of Equity Interests by a Parent.
SECTION 6.09 Transactions with Affiliates. No Loan Party will, nor will it
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions that (i) are in the ordinary course of
business and (ii) are at prices and on terms and conditions not less favorable
to such Borrower or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties, (b) transactions between or among any
Borrower and one or more Subsidiaries not involving any other Affiliate, (c) any
Investment permitted by Sections 6.04, (d) any Indebtedness permitted under
Section 6.01(d), (e) any Restricted Payment permitted by Section 6.08, (f) any
disposition of assets permitted under Section 6.05, (g) the payment of
reasonable fees to directors of the Company or any Subsidiary who are not
employees of the Company or any Subsidiary, and compensation and employee
benefit arrangements paid to, and indemnities provided for the benefit of,
directors, officers or employees of the Company or the Subsidiaries in the
ordinary course of business and (h) any issuances of securities or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment agreements, stock options and stock ownership plans
approved by the Company’s board of directors, (i) so long as no payment Default
has occurred and is continuing, the payment of the Management Fees permitted
under Section 6.08, (j) any contribution to the capital of Parent by the Equity
Investors or any purchase of Equity Interests of Parent by the Equity Investors
and (k) any transaction listed on Schedule 3.20.

 

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SECTION 6.10 Restrictive Agreements. No Loan Party will, nor will it permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of such Loan Party or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its property or assets,
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or (c) the ability of any Domestic
Subsidiary or Canadian Subsidiary to Guarantee Indebtedness of the Borrowers or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions existing on the
Effective Date identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to (A) customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary, or a business unit, division, product line or line of business of a
Subsidiary, pending such sale, provided such restrictions and conditions apply
only to the Subsidiary, or the business unit, division, product line or line of
business of such Subsidiary, that is to be sold and such sale is permitted
hereunder, and (B) restrictions and conditions imposed by (1) the Note
Documents, (2) any agreement or document governing or evidencing refinancing
Indebtedness in respect of the Senior Secured Notes permitted under
Section 6.01(g), or (3) any additional Indebtedness permitted to be incurred
under Section 6.01(m) or (n), provided that the restrictions and conditions
contained in any such agreement or document in clause (2) or (3) above are not
less favorable to the Lenders in any material respect, taken as a whole, than
the restrictions and conditions imposed by the Note Documents, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness and such property or assets do not constitute Collateral,
(v) clause (a) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof, (vi) the
foregoing shall not apply to agreements entered into by any Subsidiary that is
not a Guarantor (including Foreign Subsidiaries) that are otherwise permitted by
this Agreement (so long as such agreements do not prohibit the Loan Parties from
complying with the other provisions of this Agreement).
SECTION 6.11 Amendment of Material Documents. No Loan Party will, nor will it
permit any of its Subsidiaries to, amend, modify or waive any of its rights
under (a) any agreement or instrument governing or evidencing the Senior Secured
Notes or any Subordinated Indebtedness or (b) its certificate/articles of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents, in each case to the extent such amendment,
modification or waiver is adverse in any material respect to the Lenders, unless
consented to by the Administrative Agent (such consent not to be unreasonably
withheld or delayed).
SECTION 6.12 Fixed Charge Coverage Ratio. During any period commencing on the
Business Day after the third Business Day during any period of five Business
Days (each a “Fixed Charge Ratio Commencement Date”) on which Aggregate Gross
Availability is less than the greater of (i) 12.5% of the Aggregate Gross
Borrowing Base (not to exceed 12.5% of the Total Commitment) and (ii)
$20,000,000, and continuing until any later date on which Aggregate Gross
Availability shall have exceeded such threshold for at least 30 consecutive days
(a “Fixed Charge Coverage Ratio Trigger Termination Event”), the Loan Parties
will not permit the Fixed Charge Coverage Ratio, determined for any Test Period
ending on the last day of each fiscal month, to be less than 1.10 to 1.00.

 

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SECTION 6.13 Changes in Fiscal Periods. No Loan Party will change its fiscal
year or change its method of determining fiscal quarters in any way other than
switching to a calendar system.
ARTICLE VII
Events of Default and Remedies
SECTION 7.01 Events of Default. If any of the following events (any such event,
an “Event of Default”) shall occur:
(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrowers shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
Business Days or more;
(c) any representation, warranty or statement made or deemed made by or on
behalf of any Loan Party or any Subsidiary in or in connection with this
Agreement or any other Loan Document or any amendment or modification hereof or
thereof or waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any other Loan Document or any amendment or modification
hereof or thereof or waiver hereunder or thereunder, shall prove to have been
incorrect in any material respect (or, in the case of any representation,
warranty or statement qualified by materiality, in any respect) when made or
deemed made;
(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence) or 5.08 or in Article VI of this Agreement or any Loan Party shall
fail to observe or perform any covenant, condition or agreement contained in
Section 4.11 of the U.S. Security Agreement (or any similar provision of any
other Security Agreement); provided, that, with respect to any failure to
perform or observe any term, covenant or agreement contained in Section 6.12,
such failure shall only result in an Event of Default if such failure is
continuing after the earlier of (A) the Cure Expiration Date and (B) the date
upon which the Company has delivered financial statements with respect to the
applicable fiscal period without having delivered a Notice of Intent to Cure;

 

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(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those which constitute a
default under another clause of this Article) or any other Loan Document, and
such failure shall continue unremedied for a period of (i) five Business Days
after the earlier of any Loan Party’s knowledge of such breach or notice thereof
from the Administrative Agent (which notice will be given at the request of any
Lender) if such breach relates to terms or provisions of Section 5.01, 5.02
(other than Section 5.02(a)), 5.03 through 5.07, 5.09, 5.10 or 5.12 of this
Agreement or (ii) 15 Business Days after the earlier of any Loan Party’s
knowledge of such breach or notice thereof from the Administrative Agent (which
notice will be given at the request of any Lender) if such breach relates to
terms or provisions of any other Section of this Agreement or any other Loan
Document;
(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable subject to
applicable grace periods;
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or a trustee or agent on its or their behalf to
cause such Indebtedness to become due or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity, provided that
this paragraph (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary case or proceeding (including the filing of any notice of
intention in respect thereof) shall be commenced or an involuntary petition
shall be filed seeking (i) bankruptcy, liquidation, winding up, dissolution,
reorganization, examination, suspension of general operations or other relief in
respect of a Loan Party or any Subsidiary of any Loan Party or its debts, or of
a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law including any Canadian
Insolvency Laws now or hereafter in effect or (ii) the appointment of a
receiver, interim receiver, receiver and manager, liquidator, administrator,
trustee, custodian, sequestrator, conservator or similar official for any Loan
Party or any Subsidiary of any Loan Party or for a substantial part of its
assets, (iii) the composition, rescheduling, reorganization, arrangement or
readjustment of, or other relief from, or stay of proceedings to enforce, some
or all of its debts or obligations, (iv) possession, foreclosure, seizure or
retention, sale or other disposition of, or other proceedings to enforce
security over, all or any substantial part of the assets, of such Loan Party or
any Subsidiary of any Loan Party, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or more or an order or decree
approving or ordering any of the foregoing shall be entered;
(i) any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily
commence any proceeding or file any petition, pass any resolution or make an
application seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
including any Canadian Insolvency Laws now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in paragraph (h) of this Article,
(iii) apply for or consent to the appointment of a receiver, interim receiver,
receiver and manager, liquidator, assignee, trustee, custodian, sequestrator,
administrator, examiner, conservator or similar official for such Loan Party or
any Subsidiary of a Loan Party or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

