Exhibit 10.2

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

SMURFIT-STONE CONTAINER CORPORATION,

a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code,

 

as the Parent and a U.S. Guarantor,

 

SMURFIT-STONE CONTAINER ENTERPRISES, INC.,

a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code,

 

as U.S. Borrower,

 

SMURFIT-STONE CONTAINER CANADA INC.,

a company operating pursuant to a proceeding under the CCAA and a Debtor and
Debtor-in-Possession under Chapter 11 of the Bankruptcy Code,

 

as Canadian Borrower,

 

THE OTHER LOAN PARTIES PARTY HERETO,

 

THE LENDERS PARTY HERETO,

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent and Collateral Agent,

 

and

 

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

 

as Canadian Administrative Agent and Canadian Collateral Agent,

 

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J.P. MORGAN SECURITIES INC. and DEUTSCHE BANK SECURITIES INC.

 

as Co-Lead Arrangers,

 

J.P. MORGAN SECURITIES INC., DEUTSCHE BANK SECURITIES INC.,

GE CAPITAL MARKETS, INC. and BANC OF AMERICA SECURITIES LLC

 

as Joint Bookrunners,

 

DEUTSCHE BANK SECURITIES INC.,

 

as Syndication Agent,

 

and

 

GENERAL ELECTRIC CAPITAL CORPORATION and BANK OF AMERICA, N.A.

 

as Co-Documentation Agents

 

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Dated as of February 25, 2009

 

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AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS

 

ARTICLE 1.

DEFINITIONS

4

 

 

 

Section 1.1

Defined Terms

4

Section 1.2

Terms Generally

46

Section 1.3

Accounting Terms; GAAP

47

Section 1.4

Exchange Rate Calculations

47

Section 1.5

Québec Matters

47

 

 

 

ARTICLE 2.

AMOUNT AND TERMS OF CREDIT

48

 

 

 

Section 2.1

Commitment of the Lenders

48

Section 2.2

Availability of U.S. Loans

49

Section 2.3

Availability of Canadian Loans

50

Section 2.4

Letters of Credit

50

Section 2.5

Issuance

54

Section 2.6

Nature of Letter of Credit Obligations Absolute

55

Section 2.7

Making of Loans and Disbursements

55

Section 2.8

Repayment of Loans and Unreimbursed Draws; Evidence of Debt

60

Section 2.9

Interest on Loans

61

Section 2.10

Default Interest

63

Section 2.11

Optional Termination or Reduction of Commitment

63

Section 2.12

Alternate Rate of Interest

64

Section 2.13

Refinancing of Loans

64

Section 2.14

Mandatory Prepayment; Commitment Termination

66

Section 2.15

Optional Prepayment of Loans; Reimbursement of Lenders

70

Section 2.16

Reserve Requirements; Change in Circumstances

74

Section 2.17

Change in Legality

75

Section 2.18

Pro Rata Treatment, etc.

76

Section 2.19

Taxes

77

Section 2.20

Certain Fees

79

Section 2.21

Commitment Fee

79

Section 2.22

Letter of Credit Fees

80

Section 2.23

Nature of Fees

80

Section 2.24

Priority and Liens

80

Section 2.25

Use of Cash Collateral

87

Section 2.26

Right of Set-Off

87

Section 2.27

Security Interest in Collateral Accounts

87

Section 2.28

Payment of Obligations

87

Section 2.29

No Discharge; Survival of Claims

88

Section 2.30

Fifteen Month Facility Extension Option

88

Section 2.31

Eighteen Month Facility Extension Option

88

Section 2.32

Mitigation Obligations; Replacement of Lenders

89

Section 2.33

Defaulting Lenders

90

 

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ARTICLE 3.

REPRESENTATIONS AND WARRANTIES

93

 

 

 

Section 3.1

Organization and Authority

93

Section 3.2

Due Execution

93

Section 3.3

Statements Made

93

Section 3.4

Financial Statements

94

Section 3.5

Ownership

94

Section 3.6

Liens

94

Section 3.7

Compliance with Law

95

Section 3.8

Insurance

95

Section 3.9

The Orders

95

Section 3.10

Use of Proceeds

95

Section 3.11

Litigation

96

Section 3.12

Intellectual Property

96

Section 3.13

Taxes

96

Section 3.14

Investment Company Act; Other Regulations

96

Section 3.15

ERISA; Employee Matters

97

Section 3.16

Material Subsidiaries

98

Section 3.17

Receivables Securitization Indebtedness

98

 

 

 

ARTICLE 4.

CONDITIONS OF LENDING

98

 

 

 

Section 4.1

Conditions Precedent to Initial Loans

98

Section 4.2

Conditions Precedent to Each Loan and Each Letter of Credit

101

 

 

 

ARTICLE 5.

AFFIRMATIVE COVENANTS

102

 

 

 

Section 5.1

Financial Statements, Reports, etc.

102

Section 5.2

Existence

106

Section 5.3

Insurance

106

Section 5.4

Obligations and Taxes

106

Section 5.5

Notice of Event of Default, etc.

106

Section 5.6

Access to Books and Records; Collateral Reviews and Appraisals

107

Section 5.7

Maintenance of Concentration Account; Cash Dominion

108

Section 5.8

Borrowing Base Certificate

109

Section 5.9

Compliance with Laws

109

Section 5.10

Environmental Laws

109

Section 5.11

Additional Collateral; Further Assurances

110

Section 5.12

Material Contracts

110

Section 5.13

Receivables Securitization Programs

110

Section 5.14

Restructuring Advisors

111

Section 5.15

Ratings

111

Section 5.16

Use of Proceeds

111

 

 

 

ARTICLE 6.

NEGATIVE COVENANTS

111

 

 

 

Section 6.1

Liens

111

 

ii

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Section 6.2

Merger, etc.

111

Section 6.3

Indebtedness

112

Section 6.4

Capital Expenditures

112

Section 6.5

EBITDA

112

Section 6.6

Minimum Liquidity

113

Section 6.7

Guarantees and Other Liabilities

113

Section 6.8

Chapter 11/CCAA Claims

113

Section 6.9

Dividends; Capital Stock

114

Section 6.10

Transactions with Affiliates

114

Section 6.11

Investments, Loans and Advances

114

Section 6.12

Disposition of Assets

115

Section 6.13

Nature of Business

115

Section 6.14

Restrictive Agreements among Loan Parties

115

Section 6.15

Right of Subrogation among Loan Parties

115

Section 6.16

Derivative Agreements

115

Section 6.17

Reorganization Plan

116

 

 

 

ARTICLE 7.

EVENTS OF DEFAULT

116

 

 

 

Section 7.1

Events of Default

116

 

 

 

ARTICLE 8.

THE AGENTS

120

 

 

 

Section 8.1

Administration

120

Section 8.2

Advances and Payments

120

Section 8.3

Sharing of Setoffs

121

Section 8.4

Agreement of Required Lenders

122

Section 8.5

Liability of Agents

122

Section 8.6

Reimbursement and Indemnification

122

Section 8.7

Rights of Agents

123

Section 8.8

Other Duties, etc.

123

Section 8.9

Independent Lenders

123

Section 8.10

Notice of Transfer

123

Section 8.11

Successor Agents

123

Section 8.12

Quebec Security

124

 

 

 

ARTICLE 9.

MISCELLANEOUS

125

 

 

 

Section 9.1

Notices

125

Section 9.2

Survival of Agreement, Representations and Warranties, etc.

126

Section 9.3

Successors and Assigns

126

Section 9.4

Confidentiality

130

Section 9.5

Expenses

131

Section 9.6

Indemnity

132

Section 9.7

Choice of Law

132

Section 9.8

No Waiver

132

Section 9.9

Extension of Maturity

132

 

iii

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Section 9.10

Amendments, etc.

133

Section 9.11

Severability

134

Section 9.12

Headings

134

Section 9.13

Execution in Counterparts

134

Section 9.14

Prior Agreements; Inconsistencies

134

Section 9.15

Further Assurances

134

Section 9.16

Waiver of Jury Trial

135

Section 9.17

Subordination of Intercompany Indebtedness

135

Section 9.18

Certain Post Closing Matters

136

Section 9.19

USA Patriot Act

138

Section 9.20

Judgment Currency

139

Section 9.21

Several Obligations; Nonreliance; Violation of Law

139

Section 9.22

Canadian Anti-Money Laundering Legislation

139

Section 9.23

Conversion

140

Section 9.24

Restated Agreement

144

 

 

 

ARTICLE 10.

Guaranty

144

 

 

 

Section 10.1

U.S. Guaranty

144

Section 10.2

Canadian Guaranty

144

Section 10.3

Guaranty of Payment

145

Section 10.4

No Discharge or Diminishment of Guaranty

145

Section 10.5

Defenses Waived

146

Section 10.6

Rights of Subrogation

146

Section 10.7

Reinstatement; Stay of Acceleration

146

Section 10.8

Information

146

Section 10.9

Termination

146

Section 10.10

Taxes

147

Section 10.11

Maximum Liability

147

Section 10.12

Contribution

147

Section 10.13

Liability Cumulative

148

 

 

 

ARTICLE 11.

Collection Allocation Mechanism

148

 

 

 

Section 11.1

Implementation of CAM

148

Section 11.2

Letters of Credit

148

Section 11.3

Conversion

150

 

 

Annex A-1 — Canadian Revolving Commitment Amounts

 

Annex A-2 — U.S. Tranche A Revolving Commitment Amounts

 

Annex A-3 — U.S. Term Loan Commitment Amounts

 

Annex A-4 — Canadian Term Loan Commitment Amounts

 

Annex A-5 — U.S. Tranche B Revolving Commitment Amounts

 

 

 

 

Exhibit A-1 — Form of U.S. Interim Order

 

Exhibit A-2 — Form of Initial Order

 

 

iv

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Exhibit A-3 — Form of Final Order

 

Exhibit B-1 — Form of Security and Pledge Agreement

 

Exhibit B-2 — Form of Canadian Security Agreement

 

Exhibit C-1 — Form of Daily/Weekly Borrowing Base Certificate

 

Exhibit C-2 — Form of Monthly Borrowing Base Certificate

 

Exhibit D — Form of Opinion of Counsel

 

Exhibit E — Form of Assignment and Acceptance

 

Exhibit F — Form of Loan Party Joinder Agreement

 

Exhibit G — Form of Compliance Certificate

 

 

 

Schedule 1.1 — Eligible Equipment

 

Schedule 1.2 — Eligible Real Property

 

Schedule 2.24 — Non-Primed Liens

 

Schedule 3.5 — Subsidiaries

 

Schedule 3.6 — Liens

 

Schedule 3.7 — Environmental Matters

 

Schedule 3.12 — Intellectual Property

 

Schedule 4.1 — Closing Documents

 

Schedule 6.3 — Indebtedness

 

Schedule 6.11 — Other Investments

 

Schedule 6.12 — Permitted Asset Sales

 

Schedule 6.14 — Loan Party Transaction Restrictions

 

 

v

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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 25, 2009

 

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 25, 2009, among
SMURFIT-STONE CONTAINER ENTERPRISES, INC., a Delaware corporation, a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code
(“U.S. Borrower”), SMURFIT-STONE CONTAINER CANADA INC., a company continued
under the Companies Act (Nova Scotia), a company operating pursuant to a
proceeding under the CCAA, and a debtor and debtor in possession in a case
pending under Chapter 11 of the Bankruptcy Code (“Canadian Borrower,” and
together with the U.S. Borrower, the “Borrowers”), SMURFIT-STONE CONTAINER
CORPORATION, a Delaware corporation, a debtor and debtor-in-possession in a case
pending under Chapter 11 of the Bankruptcy Code (“Parent”), the other Loan
Parties party hereto, the Lenders party hereto, JPMORGAN CHASE BANK, N.A., as
Administrative Agent and Collateral Agent, and JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, as Canadian Administrative Agent and Canadian Collateral Agent.

 

INTRODUCTORY STATEMENT

 

WHEREAS, on January 26, 2009, the Loan Parties filed voluntary petitions with
the Bankruptcy Court initiating the U.S. Cases and have continued in the
possession of their assets and in the management of their businesses pursuant to
Sections 1107 and 1108 of the Bankruptcy Code; and

 

WHEREAS, on January 26, 2009, the Canadian Loan Parties (other than Smurfit-MBI
and SLP Finance General Partnership) commenced the Canadian Cases in the
Canadian Court under the CCAA; and

 

WHEREAS, on January 26, 2009, Smurfit-MBI and SLP Finance General Partnership
commenced recognition proceedings under the Bankruptcy and Insolvency Act
(Canada); and

 

WHEREAS, the Loan Parties are parties to that certain Credit Agreement dated as
of January 28, 2009 (the “Prior Agreement”); and

 

WHEREAS, the Borrowers have applied to the Lenders for a credit facility in an
aggregate principal amount of US$750,000,000 (subject to the terms and
conditions of this Agreement) consisting of (i) a US$215,000,000 revolving
credit facility available in Dollars to the U.S. Borrower or the Canadian
Borrower; (ii) a US$35,000,000 revolving credit and letter of credit facility
available in Dollars to the U.S. Borrower or the Canadian Borrower; (iii) a
US$400,000,000 term loan facility available in Dollars to the U.S. Borrower;
(iv) a US$65,000,000 revolving credit and letter of credit facility available in
Dollars or Canadian Dollars to the U.S. Borrower or the Canadian Borrower; and
(v) a US$35,000,000 term loan facility available in Dollars to the Canadian
Borrower; and

 

WHEREAS, the proceeds of the Loans will be used for (i) working capital, Letters
of Credit and Capital Expenditures; (ii) other general corporate purposes of the
Loan Parties (including intercompany loans to the extent permitted by this
Agreement); (iii) for the

 

1

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refinancing in full of Indebtedness outstanding under the Receivables
Securitization Programs; (iv) payment of any related transaction costs, fees and
expenses; and (v) the costs of administration of the Cases, all as provided for
herein; and

 

WHEREAS, all Letters of Credit issued and outstanding under the Prior Agreement
as of the Amended and Restated Effective Date and all Loans outstanding
thereunder on such date shall be deemed to be issued and outstanding under this
Agreement (as more fully described herein); and

 

WHEREAS, to provide for the repayment of the Loans, the reimbursement of any
drafts drawn under the Letters of Credit and the payment of the other Secured
Obligations of the Loan Parties, the Loan Parties will provide to the Agents for
the benefit of the Secured Parties the following (each as more fully described
herein):

 

(a)           With respect to the Secured Obligations of the U.S. Loan Parties
and the Canadian Borrower:

 

(1)           in the U.S. Cases pursuant to Section 364(c)(1) of the Bankruptcy
Code, an allowed Superpriority Claim payable from and having recourse to all
pre-petition and post-petition property of the estates of the U.S. Loan Parties
and the Canadian Borrower and all proceeds thereof (including, upon entry of the
Final Order, any proceeds of Avoidance Actions);

 

(2)           in the U.S. Cases pursuant to Section 364(c)(2) of the Bankruptcy
Code, a perfected first priority Lien on all unencumbered property of the U.S.
Loan Parties and the Canadian Borrower (including, upon entry of the Final
Order, any proceeds of Avoidance Actions) and on all cash maintained in any
Collateral Account and any investments of the funds contained therein, provided
that amounts in the Collateral Accounts shall not be subject to the Carve-Out or
the CCAA Charges;

 

(3)           in the U.S. Cases pursuant to Section 364(c)(3) of the Bankruptcy
Code, a perfected junior Lien upon all property of the U.S. Loan Parties and the
Canadian Borrower that is subject to valid and perfected Liens in existence on
the Filing Date or that is subject to valid Liens in existence on the Filing
Date that are perfected subsequent to the Filing Date as permitted by
Section 546(b) of the Bankruptcy Code (other than certain property that is
subject to the existing Liens that secure obligations under the Pre-Petition
Credit Agreement, which Liens shall be primed by the Liens granted pursuant to
Section 364(d)(1) of the Bankruptcy Code);

 

(4)           in the U.S. Cases pursuant to Section 364(d)(1) of the Bankruptcy
Code, a perfected first priority, senior priming Lien on all of the property of
the U.S. Loan Parties and the Canadian Borrower (including, without limitation,
cash, inventory, receivables, rights under license agreements, property, plant
and equipment and the residual interest of the U.S. Loan Parties and the
Canadian Borrower in any Receivables Securitization Programs) that is subject to
the Primed Liens, which Primed Liens shall be primed by and made subject and
subordinate to the perfected first priority senior priming Liens to be granted
to the Administrative Agent, which senior priming Liens in favor of the
Administrative Agent shall also prime any Liens granted after the commencement
of the Cases to provide adequate

 

2

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

 

protection Liens in respect of any of the Primed Liens, but shall not prime
(1) Non-Primed Liens which secure the Calpine Debt or (2) other Non-Primed Liens
solely to the extent such Non-Primed Liens secure claims in an aggregate amount
less than or equal to US$60,000,000; and

 

(5)           in the Canadian Cases, pursuant to an order of the Canadian Court,
in respect of the Secured Obligations of the Canadian Borrower, a CCAA DIP
Lenders’ Charge over all of the present and future assets of the Canadian
Borrower with priority over all existing Liens and security, including the
Primed Liens; and

 

(b)           With respect to the Secured Obligations of the Canadian Loan
Parties:

 

(1)           in the U.S. Cases pursuant to Section 364(c)(1) of the Bankruptcy
Code, an allowed Superpriority Claim payable from and having recourse to all
pre-petition and post-petition property of the estates of the Canadian Loan
Parties and all proceeds thereof (including, upon entry of the Final Order, any
proceeds of Avoidance Actions);

 

(2)           in the U.S. Cases pursuant to Section 364(c)(2) of the Bankruptcy
Code, a perfected first priority Lien on all unencumbered property of the
Canadian Loan Parties (including, upon entry of the Final Order, any proceeds of
Avoidance Actions) and on all cash maintained in any Collateral Account and any
investments of the funds contained therein, provided that amounts in the
Collateral Accounts shall not be subject to the Carve-Out or the CCAA Charges;

 

(3)           in the U.S. Cases pursuant to Section 364(c)(3) of the Bankruptcy
Code, a perfected junior Lien upon all property of the Canadian Loan Parties
that is subject to valid and perfected Liens in existence on the Filing Date or
that is subject to valid Liens in existence on the Filing Date that are
perfected subsequent to the Filing Date as permitted by Section 546(b) of the
Bankruptcy Code (other than certain property that is subject to the existing
Liens that secure obligations under the Pre-Petition Credit Agreement, which
liens shall be primed by the liens to be granted to the Administrative Agent
pursuant to Section 364(d)(1) of the Bankruptcy Code);

 

(4)           in the U.S. Cases pursuant to Section 364(d)(1) of the Bankruptcy
Code, a perfected first priority, senior priming Lien on all of the property of
the Canadian Loan Parties (including, without limitation, cash, inventory,
receivables, rights under license agreements, property, plant and equipment and
the residual interest of the Canadian Loan Parties in any Receivables
Securitization Programs) that is subject to the Primed Liens, which Primed Liens
shall be primed by and made subject and subordinate to the perfected first
priority senior priming Liens to be granted to the Administrative Agent, which
senior priming Liens in favor of the Administrative Agent shall also prime any
Liens granted after the commencement of the Cases to provide adequate protection
Liens in respect of any of the Primed Liens, but shall not prime (1) Non-Primed
Liens which secure the Calpine Debt or (2) other Non-Primed Liens solely to the
extent such Non-Primed Liens secure claims in an aggregate amount less than or
equal to US$60,000,000; and

 

3

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

 

(5)           in the Canadian Cases, pursuant to an order of the Canadian Court,
the CCAA DIP Lenders’ Charge over all of the present and future assets of the
Canadian Loan Parties with priority over all existing liens and security,
including the Primed Liens;

 

WHEREAS, all of the claims and Liens granted hereunder to the Agents for the
benefit of the Secured Parties in the U.S. Cases shall be subject to the
Carve-Out to the extent provided in Section 2.24 and in the Canadian Cases shall
be subject to the CCAA Charges to the extent provided in Section 2.24.

 

Accordingly, the parties hereto hereby agree as follows:

 

ARTICLE 1. DEFINITIONS

 

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

 

“ABR Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
ARTICLE 2.

 

“Account” has the meaning specified in Article 9 of the UCC or the PPSA, as
applicable, and shall include, without limitation, any right to payment owed to
any Person arising out of the sale of goods or services by such Person.

 

“Account Debtor” shall mean, with respect to any Account, the obligor with
respect to such Account.

 

“Additional Credit” shall have the meaning given such term in Section 4.2(d).

 

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1.0%) equal to the greater of (a) 3.5% and (b) (i) the LIBO
Rate in effect for such Interest Period multiplied by (ii) the Statutory Reserve
Rate.  For purposes hereof, the term “LIBO Rate” shall mean the rate appearing
on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of US$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.

 

4

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“Administration Charge” shall have the meaning given such term in Section 2.24.

 

“Administrative Agent” shall mean JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.

 

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

 

“Affiliate” shall mean, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person.  For purposes of this definition, a Person (a “Controlled Person”)
shall be deemed to be “controlled by” another Person (a “Controlling Person”) if
the Controlling Person possesses, directly or indirectly, power to direct or
cause the direction of the management and policies of the Controlled Person
whether by contract or otherwise.

 

“Agents” shall mean the Administrative Agent, the Canadian Administrative Agent,
the Collateral Agent, and  the Canadian Collateral Agent, together, and “Agent”
means any one of such Agents individually.

 

“Aggregate Credit Exposure” shall mean, at any time, the aggregate Credit
Exposure of all the Lenders.

 

“Agreement” shall mean this Amended and Restated Credit Agreement, as the same
may from time to time be amended, restated, modified or supplemented.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greatest of (a) 4.5%, (b) the Prime Rate in effect on such day, (c) the Federal
Funds Effective Rate in effect on such day plus ½ of 1% and (d) the Adjusted
LIBO Rate for a one month Interest Period on such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus 1%, provided that,
for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on
the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or
substitute page) at approximately 11:00 a.m. London time on such day (without
any rounding).  For purposes hereof, “Prime Rate” shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City (or,
in the case of Loans or Borrowings denominated in Dollars made by the Canadian
Lenders pursuant to the Canadian Commitments, the rate per annum announced from
time to time by the Canadian Administrative Agent as its U.S. base rate for
commercial loans in effect at its office in Toronto); each change in the Prime
Rate shall be effective on the date such change is publicly announced.  If the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without regard to
clause (c) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist.  Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date

 

5

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

 

of such change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate, respectively.

 

“Amended and Restated Effective Date” shall mean the date on which the First
Amendment to Credit Agreement has been executed and the conditions precedent to
the effectiveness of the First Amendment to Credit Agreement have been satisfied
or waived.

 

“Applicable Agent” shall mean (a) with respect to the Canadian Commitments,
extensions of credit thereunder, payments in respect thereof and other matters
pertaining thereto, the Canadian Administrative Agent, (b) with respect to the
U.S. Commitments, extensions of credit thereunder, payments in respect thereof
and other matters pertaining thereto, the Administrative Agent and (c) with
respect to any action or determination under any Collateral Document or
Collateral thereunder, the Agent to which a security interest is granted under
such Collateral Document; provided that the Administrative Agent shall be the
Applicable Agent for all purposes not involving a particular Class of
Commitments, extensions of credit thereunder, payments thereunder or other
matters pertaining thereto, or actions or determinations under a particular
Collateral Document.

 

“Applicable Margin” shall mean, for any day, with respect to any ABR Loan,
Eurodollar Loan, Canadian Prime Rate Loan, Discount Rate Loan, or with respect
to the Letters of Credit issued hereunder, as the case may be, the applicable
rate per annum set forth below under the caption “ABR and Canadian Prime Rate
Spread”, “Eurodollar and Discount Rate Spread”, “Letter of Credit Fees” or
“Drafts Drawn under Letters of Credit”, as the case may be:

 

Pricing Level

 

ABR and Canadian
Prime Rate Spread

 

Eurodollar
and Discount
Rate Spread

 

Letter of
Credit Fees

 

Drafts Drawn
under Letters
of Credit

 

1

 

5.5

%

6.5

%

6.5

%

5.5

%

2

 

6.5

%

7.5

%

7.5

%

6.5

%

3

 

7.5

%

8.5

%

8.5

%

7.5

%

 

The Applicable Margin shall be determined based on Pricing Level 1; provided,
that from and after January 28, 2010 (assuming the proper exercise of the
Fifteen Month Facility Extension Option), the Applicable Margin shall be
determined based on Pricing Level 2; provided, further, that from and after
April 28, 2010 (assuming the proper exercise of the Eighteen Month Facility
Extension Option), the Applicable Margin shall be determined based on Pricing
Level 3.  Notwithstanding anything to the contrary contained in this definition,
the determination of the Applicable Margin for any period shall be subject to
the provisions of Section 2.10.

 

“Applicable Percentage” shall mean, with respect to (a) any U.S. Tranche A
Revolving Lender, a percentage equal to a fraction the numerator of which is
such Lender’s U.S. Tranche A Revolving Commitment and the denominator of which
is the aggregate U.S. Tranche A Revolving Commitments of all U.S. Tranche A
Revolving Lenders (if the U.S. Tranche A Revolving Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon such
Lender’s share of the aggregate U.S. Tranche A Revolving Loans at that time),
(b) any U.S. Tranche B Revolving Lender, a percentage equal to a fraction the
numerator of which is such Lender’s U.S. Tranche B Revolving Commitment and the

 

6

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denominator of which is the aggregate U.S. Tranche B Revolving Commitments of
all U.S. Tranche B Revolving Lenders (if the U.S. Tranche B Revolving
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon such Lender’s share of the aggregate U.S. Tranche B
Revolving Credit Utilization at that time), (c) any Canadian Revolving Lender, a
percentage equal to a fraction the numerator of which is such Lender’s Canadian
Revolving Commitment and the denominator of which is the aggregate Canadian
Revolving Commitment of all Canadian Revolving Lenders (if the Canadian
Revolving Commitments have terminated or expired, the Applicable Percentages
shall be determined based upon such Lender’s share of the aggregate Canadian
Revolving Credit Utilization at that time); provided that in the case of
Section 2.33 when a Defaulting Lender shall exist, any such Defaulting Lender’s
Revolving Commitment shall be disregarded in any calculation pursuant to the
foregoing clauses (a), (b) and (c), (d) any U.S. Term Loan Lender, a percentage
equal to a fraction the numerator of which is such Lender’s outstanding
principal amount of the U.S. Term Loans and the denominator of which is the
aggregate outstanding amount of the U.S. Term Loans of all U.S. Term  Loan
Lenders, (e) any Canadian Term Loan Lender, a percentage equal to a fraction the
numerator of which is such Lender’s outstanding principal amount of the Canadian
Term Loans and the denominator of which is the aggregate outstanding amount of
the Canadian Term Loans of all Canadian Term Loan Lenders and (f) the Aggregate
Credit Exposure of any Lender, a percentage based upon such Lender’s share of
the Aggregate Credit Exposure and the unused Commitments; provided that in the
case of Section 2.33 when a Defaulting Lender shall exist, any such Defaulting
Lender’s Commitment shall be disregarded in any calculation pursuant to this
clause (f).

 

“Approved Fund” shall have the meaning set forth in Section 9.3.

 

“Asset Sale” shall mean a sale, lease or sub-lease (as lessor or sublessor),
sale and leaseback, assignment, conveyance, transfer or other disposition to, or
any exchange of property with, any Person (other than a Loan Party), in one
transaction or series of transactions, of all or any part of the Loan Parties’
or any of their Subsidiaries’ businesses, assets or properties of any kind,
whether real, personal, or mixed and whether tangible or intangible, whether now
owned or hereafter acquired, including, without limitation, the capital stock of
any of the Loan Parties (other than the Parent) or their Subsidiaries in each
case other than (i) Inventory sold in the ordinary course of business, and
(ii) sales of assets for aggregate consideration of less than US$1,000,000 with
respect to any transaction or series of related transactions and less than
US$10,000,000 in the aggregate on a cumulative basis with respect to all such
transactions during the term of this Agreement.

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
substantially in the form of Exhibit E.

 

“Available Cash” shall mean, on any date, (a) the fair market value on such date
of unrestricted cash and cash equivalents held in securities accounts of the
Loan Parties and their Subsidiaries, and (b) the amount of unrestricted
available funds held on such date in bank deposit accounts of the Loan Parties
and their Subsidiaries, in each case subject to no Liens other than (i) Liens in
favor of the Agents on behalf of the Secured Parties, (ii) Liens in favor of the
Pre-Petition Agent on behalf of the Pre-Petition Secured Lenders, (iii) the CCAA
Charges and (iv) an

 

7

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unregistered Lien in respect of Priority Payables that are not yet due and
payable, and in any event excluding amounts held in any Collateral Account, as
evidenced in the applicable Borrowing Base Certificate delivered by each
Borrower to the Administrative Agent pursuant to Section 5.8.

 

“Avoidance Actions” shall mean claims and causes of action under Sections
502(d), 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code.

 

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

 

“Banking Services Obligations” shall mean any and all obligations of the Loan
Parties, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

 

“Banking Services Reserves” means all Reserves which the Applicable Agent from
time to time establishes in its Permitted Discretion for Banking Services then
provided or outstanding.

 

“Bankruptcy Code” shall mean The Bankruptcy Reform Act of 1978, as heretofore
and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.

 

“Bankruptcy Court” shall mean the United States Bankruptcy Court for the
District of Delaware or any other court having jurisdiction over the U.S. Cases
from time to time.

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

 

“Borrowers” shall have the meaning set forth in the Introduction.

 

“Borrowing” shall mean the incurrence of Revolving Loans or the Term Loans, as
the case may be, of a single Type and Class made from all the Lenders in
accordance with their Applicable Percentages on a single date and having, in the
case of Eurodollar Loans or Discount Rate Loans, a single Interest Period or
Contract Period (with any ABR Loan or Canadian Prime Rate Loan made pursuant to
Section 2.17 being considered a part of the related Borrowing of Eurodollar
Loans or Discount Rate Loans).

 

“Borrowing Bases” shall mean the U.S. Borrowing Base and the Canadian Borrowing
Base.

 

“Borrowing Base Certificate” shall mean a certificate substantially in the form
of Exhibit C-1 hereto (with respect to the certificate to be delivered by the
Loan Parties weekly or more frequently) and Exhibit C-2 hereto (with respect to
the certificate to be delivered by the Loan Parties monthly) (in each case with
such changes therein as may be required by the

 

8

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Administrative Agent from time to time to reflect the components of and reserves
against the U.S. Borrowing Base and the Canadian Borrowing Base as provided for
hereunder from time to time), executed and certified as accurate and complete by
a Financial Officer of each of the Loan Parties, which shall include appropriate
exhibits, schedules and supporting documentation, and additional reports as
(i) outlined in Exhibits C-1 and C-2, (ii) requested by the Administrative
Agent, and (iii) provided in Section 5.8.

 

“Budget” shall have the meaning set forth in Section 4.1(j).

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in the State of New York are required or permitted to close (and,
for a Letter of Credit, other than a day on which the applicable Fronting Bank
issuing such Letter of Credit is closed); provided, however, that (a) when used
in connection with a Eurodollar Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits on the
London interbank market and (b) when used in connection with a Borrowing of
Canadian Revolving Loans, Canadian Term Loans or a Canadian Revolving Facility
Letter of Credit, the term “Business Day” shall also exclude any day on which
banks are not open for business in Toronto and Montreal.

 

“Calculation Date” shall mean (a) the last Business Day of each month, (b) the
date of each notice of Borrowing or refinancing of Canadian Revolving Loans or
Canadian Term Loans, or (c) the Business Day preceding the issuance, amendment,
extension or renewal of each Canadian Revolving Facility Letter of Credit.

 

“Calpine” shall mean Calpine Corrugated LLC, a California limited liability
company.

 

“Calpine Debt” shall mean Indebtedness of Calpine under (i) that certain Amended
and Restated Credit Agreement dated as of July 28, 2008 between Calpine and The
CIT Group/Equipment Financing, Inc. in respect of a loan in the principal amount
of US$40,350,000 and (ii) that certain Loan and Security Agreement dated as of
March 30, 2006 between Calpine and Union Bank of California, N.A. as amended
prior to and including that certain Sixth Amendment to Loan and Security
Agreement dated as of July 28, 2008 in respect of a loan in the principal amount
of US$12,000,000.

 

“CAM” shall mean the mechanism for the allocation and exchange of interests in
the Credit Facilities and collections thereunder established under ARTICLE 11.

 

“CAM Exchange” shall mean the exchange of the Lenders’ interests provided for in
Section 11.1.

 

“CAM Percentage” shall mean, as to each Lender, a fraction, expressed as a
decimal, of which (a) the numerator shall be the aggregate Obligations owed to
such Lender, and (b) the denominator shall be the aggregate Obligations owed to
all the Lenders, in each case immediately prior to the Termination Date.  For
purposes of computing each Lender’s CAM Percentage, all Obligations which shall
be denominated in Canadian Dollars shall be translated into Dollars at the
Exchange Rate in effect on the Termination Date.

 

9

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

 

“Canadian Administrative Agent” shall mean JPMorgan Chase Bank, N.A., Toronto
Branch, in its capacity as Canadian administrative agent for the Lenders
hereunder.

 

“Canadian Benefit Plans” shall mean all employee benefit plans of any nature or
kind whatsoever (other than the Canadian Pension Plans) that are maintained or
contributed to by the Canadian Borrower or any other Canadian Loan Party.

 

“Canadian Borrower” shall have the meaning set forth in the Introduction.

 

“Canadian Borrowing Base” shall mean, at the time of any determination, an
amount equal to the sum (expressed in Dollars, based on the Exchange Rate
determined in accordance with Section 1.4), without duplication, of (a) 85% of
Eligible Accounts of the Canadian Loan Parties at such time plus (b) the lesser
of (i) 65% of Eligible Inventory of the Canadian Loan Parties at such time and
(ii) 85% of the Net Orderly Liquidation Value of Eligible Inventory of the
Canadian Loan Parties at such time (in each case with respect to clauses (i) and
(ii) with any Eligible Inventory to be valued at the lower of cost (determined
on a first-in, first-out basis) or market), plus (c) the Canadian PP&E
Component, minus (d) the amount of the Reserves at such time, minus, without
duplication, (e) the then applicable aggregate amount of obligations secured by
the CCAA Charges as calculated pursuant to Section 2.24 at such time, minus
(f) to the extent not otherwise included in the CCAA Charges, the amount of
Priority Payables at such time.  The Canadian Borrowing Base at any time shall
be determined by reference to the most recent Borrowing Base Certificate
delivered to the Administrative Agent pursuant to Section 5.8 of this Agreement.

 

“Canadian Cases” shall mean the consolidated proceedings of the CCAA Cases and
the Recognition Cases.

 

“Canadian Collateral Agent” shall mean JPMorgan Chase Bank, N.A., Toronto
Branch, in its capacity as Canadian collateral agent for the Lenders hereunder
and the other Secured Parties.

 

“Canadian Commitments” shall mean the Canadian Revolving Commitment and the
Canadian Term Loan Commitment.

 

“Canadian Concentration Account” shall mean the blocked concentration account
established by the Canadian Borrower pursuant to Section 5.7 and designated as
the “Smurfit-Stone Canadian Concentration Account” with JPMorgan Chase Bank,
N.A., Toronto Branch, or a bank acceptable to the Canadian Administrative Agent.

 

“Canadian Conversion Notice” shall have the meaning given such term in
Section 9.23(c).

 

“Canadian Court” shall mean the Ontario Superior Court of Justice or any other
court having jurisdiction over the Canadian Cases.

 

“Canadian Dollar Equivalent” shall mean, on any date of determination, with
respect to any amount in Dollars, the equivalent in Canadian Dollars of such
amount determined by the Administrative Agent using the Exchange Rate then in
effect.

 

10

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“Canadian Dollars” and “C$” shall mean lawful currency of Canada.

 

“Canadian Guaranteed Obligations” shall have the meaning set forth in
Section 10.2.

 

“Canadian Guarantor” and “Canadian Guarantors” shall mean, individually or
collectively, SMBI Inc. and each of the Canadian Subsidiaries party to this
Agreement (other than the Canadian Borrower).  As of the Closing Date, the
Canadian Guarantors are 3083527 Nova Scotia Company, a corporation organized
under the laws of the Province of Nova Scotia, MBI Limited/Limitée, a
corporation organized under the laws of the Province of New Brunswick,
Smurfit-MBI, a limited partnership organized under the laws of the Province of
Ontario, Stone Container Finance Company of Canada II, a corporation organized
under the laws of the Province of Nova Scotia, 639647 British Columbia Ltd., a
company with limited liability organized under the laws of the Province of
British Columbia, B.C. Shipper Supplies Ltd., a corporation organized under the
laws of the Province of British Columbia, Specialty Containers Inc., a
corporation organized under the laws of the Province of Alberta, SLP Finance
General Partnership, a general partnership formed and operated under the Civil
Code of Québec, Francobec Company, a corporation organized under the laws of the
Province of Nova Scotia, 605681 N.B. Inc., a corporation organized under the
laws of the Province of New Brunswick, and SMBI Inc., a Delaware corporation,
and, after the Closing Date, shall include each subsequently organized Canadian
Subsidiary and each direct parent thereof.

 

“Canadian Investment Account” shall mean the account established by the Canadian
Borrower pursuant to Section 2.7(d) and designated as the “Smurfit-Stone
Canadian Investment Account” with JPMorgan Chase Bank, N.A., Toronto Branch, or
a bank acceptable to the Canadian Administrative Agent.

 

“Canadian Lender” shall mean, as of any date of determination, a Person
constituting a Canadian Revolving Lender or Canadian Term Lender.

 

“Canadian Letter of Credit Account” shall mean the non-interest bearing account
established by the Canadian Borrower under the sole and exclusive control of the
Canadian Administrative Agent maintained at JPMorgan Chase Bank, N.A., Toronto
Branch, or a bank acceptable to the Canadian Administrative Agent, designated as
the “JPMorgan Chase Bank NA (Smurfit-Stone Canadian Letter of Credit) Account”
that shall be used solely for the purposes set forth in Section 2.4(c) and
Section 2.14.

 

“Canadian Letter of Credit Outstandings” shall mean, at any time of
determination, the sum of (a) the aggregate undrawn amount of all outstanding
Canadian Revolving Facility Letters of Credit that are denominated in Dollars,
plus the U.S. Dollar Equivalent at such time of the aggregate undrawn amount of
all Canadian Revolving Facility Letters of Credit that are denominated in
Canadian Dollars and (b) the aggregate amount that has been drawn under any
Canadian Revolving Facility Letter of Credit denominated in Dollars that has not
been reimbursed by the Canadian Borrower or another Loan Party at such time plus
the U.S. Dollar Equivalent of the aggregate amount that has been drawn under any
Canadian Revolving Facility Letter of Credit denominated in Canadian Dollars
that has not been reimbursed by the Canadian Borrower or another Loan Party at
such time.  The Canadian Letter

 

11

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

 

of Credit Outstandings with respect to any Canadian Revolving Lender at any time
shall equal its Applicable Percentage of the aggregate Canadian Letter of Credit
Outstandings at such time.

 

“Canadian Loan Party” and “Canadian Loan Parties” shall mean, individually or
collectively, the Canadian Borrower and the Canadian Guarantors.

 

“Canadian Loans” shall mean the Canadian Revolving Loans and the Canadian Term
Loans.

 

“Canadian Pension Plans” shall mean all plans that are considered to be pension
plans for the purposes of, and are required to be registered under, the ITA or
any applicable pension benefits standards statute or regulation in Canada and
that are established, maintained or contributed to by the Canadian Borrower or
any other Canadian Loan Party for its current or former employees.

 

“Canadian PP&E Component” shall mean the lesser of (x) (i) during the period
commencing with the Closing Date until the twelve (12) month anniversary of the
Closing Date, up to US$15,000,000, (ii) during the period commencing with the
twelve (12) month anniversary of the Closing Date until the fifteen (15) month
anniversary of the Closing Date, up to US$10,000,000, and (iii) on the fifteen
(15) month anniversary of the Closing Date and thereafter, up to US$7,500,000,
or, in each case, such lesser amount as may be specified by the Canadian
Borrower on the Canadian Borrower’s most recent Borrowing Base Certificate, and
(y) the greater of (A) (i) 50% of the Net Orderly Liquidation Value of Eligible
Equipment of the Canadian Loan Parties at such time plus (ii) 50% of the Fair
Market Value of Eligible Real Property of the Canadian Loan Parties at such time
(as set forth in the most recent third party real estate appraisal in form and
substance satisfactory to the Administrative Agent), and (B) 20% of the Net
Orderly Liquidation Value In Place of (i) Eligible Equipment of the Canadian
Loan Parties at such time and (ii) Eligible Real Property of the Canadian Loan
Parties at such time.  Notwithstanding the foregoing sentence, until the earlier
of (x) such time as appraisals satisfactory to the Administrative Agent are
completed pursuant to Section 5.6 and (y) May 28, 2009, or such later date as
the Administrative Agent may approve in its exclusive discretion, the Canadian
PP&E Component shall be US$15,000,000 or such lesser amount as may be specified
by the Canadian Borrower on the Canadian Borrower’s most recent Borrowing Base
Certificate.

 

“Canadian Prime Rate” shall mean, on any day, the greatest of (a) 4.5%, (b) the
annual rate of interest announced from time to time by the Canadian
Administrative Agent as being its reference rate then in effect for determining
interest rates on Canadian Dollar-denominated commercial loans made by it in
Canada and (c) the CDOR Rate for a one month term in effect from time to time
plus 100 basis points per annum.

 

“Canadian Prime Rate Loan” shall mean any Loan bearing interest at a rate
determined by reference to the Canadian Prime Rate in accordance with the
provisions of ARTICLE 2.

 

“Canadian Receivables Securitization Program” shall mean the Receivables
Purchase Agreement, dated as of March 30, 2004, among MBI Limited/Limitee, in
its capacity as general partner of Smurfit-MBI, Computershare Trust Company of
Canada, in its capacity as

 

12

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trustee of King Street Funding Trust, and Scotia Capital Inc., as amended,
restated, modified or waived from time to time.

 

“Canadian Revolving Commitment” shall mean, with respect to each Canadian
Revolving Lender, the commitment of such Lender to make Canadian Revolving Loans
hereunder and to acquire participations in Canadian Revolving Facility Letters
of Credit in the amount set forth opposite its name on Annex A-1 hereto or as
may subsequent to the Closing Date be set forth in the Register from time to
time, as the same may be reduced from time to time pursuant to the terms of this
Agreement.  As of the Closing Date, the aggregate amount of the Canadian
Revolving Commitments is US$65,000,000.

 

“Canadian Revolving Credit Utilization” shall mean, at any time of
determination, the sum of (a) the aggregate principal amount of Canadian
Revolving Loans outstanding at such time and denominated in Dollars, plus
(b) the U.S. Dollar Equivalent of the aggregate principal amount of Canadian
Revolving Loans outstanding at such time and denominated in Canadian Dollars,
plus (c) the Canadian Letter of Credit Outstandings at such time.

 

“Canadian Revolving Facility Letters of Credit” shall mean any irrevocable
letter of credit issued pursuant to Section 2.4 for the account of the Canadian
Borrower or a Canadian Subsidiary by a Fronting Bank pursuant to the terms and
conditions of ARTICLE 2, which letter of credit shall be (i) a standby or import
documentary letter of credit, (ii) issued for purposes consistent with the
ordinary course of business of the Loan Parties, as determined by the Loan
Parties in their reasonable judgment, or for such other purposes as are
acceptable to the Canadian Administrative Agent, (iii) denominated in Dollars or
Canadian Dollars and (iv) otherwise in such form as may be approved from time to
time by the Canadian Administrative Agent and the applicable Fronting Bank.

 

“Canadian Revolving Lenders” shall mean the Lenders having Canadian Revolving
Commitments or holding Canadian Revolving Loans.

 

“Canadian Revolving Loan” shall mean a revolving loan to the U.S. Borrower or
the Canadian Borrower made pursuant to Section 2.1(b)(iii) in Dollars or
Canadian Dollars.

 

“Canadian Secured Obligations” shall mean (a) all Obligations owing by the
Canadian Borrower (other than in respect of its guaranty of Obligations of the
U.S. Borrower), (b) all Obligations owing by any other Canadian Loan Party,
(b) all Banking Services Obligations owing by any Canadian Loan Party and
(c) all Swap Obligations owing by any Canadian Loan Party to one or more
Canadian Lenders or their respective Affiliates; provided that at or prior to
the time that any transaction relating to a Swap Obligation is executed, the
Canadian Lender or an Affiliate thereof party thereto (other than JPMCB) shall
have delivered written notice to the Administrative Agent that such a
transaction has been entered into and that it constitutes a Canadian Secured
Obligation entitled to the benefits of the Collateral Documents.

 

“Canadian Security Agreement” shall mean the Canadian Security Agreement made by
each of the Canadian Loan Parties in favor of the Canadian Collateral Agent and
the Quebec Security Agreements.

 

13

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“Canadian Subsidiary” shall mean any Subsidiary of the Parent incorporated,
organized or formed under the laws of Canada or any province or other territory
thereof.

 

“Canadian Term Loans” shall mean the term loans to the Canadian Borrower made
pursuant to Section 2.1(a)(ii) (or made to the Canadian Borrower pursuant to
Section 9.23(c))in Dollars.

 

“Canadian Term Loan Collateral Account” shall mean the account established by
the Canadian Borrower under the sole and exclusive control of the Canadian
Administrative Agent maintained with JPMorgan Chase Bank, N.A., Toronto Branch,
or a bank acceptable to the Canadian Administrative Agent, designated as the
“Smurfit-Stone Canadian Term Loan Collateral Account” that shall be used solely
for the purposes set forth in Section 2.7(d) and Section 2.14(d).

 

“Canadian Term Loan Commitment” shall mean, with respect to each Canadian Term
Loan Lender, the commitment of such Lender to make a Canadian Term Loan
hereunder in the amount set forth opposite its name on Annex A-4 hereto, as the
same shall be reduced on the Closing Date pursuant to Section 2.14(k) and as may
be modified pursuant to Section 9.23(c).  As of the Closing Date and prior to
making the Canadian Term Loans, the aggregate amount of the Canadian Term Loan
Commitments of the Canadian Term Loan Lenders is US$35,000,000.

 

“Canadian Term Loan Conversion” shall have the meaning given such term in
Section 9.23(c).

 

“Canadian Term Loan Lenders” shall mean the Lenders having Canadian Term Loan
Commitments or holding Canadian Term Loans.

 

“Canadian Term Outstandings” shall mean, at any time of determination, an amount
equal to (a) the aggregate principal amount of the Canadian Term Loans
outstanding at such time minus (b) the amount of cash held in the Canadian Term
Loan Collateral Account at such time.

 

“Capital Expenditures” shall mean, for any period, the aggregate of all
expenditures (whether paid in cash and not accrued prior to such period but
after the Closing Date or accrued as liabilities during such period, and
including that portion of Capital Lease Obligations which is capitalized on the
consolidated balance sheet of the Loan Parties and their Subsidiaries) by the
Loan Parties and their Subsidiaries during such period that, in conformity with
GAAP, are required to be included in or reflected by the property, plant,
equipment or intangibles or similar fixed asset accounts reflected in the
consolidated balance sheet of the Loan Parties and their Subsidiaries, but
excluding expenditures made in connection with the replacement or restoration of
assets, to the extent reimbursed or financed from insurance proceeds paid on
account of the loss of or the damage to the assets being replaced or restored,
or from awards of compensation arising from the taking by condemnation or
eminent domain of such assets being replaced.

 

14

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“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.

 

“Carve-Out” shall have the meaning set forth in Section 2.24.

 

“Cases” shall mean the U.S. Cases and the Canadian Cases, individually and
collectively.

 

“Cash Flow Forecast” shall have the meaning set forth in Section 4.1(k).

 

“CCAA” shall mean the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.
C-36, as heretofore or hereafter amended.

 

“CCAA Cases” shall mean the cases commenced by the Canadian Loan Parties (other
than Surfit-MBI and SLP Finance General Partnership) pursuant to the CCAA.

 

“CCAA Charges” shall mean the Administration Charge and the Directors’ Charge.

 

“CCAA DIP Lenders’ Charge” shall have the meaning set forth in Section 2.24.

 

“CDOR Rate” shall mean on any day, with respect to a particular term as
specified herein, the annual rate of discount or interest which is the
arithmetic average of the discount rates for such term applicable to Canadian
Dollar bankers’ acceptances identified as such on the Reuters Screen CDOR
Page at approximately 10:00 A.M. (Toronto, Ontario time) on such day, or if such
day is not a Business Day, then on the immediately preceding Business Day (as
adjusted by the Administrative Agent after 10:00 A.M. (Toronto, Ontario time) to
reflect any error in any posted rate or in the posted average annual rate).  If
the rate does not appear on the Reuters Screen CDOR Page as contemplated above,
then the CDOR Rate on any day shall be calculated as the arithmetic average of
the annual discount rates for such term applicable to Canadian Dollar bankers’
acceptances of, and as quoted by, the Schedule I Banks, as of 10:00 A.M.
(Toronto, Ontario time) on that day, or if that day is not a Business Day, then
on the immediately preceding Business Day.

 

“Change of Control” shall mean (x) with respect to the Parent (i) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the Closing Date), of shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Parent; or (ii) the occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Parent, after the Filing Date, by
Persons who were neither (a) nominated by the board of directors of the Parent
nor (b) appointed by the directors so nominated, (y) the Parent shall cease to
own, directly or indirectly, beneficially and of record, 100% of the issued and
outstanding capital stock of the U.S. Borrower or any other Loan Party (or, in
the case of

 

15

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Calpine, 90%), or (z) the U.S. Borrower shall cease to own, directly or
indirectly, beneficially and of record, 100% of the issued and outstanding
capital stock of the Canadian Borrower.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are U.S. Tranche A Revolving
Loans, U.S. Tranche B Revolving Loans, Canadian Revolving Loans, U.S. Term
Loans, or Canadian Term Loans, and, when used in reference to any Commitment,
refers to whether such Commitment is a U.S. Tranche A Revolving Commitment, U.S.
Tranche B Revolving Commitment, Canadian Revolving Commitment, U.S. Term Loan
Commitment, or Canadian Term Loan Commitment.

 

“Closing Date” shall mean January 28, 2009.

 

“Closing Date Lender” shall have the meaning set forth in Section 9.3.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Co-Lead Arrangers” shall mean J.P. Morgan Securities Inc. and Deutsche Bank
Securities Inc.

 

“Collateral” shall mean all of the real, personal and mixed property (including
equity interests) in which Liens are purported to be granted pursuant to the
Orders or Collateral Documents.

 

 “Collateral Accounts” shall mean collectively, the Canadian Letter of Credit
Account, the Letter of Credit Account, the Canadian Term Loan Collateral Account
and the U.S. Term Loan Collateral Account.

 

“Collateral Agent” shall mean JPMorgan Chase Bank, N.A., in its capacity as
collateral agent for the Lenders hereunder and the other Secured Parties.

 

“Collateral Documents” shall mean, collectively, the Security Agreements and any
other documents granting a Lien upon the Collateral as security for payment of
any of the Secured Obligations.

 

“Commercial LC Exposure” shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding commercial Letters of Credit at such time plus
(b) the aggregate amount of all disbursements relating to commercial Letters of
Credit that have not yet been reimbursed by or on behalf of the Borrowers at
such time.  The Commercial LC Exposure shall be determined on a separate basis
for each Class.  The Commercial LC Exposure of any Canadian Revolving Lender or
U.S. Tranche B Revolving Lender, as the case may be, at any time shall be its
Applicable Percentage of the total Commercial LC Exposure at such time.

 

“Commitment” shall mean each of, and “Commitments” shall mean, collectively, the
Canadian Revolving Commitments, the U.S. Tranche A Revolving Commitments, the
U.S. Tranche B Revolving Commitments, the U.S. Term Loan Commitments and the
Canadian Term Loan Commitments, and, with respect to each Canadian Revolving
Lender, U.S. Tranche A Revolving Lender, U.S. Tranche B Revolving Lender, U.S.
Term Loan Lender or Canadian Term Loan Lender, as applicable, the Commitment of
each such Lender

 

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hereunder in the amount set forth opposite its name on Annex A-1, Annex A-2,
Annex A-3, Annex A-4 or Annex A-5 hereto or as may subsequent to the Closing
Date be set forth in the Register from time to time, as the same may be reduced
from time to time pursuant to this Agreement.

 

“Commitment Fee” shall have the meaning set forth in Section 2.21.

 

“Commitment Fee Percentage” shall mean 1.0% per annum.

 

“Commitment Letter” shall mean that certain Commitment Letter dated January 6,
2009 among the Administrative Agent, J.P. Morgan Securities Inc., Deutsche Bank
Securities Inc., Deutsche Bank Trust Company Americas and the Parent on behalf
of itself and the other Loan Parties.

