Exhibit 10.1

EXECUTION VERSION

SUPPLEMENTAL SENIOR REVOLVING FACILITY CREDIT AGREEMENT

dated as of

October 4, 2013

among

TIM HORTONS INC.

as Borrower

and

THE LENDERS FROM TIME TO TIME PARTIES HERETO

as Lenders

and

ROYAL BANK OF CANADA

as Administrative Agent

and

THE TORONTO-DOMINION BANK AND THE BANK OF NOVA SCOTIA

as Co-Syndication Agents

and

BANK OF MONTREAL

as Documentation Agent

and

RBC CAPITAL MARKETS

as Sole Lead Arranger and Bookrunner

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TABLE OF CONTENTS

 

ARTICLE 1 DEFINITIONS

     1     

1.1

  Defined Terms      1     

1.2

  Classification of Loans and Borrowings      19     

1.3

  Terms Generally      19     

1.4

  Accounting Terms; GAAP      20     

1.5

  Time      20     

1.6

  Permitted Liens      20     

1.7

  Limitation Regarding Subsidiaries      20   

ARTICLE 2 REVOLVING CREDIT

     21     

2.1

  Commitments      21     

2.2

  Loans and Borrowings      21     

2.3

  Requests for Borrowings      22     

2.4

  Funding of Borrowings      23     

2.5

  Interest and Acceptance Fees      24     

2.6

  Termination and Reduction of Commitments      25     

2.7

  Repayment of Loans      25     

2.8

  Evidence of Debt      26     

2.9

  Prepayments      27     

2.10

  Fees      27     

2.11

  Bankers’ Acceptances      28     

2.12

  Alternate Rate of Interest      30     

2.13

  Increased Costs; Illegality      31     

2.14

  Break Funding Payments      32     

2.15

  Taxes      33     

2.16

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs      34     

2.17

  Currency Indemnity      36     

2.18

  [Reserved]      36     

2.19

  [Reserved]      36     

2.20

  Mitigation Obligations; Replacement of Lenders      36     

2.21

  Defaulting Lenders      37   

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

     38     

3.1

  Organization; Powers      38     

3.2

  Authorization; Enforceability      38     

3.3

  Governmental Approvals; No Conflicts      38     

3.4

  Financial Condition      38     

3.5

  Litigation and Contingent Obligations      39     

3.6

  Compliance with Laws      39     

3.7

  Taxes      39     

3.8

  Pension Plans      39     

3.9

  Defaults      39     

3.10

  Environmental Matters      39     

3.11

  Anti-Money Laundering      40   

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ARTICLE 4 CONDITIONS

     40     

4.1

  Closing Date      40     

4.2

  Each Credit Event      42   

ARTICLE 5 AFFIRMATIVE COVENANTS

     43     

5.1

  Financial Statements and Other Information      43     

5.2

  Existence; Conduct of Business      44     

5.3

  Payment of Tax Obligations      44     

5.4

  Maintenance of Properties      44     

5.5

  Books and Records; Inspection Rights      45     

5.6

  Compliance with Laws      45     

5.7

  Use of Proceeds      45     

5.8

  Insurance      45     

5.9

  Subsidiary Guarantees      45     

5.10

  Financial Covenants      46     

5.11

  KYC Documentation and Anti-Money Laundering      46   

ARTICLE 6 NEGATIVE COVENANTS

     46     

6.1

  Indebtedness      46     

6.2

  Liens      47     

6.3

  Merger; Dissolution; Asset Sales      50     

6.4

  Business      51     

6.5

  Investments and Acquisitions      51     

6.6

  Restricted Payments      51     

6.7

  Transactions with Affiliates      52     

6.8

  Restrictive Agreements      52   

ARTICLE 7 EVENTS OF DEFAULT

     52     

7.1

  Events of Default      52   

ARTICLE 8 THE ADMINISTRATIVE AGENT

     56     

8.1

  Appointment of Administrative Agent      56     

8.2

  Limitation of Duties of Administrative Agent      56     

8.3

  Lack of Reliance on the Administrative Agent      56     

8.4

  Certain Rights of the Administrative Agent      56     

8.5

  Reliance by Administrative Agent      57     

8.6

  Indemnification of Administrative Agent      57     

8.7

  Administrative Agent in their Individual Capacities      57     

8.8

  May Treat Lender as Owner      57     

8.9

  Successor Administrative Agent      58   

ARTICLE 9 MISCELLANEOUS

     58     

9.1

  Notices      58     

9.2

  Waivers; Amendments      59     

9.3

  Expenses; Indemnity; Damage Waiver      60     

9.4

  Successors and Assigns      62     

9.5

  Survival      65     

9.6

  Counterparts; Integration; Effectiveness      65     

9.7

  Severability      65     

9.8

  Right of Set Off      65   

 

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  9.9   Governing Law; Jurisdiction; Consent to Service of Process      66     

9.10

  WAIVER OF JURY TRIAL      66     

9.11

  Headings      66     

9.12

  Confidentiality      66   

 

Exhibits:            

Exhibit A

     -       Form of Borrowing Request for Revolving Credit

Exhibit B

     -       Form of Assignment and Assumption      

Annex 1 – Standard Terms & Conditions

Exhibit C

     -       Compliance Certificate

Exhibit D

     -       Reserved

Exhibit E

     -       Reserved

Exhibit F

     -       Form of Guarantee for U.S. Subsidiaries

Exhibit G

     -       Form of Guarantee for Canadian Subsidiaries Schedules:      

Schedule A

     -       Commitments

Schedule B

     -       Reserved

Schedule C

     -       Reserved

Schedule D

     -       Excluded Swap Agreements

Schedule 3.5

     -       Exceptions to Representation 3.5 – Litigation

Section 3.11

     -       Anti-Money Laundering

Schedule 6.1

     -       Existing Indebtedness

Schedule 6.2

     -       Permitted Liens

 

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SUPPLEMENTAL SENIOR REVOLVING FACILITY CREDIT AGREEMENT

THIS CREDIT AGREEMENT is dated as of October 4, 2013 and is entered into among
TIM HORTONS INC., as Borrower, the Lenders from time to time parties hereto as
Lenders and ROYAL BANK OF CANADA, as Administrative Agent.

RECITALS

A. TIM HORTONS INC. (the “Borrower”) has requested the Revolving Credit
described herein and the Lenders have agreed to provide same upon and subject to
the terms and conditions set out in this Agreement;

NOW THEREFORE, for good and valuable consideration, the parties hereto agree as
follows:

ARTICLE 1

DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

“Acceptance Fee” means a fee payable by the Borrower to the Administrative Agent
for the account of a Lender in Canadian Dollars with respect to the acceptance
of a B/A or the making of a B/A Equivalent Loan, calculated on the face amount
of the B/A or the B/A Equivalent Loan at a rate per annum equal to the
Applicable Margin from time to time in effect on the basis of the actual number
of days in the applicable Contract Period (including the date of acceptance and
excluding the date of maturity) and a year of 365 or 366 days, (it being agreed
that the Applicable Margin in respect of a B/A Equivalent Loan is equivalent to
the Applicable Margin otherwise applicable to the B/A Borrowing which has been
replaced by the making of such B/A Equivalent Loan pursuant to Section 2.11(h)).

“Accordion Amount” has the meaning ascribed thereto in Section 2.1(b).

“Acquisition” means any transaction, or any series of related transactions,
consummated after the Closing Date, by which any Credit Party directly or
indirectly, by means of a take-over bid, tender offer, amalgamation, merger,
purchase of assets or otherwise (a) acquires any business or all or
substantially all of the assets of any Person engaged in any business,
(b) acquires control of securities of a Person engaged in a business
representing more than 50% of the ordinary voting power for the election of
directors or other governing position if the business affairs of such Person are
managed by a board of directors or other governing body, (c) acquires control of
more than 50% of the ownership interest in any Person engaged in any business
that is not managed by a board of directors or other governing body, or
(d) otherwise acquires Control of a Person engaged in a business.

“Administrative Agent” means Royal Bank of Canada, in its capacity as
administrative agent in respect of the Revolving Credit for the Lenders
hereunder, or any successor Administrative Agent appointed pursuant to
Section 8.9.

“Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.

“Advertising Entity” means (i) The Tim’s National Advertising Program, Inc. and
Tim Hortons Advertising and Promotion Fund (Canada) Inc. or any successor or
successors thereto which performs substantially the same function, and (ii) any
other Person acceptable to the Required Lenders which performs substantially the
same function (and only that function) as the Persons listed in paragraph (i).

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“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with, such Person.

“Agreement” means this credit agreement, as the same may from time to time be
amended, restated, modified or supplemented.

“Applicable Lender” means, with respect to any Borrowing of Revolving Loans,
each Revolving Credit Lender.

“Applicable Leverage Ratio” means, at any time, the ratio of Consolidated Total
Debt to Consolidated EBITDA at such time.

“Applicable Margin” means, on any date, the applicable rate per annum, expressed
as a percentage, set out in the relevant column and row of the table below,
determined by reference to the Applicable Leverage Ratio as set forth below,
provided that, so long as the Borrower maintains a rating of its Rated Debt from
at least one (1) of Moody’s, S&P and DBRS, the Applicable Margin will be
determined by reference to such rating or ratings on such date for the Rated
Debt.

 

Applicable Leverage Ratio

   Rating
(Moody’s,
S&P, DBRS)    Standby Fee
(in basis
points)      Base Rate/Prime
Rate Applicable
Margin (in basis
points)      LIBO/BA
Applicable
Margin
(in  basis points)  

Less than 0.50:1.00

   >A2, A or A      17.50         0.00         87.50   

Equal to or greater than 0.50:1.00 but less than 0.75:1.00

   >A3, A-or A
(low)      20.00         0.00         100.00   

Equal to or greater than 0.75:1.00 but less than 1.00:1.00

   >Baa1,
BBB+ or
BBB (high)      24.00         20.0         120.00   

Equal to or greater than 1.00:1.00 but less than 1.50:1.00

   >Baa2, BBB
or BBB      29.00         45.0         145.00   

Equal to or greater than 1.50:1.00

   < Baa2, BBB
or BBB      34.00         70.0         170.00   

For so long as the Applicable Margins are determined by reference to the
Applicable Leverage Ratio, the Applicable Margins will change (to the extent
necessary, if any) on each date on which the financial statements of the
Borrower are publicly filed and the certificate of the Borrower is delivered to
the Administrative Agent pursuant to Section 5.1 to reflect any change in the
Applicable Leverage Ratio effective as of the date of such financial statements,
based upon the financial statements for the immediately preceding Rolling
Period, or if such day is not a Business Day, then the first Business Day
thereafter. Notwithstanding the foregoing, if at any time the Borrower fails to
publicly file its financial statements or deliver to the Administrative Agent
the certificate of the Borrower as required by Section 5.1 on or before the date
required pursuant to Section 5.1 (without regard to grace periods), the
Applicable Margins will be the highest margins provided for in the above grid
from the date such financial statements are due pursuant to Section 5.1 (without
regard to grace periods) through the date all financial statements to be
provided pursuant to Section 5.1 have been publicly filed and all certificates
that are then due pursuant to Section 5.1 have been delivered to the
Administrative Agent. At any time when the Applicable Margins are determined by
reference to the debt rating or ratings for the Rated Debt, (i) if there are two
ratings and the ratings established or deemed to have been established for the
Rated Debt shall fall within different categories, the Applicable Margins shall
be based on the higher of the two applicable ratings, unless one of the two
ratings is two or more categories lower than the other, in which

 

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case the Applicable Margins shall be determined by reference to the category
next below that of the higher of the two ratings. If there are three ratings,
one of which is higher or lower than the other two, such higher or lower rating
shall be disregarded. If there are three ratings and each are at a different
level, the Applicable Margins shall be determined by reference to the middle of
the three ratings; and (ii) if the rating or ratings established or deemed to
have been established for the Rated Debt shall be changed (other than as a
result of a change in the rating system of Moody’s, S&P or DBRS), such change
shall be effective as of the date on which it is first announced by the
applicable rating agency, irrespective of when notice of such change shall have
been furnished to the Administrative Agent and the Lenders pursuant to
Section 5.1 or otherwise. Each change in the Applicable Margin shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change,
provided that no such change shall affect the Applicable Margin for any
outstanding Bankers’ Acceptance until the end of the then-current Contract
Period for such Bankers’ Acceptance. If the rating system of Moody’s, S&P or
DBRS shall change, or if any such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Margins shall be
determined in accordance with the foregoing by reference to the rating of the
Rated Debt by those of Moody’s, S&P and DBRS whose rating system has not changed
and who continue to be in the business of rating corporate debt obligations or,
if there is no such rating of the Rated Debt by any of Moody’s, S&P and DBRS,
then the Applicable Margins shall be determined by reference to the Applicable
Leverage Ratio of the Borrower. If at any time after the time when the
Applicable Margins are determined by reference to the debt rating or ratings for
the Rated Debt, the Borrower ceases to have a rating of its Rated Debt from at
least one (1) of S&P, Moody’s and DBRS, the Applicable Margin shall be
determined by reference to the Applicable Leverage Ratio.

“Applicable Percentage” means, with respect to any Revolving Credit Lender, the
percentage of the total Revolving Credit Commitments represented by such
Lender’s Revolving Credit Commitment; provided that in the case of Section 2.21
when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the
percentage of the total Commitments (disregarding any Defaulting Lender’s
Commitment) represented by such Lender’s Commitment. If any Commitments have
terminated or expired, the Applicable Percentages shall be determined based upon
the Commitments most recently in effect, after giving effect to any assignments
and to any Lender’s status as a Defaulting Lender at the time of determination.

“Approved Fund” means (a) a CLO, and (b) with respect to any Lender that is a
fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans or similar extensions of credit and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.4), and accepted by the Administrative Agent, in the form of
Exhibit B or any other form approved by the Administrative Agent.

“Authorization” means, with respect to any Person, any authorization, order,
permit, approval, grant, licence, consent, right, franchise, privilege,
certificate, judgment, writ, injunction, award, determination, direction,
decree, by-law, rule or regulation of any Governmental Authority having
jurisdiction over such Person, whether or not having the force of Law.

“B/A Borrowing” means a Borrowing comprised of one or more Bankers’ Acceptances
or, as applicable, B/A Equivalent Loans. For greater certainty, unless the
context requires otherwise, all provisions of this Agreement which are
applicable to Bankers’ Acceptances are also applicable, mutatis mutandis, to B/A
Equivalent Loans.

 

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“B/A Equivalent Loan” has the meaning set out in Section 2.11(h).

“B/A Exposure” means, at any time, the sum of the aggregate outstanding amounts
of all outstanding B/As. The B/A Exposure of any Revolving Credit Lender at any
time shall be its Applicable Percentage of the total B/A Exposure under the
Revolving Credit at such time.

“Bankers’ Acceptance” and “B/A” mean an instrument denominated in Canadian
Dollars, drawn by the Borrower and accepted by a Revolving Credit Lender in
accordance with this Agreement, and includes a “depository note” within the
meaning of the Depository Bills and Notes Act (Canada) and a bill of exchange
within the meaning of the Bills of Exchange Act (Canada).

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within Canada or the United States or from the
enforcement of judgments or writs of attachment on its assets or permit such
Person (or such Governmental Authority or instrumentality) to reject, repudiate,
disavow or disaffirm any contracts or agreements made by such Person.

“Base Rate” means, on any day, the annual rate of interest equal to the greater
of (i) the annual rate of interest announced by the Administrative Agent and in
effect as its base rate at its principal office in Toronto, Ontario on such day
for determining interest rates on U.S. Dollar-denominated commercial loans made
in Canada, (ii) the interest rate per annum equal to 0.50% per annum above the
Federal Funds Effective Rate, and (iii) the interest rate per annum equal to the
LIBO Rate applicable to U.S. Dollar borrowings for a one month interest period
on such day (or if such day is not a Business Day, the immediately preceding
Business Day) plus 1.00%.

“Base Rate Borrowing” means a Borrowing comprised of one or more Base Rate
Loans.

“Base Rate Loan” means a Loan denominated in U.S. Dollars which bears interest
at a rate based upon the Base Rate.

“Benefit Plans” means any benefit plan, other than a Pension Plan, in respect of
which any Credit Party makes or has made payments in respect of, on behalf of,
or for the benefit of its employees.

“BIA” means the Bankruptcy and Insolvency Act (Canada).

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrowed Money” means money borrowed from a Third Party and premium and
interest in respect thereof and liabilities under any note, bond, debenture,
loan, stock or other security issued to a Third Party whether or not issued as
consideration for assets or services from a Third Party, but excluding any trade
accounts payable incurred in connection with the acquisition of goods and
services in the ordinary course of business.

 

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“Borrower” has the meaning set out in the recitals hereto.

“Borrowing” means any availment of the Revolving Credit, and includes any Loan
and a rollover or conversion of any outstanding Loan.

“Borrowing Request” means a request by the Borrower for a Borrowing pursuant to
Section 2.3 substantially in the form of Exhibit A.

“Business Day” means any day that is not (i) a Saturday, Sunday or other day on
which commercial banks in Toronto, Ontario are authorized or required by
applicable Law to remain closed, or (ii) in the case of any U.S.
Dollar-denominated Borrowing, any other day on which commercial banks in New
York, New York are authorized or required by applicable Law to remain closed, or
(iii) in the case of any LIBO Rate Loan, any other day on which commercial banks
in London, England are authorized or required by applicable Law to remain
closed.

“Calculation Date” means the last day of each Fiscal Quarter or Fiscal Year, as
applicable.

“Calculation Period” means the period that is the last four Fiscal Quarters
ending on a Calculation Date.

“Canadian $ Equivalent” means, on any day, the amount of Canadian Dollars that
the Administrative Agent could purchase, in accordance with its normal practice,
with a specified amount of U.S. Dollars based on the Bank of Canada noon spot
rate on such date.

“Canadian Dollars” and “Cdn.$” refer to lawful money of Canada.

“Canadian Resident Lender” means, in respect of a particular Loan, (i) a Lender
which holds such Loan and which is resident in Canada for the purposes of the
Income Tax Act, and (ii) a Lender which is an “authorized foreign bank”, as
defined in section 2 of the Bank Act (Canada) and in subsection 248(1) of the
Income Tax Act, and which holds the Loan as part of its “Canadian banking
business”, as defined in subsection 248(1) of the Income Tax Act.

“Canadian Subsidiary” means any Subsidiary of the Borrower that is incorporated
or organized in Canada.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“CDOR Rate” means, on any day and for any period, an annual rate of interest
equal to the average rate applicable to Canadian Dollar bankers’ acceptances for
the applicable period appearing on the “Reuters Screen CDOR Page” (as defined in
the International Swaps and Derivatives Association, Inc. 2000 definitions, as
modified and amended from time to time), rounded to the nearest 1/100th of 1%
(with .005% being rounded up), at approximately 10:00 a.m., on such day, or if
such day is not a Business Day, then on the immediately preceding Business Day,
provided that if such rate does not appear on the Reuters Screen CDOR Page on
such day as contemplated, then the CDOR Rate on such day shall be calculated as
the average of the rates for such period applicable to Canadian Dollar bankers’
acceptances quoted by the banks listed in Schedule I of the Bank Act (Canada) as
of 10:00 a.m., on such day or, if such day is not a Business Day, then on the
immediately preceding Business Day.

 

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“Change of Control” means, the occurrence, directly or indirectly, and without
the prior written consent of the Required Lenders, of a change in the legal or
beneficial ownership of the Borrower from that existing on the Closing Date such
that a different Person or group of Persons acting in concert beneficially owns
or controls more than 50% of the votes that may be cast to elect the board or
other governing body of the Borrower, provided that such votes, if exercised,
are sufficient to elect a majority of the board or other governing body.

“Change in Law” means (i) the adoption of any new Law after the date of this
Agreement, (ii) any change in any existing Law or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or, for purposes of
Section 2.13(b), by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.

“CLO” means any Person (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Lender or an Affiliate of such Lender.

“Closing Date” means the date on which the conditions precedent specified in
Section 4.1 to the effectiveness of this Agreement have been satisfied or waived
by the Administrative Agent.

“Co-Syndication Agents” means The Toronto-Dominion Bank and The Bank of Nova
Scotia.

“Commitment” means, with respect to each Lender, the commitment(s) of such
Lender to make Revolving Loans hereunder as such commitment may be reduced from
time to time pursuant to Section 2.6, and as such commitments may be reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.4 and as such commitments may be increased under the
Commitment Increase Right. The initial amount(s) of each Lender’s Commitment(s)
is set out in Schedule A. The initial aggregate amount of the Revolving Credit
Commitments is Cdn.$400,000,000 or the U.S.$ Equivalent thereof

“Commitment Increase Right” means the right of the Borrower to request increases
in the Commitments in accordance with Section 2.1(b).

“Consolidated EBITDA” means, at any time, the Consolidated Net Income for the
then most recently completed four Fiscal Quarters plus (to the extent deducted
in calculating Consolidated Net Income) (i) provisions for federal, state,
provincial and local income and capital taxes accrued; (ii) Consolidated
Interest Expense; (iii) depreciation and amortization; (iv) extraordinary or
non-recurring non-cash losses incurred other than in the ordinary course of
business; and minus (to the extent added in calculating Consolidated Net Income)
(v) extraordinary or non-recurring non-cash gains realized other than in the
normal course of business, all calculated in accordance with GAAP on a
consolidated basis.

“Consolidated EBITDAR” means, with reference to any period, the sum of
Consolidated EBITDA plus Consolidated Rent Expense for such period.

“Consolidated Fixed Charges” means, with reference to any period, the sum of
Consolidated Interest Expense plus Consolidated Rent Expense for such period.

 

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“Consolidated Gross Revenues” means, with reference to any period, the
consolidated Gross Revenues of the Borrower and its Subsidiaries (excluding, for
greater certainty, Joint Ventures and Consolidated VIEs) calculated on a
consolidated basis for such period in accordance with GAAP; provided, however,
that when considering Gross Revenues of Subsidiaries that include primarily U.S.
Dollars (e.g. U.S. Subsidiaries which have Gross Revenue mainly in U.S,
Dollars), the impact of foreign exchange on Consolidated Gross Revenues shall be
eliminated by fixing the foreign exchange rate when consolidating the Gross
Revenues of the affected Subsidiaries for the purposes of determining
Consolidated Gross Revenues at par (on a dollar-for-dollar basis) with the
Canadian Dollar, as applicable from time to time.

“Consolidated Interest Expense” means, with reference to any period, the
interest expense (including original issue discount of any issued B/A and the
interest component of Capital Lease Obligations but excluding capitalized
interest due and payable after the Maturity Date) of the Borrower and its
Subsidiaries calculated on a consolidated basis for such period in accordance
with GAAP.

“Consolidated Net Income” means, with reference to any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries for such period, as
determined in accordance with GAAP.

“Consolidated Rent Expense” means, with reference to any period, all payments
under operating leases and synthetic leases of the Borrower and its Subsidiaries
to the extent deducted in computing Consolidated Net Income, calculated on a
consolidated basis for such period in accordance with GAAP.

“Consolidated Tangible Net Worth” means, for the Borrower and its Subsidiaries,
the total equity of the Borrower, less all goodwill and all items which are
defined as intangibles under GAAP.

“Consolidated Total Debt” means, without duplication, all Indebtedness of the
Borrower and its Subsidiaries, including current maturities of such obligations,
determined on a consolidated basis in accordance with GAAP.

“Consolidated VIEs” shall mean those franchise agreements and operator
agreements with franchisees that the Borrower has had to consolidate in its
consolidated financial statements because they are considered to be variable
interest entities within the meaning of the Financial Accounting Standards Board
Accounting Standards Codification Topic 810.

“Contract Period” means the term of a B/A Borrowing selected by the Borrower in
accordance with Section 2.3(a)(iv) commencing on the date of such B/A Borrowing
and expiring on a Business Day which shall be either one month, two months,
three months or, if available, as determined by the Administrative Agent in good
faith, six months thereafter (or such other terms as may be requested by the
Borrower and approved unanimously by the Lenders); provided that (i) subject to
subparagraph (ii) below, each such period which ends on a day that is not a
Business Day shall automatically be extended until the next following Business
Day, unless such extension results in the Contract Period expiring in a later
month than the month in which it would otherwise expire, in which case such
period shall be shortened so that it expires on the Business Day immediately
preceding the day on which it would otherwise expire, and (ii) no Contract
Period shall extend beyond the Maturity Date.

“Control” means, in respect of a particular Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ability to exercise voting power,
by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

 

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“Cover”, when required by this Agreement for Bankers’ Acceptances, shall be
effected by paying to the Administrative Agent in immediately available funds,
to be held by the Administrative Agent in a collateral account maintained by the
Administrative Agent at its Payment Office and collaterally assigned as
security, an amount equal to the face amount of all Bankers’ Acceptances
outstanding at such time. Such amount shall be retained by the Administrative
Agent in such collateral account until such time as the applicable Bankers’
Acceptances shall have expired or matured.

“Credit Party” means the Borrower and each Guarantor. For greater certainty,
“Credit Party” shall not include (i) any Subsidiary which has not been
designated as a Guarantor pursuant to Section 5.9; (ii) any Advertising Entity;
(iii) any Consolidated VIE; or (iv) any Joint Venture.

“Currency Due” has the meaning specified in Section 2.17.

“DBRS” shall mean Dominion Bond Rating Service Limited, or its successor.