 

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(j) any Loan Party or any Subsidiary of any Loan Party shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an aggregate amount in
excess of $10,000,000 shall be rendered against any Loan Party, any Subsidiary
of any Loan Party or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Loan Party or any Subsidiary
of any Loan Party to enforce any such judgment, or any Loan Party or any
Subsidiary of any Loan Party shall fail within 30 days to discharge one or more
non-monetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;
(l) (i) any Loan Party or any of its Subsidiaries shall, directly or indirectly,
terminate or cause to terminate, in whole or in part, or initiate the
termination of, in whole or in part, any Canadian Pension Plan so as to result
in any liability which could have a Material Adverse Effect; (ii) any event or
condition exists in respect of any Canadian Pension Plan which presents the risk
of liability of such Loan Party or any of its Subsidiaries which could have a
Material Adverse Effect;
(m) an ERISA Event shall have occurred that when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(n) a Change in Control shall occur;
(o) the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty, or any Guarantor shall fail to comply with any of the terms
or provisions of the Loan Guaranty to which it is a party, or any Guarantor
shall deny that it has any further liability under the Loan Guaranty to which it
is a party, or shall give notice to such effect;
(p) any Collateral Document shall for any reason fail to create a valid and
perfected security interest (with the priority required by the Intercreditor
Agreement) in any Collateral with an aggregate fair market value in excess of
$10,000,000 purported to be covered thereby, except as permitted by the terms of
any Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Collateral Document, or any Loan Party
shall fail to comply with any of the terms or provisions of any Collateral
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(q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms).
then, and in every such event (other than an event with respect to the Borrowers
described in paragraph (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrowers, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Loan Parties accrued hereunder
and under the other Loan Documents, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Loan Parties; and in case of any event with respect to
the Borrowers described in paragraph (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Loan Parties accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Loan Parties. Upon the occurrence and continuance of
any Event of Default, the Administrative Agent may, and at the request of the
Required Lenders shall, exercise any rights and remedies provided to the
Administrative Agent under the Loan Documents or at law or equity, including all
remedies provided under the UCC.
SECTION 7.02 Company’s Right to Cure.
(a) Notwithstanding anything to the contrary contained in Section 7.01, in the
event of any Event of Default under Section 6.12 and until the expiration of the
tenth Business Day after the date on which financial statements are required to
be delivered with respect to the applicable fiscal period hereunder (such date,
the “Cure Expiration Date”), the Company (or any Parent) may on one or more
occasions sell or issue Equity Interests and the Company may designate any
portion of the Net Proceeds thereof as an increase to EBITDA with respect to
such applicable month; provided that all such Net Proceeds to be so designated
(i) are actually received by the Company (including through capital contribution
of such Net Proceeds to the Company) no later than ten days after the date on
which financial statements are required to be delivered with respect to such
fiscal period hereunder and (ii) the aggregate amount of Net Proceeds that are
so designated shall not exceed 100% of the aggregate amount necessary to cure
such Event of Default under Section 6.12 for any applicable period.
(b) Upon receipt by the Company of any such designated Net Proceeds (the “Cure
Amount”), EBITDA for any period of calculation which includes the last fiscal
month of the Test Period ending immediately prior to the date on which such Cure
Amount was paid shall be increased, solely for the purpose of calculating the
Fixed Charge Coverage Ratio set forth in Section 6.12, by an amount equal to the
Cure Amount. The resulting increase to EBITDA from designation of a Cure Amount
shall not result in any adjustment to EBITDA or any other financial definition
for any purpose under this Agreement other than for purposes of calculating the
Fixed Charge Coverage Ratio under Section 6.12.

 

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(c) If, after giving effect to the foregoing recalculations, the Company shall
then be in compliance with the requirements of Section 6.12, the Company shall
be deemed to have satisfied the requirements of Section 6.12 as of the relevant
date of determination with the same effect as though there had been no failure
to comply therewith at such date, and the applicable breach or default of
Section 6.12 that had occurred shall be deemed cured for this purpose of the
Agreement.
(d) (i) In each period of six months, there shall be no more than one exercise
of a cure pursuant to Section 7.02(a) and (ii) in each period of twelve months,
there shall be no more than two exercises of a cure pursuant to Section 7.02(a);
provided that after any such exercise the Company shall for the following
12-month period (the “Initial Period”) maintain Aggregate Availability not less
than the greater of (1) 10% of the Aggregate Borrowing Base (not to exceed 10%
of the Total Commitment) and (2)(A) during September, October and November,
$15,000,000 and (B) during any other month, $20,000,000 (“Initial Period Minimum
Availability”). If at any time the Company shall fail to comply with the
requirements contained the clause (y) of the proviso in the immediately
preceding sentence, the Company shall be deemed to have been in breach of
Section 6.12 as of the end of the Test Period ending immediately prior to the
Initial Period.
(e) Any increase to EBITDA with respect to any fiscal month pursuant to
Section 7.02(a) above will apply to any 12-month period containing such fiscal
month.
(f) For the avoidance of doubt, any failure to comply with the Fixed Charge
Coverage Ratio after a Fixed Charge Coverage Ratio Commencement Date shall be
deemed to be cured upon a Fixed Charge Coverage Ratio Trigger Termination Event.
ARTICLE VIII
The Administrative Agent; Collateral Agent; Other Agents
SECTION 8.01 The Administrative Agent. Each of the Lenders and the Issuing Banks
hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf, including execution
of the other Loan Documents, and to exercise such powers as are delegated to the
Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto. Except as expressly
provided below with respect to the replacement of the Administrative Agent or
the Collateral Agent, the provisions of this Article are solely for the benefit
of the Administrative Agent and the Lenders, and the Borrowers shall not have
rights as a third party beneficiary of any of such provisions.