 

“Concentration Account” shall mean the blocked concentration account established
by the U.S. Borrower pursuant to Section 5.7 and designated as the
“Smurfit-Stone Concentration Account” with JPMCB.

 

“Consenting Lenders” shall have the meaning set forth in Section 9.10(b).

 

“Consolidated EBITDA” shall mean, for any period, all as determined in
accordance with GAAP, the Consolidated Net Income of the Loan Parties and their
Subsidiaries for such period, plus, without duplication and to the extent
deducted in determining Consolidated Net Income for such period, (i) all
federal, state, provincial, local and foreign income taxes, (ii) Consolidated
Interest Expense, (iii) depreciation, depletion, amortization of intangibles and
other non-cash charges or non-cash losses deducted in determining such
Consolidated Net Income, (iv) cash restructuring charges in an amount not to
exceed US$25,000,000 in the aggregate during any twelve (12) month period
(“restructuring charges”), (v) cash restructuring charges solely consisting of
one-time lump sum cash severance payments made in connection with a reduction in
force undertaken by the Loan Parties and their Subsidiaries in an amount not to
exceed US$25,000,000 in the aggregate during any twelve (12) month period,
(vi) “Chapter 11/CCAA expenses” (or “administrative costs reflecting Chapter
11/CCAA expenses”, inclusive of professional fees), (vii) non-cash pension
expenses, as shown on the Loan Parties’ consolidated statement of income for
such period, and (viii) any Downtime Credit, minus, without duplication and to
the extent included in determining such Consolidated Net Income for such period,
(i) any non-cash income or non-cash gains, (ii) cash contributions to fund
pension plan liabilities and (iii) cash expenditures pertaining to non-cash
charges or non-cash losses that were added back in the calculation of
Consolidated EBITDA hereunder for the same or a prior period.  The
classification of items as “restructuring charges” or “Chapter 11/CCAA expenses”
for purposes of determining Consolidated EBITDA shall be made by the Loan
Parties in a manner consistent with the allocations in the Budget and the Cash
Flow Forecast delivered to the Administrative Agent on or prior to the Closing
Date.

 

“Consolidated Interest Expense” means, with reference to any period, total
interest expense (including that attributable to Capital Lease Obligations) of
the Parent and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Parent and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect

 

17

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to letters of credit and bankers’ acceptance financing), calculated on a
consolidated basis for the Parent and its Subsidiaries for such period in
accordance with GAAP.  For purposes of the foregoing, interest expense shall be
determined after giving effect to any net payments made or received by the
Parent and its Subsidiaries with respect to Swap Agreements, but excluding any
gain or loss recognized under GAAP that results from the mark-to-market
valuation of any Swap Agreement.

 

“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) of the Parent and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Parent or any of its Subsidiaries, (b) the
income (or deficit) of any Person (other than a Subsidiary) in which the Parent
or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by the Parent or such Subsidiary in the
form of dividends or similar distributions, (c) the undistributed earnings of
any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary and (d) any gain (or loss) from
the sale or other disposition of any asset occurring outside of the ordinary
course of business of the Loan Parties.

 

“Contract Period” shall mean the term of a Discount Rate Loan selected by the
Canadian Borrower in accordance with Section 2.7 and Section 2.13 commencing on
the date of the Borrowing of such Discount Rate Loan, any rollover date and the
date on which any Canadian Prime Rate Loans are refinanced with Discount Rate
Loans pursuant to Section 2.13, as applicable, and expiring on a Business Day
which shall be either one month, three months, or, with the consent of all of
the applicable Canadian Lenders, six months later; provided, that no Contract
Period shall extend beyond the Maturity Date.  Notwithstanding the foregoing,
whenever the last day of any Contract Period would otherwise occur on a day
which is not a Business Day, the last day of such Contract Period shall occur on
the next succeeding Business Day.

 

“Converting Lender” shall mean, each of JPMCB, JPMorgan Chase Bank, N.A.,
Toronto Branch and Deutsche Bank Trust Company Americas.

 

“Credit Exposure” shall mean as to any Lender at any time, the sum of (a) such
Lender’s Revolving Loans at such time, plus (b) such Lender’s LC Exposure plus
(c) an amount equal to the aggregate principal amount of its Term Loans
outstanding at such time.

 

“Credit Facility” shall mean a Class of Commitments and extensions of credit
thereunder.  For purposes of this Agreement, each of the following comprises a
separate Credit Facility:  (a) the U.S. Term Loans, (b) the Canadian Term Loans,
(c) the U.S. Tranche A Revolving Commitments and the U.S. Tranche A Revolving
Loans, (d) the U.S. Tranche B Revolving Commitments, the U.S. Tranche B
Revolving Loans and the U.S. Revolving Facility Letters of Credit, and (e) the
Canadian Revolving Commitments, the Canadian Revolving Loans and the Canadian
Revolving Facility Letters of Credit.

 

“Default” shall have the meaning given such term in Section 2.24.

 

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“Defaulting Lender” shall mean any Lender, as determined by the Applicable
Agent, that has (a) failed to fund any portion of its Loans or participations in
Letters of Credit within three (3) Business Days of the date required to be
funded by it hereunder, (b) notified any Borrower, the Applicable Agent, any
Fronting Bank or any Lender in writing that it does not intend to comply with
any of its funding obligations under this Agreement or has made a public
statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements in which it commits
to extend credit, (c) failed, within three (3) Business Days after request by
the Applicable Agent, to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective Loans and
participations in then outstanding Letters of Credit, (d) otherwise failed to
pay over to the Applicable Agent or any other Lender any other amount required
to be paid by it hereunder within three (3) Business Days of the date when due,
unless the subject of a good faith dispute, or (e) (i) become or is insolvent or
has a parent company that has become or is insolvent or (ii) become the subject
of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment or has a parent company that has become the subject of
a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.

 

“Dilution Factors” shall mean, without duplication, with respect to any period,
the aggregate amount of all deductions, credit memos, returns, adjustments,
allowances, bad debt write-offs and other non-cash credits which are recorded to
reduce accounts receivable in a manner consistent with current and historical
accounting practices of the Loan Parties.

 

“Dilution Ratio” shall mean, at any date, the amount (expressed as a percentage)
equal to (a) the aggregate amount of the applicable Dilution Factors for the
twelve (12) most recently ended fiscal months divided by (b) total gross sales
for the twelve (12) most recently ended fiscal months.

 

“Dilution Reserve” shall mean, at any date, (i) the amount by which the Dilution
Ratio exceeds five  percent (5%) multiplied by (ii) the Eligible Accounts on
such date.

 

“Directors’ Charge” shall have the meaning given such term in Section 2.24.

 

“Discount Rate” shall mean with respect to a Discount Rate Loan: (a) made by a
Canadian Revolving Lender which is a Schedule I Bank, the greater of (x) 3.5%
and (y) the CDOR Rate, and (b) made by a Canadian Revolving Lender which is not
a Schedule I Bank, the greater of (x) 3.5% and (y) the CDOR Rate plus 10 basis
points per annum.

 

“Discount Rate Loan” shall mean any Loan bearing interest at a rate determined
by reference to the Discount Rate in accordance with the provisions of ARTICLE
2.

 

“Dollars” and “US$” shall mean lawful money of the United States of America.

 

“Domestic Subsidiary” shall mean any Subsidiary of the U.S. Borrower organized
under the laws of the United States or any political subdivision thereof.

 

19

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“Downtime Credit” shall mean a credit for production downtime, if any, in excess
of downtime identified in the Budget delivered on or prior to the Closing Date,
in an amount equal to US$2,500,000 for every 10,000 tons of production downtime
in excess of downtime identified in the Budget taken in any month ending on or
prior to July 31, 2009 (other than, in any event, downtime associated with
maintenance activity in the ordinary course of business), provided that the
cumulative amount of the Downtime Credit during all periods shall not exceed
US$20,000,000.  In the event the amount of production downtime in excess of
downtime identified in the Budget is more or less than 10,000 tons, the Downtime
Credit for such month shall be prorated based upon the actual number of tons of
production downtime in excess of the downtime identified in the Budget (but in
any event not to exceed the US$20,000,000 cap set forth above).

 

“Effective Date” shall mean the date identified as the effective date of a
Reorganization Plan of the Loan Parties that is confirmed or sanctioned pursuant
to an order of the Bankruptcy Court or Canadian Court, as the case may be, in
the Cases.

 

“Eighteen Month Facility Extension Option” shall have the meaning given such
term in Section 2.31.

 

“Eligible Accounts” means, at any time, the Accounts of a Loan Party which the
Applicable Agent determines in its Permitted Discretion are eligible as the
basis for the extension of Loans and the issuance of Letters of Credit
hereunder.  Without limiting the Applicable Agent’s discretion provided herein,
Eligible Accounts shall not include any Account:

 

(A)           WHICH IS NOT SUBJECT TO A FIRST PRIORITY PERFECTED LIEN IN FAVOR
OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES SUBJECT ONLY TO
(I) THE CCAA CHARGES AND (II) AN UNREGISTERED LIEN IN RESPECT OF PRIORITY
PAYABLES THAT ARE NOT YET DUE AND PAYABLE;

 

(B)           WHICH IS SUBJECT TO ANY LIEN OTHER THAN (I) A LIEN IN FAVOR OF THE
APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES, (II) A LIEN (IF ANY)
PERMITTED BY THE LOAN DOCUMENTS WHICH DOES NOT HAVE PRIORITY OVER THE LIEN IN
FAVOR OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES, (III) A
LIEN CONTEMPLATED BY CLAUSE (IV) OF THE DEFINITION OF PERMITTED LIENS, AND
(IV) AN UNREGISTERED LIEN IN RESPECT OF PRIORITY PAYABLES THAT ARE NOT YET DUE
AND PAYABLE;

 

(C)           WHICH (I) IS UNPAID MORE THAN 90 DAYS AFTER THE DATE OF THE
ORIGINAL INVOICE THEREFOR, OR (II) HAS BEEN WRITTEN OFF THE BOOKS OF THE LOAN
PARTY OR OTHERWISE DESIGNATED AS UNCOLLECTIBLE (IN DETERMINING THE AGGREGATE
AMOUNT FROM THE SAME ACCOUNT DEBTOR THAT IS UNPAID HEREUNDER THERE SHALL BE
EXCLUDED THE AMOUNT OF ANY NET CREDIT BALANCES RELATING TO ACCOUNTS DUE FROM AN
ACCOUNT DEBTOR WHICH ARE UNPAID MORE THAN 90 DAYS FROM THE DATE OF INVOICE);

 

(D)           WHICH IS OWING BY AN ACCOUNT DEBTOR FOR WHICH MORE THAN 50% OF THE
ACCOUNTS OWING FROM SUCH ACCOUNT DEBTOR AND ITS AFFILIATES ARE INELIGIBLE
HEREUNDER;

 

(E)           WHICH IS OWING BY AN ACCOUNT DEBTOR TO THE EXTENT THE AGGREGATE
AMOUNT OF ACCOUNTS OWING FROM SUCH ACCOUNT DEBTOR AND ITS AFFILIATES TO THE LOAN
PARTIES EXCEEDS 10% OF THE AGGREGATE AMOUNT OF ELIGIBLE ACCOUNTS OF THE LOAN
PARTIES;

 

20

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(F)            WHICH, FOR ANY ACCOUNT DEBTOR, EXCEEDS THE APPLICABLE CREDIT
LIMIT, IF ANY, DETERMINED BY THE LOAN PARTIES, TO THE EXTENT OF SUCH EXCESS, AS
DETERMINED IN A MANNER MUTUALLY ACCEPTABLE TO THE LOAN PARTIES AND THE
APPLICABLE AGENT;

 

(G)           WITH RESPECT TO WHICH ANY COVENANT, REPRESENTATION, OR WARRANTY
CONTAINED IN THIS AGREEMENT OR IN THE COLLATERAL DOCUMENTS HAS BEEN BREACHED OR
IS NOT TRUE IN ANY MATERIAL RESPECT;

 

(H)           WHICH (I) DOES NOT ARISE FROM THE SALE OF GOODS OR PERFORMANCE OF
SERVICES IN THE ORDINARY COURSE OF BUSINESS, (II) IS NOT EVIDENCED BY AN INVOICE
OR OTHER DOCUMENTATION SATISFACTORY TO THE APPLICABLE AGENT WHICH HAS BEEN SENT
TO THE ACCOUNT DEBTOR, (III) REPRESENTS A PROGRESS BILLING, (IV) IS CONTINGENT
UPON ANY LOAN PARTY’S COMPLETION OF ANY FURTHER PERFORMANCE, (V) REPRESENTS A
SALE ON A BILL-AND-HOLD, GUARANTEED SALE, SALE-AND-RETURN, SALE ON APPROVAL,
CONSIGNMENT, CASH-ON-DELIVERY OR ANY OTHER REPURCHASE OR RETURN BASIS OR
(VI) RELATES TO PAYMENTS OF INTEREST, IN EACH CASE DETERMINED IN A MANNER
MUTUALLY ACCEPTABLE TO THE LOAN PARTIES AND THE APPLICABLE AGENT;

 

(I)            FOR WHICH THE GOODS GIVING RISE TO SUCH ACCOUNT HAVE NOT BEEN
SHIPPED TO THE ACCOUNT DEBTOR OR FOR WHICH THE SERVICES GIVING RISE TO SUCH
ACCOUNT HAVE NOT BEEN PERFORMED BY A LOAN PARTY OR IF SUCH ACCOUNT WAS INVOICED
MORE THAN ONCE, IN EACH CASE DETERMINED IN A MANNER MUTUALLY ACCEPTABLE TO THE
LOAN PARTIES AND THE APPLICABLE AGENT;

 

(J)            WHICH IS OWED BY AN ACCOUNT DEBTOR WHICH HAS (I) APPLIED FOR,
SUFFERED, OR CONSENTED TO THE APPOINTMENT OF ANY RECEIVER, CUSTODIAN, TRUSTEE,
OR LIQUIDATOR OF ITS ASSETS, (II) HAS HAD POSSESSION OF ALL OR A MATERIAL PART
OF ITS PROPERTY TAKEN BY ANY RECEIVER, CUSTODIAN, TRUSTEE OR LIQUIDATOR,
(III) FILED, OR HAD FILED AGAINST IT, ANY REQUEST OR PETITION FOR LIQUIDATION,
REORGANIZATION, ARRANGEMENT, ADJUSTMENT OF DEBTS, ADJUDICATION AS BANKRUPT,
WINDING-UP, OR VOLUNTARY OR INVOLUNTARY CASE UNDER ANY STATE, PROVINCIAL OR
FEDERAL BANKRUPTCY LAWS, (IV) HAS ADMITTED IN WRITING ITS INABILITY, OR IS
GENERALLY UNABLE TO, PAY ITS DEBTS AS THEY BECOME DUE, (V) BECOME INSOLVENT, OR
(VI) CEASED OPERATION OF ITS BUSINESS;

 

(K)           WHICH IS OWED BY ANY ACCOUNT DEBTOR WHICH HAS SOLD ALL OR A
SUBSTANTIALLY ALL OF ITS ASSETS;

 

(L)            WHICH IS OWED BY AN ACCOUNT DEBTOR WHICH (I) DOES NOT MAINTAIN
ITS CHIEF EXECUTIVE OFFICE OR HAVE MATERIAL BUSINESS OPERATIONS IN THE U.S. OR
CANADA OR (II) IS NOT ORGANIZED AND EXISTING UNDER APPLICABLE LAW OF THE U.S. OR
CANADA OR, IN EITHER CASE ANY POLITICAL SUBDIVISION THEREOF, UNLESS, IN EITHER
CASE, SUCH ACCOUNT IS BACKED BY A LETTER OF CREDIT ACCEPTABLE TO THE APPLICABLE
AGENT WHICH IS IN THE POSSESSION OF, HAS BEEN ASSIGNED TO AND IS DIRECTLY
DRAWABLE BY, THE APPLICABLE AGENT;

 

(M)          WHICH IS OWED IN ANY CURRENCY OTHER THAN DOLLARS OR CANADIAN
DOLLARS;

 

(N)           (A) WITH RESPECT TO THE U.S. BORROWING BASE, WHICH IS OWED BY
(I) THE GOVERNMENT (OR ANY DEPARTMENT, AGENCY, PUBLIC CORPORATION, OR
INSTRUMENTALITY THEREOF) OF ANY COUNTRY OTHER THAN THE U.S. UNLESS SUCH ACCOUNT
IS BACKED BY A LETTER OF CREDIT ACCEPTABLE TO THE APPLICABLE AGENT WHICH IS IN
THE POSSESSION OF THE APPLICABLE AGENT, OR (II) THE GOVERNMENT OF THE U.S., OR
ANY DEPARTMENT, AGENCY, PUBLIC CORPORATION, OR INSTRUMENTALITY THEREOF, UNLESS
THE

 

21

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FEDERAL ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED (31 U.S.C. § 3727 ET SEQ.
AND 41 U.S.C. § 15 ET SEQ.), AND ANY OTHER STEPS NECESSARY TO PERFECT THE LIEN
OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES IN SUCH ACCOUNT
HAVE BEEN COMPLIED WITH TO THE APPLICABLE AGENT’S SATISFACTION; AND (B) WITH
RESPECT TO THE CANADIAN BORROWING BASE, WHICH IS OWED BY (I) THE GOVERNMENT (OR
ANY DEPARTMENT, AGENCY, PUBLIC CORPORATION, OR INSTRUMENTALITY THEREOF) OF ANY
COUNTRY OTHER THAN CANADA UNLESS SUCH ACCOUNT IS BACKED BY A LETTER OF CREDIT
ACCEPTABLE TO THE APPLICABLE AGENT WHICH IS IN THE POSSESSION OF THE APPLICABLE
AGENT, OR (II) THE GOVERNMENT OF CANADA, OR ANY DEPARTMENT, AGENCY, PUBLIC
CORPORATION, OR INSTRUMENTALITY THEREOF, UNLESS THE FINANCIAL ADMINISTRATION ACT
(CANADA) OR SIMILAR PROVINCIAL OR TERRITORIAL LEGISLATION OR MUNICIPAL ORDINANCE
OF SIMILAR PURPOSE, IN EACH CASE AS AMENDED, AND ANY OTHER STEPS NECESSARY TO
PERFECT THE LIEN OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES
IN SUCH ACCOUNT HAVE BEEN COMPLIED WITH TO THE APPLICABLE AGENT’S SATISFACTION;

 

(O)           WHICH IS OWED BY ANY AFFILIATE, EMPLOYEE, OFFICER, DIRECTOR,
AGENT, HOLDER OF MORE THAN 2% OF THE ISSUED AND OUTSTANDING CAPITAL STOCK OF THE
PARENT OR ANY STOCKHOLDER OF ANY OTHER LOAN PARTY;

 

(P)           WHICH IS OWED BY AN ACCOUNT DEBTOR OR ANY AFFILIATE OF SUCH
ACCOUNT DEBTOR TO WHICH ANY LOAN PARTY IS INDEBTED, BUT ONLY TO THE EXTENT OF
SUCH INDEBTEDNESS OR IS SUBJECT TO ANY SECURITY, DEPOSIT, PROGRESS PAYMENT,
RETAINAGE OR OTHER SIMILAR ADVANCE MADE BY OR FOR THE BENEFIT OF AN ACCOUNT
DEBTOR, IN EACH CASE TO THE EXTENT THEREOF;

 

(Q)           WHICH IS SUBJECT TO ANY COUNTERCLAIM, DEDUCTION, DEFENSE, SETOFF
OR DISPUTE BUT ONLY TO THE EXTENT OF ANY SUCH COUNTERCLAIM, DEDUCTION, DEFENSE,
SETOFF OR DISPUTE;

 

(R)            WHICH IS EVIDENCED BY ANY PROMISSORY NOTE, CHATTEL PAPER, OR
INSTRUMENT OR SUBJECT TO A PAYMENT PLAN;

 

(S)           WITH RESPECT TO WHICH SUCH LOAN PARTY HAS MADE ANY AGREEMENT WITH
THE ACCOUNT DEBTOR FOR ANY REDUCTION THEREOF, OTHER THAN DISCOUNTS AND
ADJUSTMENTS GIVEN IN THE ORDINARY COURSE OF BUSINESS, OR ANY ACCOUNT WHICH WAS
PARTIALLY PAID AND SUCH LOAN PARTY CREATED A NEW RECEIVABLE FOR THE UNPAID
PORTION OF SUCH ACCOUNT, OR ANY UNPAID PORTION OF ANY PARTIALLY PAID ACCOUNT TO
THE EXTENT OF SUCH UNPAID PORTION;

 

(T)            WHICH DOES NOT COMPLY IN ALL MATERIAL RESPECTS WITH THE
REQUIREMENTS OF ALL APPLICABLE LAWS AND REGULATIONS, WHETHER FEDERAL, STATE,
PROVINCIAL OR LOCAL, INCLUDING WITHOUT LIMITATION THE FEDERAL CONSUMER CREDIT
PROTECTION ACT, THE FEDERAL TRUTH IN LENDING ACT AND REGULATION Z OF THE BOARD;

 

(U)           WHICH IS FOR GOODS THAT HAVE BEEN SOLD UNDER A PURCHASE ORDER OR
PURSUANT TO THE TERMS OF A CONTRACT OR OTHER AGREEMENT OR UNDERSTANDING (WRITTEN
OR ORAL) THAT INDICATES OR PURPORTS THAT ANY PERSON OTHER THAN SUCH LOAN PARTY
HAS OR HAS HAD AN OWNERSHIP INTEREST IN SUCH GOODS, OR WHICH INDICATES ANY PARTY
OTHER THAN SUCH LOAN PARTY AS PAYEE OR REMITTANCE PARTY, IN EACH CASE DETERMINED
IN A MANNER MUTUALLY ACCEPTABLE TO THE LOAN PARTIES AND THE APPLICABLE AGENT; OR

 

(V)           WHICH WAS CREATED ON CASH ON DELIVERY TERMS.

 

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IN THE EVENT THAT AN ACCOUNT WHICH WAS PREVIOUSLY AN ELIGIBLE ACCOUNT CEASES TO
BE AN ELIGIBLE ACCOUNT HEREUNDER, SUCH LOAN PARTY SHALL NOTIFY THE APPLICABLE
AGENT THEREOF ON AND AT THE TIME OF SUBMISSION TO THE APPLICABLE AGENT OF THE
NEXT BORROWING BASE CERTIFICATE.  EXCEPT AS OTHERWISE SET FORTH ABOVE, THE
AMOUNT OF AN ELIGIBLE ACCOUNT SHALL BE DETERMINED BASED ON THE FACE AMOUNT OF
SUCH ACCOUNT; PROVIDED THAT THE FACE AMOUNT OF AN ACCOUNT MAY, IN THE APPLICABLE
AGENT’S PERMITTED DISCRETION, BE REDUCED BY, WITHOUT DUPLICATION, TO THE EXTENT
NOT REFLECTED IN SUCH FACE AMOUNT, (I) THE AMOUNT OF ALL ACCRUED AND ACTUAL
DISCOUNTS, CLAIMS, CREDITS OR CREDITS PENDING, PROMOTIONAL PROGRAM ALLOWANCES,
PRICE ADJUSTMENTS, FINANCE CHARGES OR OTHER ALLOWANCES (INCLUDING ANY AMOUNT
THAT SUCH LOAN PARTY MAY BE OBLIGATED TO REBATE TO AN ACCOUNT DEBTOR PURSUANT TO
THE TERMS OF ANY AGREEMENT OR UNDERSTANDING (WRITTEN OR ORAL)) AND (II) THE
AGGREGATE AMOUNT OF ALL CASH RECEIVED IN RESPECT OF SUCH ACCOUNT BUT NOT YET
APPLIED BY SUCH LOAN PARTY TO REDUCE THE AMOUNT OF SUCH ACCOUNT.

 

“Eligible Equipment” means the equipment owned by a Loan Party located at the
Loan Parties’ facilities described on Schedule 1.1, as updated from time to time
with the consent of the Administrative Agent, and meeting each of the following
requirements:

 

(A)           SUCH LOAN PARTY HAS GOOD TITLE TO SUCH EQUIPMENT;

 

(B)           SUCH LOAN PARTY HAS THE RIGHT TO SUBJECT SUCH EQUIPMENT TO A LIEN
IN FAVOR OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES; SUCH
EQUIPMENT IS SUBJECT TO A FIRST PRIORITY PERFECTED LIEN IN FAVOR OF THE
APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES AND IS FREE AND CLEAR OF
ALL OTHER LIENS OF ANY NATURE WHATSOEVER (EXCEPT FOR (I) PERMITTED LIENS WHICH
DO NOT HAVE PRIORITY OVER THE LIEN IN FAVOR OF THE APPLICABLE AGENT FOR THE
BENEFIT OF THE SECURED PARTIES, (II) UNREGISTERED LIENS IN RESPECT OF PRIORITY
PAYABLES THAT ARE NOT YET DUE AND PAYABLE, (III) THE CCAA CHARGES AND (IV) LIENS
PERMITTED BY CLAUSE (IV) OF THE DEFINITION OF PERMITTED LIENS);

 

(C)           THE FULL PURCHASE PRICE FOR SUCH EQUIPMENT HAS BEEN PAID BY SUCH
LOAN PARTY;

 

(D)           SUCH EQUIPMENT IS LOCATED ON PREMISES (I) OWNED BY SUCH LOAN
PARTY, WHICH PREMISES ARE SUBJECT TO A FIRST PRIORITY PERFECTED LIEN IN FAVOR OF
THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES, OR (II) LEASED BY
SUCH LOAN PARTY WHERE (X) THE LESSOR HAS DELIVERED TO THE APPLICABLE AGENT A
LANDLORD LIEN WAIVER OR (Y) A RESERVE FOR RENT, CHARGES, AND OTHER AMOUNTS DUE
OR TO BECOME DUE WITH RESPECT TO SUCH FACILITY HAS BEEN ESTABLISHED BY THE
APPLICABLE AGENT IN ITS PERMITTED DISCRETION;

 

(E)           SUCH EQUIPMENT IS IN GOOD WORKING ORDER AND CONDITION (ORDINARY
WEAR AND TEAR EXCEPTED) AND IS USED OR HELD FOR USE BY SUCH LOAN PARTY IN THE
ORDINARY COURSE OF BUSINESS OF THE LOAN PARTY;

 

(F)            SUCH EQUIPMENT IS NOT SUBJECT TO ANY AGREEMENT WHICH RESTRICTS
THE ABILITY OF SUCH LOAN PARTY TO USE, SELL, TRANSPORT OR DISPOSE OF SUCH
EQUIPMENT OR WHICH RESTRICTS THE APPLICABLE AGENT’S ABILITY TO TAKE POSSESSION
OF, SELL OR OTHERWISE DISPOSE OF SUCH EQUIPMENT; AND

 

(G)           SUCH EQUIPMENT DOES NOT CONSTITUTE “FIXTURES” UNDER THE APPLICABLE
LAWS OF THE JURISDICTION IN WHICH SUCH EQUIPMENT IS LOCATED.

 

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“Eligible Inventory”  means, at any time, the Inventory of a Loan Party which
the Applicable Agent determines in its Permitted Discretion is eligible as the
basis for the extension of Loans and the issuance of Letters of Credit
hereunder.  Without limiting the Applicable Agent’s discretion provided herein,
Eligible Inventory shall not include any Inventory:

 

(A)           WHICH IS NOT SUBJECT TO A FIRST PRIORITY PERFECTED LIEN IN FAVOR
OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES SUBJECT ONLY TO
(I) THE CCAA CHARGES AND (II) AN UNREGISTERED LIEN IN RESPECT OF PRIORITY
PAYABLES THAT ARE NOT YET DUE AND PAYABLE;

 

(B)           WHICH IS SUBJECT TO ANY LIEN OTHER THAN (I) A LIEN IN FAVOR OF THE
APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES, (II) A LIEN (IF ANY)
PERMITTED BY THE LOAN DOCUMENTS WHICH DOES NOT HAVE PRIORITY OVER THE LIEN IN
FAVOR OF THE APPLICABLE AGENT FOR THE BENEFIT OF THE SECURED PARTIES, (III) A
LIEN CONTEMPLATED BY CLAUSE (IV) OF THE DEFINITION OF PERMITTED LIENS, AND
(IV) AN UNREGISTERED LIEN IN RESPECT OF PRIORITY PAYABLES THAT ARE NOT YET DUE
AND PAYABLE;

 

(C)           WHICH IS, IN THE APPLICABLE AGENT’S OPINION, SLOW MOVING,
OBSOLETE, UNMERCHANTABLE, DEFECTIVE, USED, UNFIT FOR SALE, NOT SALABLE AT PRICES
APPROXIMATING AT LEAST THE COST OF SUCH INVENTORY IN THE ORDINARY COURSE OF
BUSINESS OR UNACCEPTABLE DUE TO AGE, TYPE, CATEGORY OR QUANTITY;

 

(D)           WITH RESPECT TO WHICH ANY COVENANT, REPRESENTATION, OR WARRANTY
CONTAINED IN THIS AGREEMENT OR THE COLLATERAL DOCUMENTS BEEN BREACHED OR IS NOT
TRUE  IN ANY MATERIAL RESPECT AND WHICH DOES NOT CONFORM IN ANY MATERIAL RESPECT
TO ALL STANDARDS IMPOSED BY ANY GOVERNMENTAL AUTHORITY;

 

(E)           IN WHICH ANY PERSON OTHER THAN SUCH LOAN PARTY SHALL (I) HAVE ANY
DIRECT OR INDIRECT OWNERSHIP, INTEREST OR TITLE TO SUCH INVENTORY OR (II) BE
INDICATED ON ANY PURCHASE ORDER OR INVOICE WITH RESPECT TO SUCH INVENTORY AS
HAVING OR PURPORTING TO HAVE AN INTEREST THEREIN;

 

(F)            WHICH IS NOT WORK-IN-PROCESS, RAW MATERIALS OR FINISHED GOODS OR
WHICH CONSTITUTES SPARE OR REPLACEMENT PARTS, SUBASSEMBLIES, PACKAGING SUPPLIES
AND SHIPPING MATERIAL, MANUFACTURING SUPPLIES, SAMPLES, PROTOTYPES, DISPLAYS OR
DISPLAY ITEMS, BILL-AND-HOLD GOODS, GOODS THAT ARE RETURNED OR MARKED FOR
RETURN, REPOSSESSED GOODS, DEFECTIVE OR DAMAGED GOODS, GOODS HELD ON
CONSIGNMENT, OR GOODS WHICH ARE NOT OF A TYPE HELD FOR SALE IN THE ORDINARY
COURSE OF BUSINESS, INCLUDING, BUT NOT LIMITED TO, FUELS, CHEMICALS, STARCHES,
INK AND ADHESIVES;

 

(G)           WHICH IS NOT LOCATED IN THE UNITED STATES OR CANADA OR IS IN
TRANSIT (OTHER THAN BETWEEN LOCATIONS IN THE UNITED STATES OR CANADA CONTROLLED
BY LOAN PARTIES, TO THE EXTENT INCLUDED IN CURRENT PERPETUAL INVENTORY REPORTS
OF ANY LOAN PARTY);

 

(H)           WHICH IS LOCATED IN ANY LOCATION LEASED BY SUCH LOAN PARTY UNLESS
(I) THE LESSOR HAS DELIVERED TO THE APPLICABLE AGENT A LANDLORD LIEN WAIVER  OR
(II) A RESERVE FOR RENT, CHARGES, AND OTHER AMOUNTS DUE OR TO BECOME DUE WITH
RESPECT TO SUCH FACILITY HAS BEEN ESTABLISHED BY THE APPLICABLE AGENT IN ITS
PERMITTED DISCRETION;

 

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(I)            WHICH IS LOCATED IN ANY THIRD PARTY WAREHOUSE OR IS IN THE
POSSESSION OF A BAILEE (OTHER THAN A THIRD PARTY PROCESSOR) AND IS NOT EVIDENCED
BY A DOCUMENT (OTHER THAN BILLS OF LADING ISSUED WITH RESPECT TO INVENTORY IN
TRANSIT BETWEEN LOCATIONS IN THE UNITED STATES OR CANADA CONTROLLED BY LOAN
PARTIES), UNLESS (I) SUCH WAREHOUSEMAN OR BAILEE HAS DELIVERED TO THE APPLICABLE
AGENT A LANDLORD LIEN WAIVER AND SUCH OTHER DOCUMENTATION AS THE APPLICABLE
AGENT MAY REQUIRE OR (II) AN APPROPRIATE RESERVE HAS BEEN ESTABLISHED BY THE
APPLICABLE AGENT IN ITS PERMITTED DISCRETION;

 

(J)            WHICH IS BEING PROCESSED OFFSITE AT A THIRD PARTY LOCATION OR
OUTSIDE PROCESSOR, OR IS IN-TRANSIT TO OR FROM SAID THIRD PARTY LOCATION OR
OUTSIDE PROCESSOR;

 

(K)           WHICH IS A DISCONTINUED PRODUCT OR COMPONENT THEREOF;

 

(L)            WHICH IS THE SUBJECT OF A CONSIGNMENT BY SUCH LOAN PARTY AS
CONSIGNOR;

 

(M)          WHICH CONTAINS OR BEARS ANY INTELLECTUAL PROPERTY RIGHTS LICENSED
TO SUCH LOAN PARTY UNLESS THE APPLICABLE AGENT IS SATISFIED THAT IT MAY SELL OR
OTHERWISE DISPOSE OF SUCH INVENTORY WITHOUT (I) INFRINGING THE RIGHTS OF SUCH
LICENSOR, (II) VIOLATING ANY CONTRACT WITH SUCH LICENSOR, OR (III) INCURRING ANY
LIABILITY WITH RESPECT TO PAYMENT OF ROYALTIES OTHER THAN ROYALTIES INCURRED
PURSUANT TO SALE OF SUCH INVENTORY UNDER THE CURRENT LICENSING AGREEMENT;

 

(N)           WHICH IS NOT REFLECTED IN A CURRENT INVENTORY REPORT OF SUCH LOAN
PARTY (UNLESS SUCH INVENTORY IS REFLECTED IN A REPORT TO THE APPLICABLE AGENT AS
“IN TRANSIT” INVENTORY);

 

(O)           FOR WHICH RECLAMATION RIGHTS HAVE BEEN ASSERTED BY THE SELLER; OR

 

(P)           ANY PORTION OF THE COST OF SUCH INVENTORY IS ATTRIBUTABLE TO
INTERCOMPANY PROFIT BETWEEN ANY LOAN PARTY AND ANY OF ITS AFFILIATES (BUT ONLY
TO THE EXTENT OF SUCH PORTION).

 

IN THE EVENT THAT INVENTORY WHICH WAS PREVIOUSLY ELIGIBLE INVENTORY CEASES TO BE
ELIGIBLE INVENTORY HEREUNDER, SUCH LOAN PARTY SHALL NOTIFY THE APPLICABLE AGENT
THEREOF ON AND AT THE TIME OF SUBMISSION TO THE APPLICABLE AGENT OF THE NEXT
BORROWING BASE CERTIFICATE.

 

“Eligible Real Property” means the real property (including fixtures thereto)
listed on Schedule 1.2, as updated from time to time with the consent of the
Administrative Agent (such consent not to be unreasonably withheld), owned by a
Loan Party (i) that is acceptable in the exclusive discretion of the Applicable
Agent for inclusion in the U.S. Borrowing Base or Canadian Borrowing Base, as
the case may be, (ii) in respect of which an appraisal report has been delivered
to the Applicable Agent in form, scope and substance reasonably satisfactory to
the Applicable Agent, (iii) in respect of which the Applicable Agent is
satisfied that all actions necessary or desirable in order to create perfected
first priority Lien (subject only to (i) the CCAA Charges and (ii) an
unregistered Lien in respect of Priority Payables that are not yet due and
payable) on such real property have been taken, including, the filing and
recording of Collateral Documents, (iv) in respect of which an environmental
assessment report has been completed and delivered to the Applicable Agent in
form and substance satisfactory to such Applicable Agent and which does not
indicate any material environmental liability, or material non-compliance with
any Environmental Law (which liability or non-compliance was not previously
disclosed to Lenders), (v) which is adequately

 

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protected by fully-paid valid title insurance with endorsements and in amounts
reasonably acceptable to the Applicable Agent, insuring that the Applicable
Agent, for the benefit of the Secured Parties, shall have a perfected first
priority Lien (subject only to (i) the CCAA Charges and (ii) an unregistered
Lien in respect of Priority Payables that are not yet due and payable) on such
real property, evidence of which shall have been provided in form and substance
reasonably satisfactory to the Applicable Agent, and (vi) if required by the
Applicable Agent: (A) an ALTA survey has been delivered for which all necessary
fees have been paid and which is dated no more than 30 days prior to the date on
which the applicable Collateral Document is recorded, certified to the
Applicable Agent and the issuer of the title insurance policy in a manner
reasonably satisfactory to the Applicable Agent by a land surveyor duly
registered and licensed in the state or province in which such Eligible Real
Property is located and reasonably acceptable to the Applicable Agent, and shows
all buildings and other improvements, any offsite improvements, the location of
any easements, parking spaces, rights of way, building setback lines and other
dimensional regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than encroachments
and other defects reasonably acceptable to the Applicable Agent; and (B) such
Loan Party shall have used its reasonable best efforts to obtain such consents,
agreements and confirmations of lessors and third parties as the Applicable
Agent may deem necessary or desirable, together with evidence that all other
actions that the Applicable Agent may deem necessary or desirable in order to
create perfected first priority Liens (subject only to (i) the CCAA Charges and
(ii) an unregistered Lien in respect of Priority Payables that are not yet due
and payable) on the property described in the Collateral Document have been
taken.

 

“Environmental Laws” shall mean all local, state, federal, provincial and
foreign laws, statutes, ordinances, orders, rules, regulations, or binding
policies or decrees relating to (i) pollution or protection of the environment,
including, without limitation, those relating to protection or rehabilitation of
the land, water (surface or subsurface water) or air, or fines, injunctions,
penalties, damages, contribution, cost recovery compensation, losses, injuries,
investigations or remedial work resulting from the presence, release or
threatened release of Hazardous Waste or Hazardous Substances, (ii) the
generation, use, storage, transportation or disposal of Hazardous Waste or
Hazardous Substance, or (iii) occupational safety and health, industrial hygiene
or protection of wetlands, in any manner applicable to the Loan Parties or any
of their respective properties, and any analogous future local, state, federal,
provincial and foreign laws, statutes, ordinances, orders, rules, regulations,
or binding policies or decrees, each as in effect as of the date of
determination.

 

“Environmental Lien” shall mean a Lien in favor of any Governmental Authority
for (i) any liability under federal, provincial or state Environmental Laws, or
(ii) damages arising from or costs incurred by such Governmental Authority in
response to a release or threatened release of a Hazardous Substance or
Hazardous Waste.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
which is a member of a group of which any of the Loan Parties is a member and
which is under

 

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common control within the meaning of Section 414(b) or (c) of the Code and the
regulations promulgated and rulings issued thereunder.

 

“Eurocurrency Liabilities” shall have the meaning assigned thereto in Regulation
D issued by the Board, as in effect from time to time.

 

“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.

 

“Eurodollar Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Adjusted LIBO Rate in accordance with the provisions of ARTICLE
2.

 

“Event of Default” shall have the meaning given such term in ARTICLE 7.

 

“Excess Availability” shall mean, on any date of determination, (x) the lesser
of (i) the sum of (A) the Total Revolving Commitment plus (B) Canadian Term
Outstandings plus U.S. Term Outstandings and (ii) the sum of (A) the U.S.
Borrowing Base plus (B) the Canadian Borrowing Base minus (y) the Total U.S.
Outstandings minus (z) the Total Canadian Outstandings.

 

“Exchange Rate” shall mean, on any day, (a) for purposes of determining the U.S.
Dollar Equivalent, the rate at which Canadian Dollars may be exchanged into
Dollars and (b) for purposes of determining the Canadian Dollar Equivalent, the
rate at which Dollars may be exchanged into Canadian Dollars, in each case as
quoted by the Bank of Canada for Canadian Dollars (or, if not so quoted, the
spot rate of exchange quoted for wholesale transactions made by the
Administrative Agent in Toronto, Ontario) at 12:00 Noon, Toronto time, on such
day; provided, that if at the time of any such determination, for any reason, no
such spot rate is being quoted, the Administrative Agent may use any reasonable
method it deems applicable to determine such rate, and such determination shall
be conclusive absent manifest error.

 

“Facilities” shall mean any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by the Loan Parties (but
only as to portions of buildings actually leased or used) or any of their
respective predecessors or any of their respective Affiliates that are directly
or indirectly controlled by the Loan Parties.

 

“Fair Market Value” shall mean the price at which property would change hands
between a willing buyer and a willing seller, neither being under any compulsion
to buy or to sell and both having reasonable knowledge of relevant facts
determined in a manner acceptable to the Applicable Agent by an appraiser
acceptable to the Applicable Agent.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received

 

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by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.

 

“Fees” shall collectively mean the Commitment Fees, Letter of Credit Fees and
other fees referred to in Section 2.20, Section 2.21, Section 2.22, Section 2.30
and Section 2.31.

 

“Fifteen Month Facility Extension Option” shall have the meaning given such term
in Section 2.30.

 

“Filing Date” shall mean January 26, 2009.

 

“Final Order” shall have the meaning set forth in Section 4.2(d).

 

“Financial Officer” shall mean the Chief Financial Officer, Chief Accounting
Officer, Controller or Treasurer of a Loan Party.

 

“Finished Goods” shall mean completed goods which require no additional
processing or manufacturing to be sold to third party customers by the Loan
Parties in the ordinary course of business.

 

“First Amendment to Credit Agreement” shall mean that certain First Amendment to
Credit Agreement dated as of February 25, 2009.

 

“Foreign Subsidiary” shall mean any Subsidiary of the Parent that is not
organized under the laws of the United States of America.

 

“Fronting Bank” shall mean JPMCB or such other commercial bank as may agree with
JPMCB to act in such capacity and shall be reasonably satisfactory to the Loan
Parties and the Administrative Agent.

 

“GAAP” shall mean accounting principles generally accepted in the United States
and applied in accordance with Section 1.3.

 

“Governmental Authority” shall mean the government of the United States of
America or Canada, any other nation or any political subdivision thereof,
whether state, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

“Guaranteed Obligations” shall have the meaning set forth in Section 10.2.

 

“Guarantor” shall mean each of the Borrowers, the U.S. Guarantors and the
Canadian Guarantors; provided that no Foreign Subsidiary (other than the
Canadian Borrower) shall, or shall be deemed to, guarantee any Secured
Obligations of any entity organized under the laws of the United States nor
shall it have any obligations with respect to any such amounts.

 

“Guaranty” shall mean ARTICLE 10 of this Agreement.

 

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“Hazardous Substances” shall mean, but is not limited to, any pollutant,
contaminant, toxic substance, hazardous material, dangerous good, asbestos, urea
formaldehyde, PCB or non-hazardous petroleum products or any other substance
defined in or regulated by any Environmental Laws as a hazardous substance.

 

“Hazardous Waste” shall mean any Hazardous Substance that is a waste,
by-product, residual material or recyclable material, or any other substance
which, in each case, is defined in or regulated by any Environmental Laws as a
hazardous waste.

 

“Indebtedness” shall mean, at any time and with respect to any Person:  (i) all
indebtedness of such Person for borrowed money; (ii) all indebtedness of such
Person for the deferred purchase price of property or services (other than
property, including inventory, and services purchased, and trade accounts
payable, accrued expenses and deferred compensation items arising, in the
ordinary course of business); (iii) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments; (iv) all indebtedness of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property);
(v) all obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as Capital Lease Obligations, to the extent
required to be so recorded; (vi) all reimbursement, payment or similar
obligations of such Person, contingent or otherwise, under acceptance, letter of
credit or similar facilities; (vii) all net obligations of such Person in
respect of Swap Agreements (such net obligations to be equal at any time to the
termination value of such Swap Agreements or other arrangements that would be
payable by or to such Person at such time); (viii) all indebtedness referred to
in clauses (i) through (vii) above guaranteed directly or indirectly by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (a) to pay or purchase such indebtedness or to advance or supply funds
for the payment or purchase of such indebtedness, (b) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such indebtedness or to
assure the holder of such indebtedness against loss in respect of such
indebtedness, (c) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (d) otherwise to
assure a creditor against loss in respect of such indebtedness; and (ix) all
indebtedness referred to in clauses (i) through (viii) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness.

 

“Indemnified Party” shall have the meaning given such term in Section 9.6.

 

“Initial Order” shall mean an order of the Canadian Court in the Canadian Cases
in substantially the form of Exhibit A-2, or such other form as is satisfactory
to the Administrative Agent in its exclusive discretion, entered in accordance
with the terms and conditions of Section 4.1, as such order may be amended or
restated to effect the consolidation of the Recognition Cases and the CCAA
Cases, and as such order may be further amended or restated with the express
written consent of the Administrative Agent.

 

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“Insufficiency” shall mean, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities within the meaning of Section 4001(a)(18) of ERISA.

 

“Intercompany Indebtedness” shall mean any claim of an Affiliate of a Loan Party
against any other Affiliate of a Loan Party, any claim of a Loan Party against
any of its Affiliates, and any claim of any Affiliate of a Loan Party against a
Loan Party and shall include the face amount of Letters of Credit issued for the
account of Loan Parties other than the Borrowers.

 

“Interest Payment Date” shall mean (i) as to any Eurodollar Loan and any
Discount Rate Loan, the last day of each consecutive thirty (30) day period
running from the commencement of the applicable Interest Period or Contract
Period, and (ii) as to all ABR Loans and Canadian Prime Rate Loans, the last
calendar day of each month and the date on which any ABR Loans are refinanced
with Eurodollar Loans or Canadian Prime Rate Loans are refinanced with Discount
Rate Loans pursuant to Section 2.13.

 

“Interest Period” shall mean, as to any Borrowing of Eurodollar Loans, the
period commencing on the date of such Borrowing (including as a result of a
refinancing of ABR Loans) or on the last day of the preceding Interest Period
applicable to such Borrowing and ending on the numerically corresponding day (or
if there is no corresponding day, the last day) in the calendar month that is
one, three or six months thereafter, as the Borrowers may elect in the related
notice delivered pursuant to Section 2.7(b) or Section 2.13; provided, however,
that (i) if any Interest Period would end on a day which shall not be a Business
Day, such Interest Period shall be extended to the next 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,
and (ii) no Interest Period shall end later than the Maturity Date.

 

“Interim Canadian Revolving Commitment” shall have the meaning set forth in
Section 2.3(a).

 

“Interim Order” shall mean, individually and collectively, the Initial Order and
the U.S. Interim Order.

 

“Interim Period” shall have the meaning set forth in Section 2.2(a).

 

“Interim U.S. Revolving Commitment” shall have the meaning set forth in
Section 2.2(a).

 

“Interim U.S. Tranche A Revolving Commitment” shall have the meaning set forth
in Section 2.2(a).

 

“Inventory” shall mean all Raw Materials, Work-in-Process and Finished Goods
owned, held or generated by the Loan Parties in the normal course of business.

 

“Inventory Reserves” shall mean reserves against Inventory equal to the sum of
the following:

 

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(A)                                  A RESERVE FOR SHRINK, OR DISCREPANCIES THAT
ARISE PERTAINING TO INVENTORY QUANTITIES ON HAND BETWEEN THE LOAN PARTIES’
PERPETUAL ACCOUNTING SYSTEM, AND PHYSICAL COUNTS OF THE INVENTORY WHICH WILL BE
DETERMINED BY THE ADMINISTRATIVE AGENT IN ITS PERMITTED DISCRETION WITH THE
VARIANCE EXPRESSED AS A PERCENTAGE OF INVENTORY; AND

 

(B)                                 A RESERVE FOR INVENTORY WHICH IS DESIGNATED
TO  BE  RETURNED TO VENDOR OR WHICH IS RECOGNIZED AS DAMAGED OR OFF QUALITY OR
NOT TO CUSTOMER SPECIFICATIONS BY A LOAN PARTY; AND

 

(C)                                  A REVALUATION RESERVE WHEREBY CAPITALIZED
FAVORABLE VARIANCES SHALL BE DEDUCTED FROM ELIGIBLE INVENTORY AND UNFAVORABLE
VARIANCES SHALL NOT BE ADDED TO ELIGIBLE INVENTORY; AND

 

(D)                                 A LOWER OF THE COST OR MARKET RESERVE FOR
ANY DIFFERENCES BETWEEN A LOAN PARTY’S ACTUAL COST TO PRODUCE VERSUS ITS SELLING
PRICE TO THIRD PARTIES, DETERMINED ON A PRODUCT LINE BASIS; AND

 

(E)                                  ANY OTHER RESERVE ESTABLISHED BY THE
APPLICABLE AGENT IN ITS PERMITTED DISCRETION, FROM TIME TO TIME.

 

“Investment Accounts” shall mean, individually or collectively, the Canadian
Investment Account and the U.S. Investment Account.

 

“Investments” shall have the meaning given such term in Section 6.11.

 

“ITA” shall mean the Income Tax Act (Canada), as amended, and any successor
thereto, and any regulations promulgated thereunder.

 

“JPMCB” shall mean JPMorgan Chase Bank, N.A., a national banking association.

 

“Judgment Currency” and “Judgment Currency Conversion Date” shall have the
meanings set forth in Section 9.20.

 

“Landlord Lien Waiver” shall mean a written agreement in such form as is
reasonably acceptable to the Administrative Agent, pursuant to which a Person
shall waive or subordinate its rights and claims as landlord in any Collateral
of the Loan Parties for unpaid rents, grant access to the Administrative Agent
for the repossession and sale of such Collateral and make other agreements
relative thereto.

 

“LC Exposure” shall mean the sum of the Commercial LC Exposure and the Standby
LC Exposure.  The LC Exposure shall be determined on a separate basis for each
Class.  The LC Exposure of any Canadian Revolving Lender or U.S. Tranche B
Revolving Lender, as the case may be, at any time shall be its Applicable
Percentage of the total LC Exposure at such time.

 

“LC Reserve Account” shall have the meaning set forth in Section 11.2.

 

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“Lenders” shall mean the Canadian Lenders and the U.S. Lenders.

 

“Lender Affiliate” shall mean, (i) with respect to any Lender, (a) an Affiliate
of such Lender or (b) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by such Lender or an Affiliate of such Lender and
(ii) with respect to any Lender that is a fund which invests in loans and
similar extensions of credit, any other fund that invests in 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.

 

“Letters of Credit” shall mean the Canadian Revolving Facility Letters of Credit
and the U.S. Revolving Facility Letters of Credit.

 

“Letter of Credit Account” shall mean the non-interest bearing account
established by the U.S. Borrower under the sole and exclusive control of the
Administrative Agent maintained at the office of the Administrative Agent at 270
Park Avenue, New York, New York 10017 designated as the “Smurfit-Stone U.S.
Letter of Credit Account” that shall be used solely for the purposes set forth
in Section 2.4(c) and Section 2.14.

 

“Letter of Credit Fees” shall mean the fees payable in respect of Letters of
Credit pursuant to Section 2.22.

 

“Letter of Credit Outstandings” shall mean, at any time, the sum of (i) the U.S.
Letter of Credit Outstandings plus (ii) the Canadian Letter of Credit
Outstandings.

 

“Lien” shall mean (i) any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, assignment for security, hypothecation, prior claim (within
the meaning of the Civil Code of Quebec), encumbrance or charge of any kind
whatsoever (including any conditional sale or other title retention agreement or
any lease in the nature thereof), (ii) in the case of securities, any purchaser
option, call or similar right of a third party with respect to such securities,
and (iii) any other arrangement having the effect of providing security.

 

“Loan” shall mean each Canadian Revolving Loan, U.S. Revolving Loan, Canadian
Term Loan, and U.S. Term Loan.

 

“Loan Documents” shall mean this Agreement, the Letters of Credit, any Letter of
Credit applications, the Collateral Documents and any other instrument or
agreement executed and delivered in connection herewith.

 

“Loan Party” and “Loan Parties” shall mean the U.S. Borrower, the Canadian
Borrower, the Parent, the other U.S. Guarantors and the Canadian Guarantors.

 

“Loan Party Joinder Agreement” shall have the meaning give such term in
Section 5.11.

 

“Material Adverse Effect” shall mean (i) a material adverse effect upon the
business, operations, assets, properties or financial condition of the Parent
and its consolidated

 

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Subsidiaries, taken as a whole, (ii) the material impairment of the ability of
any Loan Party to perform its Obligations or (iii) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Loan
Party of a Loan Document to which it is a party.

 

“Maturity Date” shall mean January 28, 2010; provided, that upon the
effectiveness of the Fifteen Month Facility Extension Option, the Maturity Date
shall be extended to April 28, 2010; provided, further that upon the
effectiveness of the Eighteen Month Facility Extension Option, the Maturity Date
shall be extended to July 28, 2010.