“Debt Issuance” means the issuance by the Borrower of any debt security being
any bond, debenture, notes or similar instrument representing Indebtedness
issued in the debt capital markets. For greater certainty, a “Debt Issuance”
does not include the issuance of bankers’ acceptances.

“Default” means any event or condition which constitutes an Event of Default or
which, upon notice, lapse of time or both, would, unless cured or waived, become
an Event of Default.

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

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) pay over to the Administrative Agent or any Lender any other amount
required to be paid by it hereunder, unless, in the case of clause (i) above,
such Lender notifies the Administrative Agent in writing that such failure is
the result of such Lender’s good faith determination that a condition precedent
to funding (specifically identified and including the particular default, if
any) has not been satisfied, (b) has notified the Borrower or the Administrative
Agent or any other Lender in writing, or has made a public statement to the
effect, that it does not intend or expect to comply with any of its funding
obligations under this Agreement (unless such writing or public statement
indicates that such position is based on such Lender’s good faith determination
that a condition precedent (specifically identified and including the particular
default, if any) to funding a loan under this Agreement cannot be satisfied) or
generally under other agreements in which it commits to extend credit, (c) has
failed, within three Business Days after request by the Administrative Agent or
any other Lender, acting in good faith, to provide a certification in writing
from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans, under this Agreement provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon the Person making the
request in clause (c) above receiving such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of a Bankruptcy Event.

“Discount Proceeds” means, for any B/A (or, as applicable, any B/A Equivalent
Loan), an amount (rounded to the nearest whole cent, and with one-half of one
cent being rounded up) calculated on the applicable date of Borrowing by
multiplying:

 

  (i) the face amount of the B/A (or, as applicable, the undiscounted amount of
the B/A Equivalent Loan); by

 

  (ii) the quotient of one divided by the sum of one plus the product of:

 

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  (A) the Discount Rate (expressed as a decimal) applicable to such B/A (or as
applicable, such B/A Equivalent Loan), multiplied by

 

  (B) a fraction, the numerator of which is the Contract Period of the B/A (or,
as applicable, the B/A Equivalent Loan) and the denominator of which is 365,

with such quotient being rounded up or down to the nearest fifth decimal place,
and with .000005 being rounded up.

“Discount Rate” means, with respect to either a B/A for a particular Contract
Period being purchased by a Lender on any day or a B/A Equivalent Loan being
made by a Lender on any day, (i) for any Lender which is a Schedule I chartered
bank under the Bank Act (Canada), the CDOR Rate on such day for such Contract
Period; and (ii) for any other Lender, the lesser of (a) the CDOR Rate on such
day for such Contract Period, plus 0.10%, and (b) the percentage discount rate
(which will be expressed in terms of the CDOR Rate or a spread over the CDOR
Rate) quoted by such Lender as the percentage discount rate at which such Lender
would, in accordance with its normal practices, at or about 10:00 a.m. on such
date, be prepared to purchase bankers’ acceptances or make B/A Equivalent Loans
having a face amount and term comparable to the face amount and term of such B/A
or B/A Equivalent Loan.

“Documentation Agent” means Bank of Montreal.

“Environmental Laws” means all federal, provincial, local or foreign laws,
rules, regulations, codes, ordinances, orders, decrees, judgements, injunctions,
notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, release, threatened
release or disposal of any Hazardous Material, or to health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Credit Party directly or indirectly resulting
from or based upon (a) violation of any Environmental Laws, (b) the generation,
use, handling, collection, treatment, storage, transportation, recovery,
recycling or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials into
the environment, or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equity Securities” means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and non-voting) of, such Person’s capital, whether
outstanding on the Closing Date or issued after the Closing Date, including any
interest in a partnership, limited partnership or other similar Person and any
beneficial interest in a trust, and any and all rights, warrants, debt
securities, options or other rights exchangeable for or convertible into any of
the foregoing.

“Event of Default” has the meaning set out in Section 7.1.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income, or capital taxes (including the large corporations tax
imposed under Part I.3 of the Income Tax Act) imposed on (or measured by) its
taxable capital, and any substantially similar taxes imposed by Canada, the
United States or by any other jurisdiction under the Laws of which such
recipient is organized or in which its principal office is located or in which
its applicable lending office is located; (b) any branch profits taxes imposed
by the United

 

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States of America or any similar taxes imposed by any other jurisdiction in
which the Borrower is located; (c) any taxes for which no payment is required
from the Borrower pursuant to Section 9.4(f); (d) any income or withholding
taxes imposed on a Lender for its failure or inability (other than as a result
of a Change of Law) to comply with Section 2.15(e), (e) any income or
withholding taxes imposed on payments to, or for the benefit of, any Lender
(other than an assignee pursuant to a request by the Borrower under
Section 2.20) on the date such Lender becomes a party hereto (or designates a
new lending office), (f) any U.S. federal withholding taxes imposed under FATCA
and (g) any withholding taxes imposed on payments to, or for the benefit of the
Administrative Agent, any Lender or any other recipient: (A) with which the
payor does not deal at arm’s length for the purposes of the Income Tax Act
(Canada) at the time of making the payment; or (B) in respect of a debt or other
obligation to pay an amount to a person with whom the payor is not dealing at
arm’s length within the meaning of the Income Tax Act (Canada); provided,
however, that clauses (d) and (e) shall not apply to (i) Taxes imposed on
payments to a Lender for a portion of a Loan that such Lender acquired by
assignment to the extent that, immediately prior to the assignment, the party
that assigned such portion of the Loan was entitled to additional payments under
Section 2.15(a) for such Taxes (or indemnity under Section 2.15(c) for such
Taxes); (ii) Taxes imposed on payments to a Lender for any portion of a Loan
that such Lender acquired by assignment after or during a continuation of a
Default; or (iii) Taxes imposed on a Lender that designates a new lending office
to the extent that, immediately prior to such designation, such Lender was
entitled to additional payments under Section 2.15(a) with respect to such Taxes
(or indemnity under Section 2.15(c) for such Taxes).

“Existing Revolving Facility Agreement” means the senior revolving facility
credit agreement dates as of December 13, 2010 among Tim Hortons Inc. and The
TDL Group Corp. as borrowers, the lenders from time to time parties thereto as
lenders, The Bank of Nova Scotia as administrative agent thereunder, and others,
as amended by a first amending agreement among the same parties dated
January 26, 2012.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code of the
United States of America, as of the date of this Agreement (or any amended or
successor version that is substantively comparable and not materially more
onerous to comply with), any current or future regulations or official
interpretations thereof and any agreements entered into pursuant to
Section 1471(b) (1) of the Internal Revenue Code of the United States of
America.

“Federal Funds Effective Rate” means, for any day, the per annum rate equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System of the United States of America arranged
by Federal funds brokers on such day, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Board of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

“Fee Letter” means any letter agreement among the Lead Arranger, the
Administrative Agent and the Borrower relating to the payment of fees to the
Lead Arranger and/or the Administrative Agent, including, without limitation,
section 3 of the arrangement letter relating to fees dated September 6, 2013
between the Lead Arranger and the Borrower which section survives, by its terms,
the entering into of this Agreement.

“Fiscal Quarter” means any fiscal quarter of the Borrower, and “Fiscal Year”
means any fiscal year of the Borrower. The Fiscal Year of the Borrower ends on
the Sunday which is closest to December 31 in each year. The first Fiscal
Quarter of the Borrower ends on the date which is 13 weeks after the end of the
most recently completed Fiscal Year; the second Fiscal Quarter of the Borrower
ends on the date which is 13 weeks after the end of the most recently completed
first Fiscal Quarter; and the third Fiscal Quarter of the Borrower ends on the
date which is 13 weeks after the end of the most recently completed second
Fiscal Quarter.

 

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“Foreign Lender” means any Lender that is not a Canadian Resident Lender.

“Former Parent” means Tim Hortons Inc., a Delaware company.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time, subject to the application of the
provisions of Section 1.4

“Governmental Authority” means the Government of Canada, the United States of
America, any other nation or any political subdivision thereof, whether federal,
provincial, state, territorial or local, and any agency, authority,
instrumentality, regulatory body, court, central bank, fiscal or monetary
authority or other authority regulating financial institutions, and any other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including the
Bank Committee on Banking Regulation and Supervisory Practices of the Bank of
International Settlements.

“Gross Revenues” means, in respect of any Person and with reference to any
period, the total amount of all revenue received by such Person during such
period from all sources from the ordinary course of business whether from sales,
rents, royalties or otherwise; provided, however, that Gross Revenues shall not
include dividends or distributions from Subsidiaries or intercompany revenues;
and, provided further, that when considering Gross Revenues of a Person that
include primarily U.S. Dollars (e.g. U.S. Subsidiaries which have Gross Revenues
mainly in U.S. Dollars), the impact of foreign exchange on Gross Revenues shall
be eliminated by fixing the foreign exchange rate when calculating the Gross
Revenues of the affected Person at par (on a dollar-for-dollar basis) with the
Canadian Dollar, as applicable from time to time.

“Guarantee” of or by any Person (in this definition, 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 (in this definition, the “primary credit party”) 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 (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (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 solvency, or any other balance sheet, income statement or other
financial statement condition or liquidity of the primary credit party so as to
enable the primary credit party to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of
guarantee issued to support such Indebtedness or other obligation, and
“Guarantees” shall mean each Guarantee provided by a Guarantor under this
Agreement.

“Guarantor” means each Subsidiary of the Borrower required or designated to
provide a Subsidiary Guarantee pursuant to Section 5.9 unless in each case, the
Borrower shall have revoked the designation of such Subsidiary as a Guarantor in
accordance with Section 5.9. As at the date of this Agreement, no Subsidiary is
required or has been designated by the Borrower to provide a Subsidiary
Guarantee pursuant to Section 5.9 other than The TDL Group Corp, which shall be
the sole Guarantor on the Closing Date.

 

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“Hazardous Materials” means any substance, product, liquid, waste, pollutant,
chemical, contaminant, insecticide, pesticide, gaseous or solid matter, organic
or inorganic matter, fuel, micro-organism, ray, odour, radiation, energy,
vector, plasma, constituent or material which (a) is or becomes listed,
regulated or addressed under any Environmental Laws, or (b) is, or is deemed to
be, alone or in any combination, hazardous, hazardous waste, toxic, a pollutant,
a deleterious substance, a contaminant or a source of pollution or contamination
under any Environmental Laws, including asbestos, petroleum and polychlorinated
biphenyls, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Laws.

“Income Tax Act” means the Income Tax Act (Canada) and the regulations
promulgated thereunder, as amended from time to time.

“Indebtedness” means, with respect to any Person, without duplication: (a) its
liabilities for borrowed money, including bankers’ acceptances, and its
redemption obligations in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of property acquired by such
Person (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property); (c) all
liabilities appearing on its balance sheet in accordance with GAAP in respect of
capital leases; (d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed or
otherwise become liable for such liabilities); (e) all its liabilities in
respect of letters of credit or instruments serving a similar function issued or
accepted for its account by banks and other financial institutions (whether or
not representing obligations for borrowed money); (f) the net marked-to-market
liability of such Persons under Swap Agreements, other than the Swap Agreements
listed in Schedule D; and (g) any Receivables Facility Attributed Indebtedness,
(h) any direct or indirect obligation of such Person guaranteeing or agreeing or
intending to guarantee any Indebtedness of any other Person in any manner,
provided that Indebtedness shall not include Tim Card obligations as set forth
in the Borrower’s financial statements to be delivered pursuant to Section 5.1
hereof, trade payables and accrued expenses, in each case, arising in the
ordinary course of business, and (i) any Guarantee by such Person with respect
to liabilities of another Person of a type described in any of clauses
(a) through (f) hereof.

“Indemnified Taxes” means all Taxes other than Excluded Taxes.

“Indemnitee” has the meaning specified in Section 9.3(b).

“Interest Payment Date” means, (a) in the case of any Loan other than a LIBO
Rate Loan, each Quarterly Date in each calendar year, and (b) in the case of a
LIBO Rate Loan, the last day of each Interest Period relating to such LIBO Rate
Loan, provided that if an Interest Period for any LIBO Rate Loan is of a
duration exceeding three months, then “Interest Payment Date” shall also include
each date which occurs at each three-month interval after the first day of such
Interest Period.

“Interest Period” means, with respect to a LIBO Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one month, two months, three
months or, subject to availability, six months thereafter, as the Borrower may
elect; provided that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the immediately
succeeding Business Day unless 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, (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, and
(iii) no Interest Period shall extend beyond the Maturity Date. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and, in the case of a converted or continued Borrowing,
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

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“Investment” means, as applied to any Person (the “investor”), any direct or
indirect purchase or other acquisition by the investor of, or a beneficial
interest in, Equity Securities of any other Person, including any exchange of
Equity Securities for Indebtedness, or any direct or indirect loan, advance
(other than advances to employees for moving, travel, tax equalization for
expatriate employees, and other similar type expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by the investor to any other Person, including all Indebtedness and accounts
receivable owing to the investor from such other Person that did not arise from
sales or services rendered to such other Person in the ordinary course of the
investor’s business, or any direct or indirect purchase or other acquisition of
bonds, notes, debentures or other debt securities of, any other Person. The
amount of any Investment shall be the original cost of such Investment plus the
cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment minus any amounts (a) realized upon the disposition of assets
comprising an Investment (including the value of any liabilities assumed by any
Person other than a Credit Party in connection with such disposition),
(b) constituting repayments of Investments that are loans or advances or
(c) constituting cash returns of principal or capital thereon (including any
dividend, redemption or repurchase of equity that is accounted for, in
accordance with GAAP, as a return of principal or capital).

“Joint Venture” means a joint venture required to be consolidated, or accounted
by the equity method, on the Borrower’s financial statements under GAAP.

“Judgment Currency” has the meaning specified in Section 2.17.

“Laws” means all federal, provincial, state, municipal, foreign and
international statutes, acts, codes, ordinances, decrees, treaties, rules,
regulations, municipal by-laws, judicial or arbitral or administrative or
ministerial or departmental or regulatory judgments, orders, decisions, rulings
or awards or any provisions of the foregoing, including general principles of
common and civil law and equity, and all policies, practices and guidelines of
any Governmental Authority binding on or affecting the Person referred to in the
context in which such word is used (including, in the case of tax matters, any
accepted practice or application or official interpretation of any relevant
Governmental Authority); and “Law” means any one or more of the foregoing.

“Lead Arranger” means RBC Capital Markets, a division of Royal Bank of Canada,
in its capacity as sole lead arranger and bookrunner hereunder.

“Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of
such Lender, or (ii) a CLO administered or managed by such Lender or an
Affiliate of such Lender, and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund
that invests in bank loans and similar extensions of credit and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment
advisor.

“Lenders” means the Persons listed as lenders on Schedule A and any other Person
that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption.

“LIBO Rate Borrowing” means a Borrowing comprised of one or more LIBO Rate
Loans.

“LIBO Rate Loan” means a Loan denominated in U.S. Dollars which bears interest
at a rate based upon the LIBO Rate.

 

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“LIBO Rate” means, for any Interest Period, the rate for U.S. Dollar borrowings
(in respect of LIBO Rate Loans), appearing on the Reuters Screen LIBOR01 (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 U.S. Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for U.S. Dollar deposits with
a maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the “LIBO Rate” for such
Interest Period shall be the rate at which U.S. Dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.

“Lien” means, (a) with respect to any asset, any mortgage, deed of trust, lien,
pledge, hypothec, hypothecation, encumbrance, charge, security interest, royalty
interest, adverse claim, defect of title or right of set off in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease, title retention agreement or consignment agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to any asset, (c) any purchase option, call or similar right
of a third party with respect to such assets, (d) any netting arrangement,
defeasance arrangement or reciprocal fee arrangement (other than customary
netting arrangements pursuant to any Swap Agreement), and (e) any other
arrangement having the effect of providing security.

“Loan” means any loan made by the Lenders to the Borrower pursuant to this
Agreement, and includes any B/A accepted (and any B/A Equivalent Loan purchased)
by any Lender hereunder.

“Loan Documents” means this Agreement, the Subsidiary Guarantees, the Borrowing
Requests and any Fee Letter, together with any other document, instrument or
agreement (other than participation, agency or similar agreements among the
Lenders or between any Lender and any other bank or creditor with respect to any
indebtedness or obligations of any Credit Party (as applicable) hereunder or
thereunder) entered into in connection with this Agreement on the Closing Date
or thereafter, as such documents, instruments or agreements may be amended,
modified or supplemented from time to time.

“Material Adverse Change” means any event, development or circumstance that has
had or could reasonably be expected to have a Material Adverse Effect.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property or condition, financial or otherwise, of the Borrower and its
Subsidiaries taken as a whole, or (b) the validity or enforceability of any of
the Loan Documents or the rights and remedies of the Administrative Agent and
the Lenders thereunder (other than any termination thereof in accordance with
its terms).

“Material Indebtedness” means any Indebtedness (other than the Loans) of any one
or more Credit Parties in an aggregate principal amount exceeding
Cdn.$25,000,000 or the equivalent thereof in any other currency.

“Maturity Date” means the date that is 364 days from the Closing Date.

“Moody’s” means Moody’s Investors Service, Inc., or its successor.

“Notes Indenture” means the trust indenture between the Borrower and the Trustee
dated as of June 1, 2010 providing for the issuance of senior unsecured notes,
as supplemented by a first supplemental trust indenture between such parties
dated as of December 1, 2010.

 

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“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.

“Participant” has the meaning set out in Section 9.4(e).

“Payment Office” means the Administrative Agent’s office located at the address
and to the attention of the individual set out on Schedule A hereto (or such
other office or individual as the Administrative Agent may hereafter designate
in writing to the other parties hereto).

“Pension Plan” means any pension plan required to be registered under Canadian
federal or provincial law that is maintained or contributed to by the Borrower
or any Subsidiary for its employees or former employees.

“Permitted Acquisition” has the meaning set forth in Section 6.5(b).

“Permitted Liens” means Liens permitted under Section 6.2.

“Permitted Receivables Financing” means any transaction or series of
transactions pursuant to which the Borrower or a Subsidiary of the Borrower
sells, transfers, disposes of, securitizes or enters into any other asset-backed
financing of trade accounts receivable of or owing to the Borrower or any
Subsidiary of the Borrower, and any contract rights related thereto, in each
case, on customary terms for fair value as determined at the time of
consummation in good faith by the Borrower or such Subsidiary.

“Person” includes any natural person, corporation, company, limited liability
company, trust, joint venture, association, unincorporated organization,
partnership, Governmental Authority or other entity.

“PPSA” means the Personal Property Security Act (Ontario), as amended from time
to time.

“Prime Borrowing” means a Borrowing comprised of one or more Prime Loans.

“Prime Loan” means a Loan denominated in Canadian Dollars which bears interest
at a rate based upon the Prime Rate.

“Prime Rate” means, on any day, the annual rate of interest equal to the greater
of (i) the annual rate of interest announced by the Administrative Agent and in
effect as its prime rate at its principal office in Toronto, Ontario on such day
for determining interest rates on Canadian Dollar-denominated commercial loans
in Canada, and (ii) the annual rate of interest equal to the sum of (A) the
one-month CDOR Rate in effect on such day, plus (B) 0.75%.

“Purchase Money Lien” means any Lien securing any unpaid part of, or incurred to
provide the whole or any part of, the cost of acquisition of any real or
personal property acquired from other than the Borrower, a Subsidiary or a
Related Party and any expenditures made for fixed improvements thereto if made
or firmly committed within 12 months after the acquisition of such real or
personal property and any extension, renewal, or refunding thereof not in excess
of the outstanding principal amount as at the date of such extension, renewal or
refunding and not extending or affecting any additional real or personal
property.

“Quarterly Date” means the first Business Day of each of the months of January,
April, July and October.

“Rated Debt” means the senior, unsecured, non-third party credit enhanced, long
term debt of the Borrower which is rated by any one or more of Moody’s, S&P
and/or DBRS.

 

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“Receivable” means the indebtedness and payment obligations of any Person to any
Credit Party or acquired by any Credit Party (including obligations constituting
an account or general intangible or evidenced by a note, instrument, contract,
security agreement, chattel paper or other evidence of indebtedness or security)
arising from a sale of merchandise or the provision of services by such Credit
Party or the Person from which such indebtedness and payment obligation were
acquired by such Credit Party, including (a) any right to payment for goods sold
or for services rendered and (b) the right to payment of any interest, sales
taxes, finance charges, returned cheque or late charges and other obligations of
such Person with respect thereto.

“Receivables Facility Attributed Indebtedness” means the amount of obligations
outstanding under any Permitted Receivables Financing on any date of
determination that would be characterized as principal if such Permitted
Receivables Financing were structured as a secured lending transaction rather
than as a purchase, excluding any obligations outstanding that arise in
connection with transfers of loan obligations owing to the Borrower and its
Subsidiaries by franchisees and other related assets that are treated as true
sales of financial assets under Accounting Standards Codification 860, as in
effect from time to time.

“Registers” has the meaning set out in Section 9.4(c).

“Related Parties” means, collectively or individually, (i) when used with
reference to the Borrower and its Subsidiaries: the Advertising Entities, Joint
Ventures, Consolidated VIEs, Tim Horton Children’s Foundation Inc. and Tim
Horton Children’s Foundation (US), Inc. and (ii) when used with reference to the
Administrative Agent, the Lenders, such Person’s Affiliates and the respective
directors, officers, employees, Administrative Agent and advisors of such Person
and of such Person’s Affiliates.

“Related Property” shall mean, with respect to each Receivable, (a) all of the
interest of the applicable Credit Party in the goods, if any, sold and delivered
to an account debtor relating to the sale which gave rise to such Receivable,
(b) all other security interests or Liens, and the interest of the applicable
Credit Party in the property subject thereto, from time to time purporting to
secure payment of such Receivable, together with all financing statements
describing any collateral securing such Receivable, (c) all guarantees,
insurance, letters of credit and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable,
in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or pursuant to any obligations evidenced by a note,
instrument, contract, security agreement, chattel paper or other evidence of
indebtedness or security and the proceeds thereof, and (d) all other assets that
are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving Receivables.

“Release” is to be broadly interpreted and shall include an actual or potential
discharge, deposit, spill, leak, pumping, pouring, emission, emptying,
injection, escape, leaching, seepage or disposal of Hazardous Materials which is
or may be in breach of any Environmental Laws.

“Release Conditions” means, on any Calculation Date, where the Gross Revenues of
the Borrower for the Calculation Period ended on such Calculation Date are equal
to or exceed 75% of the Consolidated Gross Revenues.

“Required Lenders” means, at any time, Lenders having aggregate Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
aggregate Revolving Credit Exposures and unused Commitments at such time.

“Responsible Officer” means, with respect to any Person, the chairman, the
president, any vice president, the chief executive officer or the chief
operating officer, and, in respect of financial or accounting matters, any chief
financial officer, principal accounting officer, treasurer or controller of such
Person.

 

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“Restricted Payment” shall mean, with respect to any Person, any payment by such
Person (i) of any dividends on any of its Equity Securities, or (ii) on account
of, or for the purpose of setting apart any property for a sinking or other
analogous fund for, the purchase, redemption, retirement or other acquisition of
any of its Equity Securities or any Equity Securities of any other Credit Party,
Subsidiary, Advertising Entity, Joint Venture or Consolidated VIE or any
warrants, options or rights to acquire any such Equity Securities, or the making
by such Person of any other distribution in respect of any of such Equity
Securities, or (iii) of any principal of or interest or premium on or of any
amount in respect of a sinking or analogous fund or defeasance fund for any
Indebtedness of any Credit Party, ranking in right of payment subordinate to any
liability of such Credit Party under the Loan Documents; provided, however, that
notwithstanding anything set forth above to the contrary, any payment (including
repayments and reimbursements) made by, to be made by, or which is contemplated
or required to be made by the Borrower or any Subsidiary to Wendy’s or any
Affiliate of Wendy’s under the tax sharing agreement by and between Wendy’s and
the Former Parent (an executed copy of which has been provided to the Lenders
prior to the date hereof and was executed by the parties thereto in connection
with that certain initial public offering of Equity Securities by the Former
Parent on March 29, 2006) in effect as of the Closing Date, without amendment,
as such tax sharing agreement may be assigned by the Former Parent to the
Borrower or any of its Subsidiaries, shall not be considered “Restricted
Payments”.

“Revolving Credit” means the revolving credit facility (initially
Cdn.$400,000,000 (or U.S. $ Equivalent)) established pursuant to the Revolving
Credit Commitments of the Revolving Credit Lenders.

“Revolving Credit Commitment” has the meaning set out in Section 2.1(a).

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans and the
face amount of all outstanding Bankers’ Acceptances accepted by or B/A
Equivalent Loans made by such Lender.

“Revolving Credit Lender” means any Lender having a Revolving Credit Commitment
hereunder and/or a Revolving Loan outstanding hereunder.

“Revolving Loan” has the meaning set out in Section 2.1(a).

“Rolling Period” means, commencing with the Fiscal Quarter ended June 30, 2013,
each Fiscal Quarter taken together with the three immediately preceding Fiscal
Quarters.

“Sale/Leaseback Transaction” means any transaction or series of transactions
pursuant to which the Borrower or any Subsidiary sells, transfers or otherwise
disposes of any property, real or personal, and as part of such transaction,
thereafter rents or leases such property or other property that it intends to
use for substantially the same purpose or purposes as the property being sold,
transferred or disposed of, provided that such transaction is consummated for
fair value as determined at the time of consummation in good faith by the
Borrower or such Subsidiary.