 

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The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Lender and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Loan Parties or any Subsidiary of a Loan
Party or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
For the purposes of holding any security granted by the Borrower or any other
Loan Party pursuant to the laws of the Province of Quebec to secure payment of
any bond issued by Borrower or any Loan Party, each Lender hereby irrevocably
appoints and authorizes the Administrative Agent to act as the person holding
the power of attorney (i.e. “fondé de pouvoir”) (in such capacity, the
“Attorney”) of the Lenders as contemplated under Article 2692 of the Civil Code
of Québec, and to enter into, to take and to hold on its behalf, and for its
benefit, any hypothec, and to exercise such powers and duties that are conferred
upon the Attorney under any hypothec. Moreover, without prejudice to such
appointment and authorization to act as the person holding the power of attorney
as aforesaid, each Lender hereby irrevocably appoints and authorizes the
Administrative Agent (in such capacity, the “Custodian”) to act as agent and
custodian for and on behalf of the Lenders to hold and be the sole registered
holder of any bond which may be issued under any hypothec, the whole
notwithstanding Section 32 of An Act respecting the special powers of legal
persons (Quebec) or any other applicable law, and to execute all related
documents. Each of the Attorney and the Custodian shall: (a) have the sole and
exclusive right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies given to
the Attorney and the Custodian (as applicable) pursuant to any hypothec, bond,
pledge, applicable laws or otherwise, (b) benefit from and be subject to all
provisions hereof with respect to the Administrative Agent mutatis mutandis,
including, without limitation, all such provisions with respect to the liability
or responsibility to and indemnification by the Lenders, and (c) be entitled to
delegate from time to time any of its powers or duties under any hypothec, bond,
or pledge on such terms and conditions as it may determine from time to time.
Any person who becomes a Lender shall, by its execution of an Assignment and
Assumption, be deemed to have consented to and confirmed: (i) the Attorney as
the person holding the power of attorney as aforesaid and to have ratified, as
of the date it becomes a Lender, all actions taken by the Attorney in such
capacity, and (ii) the Custodian as the agent and custodian as aforesaid and to
have ratified, as of the date it becomes a Lender, all actions taken by the
Custodian in such capacity. The Substitution of the Administrative Agent
pursuant to the provisions of this Article 8 shall also constitute the
substitution of the Attorney and the Custodian.

 

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The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary or believed by the Administrative Agent in good faith to be
necessary under the circumstances as provided in Section 9.02), and (c) except
as expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to any Loan Party or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02 or believed by
the Administrative Agent in good faith to be necessary) or in the absence of its
own willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrowers or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document or the occurrence of any Default,
(iv) the validity, enforceability, effectiveness, genuineness or accuracy of any
Loan Document or any other agreement, instrument or document, (v) the creation,
perfection or priority of Liens on the Collateral or the existence of the
Collateral, or (vi) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any representation, notice, request, certificate,
consent, statement, instrument, document or other writing (including any
electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed or sent or otherwise
authenticated by the proper Person. The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to be made by
the proper Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Loan Parties), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.
In determining compliance with any condition hereunder to the making of a Loan,
that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender prior to the making of such Loan.

 

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Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Banks and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, with the consent of the
Borrowers (not to be unreasonably withheld), to appoint a successor; provided
that no such consent of the Borrowers shall be required at any time during the
existence of an Event of Default. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Banks, appoint a successor Administrative Agent which shall be a commercial bank
or finance company or an Affiliate of any such commercial bank or finance
company which in each case has at least $500,000,000 in capital and is organized
or doing business under the laws of the U.S. or any state thereof. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
obligations, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from all its duties and
obligations under the Loan Documents. The fees payable by the Borrowers to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the Administrative Agent’s resignation hereunder, the provisions of this
Article, Section 2.17(c), Section 2.17(d) and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
SECTION 8.02 The Collateral Agent. Each of the Lenders and Issuing Banks hereby
irrevocably appoints the Collateral Agent as its agent hereunder and under the
other Loan Documents and authorizes the Collateral Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Collateral Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto.
The bank serving as the Collateral Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Collateral Agent, and such Lender and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Loan Parties or any Subsidiary of a Loan Party or
other Affiliate thereof as if it were not the Collateral Agent hereunder.

 

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The Collateral Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Collateral Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Collateral Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers except as expressly
set forth in this Agreement and (c) except as expressly set forth in the Loan
Documents, the Collateral Agent shall not have any duty to disclose, nor shall
be liable for the failure to disclose, any information relating to any Loan
Party or any of the Subsidiaries that is communicated to or obtained by any bank
serving as Collateral Agent or any of its Affiliates in any capacity. The
Collateral Agent shall not be liable for any action taken nor not taken by it in
the absence of its own willful misconduct. The Collateral Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or in connection with any Loan Document, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the adequacy, accuracy or completeness of any
information (whether oral or written) set forth or in connection with any Loan
Document, (v) the legality, the validity, enforceability, effectiveness,
adequacy or genuineness of any Loan Document or any other agreement, instrument
or document, (vi) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vii) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the Collateral
Agent.
The Collateral Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any representation, notice, request, certificate,
consent, statement, instrument, document or other writing or communication
believed by it to be genuine, correct and to have been authorized, signed or
sent by the proper Person. The Collateral Agent may consult with legal counsel
(who may be counsel for the Borrowers), independent accountants and other
experts selected by them, in their Permitted Discretion, and shall not be liable
for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts.
The Collateral Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the Collateral
Agent. The Collateral Agent and any such sub-agent may perform any and all their
duties and exercise their rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Collateral Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as the Collateral Agent.
The Collateral Agent may resign at any time by notifying the Administrative
Agent, the Issuing Banks and the Borrowers and the Required Lenders shall have
the right, with the consent of the Borrowers (not to be unreasonably withheld),
to appoint a successor collateral agent, who shall be the successor collateral
agent hereunder (the “Successor Collateral Agent”). If a Successor Collateral
Agent has not been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the Collateral Agent has given notice of
such resignation, then the retiring Collateral Agent may, on behalf of the
Lender Parties, appoint a Successor Collateral Agent which shall be a commercial
bank or finance company or an Affiliate of any such commercial bank or finance
company which in each case has at least $500,000,000 in capital and is organized
or doing business under the laws of the U.S. or any state thereof. Upon the
acceptance of its appointment as Successor Collateral Agent, such Person shall
succeed to and become vested with all the rights, powers, privileges,
obligations and duties of the retiring (or retired) Collateral Agent, and the
retiring Collateral Agent shall be discharged from the duties and obligations
hereunder.

 

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The fees payable by the Borrowers to the Successor Collateral Agent shall be the
same as those payable to the Collateral Agent unless otherwise agreed between
the Borrowers and the Successor Collateral Agent, as the case may be. After the
Collateral Agent’s resignation hereunder, the provisions of this Article,
Section 2.17(c), Section 2.17(d) and Section 9.03 shall continue in effect for
the benefit of such retiring Collateral Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Collateral Agent.
Each Lender and Issuing Bank hereby agrees that (a) it has requested a copy of
each Report prepared by or on behalf of the Collateral Agent; (b) the Collateral
Agent (i) does not make any representation or warranty, express or implied, as
to the completeness or accuracy of any Report or any of the information
contained therein or any inaccuracy or omission contained in or relating to a
Report or (ii) shall be liable for any information contained in any Report;
(c) the Reports are not comprehensive audits or examinations, and that any
Person performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of the Loan Parties’ personnel
and that the Collateral Agent undertakes no obligation to update, correct or
supplement the Reports; (d) it will keep all Reports confidential and strictly
for its internal use, and it will not share the Report with any Loan Party or
any other Person except as otherwise permitted pursuant to this Agreement; and
(e) without limiting the generality of any other indemnification provision
contained in this Agreement, it will pay and protect, and indemnify, defend, and
hold the Collateral Agent and any such other Person preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including reasonable attorney fees) incurred by as the direct
or indirect result of any third parties who might obtain all or part of any
Report through the indemnifying Lender.
SECTION 8.03 Appointment of Fondé de Pouvoir. The Borrowers and the Lenders
acknowledge that they have entered into an Appointment of fondé de pouvoir
Agreement dated as of December 2, 2009 providing for the appointment of the
Attorney in anticipation of the execution of this Agreement. The appointment of
the Attorney hereunder is a confirmation and ratification of the appointment of
the Attorney under the Appointment of fondé de pouvoir Agreement.
SECTION 8.04 Other Agents. The Joint Lead Arrangers shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such.