 

“Maximum Liability” shall have the meaning given such term in Section 10.11.

 

“Minority Lenders” shall have the meaning given such term in Section 9.10(b).

 

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor to the
rating agency business thereof.

 

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.

 

“Multiple Employer Plan” shall mean a Single Employer Plan, which (i) is
maintained for employees of a Loan Party or an ERISA Affiliate and at least one
Person other than such Loan Party and its ERISA Affiliates or (ii) was so
maintained and in respect of which a Loan Party or an ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.

 

“Net Orderly Liquidation Value” shall mean, with respect to machinery, equipment
or Inventory of any Person, the orderly liquidation value thereof as determined
in a manner acceptable to the Applicable Agent by an appraiser acceptable to the
Applicable Agent, net of all costs of liquidation thereof.

 

“Net Orderly Liquidation Value In Place” shall mean, with respect to machinery,
equipment, Inventory or real estate of any Person, the orderly liquidation value
thereof when such assets are being purchased in place to remain in operation in
“as is” condition, taking advantage of all leasehold and site improvements
designed to facilitate such assets’ operation, as determined in a manner
acceptable to the Applicable Agent by an appraiser acceptable to the Applicable
Agent, net of all costs of liquidation thereof.

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset that is subject to a Non-Primed Lien

 

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(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made as a result of such event to repay such Non-Primed Liens and (iii) the
amount of all taxes paid (or reasonably estimated to be payable) and the amount
of any reserves established to fund contingent liabilities reasonably estimated
to be payable, in each case during the year that such event occurred or the next
succeeding year and that are directly attributable to such event (as determined
reasonably and in good faith by a Financial Officer).

 

“Non-Paying Guarantor” shall have the meaning set forth in Section 10.12.

 

“Non-Primed Liens” shall mean those Liens securing: (i) certain pre-petition
claims of warehousemen, shippers, Permitted Liens and other classes of claimants
acceptable to the Administrative Agent against the Loan Parties that in each
case: (x) are senior in priority to the Pre-Petition Credit Agreement Liens; and
(y) are set forth on Schedule 2.24; and (ii) the Calpine Debt.

 

“Obligation Currency” shall have the meaning set forth in Section 9.20.

 

“Obligations” shall mean all unpaid principal of and accrued and unpaid interest
on the Loans, the reimbursement of all amounts drawn on Letters of Credit, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Loan Parties to the Lenders or to any Lender, any Agent, any
Fronting Bank or any indemnified party arising under the Loan Documents.

 

“Obligated Party” shall have the meaning set forth in Section 10.3.

 

“Orders” shall mean, collectively, (i) the Interim Order and (ii) the Final
Order.

 

“Organizational Documents” shall mean (i) with respect to any corporation, its
certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect to any limited partnership, its certificate of
limited partnership or formation, as amended, and its partnership agreement, as
amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, (iv) with respect to any limited liability company, its
certificate of formation or articles of organization, as amended, and its
operating agreement, as amended, and (v) with respect to any unlimited liability
company, its certificate of formation, as amended, and its memorandum and
articles of association, as amended.  In the event any term or condition of this
Agreement or any other Loan Document requires any Organizational Document to be
certified by a secretary of state or similar governmental official, the
reference to any such “Organizational Document” shall only be to a document of a
type customarily certified by such governmental official.

 

“Other Taxes” shall have the meaning given such term in Section 2.19(b).

 

“Parent” shall have the meaning set forth in the Introduction.

 

“Participant” shall have the meaning set forth in Section 9.3.

 

“Patriot Act” shall have the meaning given such term in Section 9.19.

 

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“Paying Guarantor” shall have the meaning set forth in Section 10.12.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.

 

“Pension Plan” shall mean a defined benefit pension (as defined in
Section 414(j) of the Code and Section 3(35) of ERISA) which meets and is
subject to the requirements of Section 401(a) of the Code.

 

“Permitted Discretion” shall mean a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment, following either (x) consultation with the Borrowers or
(y) two (2) Business Days’ advance notice to the Borrowers.

 

“Permitted Investments” shall mean (i) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America) or Canada
(or by any agency thereof to the extent such obligations are backed by the full
faith and credit of Canada), in each case maturing within one year from the date
of acquisition thereof, (ii) without limiting the provisions of paragraph
(iv) below, investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s, (iii) investments in
certificates of deposit, banker’s acceptances and time deposits (including
Eurodollar time deposits) maturing within six months from the date of
acquisition thereof issued or guaranteed by or placed with (a) any domestic
office of the Administrative Agent or the bank with whom the Loan Parties
maintain their cash management system, provided, that if such bank is not a
Lender hereunder, such bank shall have entered into an agreement with the
Administrative Agent pursuant to which such bank shall have waived all rights of
setoff and confirmed that such bank does not have, nor shall it claim, a
security interest therein or (b) any domestic office of any other commercial
bank of recognized standing organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus and
undivided profits of not less than US$500,000,000 and is the principal banking
Subsidiary of a bank holding company having a long-term unsecured debt rating of
at least “A” or the equivalent thereof from S&P or at least “A2” or the
equivalent thereof from Moody’s, (iv) investments in commercial paper maturing
within six months from the date of acquisition thereof and issued by (a) the
holding company of the Administrative Agent or (b) the holding company of any
other commercial bank of recognized standing organized under the laws of the
United States of America or any State thereof that has (1) a combined capital
and surplus in excess of US$500,000,000 and (2) commercial paper rated at the
highest credit rating obtainable from S&P or from Moody’s, (v) investments in
fully collateralized repurchase agreements with a term of not more than thirty
(30) days for underlying securities of the types described in clause (i) above
entered into with any office of a bank or trust company meeting the
qualifications specified in clause (iii) above, (vi) investments in money market
funds substantially all the assets of which are comprised of securities of the
types described in clauses (i) through (v) above, and (vii) to the extent owned
by the Loan Parties on the Filing Date, investments in joint ventures as
disclosed in Schedule 6.11 or in the capital stock of any direct or indirect
Subsidiary of the Loan Parties as disclosed in Schedule 3.5.

 

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“Permitted Liens” shall mean (i) Liens set forth on Schedule 3.6, (ii) Liens in
favor of the Agents on behalf of the Secured Parties, (iii) the CCAA Charges,
(iv) Liens imposed by law (other than Environmental Liens and any Lien imposed
under ERISA) for taxes, assessments or charges of any Governmental Authority for
claims not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP; (v) Liens (other than
any Lien imposed under ERISA) incurred or deposits made in connection with
workers’ compensation, unemployment insurance and other types of social security
benefits or to secure the performance of tenders, bids, leases, contracts (other
than for the repayment of Indebtedness), statutory obligations and other similar
obligations incurred in the ordinary course of business; (vi) non-material Liens
of landlords and Liens of statutory carriers, warehousemen, mechanics,
materialmen and other Liens (other than Environmental Liens and any Lien imposed
under ERISA) in existence on the Filing Date or thereafter imposed by law and
created in the ordinary course of business; (vii) deposits to secure the
performance of tenders, bids, and other contracts, other than for the payment of
borrowed money, arising in the ordinary course of business; (viii) easements
(including, without limitation, reciprocal easement agreements and utility
agreements), all applicable development, subdivision, use and site plan
agreements, or similar agreements, rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) and interest of ground
lessors, which do not materially interfere with the ordinary conduct of the
business of any Loan Party, and which do not materially detract from the value
of the property to which they attach or materially impair the use thereof to any
Loan Party; (ix) purchase money Liens (including Capital Lease Obligations) upon
or in any property acquired or held in the ordinary course of business to secure
the purchase price of such property or to secure Indebtedness permitted by
Section 6.3(iii) solely for the purpose of financing the acquisition of such
property; (x) Liens created in connection with extensions, renewals or
replacements, including replacement Liens granted by the Bankruptcy Court, of
any Lien referred to in clauses (i) through (ix) above, provided that the
principal amount of the obligation secured thereby is not increased and that any
such extension, renewal or replacement is limited to the property originally
encumbered thereby; (xi) pre-petition Liens granted pursuant to the Pre-Petition
Credit Agreement or the Security Documents (as defined therein) by the Loan
Parties party to the Pre-Petition Credit Agreement for the benefit of the
Secured Parties (as defined in such Security Documents); (xii) Liens junior to
the senior liens contemplated hereby that are granted by any of the Orders
pursuant to 11 U.S.C. §364(d)(1) as adequate protection to the Primed Parties,
provided that the Orders provide that the holders of such junior liens shall not
be permitted to take any action to enforce their rights with respect to such
junior liens as long as any amounts are outstanding under this Agreement or the
Lenders have any Commitment hereunder; (xiii) Liens on assets of Foreign
Subsidiaries (other than the Canadian Loan Parties) securing Indebtedness
permitted by Section 6.3(vi); (xiv) Liens arising from the granting of a license
to enter into or use any asset of a Loan Party in the ordinary course of
business of such Loan Party that does not interfere in any material respect with
the use or application by such Loan Party of the asset subject to such license;
(xv) Liens arising by operation of law on insurance policies and proceeds
thereof to secure premiums thereunder; (xvi) Liens arising out of judgments or
awards in respect of which an appeal or proceeding for review is being
diligently prosecuted, provided that (x) a stay of execution pending such appear
or proceeding for review has been obtained, (y) full provision for the payment
of the indebtedness secured by such Lien has been made on the books

 

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of such Person if and to the extent required by GAAP, and (z) an Event of
Default under Section 7.1 shall not have occurred as a result of the incurrence
of such Lien; (xvii) Liens consisting of cash deposits in an amount not to
exceed US$10,000,000 with swap counterparties as may be required pursuant to the
terms of Swap Agreements permitted by Section 6.16; (xviii) Liens granted by
Calpine to secure the Calpine Debt; (xix) rights of collecting banks or other
financial institutions having a right of setoff, revocation, refund or
chargeback with respect to money or instruments on deposit with or in the
possession of such financial institution; (xx) Liens with respect to a court
ordered administration charge in the Canadian Cases, junior to the CCAA DIP
Lenders Charge, in an aggregate amount not in excess of US$4,000,000 for the
payment of (a) allowed and unpaid professional fees and disbursements incurred
by professionals retained by the Canadian Loan Parties and (b) allowed and
unpaid professional fees and disbursements of the monitor in the Canadian Cases
including allowed and unpaid legal fees and expenses of its counsel (and
including any allowed and unpaid professional fees and disbursements incurred by
the parties referred to in (a) and (b), prior to the occurrence of such Event of
Default); and (xxi) other Liens securing Indebtedness in an aggregate amount
outstanding at any time not in excess of US$1,000,000.

 

“Person” shall mean any natural person, corporation, partnership, trust, joint
venture, association, company, estate, unincorporated organization or government
or any agency or political subdivision thereof.

 

“Plan” shall mean a Single Employer Plan or a Multiemployer Plan.

 

“Prepayment Event” means (a) any Asset Sale; or (b) any casualty or other
insured damage to, or any taking under power of eminent domain or by
condemnation or similar proceeding of, any property or asset of any Loan Party.

 

“Pre-Petition Agent” shall have the meaning set forth in Section 2.24.

 

“Pre-Petition Credit Agreement” shall mean that certain Credit Agreement dated
as of November 1, 2004, as amended, supplemented or otherwise modified prior to
the Filing Date, among the Borrowers, as borrowers, the Parent and certain of
the other Loan Parties, as guarantors, the banks and other financial
institutions from time to time parties thereto, and Deutsche Bank Trust Company
Americas, as administrative agent.

 

“Pre-Petition Debt” shall have the meaning set forth in Section 2.24.

 

“Pre-Petition Payment” shall mean a payment (by way of adequate protection or
otherwise) of principal or interest or otherwise on account of any
pre-petition/pre-filing Indebtedness or trade payables or other
pre-petition/pre-filing claims against the Loan Parties, including, without
limitation, reclamation claims and materialmen’s liens.

 

“Pre-Petition Secured Lenders” shall have the meaning set forth in Section 2.24.

 

“Primed Liens” shall have the meaning set forth in Section 2.24.

 

“Primed Parties” shall mean the parties who hold Primed Liens.

 

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“Prior Agreement” shall have the meaning set forth in the Introduction.

 

“Priority Payables” means, with respect to any Person, any amount payable by
such Person (i) solely to the extent that it is owing and is secured by a Lien
which ranks or is capable of ranking prior to or pari passu with the Liens
created by the Collateral Documents, including amounts which are past due and
owing for wages, vacation pay, severance pay, employee deductions, sales tax,
excise tax, Tax payable pursuant to Part IX of the Excise Tax Act (Canada) (net
of GST input credits), income tax, workers compensation, government royalties,
pension fund obligations and overdue Taxes and (ii) is not being contested by
such Person in good faith by appropriate proceedings promptly instituted and
diligently conducted in a manner that stays enforcement of such Lien and with
respect to whom such Person has established a cash reserve on its books for the
full amount thereof.

 

“Quebec Security Agreements” shall mean any (i) Deed of Hypothec and Issue of
Bonds made by any Canadian Loan Party in favor of the Applicable Agent, as fondé
de pouvoir under Article 2692 of the Civil Code of Quebec, to be executed before
a notary of the Province of Quebec, (ii) bond issued by any Canadian Loan Party
pursuant to such Deed of Hypothec and Issue of Bonds, and (iii) pledge agreement
to be granted by any Canadian Loan Party in respect of any bond issued under
such Deed of Hypothec and Issue of Bonds.

 

“Raw Materials” shall mean any items or materials used or consumed in the
manufacture of goods to be sold by the Loan Parties in the ordinary course of
business.

 

“Receivables Securitization Entities” shall mean  Stone Receivables Corporation
and SSCE Funding, LLC.

 

“Receivables Securitization Programs” shall mean the Canadian Receivables
Securitization Program and the U.S. Receivables Securitization Program.

 

“Receivables Securitization Termination Date” means the date on which each of
the Receivables Securitization Programs are terminated in accordance with the
requirements of Section 5.13, as determined by the Administrative Agent in its
exclusive discretion.

 

“Recognition Cases” shall mean the recognition proceedings commenced by the
Canadian Loan Parties pursuant to the Bankruptcy and Insolvency Act (Canada) of
the U.S. Cases with respect to Smurfit-MBI and SLP Finance General Partnership.

 

“Register” shall have the meaning set forth in Section 9.3.

 

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.

 

“Release” shall mean the disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping or
migrating of any Hazardous Substance or Hazardous Waste into or upon any land or
water or air, or otherwise entering into the environment.

 

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“Rent Reserve” with respect to any leased location where any Collateral subject
to Liens arising by operation of law is located, a reserve for rent at such
location in an amount established in the Applicable Agent’s Permitted
Discretion.

 

“Reorganization Plan” shall mean a bankruptcy plan of reorganization or a CCAA
plan or arrangement in any of the Cases.

 

“Required Lenders” shall mean, at any time, Lenders having aggregate Total
Canadian Outstandings, Total U.S. Outstandings and unused Commitments
representing more than 50% of the aggregate Total Canadian Outstandings, Total
U.S. Outstandings and unused Commitments at such time.

 

“Requirement of Law” means, as to any Person, the Organizational Documents or
other governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

 

“Reserves” means Dilution Reserves, Inventory Reserves, Rent Reserves and any
other reserves established by the Applicable Agent in its Permitted Discretion
(including, without limitation, reserves for accrued and unpaid interest on the
Secured Obligations, Banking Services Reserves, reserves for consignee’s,
warehousemen’s and bailee’s charges, reserves for Swap Obligations, reserves for
environmental liabilities of any Loan Party, reserves for contingent liabilities
of any Loan Party, reserves for uninsured losses of any Loan Party, reserves for
uninsured, underinsured, un-indemnified or under-indemnified liabilities or
potential liabilities with respect to any litigation, reserves for cash held in
deposit accounts of Smurfit-Stone Puerto Rico, Inc. during such times as cash
dominion is in effect under Section 5.7 and reserves for taxes, fees,
assessments, and other governmental charges) with respect to the Collateral or
any Loan Party, with regard to the Canadian Borrowing Base, reserves for
Priority Payables outstanding on or after the Effective Date that may affect the
collectability of such accounts or the saleability of such inventory and that
have not already been taken into account in the calculation of the applicable
Borrowing Base to the extent such Priority Payables do not constitute amounts
otherwise secured by the Directors’ Charge.

 

“Reset Date” shall have the meaning set forth in Section 1.4.

 

“Revolving Commitment” shall mean the Canadian Revolving Commitment and the U.S.
Revolving Commitment.

 

“Revolving Loans” shall mean, individually or collectively, U.S. Revolving Loans
and Canadian Revolving Loans.

 

“S&P” shall mean Standard & Poor’s Rating Services, a division of The
McGraw-Hill Companies, Inc., or any successor to the rating agency business
thereof.

 

“Schedule I Banks” shall mean the banks listed in Schedule I of the Bank Act
(Canada) having equity of more than C$8,000,000,000.

 

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“Secured Obligations” means the Canadian Secured Obligations and the U.S.
Secured Obligations.

 

“Secured Parties” means the Agents, the Lenders, the Fronting Banks and all of
the Lenders and the Affiliates of the Lenders to whom Banking Service
Obligations or Swap Obligations are owed.

 

“Security Agreements” means, collectively, the Security and Pledge Agreement and
the Canadian Security Agreement, and “Security Agreement” means any one of them.

 

“Security and Pledge Agreement” shall have the meaning given such term in
Section 4.1(c).

 

“Single Employer Plan” shall mean a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of a Loan
Party or an ERISA Affiliate or (ii) was so maintained and in respect of which a
Loan Party could have liability under Section 4069 of ERISA in the event such
Plan has been or were to be terminated.

 

“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding standby Letters of Credit at such time plus (b) the
aggregate amount of all disbursements relating to standby Letters of Credit that
have not yet been reimbursed by or on behalf of the Borrowers at such time.  The
Standby LC Exposure shall be determined on a separate basis for each Class.  The
Standby LC Exposure of any Canadian Revolving Lender or U.S. Tranche B Revolving
Lender, as the case may be, at any time shall be its Applicable Percentage of
the total Standby LC Exposure at such time.

 

“Statutory Reserve Rate” shall mean on any date the percentage (expressed as a
decimal) established by the Board and any other banking authority which is the
then stated maximum rate for all reserves (including but not limited to any
emergency, supplemental or other marginal reserve requirements) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (or any successor category of liabilities under Regulation D issued
by the Board, as in effect from time to time).  Such reserve percentages shall
include, without limitation, those imposed pursuant to said Regulation.  The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in such percentage.

 

“Subsidiary” shall mean, with respect to any Person (herein referred to as the
“parent”), any corporation, association or other business entity (whether now
existing or hereafter organized) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power for the election of directors is, at the time as of which
any determination is being made, owned or controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.

 

“Super-majority Lenders” shall mean, at any time, Lenders having aggregate Total
Canadian Outstandings, Total U.S. Outstandings and unused Commitments
representing at least 66-2/3% of the aggregate Total Canadian Outstandings,
Total U.S. Outstandings and unused Commitments at such time.

 

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“Superpriority Claim” shall mean a claim against any U.S. Loan Party in any of
the U.S. Cases which is a superpriority administrative expense claim having
priority over any or all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code.

 

“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.

 

“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction, in each case that is permitted by
Section 6.16.

 

“Taxes” shall have the meaning given such term in Section 2.19.

 

“Term Loans” shall mean, individually or collectively, the U.S. Term Loans and
the Canadian Term Loans.

 

“Term Loan Commitment” shall mean the U.S. Term Loan Commitment and the Canadian
Term Loan Commitment.

 

“Termination Date” shall mean the earliest to occur of (i) the Maturity Date,
(ii) the Effective Date, (iii) the forty-fifth (45th) day after the entry of the
Interim Order if the Final Order has not been entered prior to such forty-fifth
day, and (iv) the acceleration of the Loans and the termination of the Revolving
Commitment in accordance with the terms hereof.

 

“Termination Event” shall mean (i) a “reportable event”, as such term is
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a “reportable event” not subject to the provision for 30-day notice to the
PBGC under Section 4043 of ERISA or such regulations) or an event described in
Section 4068 of ERISA excluding events described in Section 4043(c)(9) of ERISA
or 29 CFR §§ 2615.21 or 2615.23, or (ii) the withdrawal of any Loan Party or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was
a “substantial employer”, as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by any Loan Party or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiple Employer Plan, or
(iii) providing notice of intent to terminate a Plan pursuant to
Section 4041(c) of ERISA or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate
a Plan by the PBGC under Section 4042 of ERISA, or (v) any other event or
condition (other than the commencement of the Cases and the failure to have made
any contribution accrued as of the Filing Date but not paid) which would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the

 

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appointment of a trustee to administer, any Plan, or the imposition of any
liability under Title IV of ERISA (other than for the payment of premiums to the
PBGC).

 

“Total Canadian Outstandings”  shall mean, at any time of determination, the
Canadian Revolving Credit Utilization plus the Canadian Term Outstandings.

 

“Total Revolving Commitment” shall mean, collectively, the Canadian Revolving
Commitments and the U.S. Revolving Commitments.

 

“Total U.S. Outstandings” shall mean, at any time of determination, (a) the
aggregate principal amount of the U.S. Tranche A Revolving Loans outstanding at
such time plus (b) the U.S. Tranche B Revolving Credit Utilization plus (c) the
U.S. Term Outstandings.

 

“Transferee” shall have the meaning given such term in Section 2.19.

 

“Type” when used in respect of any Loan or Borrowing shall refer to the Rate of
interest by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined.  For purposes hereof, “Rate” shall mean the
Canadian Prime Rate, the Discount Rate, the Adjusted LIBO Rate and the Alternate
Base Rate.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests. In
addition, “UCC” means with respect to the Canadian Loan Parties or any
Collateral of the Canadian Loan Parties subject thereto, the Personal Property
Security Act (the “PPSA”) or similar legislation as from time to time in effect
in the Province of Ontario or any other jurisdiction the laws of which are
required to be applied in connection with the issue of perfection of security
interests including, without limitation, the Civil Code of Quebec.

 

“Unfunded Current Liability” shall mean, with respect to any Pension Plan, the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under such Pension Plan as of the close of its most recent plan year
exceeds the fair market value of the assets allocable thereto, each determined
in accordance with Statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by such Pension Plan’s actuary in the most
recent annual valuation of such Pension Plan.

 

“Unused Revolving Commitment” shall mean, at any time, (i) the Total Revolving
Commitment less (ii) the sum of (a) the Canadian Revolving Credit Utilization,
(b) the aggregate principal amount of the U.S. Tranche A Revolving Loans
outstanding at such time and (c) the U.S. Tranche B Revolving Credit
Utilization.

 

“U.S. Borrower” shall have the meaning set forth in the Introduction.

 

“U.S. Borrowing Base” shall mean, at the time of any determination, an amount
equal to the sum, without duplication, of (a) 85% of Eligible Accounts of the
U.S. Loan Parties at such time plus (b) the lesser of (i) 65% of Eligible
Inventory of the U.S. Loan Parties at such time and (ii) 85% of the Net Orderly
Liquidation Value of Eligible Inventory of the U.S. Loan Parties at such time
(in each case with respect to clauses (i) and (ii) with any Eligible Inventory

 

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to be valued at the lower of cost (determined on a first-in, first-out basis) or
market), plus (c) the U.S. PP&E Component, minus (d) the Reserves at such time,
minus (e) the Carve-Out.  The U.S. Borrowing Base at any time shall be
determined by reference to the most recent Borrowing Base Certificate delivered
to the Administrative Agent pursuant to Section 5.8 of this Agreement.

 

“U.S. Cases” shall mean the cases under the Bankruptcy Code of the Loan Parties.

 

“U.S. Conversion Notice” shall have the meaning given such term in
Section 9.23(a).

 

“U.S. Dollar Equivalent” shall mean, on any date of determination, with respect
to any amount in Canadian Dollars, the equivalent in Dollars of such amount
determined by the Administrative Agent using the Exchange Rate in effect on such
date of determination.

 

“U.S. Guaranteed Obligations” shall have the meaning set forth in Section 10.1.

 

“U.S. Guarantor” and “U.S. Guarantors” means, individually or collectively, the
Parent and each of the Domestic Subsidiaries party to this Agreement.  As of the
Closing Date, the U.S. Guarantors are the Parent, Calpine, Cameo Container
Corporation, an Illinois corporation, Lot 24D Redevelopment Corporation, a
Missouri corporation, Atlanta & Saint Andrews Bay Railway Company, a Florida
corporation, Stone International Services Corporation, a Delaware corporation,
Stone Global, Inc., a Delaware corporation, Stone Connecticut Paperboard
Properties, Inc., a Delaware corporation, Smurfit-Stone Puerto Rico, Inc., a
Puerto Rico corporation, Smurfit Newsprint Corporation, a Delaware corporation,
SLP Finance I, Inc., a Delaware corporation, and SLP Finance II, Inc., a
Delaware corporation, each of which is a debtor and debtor-in-possession in a
case pending under Chapter 11 of the Bankruptcy Code, and, after the Closing
Date, shall include each subsequently organized Domestic Subsidiary and each
direct parent thereof.

 

“U.S. Interim Order” shall mean an order of the Bankruptcy Court in the U.S.
Cases in substantially the form of Exhibit A-1, or such other form as is
satisfactory to the Administrative Agent in its exclusive discretion, entered in
accordance with the terms and conditions of Section 4.1, as such order may be
amended, supplemented or restated with the express written consent of the
Administrative Agent in its exclusive discretion.

 

“U.S. Investment Account” shall mean the account established by the U.S.
Borrower pursuant to Section 2.7(c) and designated as the “Smurfit-Stone
Investment Account” with JPMCB.

 

“U.S. Lender” means, as of any date of determination, a Person constituting a
U.S. Term Loan Lender or U.S. Revolving Lender.

 

“U.S. Letter of Credit Outstandings” shall mean, at any time of determination,
the sum of (a) the aggregate undrawn amount of all outstanding U.S. Revolving
Facility Letters of Credit and (b) the aggregate amount that has been drawn
under any U.S. Revolving Facility Letter of Credit and has not been reimbursed
by the U.S. Borrower or another Loan Party at such time.  The U.S. Letter of
Credit Outstandings of any U.S. Tranche B Revolving Lender at any

 

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time shall equal its Applicable Percentage of the aggregate U.S. Letter of
Credit Outstandings at such time.

 

“U.S. Loan Party” and “U.S. Loan Parties” shall mean, individually or
collectively, the U.S. Borrower, the Parent and the other U.S. Guarantors.

 

“U.S. Loans” shall mean the U.S. Revolving Loans and the U.S. Term Loans.

 

“U.S. PP&E Component” shall mean the lesser of (x) (i) during the period
commencing with the Closing Date until the twelve (12) month anniversary of the
Closing Date, US$150,000,000, (ii) during the period commencing with the twelve
(12) month anniversary of the Closing Date until the fifteen (15) month
anniversary of the Closing Date, US$100,000,000, and (iii) on the fifteen (15)
month anniversary of the Closing Date and thereafter, US$75,000,000, in each
case minus the Canadian PP&E Component at such time, and (y) the greater of
(A) (i) 50% of the Net Orderly Liquidation Value of Eligible Equipment of the
U.S. Loan Parties at such time plus (ii) 50% of the Fair Market Value of
Eligible Real Property of the U.S. Loan Parties at such time (as set forth in
the most recent third party real estate appraisal in form and substance
satisfactory to the Administrative Agent), and (B) 20% of the Net Orderly
Liquidation Value In Place of (i) Eligible Equipment of the U.S. Loan Parties at
such time and (ii) Eligible Real Property of the U.S. Loan Parties at such
time.  Notwithstanding the foregoing sentence, until the earlier of (x) such
time as appraisals satisfactory to the Administrative Agent are completed
pursuant to Section 5.6 and (y) May 28, 2009, or such later date as the
Administrative Agent may approve in its exclusive discretion, the U.S. PP&E
Component shall be US$150,000,000 minus the Canadian PP&E Component.

 

“U.S. Receivables Securitization Program” shall mean (a) that certain Master
Indenture, dated as of November 23, 2004, between SSCE Funding, LLC (as used in
this definition, the “Securitization Issuer”) and Deutsche Bank Trust Company
Americas, as Indenture Trustee (as used in this Section and in such capacity,
the “Securitization Trustee”) and (b) that certain Series 2004-1 Indenture
Supplement to Master Indenture, dated as of November 23, 2004, between the
Securitization Issuer and the Securitization Trustee, in each case, as amended,
restated, modified or waived from time to time.

 

“U.S. Revolving Commitment” shall mean the U.S. Tranche A Revolving Commitment
and the U.S. Tranche B Revolving Commitment.

 

“U.S. Revolving Facility Letters of Credit” shall mean any irrevocable letter of
credit issued pursuant to Section 2.4 for the account of the U.S. Borrower or a
Domestic Subsidiary by a Fronting Bank pursuant to the terms and conditions of
ARTICLE 2, which letter of credit shall be (i) a standby or import documentary
letter of credit, (ii) issued for purposes that are consistent with the ordinary
course of business of the Loan Parties or for such other purposes as are
acceptable to the Administrative Agent, (iii) denominated in Dollars and
(iv) otherwise in such form as may be approved from time to time by the
Administrative Agent and the applicable Fronting Bank.

 

“U.S. Revolving Lenders” shall mean the U.S. Tranche A Revolving Lenders and the
U.S. Tranche B Revolving Lenders.

 

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“U.S. Revolving Loans” shall mean the U.S. Tranche A Revolving Loans and the
U.S. Tranche B Revolving Loans.

 

“U.S. Secured Obligations” means (a) all Obligations owing by any U.S. Loan
Party, (b) all Banking Services Obligations owing by any U.S. Loan Party,
(c) Swap Obligations owing by any U.S. Loan Party to one or more U.S. Lenders or
their respective Affiliates; provided that at or prior to the time that any
transaction relating to a Swap Obligation is executed, the U.S. Lender or an
Affiliate thereof party thereto (other than JPMCB) shall have delivered written
notice to the Administrative Agent that such a transaction has been entered into
and that it constitutes a U.S. Secured Obligation entitled to the benefits of
the Collateral Documents, and (d) all obligations owing by the Canadian Borrower
in respect of its guaranty of Obligations of the U.S. Borrower.

 

“U.S. Term Loans” means the term loans to the U.S. Borrower made pursuant to
Section 2.1(a)(i) (or made to the U.S. Borrower pursuant to Section 9.23(a))in
Dollars.

 

“U.S. Term Loan Collateral Account” shall mean the account established by the
U.S. Borrower under the sole and exclusive control of the Administrative Agent
maintained at the office of the Administrative Agent at 270 Park Avenue, New
York, New York 10017 designated as the “Smurfit-Stone U.S. Term Loan Collateral
Account” that shall be used solely for the purposes set forth in
Section 2.7(c) and Section 2.14(a) and shall include any separate investment
product linked to such account mutually acceptable to the U.S. Borrower and the
Administrative Agent in accordance with Section 6.11.

 

“U.S. Term Loan Commitment” shall mean, with respect to each U.S. Term Loan
Lender, the commitment of such Lender to make a U.S. Term Loan hereunder in the
amount set forth opposite its name on Annex A-3 hereto, as the same shall be
reduced on the Closing Date pursuant to Section 2.14(k) and as may be modified
pursuant to Section 9.23(a).  As of the Closing Date and prior to making the
U.S. Term Loans, the aggregate amount of the U.S. Term Loan Commitments of the
U.S. Term Loan Lenders is US$400,000,000.

 

 “U.S. Term Loan Conversion” shall have the meaning given such term in
Section 9.23(a).

 

“U.S. Term Loan Lenders” shall mean the Lenders having U.S. Term Loan
Commitments or holding the  U.S. Term Loans.

 

“U.S. Term Outstandings” shall mean, at any time of determination, an amount
equal to (a) the aggregate principal amount of U.S. Term Loans outstanding at
such time minus (b) the amount of cash held in the U.S. Term Loan Collateral
Account at such time.

 

“U.S. Tranche A Revolving Commitment” shall mean, with respect to each U.S.
Tranche A Revolving Lender, the commitment of such Lender to make U.S. Tranche A
Revolving Loans hereunder in the amount set forth opposite its name on Annex A-2
hereto or as may subsequent to the Amended and Restated Effective Date be set
forth in the Register from time to time, as the same may be reduced from time to
time pursuant to the terms of this Agreement.  As of the Amended and Restated
Effective Date, the aggregate amount of the U.S.

 

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Tranche A Revolving Commitments of the U.S. Tranche A Revolving Lenders is
US$215,000,000.

 

“U.S. Tranche A Revolving Lender” shall mean the Lenders having U.S. Tranche A
Revolving Commitments or holding U.S. Tranche A Revolving Loans.

 

“U.S. Tranche A Revolving Loans” shall mean the revolving loans to the U.S.
Borrower or the Canadian Borrower made pursuant to Section 2.1(b)(i) in Dollars.

 

“U.S. Tranche B Revolving Commitment” shall mean, with respect to each U.S.
Tranche B Revolving Lender, the commitment of such Lender to make U.S. Tranche B
Revolving Loans hereunder and to acquire participations in U.S. Revolving
Facility Letters of Credit in the amount set forth opposite its name on Annex
A-5 hereto or as may subsequent to the Amended and Restated Effective Date be
set forth in the Register from time to time, as the same may be reduced from
time to time pursuant to the terms of this Agreement.  As of the Amended and
Restated Effective Date, the aggregate amount of the U.S. Tranche B Revolving
Commitments of the U.S. Tranche B Revolving Lenders is US$35,000,000.

 

“U.S. Tranche B Revolving Credit Utilization” shall mean, at any time of
determination, the sum of (a) the aggregate principal amount of U.S. Tranche B
Revolving Loans outstanding at such time and (b) the U.S. Letter of Credit
Outstandings at such time.

 

“U.S. Tranche B Revolving Lender” shall mean the Lenders having U.S. Tranche B
Revolving Commitments or holding U.S. Tranche B Revolving Loans.

 

“U.S. Tranche B Revolving Loans” shall mean the revolving loans to the U.S.
Borrower or the Canadian Borrower made pursuant to Section 2.1(b)(ii) in
Dollars.

 

“Withdrawal Liability” shall have the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.

 

“Work-in-Process” shall mean Inventory which consists of work-in-process
including, without limitation, materials other than Raw Materials, Finished
Goods or saleable products, title to which and sole ownership of which is vested
in a Loan Party.

 

Section 1.2                                      Terms Generally.  The
definitions in Section 1.1 shall apply equally to both 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. Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words

 

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“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

Section 1.3                                      Accounting Terms; GAAP.  Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, if the Loan Parties notify the Administrative Agent that
the Loan Parties request an amendment to any provision hereof to eliminate the
effect of any change occurring after the Closing Date in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Loan Parties that the Required Lenders request an amendment
to any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until  such
notice shall have been withdrawn or such provision  amended in accordance
herewith.

 

Section 1.4                                      Exchange Rate Calculations.  On
each Calculation Date, the Administrative Agent shall (a) determine the Exchange
Rate as of such Calculation Date in respect of Canadian Dollars (and any other
currency for which an Exchange Rate is required) and (b) give notice thereof to
the applicable Borrower, and with respect to each Lender, to any Lender that
shall have requested such information. The Exchange Rate so determined shall
become effective on the first Business Day immediately following the relevant
Calculation Date (each, a “Reset Date”) and shall remain effective until the
next succeeding Reset Date, and shall for all purposes of this Agreement (other
than Section 2.13, Section 9.20, Section 11.3 and any other provision expressly
requiring the use of a current Exchange Rate) be the Exchange Rate employed in
converting amounts between Dollars, on the one hand, and any other applicable
currency on the other hand; provided that, for purposes of determining any
Borrowing Base, the relevant Exchange Rate shall be determined by the applicable
Borrower at the time that the relevant Borrowing Base Certificate is prepared
and shall be set forth in such Borrowing Base Certificate. Notwithstanding the
foregoing, for purposes of determining compliance by the Loan Parties with the
limitations on Indebtedness, Indebtedness secured by Liens, loans, advances,
investments, guarantees and payments contained in ARTICLE 6, compliance will be
determined based on the U.S. Dollar Equivalent amount of the Indebtedness,
Liens, Loans, advances, investments, guarantees and payments denominated in
currencies other than Dollars subject to such provisions on the date of
incurrence or payment thereof, and Borrowers will not be deemed to be in
violation of such covenants solely as a result of subsequent changes in the
Exchange Rate which cause the U.S. Dollar Equivalent amount of such obligations
or payments to exceed such limitations.

 

Section 1.5                                      Québec Matters.  For purposes
of any assets, liabilities or entities located in the Province of Québec and for
all other purposes pursuant to which the interpretation or construction of this
Agreement may be subject to the laws of the Province of Québec or a court or
tribunal exercising jurisdiction in the Province of Québec, (a) “personal
property” shall include “movable property”, (b) “real property” or “real estate”
shall include “immovable property”, (c) “tangible property” shall include
“corporeal property”, (d) “intangible property” shall include “incorporeal
property”, (e) “security interest”, “mortgage” and “lien” shall include a
“hypothec”, “right of retention”, “prior claim” and a resolutory clause, (f) all
references to

 

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filing, perfection, priority, registering or recording under the Uniform
Commercial Code or a Personal Property Security Act shall include publication
under the Civil Code of Québec, (g) all references to “perfection” of or
“perfected” liens or security interest shall include a reference to an
“opposable” or “set up” lien or security interest as against third parties,
(h) any “right of offset”, “right of setoff” or similar expression shall include
a “right of compensation”, (i) “goods” shall include “corporeal movable
property” other than chattel paper, documents of title, instruments, money and
securities, (j) an “agent” shall include a “mandatary”, (k) “construction liens”
shall include “legal hypothecs” contemplated under Article 2724(2) of the Civil
Code of Québec; (l) “joint and several” shall include “solidary”; (m) “gross
negligence or willful misconduct” shall be deemed to be “intentional or gross
fault”; (n) “beneficial ownership” shall include “ownership on behalf of another
as mandatary”; (o) “easement” shall include “servitude”; (p) “priority” shall
include “prior claim”; (q) “survey” shall include “certificate of location and
plan”; (r) “state” shall include “province”; (s) “fee simple title” shall
include “absolute ownership”; (t) “accounts” shall include “claims”.  The
parties hereto confirm that it is their wish that this Agreement and any other
document executed in connection with the transactions contemplated herein be
drawn up in the English language only and that all other documents contemplated
thereunder or relating thereto, including notices, may also be drawn up in the
English language only.  Les parties aux présentes confirment que c’est leur
volonté que cette convention et les autres documents de crédit soient rédigés en
langue anglaise seulement et que tous les documents, y compris tous avis,
envisagés par cette convention et les autres documents peuvent être rédigés en
langue anglaise seulement.

 

ARTICLE 2. AMOUNT AND TERMS OF CREDIT.

 

SECTION 2.1                                      COMMITMENT OF THE LENDERS.

 

(A)                                  SUBJECT TO THE TERMS AND SUBJECT TO THE
CONDITIONS HEREIN SET FORTH:

 

(I)            EACH U.S. TERM LOAN LENDER AGREES TO MAKE TO THE U.S. BORROWER ON
THE CLOSING DATE A U.S. TERM LOAN IN DOLLARS IN A PRINCIPAL AMOUNT EQUAL TO ITS
U.S. TERM LOAN COMMITMENT; AND

 

(II)           EACH CANADIAN TERM LOAN LENDER AGREES TO MAKE TO THE CANADIAN
BORROWER ON THE CLOSING DATE A CANADIAN TERM LOAN IN DOLLARS IN A PRINCIPAL
AMOUNT EQUAL TO ITS CANADIAN TERM LOAN COMMITMENT.

 

AMOUNTS PAID OR REPAID IN RESPECT OF TERM LOANS MAY NOT BE REBORROWED.

 

(B)                                 SUBJECT TO THE TERMS AND SUBJECT TO THE
CONDITIONS HEREIN SET FORTH:

 

(I)            EACH U.S. TRANCHE A REVOLVING LENDER AGREES TO MAKE TO THE U.S.
BORROWER OR THE CANADIAN BORROWER AT ANY TIME AND FROM TIME TO TIME DURING THE
PERIOD COMMENCING ON THE CLOSING DATE AND ENDING ON THE TERMINATION DATE (OR THE
EARLIER DATE OF TERMINATION OF THE U.S. TRANCHE A REVOLVING COMMITMENT) U.S.
TRANCHE A REVOLVING LOANS IN DOLLARS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO
EXCEED, WHEN ADDED TO SUCH LENDER’S APPLICABLE PERCENTAGE OF

 

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THE THEN AGGREGATE U.S. TRANCHE A REVOLVING LOANS, THE U.S. TRANCHE A REVOLVING
COMMITMENT OF SUCH LENDER;

 

(II)           EACH U.S. TRANCHE B REVOLVING LENDER AGREES TO MAKE TO THE U.S.
BORROWER OR THE CANADIAN BORROWER AT ANY TIME AND FROM TIME TO TIME DURING THE
PERIOD COMMENCING ON THE CLOSING DATE AND ENDING ON THE TERMINATION DATE (OR THE
EARLIER DATE OF TERMINATION OF THE U.S. TRANCHE B REVOLVING COMMITMENT) U.S.
TRANCHE B REVOLVING LOANS IN DOLLARS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO
EXCEED, WHEN ADDED TO SUCH LENDER’S APPLICABLE PERCENTAGE OF THE THEN AGGREGATE
U.S. TRANCHE B REVOLVING CREDIT UTILIZATION, THE U.S. TRANCHE B REVOLVING
COMMITMENT OF SUCH LENDER; AND

 

(III)          EACH CANADIAN REVOLVING LENDER AGREES TO MAKE TO THE U.S.
BORROWER OR THE CANADIAN BORROWER AT ANY TIME AND FROM TIME TO TIME DURING THE
PERIOD COMMENCING ON THE CLOSING DATE AND ENDING ON THE TERMINATION DATE (OR THE
EARLIER DATE OF TERMINATION OF THE CANADIAN REVOLVING COMMITMENT) CANADIAN
REVOLVING LOANS IN DOLLARS OR CANADIAN DOLLARS IN AN AGGREGATE PRINCIPAL AMOUNT
NOT TO EXCEED, WHEN ADDED TO SUCH LENDER’S APPLICABLE PERCENTAGE OF THE THEN
AGGREGATE CANADIAN REVOLVING CREDIT UTILIZATION, THE CANADIAN REVOLVING
COMMITMENT OF SUCH LENDER.

 

SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN, REVOLVING LOANS MAY BE
REPAID AND REBORROWED.

 

(C)                                  EACH BORROWING SHALL BE MADE BY THE LENDERS
PRO RATA IN ACCORDANCE WITH THEIR RESPECTIVE APPLICABLE COMMITMENTS; PROVIDED,
HOWEVER, THAT THE FAILURE OF ANY LENDER TO MAKE ANY LOAN SHALL NOT IN ITSELF
RELIEVE THE OTHER LENDERS OF THEIR OBLIGATIONS TO LEND.

 

SECTION 2.2                                      AVAILABILITY OF U.S. LOANS.

 

(A)                                  DURING THE PERIOD COMMENCING ON THE CLOSING
DATE AND ENDING ON THE DATE THE BANKRUPTCY COURT AND CANADIAN COURT (IF
APPLICABLE), AS THE CASE MAY BE, ENTERS THE FINAL ORDER (SUCH PERIOD BEING
REFERRED TO AS THE “INTERIM PERIOD”), (I) US$65,000,000 OF THE U.S. TRANCHE A
REVOLVING COMMITMENT (THE “INTERIM U.S. TRANCHE A REVOLVING COMMITMENT”) AND
(II) THE ENTIRE U.S. TRANCHE B REVOLVING COMMITMENT (THE U.S. TRANCHE B
REVOLVING COMMITMENT, TOGETHER WITH THE INTERIM U.S. TRANCHE A REVOLVING
COMMITMENT, THE “INTERIM U.S. REVOLVING COMMITMENT”) SHALL BE AVAILABLE TO THE
U.S. BORROWER AND THE CANADIAN BORROWER (SUBJECT TO COMPLIANCE WITH THE U.S.
BORROWING BASE AND THE TERMS, CONDITIONS AND COVENANTS DESCRIBED IN THIS
AGREEMENT).

 

(B)                                 ON THE FIRST BUSINESS DAY AFTER THE
EXPIRATION OF THE INTERIM PERIOD, THE ENTIRE U.S. REVOLVING COMMITMENT SHALL BE
AVAILABLE TO THE U.S. BORROWER AND THE CANADIAN BORROWER (SUBJECT TO COMPLIANCE
WITH THE U.S. BORROWING BASE AND THE TERMS, CONDITIONS AND COVENANTS IN THIS
AGREEMENT).

 

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(C)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CONTRARY, (I) TOTAL U.S. OUTSTANDINGS SHALL NOT AT ANY TIME EXCEED THE U.S.
BORROWING BASE, (II) THE AGGREGATE PRINCIPAL AMOUNT OF THE U.S. TRANCHE A
REVOLVING LOANS SHALL NOT AT ANY TIME EXCEED (X) PRIOR TO THE EXPIRATION OF THE
INTERIM PERIOD, THE INTERIM U.S. TRANCHE A REVOLVING COMMITMENT, AND (Y) FROM
AND AFTER THE EXPIRATION OF THE INTERIM PERIOD, THE U.S. TRANCHE A REVOLVING
COMMITMENT (AS SUCH U.S. TRANCHE A REVOLVING COMMITMENT MAY BE REDUCED FROM TIME
TO TIME PURSUANT TO THE TERMS OF THIS AGREEMENT) AND (III) U.S. TRANCHE B
REVOLVING CREDIT UTILIZATION SHALL NOT AT ANY TIME EXCEED THE U.S. TRANCHE B
REVOLVING COMMITMENT (AS SUCH U.S. TRANCHE B REVOLVING COMMITMENT MAY BE REDUCED
FROM TIME TO TIME PURSUANT TO THE TERMS OF THIS AGREEMENT), AND NO LOAN SHALL BE
MADE OR LETTER OF CREDIT ISSUED IN VIOLATION OF THE FOREGOING.

 

SECTION 2.3            AVAILABILITY OF CANADIAN LOANS.

 

(A)           DURING THE INTERIM PERIOD, US$15,000,000 (OR THE CANADIAN DOLLAR
EQUIVALENT THEREOF) OF THE CANADIAN REVOLVING COMMITMENT (THE “INTERIM CANADIAN
REVOLVING COMMITMENT”) SHALL BE AVAILABLE TO THE CANADIAN BORROWER AND THE U.S.
BORROWER (SUBJECT TO COMPLIANCE WITH THE CANADIAN BORROWING BASE AND THE TERMS,
CONDITIONS AND COVENANTS DESCRIBED IN THIS AGREEMENT).

 

(B)           ON THE FIRST BUSINESS DAY AFTER THE EXPIRATION OF THE INTERIM
PERIOD, THE ENTIRE CANADIAN REVOLVING COMMITMENT SHALL BE AVAILABLE TO THE
CANADIAN BORROWER AND THE U.S. BORROWER (SUBJECT TO COMPLIANCE WITH THE CANADIAN
BORROWING BASE AND THE TERMS, CONDITIONS AND COVENANTS IN THIS AGREEMENT).

 

(C)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CONTRARY, (I) TOTAL CANADIAN OUTSTANDINGS SHALL NOT AT ANY TIME EXCEED THE
CANADIAN BORROWING BASE AND (II) CANADIAN REVOLVING CREDIT UTILIZATION SHALL NOT
AT ANY TIME EXCEED (X) PRIOR TO THE EXPIRATION OF THE INTERIM PERIOD, THE
INTERIM CANADIAN REVOLVING COMMITMENT, AND (Y) FROM AND AFTER THE EXPIRATION OF
THE INTERIM PERIOD, THE CANADIAN REVOLVING COMMITMENT (AS SUCH CANADIAN
REVOLVING COMMITMENT MAY BE REDUCED FROM TIME TO TIME PURSUANT TO THE TERMS OF
THIS AGREEMENT), AND NO LOAN SHALL BE MADE OR LETTER OF CREDIT ISSUED IN
VIOLATION OF THE FOREGOING.

 

SECTION 2.4            LETTERS OF CREDIT.

 

(A)           UPON THE TERMS AND SUBJECT TO THE CONDITIONS HEREIN SET FORTH, THE
U.S. BORROWER MAY REQUEST A FRONTING BANK, AT ANY TIME AND FROM TIME TO TIME
AFTER THE CLOSING DATE AND PRIOR TO THE TERMINATION DATE, TO ISSUE, AND, SUBJECT
TO THE TERMS AND CONDITIONS CONTAINED HEREIN, SUCH FRONTING BANK SHALL ISSUE,
FOR THE ACCOUNT OF THE U.S. BORROWER OR A DOMESTIC SUBSIDIARY, AS THE CASE MAY
BE, ONE OR MORE U.S. REVOLVING FACILITY LETTERS OF CREDIT IN A FORM REASONABLY
ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND SUCH FRONTING BANK IN SUPPORT OF
OBLIGATIONS OF THE U.S. BORROWER OR A DOMESTIC SUBSIDIARY OF THE U.S. BORROWER,
AS THE CASE MAY BE, PROVIDED THAT NO LETTER OF CREDIT SHALL BE ISSUED IF AFTER
GIVING EFFECT TO SUCH ISSUANCE (I) THE AGGREGATE U.S. LETTER OF CREDIT
OUTSTANDINGS WOULD EXCEED US$35,000,000, (II) THE TOTAL U.S. OUTSTANDINGS WOULD
EXCEED THE U.S. BORROWING BASE OR (III) THE U.S. TRANCHE B REVOLVING CREDIT
UTILIZATION WOULD EXCEED THE U.S. TRANCHE B REVOLVING COMMITMENT (AS SUCH U.S.
TRANCHE B REVOLVING COMMITMENT MAY BE REDUCED FROM TIME TO TIME PURSUANT TO THE
TERMS OF

 

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THIS AGREEMENT).  IN CONNECTION WITH A REQUEST FOR A U.S. REVOLVING FACILITY
LETTER OF CREDIT, THE U.S. BORROWER SHALL EXECUTE AND DELIVER A FORM OF LETTER
OF CREDIT APPLICATION OR OTHER AGREEMENT TO SUCH FRONTING BANK IN A FORM
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND SUCH FRONTING BANK.  IN
THE EVENT OF ANY INCONSISTENCY BETWEEN THE TERMS AND CONDITIONS SET FORTH HEREIN
AND THE TERMS AND CONDITIONS OF ANY FORM OF LETTER OF CREDIT APPLICATION OR
OTHER AGREEMENT SUBMITTED BY THE U.S. BORROWER TO, OR ENTERED INTO BY THE U.S.
BORROWER WITH, ANY FRONTING BANK RELATING TO ANY U.S. REVOLVING FACILITY LETTER
OF CREDIT, THE TERMS AND CONDITIONS OF THIS AGREEMENT SHALL CONTROL.  ALL U.S.
REVOLVING FACILITY LETTERS OF CREDIT ISSUED AND OUTSTANDING UNDER THE PRIOR
AGREEMENT AS OF THE AMENDED AND RESTATED EFFECTIVE DATE SHALL BE DEEMED TO BE
ISSUED AND OUTSTANDING UNDER THIS AGREEMENT AND ALLOCATED AMONG THE U.S. TRANCHE
B REVOLVING LENDERS IN ACCORDANCE WITH THEIR APPLICABLE PERCENTAGES AS OF THE
AMENDED AND RESTATED EFFECTIVE DATE.