“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., and its successors.

“Standby Fees” means the standby fees payable by the Borrower pursuant to
Section 2.10(a).

“Subsidiary” means any firm, partnership, corporation or other legal entity in
which the Borrower and one or more of its Subsidiaries, or one or more
Subsidiaries of the Borrower owns, directly or indirectly, the right to elect a
majority of the board of directors, if it is a corporation, or the right to make
or control its management decisions, if it is some other Person, but excluding
any Related Party.

 

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“Subsidiary Guarantees” means the guarantees by (a) the U.S. Subsidiaries in
support of the obligations of the Borrower under this Agreement and the other
Loan Documents, the form of which is attached as Exhibit F hereto, and (b) the
Canadian Subsidiaries in support of the obligations of the Borrower under this
Agreement and the other Loan Documents, the form of which is attached as Exhibit
G hereto. For the purposes of Section 5.9 and Section 9.2(b)(vii), the
Subsidiary Borrower Guarantee shall be deemed to be a “Subsidiary Guarantee”.

“Successor” has the meaning set out in Section 6.3.

“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 Credit Parties shall
be a Swap Agreement.

“Tax Returns” means all returns, reports, elections, notices, filings,
statements, declarations, forms, claims for refund or other documents (whether
intangible, electronic or other form) and including any amendments, schedules,
attachments, supplements, appendices and exhibits thereto, made, prepared or
filed or required to be made, prepared or filed by applicable Laws with a
Governmental Authority in respect of Taxes.

“Taxes” includes any taxes, duties, fees, premiums, assessments, imposts,
levies, tariffs and other charges of any kind whatsoever imposed, assessed,
reassessed, or collected by any Governmental Authority, including all interest,
penalties, fines, instalments, additions to tax or other additional amounts
imposed, assessed, reassessed, or collected by any Governmental Authority in
respect thereof, and including those related to, or levied on, or measured by,
or referred to as, gross income, net income, gross receipts, profits, royalty,
capital, capital gains, transfer, land transfer, sales, goods and services,
harmonized sales, use, value-added, severance, premium, alternative, real
property, capital stock, personal property, ad valorem, windfall profits,
environmental, excise, stamp, withholding, business, franchise, property
development, occupancy, employer health, payroll, employment, health, social
services, education and social security taxes, all surtaxes, all customs duties
and import and export taxes, countervail and anti-dumping, all license,
franchise and registration fees and all employment insurance, health insurance
and Canada, Quebec and other government pension plan premiums or contributions,
all withholdings on amounts paid to or by the relevant Person, and any liability
for any of the foregoing as a transferee, successor, guarantor or by contract or
by operation of applicable Law, whether disputed or not.

“Third Party” means any Person other than the Borrower, a Subsidiary or a
Related Party.

“Threshold” means, in respect of then most recently completed Calculation
Period, a minimum of 75% of Consolidated Gross Revenues.

“Transactions” means the execution, delivery and performance by the Credit
Parties of this Agreement and the other Loan Documents and the borrowing of
Loans, the use of the proceeds thereof.

“Trustee” means BNY Trust Company of Canada in its capacity as trustee under the
Notes Indenture and any indenture supplemental thereto, and any successor
thereto appointed in accordance with the provisions of the Notes Indenture.

 

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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 Prime Rate, the Base Rate, or the LIBO Rate.

“U.S. Dollars” and “U.S.$” refer to lawful money of the United States of
America.

“U.S.$ Equivalent” means, on any day, the amount of U.S. Dollars that the
Administrative Agent could purchase, in accordance with its normal practice,
with a specified amount of Canadian Dollars based on the Bank of Canada noon
spot rate on such day.

“U.S. Subsidiary” means a Subsidiary of the Borrower that is incorporated or
organized in the United States of America.

“Wendy’s” means Wendy’s International, Inc., an Ohio corporation.

“wholly-owned subsidiary” of a Person means any subsidiary of such Person of
which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the equity or 100% of the ordinary voting power
or 100% of the general partnership or membership interests are, at the time any
determination is being made, owned, controlled or held by such Person or one or
more subsidiaries of such Person or by such Person and one or more subsidiaries
of such Person.

1.2 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by class e.g., a “Revolving Loan”) or by
Type (e.g., a “LIBO Rate Loan”) or by class and Type (e.g., a “LIBO Revolving
Loan”). Borrowings also may be classified and referred to by class (e.g., a
“Revolving Borrowing”) or by Type (e.g., a “LIBO Rate Borrowing”) or by class
and Type (e.g., a “LIBO Rate Revolving Borrowing”).

1.3 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”. The word “or”
is disjunctive; the word “and” is conjunctive. The word “shall” is mandatory;
the word “may” is permissive. The words “to the knowledge of” means, when
modifying a representation, warranty or other statement of any Person, that the
fact or situation described therein is known by the Person (or, in the case or a
Person other than a natural Person, known by the Responsible Officer of that
Person) making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in accordance with
the standard of what a reasonable Person in similar circumstances would have
done) would have been known by the Person (or, in the case of a Person other
than a natural Person, would have been known by such Responsible Officer of that
Person). Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set out herein),
(b) any reference herein to any statute or any section thereof shall, unless
otherwise expressly stated, be deemed to be a reference to such statute or
section as amended, restated or re-enacted from time to time, (c) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (d) 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, (e) 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
(f) 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. Any
reference herein to an action, document or other matter or thing being
“satisfactory to the Lenders”, “to the Lenders’ satisfaction” or similar
phrases, shall mean that such action, document, matter or thing must be
satisfactory to Lenders constituting the Required Lenders, unless it is
described in clauses (i) to and including (vii) of Section 9.2(b) hereof, in
which case it must be satisfactory to each Lender whose consent is required
under the applicable clause.

 

 

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1.4 Accounting Terms; GAAP. Except as otherwise expressly provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP; provided, however, that all
accounting or financial terms used in this Agreement (and all defined terms used
in the definition of any such accounting or financial term) shall have the
respective meanings given to such terms (and defined terms) under GAAP as in
effect on the date hereof applied on a basis consistent with those used in
preparing the financial statements referred to in Section 5.1. In the event of
any change in GAAP after the date hereof, and if such change would affect any
such computation (including the computation of any of the financial covenants
set forth in Section 5.10) or determination, or the meaning of any such
accounting or financial term or any defined term used in the definition of any
such financial or accounting term, then the parties hereto agree to endeavour,
in good faith, to agree upon an amendment to this Agreement that would adjust
such computation, determination or meaning in a manner that would preserve the
original intent thereof but in accordance with the GAAP as so changed, provided
that, until so amended such computation, determination or meaning shall, for
purposes of this Agreement, continue to be governed by GAAP as in effect
immediately prior to such change. 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 (i) without giving effect to any election under Accounting Standards
Codification 825-10-25 (previously referred to as Statement of Financial
Accounting Standards 159) (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair
value”, as defined therein and (ii) without giving effect to any change to, or
modification of, GAAP which would require the capitalization of leases
characterized as “operating leases” as of the Closing Date.

1.5 Time. All time references herein shall, unless otherwise specified, be
references to local time in Toronto, Ontario. Time is of the essence of this
Agreement and the other Loan Documents.

1.6 Permitted Liens. Any reference in any of the Loan Documents to a Permitted
Lien is not intended to subordinate or postpone, and shall not be interpreted as
subordinating or postponing, or as any agreement to subordinate or postpone, any
Lien created by any of the Loan Documents to any Permitted Lien.

1.7 Limitation Regarding Subsidiaries. Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement shall require the Borrower
or any Subsidiary to cause any Person who is not a Subsidiary of such Person to
do anything or to refrain from doing anything hereunder.

 

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ARTICLE 2

REVOLVING CREDIT

2.1 Commitments.

(a) Subject to the terms and conditions set forth herein, each Revolving Credit
Lender commits to make Loans denominated in Canadian Dollars or U.S. Dollars
(each such Loan made under this Section 2.1(a), a “Revolving Loan”) to the
Borrower from time to time during the period commencing on the Closing Date and
ending on the Maturity Date (each such commitment, as it may be reduced from
time to time pursuant to Section 2.6, and as it may be reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to
Section 9.4, and as such commitments may be increased under the Commitment
Increase Right, a “Revolving Credit Commitment”) in an aggregate principal
amount equal to the amount set forth beside such Lender’s name in Schedule A
under the heading “Revolving Credit Commitments”, or as it may appear in the
applicable Assignment and Assumption, provided that any Revolving Loans made by
any Lender as requested by the Borrower will not result in (i) such Revolving
Credit Lender’s Revolving Credit Exposure exceeding such Revolving Credit
Lender’s Revolving Credit Commitment, or (ii) the sum of the total Revolving
Credit Exposures exceeding the total Revolving Credit Commitment. Within the
foregoing limits and subject to the terms and conditions set forth herein,
including Section 2.7(b), the Borrower may borrow, repay and reborrow Revolving
Loans in the manner provided in Section 2.2(b) by giving notice in the manner
required by Section 2.3.

(b) Subject to the terms and conditions hereof, including without limitation
Section 2.1(e), at any time after the Closing Date, provided that no Event of
Default has occurred and is continuing and that the Borrower is in compliance
with the financial covenants in Section 5.10 both before and immediately after
giving effect to the requested Commitment increase, the Borrower shall have the
right (the “Commitment Increase Right”) to request that the Lenders or any other
Persons increase the Revolving Credit Commitments, by an aggregate of up to Cdn.
$400,000,000, subject to a minimum increase of Cdn.$10,000,000 (the “Accordion
Amount”). Each Lender shall have the option to provide its Applicable Percentage
of any increase made under this Section 2.1(b). Any Lender which does not advise
the Borrower and the Administrative Agent, within 15 days of the applicable
Commitment increase request, that such Lender will provide its Applicable
Percentage of such Commitment increase request will be deemed to have declined
to provide its Applicable Percentage of such Commitment increase request.

(c) Notwithstanding anything to the contrary in this Agreement, (i) in
exercising the Commitment Increase Right, the Borrower shall not require the
consent of any Lender other than any Lender providing all or part of the
requested Commitment increase, and (ii) no Lender shall have any obligation to
participate in any requested Commitment increase unless it agrees to do so in
its sole discretion.

(d) Any such Commitment increase shall be documented pursuant to an amendment
agreement satisfactory to the Administrative Agent and executed by the Borrower,
the Persons providing the requested Commitment increase and the Administrative
Agent.

(e) Notwithstanding anything to the contrary herein, if the Borrower shall at
any time or from time to time raise funds by way of one or more Debt Issuances
on or after the Closing Date, the Accordion Amount shall be reduced by an amount
equal to 100% of the cash proceeds of each such Debt Issuance (net of
reasonable, bona fide transaction costs and expenses directly related thereto);
provided that if the net cash proceeds from any such Debt Issuance or Debt
Issuances exceeds in the aggregate, the then current Accordion Amount, the
Accordion Amount shall be reduced to zero and the Commitment Increase Right
terminated.

2.2 Loans and Borrowings.

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Revolving Credit Lenders ratably in accordance with
their respective Applicable Percentage. 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.

 

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(b) Subject to Section 2.16, each Revolving Borrowing shall be comprised
entirely of Prime Loans, Bankers’ Acceptances, B/A Equivalent Loans, Base Rate
Loans or LIBO Rate Loans as the Borrower may request in accordance herewith.
Each Lender may at its option make any LIBO Rate Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that a
Lender may only exercise such option if it shall not result in any increased
costs or withholding tax obligations for the Borrower or affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

(c) At the commencement of each Interest Period for any LIBO Rate Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of U.S.$100,000, and not less than U.S.$5,000,000. At the time that
each Prime Revolving Borrowing or Base Rate Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that, in the case of each Prime
Revolving Borrowing, is an integral multiple of Cdn.$100,000 and not less than
Cdn.$1,000,000 and, in the case of each Base Rate Revolving Borrowing, is an
integral multiple of U.S.$100,000 and not less than U.S.$1,000,000; provided
that a Prime Revolving Borrowing or a Base Rate Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
applicable Commitments. Borrowings of more than one Type and class may be
outstanding at the same time.

2.3 Requests for Borrowings

(a) To request a Borrowing, the Borrower shall notify the Administrative Agent
of such request by written Borrowing Request (A) in the case of a LIBO Rate
Borrowing, not later than 11:00 a.m. three Business Days before the date of the
proposed Borrowing, (B) in the case of a B/A Borrowing, not later than 11:00
a.m. two Business Days before the date of the proposed Borrowing, (C) in the
case of a Prime Borrowing or a Base Rate Borrowing not later than 11:00 a.m.
(i) one Business Day before the date of the proposed Borrowing where such
Borrowing is in an amount greater than Cdn. $10,000,000 (in the case of a Prime
Borrowing) or U.S. $10,000,000. (in the case of a Base Rate Borrowing), and
(ii) on the date of the proposed Borrowing where such Borrowing is in an amount
that is equal to or less than Cdn $10,000,000 (in the case of a Prime
Borrowing), or U.S. $10,000,000 (in the case of a Base Rate Borrowing) or,
(D) in any other case, not later than one Business Day before the date of the
proposed Borrowing. Each such borrowing request shall be irrevocable. The
Administrative Agent and each Lender are entitled to rely and act upon any
borrowing request or written Borrowing Request given or purportedly given by the
Borrower, and the Borrower hereby waives the right to dispute the authenticity
and validity of any such request or resulting transaction once the
Administrative Agent or any Lender has advanced funds, accepted a B/A or made a
B/A Equivalent Loan based on such borrowing request or written Borrowing
Request. Each such written Borrowing Request shall specify the following
information:

 

  (i) the aggregate amount and currency of each requested Borrowing;

 

  (ii) the date of such Borrowing, which shall be a Business Day;

 

  (iii) whether such Borrowing is to be a Prime Borrowing, a B/A Borrowing, a
Base Rate Borrowing, or a LIBO Rate Borrowing;

 

  (iv) in the case of a LIBO Rate Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”, and in the case of a B/A Borrowing, the initial
Contract Period to be applicable thereto, which shall be a period contemplated
by the definition of the term “Contract Period”; and

 

  (v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply herewith.

 

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(b) If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Prime Borrowing (if denominated in Canadian Dollars) or a
Base Rate Borrowing (if denominated in U. S. Dollars). If no currency is
specified, the Borrowing shall be denominated in Canadian Dollars. If no
Interest Period is specified with respect to any requested LIBO Rate Borrowing,
then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. If no Contract Period is specified with respect to any
requested B/A Borrowing, then the Borrower shall be deemed to have selected a
Contract Period of one month duration. Promptly following receipt of a Borrowing
Request in accordance with this Section 2.3, 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.

(c) Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request. Thereafter, the Borrower may elect to convert a Borrowing to
a different Type or to continue such Borrowing and, in the case of (i) a LIBO
Rate Borrowing, may elect a new Interest Period therefor, or (ii) a B/A
Borrowing, may elect a new Contract Period therefor, all as provided in this
Section 2.3(c). The Borrower 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. To make an election pursuant to this Section 2.3(c), the
Borrower shall notify the Administrative Agent of such election by the time that
a Borrowing Request would be required under Section 2.3(a) if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such request shall be irrevocable. In
addition to the information specified in Section 2.3(b), each written Borrowing
Request shall specify the Borrowing to which such 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. For greater
certainty, if a Borrowing is being converted from a Borrowing in one currency to
a Borrowing in another currency, the conversion will be effected by way of
repayment of the original Borrowing and re-advance of the new Borrowing, and not
merely by way of book entry.

(d) In the absence of a timely and proper election with regard to (i) LIBO Rate
Borrowings, the Borrower shall be deemed to have elected to convert such LIBO
Rate Borrowings to Base Rate Borrowings on the last day of the Interest Period
of the relevant LIBO Rate Borrowings, and (ii) B/A Borrowings, the Borrower
shall be deemed to have elected to convert such B/A Borrowings to Prime
Borrowings on the last day of the Contract Period of the relevant B/A
Borrowings.

2.4 Funding of Borrowings

(a) Each Lender shall make each Loan to be made by it hereunder on the basis of
its Applicable Percentage applicable to such Loan on the proposed date thereof
by wire transfer of immediately available funds by 12:00 noon, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent and
designated by the Borrower in the applicable Borrowing Request, or to such other
account with another financial institution as may be designated by the Borrower
in the applicable Borrowing Request (which Borrowing Request may, for greater
certainty, refer to standing instructions provided in writing by the Borrower to
the Administrative Agent from time to time).

 

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(b) Unless the Administrative Agent shall have received written 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 Section 2.4(a) and may, in
reliance upon such assumption, make available to the Borrower 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
Administrative Agent shall seek repayment of such corresponding amount from the
applicable Lender with interest thereon for each day from and including the date
such amount is made available to the Borrower to but excluding the date of
payment by such Lender to the Administrative Agent, at the rate of interest
customary for interbank compensation in such currency. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing. If the Administrative Agent makes such
Lender’s share of such Borrowing available to the Borrower, and if such Lender’s
share of such Borrowing is not made available to the Administrative Agent by
such Lender within one (1) Business Day after such date, the Administrative
Agent shall also be entitled to recover such amount with interest thereon as set
forth in this Section 2.4(b) from the Borrower.

2.5 Interest and Acceptance Fees.

(a) The Loans comprising each Prime Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 days or 366
days, as the case may be) at a rate per annum equal to the Prime Rate from time
to time in effect plus the Applicable Margin. The Loans comprising each Base
Rate Borrowing shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 365 days or 366 days, as the case may be) at a
rate per annum equal to the Base Rate from time to time in effect plus the
Applicable Margin. The Loans comprising each LIBO Rate Borrowing shall bear
interest (computed on the basis of the actual number of days in the relevant
Interest Period over a year of 360 days) at the LIBO Rate for the Interest
Period in effect for such LIBO Rate Borrowing plus the Applicable Margin.

(b) The Loans comprising each B/A Borrowing shall be subject to the Acceptance
Fee which shall be payable as set out in Section 2.11.

(c) Notwithstanding the foregoing, (i) if any amount of principal, interest,
fees or other amounts payable by the Borrower hereunder shall not be paid when
due, such overdue amount shall bear interest, after as well as before judgment,
at a rate per annum equal to (A) in the case of overdue principal and interest
of any Loan, 2% plus the rate otherwise applicable to such Loan, or (B) in the
case of any amount not constituting principal of or interest on a Loan, at a
rate equal to 2% plus the rate otherwise applicable to Prime Loans; and (ii) if
an Event of Default has occurred that is continuing other than an Event of
Default covered in subparagraph (i) above, then, at the request of the Required
Lenders, all amounts due and payable hereunder shall bear interest, after as
well as before judgment, at a rate per annum equal to 2% plus the rate otherwise
applicable to Prime Loans for so long as the Event of Default is continuing.

(d) Accrued interest on each Loan (other than B/A Borrowings) shall be payable
in arrears on (i) each applicable Interest Payment Date, and (ii) in the case of
Revolving Loans, upon termination of the applicable Revolving Credit
Commitments; provided that interest accrued under paragraph (c) above shall be
payable on demand. In addition, in the event of any repayment or prepayment of
any Loan, accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment.

 

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(e) All interest hereunder shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). Any Loan that is
repaid on the same day on which it is made shall bear interest for one day. The
applicable Prime Rate, Base Rate, LIBO Rate or Discount Rate shall be determined
by the Administrative Agent, and such determination shall be conclusive absent
manifest error.

(f) For the purposes of the Interest Act (Canada) and disclosure thereunder,
whenever any interest or any fee to be paid hereunder or in connection herewith
is to be calculated on the basis of a 360-day or 365-day year, the yearly rate
of interest to which the rate used in such calculation is equivalent is the rate
so used multiplied by the actual number of days in the calendar year in which
the same is to be ascertained and divided by 360 or 365, as applicable. The
rates of interest under this Agreement are nominal rates, and not effective
rates or yields. The principle of deemed reinvestment of interest does not apply
to any interest calculation under this Agreement.

(g) If any provision of this Agreement would oblige the Borrower to make any
payment of interest or other amount payable to any Lender in an amount or
calculated at a rate which would be prohibited by law or would result in a
receipt by that Lender of “interest” at a “criminal rate” (as such terms are
construed under the Criminal Code (Canada)), then, notwithstanding such
provision, 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 that
Lender of “interest” at a “criminal rate”, such adjustment to be effected, to
the extent necessary (but only to the extent necessary), as follows:

 

  (i) first, by reducing the amount or rate of interest or the amount or rate of
any Acceptance Fee required to be paid to the affected Lender under Section 2.5;
and

 

  (ii) thereafter, by reducing any fees, commissions, costs, expenses, premiums
and other amounts required to be paid to the affected Lender which would
constitute interest for purposes of section 347 of the Criminal Code (Canada).

2.6 Termination and Reduction of Commitments.

(a) Unless previously terminated, the Revolving Credit Commitments shall
terminate on the Maturity Date.

(b) The Borrower may, upon three (3) Business Days prior written notice to the
Administrative Agent, permanently cancel any unused portion of the Revolving
Credit, without penalty. The Administrative Agent shall promptly notify each
Revolving Credit Lender of the receipt by the Administrative Agent of any such
notice. Any such cancellation shall be applied ratably in respect of the
applicable Revolving Credit Commitments of each Revolving Credit Lender. Each
notice delivered by the Borrower pursuant to this Section 2.6(b) shall be
irrevocable.

2.7 Mandatory Repayment of Loans.

(a) Subject to earlier payment otherwise required hereunder, including pursuant
to Section 2.7(b), the Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of each Revolving Loan made to it and outstanding on the
Maturity Date.

 

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(b) If the Borrower shall at any time or from time to time raise funds by way of
one or more Debt Issuances on or after the Closing Date, 100% of the cash
proceeds of any Debt Issuance (net of reasonable bona fide transaction costs and
expenses directly related thereto) shall be paid to the Administrative Agent for
the account of the Lenders in repayment of the outstanding Loans, including all
accrued interest thereon; provided that if the then outstanding Loans and
interest thereon is an amount which is less than 100% of such net cash proceeds
from such Debt Issuance, the net cash proceeds to be paid to the Administrative
Agent hereunder shall be limited to an amount which is equal to the then
outstanding Loans and all interest thereon. Amounts required to be repaid as a
mandatory repayment under this Section 2.7(b) from the net cash proceeds of an
initial Debt Issuance (the “Initial Debt Issuance”) on or following the Closing
Date may be reborrowed by the Borrower, subject to the terms hereof, including
Section 4.2. Amounts required to be repaid as a mandatory repayment under this
Section 2.7(b) from the net cash proceeds of any Debt Issuance subsequent to the
Initial Debt Issuance (each a “Subsequent Debt Issuance”), shall be applied as a
permanent reduction of the Revolving Credit and may not be reborrowed. If the
net cash proceeds from any Subsequent Debt Issuance required to be paid as a
mandatory repayment hereunder is sufficient to repay the outstanding Loans in
full, each Lenders’ Commitment and the Revolving Credit Commitment shall be
permanently reduced to zero and cancelled and the Revolving Credit (including
the Commitment Increase Right) terminated. If 100% of the net cash proceeds of
any Subsequent Debt Issuance is not sufficient to repay the outstanding Loans in
full, immediately following the mandatory repayment required hereunder, the then
unused portion of the Revolving Credit shall be permanently cancelled (such
cancellation to be applied ratably in respect of the Revolving Credit
Commitments of each Revolving Credit Lender), and thereafter any Loans which
remain outstanding, if repaid prior to the Maturity Date, may not be reborrowed,
and the Revolving Credit Commitment shall be permanently reduced by an amount
equal to each such repayment. Mandatory repayments required pursuant to this
Section 2.7(b) shall be paid by the Borrower to the Administrative Agent within
two (2) Business Days of the closing of the applicable Debt Issuance.

2.8 Evidence of Debt.

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrower to such Lender resulting
from each extension of credit made by such Lender hereunder, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.

(b) The Administrative Agent shall maintain, with respect to the Borrower,
accounts in which it shall record (i) the amount of each Borrowing made
hereunder, the class and Type thereof and, in the cases of Bankers’ Acceptances
or LIBO Rate Loans, the relevant Contract Period or Interest Period, applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder, and (iii) the
amount of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender’s share thereof.

(c) The entries made in the accounts maintained pursuant to Sections 2.8(a) and
(b) shall be conclusive evidence (absent manifest error) of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Borrowings in accordance with the terms of this Agreement. In the event of a
conflict between the records maintained by an Administrative Agent and any
Lender, the records maintained by the Administrative Agent shall govern.

(d) Any Lender may request that Loans (other than B/As) made by it be evidenced
by a promissory note. In such event, the 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. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.4 be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

 

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2.9 Prepayments.

(a) Voluntary Prepayments. The Borrower may, at its option, at any time and from
time to time, prepay the Revolving Loans, without penalty or premium, (but
subject to payment of any amounts payable under Section 2.14), in whole or in
part, upon giving three (3) Business Days’ prior written notice to the
Administrative Agent; provided, however, that the Borrower may not prepay any
B/A Borrowing but may defease any B/A Borrowing in accordance with Section 2.11.
Such notice shall specify the date and amount of prepayment and whether the
prepayment is of Prime Loans, Bankers’ Acceptances, B/A Equivalent Loans, Base
Rate Loans or LIBO Rate Loans, or any combination thereof, and, in each case if
a combination thereof, the principal amount allocable to each. Upon receipt of
such notice, the Administrative Agent shall promptly notify each Applicable
Lender of the contents thereof and of such Lender’s Applicable Percentage of
such prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with any
amounts payable pursuant to Section 2.14 and accrued interest to such date on
the amount prepaid in accordance with Section 2.5(d). Each voluntary prepayment
of any Canadian Dollar-denominated Revolving Loan shall be in a minimum
principal amount of Cdn.$5,000,000 and in an integral multiple of Cdn.$100,000;
and each voluntary prepayment of any U.S. Dollar-denominated Revolving Loan
shall be in a minimum principal amount of U.S.$5,000,000 and in an integral
multiple of U.S.$100,000.