 

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ARTICLE IX
Miscellaneous
SECTION 9.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph
(b) below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by facsimile or by other electronic
transmission, as follows:

  (i)   if to any Loan Party (including each Borrower), to the Company at:

Easton-Bell Sports, Inc.
7855 Haskell Avenue, Suite 200
Van Nuys, CA 91406-1999
Attention: Mark Tripp
Facsimile No: (818) 782-9733
Easton-Bell Sports, LLC
c/o Fenway Partners
152 W. 57th Street
New York, NY 10019
Attention: Aron Schwartz
Facsimile No.: (212) 581-1205
With a copy to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Attention: Sunil Savkar
Facsimile No: (646) 728-1533

  (ii)   if to the Administrative Agent or the Swingline Lender, to:

JPMorgan Chase Bank, N.A.
3 Park Plaza, Suite 900
CA2-4950
Irvine, CA 92614
Attention: Teresa B. Keckler
Facsimile No: (949) 471-9892

With a copy to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Attention: Patrick Ryan
Facsimile No: (212) 455-2502

 

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  (iii)   if to JPMCB as an Issuing Bank, to:

JPMorgan Chase Bank, N.A.
3 Park Plaza, Suite 900
CA2-4950
Irvine, CA 92614
Attention: Teresa B. Keckler
Facsimile No: (949) 471-9892
With a copy to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Attention: Patrick Ryan
Facsimile No: (212) 455-2502
(iv) if to any other Lender, to it at its address or facsimile number set forth
in its Administrative Questionnaire.
All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile or by other electronic
transmission shall be deemed to have been given when sent, provided that if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient.
(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications (including e-mail and internet or
intranet websites) pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable Lender.
The Administrative Agent or the Company (on behalf of the Loan Parties) may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it; provided
that approval of such procedures may be limited to particular notices or
communications. All such notices and other communications (i) sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function,
as available, return e-mail or other written acknowledgement), provided that if
not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(b)(i) of notification that such notice or communication is available and
identifying the website address therefor.

 

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(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto (or, in the
case of any such change by a Lender, by notice to the Borrowers and the
Administrative Agent).
SECTION 9.02 Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Collateral Agent, any Issuing Bank or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Banks and the Lenders hereunder and under any other Loan Document are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or the issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender may have had notice or
knowledge of such Default at the time. No notice to or demand on the Borrowers
or any Loan Party in any case shall entitle the Borrowers or any Loan Party to
any other or further notice or demand in similar or other circumstances.
(b) Except as provided in the first sentence of Section 2.09(f) (with respect to
any commitment increase), neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived, amended or modified except in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Loan Parties and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders; provided
that, without limiting the provisions of Section 2.09(f), no such agreement
shall:
(i) increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 7.01) without the written consent of such Lender,
(ii) reduce or forgive the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce or forgive any interest or fees
payable hereunder, without the written consent of each Lender directly affected
thereby,
(iii) postpone any scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender directly affected thereby,
(iv) change Section 2.18(b), (c) or (e) in a manner that would alter the manner
in which payments are shared, without the written consent of each Lender
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(v) add new categories of eligible assets or make changes affecting any
Borrowing Base eligibility criteria that have the effect of increasing Aggregate
Availability, U.S. Facility Availability or Canadian Availability, without the
written consent of the Collateral Agent and the Supermajority Lenders,
(vi) change any of the provisions of this Section or the percentage set forth in
the definition of “Required Lenders” or “Supermajority Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or thereunder or make
any determination or grant any consent hereunder or thereunder, without the
written consent of each Lender,
(vii) permit the Borrowers to assign their rights or obligations hereunder,
release any Guarantor from its obligation under its Loan Guaranty (except as
otherwise permitted herein or in the other Loan Documents), or increase the
advance rates set forth in the definitions of Aggregate Borrowing Base, U.S.
Borrowing Base or Canadian Borrowing Base, without the written consent of each
Lender, or
(viii) except as provided in clauses (d) of this Section or in any Collateral
Document, release all or substantially all of the Collateral, without the
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, any Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Collateral
Agent, such Issuing Bank or the Swingline Lender, as the case may be.
(c) Notwithstanding anything to the contrary in this Section, if the
Administrative Agent and the Borrowers shall have jointly identified an obvious
error or any error or omission of a technical or immaterial nature, in each
case, in any provision of the Loan Documents, then the Administrative Agent and
the Borrowers shall be permitted to amend such provision and such amendment
shall become effective without any further action or consent of any other party
to any Loan Document if the same is not objected to in writing by the Required
Lenders within five Business Days following receipt of notice thereof. The
Administrative Agent may also amend the Commitment Schedule to reflect
assignments entered into pursuant to Section 9.04.
(d) The Lenders hereby irrevocably authorize the Administrative Agent, at its
option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (A) upon the
termination of the all Commitments, payment and satisfaction in full in cash of
all Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner satisfactory to
each affected Lender, (B) constituting property being sold or disposed of if the
Loan Party disposing of such property certifies to the Administrative Agent that
the sale or disposition is made in compliance with the terms of this Agreement
(and the Administrative Agent may rely conclusively on any such certificate,
without further inquiry) (C) constituting property leased or subleased by/to a
Loan Party under a lease or sublease, respectively, which has expired or been
terminated in a transaction permitted under this Agreement, or (D) as required
to effect any sale or other disposition of such Collateral in connection with
any exercise of remedies of the Administrative Agent and the Lenders pursuant to
Article VII. Except as provided in the preceding sentence, the Administrative
Agent will not release any Liens on Collateral without the prior written
authorization of the Required Lenders; provided that, the Administrative Agent
may in its discretion, release its Liens on Collateral valued in the aggregate
not in excess of $10,000,000 during any calendar year without the prior written
authorization of the Required Lenders. Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.