 

(B)           UPON THE TERMS AND SUBJECT TO THE CONDITIONS HEREIN SET FORTH, THE
CANADIAN BORROWER MAY REQUEST A FRONTING BANK, AT ANY TIME AND FROM TIME TO TIME
AFTER THE CLOSING DATE AND PRIOR TO THE TERMINATION DATE, TO ISSUE, AND, SUBJECT
TO THE TERMS AND CONDITIONS CONTAINED HEREIN, SUCH FRONTING BANK SHALL ISSUE, IN
DOLLARS OR CANADIAN DOLLARS, FOR THE ACCOUNT OF THE CANADIAN BORROWER OR A
CANADIAN SUBSIDIARY ONE OR MORE CANADIAN REVOLVING FACILITY LETTERS OF CREDIT IN
A FORM REASONABLY ACCEPTABLE TO THE APPLICABLE AGENT AND SUCH FRONTING BANK IN
SUPPORT OF OBLIGATIONS OF THE CANADIAN BORROWER OR A CANADIAN SUBSIDIARY,
PROVIDED THAT NO LETTER OF CREDIT SHALL BE ISSUED IF AFTER GIVING EFFECT TO SUCH
ISSUANCE (I) THE AGGREGATE CANADIAN LETTER OF CREDIT OUTSTANDINGS WOULD EXCEED
US$10,000,000 (OR THE CANADIAN DOLLAR EQUIVALENT THEREOF), (II) THE TOTAL
CANADIAN OUTSTANDINGS WOULD EXCEED THE CANADIAN BORROWING BASE OR (III) THE
CANADIAN REVOLVING CREDIT UTILIZATION WOULD EXCEED (X) PRIOR TO THE EXPIRATION
OF THE INTERIM PERIOD, THE INTERIM CANADIAN REVOLVING COMMITMENT AND (Y) FROM
AND AFTER THE EXPIRATION OF THE INTERIM PERIOD, THE CANADIAN REVOLVING
COMMITMENT (AS SUCH CANADIAN REVOLVING COMMITMENT MAY BE REDUCED FROM TIME TO
TIME PURSUANT TO THE TERMS OF THIS AGREEMENT).   IN CONNECTION WITH A REQUEST
FOR A CANADIAN REVOLVING FACILITY LETTER OF CREDIT, THE CANADIAN BORROWER SHALL
EXECUTE AND DELIVER A FORM OF LETTER OF CREDIT APPLICATION OR OTHER AGREEMENT TO
SUCH FRONTING BANK IN A FORM REASONABLY ACCEPTABLE TO THE APPLICABLE AGENT AND
SUCH FRONTING BANK.  IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE TERMS AND
CONDITIONS SET FORTH HEREIN AND THE TERMS AND CONDITIONS OF ANY FORM OF LETTER
OF CREDIT APPLICATION OR OTHER AGREEMENT SUBMITTED BY THE CANADIAN BORROWER TO,
OR ENTERED INTO BY THE CANADIAN BORROWER WITH, ANY FRONTING BANK RELATING TO ANY
CANADIAN REVOLVING FACILITY LETTER OF CREDIT, THE TERMS AND CONDITIONS OF THIS
AGREEMENT SHALL CONTROL. ALL CANADIAN REVOLVING FACILITY LETTERS OF CREDIT
ISSUED AND OUTSTANDING UNDER THE PRIOR AGREEMENT AS OF THE AMENDED AND RESTATED
EFFECTIVE DATE SHALL BE DEEMED TO BE ISSUED AND OUTSTANDING UNDER THIS AGREEMENT
AND ALLOCATED AMONG THE CANADIAN REVOLVING LENDERS IN ACCORDANCE WITH THEIR
APPLICABLE PERCENTAGES AS OF THE AMENDED AND RESTATED EFFECTIVE DATE.

 

(C)           NO LETTER OF CREDIT SHALL EXPIRE LATER THAN TWELVE (12) MONTHS
AFTER THE ISSUANCE THEREOF, PROVIDED THAT IF THE TERMINATION DATE SHALL OCCUR
PRIOR TO THE EXPIRATION OF ANY LETTER OF CREDIT, THE BORROWERS SHALL, AT OR
PRIOR TO THE TERMINATION DATE, EXCEPT AS THE APPLICABLE AGENT MAY OTHERWISE
AGREE IN WRITING, (I) CAUSE ALL LETTERS OF CREDIT WHICH EXPIRE AFTER THE
TERMINATION DATE TO BE RETURNED TO THE APPLICABLE FRONTING BANK UNDRAWN AND
MARKED “CANCELED” AND EACH SUCH LETTER OF CREDIT ACCOMPANIED BY WRITTEN CONSENT
OF THE BENEFICIARY ON ITS LETTERHEAD SIGNED BY AN AUTHORIZED SIGNATORY
CONSENTING TO SUCH CANCELLATION OR (II) IF THE

 

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BORROWERS ARE UNABLE TO DO SO IN WHOLE OR IN PART, EITHER (X) PROVIDE A
“BACK-TO-BACK” LETTER OF CREDIT TO ONE OR MORE FRONTING BANKS IN A FORM
SATISFACTORY TO SUCH FRONTING BANK AND THE APPLICABLE AGENT (IN THEIR EXCLUSIVE
DISCRETION), ISSUED BY A BANK SATISFACTORY TO SUCH FRONTING BANK AND THE
APPLICABLE AGENT (IN THEIR EXCLUSIVE DISCRETION), IN AN AMOUNT EQUAL TO THE
GREATER OF (A) AN AMOUNT, AS DETERMINED BY SUCH FRONTING BANK AND THE APPLICABLE
AGENT, EQUAL TO THE FACE AMOUNT OF ALL OUTSTANDING LETTERS OF CREDIT ISSUED BY
SUCH FRONTING BANK PLUS THE SUM OF ALL PROJECTED CONTRACTUAL OBLIGATIONS TO THE
APPLICABLE AGENT, SUCH FRONTING BANK AND THE LENDERS OF THE BORROWERS THEREUNDER
THROUGH THE EXPIRATION DATE(S) OF SUCH LETTERS OF CREDIT, AND (B) 105% OF THE
THEN LETTER OF CREDIT OUTSTANDINGS WITH RESPECT TO LETTERS OF CREDIT ISSUED BY
SUCH FRONTING BANK OR (Y) SOLELY WITH RESPECT TO LETTERS OF CREDIT SCHEDULED TO
EXPIRE ON OR BEFORE THE DATE THAT IS NINETY (90) DAYS AFTER THE TERMINATION
DATE, DEPOSIT CASH IN THE LETTER OF CREDIT ACCOUNT OR CANADIAN LETTER OF CREDIT
ACCOUNT, AS THE CASE MAY BE, IN AN AMOUNT WHICH, TOGETHER WITH ANY AMOUNTS THEN
HELD IN THE LETTER OF CREDIT ACCOUNT OR THE CANADIAN LETTER OF CREDIT ACCOUNT,
AS THE CASE MAY BE, IS EQUAL TO THE GREATER OF (A) AN AMOUNT, AS DETERMINED BY
THE FRONTING BANKS AND THE APPLICABLE AGENT, EQUAL TO THE FACE AMOUNT OF ALL
OUTSTANDING LETTERS OF CREDIT PLUS THE SUM OF ALL PROJECTED CONTRACTUAL
OBLIGATIONS TO THE APPLICABLE AGENT, THE FRONTING BANKS AND THE LENDERS OF THE
BORROWERS THEREUNDER THROUGH THE EXPIRATION DATE(S) OF SUCH LETTERS OF CREDIT,
AND (B) 105% OF THE THEN LETTER OF CREDIT OUTSTANDINGS AS COLLATERAL SECURITY
FOR THE BORROWERS’ REIMBURSEMENT OBLIGATIONS IN CONNECTION THEREWITH, SUCH CASH
TO BE REMITTED TO THE BORROWERS UPON THE EXPIRATION, CANCELLATION OR OTHER
TERMINATION OR SATISFACTION OF SUCH REIMBURSEMENT OBLIGATIONS.

 

(D)           THE BORROWERS SHALL PAY TO EACH FRONTING BANK, IN ADDITION TO SUCH
OTHER FEES AND CHARGES AS ARE SPECIFICALLY PROVIDED FOR IN SECTION 2.22 HEREOF,
SUCH FEES AND CHARGES IN CONNECTION WITH THE ISSUANCE AND PROCESSING OF THE
LETTERS OF CREDIT ISSUED BY SUCH FRONTING BANK AS ARE CUSTOMARILY IMPOSED BY
SUCH FRONTING BANK FROM TIME TO TIME IN CONNECTION WITH LETTER OF CREDIT
TRANSACTIONS.

 

(E)           DRAFTS DRAWN UNDER EACH LETTER OF CREDIT (I) SHALL BE REIMBURSED
BY THE APPLICABLE BORROWER IN THE SAME CURRENCY AS WHICH SUCH DRAW WAS PAID ON
THE BUSINESS DAY IMMEDIATELY FOLLOWING THE DAY SUCH BORROWER RECEIVED NOTICE
FROM THE APPLICABLE FRONTING BANK THAT PAYMENT OF SUCH DRAFT WILL BE MADE,
PROVIDED, THAT IF SUCH BORROWER SHALL HAVE RECEIVED SUCH NOTICE THEREOF PRIOR TO
10:00 A.M., NEW YORK TIME, ON THE DATE SUCH DRAFT WAS DRAWN, SUCH BORROWER SHALL
EFFECT REIMBURSEMENT ON THE SAME BUSINESS DAY AS SUCH BORROWER RECEIVED NOTICE
THEREOF, AND, (II)(A) WITH RESPECT TO LETTERS OF CREDIT DENOMINATED IN DOLLARS,
SHALL BEAR INTEREST FROM THE DATE OF DRAW UNTIL THE FIRST BUSINESS DAY FOLLOWING
THE DATE OF DRAW AT A RATE PER ANNUM EQUAL TO THE ALTERNATE BASE RATE PLUS THE
APPLICABLE MARGIN AND THEREAFTER UNTIL REIMBURSED IN FULL AT A RATE PER ANNUM
EQUAL TO THE ALTERNATE BASE RATE PLUS THE APPLICABLE MARGIN PLUS 2.0%, AND
(B) WITH RESPECT TO LETTERS OF CREDIT DENOMINATED IN CANADIAN DOLLARS, SHALL
BEAR INTEREST FROM THE DATE OF DRAW UNTIL THE FIRST BUSINESS DAY FOLLOWING THE
DATE OF DRAW AT A RATE PER ANNUM EQUAL TO THE CANADIAN PRIME RATE PLUS THE
APPLICABLE MARGIN AND THEREAFTER UNTIL REIMBURSED IN FULL AT A RATE PER ANNUM
EQUAL TO THE CANADIAN PRIME RATE PLUS THE APPLICABLE MARGIN PLUS 2.0% (COMPUTED
ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED OVER A YEAR OF 360 DAYS).  IN
THE CASE OF DRAFTS DRAWN ON ANY U.S. REVOLVING FACILITY LETTER OF CREDIT, THE
U.S. BORROWER SHALL EFFECT SUCH REIMBURSEMENT (X) IF SUCH DRAW OCCURS PRIOR TO
THE TERMINATION DATE (OR THE EARLIER DATE OF TERMINATION OF THE U.S. TRANCHE B
REVOLVING COMMITMENT), IN CASH OR THROUGH A BORROWING OF U.S. TRANCHE B
REVOLVING LOANS WITHOUT THE SATISFACTION OF THE

 

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CONDITIONS PRECEDENT SET FORTH IN SECTION 4.2 OR (Y) IF SUCH DRAW OCCURS ON OR
AFTER THE TERMINATION DATE (OR THE EARLIER DATE OF TERMINATION OF THE U.S.
TRANCHE B REVOLVING COMMITMENT), IN CASH.  EACH U.S. TRANCHE B REVOLVING LENDER
AGREES TO MAKE THE U.S. TRANCHE B REVOLVING LOANS DESCRIBED IN CLAUSE (X) OF THE
PRECEDING SENTENCE NOTWITHSTANDING A FAILURE TO SATISFY THE APPLICABLE LENDING
CONDITIONS THERETO OR THE PROVISIONS OF SECTION 2.33.  IN THE CASE OF DRAFTS
DRAWN ON ANY CANADIAN REVOLVING FACILITY LETTER OF CREDIT, THE CANADIAN BORROWER
SHALL EFFECT SUCH REIMBURSEMENT (X) IF SUCH DRAW OCCURS PRIOR TO THE TERMINATION
DATE (OR THE EARLIER DATE OF TERMINATION OF THE CANADIAN REVOLVING COMMITMENT),
IN CASH OR THROUGH A BORROWING OF CANADIAN REVOLVING LOANS WITHOUT THE
SATISFACTION OF THE CONDITIONS PRECEDENT SET FORTH IN SECTION 4.2 OR (Y) IF SUCH
DRAW OCCURS ON OR AFTER THE TERMINATION DATE (OR THE EARLIER DATE OF TERMINATION
OF THE CANADIAN REVOLVING COMMITMENT), IN CASH.  EACH CANADIAN REVOLVING LENDER
AGREES TO MAKE THE CANADIAN REVOLVING LOANS DESCRIBED IN CLAUSE (X) OF THE
PRECEDING SENTENCE NOTWITHSTANDING A FAILURE TO SATISFY THE APPLICABLE LENDING
CONDITIONS THERETO OR THE PROVISIONS OF SECTION 2.33.

 

(F)            IMMEDIATELY UPON THE ISSUANCE OF ANY LETTER OF CREDIT BY ANY
FRONTING BANK, SUCH FRONTING BANK SHALL BE DEEMED TO HAVE SOLD TO EACH CANADIAN
REVOLVING LENDER OR U.S. TRANCHE B REVOLVING LENDER, AS THE CASE MAY BE, OTHER
THAN SUCH FRONTING BANK, AND EACH SUCH OTHER LENDER SHALL BE DEEMED
UNCONDITIONALLY AND IRREVOCABLY TO HAVE PURCHASED FROM SUCH FRONTING BANK,
WITHOUT RECOURSE OR WARRANTY, AN UNDIVIDED INTEREST AND PARTICIPATION, TO THE
EXTENT OF SUCH LENDER’S APPLICABLE PERCENTAGE, IN SUCH LETTER OF CREDIT, EACH
DRAWING THEREUNDER AND THE OBLIGATIONS OF THE BORROWERS UNDER THIS AGREEMENT
WITH RESPECT THERETO.  UPON ANY CHANGE IN THE COMMITMENTS PURSUANT TO
SECTION 2.11, SECTION 2.14, SECTION 2.15, SECTION 9.3 OR ARTICLE 11, IT IS
HEREBY AGREED THAT WITH RESPECT TO ALL LETTER OF CREDIT OUTSTANDINGS, THERE
SHALL BE AN AUTOMATIC ADJUSTMENT TO THE PARTICIPATIONS HEREBY CREATED TO REFLECT
THE NEW APPLICABLE PERCENTAGES OF THE ASSIGNING AND ASSIGNEE LENDERS.  ANY
ACTION TAKEN OR OMITTED BY A FRONTING BANK UNDER OR IN CONNECTION WITH A LETTER
OF CREDIT, IF TAKEN OR OMITTED IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, SHALL NOT CREATE FOR SUCH FRONTING BANK ANY RESULTING LIABILITY TO
ANY OTHER LENDER.

 

(G)           IN THE EVENT THAT A FRONTING BANK MAKES ANY PAYMENT UNDER ANY U.S.
REVOLVING FACILITY LETTER OF CREDIT AND THE U.S. BORROWER SHALL NOT HAVE
REIMBURSED SUCH AMOUNT IN FULL TO SUCH FRONTING BANK PURSUANT TO THIS SECTION,
THE APPLICABLE FRONTING BANK SHALL PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT,
WHICH SHALL PROMPTLY NOTIFY EACH U.S. TRANCHE B REVOLVING LENDER OF SUCH
FAILURE, AND EACH U.S. TRANCHE B REVOLVING LENDER SHALL PROMPTLY AND
UNCONDITIONALLY PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE
APPLICABLE FRONTING BANK THE AMOUNT OF SUCH LENDER’S APPLICABLE PERCENTAGE OF
SUCH UNREIMBURSED PAYMENT IN DOLLARS AND IN SAME DAY FUNDS.  IN THE EVENT THAT A
FRONTING BANK MAKES ANY PAYMENT UNDER ANY CANADIAN REVOLVING FACILITY LETTER OF
CREDIT AND THE CANADIAN BORROWER SHALL NOT HAVE REIMBURSED SUCH AMOUNT IN FULL
TO SUCH FRONTING BANK PURSUANT TO THIS SECTION, THE APPLICABLE FRONTING BANK
SHALL PROMPTLY NOTIFY THE CANADIAN ADMINISTRATIVE AGENT, WHICH SHALL PROMPTLY
NOTIFY EACH CANADIAN REVOLVING LENDER OF SUCH FAILURE, AND EACH CANADIAN
REVOLVING LENDER SHALL PROMPTLY AND UNCONDITIONALLY PAY TO THE CANADIAN
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE APPLICABLE FRONTING BANK THE AMOUNT
OF SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH UNREIMBURSED PAYMENT IN DOLLARS
(OR IN RESPECT OF A CANADIAN REVOLVING FACILITY LETTER OF CREDIT DENOMINATED IN
CANADIAN DOLLARS, IN CANADIAN DOLLARS) AND IN SAME DAY FUNDS.  IF THE APPLICABLE
FRONTING BANK SO NOTIFIES THE APPLICABLE AGENT, AND THE APPLICABLE AGENT SO
NOTIFIES THE U.S.

 

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TRANCHE B REVOLVING LENDERS OR THE CANADIAN REVOLVING LENDERS, AS THE CASE MAY
BE, PRIOR TO 11:00 A.M. (NEW YORK CITY TIME) ON ANY BUSINESS DAY, SUCH LENDERS
SHALL MAKE AVAILABLE TO THE APPLICABLE FRONTING BANK SUCH LENDER’S APPLICABLE
PERCENTAGE OF THE AMOUNT OF SUCH PAYMENT ON SUCH BUSINESS DAY IN SAME DAY
FUNDS.  IF AND TO THE EXTENT SUCH LENDER SHALL NOT HAVE SO MADE ITS APPLICABLE
PERCENTAGE OF THE AMOUNT OF SUCH PAYMENT AVAILABLE TO THE APPLICABLE FRONTING
BANK, SUCH LENDER AGREES TO PAY TO SUCH FRONTING BANK, FORTHWITH ON DEMAND SUCH
AMOUNT, TOGETHER WITH INTEREST THEREON, FOR EACH DAY FROM SUCH DATE UNTIL THE
DATE SUCH AMOUNT IS PAID TO THE APPLICABLE AGENT FOR THE ACCOUNT OF SUCH
FRONTING BANK AT THE FEDERAL FUNDS EFFECTIVE RATE.  THE FAILURE OF ANY LENDER TO
MAKE AVAILABLE TO THE APPLICABLE FRONTING BANK ITS APPLICABLE PERCENTAGE OF ANY
PAYMENT UNDER ANY LETTER OF CREDIT SHALL NOT RELIEVE ANY OTHER LENDER OF ITS
OBLIGATION HEREUNDER TO MAKE AVAILABLE TO THE APPLICABLE FRONTING BANK ITS
APPLICABLE PERCENTAGE OF ANY PAYMENT UNDER ANY LETTER OF CREDIT ON THE DATE
REQUIRED, AS SPECIFIED ABOVE, BUT NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE
OF ANY OTHER LENDER TO MAKE AVAILABLE TO SUCH FRONTING BANK SUCH OTHER LENDER’S
APPLICABLE PERCENTAGE OF ANY SUCH PAYMENT.  WHENEVER A FRONTING BANK RECEIVES A
PAYMENT OF A REIMBURSEMENT OBLIGATION AS TO WHICH IT HAS RECEIVED ANY PAYMENTS
FROM THE LENDERS PURSUANT TO THIS PARAGRAPH, SUCH FRONTING BANK SHALL PAY TO
EACH LENDER WHICH HAS PAID ITS APPLICABLE PERCENTAGE THEREOF, IN DOLLARS OR
CANADIAN DOLLARS, AS APPLICABLE, AND IN SAME DAY FUNDS, AN AMOUNT EQUAL TO SUCH
LENDER’S APPLICABLE PERCENTAGE THEREOF.

 

(H)           UNLESS OTHERWISE REQUESTED BY THE APPLICABLE AGENT, EACH FRONTING
BANK SHALL REPORT IN WRITING TO THE APPLICABLE AGENT (I) ON THE FIRST BUSINESS
DAY OF EACH WEEK, THE DAILY ACTIVITY (SET FORTH BY DAY) IN RESPECT OF LETTERS OF
CREDIT DURING THE IMMEDIATELY PRECEDING WEEK, INCLUDING ALL ISSUANCES,
EXTENSIONS, AMENDMENTS AND RENEWALS, ALL EXPIRATIONS AND CANCELLATIONS AND ALL
DISBURSEMENTS AND REIMBURSEMENTS, (II) ON OR PRIOR TO EACH BUSINESS DAY ON WHICH
SUCH FRONTING BANK EXPECTS TO ISSUE, AMEND, RENEW OR EXTEND ANY LETTER OF
CREDIT, THE DATE OF SUCH ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION AND THE
AGGREGATE FACE AMOUNT OF THE LETTERS OF CREDIT TO BE ISSUED, AMENDED, RENEWED OR
EXTENDED BY IT AND OUTSTANDING AFTER GIVING EFFECT TO SUCH ISSUANCE, AMENDMENT,
RENEWAL OR EXTENSION (AND WHETHER THE AMOUNT THEREOF CHANGED), IT BEING
UNDERSTOOD THAT SUCH FRONTING BANK SHALL NOT PERMIT ANY ISSUANCE, RENEWAL,
EXTENSION OR AMENDMENT RESULTING IN AN INCREASE IN THE AMOUNT OF A LETTER OF
CREDIT TO OCCUR WITHOUT FIRST OBTAINING WRITTEN CONFIRMATION FROM THE APPLICABLE
AGENT THAT IT IS THEN PERMITTED UNDER THIS AGREEMENT, (III) ON EACH BUSINESS DAY
ON WHICH SUCH FRONTING BANK MAKES ANY PAYMENT UNDER ANY LETTER OF CREDIT, THE
DATE OF SUCH PAYMENT AND THE AMOUNT AND CURRENCY OF SUCH PAYMENT, (IV) ON ANY
BUSINESS DAY ON WHICH A BORROWER FAILS TO REIMBURSE A PAYMENT UNDER A LETTER OF
CREDIT REQUIRED TO BE REIMBURSED TO SUCH FRONTING BANK ON SUCH DAY, THE DATE OF
SUCH FAILURE, THE APPLICABLE BORROWER AND THE AMOUNT AND CURRENCY OF SUCH LETTER
OF CREDIT PAYMENT AND (V) ON ANY OTHER BUSINESS DAY, SUCH OTHER INFORMATION AS
THE APPLICABLE AGENT SHALL REASONABLY REQUEST.

 

Section 2.5            Issuance.  Whenever a Borrower desires a Fronting Bank to
issue a Letter of Credit, it shall give to such Fronting Bank and the Applicable
Agent at least three (3) Business Days’ prior written (including facsimile
communication) notice (or such shorter period as may be agreed upon by the
Applicable Agent, the Borrowers and such Fronting Bank) specifying the date on
which the proposed Letter of Credit is to be issued (which shall be a Business
Day), the stated amount and currency of the Letter of Credit so requested, the
expiration date of such Letter of Credit and the name and address of the
beneficiary thereof.

 

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Section 2.6            Nature of Letter of Credit Obligations Absolute.  The
obligations of the Borrowers to reimburse the Lenders and Fronting Banks for
drawings made under any Letter of Credit shall be unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including, without limitation:  (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim, setoff,
defense or other right which any Borrower may have at any time against a
beneficiary of any Letter of Credit or against any of the Lenders or Fronting
Banks, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction; (iii) any draft, demand, certificate or
other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; (iv) payment by a Fronting Bank of
any Letter of Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of Credit;
(v) any other circumstance or happening whatsoever, which is similar to any of
the foregoing; or (vi) the fact that any Event of Default shall have occurred
and be continuing; provided, that such circumstance or event shall not have been
the result of the gross negligence or willful misconduct of the applicable
Fronting Bank.

 

Section 2.7            Making of Loans and Disbursements.

 

(A)           EXCEPT AS CONTEMPLATED BY SECTION 2.12, LOANS DENOMINATED IN
DOLLARS SHALL BE EITHER ABR LOANS OR EURODOLLAR LOANS AND LOANS DENOMINATED IN
CANADIAN DOLLARS SHALL BE EITHER CANADIAN PRIME RATE LOANS OR DISCOUNT RATE
LOANS, IN EACH CASE AS THE BORROWERS MAY REQUEST SUBJECT TO AND IN ACCORDANCE
WITH THIS SECTION, PROVIDED THAT ALL LOANS MADE PURSUANT TO THE SAME BORROWING
SHALL, UNLESS OTHERWISE SPECIFICALLY PROVIDED HEREIN, BE LOANS OF THE SAME TYPE
AND IN THE SAME CURRENCY.  EACH LENDER MAY FULFILL ITS COMMITMENT WITH RESPECT
TO ANY EURODOLLAR LOAN OR ABR LOAN BY CAUSING ANY LENDING OFFICE OF SUCH LENDER
TO MAKE SUCH LOAN; PROVIDED THAT ANY SUCH USE OF A LENDING OFFICE SHALL NOT
AFFECT THE OBLIGATION OF THE APPLICABLE BORROWER TO REPAY SUCH LOAN IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.  EACH LENDER SHALL, SUBJECT TO ITS
OVERALL POLICY CONSIDERATIONS, USE REASONABLE EFFORTS (BUT SHALL NOT BE
OBLIGATED) TO SELECT A LENDING OFFICE WHICH WILL NOT RESULT IN THE PAYMENT OF
INCREASED COSTS BY THE BORROWERS PURSUANT TO SECTION 2.16 OR SECTION 2.19,
PROVIDED THAT A LENDER’S SELECTION OF A LENDING OFFICE SHALL HAVE NO EFFECT ON
THE OBLIGATIONS OF ANY LOAN PARTY PURSUANT TO SECTION 2.16 OR SECTION 2.19. 
SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION AND THE PROVISIONS OF
SECTION 2.13, BORROWINGS OF LOANS OF MORE THAN ONE TYPE MAY BE INCURRED AT THE
SAME TIME, PROVIDED THAT NO MORE THAN TEN (10) BORROWINGS OF EURODOLLAR LOANS
AND DISCOUNT RATE LOANS MAY BE OUTSTANDING AT ANY TIME.  ALL U.S. REVOLVING
LOANS OUTSTANDING UNDER THE PRIOR AGREEMENT AS OF THE AMENDED AND RESTATED
EFFECTIVE DATE SHALL BE DEEMED TO BE U.S. TRANCHE A REVOLVING LOANS AND
ALLOCATED AMONG THE U.S. TRANCHE A REVOLVING LENDERS IN ACCORDANCE WITH THEIR
APPLICABLE PERCENTAGES AS OF THE AMENDED AND RESTATED EFFECTIVE DATE.  ALL OTHER
LOANS OUTSTANDING UNDER THE PRIOR AGREEMENT AS OF THE AMENDED AND RESTATED
EFFECTIVE DATE SHALL BE DEEMED TO BE LOANS OF THE SAME CLASS UNDER THIS
AGREEMENT AND ALLOCATED AMONG THE LENDERS OF EACH APPLICABLE CLASS IN ACCORDANCE
WITH THEIR APPLICABLE PERCENTAGES AS OF THE AMENDED AND RESTATED EFFECTIVE DATE.

 

(B)           THE APPLICABLE BORROWER SHALL GIVE THE APPLICABLE AGENT (WITH A
SIMULTANEOUS COPY TO THE ADMINISTRATIVE AGENT IF THE ADMINISTRATIVE AGENT IS NOT
THE APPLICABLE AGENT) PRIOR WRITTEN, FACSIMILE OR TELEPHONIC (CONFIRMED PROMPTLY
IN WRITING) NOTICE OF EACH

 

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BORROWING OF REVOLVING LOANS HEREUNDER OF AT LEAST THREE (3) BUSINESS DAYS PRIOR
TO A BORROWING OF EURODOLLAR LOANS AND DISCOUNT RATE LOANS AND, TO THE EXTENT
PRACTICAL, ONE (1) BUSINESS DAY FOR ABR LOANS AND CANADIAN PRIME RATE LOANS,
OTHERWISE SUCH ABR LOANS AND CANADIAN PRIME RATE LOANS MAY BE BORROWED ON THE
BUSINESS DAY ON WHICH SUCH BORROWER GIVES SUCH NOTICE; SUCH NOTICE SHALL BE
IRREVOCABLE AND SHALL SPECIFY THE FOLLOWING INFORMATION:

 

(I)            THE BORROWER REQUESTING SUCH BORROWING;

 

(II)           THE TYPE (E.G., DISCOUNT RATE, CANADIAN PRIME RATE, EURODOLLAR OR
ABR) OF SUCH BORROWING;

 

(III)          THE CLASS (E.G., CANADIAN REVOLVING LOAN, U.S. TRANCHE A
REVOLVING LOAN OR U.S. TRANCHE B REVOLVING LOAN) OF SUCH BORROWING;

 

(IV)          THE AMOUNT AND CURRENCY OF SUCH BORROWING (WHICH SHALL NOT (A) IN
THE CASE OF DOLLAR-DENOMINATED REVOLVING LOANS, BE LESS THAN US$1,000,000 OR ANY
INTEGRAL MULTIPLE OF US$1,000,000 IN EXCESS OF SUCH MINIMUM AMOUNT, OR (B) IN
THE CASE OF CANADIAN DOLLAR-DENOMINATED REVOLVING LOANS, BE LESS THAN
C$1,000,000 OR ANY INTEGRAL MULTIPLE OF C$1,000,000 IN EXCESS OF SUCH MINIMUM
AMOUNT);

 

(V)           THE DATE OF SUCH BORROWING (WHICH SHALL BE A BUSINESS DAY);

 

(VI)          IN THE CASE OF A EURODOLLAR LOAN, THE INTEREST PERIOD WITH RESPECT
THERETO;

 

(VII)         IN THE CASE OF A DISCOUNT RATE LOAN, THE CONTRACT PERIOD WITH
RESPECT THERETO; AND

 

(VIII)        THE NUMBER AND LOCATION OF THE ACCOUNT TO WHICH FUNDS ARE TO BE
DISBURSED.

 

SUCH NOTICE, TO BE EFFECTIVE, MUST BE RECEIVED BY THE APPLICABLE AGENT (AND THE
ADMINISTRATIVE AGENT IF THE ADMINISTRATIVE AGENT IS NOT THE APPLICABLE AGENT)
NOT LATER THAN 10:00 A.M., NEW YORK CITY TIME, ON THE THIRD (3RD) BUSINESS DAY
PRECEDING THE DATE ON WHICH SUCH BORROWING IS TO BE MADE IN THE CASE OF
EURODOLLAR LOANS OR DISCOUNT RATE LOANS AND NOT LATER THAN 12:00 NOON, NEW YORK
CITY TIME, ON THE SAME BUSINESS DAY AS THE DATE OF SUCH BORROWING IN THE CASE OF
ABR LOANS AND CANADIAN PRIME RATE LOANS.  IF NO ELECTION IS MADE AS TO THE TYPE
OF A U.S. REVOLVING LOAN OR CANADIAN REVOLVING LOAN DENOMINATED IN DOLLARS, SUCH
NOTICE SHALL BE DEEMED A REQUEST FOR BORROWING OF ABR LOANS.  IF NO ELECTION IS
MADE AS TO THE TYPE OF A CANADIAN REVOLVING LOAN DENOMINATED IN CANADIAN
DOLLARS, SUCH NOTICE SHALL BE DEEMED A REQUEST FOR BORROWING OF CANADIAN PRIME
RATE LOANS.  IF THE BORROWING IS A REQUEST FOR A EURODOLLAR LOAN AND NO ELECTION
IS MADE AS TO THE INTEREST PERIOD, SUCH NOTICE SHALL BE DEEMED TO HAVE REQUESTED
AN INTEREST PERIOD OF ONE MONTH’S DURATION.  IF THE BORROWING IS A REQUEST FOR A
DISCOUNT RATE LOAN AND NO ELECTION IS MADE AS TO THE CONTRACT PERIOD, SUCH
NOTICE SHALL BE DEEMED TO HAVE REQUESTED A CONTRACT PERIOD OF ONE MONTH’S
DURATION.  IF NO ELECTION IS MADE AS

 

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TO THE CURRENCY OF A LOAN, SUCH NOTICE SHALL BE DEEMED A REQUEST FOR BORROWING
OF DOLLARS.  THE APPLICABLE AGENT SHALL PROMPTLY NOTIFY EACH REVOLVING LENDER OF
ITS APPLICABLE PERCENTAGE OF SUCH BORROWING, THE DATE OF SUCH BORROWING, THE
TYPE AND CLASS OF BORROWING OR LOANS BEING REQUESTED, THE INTEREST PERIOD OR
INTEREST PERIODS APPLICABLE THERETO AND THE CONTRACT PERIOD OR CONTRACT PERIODS
APPLICABLE THERETO, AS APPROPRIATE.  ON THE BORROWING DATE SPECIFIED IN SUCH
NOTICE, EACH REVOLVING LENDER SHALL MAKE ITS SHARE OF BORROWINGS OF ABR RATE
LOANS OR CANADIAN PRIME RATE LOANS AVAILABLE TO THE APPLICABLE AGENT AT ITS
OFFICE MOST RECENTLY DESIGNATED FOR SUCH PURPOSE IN A NOTICE TO THE LENDERS, NO
LATER THAN 3:00 P.M., NEW YORK CITY TIME, AND ITS SHARE OF BORROWINGS OF
EURODOLLAR LOANS OR DISCOUNT RATE LOANS AVAILABLE AT THE OFFICE OF THE
APPLICABLE AGENT AT ITS OFFICE MOST RECENTLY DESIGNATED FOR SUCH PURPOSE IN A
NOTICE TO THE LENDERS, NO LATER THAN NO LATER THAN 1:00 P.M., NEW YORK CITY
TIME, IN EACH CASE IN IMMEDIATELY AVAILABLE FUNDS.  UPON RECEIPT OF THE FUNDS
MADE AVAILABLE BY THE LENDERS TO FUND ANY BORROWING HEREUNDER, THE APPLICABLE
AGENT SHALL DISBURSE SUCH FUNDS IN THE MANNER SPECIFIED IN THE NOTICE OF
BORROWING DELIVERED BY THE BORROWERS.

 

(C)           THE U.S. BORROWER SHALL BORROW THE ENTIRE PRINCIPAL AMOUNT OF THE
U.S. TERM LOANS ON THE CLOSING DATE AND THE PROCEEDS OF SUCH BORROWING SHALL BE
DISBURSED AS FOLLOWS: (X) AN AMOUNT EQUAL TO THE EXCESS OF THE U.S. TERM LOANS
OVER THE THEN CURRENT U.S. BORROWING BASE SHALL BE DEPOSITED IN THE U.S. TERM
LOAN COLLATERAL ACCOUNT, (Y) THE AMOUNT REQUESTED BY THE U.S. BORROWER TO BE
USED IN AMOUNTS AND FOR PURPOSES CONSISTENT WITH THE BUDGET DELIVERED TO THE
ADMINISTRATIVE AGENT ON OR PRIOR TO THE CLOSING DATE SHALL BE DISBURSED TO THE
U.S. BORROWER AND (Z) THE REMAINDER OF SUCH BORROWING SHALL BE DEPOSITED IN THE
U.S. INVESTMENT ACCOUNT.  THE U.S. BORROWER SHALL GIVE THE ADMINISTRATIVE AGENT
AT LEAST THREE (3) BUSINESS DAYS’ PRIOR WRITTEN, FACSIMILE OR TELEPHONIC
(CONFIRMED PROMPTLY IN WRITING) NOTICE THAT IT IS BORROWING THE U.S. TERM LOANS
ON THE CLOSING DATE; SUCH NOTICE SHALL SPECIFY THE FOLLOWING INFORMATION:

 

(I)            THE TYPE (E.G., EURODOLLAR OR ABR ) OF SUCH BORROWING;

 

(II)           IN THE CASE OF A EURODOLLAR LOAN, THE INTEREST PERIOD WITH
RESPECT THERETO;

 

(III)          THE AMOUNT OF SUCH BORROWING TO BE DEPOSITED IN THE U.S. TERM
LOAN COLLATERAL ACCOUNT PURSUANT TO CLAUSE (X) OF THE FIRST SENTENCE OF THIS
SECTION 2.7(C);

 

(IV)          THE AMOUNT OF SUCH BORROWING TO BE DISBURSED TO THE U.S. BORROWER
PURSUANT TO CLAUSE (Y) OF THE FIRST SENTENCE OF THIS SECTION 2.7(C);

 

(V)           THE AMOUNT OF SUCH BORROWING TO BE DEPOSITED IN THE U.S.
INVESTMENT ACCOUNT PURSUANT TO CLAUSE (Z) OF THE FIRST SENTENCE OF THIS
SECTION 2.7(C); AND

 

(VI)          SUCH OTHER INSTRUCTIONS AS THE ADMINISTRATIVE AGENT MAY REQUIRE.

 

IF NO ELECTION IS MADE AS TO THE TYPE OF LOAN, SUCH NOTICE SHALL BE DEEMED A
REQUEST FOR BORROWING OF ABR LOANS.  IF THE BORROWING IS A REQUEST FOR A
EURODOLLAR LOAN AND NO ELECTION IS

 

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MADE AS TO THE INTEREST PERIOD, SUCH NOTICE SHALL BE DEEMED TO HAVE REQUESTED AN
INTEREST PERIOD OF ONE MONTH’S DURATION.  THE ADMINISTRATIVE AGENT SHALL
PROMPTLY NOTIFY EACH U.S. TERM LOAN LENDER OF ITS APPLICABLE PERCENTAGE OF SUCH
BORROWING, THE TYPE OF BORROWING BEING REQUESTED AND THE INTEREST PERIOD OR
INTEREST PERIODS APPLICABLE THERETO, AS APPROPRIATE.  ON THE CLOSING DATE, EACH
U.S. TERM LOAN LENDER SHALL MAKE ITS SHARE OF THE U.S. TERM LOANS AVAILABLE TO
THE ADMINISTRATIVE AGENT AT ITS OFFICE MOST RECENTLY DESIGNATED FOR SUCH PURPOSE
IN A NOTICE TO THE LENDERS, NO LATER THAN 12:00 NOON, NEW YORK CITY TIME, IN
IMMEDIATELY AVAILABLE FUNDS.  UPON RECEIPT OF THE FUNDS MADE AVAILABLE BY THE
U.S. TERM LOAN LENDERS TO FUND THE U.S. TERM LOANS HEREUNDER, THE ADMINISTRATIVE
AGENT SHALL DISBURSE SUCH FUNDS IN THE MANNER SPECIFIED IN THE NOTICE OF
BORROWING DELIVERED BY THE U.S. BORROWER.  AFTER THE CLOSING DATE, ONE
(1) BUSINESS DAY AFTER THE ADMINISTRATIVE AGENT’S RECEIPT OF (I) A BORROWING
BASE CERTIFICATE DEMONSTRATING TO THE ADMINISTRATIVE AGENT’S SATISFACTION THAT
THE THEN U.S. BORROWING BASE EXCEEDS THE AMOUNT OF THE TOTAL U.S. OUTSTANDINGS,
(II) SUCH WRITTEN DISBURSEMENT INSTRUCTIONS AS THE ADMINISTRATIVE AGENT MAY
REQUIRE AND (III) A CERTIFICATION FROM A FINANCIAL OFFICER OF THE U.S. BORROWER
THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, THE
ADMINISTRATIVE AGENT SHALL DISBURSE AN AMOUNT NOT TO EXCEED THE AMOUNT BY WHICH
THE U.S. BORROWING BASE EXCEEDS THE TOTAL U.S. OUTSTANDINGS FROM THE U.S. TERM
LOAN COLLATERAL ACCOUNT (INCLUDING AMOUNTS DEPOSITED THEREIN PURSUANT TO THIS
PARAGRAPH (C) OR SECTION 2.14(A)) TO THE U.S. INVESTMENT ACCOUNT.  UPON THE
ADMINISTRATIVE AGENT’S RECEIPT FROM THE U.S. BORROWER OF SUCH WRITTEN
DISBURSEMENT INSTRUCTIONS AS THE ADMINISTRATIVE AGENT MAY REQUIRE, THE
ADMINISTRATIVE AGENT SHALL PERMIT THE U.S. BORROWER TO WITHDRAW FROM THE U.S.
INVESTMENT ACCOUNT SUCH AMOUNT AS THE U.S. BORROWER SHALL REQUEST.  IF, AS OF
THE END OF THE THIRD (3RD) BUSINESS DAY FOLLOWING ANY SUCH WITHDRAWAL, THE
AVAILABLE CASH (EXCLUDING AMOUNTS ON DEPOSIT IN THE INVESTMENT ACCOUNTS) SHALL
EXCEED US$50,000,000, THE U.S. BORROWER SHALL MAKE A DEPOSIT TO THE U.S.
INVESTMENT ACCOUNT ON THE FOLLOWING BUSINESS DAY IN AN AMOUNT WHICH, WHEN
AGGREGATED WITH THE AMOUNT DEPOSITED IN THE CANADIAN INVESTMENT ACCOUNT ON SUCH
DAY, SHALL BE EQUAL TO SUCH EXCESS. THE U.S. INVESTMENT ACCOUNT SHALL BE CLOSED
AND THE CASH DEPOSITED THEREIN SHALL BE DISBURSED TO THE U.S. BORROWER ON THE
EARLIER OF (X) THE RECEIVABLES SECURITIZATION TERMINATION DATE AND (Y) SIXTY
(60) DAYS AFTER THE CLOSING DATE.

 

(D)           THE CANADIAN BORROWER SHALL BORROW THE ENTIRE PRINCIPAL AMOUNT OF
THE CANADIAN TERM LOANS ON THE CLOSING DATE AND THE PROCEEDS OF SUCH BORROWING
SHALL BE DISBURSED AS FOLLOWS: (X) AN AMOUNT EQUAL TO THE EXCESS OF THE CANADIAN
TERM LOANS OVER THE THEN CURRENT CANADIAN BORROWING BASE SHALL BE DEPOSITED IN
THE CANADIAN TERM LOAN COLLATERAL ACCOUNT, (Y) THE AMOUNT REQUESTED BY THE
CANADIAN BORROWER TO BE USED IN AMOUNTS AND FOR PURPOSES CONSISTENT WITH THE
BUDGET DELIVERED TO THE ADMINISTRATIVE AGENT ON OR PRIOR TO THE CLOSING DATE
SHALL BE DISBURSED TO THE CANADIAN BORROWER AND (Z) THE REMAINDER OF SUCH
BORROWING SHALL BE DEPOSITED IN THE CANADIAN INVESTMENT ACCOUNT.  THE CANADIAN
BORROWER SHALL GIVE THE CANADIAN ADMINISTRATIVE AGENT AT LEAST THREE
(3) BUSINESS DAYS’ PRIOR WRITTEN, FACSIMILE OR TELEPHONIC (CONFIRMED PROMPTLY IN
WRITING) NOTICE THAT IT IS BORROWING THE CANADIAN TERM LOANS ON THE CLOSING
DATE; SUCH NOTICE SHALL SPECIFY THE FOLLOWING INFORMATION:

 

(I)            THE TYPE (E.G., EURODOLLAR OR ABR ) OF SUCH BORROWING;

 

(II)           IN THE CASE OF A EURODOLLAR LOAN, THE INTEREST PERIOD WITH
RESPECT THERETO;

 

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(III)          THE AMOUNT OF SUCH BORROWING TO BE DEPOSITED IN THE CANADIAN TERM
LOAN COLLATERAL ACCOUNT PURSUANT TO CLAUSE (X) OF THE FIRST SENTENCE OF THIS
SECTION 2.7(D);

 

(IV)          THE AMOUNT OF SUCH BORROWING TO BE DISBURSED TO THE CANADIAN
BORROWER PURSUANT TO CLAUSE (Y) OF THE FIRST SENTENCE OF THIS SECTION 2.7(D);

 

(V)           THE AMOUNT OF SUCH BORROWING TO BE DEPOSITED IN THE CANADIAN
INVESTMENT ACCOUNT PURSUANT TO CLAUSE (Z) OF THE FIRST SENTENCE OF THIS
SECTION 2.7(D); AND

 

(VI)          SUCH OTHER INSTRUCTIONS AS THE CANADIAN ADMINISTRATIVE AGENT MAY
REQUIRE.

 

IF NO ELECTION IS MADE AS TO THE TYPE OF LOAN, SUCH NOTICE SHALL BE DEEMED A
REQUEST FOR BORROWING OF ABR LOANS.  IF THE BORROWING IS A REQUEST FOR A
EURODOLLAR LOAN AND NO ELECTION IS MADE AS TO THE INTEREST PERIOD, SUCH NOTICE
SHALL BE DEEMED TO HAVE REQUESTED AN INTEREST PERIOD OF ONE MONTH’S DURATION. 
THE CANADIAN ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY EACH CANADIAN TERM LOAN
LENDER OF ITS APPLICABLE PERCENTAGE OF SUCH BORROWING, THE TYPE OF BORROWING
BEING REQUESTED AND THE INTEREST PERIOD OR INTEREST PERIODS APPLICABLE THERETO,
AS APPROPRIATE.  ON THE CLOSING DATE, EACH CANADIAN TERM LOAN LENDER SHALL MAKE
ITS SHARE OF THE CANADIAN TERM LOANS AVAILABLE TO THE CANADIAN ADMINISTRATIVE
AGENT AT ITS OFFICE MOST RECENTLY DESIGNATED FOR SUCH PURPOSE IN A NOTICE TO THE
LENDERS, NO LATER THAN 12:00 NOON, NEW YORK CITY TIME, IN IMMEDIATELY AVAILABLE
FUNDS.  UPON RECEIPT OF THE FUNDS MADE AVAILABLE BY THE CANADIAN TERM LOAN
LENDERS TO FUND THE CANADIAN TERM LOANS HEREUNDER, THE CANADIAN ADMINISTRATIVE
AGENT SHALL DISBURSE SUCH FUNDS IN THE MANNER SPECIFIED IN THE NOTICE OF
BORROWING DELIVERED BY THE CANADIAN BORROWER.  AFTER THE CLOSING DATE, ONE
(1) BUSINESS DAY AFTER THE CANADIAN ADMINISTRATIVE AGENT’S RECEIPT OF (I) A
BORROWING BASE CERTIFICATE DEMONSTRATING TO THE CANADIAN ADMINISTRATIVE AGENT’S
SATISFACTION THAT THE THEN CANADIAN BORROWING BASE EXCEEDS THE AMOUNT OF THE
TOTAL CANADIAN OUTSTANDINGS, (II) SUCH WRITTEN DISBURSEMENT INSTRUCTIONS AS THE
CANADIAN ADMINISTRATIVE AGENT MAY REQUIRE AND (III) A CERTIFICATION FROM A
FINANCIAL OFFICER OF THE CANADIAN BORROWER THAT NO DEFAULT OR EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING, THE CANADIAN ADMINISTRATIVE AGENT SHALL DISBURSE
AN AMOUNT NOT TO EXCEED THE AMOUNT BY WHICH THE CANADIAN BORROWING BASE EXCEEDS
THE TOTAL CANADIAN OUTSTANDINGS FROM THE CANADIAN TERM LOAN COLLATERAL ACCOUNT
(INCLUDING AMOUNTS DEPOSITED THEREIN PURSUANT TO THIS PARAGRAPH (D) OR
SECTION 2.14(D)) TO THE CANADIAN INVESTMENT ACCOUNT.  UPON THE CANADIAN
ADMINISTRATIVE AGENT’S RECEIPT FROM THE CANADIAN BORROWER OF SUCH WRITTEN
DISBURSEMENT INSTRUCTIONS AS THE CANADIAN ADMINISTRATIVE AGENT MAY REQUIRE, THE
CANADIAN ADMINISTRATIVE AGENT SHALL PERMIT THE CANADIAN BORROWER TO WITHDRAW
FROM THE CANADIAN INVESTMENT ACCOUNT SUCH AMOUNT AS THE CANADIAN BORROWER SHALL
REQUEST.  IF, AS OF THE END OF THE THIRD (3RD) BUSINESS DAY FOLLOWING ANY SUCH
WITHDRAWAL, THE AVAILABLE CASH (EXCLUDING AMOUNTS ON DEPOSIT IN THE INVESTMENT
ACCOUNTS) SHALL EXCEED US$50,000,000, THE CANADIAN BORROWER SHALL MAKE A DEPOSIT
TO THE CANADIAN INVESTMENT ACCOUNT ON THE FOLLOWING BUSINESS DAY IN AN AMOUNT
WHICH, WHEN AGGREGATED WITH THE AMOUNT DEPOSITED IN THE U.S. INVESTMENT ACCOUNT
ON SUCH DAY, SHALL BE EQUAL TO SUCH EXCESS.  THE CANADIAN INVESTMENT ACCOUNT
SHALL BE CLOSED AND THE CASH DEPOSITED THEREIN SHALL BE

 

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DISBURSED TO THE CANADIAN BORROWER ON THE EARLIER OF (X) THE RECEIVABLES
SECURITIZATION TERMINATION DATE AND (Y) SIXTY (60) DAYS AFTER THE CLOSING DATE.

 

(E)           UNLESS THE APPLICABLE AGENT SHALL HAVE RECEIVED NOTICE FROM A
LENDER PRIOR TO THE PROPOSED DATE OF ANY BORROWING THAT SUCH LENDER WILL NOT
MAKE AVAILABLE TO THE APPLICABLE AGENT SUCH LENDER’S SHARE OF SUCH BORROWING,
THE APPLICABLE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH SHARE AVAILABLE
ON SUCH DATE IN ACCORDANCE WITH THIS SECTION AND MAY, IN RELIANCE UPON SUCH
ASSUMPTION, MAKE AVAILABLE TO THE APPLICABLE BORROWER A CORRESPONDING AMOUNT. 
IN SUCH EVENT, IF A LENDER HAS NOT IN FACT MADE ITS SHARE OF THE APPLICABLE
BORROWING AVAILABLE TO THE APPLICABLE AGENT, THEN THE APPLICABLE LENDER AND THE
APPLICABLE BORROWER SEVERALLY AGREE TO PAY TO THE APPLICABLE AGENT FORTHWITH ON
DEMAND SUCH CORRESPONDING AMOUNT WITH INTEREST THEREON, FOR EACH DAY FROM AND
INCLUDING THE DATE SUCH AMOUNT IS MADE AVAILABLE TO THE APPLICABLE BORROWER TO
BUT EXCLUDING THE DATE OF PAYMENT TO THE APPLICABLE AGENT, AT (I) IN THE CASE OF
SUCH LENDER, THE GREATER OF THE FEDERAL FUNDS EFFECTIVE RATE AND A RATE
DETERMINED BY THE APPLICABLE AGENT IN ACCORDANCE WITH BANKING INDUSTRY RULES ON
INTERBANK COMPENSATION OR (II) IN THE CASE OF THE BORROWER, THE INTEREST RATE
APPLICABLE TO ABR LOANS OR CANADIAN PRIME RATE LOANS, AS THE CASE MAY BE.  IF
SUCH LENDER PAYS SUCH AMOUNT TO THE APPLICABLE AGENT, THEN SUCH AMOUNT SHALL
CONSTITUTE SUCH LENDER’S LOAN INCLUDED IN SUCH BORROWING.

 

Section 2.8            Repayment of Loans and Unreimbursed Draws; Evidence of
Debt

 

(A)           THE U.S. BORROWER HEREBY UNCONDITIONALLY PROMISES TO PAY TO
(I) THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH U.S. TRANCHE A REVOLVING
LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF EACH U.S. TRANCHE A REVOLVING LOAN
OBTAINED BY THE U.S. BORROWER AS SET FORTH HEREIN; (II) THE ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF EACH U.S. TRANCHE B REVOLVING LENDER THE THEN UNPAID
PRINCIPAL AMOUNT OF EACH U.S. TRANCHE B REVOLVING LOAN OBTAINED BY THE U.S.
BORROWER AND EACH UNREIMBURSED DRAW UNDER ALL U.S. REVOLVING FACILITY LETTERS OF
CREDIT AS SET FORTH HEREIN; (III) THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF
EACH U.S. TERM LOAN LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF EACH U.S. TERM
LOAN AS SET FORTH HEREIN; AND (IV) THE CANADIAN ADMINISTRATIVE AGENT FOR THE
ACCOUNT OF EACH CANADIAN REVOLVING LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF
EACH CANADIAN REVOLVING LOAN OBTAINED BY THE U.S. BORROWER AS SET FORTH HEREIN.

 

(B)           THE CANADIAN BORROWER HEREBY UNCONDITIONALLY PROMISES TO PAY TO
(I) THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH U.S. TRANCHE A REVOLVING
LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF EACH U.S. TRANCHE A REVOLVING LOAN
OBTAINED BY THE CANADIAN BORROWER AS SET FORTH HEREIN; (II) THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF EACH U.S. TRANCHE B REVOLVING LENDER THE THEN UNPAID
PRINCIPAL AMOUNT OF EACH U.S. TRANCHE B REVOLVING LOAN OBTAINED BY THE CANADIAN
BORROWER AS SET FORTH HEREIN; (III) THE CANADIAN ADMINISTRATIVE AGENT FOR THE
ACCOUNT OF EACH CANADIAN REVOLVING LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF
EACH CANADIAN REVOLVING LOAN OBTAINED BY THE CANADIAN BORROWER AND EACH
UNREIMBURSED DRAW UNDER ALL CANADIAN REVOLVING FACILITY LETTERS OF CREDIT AS SET
FORTH HEREIN; AND (IV) THE CANADIAN ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH
CANADIAN TERM LOAN LENDER THE UNPAID PRINCIPAL AMOUNT OF EACH CANADIAN TERM LOAN
AS SET FORTH HEREIN.