(b) Currency Fluctuations. If the Administrative Agent determines on any day,
solely by reason of currency fluctuations, that the Canadian $ Equivalent of the
Loans made by the Lenders to the Borrower exceeds 105% of the Commitments of the
Lenders (the amount by which Loans outstanding exceed 100% of the Commitments on
such day being referred to in this Section as the “Excess Amount”), then, the
Borrower shall immediately pay to the Administrative Agent, for the account of
the Lenders, an amount equal to the Excess Amount, upon the earlier of three
(3) Business Days written notice from the Administrative Agent to the Borrower
of such Excess Amount, and the date of any conversion or rollover of an existing
Borrowing to the extent the Administrative Agent has determined that an Excess
Amount is outstanding on such date. The Lenders shall apply the amount of any
such payment first on account of the repayment of the principal amount of any
outstanding Base Rate Loans until all such Base Rate Loans shall have been paid
in full, then on account of any outstanding LIBO Rate Loans until all such LIBO
Rate Loans shall have been paid in full.

(c) Notice by Borrower. Each notice provided by the Borrower hereunder in
respect of any prepayment hereunder shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid.

2.10 Fees.

(a) The Borrower shall pay to the Administrative Agent for the account of and
distribution to each Revolving Credit Lender in accordance with its Applicable
Percentage a standby fee for the period commencing on the Closing Date to and
including the Maturity Date or such earlier date as the Revolving Credit
Commitments shall have been terminated entirely (in this Section 2.10(a), the
“termination date”). The standby fees on the Revolving Credit Commitments shall
be payable in arrears on each Quarterly Date, commencing on the first Quarterly
Date to occur after the Closing Date, and on the termination date, and shall be
calculated at the then applicable rate per annum as set out in the definition of
Applicable Margin (in the column of the table therein titled “Standby Fee”) on
the average daily unused amount of the Revolving Credit Commitments, during the
Fiscal Quarter immediately preceding such Quarterly Date or during the Fiscal
Quarter to the termination date, as the case may be. All standby fees shall be
computed on the basis of a year of 365 or 366 days, as the case may be, and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).

 

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(b) The Borrower agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times as set forth in any Fee Letter.

(c) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, in the case of
Standby Fees, to the applicable Lenders. Fees paid shall not be refundable
except in the case of manifest error in the calculation of any fee payment.

2.11 Bankers’ Acceptances.

(a) Subject to the terms and conditions of this Agreement, the Borrower may
request a Borrowing by presenting drafts for acceptance and purchase as B/As by
the Lenders.

(b) No Contract Period with respect to a B/A to be accepted and purchased under
the Revolving Credit shall extend beyond the Maturity Date.

(c) To facilitate availment of B/A Borrowings, the Borrower hereby appoints each
Lender as its attorney to sign and endorse on its behalf (in accordance with a
Borrowing Request relating to a B/A Borrowing), in handwriting or by facsimile
or mechanical signature as and when deemed necessary by such Lender, blank forms
of B/As in the form requested by such Lender. In this respect, it is each
Lender’s responsibility to maintain an adequate supply of blank forms of B/As
for acceptance under this Agreement. The Borrower recognizes and agrees that all
B/As signed and/or endorsed by a Lender on behalf of the Borrower shall bind the
Borrower as fully and effectually as if signed in the handwriting of and duly
issued by the proper signing officers of the Borrower. Each Lender is hereby
authorized (in accordance with a Borrowing Request relating to a B/A Borrowing)
to issue such B/As endorsed in blank in such face amounts as may be determined
by such Lender; provided that the aggregate amount thereof is equal to the
aggregate amount of B/As required to be accepted and purchased by such Lender.
No Lender shall be liable for any damage, loss or other claim arising by reason
of any loss or improper use of any such instrument except the gross negligence
or wilful misconduct of the Lender or its officers, employees, agent or
representatives. Each Lender shall maintain a record with respect to B/As
(i) received by it in blank hereunder, (ii) voided by it for any reason,
(iii) accepted and purchased by it hereunder, and (iv) cancelled at their
respective maturities. On request by or on behalf of the Borrower, a Lender
shall cancel all forms of B/A which have been pre-signed or pre-endorsed on
behalf of the Borrower and which are held by such Lender and are not required to
be issued in accordance with any Borrowing Request made by the Borrower in
respect of a B/A Borrowing. Alternatively, the Borrower agrees that, at the
request of the Administrative Agent, the Borrower shall deliver to the
Administrative Agent a “depository note” which complies with the requirements of
the Depository Bills and Notes Act (Canada), and consents to the deposit of any
such depository note in the book-based debt clearance system maintained by the
Canadian Depository for Securities.

(d) Drafts of the Borrower to be accepted as B/As hereunder shall be signed as
set out in this Section 2.11. Notwithstanding that any person whose signature
appears on any B/A may no longer be an authorized signatory for any Lender or
the Borrower at the date of issuance of a B/A, such signature shall nevertheless
be valid and sufficient for all purposes as if such authority had remained in
force at the time of such issuance and any such B/A so signed shall be binding
on the Borrower.

(e) Promptly following receipt of a Borrowing Request specifying a Borrowing by
way of B/As, the Administrative Agent shall so advise the Lenders and shall
advise each Lender of the aggregate face amount of the B/As to be accepted by it
and the applicable Contract Period (which shall be identical for all Lenders).
In the case of B/A Borrowings under the Revolving Credit, the aggregate face
amount of the B/As to be accepted by the Lenders shall be in a minimum aggregate
amount of Cdn.$5,000,000 and shall be a whole multiple of Cdn.$100,000, and such
face amount shall be in the Revolving Credit Lenders’ pro rata portions of the
Borrowing, provided that the Administrative Agent may, in its sole discretion,
increase or reduce any Revolving Credit Lender’s portion of such B/A Borrowing
to the nearest Cdn.$1,000 provided that no Revolving Lender’s Revolving Credit
Commitment shall be thereby exceeded.

 

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(f) Upon acceptance of a B/A by a Lender, such Lender shall purchase, or arrange
for the purchase of, each B/A from the Borrower at the Discount Rate for such
Lender applicable to such B/A accepted by it and provide to the Administrative
Agent the Discount Proceeds for the account of the Borrower. The Acceptance Fee
payable by the Borrower to a Lender under Section 2.5 in respect of each B/A
accepted by such Lender shall be set off against the Discount Proceeds payable
by such Lender under this Section 2.11.

(g) Each Lender may at any time and from time to time hold, sell, rediscount or
otherwise dispose of any or all B/As accepted and purchased by it.

(h) If a Lender is not a chartered bank or Schedule III bank under the Bank Act
(Canada) or if a Lender notifies the Administrative Agent in writing that it is
otherwise unable to accept Bankers’ Acceptances, such Lender will, instead of
accepting and purchasing Bankers’ Acceptances, make a Loan (a “B/A Equivalent
Loan”) to the Borrower in the amount and for the same term as the draft which
such Lender would otherwise have been required to accept and purchase hereunder.
Each such Lender will provide to the Administrative Agent the Discount Proceeds
of such B/A Equivalent Loan for the account of the relevant Borrower. Each such
B/A Equivalent Loan will bear interest at the same rate which would result if
such Lender had accepted (and been paid an Acceptance Fee) and purchased (on a
discounted basis) a Bankers’ Acceptance for the relevant Contract Period (it
being the intention of the parties that each such B/A Equivalent Loan shall have
the same economic consequences for the Lenders and the Borrower as the Bankers’
Acceptance which such B/A Equivalent Loan replaces). All such interest shall be
paid in advance on the date such B/A Loan is made, and will be deducted from the
principal amount of such B/A Equivalent Loan. Subject to repayment requirements,
on the last day of the relevant Contract Period for such B/A Equivalent Loan,
the relevant Borrower shall be entitled to convert each such B/A Equivalent Loan
into another type of Loan, or to roll over each such B/A Equivalent Loan into
another B/A Equivalent Loan, all in accordance with the applicable provisions of
this Agreement.

(i) With respect to each B/A Borrowing, at or before 11:00 a.m. two Business
Days before the last day of the Contract Period of such B/A Borrowing, the
Borrower shall notify the Administrative Agent if the Borrower intends to issue
B/As on such last day of the Contract Period to provide for the payment of such
maturing B/A Borrowing. If the Borrower fails to notify the Administrative Agent
of its intention to issue B/As on such last day of the Contract Period, the
Borrower shall provide payment to the Administrative Agent on behalf of the
Lenders of an amount equal to the aggregate face amount of such B/A Borrowing on
the last day of the Contract Period thereof. If the Borrower fails to make such
payment, such maturing B/As shall be deemed to have been converted on the last
day of the Contract Period into a Prime Loan in an amount equal to the face
amount of such B/As.

(j) The Borrower waives presentment for payment and any other defence to payment
of any amounts due to a Lender in respect of a B/A accepted and purchased by it
pursuant to this Agreement which might exist solely by reason of such B/A being
held, at the maturity thereof, by such Lender in its own right, and the Borrower
agrees not to claim any days of grace if such Lender, as holder, sues the
relevant Borrower on the B/A for payment of the amount payable by the Borrower
thereunder. On the last day of the Contract Period of a B/A, or such earlier
date as may be required or permitted pursuant to the provisions of this
Agreement, the relevant Borrower shall pay the Administrative Agent for the
account of the Lenders that have accepted and purchased such B/A the full face
amount of such B/A and, after such payment, the Borrower shall have no further
liability in respect of such B/A and such Lenders shall be entitled to all
benefits of, and be responsible for all payments due to third parties under,
such B/A.

 

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(k) Except as required by any Lender upon the occurrence of an Event of Default,
no B/A Borrowing may be repaid by the Borrower prior to the expiry date of the
Contract Period applicable to such B/A Borrowing; provided, however, that the
Borrower may defease any B/A Borrowing by depositing with the Administrative
Agent an amount that is sufficient to repay the full face amount of such B/A
Borrowing on the expiry date of the Contract Period applicable to such B/A
Borrowing.

(l) If any Event of Default shall occur and be continuing, on the Business Day
that the Borrower receives written notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated,
including pursuant to Section 2.7, Lenders with B/A Exposure representing
greater than 50% of the total applicable B/A Exposure) demanding the deposit of
cash collateral pursuant to this Section 2.11(l), the Borrower shall deposit in
an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Revolving Credit Lenders, an amount in cash
equal to the applicable B/A Exposure as of such date; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default described
in Section 7.1(h), (i) or (j). Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Any such deposit shall bear interest for the account of the Borrower at
the rate customarily paid by the Administrative Agent for deposits of similar
currency, amount and tenor, which interest shall be credited to such account.
Moneys in such account shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the B/A Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of
Revolving Credit Lenders with B/A Exposure representing greater than 50% of the
total applicable B/A Exposure), be applied to satisfy other obligations of the
Borrower under this Agreement. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence of an Event of
Default, and all Events of Default shall have been subsequently cured or waived,
such amount together with all interest earned thereon (to the extent not applied
as aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

2.12 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a LIBO Rate Borrowing or Contract Period for a B/A Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period or CDOR Rate for such
Contract Period; or

(b) the Administrative Agent is advised by the Required Lenders that the LIBO
Rate for such Interest Period or CDOR Rate for such Contract Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period or Contract
Period, as applicable;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy 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, (A)(i) any Borrowing
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a LIBO Rate Borrowing shall be ineffective, and (ii) if any
Borrowing Request requests a LIBO Rate Borrowing,

 

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such Borrowing shall be made as a Base Rate Borrowing, (B) (i) any Borrowing
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a B/A Borrowing shall be ineffective, and (ii) if any Borrowing
Request requests a B/A Borrowing, such Borrowing shall be made as a Prime Rate
Borrowing.

2.13 Increased Costs; Illegality.

(a) If any Change in Law shall:

 

  (i) impose, modify or deem applicable any liquidity or other reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender; or

 

  (ii) impose on any Lender or the London interbank market any other condition
affecting this Agreement (including the imposition on any Lender of, or any
change to, any charge, other than Taxes, with respect to its LIBO Rate Loans or
B/A Borrowings, or its obligation to make LIBO Rate Loans or B/A Borrowings);

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan (or of maintaining its obligation to
make any such Loan) or to increase the cost to such Lender in maintaining any
Loan or to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise), then upon request of
such Lender the Borrower will pay to such Lender, such additional amount or
amounts as will compensate such Lender, for such additional costs incurred or
reduction suffered.

(b) If any Lender 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 capital or on the capital of such Lender’s holding company, if any, as
a consequence of this Agreement or the Loans made by, to a level below that
which such Lender or such Lender’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s policies and the
policies of such Lender’s holding company with respect to capital adequacy) and
such Lender’s desired return on capital, then from time to time the Borrower
will pay to such Lender, such additional amount or amounts as will compensate
such Lender or such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth amount or amounts necessary to
compensate such Lender as specified in Sections 2.13(a) or (b), together with a
brief description of the Change of Law, shall be delivered to the Borrower, and
shall be conclusive absent manifest error. In preparing any such certificate, a
Lender shall be entitled to use averages and to make reasonable estimates, and
shall not be required to “match contracts” or to isolate particular
transactions. The Borrower shall pay such Lender 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 to demand compensation pursuant
to this Section 2.13 shall not constitute a waiver of such Lender’s right to
demand such compensation; provided that the Borrower shall not be required to
compensate any Lender pursuant to this Section 2.13 for any increased costs or
reduction incurred more than 90 days prior to the date such Lender, notifies the
Borrower in writing of the Change in Law giving rise to such increased costs or
reduction and of such Lender’s intention to claim compensation therefor;
provided further, that if such adoption or such change giving rise to such
increased costs or reduction is retroactive, such 90-day period shall be
extended to include the period of retroactive effect.

 

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(e) In the event that any Lender shall have determined (which determination
shall be reasonably exercised and shall, absent manifest error, be final,
conclusive and binding upon all parties) at any time that the making or
continuance of any LIBO Rate Loan or B/A Borrowing has become unlawful or
materially restricted as a result of compliance by such Lender in good faith
with any Change in Law, or by any applicable guideline or order (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful), then, in any such event, such Lender shall give prompt notice (by
telephone and confirmed in writing) to the Borrower and to the Administrative
Agent of such determination (which notice the Administrative Agent shall
promptly transmit to the other Lenders). Upon the giving of the notice to the
Borrower referred to in this Section 2.13(e), the Borrower’s right to request
(by continuation, conversion or otherwise), and such Lender’s obligation to
make, LIBO Rate Loans or B/A Borrowing, as applicable, shall be immediately
suspended, and thereafter:

(i) any requested Borrowing of LIBO Rate Loans shall, as to such Lender only, be
deemed to be a request for a Base Rate Loan, and if the affected LIBO Rate Loan
or Loans are then outstanding, the Borrower shall immediately, or if permitted
by applicable Law, no later than the date permitted thereby, upon at least one
Business Day prior written notice to the Administrative Agent and the affected
Lender, convert each such LIBO Rate Loan into a Base Rate Loan, and

(ii) any requested B/A Borrowing shall, as to such Lender only, be deemed to be
a request for a Prime Rate Loan, and if the affected B/A Borrowings are then
outstanding, the Borrower shall immediately upon the expiry of the applicable
Contract Period convert each such B/A Borrowing into a Prime Rate Loan,

provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 2.13(e).

2.14 Break Funding Payments. In the event of (a) the failure by the Borrower to
borrow, convert, continue or prepay any Loan on the date specified in any notice
delivered by the Borrower pursuant hereto, or (b) the payment or conversion of
any B/A Borrowing or LIBO Rate Loan other than on the last day of a Contract
Period or Interest Period, as applicable (including as a result of an Event of
Default), or (c) the assignment of any Loan (including the assignment of any
LIBO Rate Loan) other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.20, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense, if any, incurred by such Lender which is attributable to such
event. In the case of a LIBO Rate Loan, such loss, cost or expense to any Lender
shall be deemed to include an amount determined by such Lender to be the excess,
if any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the LIBO 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 which would
accrue on such principal amount for such period and the interest rate at which
U.S. Dollar deposits, of a comparable amount and period are available to such
Lender at the commencement of such period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section 2.14 shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

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2.15 Taxes.

(a) Any and all payments by or on account of any obligation of the Credit
Parties under the Loan Documents shall be made free and clear of, and without
deduction or withholding for, or on account of, any present or future Taxes
unless deduction or withholding of any Taxes is required under applicable Laws.
If any deduction or withholding of any Tax is required by applicable Laws, the
Credit Parties shall make such Tax deduction or withholding and shall timely pay
to the relevant Governmental Authority such Taxes in accordance with applicable
Laws. To the extent that such Tax is an Indemnified Tax, the Credit Parties
shall pay such additional amounts as may be necessary so that, after such
required deduction or withholding of Indemnified Tax (including any Indemnified
Tax on the additional amounts payable under this Section 2.15), any amount
payable to the Administrative Agent or the Lender (as applicable) under the Loan
Documents is equal to the same amount that would have been payable had no such
deduction or withholding of Indemnified Tax been required under applicable Laws.

(b) In addition to the payments by the Credit Parties required by
Section 2.15(a), the Credit Parties shall pay any and all present or future
stamp, value added or documentary Taxes, goods and services, harmonized sales,
or other sales, excise or property Taxes, charges or similar levies arising from
any payment made under the Loan Documents or from the execution, delivery,
performance, recordation, or filing of, or enforcement of, or otherwise with
respect to, the Loan Documents to the relevant Governmental Authority in
accordance with applicable Laws.

(c) The Credit Parties shall indemnify the Administrative Agent and each Lender,
within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.15) or Taxes described in
Section 2.15(b) payable or paid by the Administrative Agent or Lender, as the
case may be, on or with respect to any payment by or on account of any
obligation of the Credit Parties under the Loan Documents and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto
(other than penalties, interest and expenses caused by the gross negligence or
wilful misconduct of the Administrative Agent or Lender, (as the case may be)),
whether or not such Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.15) or Taxes
described in Section 2.15(b) were correctly or legally asserted or imposed by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability, delivered to the Borrower by a Lender (or by the
Administrative Agent on its own behalf or on behalf of a Lender), shall be
conclusive absent manifest error.

(d) As soon as practicable after any payment of any Tax to a Governmental
Authority in respect of any payment by or on account of any obligation of the
Credit Parties under the Loan Documents is due under applicable Laws, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(e) Each Lender shall, at such times as are reasonably requested by the Borrower
or the Administrative Agent, provide the Borrower and the Administrative Agent
with any properly completed and executed documentation prescribed by applicable
Law, or reasonably requested by the Borrower or the Administrative Agent,
certifying as to any entitlement of such Lender to an exemption from, or
reduction in, any withholding Tax with respect to any payments to be made to
such Lender under the Loan Documents (including any documentation necessary to
establish an exemption from, or reduction of, any Taxes that may be imposed
under FATCA). Each such Lender shall, whenever a lapse in time or change in
circumstances renders such documentation expired, obsolete or inaccurate in any
respect, deliver promptly to the Borrower and the Administrative Agent updated
or other appropriate documentation (including any new documentation reasonably
requested by the applicable withholding agent) or promptly notify the Borrower
and the Administrative Agent of its inability to do so. In addition, any Lender,
if reasonably requested by the Borrower or the Administrative Agent, shall
deliver such other documentation prescribed by applicable Law or reasonably
requested by the Borrower or the Administrative Agent as will enable the
Borrower or the Administrative Agent to determine whether or

 

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not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth below in Section 2.15(g)) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(f) If the Administrative Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes, as to which it has been indemnified
by the Credit Parties or with respect to which the Credit Parties have paid
additional amounts pursuant to this Section 2.15, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amount paid, by the Credit Parties under this Section 2.15 with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
that the Administrative Agent or such Lender is required to repay such refund to
such Governmental Authority. This Section 2.15(f) shall not be construed to
require the Administrative Agent or any Lender to make available its Tax Returns
(or any other information relating to its Taxes which it deems confidential) to
the Borrower or any other Person. Nothing herein contained shall interfere with
the right of any Lender to arrange its affairs in whatsoever manner it thinks
fit and, without limiting the generality of the foregoing, no Lender shall be
under any obligation to claim relief for tax purposes on its corporate profits
or otherwise, or to claim such relief in priority to any other claims, reliefs,
credits or deductions available to it or to disclose details of its affairs.

(g) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as
applicable), such Lender shall deliver to Borrower and the Administrative Agent
at the time or times prescribed by applicable Law and at such time or times
reasonably requested by Borrower or the Administrative Agent such documentation
prescribed by applicable Law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional
documentation reasonably requested by Borrower or the Administrative Agent as
may be necessary for Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause, “FATCA” shall
include any amendments made to FATCA after the date of this Agreement.

2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees, amounts payable under any indemnity
contained herein, or otherwise hereunder) prior to 12:00 noon, 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 at the applicable Payment Office,
except that payments pursuant to any of Sections 2.13, 2.14, 2.15 and 9.3 shall
be made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof, which, in the
case of payments to be distributed to the Lenders, shall be on the basis of
their respective Applicable Percentage unless otherwise provided herein.

 

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If any payment hereunder shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension, provided that, in the case of any payment with
respect to a LIBO Rate Loan, the date for payment shall be advanced to the next
preceding Business Day if the next succeeding Business Day is in a subsequent
calendar month. All payments under this Section 2.16 in respect of LIBO Rate
Loans and Base Rate Loans or and in respect of indemnification and expense
reimbursement obligations invoiced in U.S. Dollars shall be made in U.S.
Dollars. All other payments under this Section 2.16 shall be made in Canadian
Dollars. The Borrower hereby authorizes the Administrative Agent to debit the
general operating bank account of the Borrower which is maintained with Royal
Bank of Canada to effect any payment due to the Lenders or the Administrative
Agent pursuant to this Agreement. Any resulting overdraft in such account shall
be payable by the Borrower to the Administrative Agent in same day funds.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first towards payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal then due hereunder, ratably amount
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.

(c) 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 resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans 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; 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) this
Section 2.16(c) shall not apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The 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 the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received written notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each applicable Lender,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender 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 Administrative Agent, at the rate of interest customary for
interbank compensation for such currency.

 

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(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.16(d), 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 under such Section 2.16(d) until all such
unsatisfied obligations are fully paid.

(f) Nothing in this Agreement shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

2.17 Currency Indemnity. If, for the purposes of obtaining judgment in any court
in any jurisdiction with respect to this Agreement or any other Loan Document,
it becomes necessary to convert into a particular currency (the “Judgment
Currency”) any amount due under this Agreement or under any other Loan Document
in any currency other than the Judgment Currency (the “Currency Due”), then
conversion shall be made at the rate of exchange prevailing on the Business Day
before the day on which judgment is given. For this purpose, (A), in respect of
any amount due in Canadian Dollars, “rate of exchange” means the average of the
rates at which the Administrative Agent is able, on the relevant date, to
purchase the Currency Due with the Judgment Currency in accordance with their
normal practice at its head office in Toronto, Ontario; and (B) in respect of
any amount due in U.S. Dollars, “rate of exchange” means the average of the
rates at which the Administrative Agent is able, on the relevant date, to
purchase the Currency Due with the Judgment Currency in accordance with its
normal practice at its head office in Toronto, Ontario. In the event that there
is a change in the rate of exchange prevailing between the Business Day before
the day on which the judgment is given and the date of receipt by the
Administrative Agent of the amount due, the Borrower will, on the date of
receipt by the Administrative Agent, pay such additional amounts, if any, or be
entitled to receive reimbursement of such amount, if any, as may be necessary to
ensure that the amount received by the Administrative Agent on such date is the
amount in the Judgment Currency which when converted at the rate of exchange
prevailing on the date of receipt by the Administrative Agent is the amount then
due under this Agreement or such other Loan Document in the Currency Due. If the
amount of the Currency Due which the Administrative Agent is so able to purchase
is less than the amount of the Currency Due originally due to it, the Borrower
shall indemnify and save the Administrative Agent and the Lenders harmless from
and against all loss or damage arising as a result of such deficiency. This
indemnity shall constitute an obligation separate and independent from the other
obligations contained in this Agreement and the other Loan Documents, shall give
rise to a separate and independent cause of action, shall apply irrespective of
any indulgence granted by an Administrative Agent from time to time and shall
continue in full force and effect notwithstanding any judgment or order for a
liquidated sum in respect of an amount due under this Agreement or any other
Loan Document or under any judgment or order.

2.18 [Reserved].

2.19 [Reserved].

2.20 Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.13, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the
future, and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

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(b) If any Lender requests compensation under Section 2.13, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense (including the processing and recording fee
contemplated by Section 9.4(b)) and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.4), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be, another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts), and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.13 or payments required to be made pursuant to Section 2.15,
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

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 shall cease to accrue on the unfunded portion of the Revolving Credit
Commitment of such Defaulting Lender pursuant to Section 2.10(a);

(b) the Revolving Credit Commitment and Revolving Credit Exposure of such
Defaulting Lender shall not be included in determining whether the Lenders or
Required Lenders have taken or may take any action hereunder (including any
consent to any amendment, waiver or other modification pursuant to
Section 9.2(b)); provided, that this clause (b) shall not apply to the vote of a
Defaulting Lender in the case of an amendment, waiver or other modification in
respect of (i) an increase in or extension of such Defaulting Lender’s
Commitment, or (ii) the reduction or excusing of or postponement of the
scheduled date of payment of the principal amount of, or interest or fees
payable on Loans as to such Defaulting Lender without such Defaulting Lender’s
consent.