 

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(e) If, in connection with any proposed amendment, waiver, modification or
consent, the consent of the Lenders holding greater than 50% of the Aggregate
Credit Exposure is obtained, but the consent of other necessary Lenders is not
obtained (any such Lender whose consent is necessary but not obtained being
referred to herein as a “Non-Consenting Lender”), then the Borrowers may elect
to replace a Non-Consenting Lender as a Lender party to this Agreement, provided
that, concurrently with such replacement, (i) another bank or other entity which
is reasonably satisfactory to the Borrowers and the Administrative Agent shall
agree, as of such date, to purchase for cash at par the Loans and other
Obligations due to the Non-Consenting Lender pursuant to an Assignment and
Assumption in accordance with Section 9.04(b) and to become a Lender for all
purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to
such Non-Consenting Lender in same day funds on the day of such replacement
(1) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrowers hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.
(f) This Agreement will be amended to remove any Canadian Loan Party as a
Canadian Borrower (a “Removed Borrower”) upon execution and delivery by the
Company to the Administrative Agent of a written notification to such effect and
repayment in full of all Loans made to such Removed Borrower, cash
collateralization of all L/C Obligations in respect of Letters of Credit issued
for the account of such Removed Borrower and repayment in full of all other
amounts owing by such Removed Borrower under this Agreement and the other Loan
Documents (it being agreed that any such repayment shall be in accordance with
the other terms of this Agreement); provided that any such Removed Borrower may
be reinstated as a Canadian Borrower (a “Reinstated Borrower”) upon
(x) execution and delivery by such Reinstated Borrower of a joinder agreement in
form and substance reasonably satisfactory to the Administrative Agent to each
of this Agreement and the applicable Collateral Documents, providing for such
Reinstated Borrower to become a party thereto, (y) agreement and acknowledgment
by the Loan Parties and such Reinstated Borrower that the Loan Guaranty covers
the obligations of such Reinstated Borrower and (z) delivery to the
Administrative Agent of (1) corporate or other applicable resolutions, other
corporate or other applicable documents, certificates and legal opinions in
respect of such Reinstated Borrower substantially equivalent to comparable
documents delivered on the Effective Date and (2) such other documents or
information with respect thereto as the Administrative Agent shall reasonably
request.

 

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SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a) The Company shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent,
the Collateral Agent and the Lead Arrangers and each of their Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication and distribution
(including, without limitation, via the internet or through a service such as
Intralinks) of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions of the Loan Documents, (ii) all reasonable out-of-pocket
expenses incurred by any Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by the
Collateral Agent in connection with the performance of its duties pursuant to
the provisions of the Loan Documents and (iv) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, any Issuing Bank or any Lender,
including the reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, any Issuing Bank or any Lender, in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. Expenses being
reimbursed by the Borrowers under this Section include, without limiting the
generality of the foregoing, reasonable out-of-pocket costs and expenses
incurred in connection with:
(i) appraisals and insurance reviews;
(ii) field examinations and the preparation of Reports based on the fees charged
by a third party retained by the Collateral Agent or the internally allocated
fees for each Person employed by the Collateral Agent with respect to each field
examination, together with the reasonable fees and expenses associated with
collateral monitoring services performed by the Specialized Due Diligence Group
of the Administrative Agent and the Borrowers agree to modify or adjust the
computation of the Borrowing Bases which may include maintaining additional
Reserves, modifying the advance rates or modifying the eligibility criteria for
the components of the Borrowing Bases to the extent required by the Collateral
Agent as a result of any such evaluation, appraisal or monitoring;
(iii) Taxes, fees and other charges for (A) lien and title searches and title
insurance and (B) recording the filing financing statements and continuations,
and other actions to perfect, protect, and continue the Administrative Agent’s
Liens;
(iv) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take; and

 

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(v) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.
All of the foregoing reasonable out-of-pocket costs and expenses may be charged
to the Borrowers as Revolving Loans or to another deposit account, to the extent
permitted under Section 2.18(d).
(b) The Borrowers shall, jointly and severally, indemnify the Administrative
Agent, the Collateral Agent, the Lead Arrangers, the Issuing Banks and each
Lender, and the affiliates and the respective Related Parties of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
penalties, incremental taxes, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee by the Borrowers or any Loan Party or any
other Person arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any other agreement or instrument
contemplated thereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated thereby, (ii) any Loan or Letter of
Credit or the use of the proceeds therefrom (including any refusal by an Issuing
Bank to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on, at, to or from any property currently or formerly owned
or operated by any Borrower or any of their Subsidiaries, or any Environmental
Liability related in any way to any Borrower or any of their Subsidiaries,
(iv) the failure of the Borrowers to deliver to the Administrative Agent the
required receipts or other required documentary evidence with respect to a
payment made by any Loan Parties for Taxes pursuant to Section 2.17, or (v) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, tax, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the bad faith, gross negligence or willful misconduct of such
Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required to be paid
by it to the Administrative Agent, any Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section and without limiting each Borrower’s
obligation to do so, each Lender severally agrees to pay to the Administrative
Agent, such Issuing Bank or the Swingline Lender, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, such Issuing Bank or the Swingline Lender in
its capacity as such.
(d) To the fullest extent permitted by applicable law, no party shall assert,
and each hereby waives, any claim against any other party or Indemnitee (i) on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof, and (ii) for contribution or any other rights of
recovery under or related to Environmental Laws that it now or hereafter may
have by statute or otherwise against any Indemnitee.

 

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(e) All amounts due under this Section shall be payable promptly, and in no
event, later than five Business Days after receipt of written demand therefor.
SECTION 9.04 Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Banks that issues any Letter of Credit), except that (i) the
Borrowers may not assign or otherwise transfer any of their rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender (and any attempted assignment or transfer by the Borrowers
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
an Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
any Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in clause (b)(ii) below, any Lender
may assign to one or more assignees (other than the Borrowers or any Affiliate
thereof) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it) with the prior written consent (such consent not to be unreasonably
withheld) of: (A) the Company, provided that no consent of the Company shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default has occurred and is continuing, any other
assignee; provided, further, that the Borrowers shall be deemed to have
consented to any such assignment unless the Company shall object thereto by
written notice to the Administrative Agent within five Business Days after
having received notice thereof; (B) the Administrative Agent (such consent not
to be unreasonably withheld), provided that no consent of the Administrative
Agent shall be required for an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund; and (C) each Issuing Bank and the Swingline Lender (such
consent not to be unreasonably withheld).
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Facility Commitment or Loans of any Class, the amount of the Commitment or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless the
Company and the Administrative Agent otherwise consent, provided that no such
consent of the Borrowers shall be required if a Specified Event of Default has
occurred and is continuing;

 

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(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500, provided that assignments made pursuant to
Section 2.19(b) or Section 9.02(e) shall not require the signature of the
assigning Lender to become effective;
(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent any Tax forms required by Section 2.17(f) and an
Administrative Questionnaire in which the assigned designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Company, the Loan Parties and their Related
Parties or their respective securities) will be made available and who may
receive such information in accordance with the assignee’s compliance procedures
and applicable laws, including Federal and state securities laws; and
(E) no assignment of all or a portion of a Lender’s Canadian Facility Commitment
shall be permitted without an equivalent assignment (to the same assignor) of
the assignee’s U.S. Commitment
For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

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(iv) The Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of and
interest on the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing
Banks and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, any Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire and any Tax forms required by Section 2.17 (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register; provided that if either the assigning Lender or the
assignee shall have failed to make any payment required to be made by it
pursuant to Section 2.04, 2.05, 2.06(e) or (f), 2.07(b), 2.18(e) or 9.03(c), the
Administrative Agent shall have no obligation to accept such Assignment and
Assumption and record the information therein in the Register unless and until
such payment shall have been made in full, together with all accrued interest
thereon. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrowers, the Administrative
Agent, the Issuing Banks or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Administrative Agent, the Issuing
Banks and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. For the avoidance of doubt, each Lender shall be responsible for the
indemnity under Section 2.19(b) with respect to any payments made by such Lender
to its participant(s). Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) (other than clause (v)