 

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(C)           EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE
AN ACCOUNT OR ACCOUNTS EVIDENCING THE OBLIGATIONS OF THE BORROWERS TO SUCH
LENDER RESULTING FROM EACH LOAN MADE BY SUCH LENDER OR PARTICIPATION IN EACH
LETTER OF CREDIT IN WHICH SUCH LENDER IS PARTICIPATING, INCLUDING THE AMOUNTS OF
PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO TIME
HEREUNDER.

 

(D)           THE APPLICABLE AGENT SHALL MAINTAIN ACCOUNTS IN WHICH IT SHALL
RECORD (I) THE AMOUNT OF EACH LOAN MADE HEREUNDER, THE TYPE AND CLASS THEREOF
AND THE INTEREST PERIOD OR CONTRACT PERIOD APPLICABLE THERETO, (II) THE AMOUNT
OF ANY PRINCIPAL OR INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM
THE U.S. BORROWER OR THE CANADIAN BORROWER, AS THE CASE MAY BE, TO EACH LENDER
HEREUNDER, (III) THE AMOUNT OF TERM LOANS ON DEPOSIT IN THE RESPECTIVE
COLLATERAL ACCOUNTS AND ALL DISBURSEMENTS FROM DEPOSITS TO SUCH ACCOUNTS AND
(IV) THE AMOUNT OF ANY SUM RECEIVED BY THE APPLICABLE AGENT HEREUNDER FOR THE
ACCOUNT OF THE LENDERS AND EACH LENDER’S SHARE THEREOF.

 

(E)           THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED PURSUANT TO PARAGRAPH
(C) OR (D) OF THIS SECTION SHALL BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND
AMOUNTS OF THE OBLIGATIONS RECORDED THEREIN; PROVIDED THAT THE FAILURE OF ANY
LENDER OR THE APPLICABLE AGENT TO MAINTAIN SUCH ACCOUNTS OR ANY ERROR THEREIN
SHALL NOT IN ANY MANNER AFFECT THE OBLIGATION OF THE LOAN PARTIES TO REPAY THE
LOANS AND DRAWS UNDER LETTERS OF CREDIT IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT.

 

(F)            ANY LENDER MAY REQUEST THAT LOANS MADE BY IT BE EVIDENCED BY A
PROMISSORY NOTE.  IN SUCH EVENT, THE BORROWERS SHALL EXECUTE AND DELIVER TO SUCH
LENDER A PROMISSORY NOTE OR NOTES PAYABLE TO THE ORDER OF SUCH LENDER (OR, IF
REQUESTED BY SUCH LENDER, TO SUCH LENDER AND ITS REGISTERED ASSIGNS) IN A FORM
FURNISHED 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 9.3) BE REPRESENTED BY ONE OR MORE PROMISSORY
NOTES IN SUCH FORM PAYABLE TO THE ORDER OF THE PAYEE NAMED THEREIN (OR, IF SUCH
PROMISSORY NOTE IS A REGISTERED NOTE, TO SUCH PAYEE AND ITS REGISTERED ASSIGNS).

 

SECTION 2.9            INTEREST ON LOANS

 

(A)           SUBJECT TO THE PROVISIONS OF SECTION 2.10, EACH ABR LOAN SHALL
BEAR INTEREST (COMPUTED, FOR ABR LOANS WHEREIN THE ALTERNATE BASE RATE IS
DETERMINED BY REFERENCE TO THE ADJUSTED LIBO RATE OR THE FEDERAL FUNDS EFFECTIVE
RATE, ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED OVER A YEAR OF 360 DAYS,
AND OTHERWISE COMPUTED ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED OVER A
YEAR OF 365 DAYS) AT A RATE PER ANNUM EQUAL TO THE APPLICABLE MARGIN PLUS THE
ALTERNATE BASE RATE.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 2.10, EACH EURODOLLAR LOAN
SHALL BEAR INTEREST (COMPUTED ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED
OVER A YEAR OF 360 DAYS) AT A RATE PER ANNUM EQUAL, DURING EACH INTEREST PERIOD
APPLICABLE THERETO, TO THE APPLICABLE MARGIN PLUS THE ADJUSTED LIBO RATE FOR
SUCH INTEREST PERIOD IN EFFECT FOR SUCH BORROWING.

 

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(C)           SUBJECT TO THE PROVISIONS OF SECTION 2.10, EACH CANADIAN PRIME
RATE LOAN SHALL BEAR INTEREST (COMPUTED ON THE BASIS OF THE ACTUAL NUMBER OF
DAYS ELAPSED OVER A YEAR OF 365 DAYS) AT A RATE PER ANNUM EQUAL TO THE
APPLICABLE MARGIN PLUS THE CANADIAN PRIME RATE.

 

(D)           SUBJECT TO THE PROVISIONS OF SECTION 2.10, EACH DISCOUNT RATE LOAN
SHALL BEAR INTEREST (COMPUTED ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED
OVER A YEAR OF 365 DAYS) AT A RATE PER ANNUM EQUAL, DURING EACH CONTRACT PERIOD
APPLICABLE THERETO, TO THE APPLICABLE MARGIN PLUS THE DISCOUNT RATE FOR SUCH
CONTRACT PERIOD IN EFFECT FOR SUCH BORROWING.

 

(E)           ACCRUED INTEREST ON ALL LOANS SHALL BE PAYABLE IN ARREARS ON EACH
INTEREST PAYMENT DATE APPLICABLE THERETO, AT MATURITY (WHETHER BY ACCELERATION
OR OTHERWISE), AFTER SUCH MATURITY ON DEMAND AND (WITH RESPECT TO EURODOLLAR
LOANS AND DISCOUNT RATE LOANS) UPON ANY REPAYMENT OR PREPAYMENT THEREOF (ON THE
AMOUNT PREPAID).

 

(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)           ANY PROVISION OF THIS AGREEMENT THAT WOULD OBLIGE A CANADIAN LOAN
PARTY TO PAY ANY FINE, PENALTY OR RATE OF INTEREST ON ANY ARREARS OF PRINCIPAL
OR INTEREST SECURED BY A MORTGAGE ON REAL PROPERTY OR HYPOTHEC ON IMMOVABLES
THAT HAS THE EFFECT OF INCREASING THE CHARGE ON ARREARS BEYOND THE RATE OF
INTEREST PAYABLE ON PRINCIPAL MONEY NOT IN ARREARS SHALL NOT APPLY TO SUCH
CANADIAN LOAN PARTY, WHICH SHALL BE REQUIRED TO PAY INTEREST ON MONEY IN ARREARS
AT THE SAME RATE OF INTEREST PAYABLE ON PRINCIPAL MONEY NOT IN ARREARS.

 

(H)           IF ANY PROVISION OF THIS AGREEMENT WOULD OBLIGE A CANADIAN LOAN
PARTY TO MAKE ANY PAYMENT OF INTEREST OR OTHER AMOUNT PAYABLE TO ANY SECURED
PARTY IN AN AMOUNT OR CALCULATED AT A RATE WHICH WOULD BE PROHIBITED BY LAW OR
WOULD RESULT IN A RECEIPT BY THAT SECURED PARTY 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 APPLICABLE LAW OR SO RESULT IN
A RECEIPT BY THAT SECURED PARTY 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; AND

 

(II)           THEREAFTER, BY REDUCING ANY FEES, COMMISSIONS, COSTS, EXPENSES,
PREMIUMS AND OTHER AMOUNTS REQUIRED TO BE PAID WHICH WOULD CONSTITUTE INTEREST
FOR PURPOSES OF SECTION 347 OF THE CRIMINAL CODE (CANADA).

 

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Section 2.10          Default Interest.  Upon the occurrence and during the
continuance of an Event of Default, the principal amount of all Loans
outstanding and, to the extent permitted by applicable law, any interest
payments on the Loans or any fees or other amounts owed hereunder, shall
thereafter bear interest payable on demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable hereunder with respect to the
applicable Loans (or, (x) in the case of any such fees and other amounts owed by
the U.S. Loan Parties, at a rate which is 2% per annum in excess of the interest
rate otherwise payable hereunder for ABR Loans that are U.S. Revolving Loans and
(y) in the case of any such fees and other amounts owed by the Canadian Loan
Parties, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Canadian Prime Rate Loans that are Canadian
Revolving Loans); provided, in the case of Eurodollar Loans and Discount Rate
Loans, upon the expiration of the Interest Period or Contract Period, as the
case may be, in effect at the time any such increase in interest rate is
effective, if an Event of Default shall then be continuing, such Eurodollar
Loans and Discount Rate Loans shall thereupon become ABR Loans and Canadian
Prime Rate Loans, respectively, and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable hereunder for ABR Loans and Canadian Prime Rate Loans, as the case may
be.  Payment or acceptance of the increased rates of interest provided in this
Section 2.10 is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of the Agents or any Lender.

 

Section 2.11          Optional Termination or Reduction of Commitment.  Upon at
least three (3) Business Days’ prior written notice to the Applicable Agent (and
the Administrative Agent if the Administrative Agent is not the Applicable
Agent), (i) the U.S. Borrower may at any time in whole permanently terminate, or
from time to time in part permanently reduce, the U.S. Tranche A Revolving
Commitment, (ii) the U.S. Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the U.S. Tranche B
Revolving Commitment and (iii) the Canadian Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Canadian Revolving Commitment.  Each such reduction or termination, as
applicable, of such Commitment shall be in the principal amount of US$1,000,000
or any integral multiple of US$1,000,000 in excess thereof.  The U.S. Borrower
shall not be permitted to terminate or reduce the U.S. Tranche A Revolving
Commitment if, as a result of such termination or reduction, the aggregate
principal amount of the U.S. Tranche A Revolving Loans would exceed the
aggregate U.S. Tranche A Revolving Commitment.  The U.S. Borrower shall not be
permitted to terminate or reduce the U.S. Tranche B Revolving Commitment if, as
a result of such termination or reduction, the U.S. Tranche B Revolving Credit
Utilization would exceed the aggregate U.S. Tranche B Revolving Commitment.  The
Canadian Borrower shall not be permitted to terminate or reduce the Canadian
Revolving Commitment if, as a result of such termination or reduction, the
Canadian Revolving Credit Utilization would exceed the aggregate Canadian
Revolving Commitment.  Any reduction or termination, as applicable, pursuant to
this Section shall be applied pro rata to reduce the applicable Revolving
Commitment of each applicable Lender until such Revolving Commitment is zero. 
Simultaneously with each reduction or termination, as applicable, of any
Revolving Commitment, the applicable Borrower shall pay to the Applicable Agent
for the account of each applicable Lender the Commitment Fee accrued on the
amount of the Revolving Commitment of such Lender so terminated or reduced to
but excluding the date of such termination or reduction.

 

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Section 2.12          Alternate Rate of Interest.

 

(A)           IF PRIOR TO THE COMMENCEMENT OF ANY INTEREST PERIOD FOR A
EURODOLLAR BORROWING:

 

(I)            THE ADMINISTRATIVE AGENT DETERMINES (WHICH DETERMINATION SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR) THAT ADEQUATE AND REASONABLE MEANS DO NOT
EXIST FOR ASCERTAINING THE EURODOLLAR RATE FOR SUCH INTEREST PERIOD; OR

 

(II)           THE ADMINISTRATIVE AGENT IS ADVISED BY THE REQUIRED LENDERS OF
THE APPLICABLE CLASS THAT THE EURODOLLAR RATE FOR SUCH INTEREST PERIOD WILL NOT
ADEQUATELY AND FAIRLY REFLECT THE COST TO SUCH LENDERS (OR LENDER) OF MAKING OR
MAINTAINING THEIR LOANS (OR ITS LOAN) INCLUDED IN SUCH BORROWING FOR SUCH
INTEREST PERIOD;

 

THEN THE ADMINISTRATIVE AGENT SHALL GIVE NOTICE THEREOF TO THE BORROWERS AND THE
LENDERS BY TELEPHONE OR FACSIMILE AS PROMPTLY AS PRACTICABLE THEREAFTER AND,
UNTIL THE ADMINISTRATIVE AGENT NOTIFIES THE BORROWERS AND THE LENDERS THAT THE
CIRCUMSTANCES GIVING RISE TO SUCH NOTICE NO LONGER EXIST, ANY REQUEST BY THE
BORROWERS FOR A BORROWING OF EURODOLLAR LOANS (INCLUDING PURSUANT TO A
REFINANCING WITH EURODOLLAR LOANS) PURSUANT TO SECTION 2.7 OR SECTION 2.13 SHALL
BE DEEMED A REQUEST FOR A BORROWING OF ABR LOANS.

 

(B)           IF PRIOR TO THE COMMENCEMENT OF ANY CONTRACT PERIOD FOR A
BORROWING COMPRISED OF A DISCOUNT RATE LOAN:

 

(I)            THE CANADIAN ADMINISTRATIVE AGENT DETERMINES (WHICH DETERMINATION
SHALL BE CONCLUSIVE MANIFEST ERROR) THAT ADEQUATE AND REASONABLE MEANS DO NOT
EXIST FOR ASCERTAINING THE DISCOUNT RATE FOR SUCH CONTRACT PERIOD, OR

 

(II)           THE CANADIAN ADMINISTRATIVE AGENT IS ADVISED BY THE REQUIRED
LENDERS OF THE APPLICABLE CLASS THAT THE DISCOUNT RATE FOR SUCH CONTRACT PERIOD
WILL NOT ADEQUATELY AND FAIRLY REFLECT THE COST TO SUCH LENDERS (OR LENDER) OF
MAKING OR MAINTAINING THEIR LOANS (OR ITS LOAN) INCLUDED IN SUCH BORROWING FOR
SUCH CONTRACT PERIOD,

 

THEN THE CANADIAN ADMINISTRATIVE AGENT SHALL GIVE NOTICE THEREOF TO THE
BORROWERS AND THE LENDERS BY TELEPHONE OR FACSIMILE AS PROMPTLY AS PRACTICAL
THEREAFTER AND, UNTIL THE CANADIAN ADMINISTRATIVE AGENT NOTIFIES THE BORROWERS
AND THE LENDERS THAT THE CIRCUMSTANCES GIVING RISE TO SUCH NOTICE NO LONGER
EXISTS, ANY REQUEST BY THE BORROWERS FOR A BORROWING OF DISCOUNT RATE LOANS
(INCLUDING PURSUANT TO A REFINANCING WITH DISCOUNT RATE LOANS) PURSUANT TO
SECTION 2.7 OR SECTION 2.13 SHALL BE DEEMED A REQUEST FOR A BORROWING OF
CANADIAN PRIME RATE LOANS.

 

Section 2.13          Refinancing of Loans.  The Borrowers shall have the right,
at any time, on three (3) Business Days’ prior irrevocable notice to the
Applicable Agent (and the Administrative Agent if the Administrative Agent is
not the Applicable Agent) (which notice, to be effective, must be received by
the Applicable Agent not later than 1:00 p.m., New York City

 

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time, on the third Business Day preceding the date of any refinancing), (x) to
refinance any outstanding Borrowing or Borrowings of Loans of one Type (or a
portion thereof) with a Borrowing of Loans of the other Type or (y) to continue
an outstanding Borrowing of Eurodollar Loans for an additional Interest Period
or to continue an outstanding Borrowing of Discount Rate Loans for an additional
Contract Period, subject to the following:

 

(A)           AS A CONDITION TO THE REFINANCING OF ABR LOANS WITH EURODOLLAR
LOANS AND TO THE CONTINUATION OF EURODOLLAR LOANS FOR AN ADDITIONAL INTEREST
PERIOD, NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AT THE TIME OF
SUCH REFINANCING;

 

(B)           AS A CONDITION TO THE REFINANCING OF CANADIAN PRIME RATE LOANS
WITH DISCOUNT RATE LOANS AND TO THE CONTINUATION OF DISCOUNT RATE LOANS FOR AN
ADDITIONAL CONTRACT PERIOD, NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AT THE TIME OF SUCH REFINANCING;

 

(C)           IF LESS THAN A FULL BORROWING OF LOANS SHALL BE REFINANCED, SUCH
REFINANCING SHALL BE MADE PRO RATA AMONG THE APPLICABLE LENDERS IN ACCORDANCE
WITH THE RESPECTIVE PRINCIPAL AMOUNTS OF THE LOANS COMPRISING SUCH BORROWING
HELD BY SUCH LENDERS IMMEDIATELY PRIOR TO SUCH REFINANCING;

 

(D)           THE AGGREGATE PRINCIPAL AMOUNT OF LOANS BEING REFINANCED SHALL BE
AT LEAST (I) IN THE CASE OF DOLLAR-DENOMINATED LOANS, US$1,000,000 OR ANY
INTEGRAL MULTIPLE OF US$1,000,000 IN EXCESS THEREOF, OR (II) IN THE CASE OF
CANADIAN DOLLAR-DENOMINATED LOANS, C$1,000,000 OR ANY INTEGRAL MULTIPLE OF
C$1,000,000 IN EXCESS THEREOF, PROVIDED THAT NO PARTIAL REFINANCING OF A
BORROWING OF EURODOLLAR LOANS OR DISCOUNT RATE LOANS AS THE CASE MAY BE, SHALL
RESULT IN THE EURODOLLAR LOANS OR DISCOUNT RATE LOANS AS THE CASE MAY BE,
REMAINING OUTSTANDING PURSUANT TO SUCH BORROWING BEING LESS THAN US$1,000,000 OR
C$1,000,000, RESPECTIVELY, IN AGGREGATE PRINCIPAL AMOUNT;

 

(E)           EACH LENDER SHALL EFFECT EACH REFINANCING BY APPLYING THE PROCEEDS
OF ITS NEW CANADIAN PRIME RATE LOAN, DISCOUNT RATE LOAN, EURODOLLAR LOAN OR ABR
LOAN, AS THE CASE MAY BE, TO ITS LOAN BEING REFINANCED;

 

(F)            THE INTEREST PERIOD WITH RESPECT TO A BORROWING OF EURODOLLAR
LOANS EFFECTED BY A REFINANCING OR IN RESPECT TO THE BORROWING OF EURODOLLAR
LOANS BEING CONTINUED AS EURODOLLAR LOANS SHALL COMMENCE ON THE DATE OF
REFINANCING OR THE EXPIRATION OF THE CURRENT INTEREST PERIOD APPLICABLE TO SUCH
CONTINUING BORROWING, AS THE CASE MAY BE;

 

(G)           A BORROWING OF EURODOLLAR LOANS MAY BE REFINANCED ONLY ON THE LAST
DAY OF AN INTEREST PERIOD APPLICABLE THERETO;

 

(H)           EACH REQUEST FOR A REFINANCING WITH A BORROWING OF EURODOLLAR
LOANS WHICH FAILS TO STATE AN APPLICABLE INTEREST PERIOD SHALL BE DEEMED TO BE A
REQUEST FOR AN INTEREST PERIOD OF ONE MONTH;

 

(I)            THE CONTRACT PERIOD WITH RESPECT TO A BORROWING OF DISCOUNT RATE
LOANS EFFECTED BY A REFINANCING OR IN RESPECT TO THE BORROWING OF DISCOUNT RATE
LOANS BEING CONTINUED

 

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AS DISCOUNT RATE LOANS SHALL COMMENCE ON THE DATE OF REFINANCING OR THE
EXPIRATION OF THE CURRENT CONTRACT PERIOD APPLICABLE TO SUCH CONTINUING
BORROWING, AS THE CASE MAY BE;

 

(J)            A BORROWING OF DISCOUNT RATE LOANS MAY BE REFINANCED ONLY ON THE
LAST DAY OF A CONTRACT PERIOD APPLICABLE THERETO; AND

 

(K)           EACH REQUEST FOR A REFINANCING WITH A BORROWING OF DISCOUNT RATE
LOANS WHICH FAILS TO STATE AN APPLICABLE CONTRACT PERIOD SHALL BE DEEMED TO BE A
REQUEST FOR A CONTRACT PERIOD OF ONE MONTH.

 

In the event that the U.S. Borrower or Canadian Borrower, as applicable, shall
not give notice to refinance any Borrowing of Eurodollar Loans, or to continue
such Borrowing as Eurodollar Loans, or shall not be entitled to refinance or
continue such Borrowing as Eurodollar Loans, in each case as provided above,
such Borrowing shall automatically be refinanced with a Borrowing of ABR Loans
at the expiration of the then-current Interest Period.  In the event that the
Canadian Borrower shall not give notice to refinance any Borrowing of Discount
Rate Loans, or to continue such Borrowing as Discount Rate Loans, or shall not
be entitled to refinance or continue such Borrowing as Discount Rate Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of Canadian Prime Rate Loans at the expiration of the
then-current Contract Period.  The Applicable Agent shall, after it receives
notice from the U.S. Borrower or Canadian Borrower, as applicable, promptly give
each Lender notice of any refinancing, in whole or part, of any Loan made by
such Lender.

 

(L)            NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN:

 

(I)            ALL LOANS DENOMINATED IN DOLLARS SHALL BE REPAID IN DOLLARS;

 

(II)           ALL LOANS DENOMINATED IN CANADIAN DOLLARS SHALL BE REPAID IN
CANADIAN DOLLARS;

 

(III)          LOANS DENOMINATED IN DOLLARS MAY ONLY BE ABR LOANS OR EURODOLLAR
LOANS; AND

 

(IV)          LOANS DENOMINATED IN CANADIAN DOLLARS MAY ONLY BE CANADIAN PRIME
RATE LOANS OR DISCOUNT RATE LOANS.

 

ALL BORROWINGS, REFINANCINGS, CONTINUATIONS AND CONVERSIONS, AS APPLICABLE, OF
LOANS SHALL BE CONSISTENT WITH THE FOREGOING.

 

SECTION 2.14         MANDATORY PREPAYMENT; COMMITMENT TERMINATION

 

(A)           IF AT ANY TIME THE TOTAL U.S. OUTSTANDINGS EXCEEDS THE U.S.
BORROWING BASE, WITHIN ONE (1) BUSINESS DAY (I) THE BORROWERS WILL PREPAY THE
U.S. REVOLVING LOANS IN AN AMOUNT NECESSARY TO CAUSE THE TOTAL U.S. OUTSTANDINGS
TO BE EQUAL TO OR LESS THAN THE U.S. BORROWING BASE, (II) AFTER GIVING EFFECT TO
THE PREPAYMENT IN FULL OF THE U.S. REVOLVING LOANS, THE U.S. BORROWER WILL
DEPOSIT INTO THE LETTER OF CREDIT ACCOUNT AN AMOUNT EQUAL TO 105% OF THE AMOUNT
BY WHICH THE AGGREGATE U.S. LETTER OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT OF
CASH HELD IN THE LETTER OF CREDIT ACCOUNT) SO EXCEEDS THE U.S. BORROWING BASE,
AND (III) AFTER GIVING

 

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EFFECT TO THE PREPAYMENT IN FULL OF THE U.S. REVOLVING LOANS AND THE CASH
COLLATERALIZATION OF THE U.S. LETTER OF CREDIT OUTSTANDINGS, THE U.S. BORROWER
WILL (X) DEPOSIT INTO THE U.S. TERM LOAN COLLATERAL ACCOUNT AN AMOUNT EQUAL TO
THE AMOUNT BY WHICH THE U.S. TERM OUTSTANDINGS EXCEEDS THE U.S. BORROWING BASE
OR (Y) PREPAY THE U.S. TERM LOANS IN AN AMOUNT EQUAL TO THE AMOUNT BY WHICH THE
U.S. TERM OUTSTANDINGS EXCEEDS THE U.S. BORROWING BASE.

 

(B)           IF AT ANY TIME THE AGGREGATE PRINCIPAL AMOUNT OF THE U.S. TRANCHE
A REVOLVING LOANS EXCEEDS (A) PRIOR TO THE EXPIRATION OF THE INTERIM PERIOD, THE
INTERIM U.S. TRANCHE A REVOLVING COMMITMENT, OR (B) FROM AND AFTER THE
EXPIRATION OF THE INTERIM PERIOD, THE U.S. TRANCHE A REVOLVING COMMITMENT,
WITHIN ONE (1) BUSINESS DAY THE BORROWERS WILL PREPAY THE U.S. TRANCHE A
REVOLVING LOANS IN AN AMOUNT NECESSARY TO CAUSE THE AGGREGATE PRINCIPAL AMOUNT
OF THE U.S. TRANCHE A REVOLVING LOANS TO BE EQUAL TO OR LESS THAN (A) PRIOR TO
THE EXPIRATION OF THE INTERIM PERIOD, THE INTERIM U.S. TRANCHE A REVOLVING
COMMITMENT, OR (B) FROM AND AFTER THE EXPIRATION OF THE INTERIM PERIOD, THE U.S.
TRANCHE A REVOLVING COMMITMENT.

 

(C)           IF AT ANY TIME THE U.S. TRANCHE B REVOLVING CREDIT UTILIZATION
EXCEEDS THE U.S. TRANCHE B REVOLVING COMMITMENT, WITHIN ONE (1) BUSINESS DAY
(I) THE BORROWERS WILL PREPAY THE U.S. TRANCHE B REVOLVING LOANS IN AN AMOUNT
NECESSARY TO CAUSE THE AGGREGATE PRINCIPAL AMOUNT OF THE U.S. TRANCHE B
REVOLVING CREDIT UTILIZATION, INCLUDING UNREIMBURSED DRAWS, TO BE EQUAL TO OR
LESS THAN THE U.S. TRANCHE B REVOLVING COMMITMENT AND (II) IF, AFTER GIVING
EFFECT TO THE PREPAYMENT IN FULL OF THE U.S. TRANCHE B REVOLVING LOANS, THE
AGGREGATE U.S. LETTER OF CREDIT OUTSTANDINGS EXCEEDS THE U.S. TRANCHE B
REVOLVING COMMITMENT, THE U.S. BORROWER WILL DEPOSIT INTO THE LETTER OF CREDIT
ACCOUNT AN AMOUNT EQUAL TO 105% OF THE AMOUNT BY WHICH THE AGGREGATE U.S. LETTER
OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE LETTER OF CREDIT
ACCOUNT) SO EXCEEDS THE U.S. TRANCHE B REVOLVING COMMITMENT.

 

(D)           IF AT ANY TIME THE TOTAL CANADIAN OUTSTANDINGS EXCEEDS THE
CANADIAN BORROWING BASE, WITHIN ONE (1) BUSINESS DAY (I) THE BORROWERS WILL
PREPAY THE CANADIAN REVOLVING LOANS IN AN AMOUNT NECESSARY TO CAUSE THE TOTAL
CANADIAN OUTSTANDINGS TO BE EQUAL TO OR LESS THAN THE CANADIAN BORROWING BASE,
(II) AFTER GIVING EFFECT TO THE PREPAYMENT IN FULL OF THE CANADIAN REVOLVING
LOANS, THE CANADIAN BORROWER WILL DEPOSIT INTO THE CANADIAN LETTER OF CREDIT
ACCOUNT AN AMOUNT EQUAL TO 105% OF THE AMOUNT BY WHICH THE AGGREGATE CANADIAN
LETTER OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE CANADIAN
LETTER OF CREDIT ACCOUNT) SO EXCEEDS THE CANADIAN BORROWING BASE, AND
(III) AFTER GIVING EFFECT TO THE PREPAYMENT IN FULL OF THE CANADIAN REVOLVING
LOANS AND THE CASH COLLATERALIZATION OF THE CANADIAN LETTER OF CREDIT
OUTSTANDINGS, THE CANADIAN BORROWER WILL (X) DEPOSIT INTO THE CANADIAN TERM LOAN
COLLATERAL ACCOUNT AN AMOUNT EQUAL TO THE AMOUNT BY WHICH THE CANADIAN TERM
OUTSTANDINGS EXCEEDS THE CANADIAN BORROWING BASE OR (Y) PREPAY THE CANADIAN TERM
LOANS IN AN AMOUNT EQUAL TO OR THE AMOUNT BY WHICH THE CANADIAN TERM
OUTSTANDINGS EXCEEDS THE CANADIAN BORROWING BASE.

 

(E)           IF AT ANY TIME THE CANADIAN REVOLVING CREDIT UTILIZATION EXCEEDS
(A) PRIOR TO THE EXPIRATION OF THE INTERIM PERIOD, THE INTERIM CANADIAN
REVOLVING COMMITMENT, OR (B) FROM AND AFTER THE EXPIRATION OF THE INTERIM
PERIOD, THE CANADIAN REVOLVING COMMITMENT, WITHIN ONE (1) BUSINESS DAY (I) THE
BORROWERS WILL PREPAY THE CANADIAN REVOLVING LOANS IN AN AMOUNT NECESSARY TO
CAUSE THE AGGREGATE PRINCIPAL AMOUNT OF THE CANADIAN REVOLVING CREDIT
UTILIZATION, INCLUDING UNREIMBURSED DRAWS, TO BE EQUAL TO OR LESS THAN (A) PRIOR
TO THE EXPIRATION OF THE INTERIM PERIOD, THE INTERIM CANADIAN REVOLVING
COMMITMENT, OR (B) FROM AND AFTER THE

 

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EXPIRATION OF THE INTERIM PERIOD, THE CANADIAN REVOLVING COMMITMENT AND (II) IF,
AFTER GIVING EFFECT TO THE PREPAYMENT IN FULL OF THE CANADIAN REVOLVING LOANS,
THE AGGREGATE CANADIAN LETTER OF CREDIT OUTSTANDINGS EXCEEDS (A) PRIOR TO THE
EXPIRATION OF THE INTERIM PERIOD, THE INTERIM CANADIAN REVOLVING COMMITMENT, OR
(B) FROM AND AFTER THE EXPIRATION OF THE INTERIM PERIOD, THE CANADIAN REVOLVING
COMMITMENT, THE CANADIAN BORROWER WILL DEPOSIT INTO THE CANADIAN LETTER OF
CREDIT ACCOUNT AN AMOUNT EQUAL TO 105% OF THE AMOUNT BY WHICH THE AGGREGATE
CANADIAN LETTER OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE
CANADIAN LETTER OF CREDIT ACCOUNT) SO EXCEEDS (A) PRIOR TO THE EXPIRATION OF THE
INTERIM PERIOD, THE INTERIM CANADIAN REVOLVING COMMITMENT, OR (B) FROM AND AFTER
THE EXPIRATION OF THE INTERIM PERIOD, THE CANADIAN REVOLVING COMMITMENT.

 

(F)            UPON THE RECEIPT OF THE NET PROCEEDS BY ANY OF THE U.S. LOAN
PARTIES FROM ANY PREPAYMENT EVENT (INCLUDING AMOUNTS RECEIVED BY A U.S. LOAN
PARTY FROM A CANADIAN GUARANTOR PURSUANT TO SECTION 2.14(H)), THE U.S. LOAN
PARTIES SHALL, JOINTLY AND SEVERALLY, APPLY SUCH NET PROCEEDS AS FOLLOWS: 
FIRST, TO REPAY THE THEN OUTSTANDING U.S. TERM LOANS; SECOND, TO REPAY THE THEN
OUTSTANDING U.S. REVOLVING LOANS RATABLY (WITHOUT A PERMANENT REDUCTION OF THE
U.S. REVOLVING COMMITMENT); THIRD, TO REPAY THE THEN OUTSTANDING CANADIAN TERM
LOANS; FOURTH, TO REPAY THE THEN OUTSTANDING CANADIAN REVOLVING LOANS (WITHOUT A
PERMANENT REDUCTION OF THE CANADIAN REVOLVING COMMITMENT); FIFTH, TO DEPOSIT
INTO THE LETTER OF CREDIT ACCOUNT AN AMOUNT EQUAL TO THE GREATER OF (I) AN
AMOUNT, AS DETERMINED BY THE FRONTING BANKS AND THE ADMINISTRATIVE AGENT, EQUAL
TO THE FACE AMOUNT OF ALL OUTSTANDING U.S. REVOLVING FACILITY LETTERS OF CREDIT
PLUS THE SUM OF ALL PROJECTED CONTRACTUAL OBLIGATIONS OF THE AGENTS, THE
FRONTING BANKS AND THE LENDERS OF THE U.S. BORROWER THEREUNDER THROUGH THE
EXPIRATION DATE(S) OF SUCH LETTERS OF CREDIT AND (II) 105% OF THE AGGREGATE U.S.
LETTER OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE LETTER OF
CREDIT ACCOUNT); AND SIXTH, TO DEPOSIT INTO THE CANADIAN LETTER OF CREDIT
ACCOUNT AN AMOUNT EQUAL TO THE GREATER OF (I) AN AMOUNT, AS DETERMINED BY THE
FRONTING BANKS AND THE CANADIAN ADMINISTRATIVE AGENT, EQUAL TO THE FACE AMOUNT
OF ALL OUTSTANDING CANADIAN REVOLVING FACILITY LETTERS OF CREDIT PLUS THE SUM OF
ALL PROJECTED CONTRACTUAL OBLIGATIONS OF THE AGENTS, THE FRONTING BANKS AND THE
LENDERS OF THE CANADIAN BORROWER THEREUNDER THROUGH THE EXPIRATION DATE(S) OF
SUCH LETTERS OF CREDIT AND (II) 105% OF THE AGGREGATE CANADIAN LETTER OF CREDIT
OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE CANADIAN LETTER OF CREDIT
ACCOUNT); PROVIDED, HOWEVER, THAT IF THE U.S. BORROWER SHALL DELIVER TO THE
ADMINISTRATIVE AGENT A CERTIFICATE OF A FINANCIAL OFFICER TO THE EFFECT THAT THE
U.S. LOAN PARTIES INTEND TO APPLY THE NET PROCEEDS FROM A PREPAYMENT EVENT
DESCRIBED IN CLAUSE (B) OF THE DEFINITION THEREOF WITHIN 180 DAYS AFTER RECEIPT
OF SUCH NET PROCEEDS TO ACQUIRE (OR REPLACE OR REBUILD) REAL PROPERTY, EQUIPMENT
OR OTHER TANGIBLE ASSETS (EXCLUDING INVENTORY) TO BE USED IN THE BUSINESS OF THE
U.S. LOAN PARTIES, AND CERTIFYING THAT NO DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, THEN NO PREPAYMENT SHALL BE REQUIRED BY THIS
SECTION (TO THE EXTENT THE U.S. LOAN PARTIES EFFECT SUCH REINVESTMENT WITHIN THE
FOREGOING 180-DAY PERIOD) SO LONG AS SUCH NET PROCEEDS SHALL REMAIN DEPOSITED IN
AN ACCOUNT WITH THE APPLICABLE AGENT UNTIL REQUESTED BY A U.S. LOAN PARTY FOR
USE IN ACCORDANCE WITH SUCH NOTICE.

 

(G)           UPON THE RECEIPT OF THE NET PROCEEDS BY THE CANADIAN BORROWER FROM
ANY PREPAYMENT EVENT (INCLUDING AMOUNTS RECEIVED BY THE CANADIAN BORROWER FROM A
CANADIAN GUARANTOR PURSUANT TO SECTION 2.14(H), WITH THE UNDERSTANDING THAT NO
SUCH AMOUNT RECEIVED FROM A CANADIAN GUARANTOR SHALL BE APPLIED IN RESPECT OF
THE CANADIAN BORROWER’S GUARANTY OF THE U.S. SECURED OBLIGATIONS), THE CANADIAN
BORROWER SHALL APPLY SUCH NET PROCEEDS AS FOLLOWS: 

 

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FIRST, TO REPAY THE THEN OUTSTANDING CANADIAN TERM LOANS; SECOND, TO REPAY THE
THEN OUTSTANDING CANADIAN REVOLVING LOANS MADE TO THE CANADIAN BORROWER (WITHOUT
A PERMANENT REDUCTION OF THE CANADIAN REVOLVING COMMITMENT); THIRD, TO THE
EXTENT PERMITTED BY APPLICABLE LAW AND NOT OTHERWISE PROHIBITED BY AN ORDER OF
THE CANADIAN COURT, TO REPAY THE THEN OUTSTANDING U.S. TERM LOANS; FOURTH, TO
THE EXTENT PERMITTED BY APPLICABLE LAW AND NOT OTHERWISE PROHIBITED BY AN ORDER
OF THE CANADIAN COURT, TO REPAY THE THEN OUTSTANDING U.S. REVOLVING LOANS
RATABLY (WITHOUT A PERMANENT REDUCTION OF THE U.S. REVOLVING COMMITMENT); FIFTH,
TO THE EXTENT PERMITTED BY APPLICABLE LAW AND NOT OTHERWISE PROHIBITED BY AN
ORDER OF THE CANADIAN COURT, TO REPAY THE THEN OUTSTANDING CANADIAN REVOLVING
LOANS MADE TO THE U.S. BORROWER (WITHOUT A PERMANENT REDUCTION OF THE CANADIAN
REVOLVING COMMITMENT); SIXTH, TO DEPOSIT INTO THE CANADIAN LETTER OF CREDIT
ACCOUNT AN AMOUNT EQUAL TO THE GREATER OF (I) AN AMOUNT, AS DETERMINED BY THE
FRONTING BANKS AND THE CANADIAN ADMINISTRATIVE AGENT, EQUAL TO THE FACE AMOUNT
OF ALL OUTSTANDING CANADIAN REVOLVING FACILITY LETTERS OF CREDIT PLUS THE SUM OF
ALL PROJECTED CONTRACTUAL OBLIGATIONS OF THE AGENTS, THE FRONTING BANKS AND THE
LENDERS OF THE CANADIAN BORROWER THEREUNDER THROUGH THE EXPIRATION DATE(S) OF
SUCH LETTERS OF CREDIT AND (II) 105% OF THE AGGREGATE CANADIAN LETTER OF CREDIT
OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE CANADIAN LETTER OF CREDIT
ACCOUNT); AND SEVENTH, TO THE EXTENT PERMITTED BY APPLICABLE LAW AND NOT
OTHERWISE PROHIBITED BY AN ORDER OF THE CANADIAN COURT, TO DEPOSIT INTO THE
LETTER OF CREDIT ACCOUNT AN AMOUNT EQUAL TO THE GREATER OF (I) AN AMOUNT, AS
DETERMINED BY THE FRONTING BANKS AND THE ADMINISTRATIVE AGENT, EQUAL TO THE FACE
AMOUNT OF ALL OUTSTANDING U.S. REVOLVING FACILITY LETTERS OF CREDIT PLUS THE SUM
OF ALL PROJECTED CONTRACTUAL OBLIGATIONS OF THE AGENTS, THE FRONTING BANKS AND
THE LENDERS OF THE U.S. BORROWER THEREUNDER THROUGH THE EXPIRATION DATE(S) OF
SUCH LETTERS OF CREDIT AND (II) 105% OF THE AGGREGATE U.S. LETTER OF CREDIT
OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE LETTER OF CREDIT ACCOUNT);
PROVIDED, HOWEVER, THAT IF THE CANADIAN BORROWER SHALL DELIVER TO THE CANADIAN
ADMINISTRATIVE AGENT A CERTIFICATE OF A FINANCIAL OFFICER TO THE EFFECT THAT THE
CANADIAN LOAN PARTIES INTEND TO APPLY THE NET PROCEEDS FROM A PREPAYMENT EVENT
DESCRIBED IN CLAUSE (B) OF THE DEFINITION THEREOF WITHIN 180 DAYS AFTER RECEIPT
OF SUCH NET PROCEEDS TO ACQUIRE (OR REPLACE OR REBUILD) REAL PROPERTY, EQUIPMENT
OR OTHER TANGIBLE ASSETS (EXCLUDING INVENTORY) TO BE USED IN THE BUSINESS OF THE
CANADIAN LOAN PARTIES, AND CERTIFYING THAT NO DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, THEN NO PREPAYMENT SHALL BE REQUIRED BY THIS
SECTION (TO THE EXTENT THE CANADIAN LOAN PARTIES EFFECT SUCH REINVESTMENT WITHIN
THE FOREGOING 180-DAY PERIOD) SO LONG AS SUCH NET PROCEEDS SHALL REMAIN
DEPOSITED IN AN ACCOUNT WITH THE APPLICABLE AGENT UNTIL REQUESTED BY A CANADIAN
LOAN PARTY FOR USE IN ACCORDANCE WITH SUCH NOTICE.

 

(H)           UPON THE RECEIPT OF THE NET PROCEEDS BY ANY CANADIAN GUARANTOR
FROM ANY PREPAYMENT EVENT, SUCH CANADIAN GUARANTOR SHALL APPLY SUCH NET PROCEEDS
AS FOLLOWS:  FIRST, TO REPAY THE THEN OUTSTANDING CANADIAN TERM LOANS; SECOND,
TO REPAY THE THEN OUTSTANDING CANADIAN REVOLVING LOANS MADE TO THE CANADIAN
BORROWER (WITHOUT A PERMANENT REDUCTION OF THE CANADIAN REVOLVING COMMITMENT);
THIRD, TO DEPOSIT INTO THE CANADIAN LETTER OF CREDIT ACCOUNT AN AMOUNT EQUAL TO
THE GREATER OF (I) AN AMOUNT, AS DETERMINED BY THE FRONTING BANKS AND THE
CANADIAN ADMINISTRATIVE AGENT, EQUAL TO THE FACE AMOUNT OF ALL OUTSTANDING
CANADIAN REVOLVING FACILITY LETTERS OF CREDIT PLUS THE SUM OF ALL PROJECTED
CONTRACTUAL OBLIGATIONS OF THE AGENTS, THE FRONTING BANKS AND THE LENDERS OF THE
CANADIAN BORROWER THEREUNDER THROUGH THE EXPIRATION DATE(S) OF SUCH LETTERS OF
CREDIT AND (II) 105% OF THE AGGREGATE CANADIAN LETTER OF CREDIT OUTSTANDINGS
(NET OF THE AMOUNT OF CASH HELD IN THE CANADIAN LETTER OF CREDIT ACCOUNT);
FOURTH, TO REPAY ANY OUTSTANDING POST-PETITION/POST-FILING INDEBTEDNESS OWED BY
SUCH CANADIAN

 

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GUARANTOR TO A U.S. LOAN PARTY OR THE CANADIAN BORROWER; AND FIFTH TO THE EXTENT
PERMITTED BY APPLICABLE LAW AND NOT OTHERWISE PROHIBITED BY ANY APPLICABLE COURT
ORDER TO REPAY ANY OUTSTANDING PRE-PETITION INDEBTEDNESS OWED BY SUCH CANADIAN
GUARANTOR TO A U.S. LOAN PARTY OR THE CANADIAN BORROWER; PROVIDED, HOWEVER, THAT
IF THE CANADIAN BORROWER SHALL DELIVER TO THE CANADIAN ADMINISTRATIVE AGENT A
CERTIFICATE OF A FINANCIAL OFFICER TO THE EFFECT THAT THE CANADIAN GUARANTORS
INTEND TO APPLY THE NET PROCEEDS FROM A PREPAYMENT EVENT DESCRIBED IN CLAUSE
(B) OF THE DEFINITION THEREOF WITHIN 180 DAYS AFTER RECEIPT OF SUCH NET PROCEEDS
TO ACQUIRE (OR REPLACE OR REBUILD) REAL PROPERTY, EQUIPMENT OR OTHER TANGIBLE
ASSETS (EXCLUDING INVENTORY) TO BE USED IN THE BUSINESS OF THE CANADIAN
GUARANTORS, AND CERTIFYING THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND
IS CONTINUING, THEN NO PREPAYMENT SHALL BE REQUIRED BY THIS SECTION (TO THE
EXTENT THE CANADIAN GUARANTORS EFFECT SUCH REINVESTMENT WITHIN THE FOREGOING
180-DAY PERIOD) SO LONG AS SUCH NET PROCEEDS SHALL REMAIN DEPOSITED IN AN
ACCOUNT WITH THE APPLICABLE AGENT UNTIL REQUESTED BY A CANADIAN LOAN PARTY FOR
USE IN ACCORDANCE WITH SUCH NOTICE.

 

(I)            IF ON ANY DATE, AS A RESULT OF FLUCTUATIONS IN THE EXCHANGE RATE,
THE ADMINISTRATIVE AGENT DETERMINES THAT THE AGGREGATE CANADIAN REVOLVING CREDIT
UTILIZATION SHALL HAVE EXCEEDED FOR MORE THAN THREE (3) CONSECUTIVE BUSINESS
DAYS (X) AN AMOUNT EQUAL TO 105% OF THE TOTAL CANADIAN REVOLVING COMMITMENTS OR
(Y) AN AMOUNT EQUAL TO THE CANADIAN BORROWING BASE MINUS THE CANADIAN TERM
LOANS, THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWERS OF SUCH OCCURRENCE
AND THE BORROWERS SHALL ON THE NEXT SUCCEEDING BUSINESS DAY PREPAY CANADIAN
REVOLVING LOANS IN AN AMOUNT SUFFICIENT TO ELIMINATE SUCH EXCESS.

 

(J)            UPON THE TERMINATION DATE, THE CANADIAN REVOLVING COMMITMENT AND
THE U.S. REVOLVING COMMITMENT SHALL EACH BE TERMINATED IN FULL AND THE LOAN
PARTIES SHALL PAY THE LOANS IN FULL IN CASH AND, IF ANY LETTER OF CREDIT REMAINS
OUTSTANDING, COMPLY WITH SECTION 2.4(C).

 

(K)           THE U.S. TERM LOAN COMMITMENTS AND THE CANADIAN TERM LOAN
COMMITMENTS SHALL TERMINATE AT 5:00 P.M., NEW YORK CITY TIME, ON THE CLOSING
DATE.

 

SECTION 2.15          OPTIONAL PREPAYMENT OF LOANS; REIMBURSEMENT OF LENDERS

 

(A)           THE BORROWERS SHALL HAVE THE RIGHT AT ANY TIME AND FROM TIME TO
TIME TO PREPAY ANY BORROWINGS WITHOUT PENALTY (EXCEPT FOR ANY BREAKAGE COSTS
ASSOCIATED WITH EURODOLLAR LOANS AND DISCOUNT RATE LOANS), IN WHOLE OR IN PART,
(X) WITH RESPECT TO A BORROWING OF EURODOLLAR LOANS OR DISCOUNT RATE LOANS, UPON
AT LEAST THREE (3) BUSINESS DAYS’ PRIOR WRITTEN, FACSIMILE OR TELEPHONIC
(CONFIRMED PROMPTLY IN WRITING) NOTICE TO THE APPLICABLE AGENT (AND THE
ADMINISTRATIVE AGENT IF THE ADMINISTRATIVE AGENT IS NOT THE APPLICABLE AGENT)
AND (Y) WITH RESPECT TO A BORROWING OF ABR LOANS OR CANADIAN PRIME RATE LOANS,
UPON PRIOR WRITTEN, FACSIMILE OR TELEPHONIC (CONFIRMED PROMPTLY IN WRITING)
NOTICE TO THE APPLICABLE AGENT (AND THE ADMINISTRATIVE AGENT IF THE
ADMINISTRATIVE AGENT IS NOT THE APPLICABLE AGENT) RECEIVED NO LATER THAN 12:00
NOON, NEW YORK CITY TIME ON THE DATE OF SUCH PREPAYMENT; PROVIDED, HOWEVER, THAT
(I) EACH SUCH PARTIAL PREPAYMENT SHALL BE IN INTEGRAL MULTIPLES OF US$1,000,000
OR C$1,000,000, AS APPLICABLE, OR THE ENTIRE AMOUNT OF SUCH BORROWING, (II) NO
PREPAYMENT OF A BORROWING OF EURODOLLAR LOANS OR DISCOUNT RATE LOANS SHALL BE
PERMITTED PURSUANT TO THIS SECTION 2.15(A) OTHER THAN ON THE LAST DAY OF AN
INTEREST PERIOD OR CONTRACT PERIOD APPLICABLE THERETO UNLESS SUCH PREPAYMENT IS
ACCOMPANIED BY THE PAYMENT OF THE AMOUNTS DESCRIBED IN CLAUSE (I) OF THE FIRST

 

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SENTENCE OF SECTION 2.15(B), AND (III) NO PARTIAL PREPAYMENT OF A BORROWING OF
EURODOLLAR LOANS OR DISCOUNT RATE LOANS SHALL RESULT IN THE AGGREGATE PRINCIPAL
AMOUNT OF THE EURODOLLAR LOANS OR DISCOUNT RATE LOANS REMAINING OUTSTANDING
PURSUANT TO SUCH BORROWING BEING LESS THAN US$1,000,000 OR C$1,000,000, AS
APPLICABLE.  EACH NOTICE OF PREPAYMENT SHALL SPECIFY THE PREPAYMENT DATE, THE
PRINCIPAL AMOUNT OF THE BORROWING TO BE PREPAID AND IN THE CASE OF A BORROWING
OF EURODOLLAR LOANS, THE BORROWING OR BORROWINGS PURSUANT TO WHICH MADE, SHALL
BE IRREVOCABLE AND SHALL COMMIT THE U.S. BORROWER OR CANADIAN BORROWER, AS THE
CASE MAY BE, TO PREPAY SUCH LOAN BY THE AMOUNT AND ON THE DATE STATED THEREIN. 
THE APPLICABLE AGENT SHALL, PROMPTLY AFTER RECEIVING NOTICE FROM THE U.S.
BORROWER OR CANADIAN BORROWER, AS THE CASE MAY BE, HEREUNDER, NOTIFY EACH
APPLICABLE LENDER OF THE PRINCIPAL AMOUNT OF THE LOANS HELD BY SUCH LENDER WHICH
ARE TO BE PREPAID, THE PREPAYMENT DATE AND THE MANNER OF APPLICATION OF THE
PREPAYMENT.  SUBJECT TO SECTION 2.15(D), SUCH PREPAYMENTS SHALL BE APPLIED
RATABLY TO THE LOANS INCLUDED IN THE PREPAID BORROWING.

 

(B)           THE BORROWERS SHALL REIMBURSE EACH LENDER ON DEMAND FOR ANY LOSS
INCURRED OR TO BE INCURRED BY IT IN THE REEMPLOYMENT OF THE FUNDS RELEASED
(I) RESULTING FROM ANY PREPAYMENT (FOR ANY REASON WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, REFINANCING WITH ABR LOANS OR CANADIAN PRIME RATE LOANS, AS
APPLICABLE) OF ANY EURODOLLAR LOAN OR DISCOUNT RATE LOAN REQUIRED OR PERMITTED
UNDER THIS AGREEMENT, IF SUCH LOAN IS PREPAID OTHER THAN ON THE LAST DAY OF THE
INTEREST PERIOD OR CONTRACT PERIOD FOR SUCH LOAN OR (II) IN THE EVENT THAT AFTER
THE BORROWERS DELIVER A NOTICE OF BORROWING UNDER SECTION 2.7 IN RESPECT OF
EURODOLLAR LOANS OR DISCOUNT RATE LOANS, SUCH LOANS ARE NOT MADE ON THE FIRST
DAY OF THE INTEREST PERIOD OR CONTRACT PERIOD SPECIFIED IN SUCH NOTICE OF
BORROWING FOR ANY REASON OTHER THAN A BREACH BY SUCH LENDER OF ITS OBLIGATIONS
HEREUNDER.  IN THE CASE OF A EURODOLLAR LOAN, SUCH LOSS SHALL BE THE AMOUNT AS
REASONABLY DETERMINED BY SUCH LENDER AS THE EXCESS, IF ANY, OF (A) THE AMOUNT OF
INTEREST WHICH WOULD HAVE ACCRUED TO SUCH LENDER ON THE AMOUNT SO PAID OR NOT
BORROWED AT A RATE OF INTEREST EQUAL TO THE ADJUSTED LIBO RATE FOR SUCH LOAN,
FOR THE PERIOD FROM THE DATE OF SUCH PAYMENT OR FAILURE TO BORROW TO THE LAST
DAY (X) IN THE CASE OF A PAYMENT OR REFINANCING WITH ABR LOANS OTHER THAN ON THE
LAST DAY OF THE INTEREST PERIOD FOR SUCH LOAN, OF THE THEN CURRENT INTEREST
PERIOD FOR SUCH LOAN, OR (Y) IN THE CASE OF SUCH FAILURE TO BORROW, OF THE
INTEREST PERIOD FOR SUCH LOAN WHICH WOULD HAVE COMMENCED ON THE DATE OF SUCH
FAILURE TO BORROW, OVER (B) THE AMOUNT OF INTEREST WHICH WOULD HAVE ACCRUED TO
SUCH LENDER ON SUCH AMOUNT BY PLACING SUCH AMOUNT ON DEPOSIT FOR A COMPARABLE
PERIOD WITH LEADING BANKS IN THE LONDON INTERBANK MARKET.  EACH LENDER SHALL
DELIVER TO THE U.S. BORROWER OR CANADIAN BORROWER, AS THE CASE MAY BE, FROM TIME
TO TIME ONE OR MORE CERTIFICATES SETTING FORTH THE AMOUNT OF SUCH LOSS AS
DETERMINED BY SUCH LENDER.