In the event that the Administrative Agent and the Borrower each agrees that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then on such date such Lender shall purchase at par such
of the Loans of the other Lenders as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Loans in accordance with
its Applicable Percentage.

 

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ARTICLE 3

REPRESENTATIONS AND WARRANTIES

In order to induce the Administrative Agent and the Lenders to enter into this
Agreement, to make any Loans hereunder, the Borrower (on its own behalf and on
behalf of its Subsidiaries, to the extent applicable) hereby represents and
warrants to the Administrative Agent and each Lender that each statement set
forth in this Article 3 is true and correct on the Closing Date, and, subject to
the Section 4.2(a), will be true and correct on the date each Borrowing is
requested and made hereunder:

3.1 Organization; Powers. Each Credit Party is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.

3.2 Authorization; Enforceability. The Transactions are within the corporate
powers of each Credit Party and have been duly authorized by all necessary
corporate and, if required, shareholder action. This Agreement and the other
Loan Documents to which each Credit Party is a party have been duly executed and
delivered by such Credit Party and constitute legal, valid and binding
obligations of such Credit Party, enforceable in accordance with their 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.

3.3 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 other than those the absence of which could not
reasonably be expected to result in a Material Adverse Effect, (b) will not
violate any applicable Law or the charter, by-laws or other organizational
documents of any Credit Party or any order of any Governmental Authority,
(c) will not violate or result in a default under any material indenture,
material agreement or other material instrument binding upon any Credit Party or
their respective assets, or give rise to a right thereunder to require any
payment to be made by any Credit Party, except such as could not reasonably be
expected to result in a Material Adverse Effect, and (d) will not result in the
creation or imposition of any Lien on any asset of any Credit Party.

3.4 Financial Condition.

(a) The Borrower has publicly filed its consolidated balance sheets and
statements of income, retained earnings and changes in financial position as of
and for the Fiscal Year ended December 30, 2012, together with the report of its
auditors thereon. Such financial statements present fairly, in all material
respects, the consolidated financial position and results of operations and cash
flows of the Borrower as of such date and for such period in accordance with
GAAP.

(b) Since December 30, 2012 there has been no Material Adverse Change.

(c) All written information (including that disclosed in all financial
statements) pertaining to the Credit Parties (in this Section 3.4(c), the
“Information”) that has been or will be made available to the Lenders or the
Administrative Agent by the Borrower, taken as a whole, is or will be, as of the
date furnished or publicly filed, complete and correct in all material respects
and does not or will not, as of the date furnished or publicly filed, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made.

 

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3.5 Litigation and Contingent Obligations. Except as disclosed in Schedule 3.5,
and except for environmental-related matters (which are dealt with in
Section 3.10), there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting any of the Credit Parties (i) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (ii) that involve this
Agreement, any other Loan Document, or the Transactions. Other than any
contingent obligation which could not reasonably be expected to have a Material
Adverse Effect, the Borrower has no contingent obligations not provided for or
disclosed in the financial statements and notes thereto referred to in
Section 5.1.

3.6 Compliance with Laws. Each Credit Party is in compliance with all Laws
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. No Credit Party has violated or failed to obtain any
Authorization necessary to the ownership of any of its property or assets or the
conduct of its business, which violation or failure could reasonably be expected
to have (in the event that such a violation or failure were asserted by any
Person through appropriate action) a Material Adverse Effect.

3.7 Taxes. Each Credit Party has filed or caused to be filed all material Tax
Returns required to have been filed by it under applicable Laws and has paid or
caused to be paid all Taxes required to be paid by it under applicable Laws
except where (i) the validity or amount of such Taxes is being contested,
objected to or appealed in good faith by appropriate proceedings, (ii) the
Credit Party has made adequate provisions or reserves in its financial
statements for such Taxes in accordance with GAAP, and (iii) the failure to pay
such Taxes pending such contest, objection or appeal could not reasonably be
expected individually or in the aggregate to have a Material Adverse Effect.

3.8 Pension Plans. The Pension Plans are duly registered under the Income Tax
Act (if required to be so registered) and any other applicable Laws which
require registration, have been administered in accordance with the Income Tax
Act and such other applicable Laws and no event has occurred which could
reasonably be expected to cause the loss of such registered status, except to
the extent that any failure to do so could not reasonably be expected to have a
Material Adverse Effect. All material obligations of each of the Credit Parties
(including fiduciary, funding, investment and administration obligations)
required to be performed in connection with the Pension Plans and the funding
agreements therefor have been performed on a timely basis, except to the extent
that any failure to do so could not reasonably be expected to have a Material
Adverse Effect. There are no outstanding disputes concerning the assets of the
Pension Plans or the Benefit Plans that could reasonably be expected to have a
Material Adverse Effect. All contributions or premiums required to be made or
paid by each of the Credit Parties to the Pension Plans or the Benefit Plans
have been made or paid on a timely basis in accordance with the terms of such
plans and all applicable Laws, except to the extent that any failure to do so
could not reasonably be expected to have a Material Adverse Effect. There have
been no improper withdrawals or applications of the assets of the Pension Plans
or the Benefit Plans, that could reasonably be expected to have a Material
Adverse Effect.

3.9 Defaults. No Credit Party is in default nor has any event or circumstance
occurred which, but for the passage of time or the giving of notice, or both,
would constitute a default (in any respect that could reasonably be expected to
have a Material Adverse Effect) under any material loan or credit agreement,
indenture, mortgage, deed of trust, security agreement or other instrument or
agreement evidencing or pertaining to any Indebtedness of any Credit Party, or
under any material agreement or instrument to which a Credit Party is a party or
by which any Credit Party is bound.

3.10 Environmental Matters. No Credit Party has received any written notice to
the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.

 

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3.11 Anti-Money Laundering. Set forth in Schedule 3.11 attached hereto is (a) a
list of the names of each of the directors of the Borrower and, to the knowledge
of the Borrower after having taken reasonable measures to obtain such
information, the principal occupation of each such director, and (b) a list of
the names of all individuals who, to the knowledge of the Borrower after having
taken reasonable measures to obtain such information, directly or indirectly own
or control twenty-five percent (25%) or more of the voting interests or Equity
Securities of the Borrower or its Subsidiaries, and their respective addresses
and occupations, in each case as at the date of this Agreement. Neither the
Borrower nor any of its Subsidiaries is a charity registered with the Canada
Revenue Agency; and neither the Borrower nor any of its Subsidiaries solicits
charitable financial donations from the public.

ARTICLE 4

CONDITIONS

4.1 Closing Date. The obligations of the Lenders to make Loans hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.2), provided that once all
such conditions have been satisfied or waived in accordance with Section 9.2),
the obligations of the Lenders to make Loans hereunder shall be governed by
Section 4.2:

(a) Credit Agreement. The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of each party hereto, or (ii) written evidence satisfactory to
the Administrative Agent (which may include facsimile transmission of a signed
signature page of this Agreement) that each such party has signed a counterpart
of this Agreement.

(b) Legal Opinions. The Administrative Agent shall have received customary
written opinions (addressed to the Administrative Agent and the Lenders and
dated the Closing Date) from counsel to the Credit Parties covering the Credit
Parties, this Agreement, the other Loan Documents, or the Transactions in form
and substance acceptable to the Administrative Agent, acting reasonably
(together with copies of all factual certificates and legal opinions delivered
to such counsel in connection with such opinions upon which counsel has relied).
The Administrative Agent and the Lenders agree that in-house legal counsel to
any Credit Party may deliver any legal opinion required in respect of the
corporate existence and standing of such Credit Party, the due authorization,
execution and delivery of any Loan Documents to which such Credit Party is a
party, and the lack of conflict with reference to the constating documents of
such Credit Party, provided that such in-house counsel is qualified, on the
Closing Date, to practice law in the jurisdiction of incorporation or formation
of such Credit Party. All opinions and certificates referred to in this
Section 4.1(b) shall be addressed to the Administrative Agent and the Lenders
and dated the Closing Date.

(c) Corporate Certificates. The Administrative Agent shall have received:

 

  (i) certified copies of the resolutions of the board of directors,
shareholders or other similar action of each Credit Party, dated as of the
Closing Date (or such other date as is acceptable to the Administrative Agent),
and approving, as appropriate, the Loans, this Agreement and the other Loan
Documents, and all other documents, if any, to which such Credit Party is a
party and evidencing corporate authorization with respect to such documents;

 

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  (ii) a certificate of the Secretary or an Assistant Secretary of each Credit
Party, dated as of the Closing Date (or such other date as is acceptable to the
Administrative Agent), and certifying (A) the name, title and true signature of
each officer of such Person authorized to execute this Agreement and the other
Loan Documents to which it is a party, (B) the name, title and true signature of
each officer of such Person authorized to provide the certifications required
pursuant to this Agreement, including certifications required pursuant to
Section 5.1 and Borrowing Requests, and (C) that attached thereto is a true and
complete copy of the articles of incorporation and by-laws of each Credit Party,
as amended to such date, and a recent certificate of status, certificate of
compliance, good standing certificate or analogous certificate; and

 

  (iii) a certificate of the Secretary or an Assistant Secretary of the Borrower
dated as of the Closing Date certifying that attached thereto is a true and
complete copy of the Existing Revolving Facility Agreement, including all
amendments thereto to the Closing Date.

(d) Closing Conditions Certificate. The Administrative Agent shall have received
a certificate, dated the Closing Date and signed by a Responsible Officer of the
Borrower, confirming compliance with the financial covenants set out in
Section 5.10 (without the inclusion of any calculation thereof in such
certificate) and with the conditions set out in Section 4.2(a) and (b).

(e) Fees. The Administrative Agent, the Lenders and the Lead Arranger shall have
received all fees and other amounts due and payable on or prior to the Closing
Date, including, to the extent invoiced, reimbursement or payment of all
reasonable legal fees and other reasonable out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Loan Document.

(f) Execution and Delivery of Documentation. Each Credit Party shall have duly
authorized, executed and delivered all documents required hereunder, all in form
and substance satisfactory to the Administrative Agent, acting reasonably. The
Administrative Agent shall have received and be satisfied with the results of
all bankruptcy searches conducted by the Borrower and their counsel with respect
to the Credit Parties in all jurisdictions selected by the Administrative Agent
and its counsel.

(g) Guarantees. The Administrative Agent shall have received executed copies of
the (i) a Subsidiary Guarantee from The TDL Group Corp. dated as of the Closing
Date substantially in the form of Exhibit G, and (ii) and evidence that no
additional Subsidiary Guarantees are necessary to meet the conditions described
in Section 5.9.

(h) Regulatory Approval; Consents; Waivers. The Administrative Agent and the
Lenders shall be satisfied, acting reasonably, that all material Authorizations
required in connection with the Transactions contemplated hereby have been
obtained and are in full force and effect, and that all consents and waivers
required to consummate the Transactions have been obtained, to the extent that
consummation of the Transactions would otherwise be restricted or prohibited
under the terms of any material contract, in each case without the imposition of
any burdensome provisions.

(i) Financial Statements. The Administrative Agent and the Lenders shall be
satisfied that the Borrower is up to date in its required public filings of
annual and interim period financial statements to the Closing Date.

 

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(j) Indebtedness. The Transactions contemplated in this Agreement and the other
Loan Documents shall not have caused any event or condition to occur which has
resulted, or which will result, in any Material Indebtedness becoming due prior
to its scheduled maturity or that permits (with or without the giving of notice,
the lapse of time, or both) the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity, or which will result in
the creation of any Liens under any Indebtedness.

(k) Other Documentation. The Administrative Agent and the Lenders shall have
received such documents as they may reasonably request in connection with
applicable “know your customer” and anti-money laundering rules and regulations,
and the Administrative Agent shall have received such other documents and
instruments as are customary for transactions of this type or as they may
reasonably request, including those required under applicable “know your
customer” and anti-money laundering rules and regulations.

The obligations of the Lenders to make Loans hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.2) at or prior to 3:00 p.m. Toronto time on October 31,
2013 (and, in the event such conditions are not so satisfied or waived by such
time, the Commitments shall terminate at such time).

4.2 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, (including on the occasions of the initial Borrowings
hereunder), is subject to the satisfaction of the following conditions:

(a) the representations and warranties of the Borrower set out in this Agreement
shall be true and correct on and as of the date of each such Borrowing as if
made on such date except to the extent that (i) any change to the
representations and warranties has been disclosed to the Administrative Agent
and accepted by the Required Lenders, or (ii) any representation and warranty is
stated to be made as of a particular time, which representation and warranty
shall remain true and correct as of such earlier date;

(b) at the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing; and

(c) the Administrative Agent shall have received a Borrowing Request in the
manner and within the time period required by Section 2.3.

Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the accuracy of the matters specified in
paragraphs (a) and (b) above. This requirement does not apply on the conversion
or rollover of an existing Borrowing provided that the aggregate outstanding
Borrowings will not be increased as a consequence thereof.

 

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ARTICLE 5

AFFIRMATIVE COVENANTS

From (and including) the Closing Date 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, the Borrower (on its own behalf and on
behalf of its Subsidiaries, to the extent applicable) covenants and agrees with
the Lenders that:

5.1 Financial Statements and Other Information.

(a) As soon as available and in any event within 90 days after the end of each
Fiscal Year, (i) the Borrower will publicly file its audited consolidated
balance sheet and related statements of income, retained earnings and statements
of cash flow as of the end of and for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all reported
on by PricewaterhouseCoopers or other independent auditors 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
Borrower on a consolidated basis in accordance with GAAP consistently applied,
and (ii) the Borrower will furnish to the Administrative Agent, for delivery by
the Administrative Agent to each Lender, its unaudited consolidated balance
sheet and related statements of income, retained earnings and statements of cash
flow as of the end of and for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, on a consolidated
basis in accordance with GAAP consistently applied, except that the assets,
liabilities, revenues and expenses of the Advertising Entities, the Joint
Ventures and the Consolidated VIEs shall be disregarded provided that all or
substantially all of the Indebtedness of the Advertising Entities, the Joint
Ventures and the Consolidated VIEs is non-recourse to the Borrower and its
Subsidiaries;

(b) As soon as available and in any event within 45 days after the end of each
of the first three Fiscal Quarters of each Fiscal Year, (i) the Borrower will
publicly file its unaudited consolidated balance sheet and related statements of
income, retained earnings and statement of cash flow as of the end of and for
such Fiscal Quarter and the then elapsed portion of the Fiscal Year which
includes such Fiscal Quarter, 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 a
Responsible Officer of the Borrower as presenting fairly in all material
respects the financial condition and results of operations of the Borrower on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments; and (ii) the Borrower will furnish to the
Administrative Agent for delivery to the Lenders its unaudited consolidated
balance sheet and related statements of income, retained earnings and statement
of cash flow as of the end of and for such Fiscal Quarter and the then elapsed
portion of the Fiscal Year which includes such Fiscal Quarter, 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 a Responsible Officer of the Borrower as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments, except that
the assets, liabilities, revenues and expenses of the Advertising Entities, the
Joint Ventures and the Consolidated VIEs shall be disregarded provided that all
or substantially all of the Indebtedness of the Advertising Entities, the Joint
Ventures and the Consolidated VIEs is non-recourse to the Borrower and its
Subsidiaries;

(c) Concurrently with furnishing the financial statements required pursuant to
Sections 5.1(a)(ii) and 5.1(b)(ii) above, the Borrower shall deliver to the
Administrative Agent, who shall in turn deliver to the Lenders, a certificate of
the Borrower, substantially in the form of Exhibit C hereto, signed by a
Responsible Officer of the Borrower (i) stating that a review of such financial
statements during the period covered thereby and of the activities of the Credit
Parties has been made under such Responsible Officer’s supervision with a view
to determining whether the Credit Parties have fulfilled all of their
obligations under this Agreement and the other Loan Documents, (ii) stating that
no Default or Event of Default exists as of such date of certification; or, if
there shall be a Default or Event of Default, specifying the nature and status
thereof and the Borrower’ proposed response thereto, (iii) demonstrating in
reasonable detail compliance (including showing all financial covenant and other
material calculations) as at the end of the most recently completed Fiscal Year
or the most recently completed Fiscal Quarter, with the financial covenants in
Section 5.10 and the basket in paragraph (B) in the last sentence of Section 6.1
and the baskets in Sections 6.2(cc) and 6.5(a)(i), (iv) listing the Credit
Parties as at the end of the most recently completed Fiscal Year, and
(v) containing or accompanied by such financial or other details, information
and material as the Administrative Agent may reasonably request to evidence such
compliance;

 

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(d) Promptly after any Credit Party learns of the receipt or occurrence of any
of the following, the Borrower shall deliver to the Administrative Agent, who
shall in turn deliver to the Lenders, a certificate of the Borrower, signed by a
Responsible Officer of the Borrower, specifying (i) any official notice of any
violation, possible violation, non-compliance or possible non-compliance, or
claim made by any Governmental Authority pertaining to all or any part of the
properties of any Credit Party which could reasonably be expected to have a
Material Adverse Effect, (ii) any event which constitutes a Default or Event of
Default, together with a detailed statement specifying the nature thereof and
the steps being taken to cure such Default or Event of Default, or (iii) any
change to any of the ratings assigned by any rating agency to the Rated Debt of
the Borrower; and

(e) Promptly after the occurrence thereof, the Borrower shall deliver to the
Administrative Agent, who shall in turn deliver to the Lenders, notice of the
institution of or any material adverse development in any action, suit or
proceeding or any governmental investigation or any arbitration before any court
or arbitrator or any Governmental Authority or official against any Credit Party
or any material property thereof which could reasonably be expected to have a
Material Adverse Effect.

(f) The Borrower shall deliver to the Administrative Agent, who shall in turn
deliver to the Lenders, copies of all filings made with and consents,
authorizations or acceptances received from the Ontario Securities Commission,
any similar regulatory authority and the Toronto Stock Exchange in connection
with any substantial or normal course issuer bid by the Borrower, or other
transaction contemplated in Section 5.7 and in connection with any Debt
Issuance, in each case promptly after the making of such filings or receipt of
such consents, authorizations or acceptances as the case may be.

5.2 Existence; Conduct of Business. The Borrower will, and will cause each other
Credit Party to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence (except as permitted in
Section 6.3), and except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect, obtain, preserve,
renew and keep in full force and effect any and all rights, licenses, permits,
privileges and franchises material to the conduct of its business.

5.3 Payment of Tax Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay when due its Tax liabilities, in accordance with applicable
Laws, except where (a) the validity or amount of such Taxes is being contested,
objected to or appealed in good faith by appropriate proceedings, (b) the
Borrower or such other Subsidiary has made adequate provisions or reserves for
such Taxes in its financial statements in accordance with GAAP, and (c) the
failure to pay such Taxes pending such contest, objection or appeal could not
reasonably be expected individually or in the aggregate to have a Material
Adverse Effect.

5.4 Maintenance of Properties. The Borrower will, and will cause each of its
Subsidiaries to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
except (i) to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect or (ii) as otherwise permitted by
Section 6.3.

 

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5.5 Books and Records; Inspection Rights. The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which entries
in accordance with GAAP are made of all dealings and transactions in relation to
its business and activities. The Borrower will, and will cause each other Credit
Party to, permit any representatives designated by either the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times during normal business hours as the
Administrative Agent may reasonably request and having due regard for, and with
minimal disruptions of, the ongoing business of the Borrower and the
Subsidiaries; provided that (i) all such visits, inspections and inquiries shall
be co-ordinated through the Administrative Agent, and (ii) unless a Default
shall have occurred and be continuing, neither the Borrower nor any of its
Subsidiaries shall be responsible for the costs and expenses incurred by the
Administrative Agent, any Lender, or their representatives in connection with
such inspection or visit.

5.6 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all Laws of any Governmental Authority applicable
to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.7 Use of Proceeds. The proceeds of the Revolving Loans will be used for
general corporate purposes of the Borrower and for the purchase of common shares
of the Borrower under any substantial or normal course issuer bid, by private
agreement or otherwise, or other cash distribution to shareholders, in each case
made in compliance with applicable securities laws and the requirements of the
Toronto Stock Exchange.

5.8 Insurance. The Borrower will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to their respective properties and business
against such liabilities, casualties, risks and contingencies and in such types
(including business interruption insurance) and amounts as is customary in the
case of Persons engaged in the same or similar businesses and similarly situated
and in accordance with any requirement of any Governmental Authority.

5.9 Subsidiary Guarantees. If, as at any Calculation Date, the Gross Revenues of
the Guarantors who have provided Subsidiary Guarantees (if any) for the
Calculation Period ended on such Calculation Date, when aggregated with the
Gross Revenues of the Borrower for such Calculation Period, do not meet or
exceed the Threshold, the Borrower shall, within 45 days of such Calculation
Date (or 90 days if such Calculation Date is the end of a Fiscal Year)
designate, by written notice to the Administrative Agent, those Subsidiaries,
including the Subsidiary having the highest Gross Revenues for such Calculation
Period, with Gross Revenues for such Calculation Period which, when aggregated
with those of the Borrower, would meet or exceed the Threshold to become
Guarantors and provide a Subsidiary Guarantee to the Administrative Agent within
such 45 or 90 day period. The Borrower may, by written notice to the
Administrative Agent within 45 days of any Calculation Date (or 90 days if such
Calculation Date is the end of a Fiscal Year), amend any designation previously
made by it provided that the foregoing conditions of this Section 5.9 are
satisfied, and the Subsidiary Guarantee of any Subsidiary no longer designated
shall be released automatically and, subject to such Subsidiary being
re-designated as a Guarantor as set out below, of no further force or effect
upon each new designee delivering its Subsidiary Guarantee, to the extent
required to meet the Threshold. The Subsidiary Guarantees of all Guarantors
(including the Subsidiary Borrower Guarantee) shall be subject to release upon
satisfaction of the Release Conditions as at any Calculation Date. For greater
certainty, to the extent that the Release Conditions are no longer satisfied as
at any subsequent Calculation Date, the Borrower shall, in accordance with this
Section 5.9, designate those Subsidiaries necessary to meet or exceed the
Threshold to become Guarantors and provide a Subsidiary Guarantee within the
time frame set out above. Any Canadian Subsidiary which is designated as a
Guarantor at any time after the Closing Date shall enter into and deliver to the
Administrative Agent a Subsidiary Guarantee substantially in the form of Exhibit
G. Any U.S. Subsidiary which is designated as a Guarantor at any time after the
Closing Date shall enter into and deliver to the Administrative Agent a
Subsidiary Guarantee substantially in the form of Exhibit F.

 

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5.10 Financial Covenants. The Borrower will comply with the following financial
covenants:

(a) Consolidated Total Debt to Consolidated EBITDA: The Borrower will not
permit, as at the end of each Fiscal Quarter, the ratio of Consolidated Total
Debt as at the end of such Fiscal Quarter to Consolidated EBITDA for the Rolling
Period then ended, to exceed 3.00:1.00.

(b) Fixed Charge Coverage Ratio. The Borrower will not permit, as at the end of
each Fiscal Quarter, the ratio of Consolidated EBITDAR to Consolidated Fixed
Charges for the Rolling Period then ended, to be less than 2.00:1.00.

(c) For the purpose of determining compliance with this Section 5.10,
(i) Consolidated EBITDA, Consolidated EBITDAR and Consolidated Fixed Charges
shall include the historical financial results of any acquired Person which
becomes a Subsidiary or acquired business as if the acquisition occurred at the
beginning of the testing period and shall give effect, on a pro forma basis, to
the incurrence or repayment of Indebtedness in connection with the acquisition,
(ii) Consolidated EBITDA, Consolidated EBITDAR and Consolidated Fixed Charges
shall exclude the historical financial results of any disposed Person which
ceases to be a Subsidiary or disposed business as if the disposition occurred at
the beginning of the testing period, and (iii) notwithstanding any provisions of
GAAP to the contrary, the assets, liabilities, revenues and expenses of the
Advertising Entities, the Joint Ventures and the Consolidated VIEs shall be
disregarded, provided that all or substantially all of the Indebtedness of the
Advertising Entities, the Joint Ventures or the Consolidated VIEs is
non-recourse to the Borrower and its Subsidiaries.

5.11 KYC Documentation and Anti-Money Laundering. The Borrower acknowledges that
each of the Administrative Agent and the Lenders have certain anti-money
laundering and anti-terrorism responsibilities under various Laws and
regulations and that from time to time the Administrative Agent or either of
them, on their own behalf or on behalf of any of the Lenders or any prospective
assignee of a Lender or Participant, may request information in order to comply
with applicable Laws and internal requirements (including any applicable “know
your customer” or “know your client” requirements). Upon receipt of any such
request, The Borrower agrees to take reasonable measures to obtain and provide
the Administrative Agent with such information as may reasonably have been so
requested and/or required by Law. The proceeds of the Revolving Loans will be
used only by the Borrower and its Subsidiaries and only for the purposes
provided for in Section 5.7, and will not be used, directly or indirectly, by
any other Person for any other purpose.