 

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thereof) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of and limitations of Sections 2.15, 2.16 and 2.17 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.18(e) as
though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as an agent of the Loan Parties, maintain a register on
which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each participant’s interest in the Loans or
other obligations under this Agreement (the “Participant Register”). The entries
in the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.
(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrowers’ prior
written consent. A Participant shall not be entitled to the benefits of
Section 2.17 unless the Borrowers and the Administrative Agent are notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers and any withholding Agent, to comply with
Section 2.17(f) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to any central bank or a Federal Reserve Bank and this Section shall
not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
SECTION 9.05 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

 

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SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent or the syndication of the Loans and Commitments
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile or by other electronic transmission shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07 Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 Right of Setoff. If a Specified Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrowers or such Guarantor against any of and all the Secured Obligations held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under the Loan Documents and although such obligations may be unmatured;
provided that, no such Lender shall exercise any right of set off prior to the
date on which the Loans are declared to be immediately due and payable, without
the prior consent of the Administrative Agent. The applicable Lender shall
notify the Borrowers and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such set-off or application under
this Section. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process. (a) The
Loan Documents (other than those containing a contrary express choice of law
provision) shall be construed in accordance with and governed by the law of the
State of New York, but giving effect to federal laws applicable to national
banks.
(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the non-exclusive jurisdiction of the Supreme Court of the
State of New York, the courts of the United States for the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
other party or its properties in the courts of any jurisdiction.

 

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(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

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SECTION 9.12 Confidentiality. Each of the Administrative Agent, the Collateral
Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ respective directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, provided, unless specifically prohibited by applicable law or court
order, each Lender shall make reasonable efforts to notify the Company of any
request by any regulatory authority or representative thereof for disclosure of
any such confidential information prior to disclosure of such confidential
information, (c) to the extent required by any Requirement of Law or by any
subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (ii) any
central bank, Federal Reserve Bank or any other governmental entity to which a
Lender has pledged a security interest in all or any portion of its rights
hereunder pursuant to Section 9.04(d) or (iii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Loan Parties and their obligations, (g) with the consent of the Borrowers or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section by such Person or (ii) becomes available to
the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender
on a non-confidential basis from a source other than a Loan Party that is not to
the knowledge of the receiving party in violation of any confidentiality
restrictions. For the purposes of this Section, “Information” means all
information received from a Loan Party or its representatives relating to the
Loan Parties, the Subsidiaries or their respective businesses, other than any
such information that is available to the Administrative Agent, the Collateral
Agent, any Issuing Bank or any Lender on a non-confidential basis prior to
disclosure by a Loan Party or its representative. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN THIS SECTION 9.12
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE COMPANY AND ITS AFFILIATES AND THEIR RELATED PARTIES
OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE
PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL
HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES
AND APPLICABLE LAW, INCLUDING FEDERAL, PROVINCIAL, TERRITORIAL AND STATE
SECURITIES LAWS AND THE TERMS HEREOF.
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED
IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION
THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS
COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL, PROVINCIAL,
TERRITORIAL AND STATE SECURITIES LAWS AND THE TERMS HEREOF.

 

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SECTION 9.13 Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. Each Lender
hereby represents that it is not relying on or looking to any margin stock for
the repayment of the Borrowings provided for herein. Anything contained in this
Agreement to the contrary notwithstanding, no Issuing Banks nor any Lender shall
be obligated to extend credit to the Borrowers in violation of any Requirement
of Law.
SECTION 9.14 USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies the Borrowers, which information includes the names and
addresses of the Borrowers and other information that will allow such Lender to
identify the Borrowers in accordance with the Act.
SECTION 9.15 Disclosure. Each Loan Party and each Lender hereby acknowledges and
agrees that the Administrative Agent and/or its Affiliates from time to time may
hold investments in, make other loans to or have other relationships with any of
the Loan Parties and their respective Affiliates.
SECTION 9.16 No Fiduciary Relationship. The Loan Parties agree that in
connection with all aspects of the transactions contemplated hereby and any
communications in connection therewith, the Loan Parties, the Subsidiaries and
their Affiliates, on the one hand, and the Administrative Agent, the Collateral
Agent, the Issuing Banks, the Lenders and their Affiliates, on the other hand,
will have a business relationship that does not create, by implication or
otherwise, any fiduciary duty on the part of the Administrative Agent, the
Collateral Agent, the Lenders, the Issuing Banks or their Affiliates, and no
such duty will be deemed to have arisen in connection with any such transactions
or communications.
SECTION 9.17 Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Lenders, in assets which, in accordance with
Article 9 of the UCC or any other applicable law can be perfected only by
possession. Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver such Collateral to the Administrative Agent or otherwise deal with
such Collateral in accordance with the Administrative Agent’s instructions.

 

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SECTION 9.18 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.19 Intercreditor Arrangements. Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Administrative Agent
pursuant to this Agreement or any other Loan Document and the exercise of any
right or remedy by the Administrative Agent hereunder or under any other Loan
Document are subject to the provisions of the Intercreditor Agreement. In the
event of any conflict between the terms of the Intercreditor Agreement, this
Agreement and any other Loan Document, the terms of the Intercreditor Agreement
shall govern and control with respect to any right or remedy. Without limiting
the generality of the foregoing, and notwithstanding anything herein to the
contrary, all rights and remedies of the Administrative Agent (and the Lenders)
with respect to the Note Priority Collateral shall be subject to the terms of
the Intercreditor Agreement, and until the Note Payment Date, any obligation of
any Borrower and any Guarantor hereunder or under any other Loan Document with
respect to the delivery or control of any Note Priority Collateral, the novation
of any lien on any certificate of title, bill of lading or other document, the
giving of any notice to any bailee or other Person, the provision of voting
rights or the obtaining of any consent of any Person, in each case in connection
with any Note Priority Collateral, shall be deemed to be satisfied if such
Borrower or such Guarantor, as applicable, complies with the requirements of the
similar provision of the applicable Note Document. Until the Note Obligations
Payment Date, the delivery of any Note Priority Collateral to the Note
Representative pursuant to the Note Documents shall satisfy any delivery
requirement hereunder or under any other Loan Document.
SECTION 9.20 Judgment Currency Conversion.
(a) The obligations of the Loan Parties hereunder and under the other Loan
Documents to make payments in Dollars or in Canadian Dollars, as the case may be
(the “Obligation Currency”), shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Administrative Agent or a
Lender of the full amount of the Obligation Currency expressed to be payable to
the Administrative Agent or Lender under this Agreement or the other Loan
Documents. If, for the purpose of obtaining or enforcing judgment against any
Loan Party in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in the Obligation Currency, the conversion shall be made, at the Administrative
Agent’s quoted rate of exchange prevailing, in each case, as of the date
immediately preceding the day on which the judgment is given (such Business Day
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(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Loan Parties each covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid 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 Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date. Any amount due from a Loan Party under this Section 9.20(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) For purposes of determining the prevailing rate of exchange, such amounts
shall include any premium and costs payable in connection with the purchase of
the Obligation Currency.
ARTICLE X
Loan Guaranty
SECTION 10.01 Guaranty. Each U.S. Guarantor hereby agrees that it is jointly and
severally liable for, and, as primary obligor and not merely as surety,
absolutely and unconditionally guarantees to the Lenders the prompt payment when
due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all out-of-pocket costs and
expenses including, without limitation, all court costs and attorneys’ and
paralegals’ fees and expenses paid or incurred by the Administrative Agent, the
Collateral Agent, the Issuing Banks and the Lenders in endeavoring to collect
all or any part of the Secured Obligations from, or in prosecuting any action
against, any Borrower or any Guarantor of all or any part of the Secured
Obligations (such costs and expenses, together with the Secured Obligations,
collectively the “ U.S. Guaranteed Obligations”). Each Guarantor hereby agrees
that it is jointly and severally liable for, and, as primary obligor and not
merely as surety, absolutely and unconditionally guarantees to the Lenders the
prompt payment when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, of the Canadian Secured Obligations and,
and all out-of-pocket costs and expenses including, without limitation, all
court costs and attorneys’ and paralegals’ fees and expenses paid or incurred by
the Administrative Agent, the Collateral Agent, the Issuing Banks and the
Lenders in endeavoring to collect all or any part of the Canadian Secured
Obligations from, or in prosecuting any action against, any Borrower or any
Guarantor of all or any part of the Canadian Secured Obligations (such costs and
expenses, together with the Canadian Secured Obligations, collectively the
“Canadian Guaranteed Obligations”, together with the U.S. Guaranteed
Obligations, the “Guaranteed Obligations”). Each Guarantor further agrees that
the Guaranteed Obligations may be extended or renewed in whole or in part
without notice to or further assent from it, and that it remains bound upon its
guarantee notwithstanding any such extension or renewal. All terms of this Loan
Guaranty apply to and may be enforced by or on behalf of any domestic or foreign
branch or Affiliate of any Lender that extended any portion of the Guaranteed
Obligations.