 

(C)           IN THE EVENT THE U.S. BORROWER OR CANADIAN BORROWER, AS THE CASE
MAY BE, FAILS TO PREPAY ANY BORROWING ON THE DATE SPECIFIED IN ANY PREPAYMENT
NOTICE DELIVERED PURSUANT TO SECTION 2.15(A), THE U.S. BORROWER OR CANADIAN
BORROWER, AS THE CASE MAY BE, ON DEMAND BY ANY LENDER SHALL PAY TO THE
APPLICABLE AGENT FOR THE ACCOUNT OF SUCH LENDER ANY AMOUNTS REQUIRED TO
COMPENSATE SUCH LENDER FOR ANY LOSS INCURRED BY SUCH LENDER AS A RESULT OF SUCH
FAILURE TO PREPAY, INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST OR EXPENSES
INCURRED BY REASON OF THE ACQUISITION OF DEPOSITS OR OTHER FUNDS BY SUCH LENDER
TO FULFILL DEPOSIT OBLIGATIONS INCURRED IN ANTICIPATION OF SUCH PREPAYMENT, BUT
WITHOUT DUPLICATION OF ANY AMOUNTS PAID UNDER SECTION 2.15(B).  EACH LENDER
SHALL DELIVER TO THE U.S. BORROWER OR CANADIAN BORROWER, AS THE CASE MAY

 

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BE, FROM TIME TO TIME ONE OR MORE CERTIFICATES SETTING FORTH THE AMOUNT OF SUCH
LOSS AS DETERMINED BY SUCH LENDER.

 

(D)           ANY PROCEEDS OF COLLATERAL (OTHER THAN COLLATERAL OF THE CANADIAN
LOAN PARTIES) RECEIVED BY ANY AGENT (I) NOT CONSTITUTING EITHER (A) A SPECIFIC
PAYMENT OF PRINCIPAL, INTEREST, FEES OR OTHER SUM PAYABLE UNDER THE LOAN
DOCUMENTS (WHICH SHALL BE APPLIED AS SPECIFIED BY THE APPLICABLE BORROWER),
(B) A MANDATORY PREPAYMENT (WHICH SHALL BE APPLIED IN ACCORDANCE WITH
SECTION 2.14), (C) AMOUNTS TO BE APPLIED FROM WEEKLY SWEEPS OF AVAILABLE CASH
(WHICH SHALL BE APPLIED IN ACCORDANCE WITH SECTION 5.7) OR (D) AMOUNTS TO BE
APPLIED FROM THE CONCENTRATION ACCOUNT WHEN FULL CASH DOMINION IS IN EFFECT
(WHICH SHALL BE APPLIED IN ACCORDANCE WITH SECTION 2.15(G) AND SECTION 5.7) OR
(II) AFTER AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND THE APPLICABLE
AGENT SO ELECTS OR THE REQUIRED LENDERS SO DIRECT, SUCH FUNDS SHALL BE APPLIED
RATABLY AS FOLLOWS: FIRST, TO PAY ANY FEES, INDEMNITIES, OR EXPENSE
REIMBURSEMENTS THEN DUE TO THE AGENTS AND THE FRONTING BANKS FROM THE U.S. LOAN
PARTIES (OTHER THAN IN CONNECTION WITH BANKING SERVICES OBLIGATIONS OR SWAP
OBLIGATIONS); SECOND, TO PAY ANY FEES OR EXPENSE REIMBURSEMENTS THEN DUE TO THE
LENDERS FROM THE U.S. LOAN PARTIES (OTHER THAN IN CONNECTION WITH BANKING
SERVICES OBLIGATIONS OR SWAP OBLIGATIONS); THIRD, TO PAY INTEREST THEN DUE AND
PAYABLE ON THE U.S. LOANS RATABLY; FOURTH, TO PREPAY PRINCIPAL ON THE U.S. LOANS
AND UNREIMBURSED DRAFTS DRAWN UNDER U.S. REVOLVING FACILITY LETTERS OF CREDIT
RATABLY, FIFTH, TO PAY AN AMOUNT TO THE ADMINISTRATIVE AGENT EQUAL TO THE
GREATER OF (X) AN AMOUNT, AS DETERMINED BY THE FRONTING BANKS AND THE
ADMINISTRATIVE AGENT, EQUAL TO THE FACE AMOUNT OF ALL OUTSTANDING U.S. REVOLVING
FACILITY LETTERS OF CREDIT PLUS THE SUM OF ALL PROJECTED CONTRACTUAL OBLIGATIONS
TO THE AGENTS, THE FRONTING BANKS AND THE LENDERS OF THE U.S. BORROWER
THEREUNDER THROUGH THE EXPIRATION DATE(S) OF SUCH LETTERS OF CREDIT, AND
(Y) 105% OF THE AGGREGATE U.S. LETTER OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT
OF CASH HELD IN THE LETTER OF CREDIT ACCOUNT), TO BE HELD IN THE LETTER OF
CREDIT ACCOUNT AS CASH COLLATERAL FOR SUCH OBLIGATIONS; SIXTH, TO PAYMENT OF ANY
AMOUNTS OWING BY THE U.S. LOAN PARTIES WITH RESPECT TO BANKING SERVICES
OBLIGATIONS AND SWAP OBLIGATIONS; SEVENTH, TO THE PAYMENT OF ANY OTHER U.S.
SECURED OBLIGATION DUE TO THE AGENTS OR ANY LENDER BY THE U.S. LOAN PARTIES;
EIGHTH, TO PAY ANY FEES, INDEMNITIES, OR EXPENSE REIMBURSEMENTS THEN DUE TO THE
AGENTS AND THE FRONTING BANKS FROM THE CANADIAN LOAN PARTIES (OTHER THAN IN
CONNECTION WITH BANKING SERVICES OBLIGATIONS OR SWAP OBLIGATIONS); NINTH, TO PAY
ANY FEES OR EXPENSE REIMBURSEMENTS THEN DUE TO THE LENDERS FROM THE CANADIAN
LOAN PARTIES (OTHER THAN IN CONNECTION WITH BANKING SERVICES OBLIGATIONS OR SWAP
OBLIGATIONS); TENTH, TO PAY INTEREST THEN DUE AND PAYABLE ON THE CANADIAN LOANS
RATABLY; ELEVENTH, TO PREPAY PRINCIPAL ON THE CANADIAN LOANS AND UNREIMBURSED
DRAFTS DRAWN UNDER CANADIAN REVOLVING FACILITY LETTERS OF CREDIT RATABLY,
TWELFTH, TO PAY AN AMOUNT TO THE CANADIAN ADMINISTRATIVE AGENT EQUAL TO THE
GREATER OF (X) AN AMOUNT, AS DETERMINED BY THE FRONTING BANKS AND THE CANADIAN
ADMINISTRATIVE AGENT, EQUAL TO THE FACE AMOUNT OF ALL OUTSTANDING CANADIAN
REVOLVING FACILITY LETTERS OF CREDIT PLUS THE SUM OF ALL PROJECTED CONTRACTUAL
OBLIGATIONS TO THE AGENTS, THE FRONTING BANKS AND THE LENDERS OF THE CANADIAN
BORROWER THEREUNDER THROUGH THE EXPIRATION DATE(S) OF SUCH LETTERS OF CREDIT,
AND (Y) 105% OF THE AGGREGATE CANADIAN LETTER OF CREDIT OUTSTANDINGS (NET OF THE
AMOUNT OF CASH HELD IN THE CANADIAN LETTER OF CREDIT ACCOUNT), TO BE HELD IN THE
CANADIAN LETTER OF CREDIT ACCOUNT AS CASH COLLATERAL FOR SUCH OBLIGATIONS;
THIRTEENTH, TO PAYMENT OF ANY AMOUNTS OWING BY THE CANADIAN LOAN PARTIES WITH
RESPECT TO BANKING SERVICES OBLIGATIONS AND SWAP OBLIGATIONS; AND FOURTEENTH, TO
THE PAYMENT OF ANY OTHER CANADIAN SECURED OBLIGATION DUE TO THE AGENTS OR ANY
LENDER BY THE CANADIAN LOAN PARTIES.

 

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(E)           ANY PROCEEDS OF COLLATERAL OF THE CANADIAN LOAN PARTIES RECEIVED
BY ANY AGENT (I) NOT CONSTITUTING EITHER (A) A SPECIFIC PAYMENT OF PRINCIPAL,
INTEREST, FEES OR OTHER SUM PAYABLE UNDER THE LOAN DOCUMENTS (WHICH SHALL BE
APPLIED AS SPECIFIED BY THE APPLICABLE BORROWER), (B) A MANDATORY PREPAYMENT
(WHICH SHALL BE APPLIED IN ACCORDANCE WITH SECTION 2.14), OR (C) AMOUNTS TO BE
APPLIED FROM THE CANADIAN CONCENTRATION ACCOUNT WHEN FULL CASH DOMINION IS IN
EFFECT (WHICH SHALL BE APPLIED IN ACCORDANCE WITH SECTION 2.15(G) AND
SECTION 5.7) OR (II) AFTER AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING
AND THE APPLICABLE AGENT SO ELECTS OR THE REQUIRED LENDERS SO DIRECT, SUCH FUNDS
SHALL BE APPLIED RATABLY AS FOLLOWS: FIRST, TO PAY ANY FEES, INDEMNITIES, OR
EXPENSE REIMBURSEMENTS THEN DUE TO THE AGENTS AND THE FRONTING BANKS FROM THE
CANADIAN LOAN PARTIES (OTHER THAN IN CONNECTION WITH BANKING SERVICES
OBLIGATIONS OR SWAP OBLIGATIONS); SECOND, TO PAY ANY FEES OR EXPENSE
REIMBURSEMENTS THEN DUE TO THE LENDERS FROM THE CANADIAN LOAN PARTIES (OTHER
THAN IN CONNECTION WITH BANKING SERVICES OBLIGATIONS OR SWAP OBLIGATIONS);
THIRD, TO PAY INTEREST THEN DUE AND PAYABLE ON THE LOANS TO THE CANADIAN
BORROWER RATABLY; FOURTH, TO PREPAY PRINCIPAL ON THE CANADIAN LOANS MADE TO THE
CANADIAN BORROWER AND UNREIMBURSED DRAFTS DRAWN UNDER CANADIAN REVOLVING
FACILITY LETTERS OF CREDIT RATABLY, FIFTH, TO PAY AN AMOUNT TO THE CANADIAN
ADMINISTRATIVE AGENT EQUAL TO THE GREATER OF (X) AN AMOUNT, AS DETERMINED BY THE
FRONTING BANKS AND THE CANADIAN ADMINISTRATIVE AGENT, EQUAL TO THE FACE AMOUNT
OF ALL OUTSTANDING CANADIAN REVOLVING FACILITY LETTERS OF CREDIT PLUS THE SUM OF
ALL PROJECTED CONTRACTUAL OBLIGATIONS TO THE CANADIAN ADMINISTRATIVE AGENT, THE
FRONTING BANKS AND THE LENDERS OF THE CANADIAN BORROWER THEREUNDER THROUGH THE
EXPIRATION DATE(S) OF SUCH LETTERS OF CREDIT, AND (Y) 105% OF THE AGGREGATE
CANADIAN LETTER OF CREDIT OUTSTANDINGS (NET OF THE AMOUNT OF CASH HELD IN THE
CANADIAN LETTER OF CREDIT ACCOUNT), TO BE HELD IN THE CANADIAN LETTER OF CREDIT
ACCOUNT AS CASH COLLATERAL FOR SUCH OBLIGATIONS; SIXTH, TO PAYMENT OF ANY
AMOUNTS OWING WITH RESPECT TO BANKING SERVICES OBLIGATIONS AND SWAP OBLIGATIONS
OWED BY ANY CANADIAN LOAN PARTY; SEVENTH, TO THE PAYMENT OF ANY OTHER CANADIAN
SECURED OBLIGATION DUE TO THE AGENTS OR ANY LENDER BY THE LOAN PARTIES; AND
EIGHTH, SOLELY WITH RESPECT TO ANY REMAINING PROCEEDS OF COLLATERAL OF THE
CANADIAN BORROWER, TO THE EXTENT PERMITTED BY APPLICABLE LAW AND NOT OTHERWISE
PROHIBITED BY ANY COURT ORDER, TO THE PAYMENT OF ANY OTHER SECURED OBLIGATIONS
IN THE AMOUNTS AND IN THE PRIORITIES SET FORTH IN SECTION 2.15(D).

 

(F)            NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, UNLESS SO DIRECTED BY A BORROWER, OR UNLESS A DEFAULT OR EVENT OF
DEFAULT IS IN EXISTENCE, NEITHER THE APPLICABLE AGENT NOR ANY LENDER SHALL APPLY
ANY PAYMENT WHICH IT RECEIVES TO ANY EURODOLLAR LOAN OR DISCOUNT RATE LOAN OF A
CLASS, EXCEPT (A) ON THE EXPIRATION DATE OF THE INTEREST PERIOD APPLICABLE TO
ANY SUCH EURODOLLAR LOAN OR CONTRACT PERIOD APPLICABLE TO ANY SUCH DISCOUNT RATE
LOAN OR (B) IN THE EVENT, AND ONLY TO THE EXTENT, THAT THERE ARE NO OUTSTANDING
ABR LOANS OR CANADIAN PRIME RATE LOANS OF THE SAME CLASS AND, IN ANY SUCH EVENT,
THE LOAN PARTIES SHALL PAY THE BREAK FUNDING PAYMENT REQUIRED IN ACCORDANCE WITH
SECTION 2.15(B). THE AGENTS AND THE LENDERS SHALL HAVE THE CONTINUING AND
EXCLUSIVE RIGHT TO APPLY AND REVERSE AND REAPPLY ANY AND ALL SUCH PROCEEDS AND
PAYMENTS TO ANY PORTION OF THE SECURED OBLIGATIONS.

 

(G)           AT ALL TIMES WHEN FULL CASH DOMINION IS IN EFFECT PURSUANT TO
SECTION 5.7, ON EACH BUSINESS DAY, (I) THE ADMINISTRATIVE AGENT SHALL APPLY ALL
FUNDS CREDITED TO THE CONCENTRATION ACCOUNT THE PREVIOUS BUSINESS DAY TO PREPAY
THE U.S. REVOLVING LOANS AND (II) THE CANADIAN ADMINISTRATIVE AGENT SHALL APPLY
ALL FUNDS CREDITED TO THE CANADIAN CONCENTRATION ACCOUNT THE PREVIOUS BUSINESS
DAY TO PREPAY THE CANADIAN REVOLVING LOANS.

 

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Section 2.16          Reserve Requirements; Change in Circumstances.

 

(A)           NOTWITHSTANDING ANY OTHER PROVISION HEREIN, IF AFTER THE CLOSING
DATE ANY CHANGE IN APPLICABLE LAW OR REGULATION OR IN THE INTERPRETATION OR
ADMINISTRATION THEREOF BY ANY GOVERNMENTAL AUTHORITY CHARGED WITH THE
INTERPRETATION OR ADMINISTRATION THEREOF (WHETHER OR NOT HAVING THE FORCE OF
LAW) SHALL CHANGE THE BASIS OF TAXATION OF PAYMENTS TO ANY LENDER OF THE
PRINCIPAL OF OR INTEREST ON ANY EURODOLLAR LOAN OR DISCOUNT RATE LOAN MADE BY
SUCH LENDER OR ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER (OTHER THAN CHANGES
IN RESPECT OF TAXES, OTHER TAXES AND TAXES IMPOSED ON, OR MEASURED BY, THE NET
INCOME OR NET PROFITS OR FRANCHISE TAXES OF SUCH LENDER IN EACH CASE IMPOSED BY
THE JURISDICTION IN WHICH SUCH LENDER IS ORGANIZED, HAS ITS PRINCIPAL OFFICE, OR
IN WHICH THE APPLICABLE LENDING OFFICE FOR SUCH LOAN IS LOCATED OR BY ANY
POLITICAL SUBDIVISION OR TAXING AUTHORITY THEREIN, OR BY ANY OTHER JURISDICTION
OR BY ANY POLITICAL SUBDIVISION OR TAXING AUTHORITY THEREIN OTHER THAN A
JURISDICTION IN WHICH SUCH LENDER WOULD NOT BE SUBJECT TO TAX BUT FOR THE
EXECUTION AND PERFORMANCE OF, OR RECEIPT OF PAYMENT AND ENFORCEMENT OF RIGHTS
UNDER, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT), OR SHALL IMPOSE, MODIFY OR
DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT OR SIMILAR REQUIREMENT AGAINST
ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF OR CREDIT EXTENDED BY SUCH LENDER
(EXCEPT ANY SUCH RESERVE REQUIREMENT WHICH IS REFLECTED IN THE ADJUSTED LIBO
RATE) OR SHALL IMPOSE ON SUCH LENDER OR THE APPLICABLE INTERBANK MARKET ANY
OTHER CONDITION AFFECTING THIS AGREEMENT OR THE EURODOLLAR LOANS OR DISCOUNT
RATE LOANS MADE BY SUCH LENDER, AND THE RESULT OF ANY OF THE FOREGOING SHALL BE
TO INCREASE THE COST TO SUCH LENDER OF MAKING OR MAINTAINING ANY LOAN OR TO
REDUCE THE AMOUNT OF ANY SUM RECEIVED OR RECEIVABLE BY SUCH LENDER HEREUNDER
(WHETHER OF PRINCIPAL, INTEREST OR OTHERWISE) BY AN AMOUNT DEEMED BY SUCH LENDER
TO BE MATERIAL, THEN THE BORROWERS WILL PAY TO SUCH LENDER IN ACCORDANCE WITH
PARAGRAPH (C) BELOW SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE SUCH
LENDER FOR SUCH ADDITIONAL COSTS INCURRED OR REDUCTION SUFFERED.

 

(B)           IF ANY LENDER SHALL HAVE DETERMINED THAT THE ADOPTION OR
EFFECTIVENESS AFTER THE CLOSING DATE OF ANY LAW, RULE, REGULATION OR GUIDELINE
REGARDING CAPITAL ADEQUACY, OR ANY CHANGE IN ANY OF THE FOREGOING OR IN THE
INTERPRETATION OR ADMINISTRATION OF ANY OF THE FOREGOING BY ANY GOVERNMENTAL
AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY CHARGED WITH THE INTERPRETATION OR
ADMINISTRATION THEREOF, OR COMPLIANCE BY ANY LENDER (OR ANY LENDING OFFICE OF
SUCH LENDER) OR ANY LENDER’S HOLDING COMPANY WITH ANY REQUEST OR DIRECTIVE
REGARDING CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE FORCE OF LAW) OF ANY SUCH
AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY, 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, THE LOANS
MADE BY SUCH LENDER PURSUANT HERETO, SUCH LENDER’S COMMITMENT HEREUNDER OR THE
ISSUANCE OF, OR PARTICIPATION IN, ANY LETTER OF CREDIT BY SUCH LENDER TO A LEVEL
BELOW THAT WHICH SUCH LENDER OR SUCH LENDER’S HOLDING COMPANY COULD HAVE
ACHIEVED BUT FOR SUCH ADOPTION, CHANGE OR COMPLIANCE (TAKING INTO ACCOUNT
LENDER’S POLICIES AND THE POLICIES OF SUCH LENDER’S HOLDING COMPANY WITH RESPECT
TO CAPITAL ADEQUACY) BY AN AMOUNT DEEMED BY SUCH LENDER TO BE MATERIAL, THEN
FROM TIME TO TIME THE BORROWERS SHALL 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 EACH LENDER SETTING FORTH SUCH AMOUNT OR AMOUNTS
AS SHALL BE NECESSARY TO COMPENSATE SUCH LENDER OR ITS HOLDING COMPANY AS
SPECIFIED IN PARAGRAPH (A) OR (B) ABOVE, AS THE CASE MAY BE, SHALL BE DELIVERED
TO THE BORROWERS AND SHALL BE CONCLUSIVE ABSENT

 

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MANIFEST ERROR.  THE BORROWERS SHALL PAY EACH LENDER THE AMOUNT SHOWN AS DUE ON
ANY SUCH CERTIFICATE DELIVERED TO IT WITHIN TEN (10) DAYS AFTER ITS RECEIPT OF
THE SAME.  ANY LENDER RECEIVING ANY SUCH PAYMENT SHALL PROMPTLY MAKE A REFUND
THEREOF TO THE BORROWERS IF THE LAW, REGULATION, GUIDELINE OR CHANGE IN
CIRCUMSTANCES GIVING RISE TO SUCH PAYMENT IS SUBSEQUENTLY DEEMED OR HELD TO BE
INVALID OR INAPPLICABLE.

 

(D)           EXCEPT AS PROVIDED IN THE NEXT SENTENCE, FAILURE ON THE PART OF
ANY LENDER TO DEMAND COMPENSATION FOR ANY INCREASED COSTS OR REDUCTION IN
AMOUNTS RECEIVED OR RECEIVABLE OR REDUCTION IN RETURN ON CAPITAL WITH RESPECT TO
ANY PERIOD SHALL NOT CONSTITUTE A WAIVER OF SUCH LENDER’S RIGHT TO DEMAND
COMPENSATION WITH RESPECT TO SUCH PERIOD OR ANY OTHER PERIOD. NOTWITHSTANDING
ANYTHING TO THE CONTRARY SET FORTH HEREIN, UNLESS A LENDER GIVES NOTICE TO A
BORROWER THAT IT IS OBLIGATED TO PAY AN AMOUNT UNDER THIS SECTION 2.16 WITHIN
270 DAYS AFTER THE INCREASED COST OR REDUCED RETURN GIVING RISE TO SUCH A CLAIM
IS INCURRED OR SUFFERED, THEN SUCH LENDER SHALL ONLY BE ENTITLED TO BE
COMPENSATED TO THE EXTENT THAT SUCH INCREASED COST OR REDUCED RETURN IS INCURRED
OR SUFFERED WITHIN THE 270-DAY PERIOD BEFORE SUCH LENDER GIVES SUCH NOTICE TO
THE BORROWER; PROVIDED THAT IF THE CIRCUMSTANCES GIVING RISE TO SUCH A CLAIM
HAVE A RETROACTIVE EFFECT, THEN SUCH 270-DAY PERIOD SHALL BE EXTENDED TO INCLUDE
THE PERIOD OF SUCH RETROACTIVE EFFECT.  THE PROTECTION OF THIS SECTION SHALL BE
AVAILABLE TO EACH LENDER REGARDLESS OF ANY POSSIBLE CONTENTION OF THE INVALIDITY
OR INAPPLICABILITY OF THE LAW, RULE, REGULATION, GUIDELINE OR OTHER CHANGE OR
CONDITION WHICH SHALL HAVE OCCURRED OR BEEN IMPOSED.

 

SECTION 2.17          CHANGE IN LEGALITY

 

(A)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED ELSEWHERE IN
THIS AGREEMENT, IF (X) ANY CHANGE AFTER THE CLOSING DATE IN ANY LAW OR
REGULATION OR IN THE INTERPRETATION THEREOF BY ANY GOVERNMENTAL AUTHORITY
CHARGED WITH THE ADMINISTRATION THEREOF SHALL MAKE IT UNLAWFUL FOR A LENDER TO
MAKE OR MAINTAIN A EURODOLLAR LOAN OR DISCOUNT RATE LOAN OR TO GIVE EFFECT TO
ITS OBLIGATIONS AS CONTEMPLATED HEREBY WITH RESPECT TO A EURODOLLAR LOAN OR
DISCOUNT RATE LOAN OR (Y) AT ANY TIME ANY LENDER DETERMINES THAT THE MAKING OR
CONTINUANCE OF ANY OF ITS EURODOLLAR LOANS OR DISCOUNT RATE LOANS HAS BECOME
IMPRACTICABLE AS A RESULT OF A CONTINGENCY OCCURRING AFTER THE CLOSING DATE
WHICH ADVERSELY AFFECTS THE APPLICABLE INTERBANK MARKET OR THE POSITION OF SUCH
LENDER IN SUCH MARKET, THEN, BY WRITTEN NOTICE TO THE BORROWERS, SUCH LENDER MAY
(I) DECLARE THAT EURODOLLAR LOANS OR DISCOUNT RATE LOANS WILL NOT THEREAFTER BE
MADE BY SUCH LENDER HEREUNDER, WHEREUPON ANY REQUEST BY THE BORROWERS FOR A
(A) EURODOLLAR BORROWING SHALL, AS TO SUCH LENDER ONLY, BE DEEMED A REQUEST FOR
AN ABR LOAN UNLESS SUCH DECLARATION SHALL BE SUBSEQUENTLY WITHDRAWN AND, (B) A
BORROWING COMPRISED OF DISCOUNT RATE LOANS SHALL, AS TO SUCH LENDERS ONLY, BE
DEEMED A REQUEST FOR A CANADIAN PRIME RATE LOAN UNLESS SUCH DECLARATION SHALL BE
SUBSEQUENTLY WITHDRAWN; AND (II) REQUIRE THAT ALL OUTSTANDING (A) EURODOLLAR
LOANS MADE BY IT BE CONVERTED TO ABR LOANS, IN WHICH EVENT ALL SUCH EURODOLLAR
LOANS SHALL BE AUTOMATICALLY CONVERTED TO ABR LOANS AS OF THE EFFECTIVE DATE OF
SUCH NOTICE AS PROVIDED IN PARAGRAPH (B) BELOW, AND (B) DISCOUNT RATE LOANS MADE
BY IT BE CONVERTED TO CANADIAN PRIME RATE LOANS, IN WHICH EVENT ALL SUCH
DISCOUNT RATE LOANS SHALL BE AUTOMATICALLY CONVERTED TO CANADIAN PRIME RATE
LOANS AS OF THE EFFECTIVE DATE OF SUCH NOTICE AS PROVIDED IN PARAGRAPH
(B) BELOW.  IN THE EVENT ANY LENDER SHALL EXERCISE ITS RIGHTS UNDER CLAUSE
(I) OR (II) OF THIS PARAGRAPH (A), ALL PAYMENTS AND PREPAYMENTS OF PRINCIPAL
WHICH WOULD OTHERWISE HAVE BEEN APPLIED TO REPAY THE EURODOLLAR LOANS OR
DISCOUNT RATE LOANS, AS THE CASE MAY BE, THAT WOULD HAVE BEEN MADE BY SUCH
LENDER OR THE CONVERTED EURODOLLAR LOANS OR DISCOUNT RATE LOANS, AS

 

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THE CASE MAY BE, OF SUCH LENDER SHALL INSTEAD BE APPLIED TO REPAY THE ABR LOANS
OR CANADIAN PRIME RATE LOANS, AS THE CASE MAY BE, MADE BY SUCH LENDER IN LIEU
OF, OR RESULTING FROM THE CONVERSION OF, SUCH EURODOLLAR LOANS OR DISCOUNT RATE
LOANS, AS THE CASE MAY BE.

 

(B)           FOR PURPOSES OF THIS SECTION 2.17, A NOTICE TO THE BORROWERS BY
ANY LENDER PURSUANT TO PARAGRAPH (A) ABOVE SHALL BE EFFECTIVE, IF LAWFUL, AND IF
ANY EURODOLLAR LOANS OR DISCOUNT RATE LOANS, AS THE CASE MAY BE, SHALL THEN BE
OUTSTANDING, ON THE LAST DAY OF THE THEN-CURRENT INTEREST PERIOD OR CONTRACT
PERIOD, OTHERWISE, SUCH NOTICE SHALL BE EFFECTIVE ON THE DATE OF RECEIPT BY THE
BORROWERS.

 

Section 2.18          Pro Rata Treatment, etc.

 

(A)           ALL PAYMENTS AND REPAYMENTS OF PRINCIPAL AND INTEREST IN RESPECT
OF THE LOANS (EXCEPT AS EXPRESSLY PROVIDED IN SECTION 2.14, SECTION 2.15,
SECTION 2.16, SECTION 2.17 AND ARTICLE 11) AND ALL PAYMENTS OF LETTER OF CREDIT
FEES (OTHER THAN THOSE PAYABLE TO A FRONTING BANK) FOR LETTERS OF CREDIT SHALL
BE MADE PRO RATA AMONG THE APPLICABLE LENDERS IN ACCORDANCE WITH THEIR
RESPECTIVE APPLICABLE COMMITMENTS (PROVIDED THAT IN THE CASE OF TERM LOANS OR IN
THE EVENT THAT SUCH COMMITMENTS SHALL HAVE EXPIRED OR BEEN TERMINATED, SUCH PRO
RATA ALLOCATION SHALL BE BASED ON THE RESPECTIVE PRINCIPAL AMOUNTS OF THE
OUTSTANDING LOANS OR PARTICIPATIONS IN LETTERS OF CREDIT).  ALL PAYMENTS OF
COMMITMENT FEES SHALL BE MADE PRO RATA AMONG THE LENDERS IN ACCORDANCE WITH
THEIR COMMITMENTS.  ALL PAYMENTS BY THE BORROWERS HEREUNDER SHALL BE (I) EXCEPT
AS OTHERWISE PROVIDED IN SECTION 2.19, NET OF ANY TAX APPLICABLE TO THE
BORROWERS AND (II) MADE IN DOLLARS OR CANADIAN DOLLARS (AS APPLICABLE) IN
IMMEDIATELY AVAILABLE FUNDS, WITHOUT DEFENSE, SETOFF OR COUNTERCLAIM AND FREE OF
ANY RESTRICTION OR CONDITION, AT THE OFFICE OF THE APPLICABLE AGENT BY 12:00
NOON, NEW YORK CITY TIME, ON THE DATE ON WHICH SUCH PAYMENT SHALL BE DUE. 
INTEREST IN RESPECT OF ANY LOAN HEREUNDER SHALL ACCRUE FROM AND INCLUDING THE
DATE OF SUCH LOAN TO BUT EXCLUDING THE DATE ON WHICH SUCH LOAN IS PAID IN FULL
OR CONVERTED TO A LOAN OF A DIFFERENT TYPE.

 

(B)           UNLESS THE APPLICABLE AGENT SHALL HAVE RECEIVED NOTICE FROM THE
APPLICABLE BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE
APPLICABLE AGENT FOR THE ACCOUNT OF THE LENDERS OR A FRONTING BANK HEREUNDER
THAT THE BORROWER WILL NOT MAKE SUCH PAYMENT, THE APPLICABLE 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 OR A FRONTING
BANK, AS THE CASE MAY BE, THE AMOUNT DUE.  IN SUCH EVENT, IF THE BORROWER HAS
NOT IN FACT MADE SUCH PAYMENT, THEN EACH OF THE LENDERS OR A FRONTING BANK, AS
THE CASE MAY BE, SEVERALLY AGREES TO REPAY TO THE APPLICABLE AGENT FORTHWITH ON
DEMAND THE AMOUNT SO DISTRIBUTED TO SUCH LENDER OR FRONTING BANK WITH INTEREST
THEREON, FOR EACH DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS DISTRIBUTED TO
IT TO BUT EXCLUDING THE DATE OF PAYMENT TO THE APPLICABLE AGENT, AT THE GREATER
OF THE FEDERAL FUNDS EFFECTIVE RATE AND A RATE DETERMINED BY THE APPLICABLE
AGENT IN ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.

 

(C)           IF ANY LENDER SHALL FAIL TO MAKE ANY PAYMENT REQUIRED TO BE MADE
BY IT PURSUANT TO SECTION 2.4(E) OR 2.4(G), SECTION 2.7(B), 2.7(C), 2.7(D) OR
2.7(E), SECTION 2.18(B) OR SECTION 9.6(B), THEN THE APPLICABLE AGENT MAY, IN ITS
DISCRETION (NOTWITHSTANDING ANY CONTRARY PROVISION HEREOF), APPLY ANY AMOUNTS
THEREAFTER RECEIVED BY THE APPLICABLE AGENT FOR THE ACCOUNT

 

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OF SUCH LENDER TO SATISFY SUCH LENDER’S OBLIGATIONS UNDER SUCH SECTIONS UNTIL
ALL SUCH UNSATISFIED OBLIGATIONS ARE FULLY PAID.

 

SECTION 2.19          TAXES

 

(A)           EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 2.19, ANY AND ALL
PAYMENTS BY THE LOAN PARTIES HEREUNDER AND UNDER ANY OTHER LOAN DOCUMENT SHALL
BE MADE FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR ANY AND ALL CURRENT OR
FUTURE TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES OR WITHHOLDINGS, AND ALL
LIABILITIES WITH RESPECT THERETO, EXCLUDING TAXES IMPOSED ON OR MEASURED BY THE
NET INCOME OR NET PROFIT OF AN AGENT, A FRONTING BANK OR ANY LENDER (OR ANY
TRANSFEREE OR ASSIGNEE THEREOF, INCLUDING A PARTICIPATION HOLDER (ANY SUCH
ENTITY BEING CALLED A “TRANSFEREE”)) AND FRANCHISE TAXES, IN EACH CASE IMPOSED
ON AN AGENT, A FRONTING BANK OR ANY LENDER (OR TRANSFEREE) BY THE JURISDICTION
UNDER THE LAWS OF WHICH SUCH AGENT, SUCH FRONTING BANK OR ANY SUCH LENDER (OR
TRANSFEREE) IS ORGANIZED OR IN WHICH THE APPLICABLE LENDING OFFICE OF ANY SUCH
LENDER (OR TRANSFEREE) OR APPLICABLE OFFICE OF SUCH AGENT OR SUCH FRONTING BANK,
IS LOCATED OR ANY POLITICAL SUBDIVISION THEREOF OR BY ANY OTHER JURISDICTION OR
BY ANY POLITICAL SUBDIVISION OR TAXING AUTHORITY THEREIN OTHER THAN A
JURISDICTION IN WHICH SUCH AGENT, SUCH FRONTING BANK OR SUCH LENDER (OR
TRANSFEREE) WOULD NOT BE SUBJECT TO TAX BUT FOR THE EXECUTION AND PERFORMANCE
OF, THE RECEIPT OF PAYMENT AND THE ENFORCEMENT OF RIGHTS UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT (ALL SUCH NONEXCLUDED TAXES, LEVIES, IMPOSTS,
DEDUCTIONS, CHARGES, WITHHOLDINGS AND LIABILITIES BEING HEREINAFTER REFERRED TO
AS “TAXES”).  IF THE LOAN PARTIES SHALL BE REQUIRED BY LAW TO DEDUCT ANY TAXES
FROM OR IN RESPECT OF ANY SUM PAYABLE HEREUNDER TO THE LENDERS (OR ANY
TRANSFEREE), A FRONTING BANK OR THE AGENTS, (I) THE SUM PAYABLE SHALL BE
INCREASED BY THE AMOUNT NECESSARY SO THAT AFTER MAKING ALL REQUIRED DEDUCTIONS
(INCLUDING DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION)
SUCH LENDER (OR TRANSFEREE), SUCH FRONTING BANK OR SUCH AGENT (AS THE CASE MAY
BE) SHALL RECEIVE AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE RECEIVED HAD NO SUCH
DEDUCTIONS BEEN MADE, (II) THE LOAN PARTIES SHALL MAKE SUCH DEDUCTIONS AND
(III) THE LOAN PARTIES SHALL PAY THE FULL AMOUNT DEDUCTED TO THE RELEVANT TAXING
AUTHORITY OR OTHER GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(B)           IN ADDITION, THE LOAN PARTIES AGREE TO PAY ANY CURRENT OR FUTURE
STAMP OR DOCUMENTARY TAXES OR ANY OTHER EXCISE OR PROPERTY TAXES, CHARGES,
ASSESSMENTS OR SIMILAR LEVIES THAT ARISE FROM ANY PAYMENT MADE HEREUNDER OR FROM
THE EXECUTION, DELIVERY OR REGISTRATION OF, OR OTHERWISE WITH RESPECT TO, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT (HEREINAFTER REFERRED TO AS “OTHER TAXES”).

 

(C)           THE BORROWERS WILL INDEMNIFY EACH LENDER (OR TRANSFEREE), EACH
FRONTING BANK AND EACH AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES PAID
BY SUCH LENDER (OR TRANSFEREE), SUCH FRONTING BANK OR SUCH AGENT, AS THE CASE
MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE
CORRECTLY OR LEGALLY ASSERTED BY THE RELEVANT TAXING AUTHORITY OR OTHER
GOVERNMENTAL AUTHORITY.  SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30)
DAYS AFTER THE DATE ANY LENDER (OR TRANSFEREE), ANY FRONTING BANK OR ANY AGENT,
AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR.  IF ANY LENDER (OR
TRANSFEREE), FRONTING BANK OR AGENT RECEIVES A REFUND IN RESPECT OF ANY TAXES OR
OTHER TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED BY THE LOAN PARTIES PURSUANT TO
THIS SECTION, AND IN SUCH LENDER’S (OR TRANSFEREE’S), FRONTING BANK’S OR AGENT’S
OPINION, SUCH REFUND AMOUNT IS BOTH REASONABLY IDENTIFIABLE AND QUANTIFIABLE BY
IT

 

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WITHOUT UNACCEPTABLE ADMINISTRATIVE BURDEN, IT SHALL PROMPTLY NOTIFY THE LOAN
PARTIES OF SUCH REFUND AND SHALL, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A
REQUEST BY THE LOAN PARTIES (OR PROMPTLY UPON RECEIPT, IF THE LOAN PARTIES HAVE
REQUESTED APPLICATION FOR SUCH REFUND PURSUANT HERETO), REPAY SUCH REFUND TO THE
LOAN PARTIES (TO THE EXTENT OF AMOUNTS THAT HAVE BEEN PAID BY THE LOAN PARTIES
UNDER THIS SECTION WITH RESPECT TO SUCH REFUND) PLUS INTEREST THAT IS RECEIVED
BY THE LENDER (OR TRANSFEREE), FRONTING BANK OR SUCH AGENT AS PART OF THE
REFUND, NET OF ALL TAXES AND OUT-OF-POCKET EXPENSES OF SUCH LENDER (OR
TRANSFEREE), FRONTING BANK OR SUCH AGENT AND WITHOUT ADDITIONAL INTEREST
THEREON; PROVIDED THAT THE LOAN PARTIES, UPON THE REQUEST OF SUCH LENDER (OR
TRANSFEREE), SUCH FRONTING BANK, OR SUCH AGENT, AGREE TO RETURN SUCH REFUND
(PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER (OR TRANSFEREE),
FRONTING BANK OR THE ADMINISTRATIVE AGENT IN THE EVENT SUCH LENDER (OR
TRANSFEREE), SUCH FRONTING BANK, OR SUCH AGENT IS REQUIRED TO REPAY SUCH
REFUND.  NOTHING CONTAINED IN THIS SUB-SECTION (C) SHALL INTERFERE WITH THE
RIGHT OF ANY LENDER (OR TRANSFEREE), FRONTING BANK OR ANY AGENT TO ARRANGE ITS
AFFAIRS IN ANY MANNER IT THINKS FIT AND, IN PARTICULAR, NO LENDER (OR
TRANSFEREE), FRONTING BANK OR AGENT 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 REQUIRE ANY LENDER (OR TRANSFEREE), ANY FRONTING BANK OR ANY AGENT
TO MAKE AVAILABLE ANY OF ITS TAX RETURNS (OR ANY OTHER INFORMATION RELATING TO
ITS TAXES THAT IT DEEMS TO BE CONFIDENTIAL) TO ANY LOAN PARTY OR ANY OTHER
PERSON.

 

(D)           WITHIN THIRTY (30) DAYS AFTER THE DATE OF ANY PAYMENT OF TAXES OR
OTHER TAXES WITHHELD BY THE LOAN PARTIES IN RESPECT OF ANY PAYMENT TO ANY LENDER
(OR TRANSFEREE), ANY FRONTING BANK OR ANY AGENT, THE LOAN PARTIES WILL FURNISH
TO THE ADMINISTRATIVE AGENT, AT ITS ADDRESS REFERRED TO ON THE SIGNATURE
PAGES HEREOF, THE ORIGINAL OR A CERTIFIED COPY OF A RECEIPT EVIDENCING PAYMENT
THEREOF OR SUCH OTHER EVIDENCE OF PAYMENT AS SHALL BE SATISFACTORY TO THE AGENT
OR THE LENDER (OR TRANSFEREE).

 

(E)           WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT CONTAINED
HEREIN, THE AGREEMENTS AND OBLIGATIONS CONTAINED IN THIS SECTION SHALL SURVIVE
THE PAYMENT IN FULL OF THE PRINCIPAL OF AND INTEREST ON ALL LOANS MADE
HEREUNDER.

 

(F)            EACH LENDER (AND TRANSFEREE), EACH FRONTING BANK AND EACH AGENT
SHALL ON OR PRIOR TO THE CLOSING DATE (IN THE CASE OF EACH LENDER AND AGENT
LISTED ON THE SIGNATURE PAGES HEREOF ON THE CLOSING DATE) OR ON OR PRIOR TO THE
DATE OF THE ASSIGNMENT AND ACCEPTANCE PURSUANT TO WHICH IT BECOMES A LENDER (IN
THE CASE OF EACH OTHER LENDER), DELIVER TO THE LOAN PARTIES AND THE
ADMINISTRATIVE AGENT SUCH CERTIFICATES, DOCUMENTS AND OTHER EVIDENCE, AS
REQUIRED BY THE CODE OR TREASURY REGULATIONS ISSUED PURSUANT THERETO, INCLUDING,
IF A UNITED STATES PERSON (AS SUCH TERM IS DEFINED IN SECTION 7701(A)(30) OF THE
CODE), TWO ORIGINAL COPIES OF (A) INTERNAL REVENUE SERVICE FORM W-9 (UNLESS SUCH
LENDER (OR TRANSFEREE), FRONTING BANK OR AGENT IS AN “EXEMPT RECIPIENT” AS
DEFINED IN TREASURY REGULATIONS SECTION 1.6049-4(C) FOR WHICH NO WITHHOLDING IS
REQUIRED) AND, IF NOT A UNITED STATES PERSON (AS SUCH TERM IS DEFINED IN
SECTION 7701(A)(30) OF THE CODE), TWO ORIGINAL COPIES OF (B) INTERNAL REVENUE
SERVICE FORMS W-8BEN, W-8IMY, OR W-8ECI AND ANY OTHER CERTIFICATE OR STATEMENT
OF EXEMPTION REQUIRED BY THE APPLICABLE TREASURY REGULATIONS, PROPERLY COMPLETED
AND DULY EXECUTED BY SUCH LENDER (OR TRANSFEREE), FRONTING BANK OR SUCH AGENT TO
ESTABLISH THAT SUCH PAYMENT IS NOT SUBJECT TO UNITED STATES FEDERAL WITHHOLDING
TAX UNDER THE CODE.  IN ADDITION, EACH LENDER (AND TRANSFEREE), EACH FRONTING
BANK, AND EACH AGENT AGREES THAT FROM TIME TO TIME AFTER THE CLOSING DATE OR THE
DATE OF

 

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THE ASSIGNMENT AND ACCEPTANCE PURSUANT TO WHICH IT BECOMES A LENDER, WHENEVER A
LAPSE IN TIME OR CHANGE IN CIRCUMSTANCES RENDERS SUCH FORMS OR OTHER DOCUMENTS
OBSOLETE OR INACCURATE IN ANY MATERIAL RESPECT, SUCH LENDER (AND TRANSFEREE),
SUCH FRONTING BANK, OR SUCH AGENT SHALL, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, PROMPTLY DELIVER TO THE LOAN PARTIES SUCH REPLACEMENT FORMS OR
OTHER DOCUMENTS OR NOTIFY THE LOAN PARTIES OF ITS INABILITY TO DELIVER ANY SUCH
FORMS OR OTHER DOCUMENTS.  UNLESS THE LOAN PARTIES AND THE ADMINISTRATIVE AGENT
HAVE RECEIVED FORMS OR OTHER DOCUMENTS SATISFACTORY TO THEM INDICATING THAT SUCH
PAYMENTS HEREUNDER ARE NOT SUBJECT TO UNITED STATES FEDERAL WITHHOLDING TAX OR
ARE SUBJECT TO SUCH TAX AT A RATE REDUCED BY AN APPLICABLE TAX TREATY, THE LOAN
PARTIES OR THE ADMINISTRATIVE AGENT SHALL WITHHOLD TAXES FROM SUCH PAYMENTS AT
THE APPLICABLE STATUTORY RATE.

 

(G)           THE LOAN PARTIES SHALL NOT BE REQUIRED TO PAY ANY ADDITIONAL
AMOUNTS TO ANY LENDER (OR TRANSFEREE), ANY FRONTING BANK OR ANY AGENT IN RESPECT
OF UNITED STATES FEDERAL WITHHOLDING TAX PURSUANT TO SUB-SECTION(A) ABOVE IF THE
OBLIGATION TO PAY SUCH ADDITIONAL AMOUNTS WOULD NOT HAVE ARISEN BUT FOR A
FAILURE BY SUCH LENDER (OR TRANSFEREE), SUCH FRONTING BANK OR SUCH AGENT TO
COMPLY WITH THE PROVISIONS OF SUB-SECTION (F) ABOVE.

 

(H)           ANY LENDER (OR TRANSFEREE), FRONTING BANK OR AGENT CLAIMING ANY
ADDITIONAL AMOUNTS PAYABLE PURSUANT TO THIS SECTION 2.19 SHALL USE REASONABLE
EFFORTS (CONSISTENT WITH LEGAL AND REGULATORY RESTRICTIONS) TO FILE OR DELIVER
TO THE APPLICABLE LOAN PARTY WITH A COPY TO THE ADMINISTRATIVE AGENT ANY
CERTIFICATE OR DOCUMENT REASONABLY REQUESTED BY THE LOAN PARTIES IF THE MAKING
OF SUCH DELIVERY OR SUCH A FILING WOULD AVOID THE NEED FOR OR REDUCE THE AMOUNT
OF ANY SUCH ADDITIONAL AMOUNTS THAT MAY THEREAFTER ACCRUE AND WOULD NOT, IN THE
SOLE DETERMINATION OF SUCH LENDER (OR TRANSFEREE), SUCH FRONTING BANK OR SUCH
AGENT, BE OTHERWISE MATERIALLY DISADVANTAGEOUS TO SUCH LENDER (OR TRANSFEREE),
FRONTING BANK OR SUCH AGENT.

 

(I)            FOR GREATER CERTAINTY, NO FAILURE TO PROVIDE SUCH INFORMATION,
MAKE SUCH FILING OR CHANGE SUCH LENDING OFFICE SHALL RELIEVE ANY LOAN PARTY OF
ANY OF ITS OBLIGATIONS HEREUNDER.

 

Section 2.20          Certain Fees.  The Borrowers shall pay to the
Administrative Agent, for the respective accounts of the Administrative Agent
and the Lenders, the fees set forth in (i) that certain fee letter dated
January 6, 2009 among the Administrative Agent, J.P. Morgan Securities Inc. and
the Parent, (ii) that certain fee letter dated January 6, 2009 among the
Administrative Agent, the Co-Lead Arrangers, Deutsche Bank Trust Company
Americas and the Parent, and (iii) that certain participation fee letter dated
January 23, 2009 among the Administrative Agent, the Co-Lead Arrangers, Deutsche
Bank Trust Company Americas and the Parent, in each case at the times set forth
therein; provided, that if the Canadian Borrower would otherwise pay any of the
fees described in this Section 2.20 to the Administrative Agent with respect to
any services provided in Canada by the Canadian Administrative Agent or the
Canadian Collateral Agent, it shall pay such portion of the fee directly to the
Canadian Administrative Agent or the Canadian Collateral Agent, as the case may
be.

 

Section 2.21          Commitment Fee.  The applicable Borrower shall pay to the
Applicable Agent on behalf of the U.S. Revolving Lenders and the Canadian
Revolving Lenders a commitment fee (the “Commitment Fee”) for the period
commencing on the Closing Date and ending on the Termination Date or the earlier
date of termination of the Commitments calculated

 

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(on the basis of the actual number of days elapsed over a year of 360 days) at a
rate equal to the Commitment Fee Percentage on the average daily Unused
Revolving Commitment during the preceding quarter.  For the avoidance of doubt,
the Commitment Fee shall cease to accrue on any portion of the Unused Revolving
Commitment on the date such portion is converted to a U.S. Term Loan pursuant to
Section 9.23(a) or to a Canadian Term Loan pursuant to Section 9.23(c).  Such
Commitment Fee, to the extent then accrued, shall be payable (x) monthly, in
arrears, on the last calendar day of each month, (y) on the Termination Date and
(z) as provided in Section 2.11 hereof, upon any reduction or termination in
whole or in part of the Total Revolving Commitment.

 

Section 2.22          Letter of Credit Fees.  The applicable Borrower shall pay
with respect to each Letter of Credit (i) to the Applicable Agent on behalf of
the U.S. Tranche B Revolving Lenders and the Canadian Revolving Lenders, as
applicable, a fee calculated (from the date issued on the basis of the actual
number of days elapsed over a year of 360 days) at a rate equal to the
Applicable Margin on the undrawn stated amount thereof, and (ii) to the
applicable Fronting Bank such Fronting Bank’s customary fees for issuance,
amendments and processing referred to in Section 2.4.  In addition, the
applicable Borrower shall pay each Fronting Bank for its account a fronting fee
in respect of each Letter of Credit issued by such Fronting Bank, for the period
from the date issued to and including the date of termination of such Letter of
Credit, computed at a rate per annum equal to 0.25%, or, if such Fronting Bank
is a bank other than JPMCB, as separately agreed by the Borrowers and such
Fronting Bank.  Accrued fees described in clause (i) of the first sentence of
this paragraph in respect of each Letter of Credit shall be due and payable
monthly in arrears on the last calendar day of each month and on the Termination
Date, or such earlier date as the Total Revolving Commitment is terminated. 
Accrued fees described in clause (ii) of the first sentence of this paragraph in
respect of each Letter of Credit shall be payable at times to be determined by
the Fronting Banks, the Borrowers and the Administrative Agent.

 

Section 2.23          Nature of Fees.All Fees shall be paid on the dates due, in
immediately available funds, to the Applicable Agent for the respective accounts
of the Applicable Agent and the Lenders, as provided herein and in the letters
described in Section 2.20.  Once paid, none of the Fees shall be refundable
under any circumstances.