ARTICLE 6

NEGATIVE COVENANTS

From (and including) the Closing Date 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, the Borrower (on its own behalf and on
behalf of its Subsidiaries, to the extent applicable) covenants and agrees with
the Lenders that:

6.1 Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to incur, assume or permit to exist any Indebtedness, except:

(a) any Indebtedness created hereunder;

 

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(b) any other unsecured Indebtedness existing on the Closing Date and set out in
Schedule 6.1, and any extensions, renewals or replacements of any such
Indebtedness on substantially on the same terms and conditions or otherwise on
terms and conditions satisfactory to the Required Lenders, acting reasonably;

(c) any Indebtedness of the Borrower or a Subsidiary to another Borrower or
Subsidiary;

(d) any Guarantee by the Borrower or a Subsidiary of Indebtedness of any other
Borrower or Subsidiary which is otherwise permitted hereunder;

(e) Indebtedness secured by Purchase Money Liens, provided that the aggregate
principal amount of Indebtedness permitted by this clause (e) shall not exceed
the amount permitted under Section 6.2(k) at any time;

(f) Capital Lease Obligations;

(g) Receivables Facility Attributed Indebtedness;

(h) any other unsecured Indebtedness of the Borrower or any Subsidiary, provided
that the Borrower is in compliance with the financial covenants in Section 5.10
both before and immediately after the incurrence of any such Indebtedness and no
other Default shall have occurred and be continuing;

(i) any other secured Indebtedness of the Borrower or any Subsidiary, provided
that the aggregate amount of such Indebtedness permitted by this clause
(i) shall not exceed the amount permitted by Section 6.2(cc) or shall be
permitted by Section 6.2(z); and provided further that the Borrower is in
compliance with the financial covenants in Section 5.10 both before and
immediately after the incurrence of any such Indebtedness and no other Default
shall have occurred and be continuing;

provided that, with respect to only clauses (e), (h) and (i) above, the Borrower
will not permit any Subsidiary which is not a Guarantor to incur, assume or
permit to exist any Indebtedness, except (A) any Indebtedness to a Credit Party,
and (B) Indebtedness in respect of Borrowed Money in an aggregate amount, for
all Subsidiaries which are not Guarantors, not exceeding Cdn.$100,000,000 (or
the equivalent thereof in any other currency), provided that at the time such
Indebtedness is incurred, assumed or permitted to exist the Borrower shall be in
compliance with the financial covenants in Section 5.10 both before and
immediately after the incurrence of any such Indebtedness and no other Default
shall have occurred and then be continuing.

6.2 Liens. The Borrower will not, and will not permit any of its Subsidiaries
to, create, incur, or suffer to exist any Lien in, of or on the property of the
Borrower or any of its Subsidiaries except:

(a) the interest of a lessor under a capital lease or otherwise securing Capital
Lease Obligations;

(b) Liens existing on the Closing Date and described in Schedule 6.2;

(c) Liens for Taxes on its property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate reserves or
provisions in accordance with GAAP shall have been made in its financial
statements;

 

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(d) Liens imposed by law, such as landlords’ carriers’, materialmen’s,
processors’, warehousemen’s and mechanics’ liens and other similar liens arising
in the ordinary course of business which secure payment of obligations not more
than sixty (60) days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;

(e) Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation;

(f) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety, indemnity and appeal and
release bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

(g) easements, reservations, rights-of-way, restrictions, survey exceptions,
encroachments, covenants, minor defects, irregularities and other similar
encumbrances as to real property of the Borrower or any Subsidiary which
customarily exist on properties of corporations engaged in similar activities
and similarly situated and which do not materially detract from the value of the
property subject thereto or interfere with the conduct of the business of the
Borrower or any Subsidiary conducted at the property subject thereto;

(h) Liens existing on property or assets at the time of acquisition thereof
after the Closing Date by the Borrower or any Subsidiary, provided that (i) such
Liens existed at the time of such acquisition and were not created in
anticipation thereof, and (ii) any such Lien does not encumber any other
property or assets (other than additions thereto and property in replacement or
substitution thereof);

(i) Liens existing on property or assets of a Person which becomes a Subsidiary
after the Closing Date or which, on the date on which such Person becomes a
Subsidiary, such Person shall be contractually bound to grant on any of its
property or assets; provided that (i) such Liens or contractual obligations
existed at the time such Person became a Subsidiary and were not created in
anticipation thereof, and (ii) any such Lien does not encumber any other
property or assets (other than additions thereto and property in replacement or
substitution thereof);

(j) Liens arising by reason of any judgment, decree or order of any court or
other Governmental Authority or in connection with arbitration proceedings, if
appropriate legal proceedings are being diligently prosecuted and shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired, in an aggregate amount not to exceed, when
taken together with all Liens securing bonds to stay judgments or in connection
with appeals as permitted by Section 6.2(f), Cdn.$50,000,000 at any time
outstanding;

(k) Purchase Money Liens securing purchase money Indebtedness (other than
Capital Leases) incurred by the Borrower or any Subsidiary after the Closing
Date to finance the acquisition or construction of assets used in its business,
if (i) at the time of such incurrence, no Default or Event of Default has
occurred and is then continuing or would result from such incurrence, (ii) such
Indebtedness does not exceed the lower of the fair market value or the cost of
the applicable assets on the date acquired, and (iii) such Indebtedness does not
exceed Cdn.$50,000,000 in the aggregate outstanding at any time; provided that
such Liens shall not apply to any property of the Borrower or any Subsidiary
other than that financed (including improvements thereto);

(l) the title of a lessor in or to property subject to an operating lease or
subject to a Sale/Leaseback Transaction;

 

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(m) Liens (if any) from time to time securing the obligations hereunder;

(n) municipal and zoning ordinances, which are not violated in any material
respect by the existing improvements and the present use made by the Borrower or
any Subsidiary of real property;

(o) customary rights of set off, revocation, refund or chargeback under deposit
agreements or under applicable law of banks or other financial institutions
where the Borrower or any Subsidiary maintains deposits in the ordinary course
of business permitted by this Agreement;

(p) netting and/or cash management arrangements with financial institutions at
which any accounts are maintained or utilized by the Borrower or any Subsidiary;

(q) Liens arising from the granting of a license to any person in the ordinary
course of business of the Borrower or any Subsidiary;

(r) Liens attaching solely to cash earnest money deposits made by the Borrower
or any Subsidiary in connection with any letter of intent or purchase agreement
entered into by it in connection with a Permitted Acquisition;

(s) Liens deemed to exist in connection with repurchase agreements and other
similar Investments to the extent such Investments are permitted under
Section 6.5;

(t) Liens arising by operation of law on insurance policies and proceeds thereof
to secure premiums thereunder;

(u) Liens arising in connection with a Permitted Receivables Financing;

(v) Liens on funds or securities deposited with the Trustee in connection with
any defeasance under Section 9.6 of the Notes Indenture and Liens on funds
deposited with the administrative agent under the Existing Revolving Facility
Agreement in connection with any defeasance under section 2.11(1) thereof;

(w) any Lien where sufficient cash has been deposited with the Trustee under
Section 9.2 of the Notes Indenture for the purpose of paying the underlying
principal and interest until the date of maturity of the underlying
Indebtedness;

(x) Liens granted in the ordinary course of business in connection with an
obligation under a Swap Agreement;

(y) Liens granted by the Borrower or by a Subsidiary at the time such Subsidiary
was a Guarantor to the Borrower, a Subsidiary which is then a Guarantor or a
Related Party to secure borrowed money up to Cdn.$25,000,000 or the US$
Equivalent thereof in the aggregate in existence at any time;

(z) Liens to secure Indebtedness for Borrowed Money upon any of its property,
whether now owned or hereafter acquired; provided that to the extent such
Indebtedness is in aggregate in excess of Cdn. $25,000,000 (or the US$
Equivalent thereof), the obligations of the Borrower under this Agreement and
the other Loan Documents are secured by such Lien equally and ratably with any
and all other such Indebtedness secured thereby for so long as any such other
Indebtedness shall be so secured;

(aa) Any extension, renewal or replacement (or successive extensions, renewals
or replacements) in whole or in part of any Lien referred to in the foregoing
clauses, provided that the principal amount of Indebtedness secured thereby
shall not exceed the principal amount of Indebtedness so secured prior to such
extension, renewal or replacement and that such extension, renewal or
replacement Lien shall be limited to all or a part of the assets which secured
the Lien so extended, renewed or replaced (plus improvements and construction on
such real property);

 

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(bb) such other Liens as agreed to in writing by the Lenders from time to time;
and

(cc) Liens not otherwise permitted by the provisions of Section 6.2(a) through
6.2(bb) above, securing Indebtedness in an aggregate amount not to exceed 15% of
Consolidated Tangible Net Worth, as determined as of the last day of the most
recently completed Fiscal Quarter at any time.

For the purposes of this Section 6.2, the following agreements, and the
transactions and arrangements contemplated thereby, shall not constitute, or be
considered to have created a Lien: (I) the mirror netting service agreement
dated February 1, 2007 by and among The TDL Group Corp. (f/k/a The TDL Group
Ltd.), The TDL Group, TDL Group Co., Wentim, Ltd., and certain other
Subsidiaries of the Borrower, and The Bank of Nova Scotia, as the same may be
amended (a) to add additional Subsidiaries of the Borrower as parties thereto,
or (b) in such other manner as shall not affect, in a material way, the nature
of the transactions contemplated by such agreement; and (II) the cash management
agreement dated May 15, 2003 by and between the Subsidiary Borrower and The TDL
Group Co., as the same may be amended (a) to add additional Subsidiaries of the
Borrower as parties thereto, or (b) in such other manner as shall not affect, in
a material way, the nature of the transactions contemplated by such agreement.

6.3 Merger; Dissolution; Asset Sales.

The Borrower will not, and will not permit any Guarantor or Subsidiary to, enter
into any transaction in which all or substantially all of the property and
assets of the Borrower and the Subsidiaries, considered as a whole, would become
the property of any other Person (any such Person being referred to herein as a
“Successor”), whether by way of reorganization, consolidation, amalgamation,
arrangement, merger, dissolution, liquidation, transfer, sale or otherwise,
unless:

(a) the Borrower or a Guarantor shall be the Successor; or

(b) the Successor formed (either by any one transaction or any series of
transactions which are consummated on a contemporaneous basis) by the
reorganization, consolidation, amalgamation, or arrangement or into which the
Borrower, a Guarantor or Subsidiary is merged, dissolved or liquidated or that
acquires by disposition all or substantially all of the property and assets of
the Borrower and the Subsidiaries, considered as a whole, is a Third Party that
is organized and validly existing under the federal laws of Canada or any of its
provinces or territories and expressly assumes, by an agreement executed and
delivered to the Administrative Agent in form and substance satisfactory to the
Administrative Agent, acting reasonably, all of the obligations of the relevant
Borrower or Guarantor under this Agreement and the other Loan Documents; and

(c) immediately before and after giving effect to such transaction, (A) no
Default or Event of Default shall have occurred and then be continuing, and
(B) no Material Adverse Effect would be caused as a result of such transaction.

Upon satisfaction of the foregoing, the Administrative Agent shall facilitate
the same in all respects, and may give such consents and sign, execute or join
in such documents and do such acts as in its discretion may be thought advisable
in order that such reorganization, consolidation, amalgamation, arrangement,
merger, dissolution, liquidation, transfer, sale or other similar transaction
may be carried out, and thereupon the Borrower or a Guarantor or Guarantors, as
the case may be, may be released and discharged from liability under the Loan
Documents and the Administrative Agent may execute any document or documents
which it may be advised is or are necessary or advisable for effecting or
evidencing such release and discharge.

 

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As a condition precedent to any reorganization, consolidation, amalgamation,
arrangement, merger, dissolution, liquidation, transfer, sale or other similar
transaction proposed to be carried out pursuant to this Section 6.3, the
Borrower shall furnish to the Administrative Agent an opinion of counsel to the
Borrower, in form and substance satisfactory to the Administrative Agent, acting
reasonably, as to the legality of any action proposed to be taken under
applicable Law, and as to the validity of any action taken pursuant to the
provisions contained in this Section 6.3, and the Administrative Agent shall
incur no liability by reason of reliance thereon.

Notwithstanding the foregoing, the Borrower or a Guarantor may enter into a
Permitted Receivables Financing or a Sale/Leaseback Transaction.

6.4 Business.

The Borrower will not, and will not permit any Subsidiary to, engage to any
material extent in any material business other than businesses of the type
conducted by the Borrower or its Subsidiaries on the Closing Date and businesses
reasonably related thereto.

6.5 Investments and Acquisitions. The Borrower may make any Investment and may
become or remain a partner in any partnership or joint venture, and may make any
Acquisition of any Person, provided that:

(a) (i) Investments in Advertising Entities and in any Consolidated VIEs made
during the period from the Closing Date to the Maturity Date shall not exceed
Cdn.$75,000,000 in the aggregate, and (ii) Investments consisting of partnership
or other equity interests may be made in any partnership, joint venture or other
Person so long as such partnership, joint venture or Person is in a line of
business that does not violate the terms or provisions of Section 6.4; and

(b) Any such Acquisitions shall meet the following requirements or otherwise be
approved by the Required Lenders (each such Acquisition constituting a
“Permitted Acquisition”):

(A) no Default or Event of Default shall have occurred and be continuing or
would result from such Acquisition or the incurrence of any Indebtedness in
connection therewith and, both before and immediately after giving effect to
such Acquisition, all of the representations and warranties contained herein
shall be true and correct in all material respects, unless such representation
and warranty is made as of a specific date, in which case, such representation
or warranty shall be true and correct in all material respects as of such date;
and

(B) the Acquisition is consummated pursuant to a negotiated acquisition
agreement on a non-hostile basis and approved by the target company’s board of
directors (and shareholders, if necessary) prior to the consummation of the
Acquisition;

(C) the business being acquired shall be in a line of business permitted under
Section 6.4; and

(D) no investment shall be made which would result in the Borrower or any of its
Subsidiaries acquiring any obligation in respect of a Defined Benefit Plan where
such Investment has or could reasonably be expected to have a Material Adverse
Effect.

6.6 Restricted Payments. The Borrower will not, and will not permit any
Subsidiary to, declare, pay or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) the Borrower may declare and pay
dividends with respect to its

 

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Equity Securities payable solely in additional Equity Securities of the
Borrower, (b) any Subsidiary may make Restricted Payments to the Borrower or any
other Subsidiary, and (c) the Borrower and any Subsidiary may each make any
Restricted Payment if, at the time of and immediately after giving effect to any
such Restricted Payment, the Borrower is in compliance with the financial
covenants in Section 5.10 and no other Default shall have occurred and then be
continuing.

6.7 Transactions with Affiliates. The Borrower will not, and will not permit any
Subsidiary to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of their Affiliates, except (a) in
the ordinary course of business at prices and on terms and conditions not less
favourable to the Borrower or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties, (b) transactions between the
Borrower and any Subsidiary, or between Subsidiaries, and in any such case not
involving any of their other Affiliates, (c) any Restricted Payment permitted by
Section 6.6 or any transaction contemplated by the tax sharing agreement
referred to in the definition of “Restricted Payment”, and (d) any transaction
permitted by Section 6.3.

6.8 Restrictive Agreements. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on its ability (a) to pay dividends or
make any other distribution on its stock or other ownership interests; provided
that this clause (a) shall not prevent the Borrower or its Subsidiaries from
agreeing to any such encumbrance or restriction of their ability to pay
dividends or make any other distribution on their stock or other ownership
interests to any Person which is not a Credit Party, (b) to pay any Indebtedness
or other obligation owed to the Borrower or any Subsidiary, (c) to make loans or
advances or other Investments in the Borrower or any Subsidiary or (d) to sell,
transfer or otherwise convey any of its property to the Borrower or any
Subsidiary, in each case, other than (i) restrictions imposed by this Agreement,
(ii) customary restrictions and conditions contained in agreements relating to
the sale of assets, capital stock or other equity interests pending such sale,
provided that such restrictions and conditions apply only to the assets, capital
stock or other equity interests that is to be sold and such sale shall be
permitted hereunder, (iii) restrictions imposed by applicable Law,
(iv) restrictions imposed by the holder of a Lien permitted by Section 6.2
solely on the transfer of assets subject thereto, (v) any encumbrance or
restriction with respect to a Subsidiary of the Borrower pursuant to an
agreement relating to any Indebtedness issued or incurred by such Subsidiary on
or prior to the date on which such Subsidiary became a Subsidiary of the
Borrower or was acquired by the Borrower and outstanding on such date, or
(vi) any such encumbrance or restriction consisting of customary non-assignment
provisions in leases or licenses, to the extent such provisions restrict the
transfer of the lease or license, as applicable.

ARTICLE 7

EVENTS OF DEFAULT

7.1 Events of Default. If any of the following events (“Events of Default”)
shall occur:

(a) the Borrower shall fail to pay any principal of any Loan 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 Borrower 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) above) payable
under this Agreement, when and as the same shall become due and payable and such
failure shall continue unremedied for a period of more than three (3) Business
Days after the same shall have become due and payable;

 

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(c) any representation or warranty made or deemed made by or on behalf of any
Credit Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed to be made, and if the circumstances giving rise to such incorrect
representation and warranty are capable of rectification, such circumstances are
not rectified in a manner which renders such representation no longer incorrect
in any material respect within 10 days after the applicable Credit Party becomes
aware of the incorrect representation and warranty;

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.1(d)(ii), Section 5.2 (as to the Borrower’s
legal existence only), Section 5.7 or Section 5.10 or in Article 6;

(e) any Credit Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clauses
(a), (b) or (d) above) or any other Loan Document, and such failure shall
continue unremedied for more than thirty (30) days after the earlier to occur of
(a) an officer of any Credit Party having knowledge thereof and (b) written
notice thereof from either Agent to the Borrower (which notice will be given at
the request of any Lender);

(f) any Credit Party shall fail to make any payment whether of principal or
interest, and regardless of amount, in respect of any Material Indebtedness,
when and as the same shall become due and payable and such failure continues
after the applicable grace or cure period if any, specified in the agreement
relating to such Material Indebtedness;

(g) any event or condition occurs (including any “amortization event”,
“termination event” or other similar event under any Receivables Purchase
Facility) that results in any Material Indebtedness becoming due prior to its
scheduled maturity, or (after the effluxion of any applicable grace or cure
period) 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 any
trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this Section 7.1(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
so long as the proceeds of such sale or transfer are sufficient to, and are
applied to, reduce such secured Indebtedness;

(h) any Credit Party:

 

  (i) becomes insolvent, or is unable to pay its obligations as they generally
become due, or has ceased paying its obligations in the ordinary course of
business as they generally become due, or admits in writing its inability to pay
its debts generally, or declares any general moratorium on its indebtedness, or
proposes a compromise or arrangement between it and any class of its creditors;

 

  (ii) commits an act of bankruptcy or makes an assignment of its property for
the general benefit of its creditors or makes a proposal (or files a notice of
its intention to do so);

 

  (iii) institutes any proceeding seeking to adjudicate it an insolvent, or
seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), or composition of it or its
debts or any other similar relief, under any federal, provincial or foreign Law
now or hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors (including the BIA, the Companies’ Creditors Arrangement Act (Canada)
and any applicable corporations legislation) or at common law or in equity, or
files an answer admitting the material allegations of a petition filed against
it in any such proceeding;

 

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  (iv) applies for the appointment of, or the taking of possession by, a
receiver, interim receiver, receiver/manager, sequestrator, conservator,
custodian, administrator, trustee, liquidator or other similar official for it
or any substantial part of its property; or

 

  (v) takes any action, corporate or otherwise, to approve, effect, consent to
or authorize any of the actions described in this Section 7.1(h) or in
Section 7.1(h)(i), or otherwise acts in furtherance thereof or fails to act in a
timely and appropriate manner in defence thereof;

(i) any petition is filed, application made or other proceeding instituted
against or in respect of any Credit Party:

 

  (i) seeking to adjudicate it an insolvent;

 

  (ii) seeking a receiving order against it;

 

  (iii) seeking liquidation, dissolution, winding-up, reorganization,
compromise, arrangement, adjustment, protection, moratorium, relief, stay of
proceedings of creditors generally (or any class of creditors), or composition
of it or its debts or any other relief under any federal, provincial or foreign
Law now or hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors (including the BIA, the Companies’ Creditors Arrangement Act (Canada)
and any applicable corporations legislation) or at common law or in equity; or

 

  (iv) seeking the entry of an order for relief or the appointment of, or the
taking of possession by, a receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator, trustee, liquidator or
other similar official for it or any substantial part of its property;

and such petition, application or proceeding continues undismissed, or unstayed
and in effect, for a period of sixty (60) days after the institution thereof,
provided that if an order, decree or judgment is granted or entered (whether or
not entered or subject to appeal) against such Credit Party thereunder in the
interim, such grace period will cease to apply, and provided further that if
such Credit Party files an answer admitting the material allegations of a
petition filed against it in any such proceeding, such grace period will cease
to apply;

(j) any other event occurs which, under the Laws of any applicable jurisdiction,
has an effect equivalent to any of the events referred to in either of Sections
7.1(h) or (i);

(k) one or more judgments for the payment of money in a cumulative amount in
excess of Cdn.$50,000,000 (or its then equivalent in any other currency) in the
aggregate is rendered against any one or more of the Credit Parties and they
have not (i) provided for its discharge in accordance with its terms within 30
days from the date of entry thereof, or (ii) procured a stay of execution
thereof within 30 days from the date of entry thereof and within such period, or
such longer period during which execution of such judgment has not been stayed,
appealed such judgment and caused the execution thereof to be stayed during such
appeal, provided that if enforcement and/or realization proceedings are lawfully
commenced in respect thereof in the interim, such grace period will cease to
apply;

 

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(l) this Agreement, any other Loan Document or any material obligation or other
provision hereof or thereof at any time for any reason is declared to be void or
voidable or is repudiated, or the validity, binding effect, legality or
enforceability hereof or thereof is at any time contested by any Credit Party;

(m) a Change of Control shall occur from and after the Closing Date;

(n) the Borrower 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 Pension Plan so as to result in any
liability which could reasonably be expected to have a Material Adverse Effect;
(ii) any event or condition exists in respect of any Pension Plan which presents
the risk of liability of the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect; (iii) a going concern
unfunded liability or the solvency deficiency (calculated 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) exists under any Pension Plan, the existence of
which could reasonably be expected to have a Material Adverse Effect; (iv) the
Borrower or any of its Subsidiaries shall fail to make minimum required
contributions to amortize any funding deficiencies under a Pension Plan within
the time period set out in applicable Laws or fail to make a required
contribution under any Pension Plan or Benefit Plan which failure could
reasonably be expected to have a Material Adverse Effect; (v) the Borrower or
any of its Subsidiaries makes any improper withdrawals or applications of assets
of a Pension Plan or Benefit Plan, which actions could reasonably be expected to
have a Material Adverse Effect; or (vi) the Borrower or any of its Subsidiaries
establishes a Defined Benefit Plan for any of their respective employees, except
as part of a Permitted Acquisition.

then, and in every such event (other than an event with respect to the Borrower
described in clause (h), (i) or (j) above), 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 Borrower, 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 Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind except as set out earlier in this paragraph, all of
which are hereby waived by the Borrower; and in the case of any event with
respect to the Borrower described in clause (h), (i) or (j) above, 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 Borrower accrued hereunder, and Cover for any outstanding
Bankers Acceptances, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

 

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ARTICLE 8

THE ADMINISTRATIVE AGENT

8.1 Appointment of Administrative Agent. Each Lender hereby designates Royal
Bank of Canada as Administrative Agent to act as herein specified and as
specified in the other Loan Documents. Each Lender hereby irrevocably authorizes
the Administrative Agent to take such action on its behalf under the provisions
of the Loan Documents and to exercise such powers and to perform such duties
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms thereof and such other powers as are reasonably incidental
thereto. The Administrative Agent may perform any of its duties hereunder by or
through its agent or employees.

8.2 Limitation of Duties of Administrative Agent. The Administrative Agent shall
have no duties or responsibilities except those expressly set out with respect
to such Agent in this Agreement and as specified in the other Loan Documents.
Neither the Administrative Agent, nor any of its Related Parties shall be liable
for any action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or wilful misconduct.
The duties of the Administrative Agent shall be mechanical and administrative in
nature; the Administrative Agent shall not have, by reason of this Agreement or
the other Loan Documents, a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon either Agent any
obligations in respect of this Agreement except as expressly set out herein. The
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to this Agreement or the other Loan
Documents unless it is requested in writing to do so by the Required Lenders.

8.3 Lack of Reliance on the Administrative Agent.

(a) Independent Investigation. Independently, and without reliance upon the
Administrative Agent, each Lender, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Credit Parties in connection with the
taking or not taking of any action in connection herewith, and (ii) its own
appraisal of the creditworthiness of the Credit Parties, and, except as
expressly provided in this Agreement and the other Loan Documents, the
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
consummation of the Transactions or at any time or times thereafter.

(b) Administrative Agent Not Responsible. The Administrative Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectability, priority or sufficiency
of this Agreement or the other Loan Documents or the financial condition of the
Credit Parties or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or the other Loan Documents, or the financial condition of the Credit
Parties, or the existence or possible existence of any Default or Event of
Default.