 

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SECTION 10.02 Guaranty of Payment. This Loan Guaranty is a guaranty of payment
and not of collection. Each Guarantor waives any right to require the
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender to
sue any Borrower, any Guarantor, any other guarantor, or any other person
obligated for all or any part of the Guaranteed Obligations (each, an “Obligated
Party”), or otherwise to enforce its payment against any collateral securing all
or any part of the Guaranteed Obligations.
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty (a) Except as
otherwise provided for herein, the obligations of each Guarantor hereunder are
unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including: (i) any claim of waiver,
release, extension, renewal, settlement, surrender, alteration, or compromise of
any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any
change in the corporate existence, structure or ownership of any Borrower or any
other guarantor of or other person liable for any of the Guaranteed Obligations;
(iii) any insolvency, bankruptcy, reorganization or other similar proceeding
affecting any Obligated Party, or their assets or any resulting release or
discharge of any obligation of any Obligated Party; or (iv) the existence of any
claim, setoff or other rights which any Guarantor may have at any time against
any Obligated Party, the Administrative Agent, the Collateral Agent, any Issuing
Bank, any Lender, or any other person, whether in connection herewith or in any
unrelated transactions.
(b) The obligations of each Guarantor hereunder are not subject to any defense
or setoff, counterclaim, recoupment, or termination whatsoever by reason of the
invalidity, illegality, or unenforceability of any of the Guaranteed Obligations
or otherwise, or any provision of applicable law or regulation purporting to
prohibit payment by any Obligated Party, of the Guaranteed Obligations or any
part thereof.
(c) Further, the obligations of any Guarantor hereunder are not discharged or
impaired or otherwise affected by: (i) the failure of the Administrative Agent,
the Collateral Agent, any Issuing Bank or any Lender to assert any claim or
demand or to enforce any remedy with respect to all or any part of the
Guaranteed Obligations; (ii) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection, or invalidity of any indirect or direct security for
the obligations of any Borrower for all or any part of the Guaranteed
Obligations or any obligations of any other guarantor of or other person liable
for any of the Guaranteed Obligations; (iv) any action or failure to act by the
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender with
respect to any collateral securing any part of the Guaranteed Obligations; or
(v) any default, failure or delay, willful or otherwise, in the payment or
performance of any of the Guaranteed Obligations, or any other circumstance,
act, omission or delay that might in any manner or to any extent vary the risk
of such Guarantor or that would otherwise operate as a discharge of any
Guarantor as a matter of law or equity (other than the indefeasible payment in
full in cash of the Guaranteed Obligations).

 

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SECTION 10.04 Defenses Waived. To the fullest extent permitted by applicable
law, each Guarantor hereby waives any defense based on or arising out of any
defense of any Borrower or any Guarantor or the unenforceability of all or any
part of the Guaranteed Obligations from any cause, or the cessation from any
cause of the liability of any Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Obligated Party,
or any other person. The Administrative Agent may, at its election, foreclose on
any Collateral held by it by one or more judicial or nonjudicial sales, accept
an assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Guarantor under this
Loan Guaranty except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash. To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against any Obligated Party or any security.
SECTION 10.05 Rights of Subrogation. Any right, claim or cause of action,
including, without limitation, a claim of subrogation, contribution or
indemnification of any Guarantor against any Obligated Party, or any collateral,
shall be subordinated in right of payment to the Obligations until the Loan
Parties and the Guarantors have fully performed all their obligations to the
Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders.
SECTION 10.06 Reinstatement; Stay of Acceleration. If at any time any payment of
any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Borrower or otherwise, each Guarantor’s obligations under this Loan Guaranty
with respect to that payment shall be reinstated at such time as though the
payment had not been made and whether or not the Administrative Agent, the
Collateral Agent, the Issuing Banks and the Lenders are in possession of this
Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of any
Borrower, all such amounts otherwise subject to acceleration under the terms of
any agreement relating to the Guaranteed Obligations shall nonetheless be
payable by the Guarantors forthwith on demand by the Lender.
SECTION 10.07 Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrowers’ financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks that each
Guarantor assumes and incurs under this Loan Guaranty, and agrees that neither
the Administrative Agent, the Collateral Agent, any Issuing Bank nor any Lender
shall have any duty to advise any Guarantor of information known to it regarding
those circumstances or risks.

 

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SECTION 10.08 Taxes.
All payments of the Guaranteed Obligations will be made by each Guarantor free
and clear of and without deduction or withholding for any Indemnified Taxes or
Other Taxes; provided that if any Guarantor shall be required to deduct or
withhold any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Guarantor shall make such deductions and
(iii) such Guarantor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
SECTION 10.09 Maximum Liability. The provisions of this Loan Guaranty are
severable, and in any action or proceeding involving any corporate law, or any
provincial, state, federal or foreign bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of any
Guarantor under this Loan Guaranty would otherwise be held or determined to be
void, voidable, avoidable, invalid or unenforceable on account of the amount of
such Guarantor’s liability under this Loan Guaranty, then, notwithstanding any
other provision of this Loan Guaranty to the contrary, the amount of such
liability shall, without any further action by the Guarantors or the Lenders, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant Guarantor’s “Maximum Liability”). This
Section with respect to the Maximum Liability of each Guarantor is intended
solely to preserve the rights of the Lenders to the maximum extent not subject
to avoidance under applicable law, and no Guarantor nor any other person or
entity shall have any right or claim under this Section with respect to such
Maximum Liability, except to the extent necessary so that the obligations of any
Guarantor hereunder shall not be rendered voidable under applicable law. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Liability of each Guarantor without impairing this
Loan Guaranty or affecting the rights and remedies of the Lenders hereunder,
provided that, nothing in this sentence shall be construed to increase any
Guarantor’s obligations hereunder beyond its Maximum Liability.