 

SECTION 2.24          PRIORITY AND LIENS

 

(A)           EACH OF THE LOAN PARTIES HEREBY COVENANTS AND AGREES THAT THE
SECURED OBLIGATIONS OF THE LOAN PARTIES HEREUNDER AND UNDER THE LOAN DOCUMENTS,
THE U.S. GUARANTEED OBLIGATIONS AND THE CANADIAN GUARANTEED OBLIGATIONS OF EACH
OF THE LOAN PARTIES AS FOLLOWS:

 

(I)            WITH RESPECT TO THE SECURED OBLIGATIONS OF THE U.S. LOAN PARTIES
AND THE CANADIAN BORROWER:

 

(A)          IN THE U.S. CASES PURSUANT TO SECTION 364(C)(1) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL AT ALL TIMES CONSTITUTE AN ALLOWED
SUPERPRIORITY CLAIM AND BE PAYABLE FROM AND HAVE RECOURSE TO ALL PRE-PETITION
AND POST-PETITION PROPERTY OF THE ESTATES OF THE U.S. LOAN PARTIES AND

 

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THE CANADIAN BORROWER AND ALL PROCEEDS THEREOF (INCLUDING, UPON ENTRY OF THE
FINAL ORDER, ANY PROCEEDS OF AVOIDANCE ACTIONS), AND WHICH SUPERPRIORITY CLAIM
SHALL BE SENIOR TO THE SUPERPRIORITY CLAIM GRANTED TO THE PRE-PETITION AGENT AND
THE PRE-PETITION SECURED LENDERS PURSUANT TO SECTION 2.24(D) BELOW;

 

(B)           IN THE U.S. CASES PURSUANT TO SECTION 364(C)(2) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL AT ALL TIMES BE SECURED BY A PERFECTED
FIRST PRIORITY LIEN ON ALL UNENCUMBERED PROPERTY OF THE U.S. LOAN PARTIES AND
THE CANADIAN BORROWER (INCLUDING, UPON ENTRY OF THE FINAL ORDER, ANY PROCEEDS OF
AVOIDANCE ACTIONS) AND ON ALL CASH MAINTAINED IN ANY COLLATERAL ACCOUNT AND ANY
INVESTMENTS OF THE FUNDS CONTAINED THEREIN, PROVIDED THAT AMOUNTS IN THE
COLLATERAL ACCOUNTS SHALL NOT BE SUBJECT TO THE CARVE-OUT OR THE CCAA CHARGES;

 

(C)           IN THE U.S. CASES PURSUANT TO SECTION 364(C)(3) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL BE SECURED BY A PERFECTED JUNIOR LIEN UPON
ALL PROPERTY OF THE U.S. LOAN PARTIES AND THE CANADIAN BORROWER THAT IS SUBJECT
TO VALID AND PERFECTED LIENS IN EXISTENCE ON THE FILING DATE OR THAT IS SUBJECT
TO VALID LIENS IN EXISTENCE ON THE FILING DATE THAT ARE PERFECTED SUBSEQUENT TO
THE FILING DATE AS PERMITTED BY SECTION 546(B) OF THE BANKRUPTCY CODE (OTHER
THAN CERTAIN PROPERTY THAT IS SUBJECT TO THE EXISTING LIENS THAT SECURE
OBLIGATIONS UNDER THE PRE-PETITION CREDIT AGREEMENT, WHICH LIENS SHALL BE PRIMED
BY THE LIENS TO BE GRANTED TO THE ADMINISTRATIVE AGENT DESCRIBED IN THE
FOLLOWING CLAUSE (D));

 

(D)          IN THE U.S. CASES PURSUANT TO SECTION 364(D)(1) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL BE SECURED BY A PERFECTED FIRST PRIORITY,
SENIOR PRIMING LIEN ON ALL OF THE PROPERTY OF THE U.S. LOAN PARTIES AND THE
CANADIAN BORROWER (INCLUDING, WITHOUT LIMITATION, CASH, INVENTORY, RECEIVABLES,
RIGHTS UNDER LICENSE AGREEMENTS, PROPERTY, PLANT AND EQUIPMENT AND THE RESIDUAL
INTEREST OF THE U.S. LOAN PARTIES AND THE CANADIAN BORROWER IN ANY RECEIVABLES
SECURITIZATION PROGRAMS) THAT IS SUBJECT TO THE EXISTING LIENS WHICH SECURE
(1) THE OBLIGATIONS OF THE LOAN PARTIES UNDER OR IN CONNECTION WITH THE
PRE-PETITION CREDIT AGREEMENT, AND (2) OTHER LIENS, OBLIGATIONS OR INDEBTEDNESS
OF THE LOAN PARTIES JUNIOR TO THE PRE-PETITION CREDIT AGREEMENT (COLLECTIVELY,
THE “PRIMED LIENS”), WHICH PRIMED LIENS SHALL BE PRIMED BY AND MADE SUBJECT

 

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AND SUBORDINATE TO THE PERFECTED FIRST PRIORITY SENIOR PRIMING LIENS TO BE
GRANTED TO THE ADMINISTRATIVE AGENT, WHICH SENIOR PRIMING LIENS IN FAVOR OF THE
ADMINISTRATIVE AGENT SHALL ALSO PRIME ANY LIENS GRANTED AFTER THE COMMENCEMENT
OF THE CASES TO PROVIDE ADEQUATE PROTECTION LIENS IN RESPECT OF ANY OF THE
PRIMED LIENS, BUT SHALL NOT PRIME (1) NON-PRIMED LIENS WHICH SECURE THE CALPINE
DEBT OR (2) OTHER NON-PRIMED LIENS SOLELY TO THE EXTENT SUCH NON-PRIMED LIENS
SECURE CLAIMS IN AN AGGREGATE AMOUNT LESS THAN OR EQUAL TO US$60,000,000; AND

 

(E)           IN THE CANADIAN CASES, PURSUANT TO AN ORDER OF THE CANADIAN COURT,
IN RESPECT OF THE SECURED OBLIGATIONS OF THE CANADIAN BORROWER, SUCH SECURED
OBLIGATIONS WILL BE SECURED BY A SUPERPRIORITY CHARGE AND SENIOR PRIMING
SECURITY INTEREST (“CCAA DIP LENDERS’ CHARGE”) OVER ALL OF THE PRESENT AND
FUTURE ASSETS OF THE CANADIAN BORROWER WITH PRIORITY OVER ALL EXISTING LIENS AND
SECURITY, INCLUDING THE PRIMED LIENS; AND

 

(II)           WITH RESPECT TO THE CANADIAN SECURED OBLIGATIONS OF THE CANADIAN
LOAN PARTIES:

 

(A)          IN THE U.S. CASES PURSUANT TO SECTION 364(C)(1) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL AT ALL TIMES CONSTITUTE AN ALLOWED
SUPERPRIORITY CLAIM AND BE PAYABLE FROM AND HAVE RECOURSE TO ALL PRE-PETITION
AND POST-PETITION PROPERTY OF THE ESTATES OF THE CANADIAN LOAN PARTIES AND ALL
PROCEEDS THEREOF (INCLUDING, UPON ENTRY OF THE FINAL ORDER, ANY PROCEEDS OF
AVOIDANCE ACTIONS), AND WHICH SUPERPRIORITY CLAIM SHALL BE SENIOR TO THE
SUPERPRIORITY CLAIM GRANTED TO THE PRE-PETITION AGENT AND THE PRE-PETITION
SECURED LENDERS PURSUANT TO SECTION 2.24(D) BELOW;

 

(B)           IN THE U.S. CASES PURSUANT TO SECTION 364(C)(2) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL AT ALL TIMES BE SECURED BY A PERFECTED
FIRST PRIORITY LIEN ON ALL UNENCUMBERED PROPERTY OF THE CANADIAN LOAN PARTIES
(INCLUDING, UPON ENTRY OF THE FINAL ORDER, ANY PROCEEDS OF AVOIDANCE ACTIONS)
AND ON ALL CASH MAINTAINED IN ANY COLLATERAL ACCOUNT AND ANY INVESTMENTS OF THE
FUNDS CONTAINED THEREIN, PROVIDED THAT AMOUNTS IN THE COLLATERAL ACCOUNTS SHALL
NOT BE SUBJECT TO THE CARVE-OUT OR THE CCAA CHARGES;

 

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(C)           IN THE U.S. CASES PURSUANT TO SECTION 364(C)(3) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL BE SECURED BY A PERFECTED JUNIOR LIEN UPON
ALL PROPERTY OF THE CANADIAN LOAN PARTIES THAT IS SUBJECT TO VALID AND PERFECTED
LIENS IN EXISTENCE ON THE FILING DATE OR THAT IS SUBJECT TO VALID LIENS IN
EXISTENCE ON THE FILING DATE THAT ARE PERFECTED SUBSEQUENT TO THE FILING DATE AS
PERMITTED BY SECTION 546(B) OF THE BANKRUPTCY CODE (OTHER THAN CERTAIN PROPERTY
THAT IS SUBJECT TO THE EXISTING LIENS THAT SECURE OBLIGATIONS UNDER THE
PRE-PETITION CREDIT AGREEMENT, WHICH LIENS SHALL BE PRIMED BY THE LIENS TO BE
GRANTED TO THE ADMINISTRATIVE AGENT DESCRIBED IN THE FOLLOWING CLAUSE (D));

 

(D)          IN THE U.S. CASES PURSUANT TO SECTION 364(D)(1) OF THE BANKRUPTCY
CODE, SUCH SECURED OBLIGATIONS SHALL BE SECURED BY A PERFECTED FIRST PRIORITY,
SENIOR PRIMING LIEN ON ALL OF THE PROPERTY OF THE CANADIAN LOAN PARTIES
(INCLUDING, WITHOUT LIMITATION, CASH, INVENTORY, RECEIVABLES, RIGHTS UNDER
LICENSE AGREEMENTS, PROPERTY, PLANT AND EQUIPMENT AND THE RESIDUAL INTEREST OF
THE CANADIAN LOAN PARTIES IN ANY RECEIVABLES SECURITIZATION PROGRAMS) THAT IS
SUBJECT TO THE PRIMED LIENS, WHICH PRIMED LIENS SHALL BE PRIMED BY AND MADE
SUBJECT AND SUBORDINATE TO THE PERFECTED FIRST PRIORITY SENIOR PRIMING LIENS TO
BE GRANTED TO THE ADMINISTRATIVE AGENT, WHICH SENIOR PRIMING LIENS IN FAVOR OF
THE ADMINISTRATIVE AGENT SHALL ALSO PRIME ANY LIENS GRANTED AFTER THE
COMMENCEMENT OF THE CASES TO PROVIDE ADEQUATE PROTECTION LIENS IN RESPECT OF ANY
OF THE PRIMED LIENS, BUT SHALL NOT PRIME (1) NON-PRIMED LIENS WHICH SECURE THE
CALPINE DEBT OR (2) OTHER NON-PRIMED LIENS SOLELY TO THE EXTENT SUCH NON-PRIMED
LIENS SECURE CLAIMS IN AN AGGREGATE AMOUNT LESS THAN OR EQUAL TO US$60,000,000;
AND

 

(E)           IN THE CANADIAN CASES, PURSUANT TO AN ORDER OF THE CANADIAN COURT,
SUCH SECURED OBLIGATIONS WILL BE SECURED BY THE CCAA DIP LENDERS’ CHARGE OVER
ALL OF THE PRESENT AND FUTURE ASSETS OF THE CANADIAN LOAN PARTIES WITH PRIORITY
OVER ALL EXISTING LIENS AND SECURITY, INCLUDING THE PRIMED LIENS;

 

subject in each case only to the following:

 

(x)           with respect to the Cases and assets of the U.S. Loan Parties,
(x) in the event of the occurrence and during the continuance of an Event of
Default or an event that would constitute an Event of Default

 

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with the giving of notice or lapse of time or both (a “Default”), the payment of
allowed and unpaid professional fees and disbursements incurred by (A) the U.S.
Loan Parties and (B) any statutory committees appointed in the Cases of the U.S.
Loan Parties, in an aggregate amount of items (A) and (B) not in excess of the
lesser of (I) US$4,000,000 (plus all unpaid professional fees and disbursements
reported on the Borrowing Base Certificate delivered immediately prior to the
occurrence of such Default or Event of Default, to the extent such fees and
expense are subsequently allowed by the Bankruptcy Court), and
(II) US$6,500,000, and (y) the payment of fees pursuant to 28 U.S.C. § 1930 and
to the Clerk of the Bankruptcy Court ((x) and (y), collectively, the
“Carve-Out”);

 

(y)           the CCAA DIP Lenders’ Charge in the assets of the Canadian Loan
Parties in the Canadian Cases will be subject to the court ordered
administration charge in an aggregate amount not in excess of US$1,000,000 (the
“Administration Charge”) for the payment of (a) allowed and unpaid professional
fees and disbursements incurred by professionals retained by the Canadian Loan
Parties and (b) allowed and unpaid professional fees and disbursements of the
monitor in the Canadian Cases including allowed and unpaid legal fees and
expenses of its counsel (and including any allowed and unpaid professional fees
and disbursements incurred by the parties referred to in (a) and (b), prior to
the occurrence of such Event of Default); and

 

(z)            the CCAA DIP Lenders’ Charge in the assets of the Canadian Loan
Parties in the Canadian Cases will also be subject to the Canadian Court ordered
directors charge in an amount not exceeding US$8,600,000 (the “Directors
Charge”), securing the Canadian Loan Parties’ obligation to indemnify the
officers and directors of the Canadian Loan Parties for personal liability which
may arise from non-payment by the Canadian Loan Parties of the following (which
shall be separately identified on the most recent Borrowing Base Certificate):
(a) all outstanding and future wages, salaries, employee and pension benefits,
vacation pay, bonuses and expenses payable on or after the Filing Date, in each
case incurred in the ordinary course of business and consistent with existing
compensation policies and arrangements; (b) any statutory deemed trust amounts
in favour of the Crown in right of Canada or of any Province thereof or any
other taxation authority which are required to be deducted from employees’
wages, including, without limitation, amounts in respect of (i) employment
insurance, (ii) Canada Pension Plan, (iii) Quebec Pension Plan, and (iv) income
taxes; (c) all goods and services or other applicable sales taxes

 

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required to be remitted by the Canadian Loan Parties in connection with the sale
of goods and services by the Canadian Loan Parties, but only where such sales
taxes are accrued or collected after the Filing Date, or where such sales taxes
were accrued or collected prior to the Filing Date but are not required to be
remitted until on or after the Filing Date; and (d) any amount payable to the
Crown in right of Canada or of any Province thereof or any political subdivision
thereof or any other taxation authority in respect of municipal realty,
municipal business or other taxes, assessments or levies of any nature or kind
which are entitled at law to be paid in priority to claims of secured creditors
and which are attributable to or in respect of the carrying on of the business
by the Canadian Loan Parties;

 

provided that no portion of the Carve-Out shall be utilized for the payment of
professional fees and disbursements incurred in connection with any challenge to
the amount, extent, priority, validity, perfection or enforcement of (A) the
Indebtedness of the Loan Parties owed to the parties primed by the priming Liens
or to the collateral securing such Indebtedness or any other action against such
parties or (B) the Secured Obligations.  Amounts in the Collateral Accounts
shall not be subject to the Carve-Out.  By execution hereof, the Loan Parties
hereby consent to the priming Liens referenced in clauses (i)(D) and
(ii)(D) above.  Notwithstanding the foregoing, so long as no Default or Event of
Default shall have occurred and be continuing, the Loan Parties shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under 11 U.S.C. §§ 328, 330 and 331, or as allowed and payable pursuant to
orders of the Canadian Court, as the same may be due and payable, and any
compensation and expenses previously paid, or accrued but unpaid, prior to the
occurrence of such Default or Event of Default shall not reduce the Carve-Out or
the Administration Charge.

 

(B)           AS A COMPONENT OF ADEQUATE PROTECTION, THE ADMINISTRATIVE AGENTS
UNDER THE PRE-PETITION CREDIT AGREEMENT (COLLECTIVELY, THE “PRE-PETITION AGENT”)
SHALL RECEIVE FROM THE APPLICABLE BORROWERS (I) FOLLOWING THE CLOSING DATE,
IMMEDIATE CASH PAYMENT OF ALL ACCRUED AND UNPAID INTEREST (INCLUDING ANY
PRE-PETITION INTEREST) ON THE OBLIGATIONS OF SUCH BORROWER UNDER THE
PRE-PETITION CREDIT AGREEMENT (THE “PRE-PETITION DEBT”) AND LETTER OF CREDIT
FEES AT THE NON-DEFAULT CONTRACT RATE APPLICABLE ON THE FILING DATE AS PROVIDED
FOR IN THE PRE-PETITION CREDIT AGREEMENT, AND ALL OTHER ACCRUED AND UNPAID FEES
AND DISBURSEMENTS (INCLUDING, BUT NOT LIMITED TO, FEES AND EXPENSES OWED TO THE
PRE-PETITION AGENT AND INCURRED PRIOR TO THE FILING DATE), (II) CURRENT CASH
PAYMENTS OF ALL FEES AND EXPENSES OWING BY SUCH BORROWER PAYABLE TO THE
PRE-PETITION AGENT UNDER THE PRE-PETITION CREDIT AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL, FINANCIAL AND
OTHER CONSULTANTS FOR THE PRE-PETITION AGENT (INCLUDING, BUT NOT LIMITED TO,
SUCH FEES AND DISBURSEMENTS INCURRED PRIOR TO THE FILING DATE), AND
(III) CURRENT CASH PAYMENTS OF ALL ACCRUED BUT UNPAID INTEREST ON THE
PRE-PETITION DEBT OWING BY SUCH BORROWER, AND LETTER OF CREDIT AND OTHER FEES,
IN EACH CASE AT THE NON-DEFAULT CONTRACT RATE APPLICABLE ON THE FILING DATE
(INCLUDING LIBOR PRICING OPTIONS) UNDER THE PRE-PETITION CREDIT AGREEMENT,
PROVIDED THAT, WITHOUT PREJUDICE TO THE RIGHTS OF ANY OTHER PARTY TO CONTEST
SUCH ASSERTION, THE LENDERS UNDER THE PRE-PETITION CREDIT AGREEMENT (THE
“PRE-PETITION SECURED LENDERS”) RESERVE THEIR RIGHTS TO ASSERT CLAIMS FOR THE
PAYMENT OF ADDITIONAL INTEREST

 

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CALCULATED AT ANY OTHER APPLICABLE RATE OF INTEREST (INCLUDING, WITHOUT
LIMITATION, DEFAULT RATES), OR ON ANY OTHER BASIS, PROVIDED FOR IN THE
PRE-PETITION CREDIT AGREEMENT.

 

(C)           AS A FURTHER COMPONENT OF ADEQUATE PROTECTION, TO THE EXTENT OF
THE DIMINUTION IN THE VALUE OF COLLATERAL ON THE PETITION DATE SECURING THE
PRE-PETITION DEBT, INCLUDING USE OF CASH COLLATERAL, THE PRE-PETITION AGENT AND
THE PRE-PETITION SECURED LENDERS SHALL BE GRANTED JUNIOR REPLACEMENT SECURITY
INTERESTS IN AND LIENS UPON ALL OF THE PROPERTY OF THE U.S. LOAN PARTIES
(INCLUDING, UPON ENTRY OF THE FINAL ORDER, ANY PROCEEDS OF AVOIDANCE ACTIONS),
WHICH SECURITY INTERESTS AND LIENS SHALL BE SUBJECT TO THE CARVE-OUT AND SHALL
BE JUNIOR TO THE SECURITY INTEREST IN AND LIENS UPON THE PROPERTY OF THE U.S.
LOAN PARTIES GRANTED UNDER SECTION 364(D)(1) OF THE BANKRUPTCY CODE FOR THE
BENEFIT OF THE ADMINISTRATIVE AGENT AND THE LENDERS.

 

(D)           AS A FURTHER COMPONENT OF ADEQUATE PROTECTION, THE PRE-PETITION
AGENT AND THE PRE-PETITION SECURED LENDERS SHALL BE GRANTED, SUBJECT TO THE
PAYMENT OF THE CARVE-OUT, A SUPERPRIORITY CLAIM IN AN AMOUNT EQUAL TO THE
DIMINUTION IN THE VALUE OF COLLATERAL ON THE FILING DATE SECURING THE
INDEBTEDNESS UNDER THE PRE-PETITION CREDIT AGREEMENT, AS PROVIDED FOR IN SECTION
507(B) OF THE BANKRUPTCY CODE, IMMEDIATELY JUNIOR TO THE CLAIMS UNDER SECTION
364(C)(1) OF THE BANKRUPTCY CODE HELD BY THE ADMINISTRATIVE AGENT AND THE
LENDERS AND PAYABLE FROM ALL PROPERTY OF THE U.S. LOAN PARTIES; PROVIDED,
HOWEVER, THAT THE PRE-PETITION AGENT AND THE PRE-PETITION SECURED LENDERS SHALL
NOT RECEIVE OR RETAIN ANY PAYMENTS, PROPERTY OR OTHER AMOUNTS IN RESPECT OF THE
SUPERPRIORITY CLAIMS UNDER SECTION 507(B) OF THE BANKRUPTCY CODE UNLESS AND
UNTIL PAYMENT IN FULL OF ALL SECURED OBLIGATIONS OF THE U.S. LOAN PARTIES.

 

(E)           SUBJECT TO THE PRIORITIES SET FORTH IN SUBSECTION (A) ABOVE AND TO
THE CARVE-OUT, IN THE CASE OF THE U.S. LOAN PARTIES, OR THE ADMINISTRATION
CHARGE, IN THE CASE OF THE CANADIAN LOAN PARTIES, AS TO ALL REAL PROPERTY THE
TITLE TO WHICH IS HELD BY A LOAN PARTY, OR THE POSSESSION OF WHICH IS HELD BY A
LOAN PARTY PURSUANT TO LEASEHOLD INTEREST, THE LOAN PARTIES HEREBY ASSIGN AND
CONVEY AS SECURITY, GRANT A SECURITY INTEREST IN, HYPOTHECATE, MORTGAGE, PLEDGE
AND SET OVER UNTO EACH APPLICABLE AGENT, ON BEHALF OF THE SECURED PARTIES ALL OF
THE RIGHT, TITLE AND INTEREST OF THE LOAN PARTIES, IN ALL OF SUCH OWNED REAL
PROPERTY AND IN ALL SUCH LEASEHOLD INTERESTS, TOGETHER IN EACH CASE WITH ALL OF
THE RIGHT, TITLE AND INTEREST OF THE LOAN PARTIES IN AND TO ALL BUILDINGS,
IMPROVEMENTS, AND FIXTURES RELATED THERETO, ANY LEASE OR SUBLEASE THEREOF, ALL
GENERAL INTANGIBLES RELATING THERETO AND ALL PROCEEDS THEREOF.  EACH LOAN PARTY
ACKNOWLEDGES THAT, PURSUANT TO THE ORDERS, THE LIENS IN FAVOR OF THE APPLICABLE
AGENTS ON BEHALF OF THE SECURED PARTIES IN ALL OF SUCH REAL PROPERTY AND
LEASEHOLD INSTRUMENTS OF THE LOAN PARTIES SHALL BE PERFECTED WITHOUT THE
RECORDATION OF ANY INSTRUMENTS OF MORTGAGE OR ASSIGNMENT.  THE LOAN PARTIES
FURTHER AGREE THAT, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT, IN THE
EXERCISE OF ITS BUSINESS JUDGMENT, THE LOAN PARTIES SHALL ENTER INTO SEPARATE
FEE MORTGAGES IN RECORDABLE FORM WITH RESPECT TO SUCH PROPERTIES AND OTHER
COLLATERAL DOCUMENTS, EACH ON TERMS SATISFACTORY TO THE ADMINISTRATIVE AGENT;
PROVIDED, HOWEVER, THAT NO U.S. LOAN PARTY SHALL BE REQUIRED TO PLEDGE IN EXCESS
OF 65% OF THE CAPITAL STOCK OF ITS DIRECT FOREIGN SUBSIDIARIES (OTHER THAN
CAPITAL STOCK OF THE CANADIAN BORROWER) OR ANY OF THE CAPITAL STOCK OF ANY
INDIRECT FOREIGN SUBSIDIARIES.

 

(F)            TO THE EXTENT ANY LOAN PARTY MAKES AGGREGATE PAYMENTS TO THE
LENDERS IN EXCESS OF THE AGGREGATE AMOUNT OF ALL LOANS RECEIVED BY SUCH LOAN
PARTY AFTER THE COMMENCEMENT OF THE CASES, THEN SUCH LOAN PARTY, AFTER THE
PAYMENT IN FULL OF ALL SECURED

 

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OBLIGATIONS AND THE TERMINATION OF THE REVOLVING COMMITMENT, SHALL BE ENTITLED
TO A CLAIM UNDER SECTION 364(C)(1) OF THE BANKRUPTCY CODE OR THE INITIAL ORDER,
AS APPLICABLE, AGAINST EACH OTHER LOAN PARTY, IN SUCH AMOUNT AS MAY BE
DETERMINED BY THE BANKRUPTCY COURT OR THE CANADIAN COURT TAKING INTO ACCOUNT THE
RELATIVE BENEFITS RECEIVED BY EACH SUCH PERSON, AND SUCH CLAIMS SHALL BE DEEMED
TO BE SUBORDINATE AND JUNIOR IN ALL RESPECTS TO THE SUPERPRIORITY CLAIMS AND
CHARGES OF THE LENDERS AND THE SUPERPRIORITY CLAIMS GRANTED AS ADEQUATE
PROTECTION TO THE PRIMED PARTIES.

 

Section 2.25          Use of Cash Collateral.  Notwithstanding anything to the
contrary contained herein, neither the U.S. Borrower nor the Canadian Borrower
shall be permitted to request a Borrowing under Section 2.7 unless the Loan
Parties shall at that time have the use of substantially all cash collateral
subject to the Orders for the purposes described in Section 3.10.

 

Section 2.26          Right of Set-Off.  Subject to the provisions of
Section 7.1, upon the occurrence and during the continuance of any Event of
Default, each Agent and each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law and without further order
of or application to the Bankruptcy Court or the Canadian Court, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by each such
Agent and each such Lender to or for the credit or the account of any Loan Party
against any and all of the Secured Obligations of such Loan Party now or
hereafter existing under the Loan Documents, irrespective of whether or not such
Agent or such Lender shall have made any demand under any Loan Document and
although such obligations may not have been accelerated.  Each Lender and each
Agent agrees promptly to notify the Loan Parties after any such set-off and
application made by such Lender or by such Agent, as the case may be, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of each Lender and each Agent under this
Section are in addition to other rights and remedies which such Lender and such
Agent may have upon the occurrence and during the continuance of any Event of
Default.

 

Section 2.27          Security Interest in Collateral Accounts.  The Loan
Parties, pursuant to Section 364(c)(2) of the Bankruptcy Code, hereby assign and
pledge to the Applicable Agent, for the ratable benefit of the Secured Parties,
and hereby grant to the Applicable Agent, for the ratable benefit of the Secured
Parties, a first priority security interest, senior to all other Liens, if any,
in all of the Loan Parties’ right, title and interest in and to the Collateral
Accounts and any investment of the funds contained therein.  Cash held in the
Letter of Credit Account or the Canadian Letter of Credit Account shall not be
available for use by the Loan Parties, whether pursuant to Section 363 of the
Bankruptcy Code or otherwise.

 

Section 2.28          Payment of Obligations.  Subject to the provisions of
Section 7.1, upon the maturity (whether by acceleration or otherwise) of any of
the Secured Obligations under this Agreement or any other Loan Documents of the
Loan Parties, the Lenders shall be entitled to immediate payment of such Secured
Obligations without further application to or order of the Bankruptcy Court or
the Canadian Court.  The Borrowers and the U.S. Loan Parties shall be jointly
and severally liable for payment of all Secured Obligations under this Agreement
or any of the other Loan Documents.  The U.S. Loan Parties and the Canadian Loan
Parties shall be jointly and severally liable for payment of all Canadian
Guaranteed Obligations under this Agreement or any of the other Loan Documents.

 

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Section 2.29          No Discharge; Survival of Claims.  Each of the Loan
Parties agrees that (i) its obligations hereunder shall not be discharged by the
entry of an order (w) confirming a Reorganization Plan in any of the Cases under
the Bankruptcy Code or under the CCAA, (x) converting any of the U.S. Cases to a
case under Chapter 7 of the Bankruptcy Code or any of the Canadian Cases to
similar liquidation proceeding in the Canadian Cases, (y) dismissing or
terminating any of the Cases, or (z) appointing any trustee in bankruptcy,
interim receiver, receiver or receiver-manager or similar officer or agent with
respect to the Canadian Loan Parties (and each of the Loan Parties, pursuant to
Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge) and
(ii) the Superpriority Claims and the CCAA DIP Lenders’ Charge granted to the
Agents and the Lenders pursuant to the Orders and described in Section 2.24
shall not be affected in any manner by the entry of an order confirming a
Reorganization Plan.

 

Section 2.30          Fifteen Month Facility Extension Option.  The Borrowers
may extend the Maturity Date from January 28, 2010 to April 28, 2010 (the
“Fifteen Month Facility Extension Option”) subject to, and the Maturity Date
shall be so extended upon satisfaction of, the following conditions precedent:

 

(I)            THE BORROWERS SHALL PROVIDE WRITTEN NOTICE TO THE ADMINISTRATIVE
AGENT AT LEAST THIRTY (30) DAYS PRIOR TO JANUARY 28, 2010 OF THEIR INTENTION TO
EXERCISE THE FIFTEEN MONTH FACILITY EXTENSION OPTION;

 

(II)           THE BORROWERS SHALL PAY A FEE TO THE ADMINISTRATIVE AGENT ON OR
BEFORE THE INITIAL MATURITY DATE FOR THE ACCOUNT OF THE LENDERS EQUAL TO 1.0% OF
THE OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOANS PLUS THE THEN AGGREGATE
COMMITMENTS;

 

(III)          THE LOAN PARTIES SHALL HAVE FILED WITH THE BANKRUPTCY COURT AND
THE CANADIAN COURT A REORGANIZATION PLAN PROVIDING FOR THE FULL REPAYMENT OF THE
LOANS IN CASH UPON CONSUMMATION THEREOF;

 

(IV)          AS OF THE INITIAL MATURITY DATE, (A) EXCESS AVAILABILITY PLUS
(B) THE LOAN PARTIES’ AVAILABLE CASH SHALL BE AT LEAST US$150,000,000 OF WHICH
EXCESS AVAILABILITY IS NOT LESS THAN US$100,000,000 (TAKING INTO ACCOUNT THE
REDUCTION IN THE U.S. PP&E COMPONENT AND CANADIAN PP&E COMPONENT TO BE EFFECTIVE
ON JANUARY 28, 2010); AND

 

(V)           NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AS OF THE INITIAL MATURITY DATE.

 

The Administrative Agent will notify the Borrowers and the Lenders upon the
effectiveness of the Fifteen Month Facility Extension Option.

 

Section 2.31          Eighteen Month Facility Extension Option.  Following
exercise of the Fifteen Month Facility Extension Option, the Borrowers may
extend the Maturity Date from April 28, 2010 to July 28, 2010 (the “Eighteen
Month Facility Extension Option”) subject to,

 

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and the Maturity Date shall be so extended upon satisfaction of, the following
conditions precedent:

 

(I)            THE BORROWERS SHALL PROVIDE WRITTEN NOTICE TO THE ADMINISTRATIVE
AGENT AT LEAST THIRTY (30) DAYS PRIOR TO APRIL 28, 2010 OF THEIR INTENTION TO
EXERCISE THE EIGHTEEN MONTH FACILITY EXTENSION OPTION;

 

(II)           THE BORROWERS SHALL PAY A FEE TO THE ADMINISTRATIVE AGENT ON OR
BEFORE APRIL 28, 2010 FOR THE ACCOUNT OF THE LENDERS EQUAL TO 1.0% OF THE
OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOANS PLUS THE THEN AGGREGATE
COMMITMENTS;

 

(III)          REQUIRED LENDERS SHALL HAVE APPROVED THE EXTENSION OF THE
MATURITY DATE TO JULY 28, 2010;

 

(IV)          THE LOAN PARTIES SHALL NOT HAVE WITHDRAWN FROM THE BANKRUPTCY
COURT OR THE CANADIAN COURT A REORGANIZATION PLAN AND CONFIRMATION OR APPROVAL
OF SUCH REORGANIZATION PLAN SHALL NOT HAVE BEEN DENIED BY THE BANKRUPTCY COURT
OR THE CANADIAN COURT, AS APPLICABLE, AT ANY TIME PRIOR TO APRIL 28, 2010;

 

(V)           AS OF APRIL 28, 2010, (A) EXCESS AVAILABILITY PLUS (B) THE LOAN
PARTIES’ AVAILABLE CASH SHALL BE AT LEAST US$150,000,000 OF WHICH EXCESS
AVAILABILITY IS NOT LESS THAN US$100,000,000 (TAKING INTO ACCOUNT THE REDUCTION
IN THE U.S. PP&E COMPONENT AND CANADIAN PP&E COMPONENT TO BE EFFECTIVE ON
APRIL 28, 2010); AND

 

(VI)          NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AS OF APRIL 28, 2010.

 

The Administrative Agent will notify the Borrowers and the Lenders upon the
effectiveness of the Eighteen Month Facility Extension Option.

 

Section 2.32                             Mitigation Obligations; Replacement of
Lenders.

 

(A)           IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.16, OR IF THE
BORROWERS ARE REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO SECTION 2.19,
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 2.16 OR SECTION 2.19, 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
BORROWERS HEREBY AGREE 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 2.16, OR IF THE
BORROWERS ARE REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER) PURSUANT TO SECTION 2.19,
OR IF ANY LENDER BECOMES A DEFAULTING LENDER, THEN THE BORROWERS MAY, AT THEIR
SOLE EXPENSE AND EFFORT, UPON NOTICE TO SUCH LENDER AND THE APPLICABLE AGENT,
REQUIRE SUCH LENDER TO ASSIGN AND DELEGATE, WITHOUT RECOURSE (IN ACCORDANCE WITH
AND SUBJECT TO THE RESTRICTIONS CONTAINED IN SECTION 9.3), ALL ITS INTERESTS,
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT TO AN ASSIGNEE THAT SHALL ASSUME
SUCH OBLIGATIONS (WHICH ASSIGNEE MAY BE ANOTHER LENDER, IF A LENDER ACCEPTS SUCH
ASSIGNMENT); PROVIDED THAT (I) THE BORROWERS SHALL HAVE RECEIVED THE PRIOR
WRITTEN CONSENT OF THE APPLICABLE AGENT (AND IF A REVOLVING COMMITMENT IS BEING
ASSIGNED, THE FRONTING BANKS), 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 AND PARTICIPATIONS IN LETTERS OF CREDIT,
ACCRUED INTEREST THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS PAYABLE TO IT
HEREUNDER, FROM THE ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL AND
ACCRUED INTEREST AND FEES) OR THE BORROWERS (IN THE CASE OF ALL OTHER AMOUNTS)
AND (III) IN THE CASE OF ANY SUCH ASSIGNMENT RESULTING FROM A CLAIM FOR
COMPENSATION UNDER SECTION 2.16 OR PAYMENTS REQUIRED TO BE MADE PURSUANT TO
SECTION 2.19, 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 BORROWERS TO REQUIRE SUCH ASSIGNMENT
AND DELEGATION CEASE TO APPLY.

 

Section 2.33          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 COMMITMENT OF SUCH DEFAULTING LENDER PURSUANT TO SECTION 2.21;

 

(B)           THE COMMITMENT AND CREDIT EXPOSURE OF SUCH DEFAULTING LENDER SHALL
NOT BE INCLUDED IN DETERMINING WHETHER ALL LENDERS OR THE REQUIRED LENDERS HAVE
TAKEN OR MAY TAKE ANY ACTION HEREUNDER (INCLUDING ANY CONSENT TO ANY AMENDMENT
OR WAIVER PURSUANT TO SECTION 9.10), PROVIDED THAT ANY WAIVER, AMENDMENT OR
MODIFICATION REQUIRING THE CONSENT OF ALL LENDERS OR EACH AFFECTED LENDER WHICH
AFFECTS SUCH DEFAULTING LENDER DIFFERENTLY THAN OTHER AFFECTED LENDERS SHALL
REQUIRE THE CONSENT OF SUCH DEFAULTING LENDER;

 

(C)           IF ANY LC EXPOSURE EXISTS AT THE TIME A LENDER BECOMES A
DEFAULTING LENDER THEN:

 

(I)            ALL OR ANY PART OF SUCH LC EXPOSURE WHICH PERTAINS TO THE U.S.
LETTER OF CREDIT OUTSTANDINGS SHALL BE REALLOCATED AMONG THE NON-DEFAULTING
LENDERS HAVING U.S. TRANCHE B REVOLVING COMMITMENTS IN ACCORDANCE WITH THEIR
RESPECTIVE APPLICABLE PERCENTAGES BUT ONLY TO THE EXTENT (X) THE SUM OF ALL
NON-DEFAULTING LENDERS’ U.S. TRANCHE B REVOLVING LOANS PLUS ALL NON-DEFAULTING
LENDERS’ LC EXPOSURE IN RESPECT OF U.S. LETTER OF CREDIT OUTSTANDINGS PLUS SUCH
DEFAULTING LENDER’S LC EXPOSURE IN RESPECT OF U.S. LETTER OF CREDIT OUTSTANDINGS
DOES NOT EXCEED THE

 

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TOTAL OF ALL NON-DEFAULTING LENDERS’ U.S. TRANCHE B REVOLVING COMMITMENTS AND
(Y) THE CONDITIONS SET FORTH IN SECTION 4.2 ARE SATISFIED AT SUCH TIME;

 

(II)           ALL OR ANY PART OF SUCH LC EXPOSURE WHICH PERTAINS TO THE
CANADIAN LETTER OF CREDIT OUTSTANDINGS SHALL BE REALLOCATED AMONG THE
NON-DEFAULTING LENDERS HAVING CANADIAN REVOLVING COMMITMENTS IN ACCORDANCE WITH
THEIR RESPECTIVE APPLICABLE PERCENTAGES BUT ONLY TO THE EXTENT (X) THE SUM OF
ALL NON-DEFAULTING LENDERS’ CANADIAN REVOLVING LOANS PLUS ALL NON-DEFAULTING
LENDERS’ LC EXPOSURE IN RESPECT OF CANADIAN LETTER OF CREDIT OUTSTANDINGS PLUS
SUCH DEFAULTING LENDER’S LC EXPOSURE IN RESPECT OF CANADIAN LETTER OF CREDIT
OUTSTANDINGS DOES NOT EXCEED THE TOTAL OF ALL NON-DEFAULTING LENDERS’ CANADIAN
REVOLVING COMMITMENTS AND (Y) THE CONDITIONS SET FORTH IN SECTION 4.2 ARE
SATISFIED AT SUCH TIME

 

(III)          IF THE REALLOCATION DESCRIBED IN CLAUSES (I) OR (II) ABOVE
CANNOT, OR CAN ONLY PARTIALLY, BE EFFECTED, NEITHER THE FRONTING BANKS NOR ANY
LENDER SHALL HAVE ANY OBLIGATION TO ISSUE NEW LETTERS OF CREDIT UNDER THIS
AGREEMENT UNLESS THE BORROWERS SHALL HAVE CASH COLLATERALIZED SUCH DEFAULTING
LENDER’S LC EXPOSURE (AFTER GIVING EFFECT TO ANY PARTIAL REALLOCATION PURSUANT
TO CLAUSES (I) AND (II) ABOVE) IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN
SECTION 2.4(C) FOR SO LONG AS SUCH LC EXPOSURE IS OUTSTANDING;

 

(IV)          IF THE BORROWERS CASH COLLATERALIZE ANY PORTION OF SUCH DEFAULTING
LENDER’S LC EXPOSURE PURSUANT TO SECTION 2.33(C), THE BORROWERS SHALL NOT BE
REQUIRED TO PAY ANY FEES TO SUCH DEFAULTING LENDER PURSUANT TO SECTION 2.21 WITH
RESPECT TO SUCH DEFAULTING LENDER’S LC EXPOSURE DURING THE PERIOD SUCH
DEFAULTING LENDER’S LC EXPOSURE IS CASH COLLATERALIZED;

 

(V)           IF THE LC EXPOSURE OF THE NON-DEFAULTING LENDERS IS REALLOCATED
PURSUANT TO SECTION 2.33(C), THEN THE FEES PAYABLE TO THE LENDERS PURSUANT TO
SECTION 2.21 SHALL BE ADJUSTED IN ACCORDANCE WITH SUCH NON-DEFAULTING LENDERS’
APPLICABLE PERCENTAGES; OR

 

(VI)          IF ANY DEFAULTING LENDER’S LC EXPOSURE IS NEITHER CASH
COLLATERALIZED NOR REALLOCATED PURSUANT TO SECTION 2.33(C), THEN, WITHOUT
PREJUDICE TO ANY RIGHTS OR REMEDIES OF ANY FRONTING BANK OR ANY LENDER
HEREUNDER, ALL LETTER OF CREDIT FEES PAYABLE UNDER SECTION 2.22 WITH RESPECT TO
SUCH DEFAULTING LENDER’S LC EXPOSURE SHALL BE PAYABLE TO SUCH FRONTING BANK
UNTIL SUCH LC EXPOSURE IS CASH COLLATERALIZED OR REALLOCATED;

 

(D)           SO LONG AS ANY LENDER IS A DEFAULTING LENDER, NO FRONTING BANK
SHALL BE REQUIRED TO ISSUE, AMEND OR INCREASE ANY LETTER OF CREDIT, UNLESS IT IS
SATISFIED THAT THE RELATED

 

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EXPOSURE WILL BE 100% COVERED BY THE COMMITMENTS OF THE NON-DEFAULTING LENDERS
OR CASH COLLATERAL WILL BE PROVIDED BY THE BORROWERS IN ACCORDANCE WITH
SECTION 2.33(C), AND PARTICIPATING INTERESTS IN ANY SUCH NEWLY ISSUED OR
INCREASED LETTER OF CREDIT SHALL BE ALLOCATED AMONG NON-DEFAULTING LENDERS IN A
MANNER CONSISTENT WITH SECTION 2.33(C)(I) (AND DEFAULTING LENDERS SHALL NOT
PARTICIPATE THEREIN); AND

 

(E)           ANY AMOUNT PAYABLE TO SUCH DEFAULTING LENDER HEREUNDER (WHETHER ON
ACCOUNT OF PRINCIPAL, INTEREST, FEES OR OTHERWISE AND INCLUDING ANY AMOUNT THAT
WOULD OTHERWISE BE PAYABLE TO SUCH DEFAULTING LENDER PURSUANT TO SECTION 2.26
BUT EXCLUDING SECTION 2.32(B)) SHALL, IN LIEU OF BEING DISTRIBUTED TO SUCH
DEFAULTING LENDER, BE RETAINED BY THE APPLICABLE AGENT IN A SEGREGATED ACCOUNT
AND, SUBJECT TO ANY APPLICABLE REQUIREMENTS OF LAW, BE APPLIED AT SUCH TIME OR
TIMES AS MAY BE DETERMINED BY THE APPLICABLE AGENT (I) FIRST, TO THE PAYMENT OF
ANY AMOUNTS OWING BY SUCH DEFAULTING LENDER TO THE APPLICABLE AGENT HEREUNDER,
(II) SECOND, PRO RATA, TO THE PAYMENT OF ANY AMOUNTS OWING BY SUCH DEFAULTING
LENDER TO ANY FRONTING BANK HEREUNDER, (III) THIRD, IF SO DETERMINED BY THE
APPLICABLE AGENT OR REQUESTED BY A FRONTING BANK, TO BE HELD IN SUCH ACCOUNT AS
CASH COLLATERAL FOR FUTURE FUNDING OBLIGATIONS OF THE DEFAULTING LENDER OF ANY
PARTICIPATING INTEREST IN ANY LETTER OF CREDIT, (IV) FOURTH, TO THE FUNDING OF
ANY LOAN IN RESPECT OF WHICH SUCH DEFAULTING LENDER HAS FAILED TO FUND ITS
PORTION THEREOF AS REQUIRED BY THIS AGREEMENT, AS DETERMINED BY THE APPLICABLE
AGENT, (V) FIFTH, IF SO DETERMINED BY THE APPLICABLE AGENT AND THE BORROWERS,
HELD IN SUCH ACCOUNT AS CASH COLLATERAL FOR FUTURE FUNDING OBLIGATIONS OF THE
DEFAULTING LENDER OF ANY LOANS UNDER THIS AGREEMENT, (VI) SIXTH, TO THE PAYMENT
OF ANY AMOUNTS OWING TO THE LENDERS OR A FRONTING BANK AS A RESULT OF ANY
JUDGMENT OF A COURT OF COMPETENT JURISDICTION OBTAINED BY ANY LENDER OR SUCH
FRONTING BANK AGAINST SUCH DEFAULTING LENDER AS A RESULT OF SUCH DEFAULTING
LENDER’S BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT, (VII) SEVENTH, TO THE
PAYMENT OF ANY AMOUNTS OWING TO THE BORROWERS AS A RESULT OF ANY JUDGMENT OF A
COURT OF COMPETENT JURISDICTION OBTAINED BY THE BORROWERS AGAINST SUCH
DEFAULTING LENDER AS A RESULT OF SUCH DEFAULTING LENDER’S BREACH OF ITS
OBLIGATIONS UNDER THIS AGREEMENT, AND (VIII) EIGHTH, TO SUCH DEFAULTING LENDER
OR AS OTHERWISE DIRECTED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT IF
SUCH PAYMENT IS (X) A PREPAYMENT OF THE PRINCIPAL AMOUNT OF ANY LOANS OR
REIMBURSEMENT OBLIGATIONS IN RESPECT OF LETTER OF CREDIT DISBURSEMENTS FOR WHICH
A DEFAULTING LENDER HAS FUNDED ITS PARTICIPATION OBLIGATIONS AND (Y) MADE AT A
TIME WHEN THE CONDITIONS SET FORTH IN SECTION 4.2 ARE SATISFIED, SUCH PAYMENT
SHALL BE APPLIED SOLELY TO PREPAY THE LOANS OF, AND REIMBURSEMENT OBLIGATIONS
OWED TO, ALL NON-DEFAULTING LENDERS PRO RATA PRIOR TO BEING APPLIED TO THE
PREPAYMENT OF ANY LOANS, OR REIMBURSEMENT OBLIGATIONS OWED TO, ANY DEFAULTING
LENDER.

 

IN THE EVENT THAT THE APPLICABLE AGENT, THE BORROWERS AND EACH FRONTING BANK
EACH AGREES THAT A DEFAULTING LENDER HAS ADEQUATELY REMEDIED ALL MATTERS THAT
CAUSED SUCH LENDER TO BE A DEFAULTING LENDER, THEN THE LC EXPOSURE OF THE
LENDERS SHALL BE READJUSTED TO REFLECT THE INCLUSION OF SUCH LENDER’S REVOLVING
COMMITMENT AND ON SUCH DATE SUCH LENDER SHALL PURCHASE AT PAR SUCH OF THE LOANS
OF THE OTHER LENDERS AS THE APPLICABLE 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 Lenders to make Loans and issue or participate in Letters
of Credit hereunder, the Loan Parties, jointly and severally, represent and
warrant as follows:

 

Section 3.1                                      Organization and Authority. 
Each of the Loan Parties and its respective Subsidiaries (i) is duly organized,
validly existing and in good standing under the law of its jurisdiction of
organization; (ii) is duly qualified to do business and in good standing in each
jurisdiction in which the failure to so qualify would have a Material Adverse
Effect; (iii) subject to the entry of the Orders (as applicable), has the
requisite power and authority to effect the transactions contemplated hereby,
and by the other Loan Documents to which it is a party, and (iv) subject to the
entry by the Bankruptcy Court or the Canadian Court, as applicable, of the
Orders, has all requisite power and authority and the legal right to own and
operate its properties, and to conduct its business as now or currently proposed
to be conducted.

 

Section 3.2                                      Due Execution.  Upon the entry
by the Bankruptcy Court and the Canadian Court, as applicable, of the Orders,
the execution, delivery and performance by each of the Loan Parties of each of
the Loan Documents to which it is a party, including, without limitation, the
grant of the Liens by each of the Loan Parties hereunder and under the
Collateral Documents, (i) are within the respective powers of each of the Loan
Parties, have been duly authorized by all necessary action, including the
consent of shareholders, partners or members, where required, and do not
(A) contravene the Organizational Documents of any of the Loan Parties,
(B) violate any Requirement of Law that could reasonably be expected to result
in a Material Adverse Effect, (C) conflict with or result in a breach of, or
constitute a default under, any indenture, mortgage or deed of trust entered
into after the Filing Date or any material lease, agreement or other instrument
entered into after the Filing Date binding on the Loan Parties or any of their
respective properties, or (D) result in or require the creation or imposition of
any Lien under any document described in clause (C) upon any of the property of
any of the Loan Parties other than Liens granted pursuant to this Agreement and
the Collateral Documents; and (ii) do not require the consent, authorization by
or approval of or notice to or filing or registration with any Governmental
Authority other than the entry of the Interim Order (or the Final Order, as
applicable).  Except for the entry of the Interim Order (or the Final Order, as
applicable), no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body is required for the
perfection of the security interests or the exercise by the Agents or the
Lenders of their respective rights and remedies under the Loan Documents.  Upon
the entry by the Bankruptcy Court and the Canadian Court, as applicable, of the
Orders, this Agreement shall have been duly executed and delivered by each of
the Loan Parties.  Upon the entry by the Bankruptcy Court and the Canadian
Court, as applicable, of the Orders, this Agreement, and each of the other Loan
Documents to which the Loan Parties are or will be a party, when delivered
hereunder or thereunder, will be, a legal, valid and binding obligation of each
Loan Party, enforceable against the Loan Parties in accordance with its terms
and the Orders subject to general principles of equity.

 

Section 3.3                                      Statements Made.  The
information that has been delivered in writing by any of the Loan Parties to the
Agents, the Bankruptcy Court or the Canadian Court (other than projections and
information of a general economic nature) taken as a whole, as of the date such
information was so furnished, does not contain any untrue statement of a
material fact or omit to

 

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state any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, taken as a whole, not
materially misleading; and, to the extent that any such information constitutes
projections, such projections were prepared in good faith on the basis of
assumptions, methods, data, tests and information believed by the Loan Parties
to be reasonable at the time such projections were furnished.  All
representations and warranties, as made or deemed made as of a particular time,
shall survive execution of each of the Loan Documents and the making of each
Loan or issuance of each Letter of Credit, and may be relied upon by the Agents
and the Lenders as being true and correct as of the date when made or deemed
made until all of the Loan Parties’ Obligations are fully and indefeasibly paid.

 

Section 3.4                                      Financial Statements.  The Loan
Parties have furnished the Lenders with copies of the audited consolidated
financial statements and schedules of the Parent and its consolidated
Subsidiaries for the fiscal year ended December 31, 2007 and the unaudited
financial statements for each succeeding fiscal quarter thereafter through and
including the fiscal quarter ending September 30, 2008.  Such financial
statements present fairly in all material respects the financial condition and
results of operations of the Parent and its consolidated Subsidiaries on a
consolidated basis as of such dates and for such periods, except, in the case of
unaudited financial statements, for the absence of footnote disclosure and for
normal year-end audit adjustments; such balance sheets and the notes thereto
disclose all liabilities, direct or contingent, of the Loan Parties and their
Subsidiaries as of the dates thereof required to be disclosed by GAAP and such
financial statements were prepared in a manner consistent with GAAP.  Since the
fiscal year ended December 31, 2007, and the fiscal quarter ended September 30,
2008, there has been no event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect other than those which customarily
occur as a result of events and circumstances leading up to and following the
commencement the Cases.

 

Section 3.5                                      Ownership.  Each of the Persons
listed on Schedule 3.5 is a direct or indirect Subsidiary of the Parent and
Schedule 3.5 correctly sets forth the ownership interest of each of the Loan
Parties in their respective Subsidiaries, in each case as of the Closing Date,
and the jurisdiction of organization of each Subsidiary.  None of the Loan
Parties owns any other Subsidiaries, whether directly or indirectly, other than
as set forth on Schedule 3.5, as may be updated by the Loan Parties from time to
time.  The Loan Parties have valid title to all assets included from time to
time in the Canadian PP&E Component and the U.S. PP&E Component and to all other
material properties and possessions under lease.

 

Section 3.6                                      Liens.  There are no Liens of
any nature whatsoever on any assets of any of the Loan Parties or their
Subsidiaries other than Permitted Liens.  Except as set forth on Schedule 3.6,
none of the Loan Parties is a party to any contract, agreement, lease or
instrument the performance of which, either unconditionally or upon the
happening of an event, will result in or require the creation of a Lien on any
assets of any Loan Party or any of their Subsidiaries or otherwise result in a
violation of this Agreement other than the Liens granted to the Applicable
Agents (for the benefit of the Secured Parties) as provided for in this
Agreement.  The aggregate amount of claims secured by the Non-Primed Liens,
other than the Calpine Debt, does not exceed US$60,000,000.

 

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Section 3.7                                     Compliance with Law.

 

(A)                                  THE OPERATIONS OF THE LOAN PARTIES AND
THEIR SUBSIDIARIES COMPLY IN ALL MATERIAL RESPECTS WITH ALL ENVIRONMENTAL LAWS;
(I) EXCEPT AS SET FORTH ON SCHEDULE 3.7, TO THE KNOWLEDGE OF THE LOAN PARTIES,
NONE OF THE OPERATIONS OF THE LOAN PARTIES OR THEIR SUBSIDIARIES IS THE SUBJECT
OF ANY GOVERNMENTAL AUTHORITY INVESTIGATION EVALUATING WHETHER ANY VIOLATION OF
ENVIRONMENTAL LAWS HAS OCCURRED OR REMEDIAL ACTION INVOLVING A MATERIAL
EXPENDITURE BY THE LOAN PARTIES IS NEEDED TO RESPOND TO THE PRESENCE OR RELEASE
OF ANY HAZARDOUS WASTE OR HAZARDOUS SUBSTANCE IN OR INTO THE ENVIRONMENT WHICH,
IN EACH CASE, WOULD BE REASONABLY LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT;
AND (II) THE LOAN PARTIES AND THEIR SUBSIDIARIES DO NOT HAVE ANY CONTINGENT
LIABILITY IN CONNECTION WITH ANY VIOLATION OF ENVIRONMENTAL LAWS OR RELEASE OF
ANY HAZARDOUS WASTE OR HAZARDOUS SUBSTANCE INTO THE ENVIRONMENT THAT IS
REASONABLY LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)                                 NONE OF THE LOAN PARTIES OR THEIR
SUBSIDIARIES IS IN VIOLATION OF ANY LAW, RULE OR REGULATION, OR IN DEFAULT WITH
RESPECT TO ANY JUDGMENT, WRIT, INJUNCTION OR DECREE OF ANY GOVERNMENTAL
AUTHORITY THE VIOLATION OF WHICH, OR A DEFAULT WITH RESPECT TO WHICH, WOULD HAVE
A MATERIAL ADVERSE EFFECT.

 

Section 3.8                                      Insurance.  All policies of
insurance of any kind or nature owned by or issued to the Loan Parties and their
Subsidiaries, including, without limitation, policies of life, fire, theft,
product liability, public liability, property damage, other casualty, employee
fidelity, workers’ compensation, employee health and welfare, title, property
and liability insurance, are in full force and effect and are of a nature and
provide such coverage as (i) is customarily carried by companies of the size and
character of the Loan Parties and their Subsidiaries or (ii) was carried by the
Loan Parties and their Subsidiaries prior to commencement of the Cases.