8.4 Certain Rights of the Administrative Agent. If the Administrative Agent
shall request instructions from the Lenders or the Required Lenders (as the case
may be) with respect to any act or action (including the failure to act) in
connection with this Agreement or the other Loan Documents, the Administrative
Agent shall be entitled to refrain from such act or taking such action unless
and until such Agent shall have received written instructions from the Lenders
or the Required Lenders, as applicable, and such Agent shall not incur liability
to any Person by reason of so refraining.

 

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Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting under this Agreement and the other Loan
Documents in accordance with the instructions of the Required Lenders, or, to
the extent required by Section 9.2, all of the Lenders.

8.5 Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or facsimile
message, electronic mail, cablegram, radiogram, order or other documentary
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.

8.6 Indemnification of Administrative Agent. To the extent the Administrative
Agent is not reimbursed and indemnified by the Borrower (including any amounts
required to be paid under Section 9.3(a) or (b)), each Lender will reimburse and
indemnify the Administrative Agent, in proportion to its aggregate Applicable
Percentage, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
reasonable counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in performing its duties hereunder, in any way relating to
or arising out of this Agreement or any other Loan Document; provided that no
Lender shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent they are found by a
non-appealable judgment of a court of competent jurisdiction to arise from
(i) the wilful misconduct, bad faith or gross negligence of the Administrative
Agent (it being acknowledged that ordinary negligence does not necessarily
constitute gross negligence) or (ii) the Administrative Agent’s wilful breach of
express duties or obligations under this Agreement or the other Loan Documents.

8.7 Administrative Agent in their Individual Capacities. With respect to its
obligations under this Agreement and the Loans made by it, Royal Bank of Canada,
in its capacity as a Lender hereunder, shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
performing the duties, if any, specified herein; and the terms “Lenders”,
“Required Lenders”, “Revolving Credit Lenders”, and any similar terms shall,
unless the context clearly otherwise indicates, include Royal Bank of Canada, in
its capacity as a Lender hereunder. Royal Bank of Canada may accept deposits
from, lend money to, and generally engage in any kind of banking, trust,
financial advisory or other business with the Credit Parties or any affiliate of
the Credit Parties as if it were not performing the duties of the Administrative
Agent, specified herein, and may accept fees and other consideration from the
Credit Parties for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.

8.8 May Treat Lender as Owner. The Borrower and the Administrative Agent may
deem and treat each Lender as the owner of the Loans recorded on the Register
maintained pursuant to Section 9.4(c) for all purposes hereof until a written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who at the
time of making such request or giving such authority or consent is the owner of
a Loan shall be conclusive and binding on any subsequent owner, transferee or
assignee of such Loan.

 

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8.9 Successor Administrative Agent.

(a) Agent Resignation. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders, and the Borrower, and may be removed at
any time, with or without cause, by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right, upon five
Business Days’ notice to the Borrower, to appoint a successor Administrative
Agent (who shall not be a non-resident of Canada within the meaning of the
Income Tax Act (Canada)), subject to the approval of the Borrower, such approval
not to be unreasonably withheld. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and approved by the Borrower, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Administrative Agent, then, upon five Business Days’
notice to the Borrower, the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent (subject to approval of the
Borrower, such approval not to be unreasonably withheld), which shall be a
financial institution organized under the laws of Canada, the outstanding
indebtedness of which is rated by any one or more of Moody’s, S&P and DBRS as A
(or their equivalent rating, as the case may be) or better.

(b) Rights, Powers, etc. Upon its acceptance of any appointment as a successor
Administrative Agent hereunder, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Article 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

(c) Co-Syndication Agents and Documentation Agent. The Co-Syndication Agents and
Documentation Agent shall have no roles or responsibilities hereunder in such
capacity.

ARTICLE 9

MISCELLANEOUS

9.1 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 in each case to the addressee,
as follows:

 

  (i) if to the Borrower or any other Credit Party:

Tim Hortons Inc.

874 Sinclair Road

Oakville, Ontario L6K 2Y1

Attention: Treasurer

Facsimile: (905) 845-3985

with a copy to:

Tim Hortons Inc.

874 Sinclair Road

Oakville, Ontario L6K 2Y1

Attention: Corporate Secretary

Facsimile: (905) 845-2931

 

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  (ii) if to the Administrative Agent:

Royal Bank of Canada, as Administrative Agent

4th Floor, 20 King Street West

Toronto, Ontario M5H 1C4

Attention: Manager, Agency Services

Facsimile: (416) 842-4023

 

  (iii) if to any Lender to it at its address (or facsimile number) set out
opposite its name in the execution page(s) of this Agreement.

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications 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 Borrower may, in its
discretion, agree to accept notices and other communication 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.

(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

9.2 Waivers; Amendments.

(a) No failure or delay by the Administrative Agent, or any Lender in exercising
any right or power hereunder 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, and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by Section 9.2(b), 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 shall not
be construed as a waiver of any Default, regardless of whether an Agent, or any
Lender may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any other Loan Document (or any provision hereof
or thereof) may be waived, amended or modified except pursuant to an agreement
or agreements in writing entered into by the Borrower and the Required Lenders
or by the Borrower and the Administrative Agent with the consent of the Required
Lenders (and for greater certainty, any such waiver, amendment or modification
shall not require any consent or other agreement of any Credit Party other than
the Borrower, notwithstanding that any such Credit Party may be a party to this
Agreement or any other Loan Document); provided that no such agreement shall:

 

  (i) increase the amount or extend the expiry date of any Commitment of any
Lender, other than in connection with the Commitment Increase Right pursuant to
Section 2.1(b);

 

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  (ii) reduce the principal amount of any Loan or reduce the rate of interest or
any fee applicable to any Loan;

 

  (iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable in respect thereof, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment;

 

  (iv) change Section 2.6 in a manner that would alter the pro rata application
of any cancellation of the Revolving Credit Commitments or Section 2.16 in a
manner that would alter the pro rata sharing of payments required thereby;

 

  (v) change any of the provisions of this Section 9.2 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder;

 

  (vi) waive any Event of Default under Section 7.1(h), (i) or (j) ;

 

  (vii) release any Subsidiary Guarantee, provided that this Section 9.2(b)(vii)
shall not apply with respect to any revocation of any designation of a Guarantor
pursuant to Section 5.9;

in each case without the prior written consent of each Lender; and provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent without the prior written consent
of the Administrative Agent.

9.3 Expenses; Indemnity; Damage Waiver.

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of one set of counsel for the Administrative Agent and
all applicable Taxes, in connection with the syndication of the credit
facilities provided for herein and the preparation and administration of this
Agreement and the other Loan Documents, (ii) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of one set of counsel for the
Administrative Agent and applicable Taxes, in connection with any amendments,
modifications or waivers of the provisions hereof or of any of the other Loan
Documents, (whether or not the transactions contemplated hereby or thereby shall
be consummated), and (iii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender and all
applicable Taxes, in connection with the enforcement or protection of their
rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

(b) The Borrower shall indemnify the Administrative Agent, and each Lender, as
well as each of their Related Parties and each assignee of any of the foregoing
Persons (each such Person and each such assignee being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all obligations,
penalties, judgments, suits, costs, losses, claims, actions, damages, expenses
and liabilities of whatsoever nature or kind and all reasonable out-of-pocket
expenses and all applicable Taxes to which any Indemnitee may become subject
arising out of or in connection with (i) the execution or delivery of the Loan
Documents or any agreement or instrument contemplated thereby, the performance
by the parties thereto of their respective obligations thereunder, and the
consummation of the Transactions or any other transactions thereunder, (ii) any
Loan or any actual or proposed use of the proceeds therefrom, (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any Subsidiaries of the Borrower, or any
Environmental Liability related in any way to the Borrower or any Subsidiaries
of the Borrower, (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto,
(v) any other aspect of this Agreement and the other Loan Documents, or (vi) the
enforcement of any Indemnitee’s rights hereunder and any related investigation,
defence, preparation of defence, litigation and enquiries, in each case
regardless of whether or not the Acquisition is consummated; provided that the
foregoing indemnity will not, as to any Indemnitee, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found by a
non-appealable judgment of a court of competent jurisdiction to arise from
(i) the wilful misconduct, bad faith or gross negligence of such Indemnitee,
(ii) an Indemnitee’s wilful breach of express duties or obligations under this
Agreement or the other Loan Documents, or (iii) any dispute, claim or other
matter between or among the Lenders. If any action shall be brought against any
Indemnitee with respect to which indemnification may be sought against the
Borrower under this Agreement, the Indemnitee shall promptly notify the Borrower
in writing and the Borrower shall, if requested by the Indemnitee or if the
Borrower desire to do so, assume the defence thereof, including the employment
of counsel reasonably satisfactory to the Indemnitee and payment of all
reasonable fees and expenses.

 

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The failure to so notify the Borrower shall not affect any obligations the
Borrower may have to the Indemnitee under this Agreement or otherwise unless
(and then only to the extent that) the Borrower are materially adversely
affected by such failure. The Indemnitee shall have the right to employ separate
counsel in such action and participate in the defence thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnitee, unless
(i) the Borrower have failed to assume the defence and employ counsel reasonably
satisfactory to the Indemnitee, or (ii) the named parties to any such action
(including any impleaded parties) include the Indemnitee and the Borrower, and
the Indemnitee shall have been advised by counsel that there may be one or more
legal defences available to it which are different from or additional to those
available to the Borrower, in which case, if such Indemnitee notifies the
Borrower in writing that it elects to employ separate counsel at the Borrower’
expense, the Borrower shall not have the right to assume the defence of such
action or proceeding on behalf of such Indemnitee; provided, however, that the
Borrower shall not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
responsible hereunder for the reasonable fees and expenses of more than one such
firm of separate counsel, in addition to any local counsel, which counsel shall
be designated by the Lead Arranger and/or their affiliates. The Borrower shall
not be liable for any settlement of any such action effected without the
Borrower’ written consent (which shall not be unreasonably withheld) and the
Borrower agree to indemnify and hold harmless the Indemnitees from and against
any loss or liability by reason of settlement of any action effected with the
Borrower’ consent. In addition, the Borrower will not, without the prior written
consent of the applicable Indemnitee, settle or compromise or consent to the
entry of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not any indemnified
applicable person is a party thereto) unless such settlement, compromise,
consent or termination includes an express unconditional release of the
Indemnitees and/or their respective affiliates, satisfactory in form and
substance to the Indemnitees and/or their respective affiliates, from all
liability arising out of such action, claim, suit or proceeding.

(c) The Borrower and each Indemnitee shall not assert, and hereby waives (to the
fullest extent permitted by applicable Law), any claim against any Indemnitee or
any Credit Party, respectively, 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, any Loan
Document, or any agreement or instrument contemplated thereby, the Transactions,
any Loan or the use of the proceeds thereof.

 

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(d) Any inspection of any property of any Credit Party made by or through the
Administrative Agent or any Lender is for purposes of administration of the
Revolving Credit only, and no Credit Party is entitled to rely upon the same
(whether or not such inspections are at the expense of the Borrower).

(e) By accepting or approving anything required to be observed, performed,
fulfilled or given to the Administrative Agent or the Lenders pursuant to the
Loan Documents, neither the Administrative Agent nor the Lenders shall be deemed
to have warranted or represented the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition thereof, and
such acceptance or approval thereof shall not constitute a warranty or
representation to anyone with respect thereto by the Administrative Agent or the
Lenders.

(f) The relationship between the Borrower and the Administrative Agent and the
Lenders is, and shall at all times remain, solely that of borrower and lenders.
Neither the Administrative Agent nor the Lenders shall under any circumstance be
construed to be partners or joint venturers of the Borrower or its Affiliates.
Neither the Administrative Agent nor the Lenders shall under any circumstance be
deemed to be in a relationship of confidence or trust or a fiduciary
relationship with the Borrower or its Affiliates, or to owe any fiduciary duty
to the Borrower or its Affiliates. Neither the Administrative Agent nor the
Lenders undertake or assume any responsibility or duty to the Borrower or its
Affiliates to select, review, inspect, supervise, pass judgment upon or inform
the Borrower or its Affiliates of any matter in connection with their property
or the operations of the Borrower or its Affiliates. The Borrower and its
Affiliates shall rely entirely upon their own judgment with respect to such
matters, and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by the Administrative Agent or the Lenders
in connection with such matters is solely for the protection of the
Administrative Agent and the Lenders, and neither the Borrower nor any other
Person is entitled to rely thereon.

(g) The Administrative Agent and the Lenders shall not be responsible or liable
to any Person for any loss, damage, liability or claim of any kind relating to
injury or death to Persons or damage to property caused by the actions, inaction
or negligence of any Credit Party and/or its Affiliates and the Borrower hereby
indemnifies and holds the Administrative Agent and the Lenders harmless on the
terms set out in Section 9.3(b) from any such loss, damage, liability or claim.

(h) This Agreement is made for the purpose of defining and setting forth certain
obligations, rights and duties of the Borrower, the Administrative Agent and the
Lenders in connection with the Loans, and is made for the sole benefit of the
Borrower, the Administrative Agent and the Lenders, and the Administrative
Agent’s and each Lender’s successors and assigns. Except as provided in Sections
9.3(b) and 9.4, no other Person shall have any rights of any nature hereunder or
by reason hereof.

(i) All amounts due under this Section 9.3 shall be payable not later than five
(5) Business Days after written demand therefor.

9.4 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 except that (i) the Borrower may not assign or otherwise
transfer any of their rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void), and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder to any Credit Party, any
Subsidiary thereof or any Affiliate of any Credit Party or Subsidiary thereof,
or otherwise except in accordance with this Section.

 

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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 and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.

(b) Any Lender may assign to one or more assignees (treating any fund that
invests in bank loans and any other fund that invests in bank loans and is
managed by the same investment advisor of such fund or by an Affiliate of such
investment advisor as a single assignee) all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitments and the Loans at the time owing to it); provided
that (i) except in the case of an assignment to a Lender or a Lender Affiliate
or an Approved Fund of any Lender, the Borrower must give its prior written
consent to such assignment (which consent shall not be unreasonably withheld or
delayed), (ii) the Administrative Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld or delayed);
and provided further that (iii) the Borrower’s consent shall not be required
with respect to any assignment made at any time after the occurrence and during
the continuance of an Event of Default, (iv) except in the case of an assignment
to a Lender or a Lender Affiliate or an Approved Fund of any Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date on which the Assignment and Assumption
relating to such assignment is delivered to the Administrative Agent) shall not
be less than Cdn.$5,000,000, unless the Borrower and the Administrative Agent
otherwise consent in writing and the amount held by each Lender after each such
assignment shall not be less than Cdn.$5,000,000, unless the Borrower and the
Administrative Agent otherwise consent in writing, (vi) each partial assignment
in respect of a Commitment and the related Loans shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement in respect of such Commitment and the related Loans,
(vii) the parties to each assignment shall execute and deliver to the
Administrative Agent (A) an Assignment and Assumption; and (B) (except in the
case of an assignment to a Lender or a Lender Affiliate or an Approved Fund of
any Lender) a processing and recordation fee of Cdn.$3,500, payable by the
assigning Lender, (viii) provided that no Default or Event of Default has
occurred and is then continuing, in the case of an assignment of a Revolving
Credit Commitment by a Canadian Resident Lender to a Foreign Lender, such
Foreign Lender shall not be entitled to require any additional payments under
Section 2.15(a) or Section 2.15(c) as a result of any Canadian withholding tax
which may be exigible in respect of any payment of interest by the Borrower to
such Foreign Lender hereunder, and (ix) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. The Administrative Agent shall provide the Borrower and each
Lender with written notice of any change in (or new) address of a Lender
disclosed in an Administrative Questionnaire. Subject to acceptance and
recording thereof pursuant to Section 9.4(d), 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, shall have all of 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 2.13, 2.14, and 2.15 and 9.3). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 9.4 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 Section 9.4(e).

 

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(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Toronto 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 the Revolving Loans owing to, each Lender pursuant to the terms hereof
from time to time, (such registers being hereafter, the “Registers”). The
entries in the Registers shall be conclusive, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Registers pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. The Registers shall be available
for inspection by the Borrower and any Lender at any reasonable time and from
time to time upon reasonable prior notice.

(d) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in Section 9.4(b) and any written
consent to such assignment required by Section 9.4(b), the Administrative Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 9.4(d).

(e) Any Lender may, without notice to the Borrower or the consent of the
Borrower, the Administrative Agent, sell participations to one or more Persons
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement and the other Loan Documents (including all or a portion of
its Commitment and the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to
Section 9.2(b) that affects such Participant. Subject to Section 9.4(f), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14, and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to this Section 9.4(b). To the
extent permitted by Law, each Participant also shall be entitled to the benefits
of Section 9.8 as though it were a Lender, provided that such Participant agrees
to be subject to Section 2.16(c) as though it were a Lender.

(f) A Participant shall not be entitled to receive any greater payment under
Section 2.13 or 2.15 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 Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.15 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.15(e) as
though it were a Lender.

(g) 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 any pledge or assignment to secure obligations to a Federal
Reserve Bank, and Section 9.4 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.

(h) Any assignment or grant of a participation pursuant to Section 9.4 shall
constitute neither a repayment by the Borrower to the assigning or granting
Lender of any Loan included therein, nor a new advance of any such Loan to the
Borrower by such Lender or by the Assignee or Participant, as the case may be.
The parties acknowledge that the Borrower’s obligations hereunder with respect
to any such Loans will continue and will not constitute new obligations as a
result of such assignment or participation.

 

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9.5 Survival. All covenants, agreements, representations and warranties made by
the Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that an Agent 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 and so long as the Commitments
have not expired or terminated. All indemnities contained in Sections 2.13,
2.14, 2.15, 9.3 and Article 8 shall survive and remain in full force and effect,
regardless of the consummation of the Transactions, the repayment of the Loans,
the expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof.

9.6 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the other Loan Documents and
any separate letter agreements with respect to fees payable to the
Administrative Agent, constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.1, 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 original counterpart of a
signature page of this Agreement by facsimile shall be as effective as delivery
of a manually executed original counterpart of this Agreement.

9.7 Severability. Any provision of this Agreement 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
hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

9.8 Right of Set Off. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by Law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all of the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of set off)
which such Lender may have and such Lender agrees to promptly notify the
Borrower and the Administrative Agent after any such set off; provided that any
failure or delay in providing any such notice shall not affect the validity of
any such action.

 

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9.9 Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement shall be construed in accordance with and governed by the
Laws of the Province of Ontario.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the non-exclusive jurisdiction of the Courts of the Province of
Ontario, and any appellate court thereof, in any action or proceeding arising
out of or relating to this Agreement, or any other Loan Document or for
recognition or enforcement of any judgment, and each 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 Ontario. 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 shall
affect any right that the an Agent, or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against the Borrower or their properties in the courts of any other
jurisdiction.

(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 in any court referred to in this
Section 9.9(b). Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by Law, any forum non conveniens defence 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 9.1. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by Law.

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.

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.

9.12 Confidentiality. The Administrative Agent and each Lender agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to each of their Affiliates, directors,
officers, employees, agent and advisors, 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 or other Governmental Authority, (c) to the extent
required by applicable Laws 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 under any Loan Document or any suit, action or proceeding relating to
any Loan Document or the enforcement of rights thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any actual or prospective assignee of or Participant in any of its rights
or obligations under this Agreement, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of either of the
Borrower, or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section, or (ii) becomes available to
an Agent or any Lender on a non-confidential basis from a source other than the
Borrower.

 

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For the purposes of this Section, “Information” means all non-public information
received from the Borrower relating to the Borrower, any of its Subsidiaries, or
their respective business, other than any such information that is available to
the an Agent or any Lender on a non-confidential basis prior to disclosure by
the Borrower. With respect to the disclosures made under clauses (b) and
(c) above (other than in connection with customary examinations by bank
regulators), the Administrative Agent, and each Lender agrees to give the
Borrower written notice as soon as practicable after learning that disclosure
must be made, describing the Information that will be disclosed and the
approximate date of disclosure.

[Signature pages follow]

 

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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.

 

Address:

874 Sinclair Road

Oakville, Ontario L6K 2Y1

    TIM HORTONS INC., as Borrower

Attention: Corporate Secretary

Facsimile No.: (905) 845-2931

    By:   /s/ CYNTHIA J. DEVINE     Name:   Cynthia J. Devine     Title:   Chief
Financial Officer     By:   /s/ MICHAEL MYSKIW     Name:   Michael Myskiw    
Title:   Treasurer

[Signatures continued on Next Page]

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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.

 

Address:

20 King Street West, 4th Floor

Toronto, Ontario M5H 1C4

   

ROYAL BANK OF CANADA., as

Administrative Agent

Attention: Senior Manager

Facsimile No.: (416) 842-4023

    By:   /s/ ANN HURLEY     Name:   Ann Hurley     Title:   Senior Manager

[Signatures continued on Next Page]

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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.

 

Address:

Royal Bank Plaza

4th Floor, South Tower

    ROYAL BANK OF CANADA., as Lender P.O. Box 50, 200 Bay Street     By:   /s/
VISHAL NAYEE Toronto, Ontario M5J 2W7     Name:   Vishal Nayee     Title:   Vice
President

Attention: Vice President

Facsimile No.: (416) 842-5321

   

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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.

 

Address:

100 King Street West, 11th Floor

Toronto, Ontario M5X 1A1

    BANK OF MONTREAL, as Lender

Attention: Managing Director

Facsimile: (416) 360-7168

    By:   /s/ MARC-ANDRE BERGERON     Name:   Marc-Andre Bergeron     Title:  
Managing Director     By:   /s/ STANLEY JULIEN     Name:   Stanley Julien    
Title:   Managing Director

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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.

 

Address:

66 Wellington St. W., 8th Floor

TD Bank Tower

    THE TORONTO-DOMINION BANK, as Lender Toronto, Ontario M5K 1A2    

 

By:

 

 

/s/ RICHARD ROBARTS

Attention: Vice President, Corporate Credit     Name:   Richard Robarts
Facsimile: (416) 308-4481     Title:   Vice President, Credit Management     By:
  /s/ TIM THOMAS     Name:   Tim Thomas     Title:   Managing Director, Credit
Origination

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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.

 

Address:

2 Robert Speck Parkway, 4th Floor

Mississauga, Ontario L4Z 1H8

    THE BANK OF NOVA SCOTIA, as Lender Attention: Director, Commercial Banking  
  By:   /S/ GIANCARLO DI ZAZZO Facsimile: (647) 388-4143     Name:   Giancarlo
Di Zazzo     Title:   Director, Commercial Banking     By:   /s/ MATT MACDONALD
    Name:   Matt Macdonald     Title:   Director, Commercial Banking

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EXHIBIT A

FORM OF BORROWING REQUEST FOR REVOLVING CREDIT

 

TO: ROYAL BANK OF CANADA, as Administrative Agent

 

RE: Credit agreement dated as of October 4, 2013 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Tim Hortons
Inc. as Borrower, Royal Bank of Canada, as Administrative Agent, and the Lenders
now or hereafter parties thereto.

We refer to the Revolving Credit constituted by the Credit Agreement and we
hereby give you notice that on [insert date] we wish to obtain a Borrowing in
the aggregate amount of [Canadian$][U.S.$].

The Borrowing requested hereby is to take the form of (check the appropriate
box):

 

  [    ] a B/A Borrowing

 

  [    ] a Prime Borrowing

 

  [    ] a Base Rate Borrowing

 

  [    ] a LIBO Rate Borrowing

[The Contract Period in respect of the B/A Borrowing requested hereby is •
months. The Interest Period in respect of the LIBO Rate Borrowing requested
hereby is • months.]

We hereby certify, after due and careful investigation, that:1

 

  (i) each of the representations and warranties made by the Borrower in the
Credit Agreement are true and correct in all material respects on and as of the
date hereof except to the extent that (i) any change to the representations and
warranties has been disclosed to the Administrative Agent and accepted by the
Required Lenders, or (ii) any representation and warranty is stated to be made
as of a particular time; and

 

  (ii) on and as of the date hereof, no Default has occurred and is continuing.

All terms defined in the Credit Agreement and used herein have the meanings
given to them by the Credit Agreement.

 

DATED: [ ]

 

TIM HORTONS INC.

By:

   

Name:

 

Title:

 

 

By:     Name:   Title:  

  

 

1  This certification need not be made on conversions or rollovers.

Note: A separate Borrowing Request must be submitted for each Type of Borrowing.

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EXHIBIT B

FORM OF

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set out below and is entered into by and between [Insert name
of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, supplemented or
otherwise modified or restated from time to time, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard
Terms and Conditions set out in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set out herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below and (ii) to the extent permitted to be assigned under
applicable Law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.            Assignor:                 2.    Assignee:               [and is an
Affiliate/Approved Fund of [identify Lender]2] 3.    Borrower:    Tim Hortons
Inc.   

 

 

2 

Select as applicable.

 

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4.            Administrative Agent:            Royal Bank of Canada, as the
Administrative Agent under the Credit Agreement 5.    Credit Agreement:   
Credit agreement dated as of October 4, 2013(as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Tim Hortons
Inc. as Borrower, Royal Bank of Canada, as Administrative Agent, and the Lenders
now or hereafter parties thereto 6.    Assigned Interest:   

 

Facility Assigned

   Aggregate Amount of
Commitment/Loans for
all Lenders      Amount of
Commitment/Loans
Assigned      Percentage Assigned of
Commitment/Loans3  

Revolving Credit

   $         $           %   

Effective Date:                              , 20          [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set out in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR:

 

[Name of Assignor]

Per:       Title Per:       Title

 

ASSIGNEE:

 

[Name of Assignee]

Per:       Title Per:       Title

 

 

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

 

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[Consented to and]4 Accepted:

 

[NAME OF ADMINISTRATIVE AGENT],
as Administrative Agent: Per:       Title Per:       Title

[Consented to:]5

 

[NAME OF RELEVANT PARTY]: Per:       Title Per:       Title

 

 

4  To be added only if the consent of the Administrative Agent is required by
the terms of Section 9.4 of the Credit Agreement.