 

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SECTION 10.10 Contribution. In the event any Guarantor (a “Paying Guarantor”)
shall make any payment or payments under this Loan Guaranty or shall suffer any
loss as a result of any realization upon any collateral granted by it to secure
its obligations under this Loan Guaranty, each other Guarantor (each a
“Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount
equal to such Non-Paying Guarantor’s “Applicable Percentage” of such payment or
payments made, or losses suffered, by such Paying Guarantor. For purposes of
this Article X, each Non-Paying Guarantor’s “Applicable Percentage” with respect
to any such payment or loss by a Paying Guarantor shall be determined as of the
date on which such payment or loss was made by reference to the ratio of
(i) such Non-Paying Guarantor’s Maximum Liability as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Borrowers after the Effective Date (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrowers after the Effective Date (whether by loan, capital
infusion or by other means). Nothing in this provision shall affect any
Guarantor’s several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor’s Maximum Liability). Each of the Guarantors
covenants and agrees that its right to receive any contribution under this Loan
Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of
payment to the payment in full in cash of the Guaranteed Obligations. This
provision is for the benefit of both the Administrative Agent, the Collateral
Agent, the Issuing Banks, the Lenders and the Guarantors and may be enforced by
any one, or more, or all of them in accordance with the terms hereof.
SECTION 10.11 Liability Cumulative. The liability of each Loan Party as a
Guarantor under this Article X is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Administrative Agent, the Collateral
Agent, the Issuing Banks and the Lenders under this Agreement and the other Loan
Documents to which such Loan Party is a party or in respect of any obligations
or liabilities of the other Loan Parties, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.

 

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

            EASTON-BELL SPORTS, INC.
      By           Name:           Title:      

            4078624 CANADA INC.
      By           Name:           Title:      

            ALL-AMERICAN SPORTS (CANADA) LTD.
      By           Name:           Title:      

            BELL SPORTS CANADA INC.
      By           Name:           Title:      

            EASTON SPORTS CANADA, INC.
      By           Name:           Title:      

 

155

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            OTHER LOAN PARTIES:

[NAME OF LOAN PARTY]
      By           Name:           Title:      

            JPMORGAN CHASE BANK, N.A., individually, as
Administrative Agent, Collateral Agent, Issuing Bank
and Swingline Lender
      By           Name:           Title:      

            [OTHER BANKS]
      By           Name:           Title:      

 

156

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EXHIBIT D
[FORM OF]
COMPLIANCE CERTIFICATE
This Compliance Certificate (the “Certificate”) is furnished pursuant to that
certain Revolving Credit Agreement, dated as of December 3, 2009 (as amended,
modified, renewed or extended from time to time, the “Credit Agreement”), among
EASTON-BELL SPORTS, INC. (the “Company”), 4078624 CANADA INC., ALL-AMERICAN
SPORTS (CANADA) LTD., BELL SPORTS CANADA INC., and EASTON SPORTS CANADA, INC.
(the “Canadian Borrowers”, and together with the Company, the “Borrowers”), the
Guarantors from time to time parties thereto, the Lenders party thereto and
JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”). Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed
thereto in the Agreement.
1. I am the duly elected, qualified and acting Chief Financial Officer of the
Company.
2. I have reviewed and am familiar with the contents of this Certificate.
3. I have reviewed the terms of the Credit Agreement and the other Loan
Documents and have made or caused to be made under my supervision, a detailed
review of the transactions and conditions of the Company and its Subsidiaries
during the accounting period covered by the financial statements attached hereto
as Attachment 1 (the “Financial Statements”).
4. [The Financial Statements fairly present in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.]1
5. No Default has occurred during or at the end of the accounting period covered
by the Financial Statements [except as set forth below].2
6. [Attached hereto as Attachment 2 are reasonably detailed calculations of the
Total Leverage Ratio for the most recently ended four fiscal quarter period of
the Company and its consolidated Subsidiaries.]3
7. [Attached hereto as Attachment 3 are the reasonably detailed calculations
demonstrating compliance with the covenant set forth in Section 6.12 of the
Credit Agreement.]4
 

      1   To be inserted in the case of Financial Statements delivered pursuant
to Section 5.01(b) or (c) of the Credit Agreement.   2   To the extent a
Default/Event of Default has occurred, the details thereof and any action taken
or proposed to be taken with respect thereto must be provided.   3   To be
inserted in the case of Financial Statements delivered pursuant to
Section 5.01(a) or (b) of the Credit Agreement.   4   Insert if Section 6.12 is
applicable.

 

 

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

 

8. No change in GAAP or in the application thereof that applies to the Company
or any of its consolidated Subsidiaries has occurred since the later of
January 3, 2009 and the date of the prior Certificate delivered pursuant to
Section 5.01(d) of the Credit Agreement.5
 

      5   To the extent a change has occurred, the effect of such change on the
financial statements accompanying this certificate must be specified.

 

 

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

 

IN WITNESS WHEREOF, I have executed this Certificate this  _____  day of
 _______, 20  ___.

                       Name:           Title:      

 

 

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

 

Attachment 1
to Compliance Certificate
[Attach Financial Statements]

 

 

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Attachment 2
to Compliance Certificate
The information described herein is as of                       ___,  _____, and
pertains to the period from                       ___,  _____  to
                      ___, _______.
[Set forth Covenant Calculations]

 

 

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SCHEDULE 1.01A
Schedule 1.01A
Commitments Schedule

                                              Canadian Sub   Lender   Bookrunner
  Agent Title   Allocation     Tranche  
JPMorgan Chase Bank, N.A.
  Joint Lead Arranger   Administrative Agent     37,131,578.95      
5,368,421.05  
Wells Fargo Capital Finance, LLC
  Joint Lead Arranger   Co-Syndication Agent     37,131,578.95      
5,368,421.05  
Bank of America, N.A.
      Co-Syndication Agent     34,947,368.42       5,052,631.58  
US Bank National Association
      Documentation Agent     34,947,368.42       5,052,631.58  
General Electric Capital Corporation
            17,473,684.21       2,526,315.79  
PNC Bank, National Association
            17,473,684.21       2,526,315.79  
Union Bank, N.A.
            17,473,684.21       2,526,315.79  
Capital One Leverage Finance Corp.
            12,500,000.00       —  
Siemens Financial Services, Inc.
            10,921,052.63       1,578,947.37  
 
                   
Totals
            220,000,000.00       30,000,000.00