5  To be added only if the consent of the Borrower and/or other parties is
required by the terms of Section 9.4 of the Credit Agreement.

 

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ANNEX 1

Credit Agreement dated as of October 4, 2013 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Tim Hortons
Inc. as Borrower, Royal Bank of Canada, as Administrative Agent, and the Lenders
now or hereafter parties thereto.

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document [, and (c) attaches the
Note(s) held by it evidencing the Assigned Facilities and requests that the
Administrative Agent exchange such Note(s) for a replacement Note or Notes
payable to the Assignee and (if the Assignor has retained any interest in the
Assigned Facilities) a replacement Note or Notes payable to the Assignor in the
respective amounts which reflect the assignment being made hereby (and after
giving effect to any other assignments which have become effective on the
Transfer Effective Date)]. [Delete bracketed language if Assignor does not hold
Note(s).]

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of each of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 5.1 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

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2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to the Effective Date or accrued subsequent to the
Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Administrative Agent for the periods prior to the
Effective Date or with respect to the making of this assignment directly between
themselves.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the laws of the Province of Ontario and
the federal laws of Canada applicable therein.

 

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EXHIBIT C

COMPLIANCE CERTIFICATE

 

TO: ROYAL BANK OF CANADA, as administrative agent under the Credit Agreement
(the “Administrative Agent”)

 

AND TO: The lenders from time to time parties to the Credit Agreement (the
“Lenders”)

Reference is made to the credit agreement dated as of October 4, 2013 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Tim Hortons Inc. as Borrower, Royal Bank of Canada, as
Administrative Agent, and the Lenders now or hereafter parties thereto. Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

The undersigned, a Responsible Officer of the Borrower, in that capacity and not
personally, hereby certifies that, as of the date hereof, (a) a review of the
consolidated financial statements of the Borrower and its Subsidiaries for the
Fiscal Quarter ended [Specify last day of Fiscal Quarter], and of the activities
of the Borrower and its Subsidiaries during such Fiscal Quarter has been made
under the supervision of the undersigned with a view to determining whether the
Borrower and its Subsidiaries have fulfilled all of their obligations under the
Credit Agreement and the other Loan Documents, (b) the Borrower and its
Subsidiaries have fulfilled their obligations under the Credit Agreement and the
other Loan Documents and all representations and warranties made in the Credit
Agreement continue to be true and correct as if made on the date hereof except
to the extent that (i) any change to the representations and warranties has been
disclosed to the Administrative Agent and accepted by the Required Lenders, or
(ii) any representation and warranty is stated to be made as of a particular
time, and (c) as at the end of the Fiscal Quarter ended [Specify last day of
Fiscal Quarter], the Borrower was in compliance with each of the financial
covenants set forth in Section 5.10 of the Credit Agreement. The Borrower’s
compliance with each of such financial covenants as at the end of such Fiscal
Quarter is demonstrated by the figures set out on the financial covenant
compliance worksheet attached hereto as Annex A.

DATED: [    ]

 

      Name:   Title:   [Chief Financial Officer]

 

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EXHIBIT D

RESERVED

 

– 15 –

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EXHIBIT E

RESERVED

 

– 16 –

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EXHIBIT F

FORM OF SUBSIDIARY GUARANTEE FOR U.S. SUBSIDIARIES

The form of Subsidiary Guarantee for U.S. Subsidiaries shall be in the form of
the Subsidiary Guarantee for Canadian Subsidiaries subject to such customary
modifications as are agreeable to the Borrower and the Administrative Agent,
each acting reasonably, as may be necessary to conform the guarantee to
applicable Laws of the State of New York.

 

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EXHIBIT G

FORM OF SUBSIDIARY GUARANTEE FOR CANADIAN SUBSIDIARIES

 

TO: ROYAL BANK OF CANADA, as administrative agent (the “Administrative Agent”)
under the Credit Agreement (as defined below)

THIS GUARANTEE is made this — day of —, 20—

WHEREAS pursuant to the terms of the credit agreement dated the 3rd day of
October, 2013 between, inter alia, Tim Hortons Inc. (the “Borrower”), and the
Administrative Agent and the Lenders from time to time parties thereto, as the
same may be supplemented, amended, restated or replaced from time to time (the
“Credit Agreement”), the Borrower has designated the undersigned, a Canadian
Subsidiary of the Borrower (the “Guarantor”), to provide the Administrative
Agent with a guarantee of the Obligations (as hereinafter defined);

AND WHEREAS it is in the interest of the Guarantor to execute and deliver this
Guarantee;

NOW THEREFORE THIS GUARANTEE WITNESSES that in consideration of the premises and
the covenants and agreements herein contained, the sum of $1.00 now paid by the
Administrative Agent to the Guarantor and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the Guarantor
covenants with the Administrative Agent as follows:

ARTICLE 1

GUARANTEE

1.1 Guarantee

The Guarantor hereby unconditionally (except to the extent otherwise provided
herein) and irrevocably guarantees in favour of the Administrative Agent and
each of the Lenders the due and punctual payment and performance of all
indebtedness, liabilities and obligations of any kind whatsoever (whether
present or future, direct or indirect, absolute or contingent, matured or
unmatured) now or hereafter owing by the Borrower to the Administrative Agent,
the Lenders or any one of them, in connection with or with respect to the Credit
Agreement and the other Loan Documents (collectively the “Obligations”) as and
when the same shall from time to time become due and payable in accordance with
the terms of the Credit Agreement or other Loan Documents as applicable provided
that an Event of Default shall have occurred, unless such Event of Default shall
have been cured or shall have been expressly waived pursuant to the terms of the
Credit Agreement (any such Event of Default which has not been cured or so
expressly waived being hereinafter referred to as an “Actionable Event of
Default”). If any or all of the Obligations are not duly paid by the Borrower
and are not recoverable under the foregoing guarantee, and provided that an
Actionable Event of Default shall have occurred and then be continuing, the
Guarantor will, as a separate and distinct obligation, indemnify and save
harmless the Administrative Agent and the Lenders, from and against all losses
resulting from the failure of the Borrower to pay such Obligations. If any or
all of the Obligations are not duly paid by the Borrower and are not recoverable
under the foregoing guarantee or indemnity, for any reason whatsoever, and
provided that an Actionable Event of Default shall have occurred and then be
continuing, such Obligations will, as a separate and distinct obligation, be
recoverable from the Guarantor as primary obligor. Any amounts payable by the
Guarantor under this Guarantee which are not paid forthwith upon demand therefor
by the Administrative Agent will bear interest from the date of such demand at
the rate or rates applicable to the corresponding Obligations.

 

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1.2 Obligation Absolute

The liability of the Guarantor hereunder will be absolute and unconditional
(except to the extent otherwise provided herein) save and except as limited in
accordance with the terms of the Credit Agreement and will not be affected by:

 

  (a) any lack of validity or enforceability of any agreement between the
Borrower and the Administrative Agent and each Lender or of the guarantee of any
other Guarantor of the Obligations;

 

  (b) any impossibility, impracticability, frustration of purpose, illegality,
force majeure or act of government;

 

  (c) the bankruptcy, winding-up, liquidation, dissolution or insolvency of the
Borrower or any other Guarantor or the amalgamation of or any change in the
status, function, control or ownership of, the Borrower, the Guarantor, the
Administrative Agent or Lender or any other Guarantor;

 

  (d) the release or amendment of any other guarantee of the Obligations;

 

  (e) any lack or limitation of power, incapacity or disability on the part of
the Borrower or of the directors, officers or Administrative Agent or any other
irregularity, defect or informality on the part of the Borrower in its
obligations to the Administrative Agent and each Lender; or

 

  (f) any other Law, regulation or other circumstance that might otherwise
constitute a defence available to, or a discharge of, the Borrower in respect of
any or all of the Obligations.

1.3 Postponement

Except as otherwise permitted under the Credit Agreement, all present and future
indebtedness and liability of the Borrower to the Guarantor is hereby postponed
to the Obligations. In case of liquidation, winding up or bankruptcy of the
Borrower (whether voluntary or involuntary) or if the Borrower makes any
composition with creditors or scheme of arrangement otherwise than as permitted
under Section 6.3 of the Credit Agreement, the Administrative Agent and the
Lenders will have the right to rank for their full claims and receive all
dividends or other payments in respect thereof in priority to the Guarantor
until the claims of the Administrative Agent and the Lenders have been paid in
full, and the Guarantor will continue to be liable hereunder for any balance
which may be owing to the Administrative Agent or any Lender by the Borrower.
The foregoing provisions of this Section 1.3 will not in any way limit or lessen
the liability of the Guarantor under any other Section of this Guarantee.

ARTICLE 2

DEALINGS WITH BORROWER AND OTHERS

2.1 No Release

The liability of the Guarantor hereunder will not be released, discharged,
limited or in any way affected by anything done, suffered or permitted by the
Administrative Agent and/or the Lenders in connection with any duties or
liabilities of the Borrower to the Administrative Agent and/or the Lenders or
any other guarantee therefor including any loss of or in respect of any security
received by the Administrative Agent from the Borrower or others. Without
limiting the generality of the foregoing, and without

 

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releasing, discharging, limiting or otherwise affecting in whole or in part the
Guarantor’s liability hereunder, without obtaining the consent of the Guarantor,
the Administrative Agent and the Lenders may, subject to the terms of the Credit
Agreement:

 

  (a) agree to any change in the time, manner or place of payment under, or in
any other term of, any agreement between the Borrower and the Administrative
Agent and/or the Lenders;

 

  (b) grant time, renewals, extensions, indulgences, releases and discharges to
the Borrower or either one of them;

 

  (c) take or abstain from taking or enforcing securities or collateral from the
Borrower or from perfecting securities or collateral of the Borrower; accept
compromises from the Borrower or either one of them; and

 

  (d) apply all money at any time received from the Borrower or from securities
or collateral received from the Borrower in accordance with the Credit
Agreement.

2.2 Release of Guarantor

Notwithstanding anything set forth herein to the contrary, the Guarantor shall
be released from all of its obligations pursuant to this Guarantee, and, subject
to the Guarantor being re-designated as a Guarantor pursuant to the terms of the
Credit Agreement, this Guarantee shall thereupon be of no further force or
effect, if the Guarantor ceases to be a Guarantor as defined for purposes of the
Credit Agreement or otherwise as provided in Section 5.9 of the Credit Agreement
without further action required by the Administrative Agent, the Guarantor, or
the Borrower.

2.3 No Exhaustion of Remedies

The Administrative Agent and the Lenders will not be bound or obligated to
proceed against or exhaust its recourse against the Borrower or other persons or
any securities or collateral it may hold or take any other action before being
entitled to demand payment from the Guarantor hereunder provided that an
Actionable Event of Default shall have occurred and then be continuing.

2.4 Prima Facie Evidence

Any account settled or stated in writing by or between the Administrative Agent
or any Lender and the Borrower will, in the absence of manifest error, be prima
facie evidence that the balance or amount thereof, appearing due to the
Administrative Agent or such Lender and, is actually so due or, appearing as
having been paid, has actually been paid.

2.5 Set-off

In any claim by the Administrative Agent or any Lender against the Guarantor,
the Guarantor may not assert any set-off or counterclaim that it or the Borrower
may have against the Administrative Agent or such Lender.

Each of the Administrative Agent and any Lender may, upon the occurrence and
during the continuance of an Actionable Event of Default and to the fullest
extent permitted by Law, set-off and apply any and all deposits at any time held
and other indebtedness at any time owing by the Administrative Agent or Lender
to or for the credit or the account of the Guarantor against any and all of the
obligations of the Guarantor now or hereafter existing under this Guarantee or
any other Loan Document even if (a) the Administrative Agent has not made any
demand hereunder, (b) Obligations are contingent or unmatured, or (c) the
Obligations are not in the same currency as the offsetting deposits or
indebtedness which may be owing by the Administrative Agent or any such Lender.

 

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2.6 Continuing Guarantee

The obligations of the Guarantor hereunder will constitute and be continuing
obligations and will apply to and secure any ultimate balance due or remaining
due to the Administrative Agent and the Lenders in respect of the Obligations
and will not be considered as wholly or partially satisfied by the payment or
liquidation at any time of any sum of money for the time being due or remaining
unpaid to the Administrative Agent or the Lenders. This Guarantee will continue
to be effective even if at any time any payment of any of the Obligations is
rendered unenforceable or is rescinded or must otherwise be returned by the
Administrative Agent or any Lender or upon the occurrence of any action or event
including the insolvency, bankruptcy or reorganization of the Borrower, all as
though such payment had not been made.

2.7 Remedies Cumulative

No remedy herein conferred upon or reserved to the Administrative Agent or the
Lenders is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now existing or hereafter to exist by Law.

ARTICLE 3

DEMAND

3.1 Demand

If any Obligation is not paid or performed for any reason whatsoever, including
upon demand by the Administrative Agent after the occurrence and during the
continuance of an Actionable Event of Default, the Administrative Agent may
demand forthwith from the Guarantor the total amount of such Obligation. The
Guarantor will make payment to or performance in favour of the Administrative
Agent of the total amount of such Obligation hereunder forthwith after demand
therefor is made to the Guarantor. The Guarantor will also make payment to the
Administrative Agent forthwith upon demand of all reasonable costs and expenses
incurred by the Administrative Agent, including the reasonable fees and
disbursements of third-party counsel to the Administrative Agent, in enforcing
this Guarantee to the extent that the Guarantor does not comply with the terms
herein.

ARTICLE 4

SUBROGATION

4.1 Subrogation

The Guarantor will not be entitled to subrogation until (i) the Guarantor makes
payment to the Administrative Agent of all amounts owing by the Guarantor under
this Guarantee; and (ii) the Obligations are paid in full, and in each case, no
such payment is subject to rescission or other like return. Thereafter, the
Administrative Agent will, at the Guarantor’s request and expense, execute and
deliver to the Guarantor appropriate documents necessary to evidence the
transfer by subrogation to the Guarantor of an interest in the Obligations and
any security held therefor resulting from such payment by the Guarantor.

 

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ARTICLE 5

BENEFIT

5.1 Benefit

This Guarantee is entered into with the Administrative Agent for its own benefit
and for the benefit of the Lenders in accordance with the Credit Agreement and
the other Loan Documents.

ARTICLE 6

TAXES AND FOREIGN CURRENCY OBLIGATIONS

6.1 Taxes

The Guarantor hereby acknowledges its obligations pursuant to Section 2.15 of
the Credit Agreement, which are included by reference in this Guarantee.

6.2 Survival of Gross-up for Withholding Taxes Provisions

The provisions of Section 6.1 shall survive any termination or discharge of this
Guarantee, the Credit Agreement and shall survive the defeasance or repayment of
all or any of the Obligations.

6.3 Foreign Currency Obligations.

The Guarantor will make payment relative to each Obligation in the currency (the
“Original Currency”) in which the applicable Borrower is required to pay such
Obligation. If the Guarantor makes payment relative to any Obligation in a
currency (the “Other Currency”) other than the Original Currency (whether
voluntarily or pursuant to an order or judgment of a court or tribunal of any
jurisdiction), such payment will constitute a discharge of the liability of the
Guarantor hereunder in respect of such Obligation only to the extent of the
amount of the Original Currency which the Administrative Agent is able to
purchase at Toronto, Ontario with the amount it receives on the date of receipt.
If the amount of the Original Currency which the Administrative Agent is able to
purchase is less than the amount of such currency originally due to it in
respect to the relevant Obligation, the Guarantor will indemnify and save the
Administrative Agent and the Lenders harmless from and against any loss or
damage arising as a result of such deficiency. This indemnity will constitute an
obligation separate and independent from the other obligations contained in this
Guarantee will give rise to a separate and independent cause of action, will
apply irrespective of any indulgence granted by the Administrative Agent or any
Lender and will continue in full force and effect notwithstanding any judgment
or order in respect of any amount due hereunder or under any judgment or order.

ARTICLE 7

GENERAL

7.1 Binding Effect of the Guarantee

This Guarantee will be binding upon the successors of the Guarantor and will
enure to the benefit of the Administrative Agent and Lenders and their
respective successors and assigns.

 

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7.2 Entire Agreement

This Guarantee, together with the applicable provisions of the other Loan
Documents, constitutes the entire agreement between the Guarantor and the
Administrative Agent with respect to the subject matter hereof and cancels and
supersedes any prior understandings and agreements between such parties with
respect thereto. There are no representations, warranties, terms, conditions,
undertakings or collateral agreements, express, implied or statutory, between
the parties relating to this Guarantee except as expressly set forth herein or
in the other Loan Documents. The Administrative Agent will not be bound by any
representations or promises made by either of the Borrower to the Guarantor and
possession of this Guarantee by the Administrative Agent will be conclusive
evidence against the Guarantor that the Guarantee was not delivered in escrow or
pursuant to any agreement that it should not be effective until any condition
precedent or subsequent has been complied with.

7.3 Amendments and Waivers

No amendment to this Guarantee will be valid or binding unless set forth in
writing and duly executed by the Guarantor and the Administrative Agent. No
waiver of any breach of any provision of this Guarantee will be effective or
binding unless made in writing and signed by the party purporting to give the
same and, unless otherwise provided in the written waiver, will be limited to
the specific breach waived.

7.4 Severability

If any provision of this Guarantee is determined to be invalid or unenforceable
in whole or in part. such invalidity or unenforceability will attach only to
such provision or part thereof, and the remaining part of such provision and all
other provisions hereof will continue in full force and effect.

7.5 Notices

Any notice to be given in connection with this Agreement shall be provided in
writing to the party for whom it is intended and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
facsimile in each case to the addressee, as follows:

 

  (a) To the Guarantor:

c/o Tim Hortons Inc.

874 Sinclair Road

Oakville, Ontario L6K 2Y1

Attention: Treasurer

Facsimile: (905) 845-3985

 

  (b) To the Administrative Agent:

Royal Bank of Canada, as Administrative Agent

4th Floor, 20 King Street West

Toronto, Ontario M5H 1C4

Attention: Manager, Agency Services

Facsimile: (416) 842-4023

or such other mailing or facsimile address as may be designated by notice given
by any party to the other. Unless the Law deems a particular notice to be
received earlier, a notice shall not be deemed received until actual receipt by
the other party of an original of such notice or facsimile thereof if sent by
facsimile transmission.

 

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7.6 Discharge

Except as otherwise contemplated by Section 2.2 of this Guarantee which shall
not require separate release, the Guarantor will not be discharged from any of
its obligations hereunder except by a release or discharge signed in writing by
the Administrative Agent, which the Administrative Agent shall provide
immediately following the payment in full of the Obligations.

7.7 Governing Law

This Guarantee will be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein.

7.8 Headings

The division of this Guarantee into Articles and Sections and the insertion of
headings are for convenience of reference only and will not affect the
construction or interpretation of this Guarantee. The terms “hereof’,
“hereunder” and similar expressions refer to this Guarantee and not to any
particular Article, Section or other portion hereof and include any agreement
supplemental hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles and Sections are to
Articles and Sections of this Guarantee.

7.9 Extended Meanings

In this Guarantee, words importing the singular number only include the plural
and vice versa, words importing any gender include all genders and words
importing persons include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations.

7.10 Definitions

Terms capitalized herein but not otherwise defined shall have the meaning
attributed thereto in the Credit Agreement.

7.11 Assignment

The Guarantor may not assign this Guarantee or any rights or obligations under
this Guarantee, except as provided in the Credit Agreement.

7.12 Executed Copy

The Guarantor acknowledges receipt of a fully executed copy of this Guarantee.

[Signature page to follow]

 

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IN WITNESS WHEREOF the Guarantor has signed this Guarantee.

 

[NAME OF CANADIAN SUBSIDIARY GUARANTOR]

Per:

      Name:   Title:

Per:

      Name:   Title:   I/We have the authority to bind the corporation

 

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SCHEDULE A

COMMITMENTS

Revolving Credit Commitments

 

Lender

   Commitment (Cdn. $)  

Royal Bank of Canada

   $ 140,000,000   

The Toronto-Dominion Bank

   $ 100,000,000   

The Bank of Nova Scotia

   $ 90,000,000   

Bank of Montreal

   $ 70,000,000      

 

 

 

Total

   $ 400,000,000.00   

 

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SCHEDULE B

Reserved

 

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SCHEDULE C

Reserved

 

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SCHEDULE D

EXCLUDED SWAP AGREEMENTS

Any coffee swaps, futures or other derivatives heretofore or hereafter entered
into by the Borrower or any of its Subsidiaries in the ordinary course of
business to hedge inventory purchases.

Any equity swaps or other derivatives heretofore or hereafter entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business to
hedge their equity compensation plans.

Any interest rate forwards heretofore or hereafter entered into by the Borrower
or any of its Subsidiaries in the ordinary course of business to hedge the
interest rate on current or future Indebtedness.

 

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SCHEDULE 3.5

EXCEPTIONS TO REPRESENTATION 3.5

LITIGATION

Nil.

 

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SCHEDULE 3.11

ANTI-MONEY LAUNDERING

 

Director

  

Principal Occupation

Paul D. House

   Chair of the Board of Directors of the Borrower

The Hon. Frank Iacobucci

   Counsel to Torys LLP

M. Shan Atkins

   Managing Director of Chetrum Capital LLC

Sherri Brillon

   Executive Vice-President and Chief Financial Officer of Encana Corporation

Marc Caira

   President and Chief Executive Officer of the Borrower

Michael J. Endres

   Managing Principal of Stonehenge Financial Holdings, Inc.

Moya Greene

   Chief Executive Officer of the Royal Mail

John Lederer

   President and Chief Executive Officer of U.S. Foods

David H. Lees

   President and Chief Executive Officer of Cardinal Health in Canada

Thomas V. Milroy

   Chief Executive Officer of BMO Capital Markets

Wayne C. Sales

   Director of SUPERVALU Inc.

 

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SCHEDULE 6.1

EXISTING INDEBTEDNESS

 

1. The Effect of Lessee Involvement in Asset Construction, Indebtedness (ASC 840
– Leases, formerly known as EITF97-10): Under ASC 840, the Borrower and The TDL
Group Corp. and/or certain of their Subsidiaries are considered the owner of
certain restaurants leased by the Borrower and The TDL Group Corp. and/or
certain of their Subsidiaries from unrelated lessors because the Borrower and
The TDL Group Corp. and/or certain of their Subsidiaries helped to construct
some of the structural elements of those restaurants. Accordingly, the Borrower
and The TDL Group Corp. and/or certain of their Subsidiaries have included the
restaurant construction costs for these restaurants in fixed assets and recorded
the relevant lessor’s contributions to the construction costs for these certain
restaurants as debt. For details regarding the amount of ASC 840 Indebtedness,
see the publicly filed financial statements of Tim Hortons Inc.

 

2. Senior Unsecured Notes: Tim Hortons Inc. has issued $300,000,000 of 4.20%
Senior Unsecured Notes, Series 1 due June 1, 2017.

 

3. Letter of Credit Indebtedness: The Borrower and The TDL Group Corp. and/or
certain of their Subsidiaries have Existing Letters of Credit outstanding, in an
aggregate amount not to exceed $5.6 million.

 

4. Guarantee Indebtedness: The Borrower and The TDL Group Corp. and/or certain
of their Subsidiaries have contingent liability as guarantors with respect to
the following:

A. Tim Hortons USA has provided a guarantee to G.E. Capital in an aggregate
amount not to exceed US$100,000 in connection with the U.S. franchise finance
program (for franchise equipment purchases);

B. Tim Hortons USA has provided a guarantee to PNC Equipment Finance in an
aggregate amount not to exceed US$3,600,000 in connection with the U.S.
franchise finance program (for franchise equipment purchases);

C. Tim Hortons USA and Tim Hortons Inc. have provided a guarantee to PNC
Equipment Finance in an aggregate amount not to exceed US$100,000 in connection
with the Coldstone equipment finance program (for franchise equipment purchases
for Coldstone ice cream);

D. Tim Hortons USA has provided a guarantee to 5 Star Bank in an aggregate
amount not to exceed US$100,000 in connection with the U.S. franchise finance
program (for franchise equipment purchases);

E. The Borrower and The TDL Group Corp. and/or certain Subsidiaries of the
Borrower and The TDL Group Corp. have provided guarantees to The Bank of Nova
Scotia in an aggregate amount presently outstanding of Cdn.$97,441.25 (which
amount is not expected to be increased) in connection with the Canadian Front
Showcase and BC Beverage equipment financing programs (for franchise equipment
purchases);

 

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F. The TDL Group Corp. has guaranteed, and certain other subsidiaries of Tim
Hortons Inc. may in the future guarantee, repayment of the 4.20% Senior
Unsecured Notes, Series 1 due June 1, 2017 referred to in paragraph 2 above; and

G. Tim Hortons USA and Tim Hortons Inc. intend to provide a guarantee to a third
party in an aggregate amount not to exceed US$3,000,000 in connection with the
US Franchise Finance Program.

 

5. Indebtedness of the Borrower and The TDL Group Corp. under the Existing
Revolving Facility Agreement.

 

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SCHEDULE 6.2

PERMITTED LIENS

Nil.

 

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