 

Section 3.9                                      The Orders.  On the date of the
making of the initial Loans or the issuance of the initial Letters of Credit
hereunder, whichever first occurs, the Interim Order will have been entered and
will not have been stayed, amended, vacated, reversed or rescinded except as
approved by the Administrative Agent, in its exclusive discretion in writing. 
On the date of the making of any Loan or the issuance of any Letter of Credit,
the Interim Order (or the Final Order, as applicable), shall have been entered
and shall not have been amended, stayed, vacated or rescinded except as approved
in writing by the Administrative Agent, in its exclusive discretion.  Upon the
maturity (whether by the acceleration or otherwise) of any of the obligations of
the Loan Parties hereunder and under the other Loan Documents, the Lenders
shall, subject to the provisions of Section 7.1 and the Orders, be entitled to
immediate payment of such obligations, and to enforce the remedies provided for
hereunder, without further application to or order by the Bankruptcy Court or
the Canadian Court.

 

Section 3.10                                Use of Proceeds.  The proceeds of
the Loans will be used for (i) working capital, Letters of Credit and Capital
Expenditures; (ii) other general corporate purposes of the Loan Parties
(including intercompany loans to the extent permitted by this Agreement);
(iii) for the refinancing in full of the Indebtedness outstanding under the
Receivables Securitization Programs; (iv) payment of any related transaction
costs, fees and expenses; and (v) the costs of administration of the Cases.  The
Letters of Credit will be issued for purposes consistent with the ordinary
course of business of the Loan Parties, as determined by the Loan Parties in
their reasonable judgment, or for such other purposes as are acceptable to the
Administrative Agent.  The proceeds of Loans may not be used in connection with
the investigation (including discovery

 

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proceedings), initiation or prosecution of any claims, causes or action,
adversary proceedings or other litigation against the Lenders or the
Administrative Agent; provided, however, that no more than US$100,000 of the
proceeds of the Loans or the Collateral may be used by any statutory committee
of unsecured creditors to investigate, and by the monitor in the Canadian Cases
to review, the pre-petition liens and claims of the Pre-Petition Agent and the
Pre-Petition Lenders.

 

Section 3.11                                Litigation.  There are no unstayed
actions, suits or proceedings pending or, to the knowledge of the Loan Parties
threatened, against or affecting any Loan Party or any of their respective
Subsidiaries or any of their respective properties, before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that are reasonably likely to have a Material Adverse
Effect.

 

Section 3.12                                Intellectual Property. Set forth on
Schedule 3.12 hereto is a complete and accurate list of all registered patents,
trademarks, trade names, service marks and copyrights, and all applications
therefor and licenses thereof, of each Loan Party or any of their Subsidiaries,
showing as of the Closing Date the jurisdiction in which registered, the
registration number, the date of registration and the expiration date.

 

Section 3.13                                Taxes.  Except to the extent
permitted by Section 5.4 hereof, each Loan Party has filed or caused to be filed
all federal, state, provincial, regional and other material tax returns,
reports, elections and filings or other documents that are required to be filed
and has paid all taxes, fees, levies, withholdings or charges shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other material taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves, if any, in conformity with GAAP
have been provided on the books of such Loan Party); other than deemed trusts
and statutory liens and charges in favor of a Governmental Authority in respect
of amounts accrued but not yet due in the usual and ordinary course of the
business of the Loan Party, no material tax Lien has been filed, and, to the
knowledge of the Loan Parties, no material claim is being asserted, with respect
to any such tax, fee or other charge (other than a claim the amount or validity
of which is being contested in good faith by the Loan Party and with respect to
which reserves, if any, in conformity with GAAP have been provided on the books
of such Loan Party), and for greater certainty taxes includes all taxes,
charges, fees, levies, imposts and other assessments, including all income,
sales, use, goods and services, harmonized sales, value added, capital, capital
gains, alternative, net worth, transfer, profits, withholding, payroll, employer
health, excise, real property and personal property taxes, and any other taxes,
customs duties, fees, assessments, or similar charges in the nature of a tax,
including Canada Pension Plan and provincial pension plan contributions,
unemployment insurance payments and workers’ compensation premiums, together
with any installments with respect thereto, and any interest, fines and
penalties with respect thereto, imposed by any Governmental Authority (including
federal, state, provincial, municipal and foreign Governmental Authorities), and
whether disputed or not.

 

Section 3.14                                Investment Company Act; Other
Regulations.  Neither the Parent nor any other Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended.  The Loan

 

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Parties are not subject to any organizational or governing document, or any law,
treaty, rule or regulation or determination of an arbitrator or a court or other
Governmental Authority that prohibits its ability to incur Indebtedness, other
than the Orders.

 

Section 3.15                                ERISA; Employee Matters.

 

(A)                                  THE LOAN PARTIES AND EACH OF THEIR ERISA
AFFILIATES ARE IN SUBSTANTIAL COMPLIANCE WITH ALL APPLICABLE PROVISIONS AND
REQUIREMENTS OF ERISA WITH RESPECT TO EACH PLAN, AND HAVE SUBSTANTIALLY
PERFORMED ALL THEIR OBLIGATIONS UNDER EACH PLAN, EXCEPT TO THE EXTENT THAT ANY
NON-COMPLIANCE WITH ERISA OR ANY SUCH FAILURE TO PERFORM WOULD NOT HAVE A
MATERIAL ADVERSE EFFECT ON THE LOAN PARTIES OR ANY OF THEIR ERISA AFFILIATES.

 

(B)                                 NO TERMINATION EVENT HAS OCCURRED WHICH HAS
RESULTED, OR IS REASONABLY LIKELY TO RESULT, IN ANY LIABILITY TO THE PBGC OR TO
ANY OTHER PERSON THAT WOULD HAVE A MATERIAL ADVERSE EFFECT.

 

(C)                                  EXCEPT TO THE EXTENT REQUIRED UNDER
SECTION 4980B OF THE CODE OR SECTION 601 OF ERISA, NONE OF THE LOAN PARTIES
MAINTAINS OR CONTRIBUTES TO ANY EMPLOYEE WELFARE BENEFIT PLAN (AS DEFINED IN
SECTION 3(1) OF ERISA) THAT PROVIDES HEALTH OR WELFARE BENEFITS (THROUGH THE
PURCHASE OF INSURANCE OR OTHERWISE) FOR ANY RETIRED OR FORMER EMPLOYEES OF THE
LOAN PARTIES, EXCEPT TO THE EXTENT THAT THE PROVISION OF SUCH BENEFITS WOULD NOT
HAVE A MATERIAL ADVERSE EFFECT.

 

(D)                                 NO PENSION PLAN HAS AN UNFUNDED CURRENT
LIABILITY IN AN AMOUNT THAT WOULD HAVE A MATERIAL ADVERSE EFFECT.

 

(E)                                  THE CANADIAN PENSION PLANS ARE DULY
REGISTERED UNDER THE ITA AND ANY OTHER APPLICABLE LAWS WHICH REQUIRE
REGISTRATION, HAVE BEEN ADMINISTERED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH
THEIR TERMS AND WITH THE ITA AND SUCH OTHER APPLICABLE LAWS, AND, TO THE
KNOWLEDGE OF THE CANADIAN BORROWER, NO EVENT HAS OCCURRED WHICH COULD REASONABLY
BE EXPECTED TO CAUSE THE LOSS OF SUCH REGISTERED STATUS.  THE CANADIAN BENEFIT
PLANS HAVE BEEN ADMINISTERED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH THEIR
TERMS AND APPLICABLE LAWS.

 

(F)                                    ALL MATERIAL OBLIGATIONS OF THE CANADIAN
BORROWER AND THE OTHER CANADIAN LOAN PARTIES REQUIRED TO BE PERFORMED BY THE
CANADIAN BORROWER OR THE OTHER CANADIAN LOAN PARTIES IN CONNECTION WITH THE
CANADIAN PENSION PLANS AND THE FUNDING AGREEMENTS THEREFOR AND THE CANADIAN
BENEFIT PLANS HAVE BEEN PERFORMED ON A TIMELY BASIS.

 

(G)                                 AS OF THE CLOSING DATE, THERE ARE NO
OUTSTANDING DISPUTES, INVESTIGATIONS, EXAMINATIONS OR OTHER LEGAL PROCEEDINGS
CONCERNING THE ASSETS OF THE CANADIAN PENSION PLANS OR THE CANADIAN BENEFIT
PLANS.

 

(H)                                 NO PROMISES OF BENEFIT IMPROVEMENTS UNDER
THE CANADIAN PENSION PLANS OR THE CANADIAN BENEFIT PLANS HAVE BEEN MADE, EXCEPT
WHERE SUCH IMPROVEMENT COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

(I)                                     ALL CONTRIBUTIONS OR PREMIUMS REQUIRED
TO BE MADE OR PAID BY THE CANADIAN BORROWER OR ANY OF ITS SUBSIDIARIES TO THE
CANADIAN PENSION PLANS OR THE CANADIAN

 

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BENEFIT PLANS HAVE BEEN MADE ON A TIMELY BASIS IN ACCORDANCE WITH THE TERMS OF
SUCH PLANS AND ALL APPLICABLE LAWS.

 

(J)                                     TO THE KNOWLEDGE OF THE CANADIAN
BORROWER, THERE HAVE BEEN NO IMPROPER WITHDRAWALS OR APPLICATIONS OF THE ASSETS
OF THE CANADIAN PENSION PLANS OR THE CANADIAN BENEFIT PLANS.

 

Section 3.16                                Material Subsidiaries.  As of the
Filing Date, the only Material Subsidiary (as such term is defined in the
Pre-Petition Credit Agreement) of the Parent that is a Domestic Subsidiary is
the U.S. Borrower.

 

Section 3.17                                Receivables Securitization
Indebtedness.  All indebtedness evidenced by the notes issued pursuant to that
certain Series 2004-2 Indenture Supplement to Master Indenture, dated as of
November 23, 2004, between SSCE Funding, LLC and Deutsche Bank Trust Company
Americas, as Indenture Trustee, as amended, restated, modified or waived from
time to time, was indefeasibly paid in full prior to the Filing Date.

 

ARTICLE 4. CONDITIONS OF LENDING

 

Section 4.1                                      Conditions Precedent to Initial
Loans.  The obligation of the Lenders to make the initial Loans or issue Letters
of Credit on the Closing Date is subject to the following conditions precedent:

 

(A)                                  SUPPORTING DOCUMENTS.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED FOR EACH OF THE LOAN PARTIES:

 

(I)                                   ORGANIZATIONAL DOCUMENTS, TO THE EXTENT
APPLICABLE, CERTIFIED AS OF A RECENT DATE PRIOR TO THE CLOSING DATE BY THE
APPLICABLE GOVERNMENTAL AUTHORITY;

 

(II)                                SIGNATURE AND INCUMBENCY CERTIFICATES OF THE
OFFICERS OF SUCH LOAN PARTY EXECUTING THE LOAN DOCUMENTS TO WHICH IT IS A PARTY,
DATED AS OF THE CLOSING DATE;

 

(III)                             DULY ADOPTED RESOLUTIONS OF THE BOARD OF
DIRECTORS OR SIMILAR GOVERNING BODY OF EACH LOAN PARTY APPROVING AND AUTHORIZING
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY OR BY WHICH IT OR ITS ASSETS MAY BE BOUND AS OF
THE CLOSING DATE, CERTIFIED AS OF THE CLOSING DATE BY ITS SECRETARY OR ASSISTANT
SECRETARY AS BEING IN FULL FORCE AND EFFECT WITHOUT MODIFICATION OR AMENDMENT;

 

(IV)                            A GOOD STANDING CERTIFICATE OR EQUIVALENT
THEREOF FROM THE APPLICABLE GOVERNMENTAL AUTHORITY OF EACH LOAN PARTY’S
JURISDICTION OF INCORPORATION, ORGANIZATION OR FORMATION AND IN EACH
JURISDICTION IN WHICH IT IS QUALIFIED AS A FOREIGN CORPORATION OR OTHER ENTITY
TO DO BUSINESS, EACH DATED A RECENT DATE PRIOR TO THE CLOSING DATE; AND

 

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(V)                               SUCH OTHER DOCUMENTS AS THE ADMINISTRATIVE
AGENT MAY REASONABLY REQUEST.

 

(B)                                 INTERIM ORDER.  NOT LATER THAN FIVE (5) DAYS
FOLLOWING THE FILING DATE, THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL HAVE
RECEIVED A CERTIFIED COPY OF EACH INTERIM ORDER APPROVING THE LOAN DOCUMENTS AND
GRANTING THE SUPERPRIORITY CLAIM STATUS AND SENIOR PRIMING AND OTHER LIENS
DESCRIBED IN SECTION 2.24 AND THE CCAA DIP LENDERS’ CHARGE, IN THE CASE OF THE
INITIAL ORDER, WHICH INTERIM ORDER (I) SHALL HAVE BEEN ENTERED UPON AN
APPLICATION OR MOTION OF THE APPLICABLE LOAN PARTIES, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE CO-LEAD ARRANGERS AND ON SUCH
PRIOR NOTICE TO SUCH PARTIES AS MAY BE SATISFACTORY TO THE ADMINISTRATIVE AGENT
AND THE CO-LEAD ARRANGERS, (II) SHALL AUTHORIZE EXTENSIONS OF CREDIT IN AMOUNTS
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE CO-LEAD ARRANGERS, (III) SHALL
APPROVE THE PAYMENT BY THE LOAN PARTIES OF ALL OF THE FEES SET FORTH IN
SECTION 2.20, SECTION 2.21 AND SECTION 2.22, (IV) SHALL BE IN FULL FORCE AND
EFFECT, (V) SHALL NOT HAVE BEEN STAYED, REVERSED, MODIFIED OR AMENDED IN ANY
RESPECT WITHOUT THE WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT AND THE CO-LEAD
ARRANGERS, (VI) SHALL BE ENTERED WITH THE CONSENT OR NON-OBJECTION OF A
PREPONDERANCE (AS DETERMINED BY THE ADMINISTRATIVE AGENT AND THE CO-LEAD
ARRANGERS IN THEIR EXCLUSIVE DISCRETION) OF THE SECURED CREDITORS OF ANY OF THE
LOAN PARTIES UNDER THE PRE-PETITION CREDIT AGREEMENT, AND (VII) IF THE INTERIM
ORDER IS THE SUBJECT OF A PENDING APPEAL IN ANY RESPECT, NEITHER THE MAKING OF
SUCH LOAN NOR THE ISSUANCE OF SUCH LETTER OF CREDIT NOR THE PERFORMANCE BY ANY
OF THE LOAN PARTIES OF ANY OF THEIR OBLIGATIONS HEREUNDER OR UNDER THE LOAN
DOCUMENTS OR UNDER ANY OTHER INSTRUMENT OR AGREEMENT REFERRED TO HEREIN SHALL BE
THE SUBJECT OF A PRESENTLY EFFECTIVE STAY PENDING APPEAL.

 

(C)                                  LOAN DOCUMENTS.  THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED (I) THIS AGREEMENT, DULY EXECUTED AND DELIVERED BY THE
ADMINISTRATIVE AGENT, EACH LOAN PARTY AND EACH LENDER, (II) THE SECURITY AND
PLEDGE AGREEMENT IN SUBSTANTIALLY THE FORM OF EXHIBIT B-1 (THE “SECURITY AND
PLEDGE AGREEMENT”), DULY EXECUTED BY EACH LOAN PARTY AND DELIVERED TO THE
ADMINISTRATIVE AGENT, (III) THE CANADIAN SECURITY AGREEMENT IN SUBSTANTIALLY THE
FORM OF EXHIBIT B-2, AND (IV) EACH OF THE OTHER LOAN DOCUMENTS LISTED ON
SCHEDULE 4.1 HERETO.

 

(D)                                 FIRST DAY ORDERS.  ALL OF THE “FIRST DAY
ORDERS” ENTERED BY THE BANKRUPTCY COURT AND BY THE CANADIAN COURT AT THE TIME OF
THE COMMENCEMENT OF THE U.S. CASES, INCLUDING BUT NOT LIMITED TO IN RESPECT OF
AMOUNTS OF CRITICAL VENDOR PAYMENTS, IF ANY, SHALL BE REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT AND THE CO-LEAD ARRANGERS.

 

(E)                                  OPINIONS OF COUNSEL.  THE ADMINISTRATIVE
AGENT AND THE LENDERS SHALL HAVE RECEIVED THE FAVORABLE WRITTEN OPINIONS OF
COUNSEL TO THE LOAN PARTIES, ACCEPTABLE TO THE ADMINISTRATIVE AGENT,
SUBSTANTIALLY IN THE FORMS OF EXHIBIT D.

 

(F)                                    PAYMENT OF FEES.  THE LOAN PARTIES SHALL
HAVE PAID TO THE APPLICABLE AGENTS AND THE CO-LEAD ARRANGERS THE THEN UNPAID
BALANCE OF ALL ACCRUED AND UNPAID FEES DUE UNDER AND PURSUANT TO THIS AGREEMENT
AND THE LETTERS REFERRED TO IN SECTION 2.20, WHICH PAYMENTS DUE ON THE CLOSING
DATE MAY BE MADE WITH THE PROCEEDS OF LOANS.

 

(G)                                 CORPORATE AND JUDICIAL PROCEEDINGS.  ALL
CORPORATE AND JUDICIAL PROCEEDINGS AND ALL INSTRUMENTS AND AGREEMENTS IN
CONNECTION WITH THE TRANSACTIONS AMONG THE

 

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LOAN PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS CONTEMPLATED BY THIS
AGREEMENT SHALL BE SATISFACTORY IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE
AGENT IN ITS EXCLUSIVE DISCRETION, AND THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED ALL INFORMATION AND COPIES OF ALL DOCUMENTS AND PAPERS, INCLUDING
RECORDS OF CORPORATE AND JUDICIAL PROCEEDINGS, WHICH THE ADMINISTRATIVE AGENT
MAY HAVE REQUESTED IN CONNECTION THEREWITH, SUCH DOCUMENTS AND PAPERS WHERE
APPROPRIATE TO BE CERTIFIED BY PROPER CORPORATE, GOVERNMENTAL OR JUDICIAL
AUTHORITIES.

 

(H)                                 INFORMATION.  THE ADMINISTRATIVE AGENT AND
THE LENDERS SHALL HAVE RECEIVED ALL INFORMATION REQUIRED BY THE PATRIOT ACT OR
ANY OTHER “KNOW-YOUR-CUSTOMER” OR ANTI-MONEY LAUNDERING RULES AND REGULATIONS
AND SUCH OTHER INFORMATION (FINANCIAL OR OTHERWISE) AS MAY BE REASONABLY
REQUESTED BY THE ADMINISTRATIVE AGENT AND SHALL HAVE DISCUSSED SUCH INFORMATION
WITH THE LOAN PARTIES’ MANAGEMENT AND SHALL BE SATISFIED WITH THE NATURE AND
SUBSTANCE OF SUCH DISCUSSIONS.

 

(I)                                     AVAILABILITY.  THE SUM OF (I) EXCESS
AVAILABILITY PLUS (II) AGGREGATE AMOUNTS ON DEPOSIT IN THE INVESTMENT ACCOUNTS,
AFTER GIVING EFFECT TO THE LOANS AND DISBURSEMENTS TO BE MADE ON THE CLOSING
DATE, SHALL BE AT LEAST US$150,000,000.

 

(J)                                     BUDGET.  THE ADMINISTRATIVE AGENT AND
THE LENDERS SHALL HAVE RECEIVED A FORECAST ON A CONSOLIDATED BASIS OF THE LOAN
PARTIES’ INCOME STATEMENT, BALANCE SHEET AND CASH FLOWS FOR EACH MONTH OF FISCAL
YEARS 2009 AND 2010, INCLUDING INFORMATION CONSOLIDATED SOLELY AS TO THE U.S.
LOAN PARTIES AND SOLELY  AS TO THE CANADIAN LOAN PARTIES AND THE MATERIAL
ASSUMPTIONS ON WHICH SUCH FORECASTS WERE BASED, AND SETTING FORTH THE
ANTICIPATED DISBURSEMENTS AND USES OF THE COMMITMENTS, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE CO-LEAD ARRANGERS (AS UPDATED
FROM TIME TO TIME PURSUANT TO SECTION 5.1(F), THE “BUDGET”).

 

(K)                                  CASH FLOW FORECAST.  THE ADMINISTRATIVE
AGENT AND THE LENDERS SHALL HAVE RECEIVED A FORECAST OF SOURCES AND USES OF CASH
BY THE U.S. LOAN PARTIES AND THE CANADIAN LOAN PARTIES ON A WEEKLY BASIS
COVERING THE 13 CALENDAR WEEKS SUCCEEDING THE FILING DATE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE CO-LEAD ARRANGERS (AS UPDATED
FROM TIME TO TIME PURSUANT TO SECTION 5.1(E), THE “CASH FLOW FORECAST”).

 

(L)                                     COMPLIANCE WITH LAWS.  THE LOAN PARTIES
SHALL HAVE GRANTED THE ADMINISTRATIVE AGENT ACCESS TO AND THE RIGHT TO INSPECT
ALL REPORTS, AUDITS AND OTHER INTERNAL INFORMATION OF THE LOAN PARTIES RELATING
TO ENVIRONMENTAL AND EMPLOYEE HEALTH AND SAFETY MATTERS AND ANY THIRD PARTY
VERIFICATION OF CERTAIN MATTERS RELATING TO COMPLIANCE WITH APPLICABLE LAWS AND
REGULATIONS REQUESTED BY THE ADMINISTRATIVE AGENT AND THE ADMINISTRATIVE AGENT
SHALL BE REASONABLY SATISFIED THAT THE LOAN PARTIES ARE IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ALL APPLICABLE ENVIRONMENTAL LAWS AND BE SATISFIED WITH
THE REASONABLY ESTIMATED COSTS OF MAINTAINING COMPLIANCE.

 

(M)                               LIEN SEARCHES.  THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED LIEN SEARCHES CONDUCTED IN THE JURISDICTIONS IN WHICH THE LOAN
PARTIES ARE ORGANIZED OR CONDUCT BUSINESS, SATISFACTORY TO THE ADMINISTRATIVE
AGENT (DATED AS OF A DATE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT),
REFLECTING THE ABSENCE OF LIENS AND ENCUMBRANCES ON THE ASSETS OF THE LOAN
PARTIES OTHER THAN PERMITTED LIENS.

 

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(N)                                 SECURITIZATION DOCUMENTS.  THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE MOST RECENT REPORTS PREPARED BY THE
LOAN PARTIES IN RESPECT OF THE RECEIVABLES SECURITIZATION PROGRAMS SATISFACTORY
IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT IN ITS EXCLUSIVE DISCRETION.

 

(O)                                 FIELD EXAMINATIONS.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED FIELD EXAMINATIONS OF THE LOAN PARTIES’ ACCOUNTS
RECEIVABLE, INVENTORY AND EQUIPMENT AND APPRAISALS OF ALL OR SUCH PORTIONS OF
THE LOAN PARTIES’ ASSETS THE ADMINISTRATIVE AGENT MAY DEEM APPROPRIATE, WHICH
FIELD EXAMINATIONS AND APPRAISALS SHALL BE SATISFACTORY IN FORM AND SUBSTANCE TO
THE ADMINISTRATIVE AGENT.

 

(P)                                 EVIDENCE OF INSURANCE.  THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED EVIDENCE OF INSURANCE POLICIES FOR THE LOAN PARTIES
AND THEIR SUBSIDIARIES SATISFACTORY IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE
AGENT.

 

(Q)                                 CLOSING DOCUMENTS.  THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED ALL DOCUMENTS REQUIRED BY THIS AGREEMENT SATISFACTORY IN
FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT AND THE CO-LEAD ARRANGERS.

 

(R)                                    OTHER CONDITIONS.  SUCH OTHER CONDITIONS
AS ARE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

Section 4.2                                      Conditions Precedent to Each
Loan and Each Letter of Credit.  The obligation of the Lenders to make each Loan
and of each Fronting Bank to issue, amend, renew or extend any Letter of Credit,
is subject to the following conditions precedent:

 

(A)                                  NOTICE.  THE APPLICABLE AGENT (AND TO THE
ADMINISTRATIVE AGENT IF IT IS NOT THE APPLICABLE AGENT) SHALL HAVE RECEIVED A
NOTICE WITH RESPECT TO EACH BORROWING OR THE ISSUANCE OF EACH LETTER OF CREDIT,
AS THE CASE MAY BE, AS REQUIRED BY ARTICLE 2.

 

(B)                                 REPRESENTATIONS AND WARRANTIES.  ALL
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF THE
DATE OF EACH BORROWING OR THE ISSUANCE OF EACH LETTER OF CREDIT HEREUNDER WITH
THE SAME EFFECT AS IF MADE ON AND AS OF SUCH DATE EXCEPT TO THE EXTENT SUCH
REPRESENTATIONS AND WARRANTIES EXPRESSLY RELATE TO AN EARLIER DATE.

 

(C)                                  NO DEFAULT.  ON THE DATE OF EACH BORROWING
OR THE ISSUANCE OF EACH LETTER OF CREDIT HEREUNDER, NO DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING.

 

(D)                                 ORDERS.  THE INTERIM ORDER SHALL BE IN FULL
FORCE AND EFFECT AND SHALL NOT HAVE BEEN STAYED, REVERSED, MODIFIED OR AMENDED
IN ANY RESPECT WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT,
PROVIDED THAT AT THE TIME OF THE MAKING OF ANY LOAN OR THE ISSUANCE OF ANY
LETTER OF CREDIT THE AGGREGATE AMOUNT OF EITHER OF WHICH, WHEN ADDED TO THE SUM
OF THE PRINCIPAL AMOUNT OF ALL LOANS THEN OUTSTANDING AND THE LETTER OF CREDIT
OUTSTANDINGS, WOULD EXCEED THE AMOUNT AUTHORIZED BY THE INTERIM ORDER
(COLLECTIVELY, THE “ADDITIONAL CREDIT”), THE ADMINISTRATIVE AGENT AND EACH OF
THE LENDERS SHALL HAVE RECEIVED A CERTIFIED COPY OF THE ORDER OF THE BANKRUPTCY
COURT AND AN ORDER OF THE CANADIAN COURT IF DEEMED NECESSARY IN THE
ADMINISTRATIVE AGENT’S EXCLUSIVE DISCRETION APPROVING CONTINUED LENDING
(COLLECTIVELY, THE

 

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“FINAL ORDER”) IN SUBSTANTIALLY THE FORM SET FORTH ON EXHIBIT A-3 OR SUCH OTHER
FORM AS MAY BE AGREED BY THE ADMINISTRATIVE AGENT AND THE LOAN PARTIES, WHICH,
IN ANY EVENT, SHALL HAVE BEEN ENTERED BY THE BANKRUPTCY COURT (AND CANADIAN
COURT, AS APPLICABLE) NO LATER THAN FORTY-FIVE (45) DAYS AFTER THE ENTRY OF THE
INTERIM ORDER, AND AT THE TIME OF THE EXTENSION OF ANY ADDITIONAL CREDIT THE
FINAL ORDER SHALL BE IN FULL FORCE AND EFFECT, AND SHALL NOT HAVE BEEN STAYED,
REVERSED, MODIFIED OR AMENDED IN ANY RESPECT WITHOUT THE PRIOR WRITTEN CONSENT
OF THE ADMINISTRATIVE AGENT; AND, IF EITHER THE INTERIM ORDER OR THE FINAL ORDER
IS THE SUBJECT OF A PENDING APPEAL IN ANY RESPECT, NEITHER THE MAKING OF THE
LOANS NOR THE ISSUANCE OF ANY LETTER OF CREDIT NOR THE PERFORMANCE BY ANY OF THE
LOAN PARTIES OF ANY OF THEIR OBLIGATIONS UNDER ANY OF THE LOAN DOCUMENTS OR
UNDER ANY OTHER INSTRUMENT OR AGREEMENT REFERRED TO HEREIN SHALL BE THE SUBJECT
OF A PRESENTLY EFFECTIVE STAY PENDING APPEAL.

 

(E)                                  PAYMENT OF FEES AND EXPENSES.  THE LOAN
PARTIES SHALL HAVE PAID TO THE APPLICABLE AGENT THE THEN UNPAID BALANCE OF ALL
ACCRUED AND UNPAID FEES AND EXPENSES THEN DUE AND PAYABLE UNDER AND PURSUANT TO
THIS AGREEMENT AND THE LETTERS REFERRED TO IN SECTION 2.20.

 

(F)                                    BORROWING BASE CERTIFICATE.  THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A BORROWING BASE CERTIFICATE IN
ACCORDANCE WITH SECTION 5.8 DATED NO MORE THAN SEVEN (7) DAYS PRIOR TO EACH
BORROWING OR THE ISSUANCE OF EACH LETTER OF CREDIT, WHICH BORROWING BASE
CERTIFICATE SHALL INCLUDE SUPPORTING SCHEDULES AS REQUIRED BY THE ADMINISTRATIVE
AGENT.

 

(G)                                 OTHER CONDITIONS.  SUCH OTHER CONDITIONS AS
ARE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the Loan
Parties on the date thereof that the conditions specified above have been
satisfied or waived.

 

ARTICLE 5. AFFIRMATIVE COVENANTS

 

From the Closing Date and for so long as any Commitment shall be in effect or
any Letter of Credit shall remain outstanding (in a face amount in excess of the
amount of cash then held in the Letter of Credit Account and the Canadian Letter
of Credit Account, or in excess of the face amount of back-to-back letters of
credit delivered, in each case pursuant to Section 2.4(c)), or any amount shall
remain outstanding or unpaid under this Agreement, each of the Loan Parties and
their respective Subsidiaries agree that, unless the Required Lenders shall
otherwise consent in writing:

 

Section 5.1                                      Financial Statements, Reports,
etc.  The Loan Parties will, and will cause their Subsidiaries to, deliver to
the Administrative Agent and each of the Lenders:

 

(A)                                  WITHIN SEVENTY-FIVE (75) DAYS AFTER THE END
OF EACH FISCAL YEAR, (I) CONSOLIDATED BALANCE SHEETS AND RELATED STATEMENTS OF
INCOME, STOCKHOLDERS’ EQUITY, AND CASH FLOWS, SHOWING THE FINANCIAL CONDITION
OF THE LOAN PARTIES AND THEIR SUBSIDIARIES AS OF THE CLOSE OF SUCH FISCAL YEAR
AND THE RESULTS OF THEIR RESPECTIVE OPERATIONS DURING SUCH YEAR, THE
CONSOLIDATED STATEMENTS TO BE AUDITED FOR THE LOAN PARTIES AND THEIR RESPECTIVE
SUBSIDIARIES BY THEIR CURRENT INDEPENDENT AUDITORS OR OTHER INDEPENDENT PUBLIC
ACCOUNTANTS OF RECOGNIZED NATIONAL STANDING AND ACCOMPANIED BY AN OPINION OF
SUCH ACCOUNTANTS (WHICH SHALL NOT BE QUALIFIED OTHER

 

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THAN WITH RESPECT TO THE CASES) AND (II) SUCH STATEMENTS CONSOLIDATED SOLELY AS
TO U.S. LOAN PARTIES AND CONSOLIDATED SOLELY AS TO CANADIAN LOAN PARTIES (ON AN
UNAUDITED BASIS AND WITHOUT FOOTNOTES), IN EACH CASE TO BE CERTIFIED BY A
FINANCIAL OFFICER OF PARENT TO THE EFFECT THAT SUCH CONSOLIDATED FINANCIAL
STATEMENTS FAIRLY PRESENT IN ALL MATERIAL RESPECTS, THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF THE LOAN PARTIES AND THEIR SUBSIDIARIES ON A
CONSOLIDATED BASIS IN ACCORDANCE WITH GAAP;

 

(B)                                 WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF
THE FIRST THREE FISCAL QUARTERS OF EACH FISCAL YEAR OF THE LOAN PARTIES, AND
WITHIN SEVENTY-FIVE (75) DAYS AFTER THE END OF THE FOURTH FISCAL QUARTER OF EACH
FISCAL YEAR, (I) CONSOLIDATED BALANCE SHEETS AND RELATED STATEMENTS OF INCOME,
STOCKHOLDERS’ EQUITY AND CASH FLOWS, SHOWING THE FINANCIAL CONDITION OF THE LOAN
PARTIES AND THEIR SUBSIDIARIES ON A CONSOLIDATED BASIS, IN EACH CASE AS OF THE
CLOSE OF SUCH FISCAL QUARTER AND THE RESULTS OF THEIR OPERATIONS DURING SUCH
FISCAL QUARTER AND THE THEN ELAPSED PORTION OF THE FISCAL YEAR, AND (II) SUCH
STATEMENTS CONSOLIDATED SOLELY AS TO U.S. LOAN PARTIES AND CONSOLIDATED SOLELY
AS TO CANADIAN LOAN PARTIES, IN EACH CASE CERTIFIED BY A FINANCIAL OFFICER OF
THE PARENT AS FAIRLY PRESENTING IN ALL MATERIAL RESPECTS, THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF THE LOAN PARTIES AND THEIR SUBSIDIARIES
ON A CONSOLIDATED BASIS IN ACCORDANCE WITH GAAP, SUBJECT TO NORMAL YEAR-END
AUDIT ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES;

 

(C)                                  WITHIN TWENTY-FIVE (25) DAYS AFTER THE END
OF EACH FISCAL MONTH (FORTY-FIVE (45) DAYS AFTER THE END OF THE FISCAL MONTH
ENDED JANUARY 31, 2009), (I) UNAUDITED MONTHLY CONSOLIDATED BALANCE SHEETS AND
RELATED STATEMENTS OF INCOME AND CASH FLOWS OF THE LOAN PARTIES AND THEIR
SUBSIDIARIES (INCLUDING THE AMOUNT OF AVAILABLE CASH BALANCES AT THE END OF EACH
SUCH FISCAL MONTH), AND (II) SUCH STATEMENTS CONSOLIDATED SOLELY AS TO U.S. LOAN
PARTIES AND CONSOLIDATED SOLELY AS TO CANADIAN LOAN PARTIES, IN EACH CASE IN
FORM AND SCOPE SATISFACTORY TO THE ADMINISTRATIVE AGENT AND SHOWING THE RESULTS
OF THE LOAN PARTIES’ AND THEIR SUBSIDIARIES’ OPERATIONS DURING SUCH FISCAL MONTH
AND THE THEN ELAPSED PORTION OF THE FISCAL YEAR, WHICH SHALL INCLUDE A SUMMARY
OF THE RESULTS OF THE LOAN PARTIES’ BUSINESS OPERATIONS FOR THE PRECEDING MONTH
AS COMPARED TO THE CORRESPONDING PERIOD IN THE BUDGET, INCLUDING A DISCUSSION OF
SIGNIFICANT VARIANCES, WHICH SUMMARY SHALL DESCRIBE THE RESULTS OF THE LOAN
PARTIES AND THEIR RESPECTIVE SUBSIDIARIES ON A CONSOLIDATED BASIS;

 

(D)                                 (I) CONCURRENTLY WITH ANY DELIVERY OF
FINANCIAL STATEMENTS UNDER (A), (B) OR (C) ABOVE AS APPLICABLE, A CERTIFICATE OF
A FINANCIAL OFFICER OF THE PARENT ON BEHALF OF EACH OF THE LOAN PARTIES IN THE
FORM OF EXHIBIT G (A) CERTIFYING THAT NO EVENT OF DEFAULT OR DEFAULT HAS
OCCURRED, OR, IF SUCH AN EVENT OF DEFAULT OR DEFAULT HAS OCCURRED, SPECIFYING
THE NATURE AND EXTENT THEREOF AND ANY CORRECTIVE ACTION TAKEN OR PROPOSED TO BE
TAKEN WITH RESPECT THERETO AND (B) SETTING FORTH COMPUTATIONS IN REASONABLE
DETAIL SATISFACTORY TO THE ADMINISTRATIVE AGENT DEMONSTRATING COMPLIANCE WITH
THE PROVISIONS OF SECTION 6.3, SECTION 6.4, SECTION 6.5, SECTION 6.6,
SECTION 6.11, AND SECTION 6.12 AND (II) ACCOMPANYING THE AUDITED CONSOLIDATED
FINANCIAL STATEMENTS DELIVERED UNDER (A)(I) ABOVE A CERTIFICATE OF THE
ACCOUNTING FIRM THAT REPORTED ON SUCH FINANCIAL STATEMENTS STATING WHETHER THEY
OBTAINED KNOWLEDGE DURING THE COURSE OF THEIR EXAMINATION OF SUCH FINANCIAL
STATEMENTS OF ANY DEFAULT (WHICH CERTIFICATE MAY BE LIMITED TO THE EXTENT
REQUIRED BY ACCOUNTING RULES OR GUIDELINES);

 

(E)                                  ON THE LAST BUSINESS DAY OF EACH WEEK,
(I) AN UPDATED CASH FLOW FORECAST COVERING THE NEXT SUCCEEDING THIRTEEN (13)
CALENDAR WEEKS, AND (II) AND A REPORT COMPARING THE

 

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PRECEDING WEEK’S ACTUAL SOURCES AND USES OF CASH BY THE LOAN PARTIES TO EACH
CASH FLOW FORECAST FOR SUCH WEEK, IN EACH CASE IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT IN ITS EXCLUSIVE DISCRETION;

 

(F)                                    NO LATER THAN FORTY-FIVE (45) DAYS AFTER
THE END OF EACH OF THE FIRST THREE FISCAL QUARTERS OF EACH FISCAL YEAR OF THE
LOAN PARTIES, AND WITHIN SEVENTY-FIVE (75) DAYS FROM THE END OF THE LAST FISCAL
QUARTER OF EACH FISCAL YEAR OF THE LOAN PARTIES, AN UPDATE OF THE BUDGET
SATISFACTORY IN FORM AND SUBSTANCE TO THE ADMINISTRATIVE AGENT IN ITS EXCLUSIVE
DISCRETION, AND LOAN PARTIES SHALL BE AVAILABLE TO DISCUSS SUCH UPDATED BUDGET
WITH THE ADMINISTRATIVE AGENT UPON THE ADMINISTRATIVE AGENT’S REASONABLE
REQUEST;

 

(G)                                 PROMPTLY AFTER THE SAME BECOME PUBLICLY
AVAILABLE, COPIES OF ALL PERIODIC AND OTHER REPORTS, PROXY STATEMENTS AND OTHER
MATERIALS FILED BY ANY LOAN PARTY WITH THE SECURITIES AND EXCHANGE COMMISSION,
OR ANY GOVERNMENTAL AUTHORITY SUCCEEDING TO ANY OF OR ALL THE FUNCTIONS OF SAID
COMMISSION, OR WITH ANY NATIONAL OR PROVINCIAL SECURITIES COMMISSION OR
EXCHANGE, AS THE CASE MAY BE;

 

(H)                                 AS SOON AS AVAILABLE AND IN ANY EVENT
(A) WITHIN THIRTY (30) DAYS AFTER ANY LOAN PARTY, OR ANY OF THEIR ERISA
AFFILIATES KNOWS OR HAS REASON TO KNOW THAT ANY TERMINATION EVENT DESCRIBED IN
CLAUSE (I) OF THE DEFINITION OF TERMINATION EVENT WITH RESPECT TO ANY SINGLE
EMPLOYER PLAN OF ANY OF THE LOAN PARTIES OR SUCH ERISA AFFILIATE HAS OCCURRED
AND (B) WITHIN TEN (10) DAYS AFTER ANY OF THE LOAN PARTIES OR ANY OF THEIR ERISA
AFFILIATES KNOWS OR HAS REASON TO KNOW THAT ANY OTHER TERMINATION EVENT WITH
RESPECT TO ANY SUCH PLAN HAS OCCURRED, A STATEMENT OF A FINANCIAL OFFICER OF
SUCH LOAN PARTY DESCRIBING SUCH TERMINATION EVENT AND THE ACTION, IF ANY, WHICH
SUCH LOAN PARTY OR SUCH ERISA AFFILIATE PROPOSES TO TAKE WITH RESPECT THERETO;

 

(I)                                     PROMPTLY AND IN ANY EVENT WITHIN TEN
(10) DAYS AFTER RECEIPT THEREOF BY ANY OF THE LOAN PARTIES OR ANY OF THEIR ERISA
AFFILIATES FROM THE PBGC COPIES OF EACH NOTICE RECEIVED BY SUCH LOAN PARTY OR
ANY SUCH ERISA AFFILIATE OF THE PBGC’S INTENTION TO TERMINATE ANY SINGLE
EMPLOYER PLAN OF SUCH LOAN PARTY OR SUCH ERISA AFFILIATE OR TO HAVE A TRUSTEE
APPOINTED TO ADMINISTER ANY SUCH PLAN;

 

(J)                                     IF REQUESTED BY THE ADMINISTRATIVE
AGENT, PROMPTLY AND IN ANY EVENT WITHIN THIRTY (30) DAYS AFTER THE FILING
THEREOF WITH THE INTERNAL REVENUE SERVICE, COPIES OF EACH SCHEDULE B (ACTUARIAL
INFORMATION) TO THE ANNUAL REPORT (FORM 5500 SERIES) WITH RESPECT TO EACH SINGLE
EMPLOYER PLAN OF ANY OF THE LOAN PARTIES OR ANY OF THEIR ERISA AFFILIATES;

 

(K)                                  WITHIN TEN (10) DAYS AFTER NOTICE IS GIVEN
OR REQUIRED TO BE GIVEN TO THE PBGC UNDER SECTION 302(F)(4)(A) OF ERISA OF THE
FAILURE OF ANY OF THE LOAN PARTIES OR ANY OF THEIR ERISA AFFILIATES TO MAKE
TIMELY PAYMENTS TO A PLAN, A COPY OF ANY SUCH NOTICE FILED AND A STATEMENT OF A
FINANCIAL OFFICER OF SUCH LOAN PARTY SETTING FORTH (A) SUFFICIENT INFORMATION
NECESSARY TO DETERMINE THE AMOUNT OF THE LIEN UNDER SECTION 302(F)(3), (B) THE
REASON FOR THE FAILURE TO MAKE THE REQUIRED PAYMENTS AND (C) THE ACTION, IF ANY,
WHICH THE LOAN PARTIES OR ANY OF THEIR ERISA AFFILIATES PROPOSED TO TAKE WITH
RESPECT THERETO;

 

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(L)                                     PROMPTLY AND IN ANY EVENT WITHIN TEN
(10) DAYS AFTER RECEIPT THEREOF BY ANY OF THE LOAN PARTIES OR ANY ERISA
AFFILIATE FROM A MULTIEMPLOYER PLAN SPONSOR, A COPY OF EACH NOTICE RECEIVED BY
SUCH LOAN PARTY OR ANY ERISA AFFILIATE CONCERNING (A) THE IMPOSITION OF
WITHDRAWAL LIABILITY BY A MULTIEMPLOYER PLAN, (B) THE DETERMINATION THAT A
MULTIEMPLOYER PLAN IS, OR IS EXPECTED TO BE, IN REORGANIZATION WITHIN THE
MEANING OF TITLE IV OF ERISA, (C) THE TERMINATION OF A MULTIEMPLOYER PLAN WITHIN
THE MEANING OF TITLE IV OF ERISA, OR (D) THE AMOUNT OF LIABILITY INCURRED, OR
WHICH MAY BE INCURRED, BY THE LOAN PARTIES OR ANY ERISA AFFILIATE IN CONNECTION
WITH ANY EVENT DESCRIBED IN CLAUSE (A), (B) OR (C) ABOVE;

 

(M)                               PROMPTLY AND IN ANY EVENT WITHIN TEN (10) DAYS
AFTER RECEIPT THEREOF BY ANY OF THE CANADIAN LOAN PARTIES (A) COPIES OF EACH
ANNUAL AND OTHER RETURN, REPORT, OR VALUATION WITH RESPECT TO EACH REGISTERED
PENSION PLAN AS FILED WITH ANY APPLICABLE GOVERNMENTAL AUTHORITY, (B) COPIES OF
ANY DIRECTION, ORDER, NOTICE, RULING OR OPINION RECEIVED FROM ANY APPLICABLE
GOVERNMENTAL AUTHORITY WITH RESPECT TO ANY REGISTERED PENSION PLAN, AND
(C) NOTICE OF ANY INCREASES HAVING A COST TO ONE OR MORE OF THE CANADIAN LOAN
PARTIES IN EXCESS OF US$5,000,000 PER ANNUM IN THE AGGREGATE, IN THE BENEFITS OF
ANY EXISTING PENSION PLAN OR EMPLOYEE BENEFIT PLAN OR THE ESTABLISHMENT OF ANY
NEW PENSION PLAN OR EMPLOYEE BENEFIT PLAN OR THE COMMENCEMENT OF CONTRIBUTIONS
TO ANY SUCH PLAN TO WHICH ANY CANADIAN LOAN PARTY WAS NOT PREVIOUSLY
CONTRIBUTING;

 

(N)                                 WITHIN TWENTY-FIVE (25) DAYS AFTER THE END
OF EACH FISCAL MONTH, A SCHEDULE DETAILING THE BALANCE OF ALL ACCRUED BUT UNPAID
PRIORITY PAYABLES;

 

(O)                                 PROMPTLY, FROM TIME TO TIME, SUCH OTHER
INFORMATION (INCLUDING, WITHOUT LIMITATION, PROJECTIONS) REGARDING THE
OPERATIONS, BUSINESS AFFAIRS AND FINANCIAL CONDITION OF ANY LOAN PARTY OR ANY OF
ITS SUBSIDIARIES, OR COMPLIANCE WITH THE TERMS OF ANY MATERIAL LOAN OR FINANCING
AGREEMENT, AS THE ADMINISTRATIVE AGENT, AT THE REQUEST OF ANY LENDER, MAY
REASONABLY REQUEST;

 

(P)                                 PROMPTLY AFTER THE SAME IS AVAILABLE, COPIES
OF ALL PLEADINGS, MOTIONS, APPLICATIONS, JUDICIAL INFORMATION, FINANCIAL
INFORMATION AND OTHER DOCUMENTS FILED IN THE CASES BY OR ON BEHALF OF ANY OF THE
LOAN PARTIES WITH THE BANKRUPTCY COURT OR THE CANADIAN COURT, OR DISTRIBUTED BY
OR ON BEHALF OF ANY OF THE LOAN PARTIES TO ANY MONITOR OR OFFICIAL COMMITTEE
APPOINTED IN ANY OF THE CASES, PROVIDING COPIES OF SAME TO COUNSEL FOR THE
ADMINISTRATIVE AGENT;

 

(Q)                                 PROMPTLY AND IN ANY EVENT WITHIN THIRTY (30)
DAYS AFTER ANY CANADIAN LOAN PARTY BECOMES AWARE OR HAS REASON TO BECOME AWARE
OF ANY EVENT WHICH MAY GIVE RISE TO THE FULL TERMINATION OF ANY CANADIAN PENSION
PLAN OR PARTIAL TERMINATION OF ANY CANADIAN PENSION PLAN WHICH COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, A STATEMENT OF A FINANCIAL
OFFICER OF SUCH LOAN PARTY DESCRIBING SUCH EVENT AND THE ACTION, IF ANY, WHICH
SUCH LOAN PARTY PROPOSES TO TAKE WITH RESPECT THERETO; AND

 

(R)                                    WITHIN TEN (10) DAYS AFTER THE FAILURE OF
ANY OF THE CANADIAN LOAN PARTIES TO MAKE CURRENT SERVICE CONTRIBUTIONS TO ANY
CANADIAN PENSION PLAN, A COPY OF ANY SUCH NOTICE FILED AND A STATEMENT OF A
FINANCIAL OFFICER OF SUCH LOAN PARTY SETTING FORTH (A) SUFFICIENT INFORMATION
NECESSARY TO DETERMINE THE AMOUNT OF ANY CORRESPONDING LIEN, (B) THE REASON FOR
THE

 

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FAILURE TO MAKE THE REQUIRED PAYMENTS AND (C) THE ACTION, IF ANY, WHICH THE LOAN
PARTIES PROPOSE TO TAKE WITH RESPECT THERETO.

 

Section 5.2                                      Existence.  The Loan Parties
will, and will cause their Subsidiaries to,  preserve and maintain in full force
and effect all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal conduct of their
businesses except (i) (A) if in the reasonable business judgment of such Loan
Party it is in its best economic interest not to preserve and maintain such
rights, privileges, qualifications, permits, licenses and franchises, and
(B) such failure to preserve the same could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (ii) as otherwise permitted in
connection with sales of assets permitted by Section 6.12.

 

Section 5.3                                      Insurance.  The Loan Parties
will, and will cause their Subsidiaries to:  (a) keep their insurable properties
insured at all times, against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies of the same or
similar size in the same or similar businesses; and maintain in full force and
effect public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by any Loan Party in such amounts and
with such deductibles as are customary with companies of the same or similar
size in the same or similar businesses and in the same geographic area, with
financially sound and responsible insurance companies; and (b) maintain such
other insurance or self insurance as may be required by law, with financially
sound and responsible insurance companies.

 

Section 5.4                                      Obligations and Taxes.  Except
with the express written consent of the Administrative Agent in each instance,
each Loan Party will pay all its material obligations arising after the Filing
Date promptly and in accordance with their terms and pay and discharge promptly
all material taxes, assessments, governmental charges, levies, fees, imposts and
withholding obligations imposed upon it or upon its income or profits or in
respect of its property arising after the Filing Date, before the same shall
become in default, as well as all material lawful claims for labor, materials
and supplies or otherwise arising after the Filing Date which, if unpaid, would
become a Lien or charge upon such properties or any part thereof; provided,
however, that no Loan Party shall be required to pay and discharge or to cause
to be paid and discharged any such obligation, tax, assessment, charge, levy,
fees, imposts and withholding obligations or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings (if
the Loan Parties shall have set aside on their books adequate reserves
therefor).

 

Section 5.5                                      Notice of Event of Default,
etc.  The Loan Parties will promptly give to the Administrative Agent notice in
writing of:

 

(I)                                     ANY DEFAULT OR EVENT OF DEFAULT; AND

 

(II)                                ANY LITIGATION, PROCEEDINGS OR MATERIAL
INVESTIGATIONS WHICH MAY EXIST AT ANY TIME BETWEEN ANY LOAN PARTY AND ANY
GOVERNMENTAL AUTHORITY.

 

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Section 5.6                                      Access to Books and Records;
Collateral Reviews and Appraisals.

 

(A)                                  THE LOAN PARTIES WILL, AND WILL CAUSE THEIR
SUBSIDIARIES TO, MAINTAIN OR CAUSE TO BE MAINTAINED AT ALL TIMES TRUE AND
COMPLETE BOOKS AND RECORDS IN ACCORDANCE WITH GAAP OF THE FINANCIAL OPERATIONS
OF THE LOAN PARTIES AND THEIR RESPECTIVE SUBSIDIARIES; AND PROVIDE THE
ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES ACCESS TO ALL SUCH BOOKS AND
RECORDS DURING REGULAR BUSINESS HOURS, IN ORDER THAT THE ADMINISTRATIVE AGENT
MAY EXAMINE AND MAKE ABSTRACTS FROM SUCH BOOKS, ACCOUNTS, RECORDS AND OTHER
PAPERS FOR THE PURPOSE OF VERIFYING THE ACCURACY OF THE VARIOUS REPORTS
DELIVERED BY THE LOAN PARTIES TO THE ADMINISTRATIVE AGENT OR THE LENDERS
PURSUANT TO THIS AGREEMENT OR FOR OTHERWISE ASCERTAINING COMPLIANCE WITH THIS
AGREEMENT, ALL AT SUCH REASONABLE TIMES AND AS OFTEN AS REASONABLY REQUESTED AND
IN ANY EVENT NO LESS FREQUENTLY THAN TWO (2) TIMES DURING ANY CALENDAR YEAR AND,
SO LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
NO MORE THAN FOUR (4) TIMES DURING ANY CALENDAR YEAR.  THE LOAN PARTIES WILL
PERMIT (AND WILL CAUSE THEIR SUBSIDIARIES TO PERMIT) ANY REPRESENTATIVES
DESIGNATED BY THE ADMINISTRATIVE AGENT TO DISCUSS THEIR AFFAIRS, FINANCES AND
CONDITION WITH THEIR OFFICERS AND INDEPENDENT ACCOUNTANTS, ALL AT SUCH
REASONABLE TIMES AND AS OFTEN AS REASONABLY REQUESTED.

 

(B)                                 THE LOAN PARTIES WILL, AND WILL CAUSE THEIR
SUBSIDIARIES TO, PERMIT ANY REPRESENTATIVES DESIGNATED BY THE ADMINISTRATIVE
AGENT (INCLUDING ANY CONSULTANTS, ACCOUNTANTS, LAWYERS AND APPRAISERS RETAINED
BY THE ADMINISTRATIVE AGENT) TO CONDUCT EVALUATIONS AND APPRAISALS OF THE LOAN
PARTIES’ COMPUTATION OF THE BORROWING BASES AND THE ASSETS INCLUDED IN THE
BORROWING BASES AND SUCH OTHER ASSETS AND PROPERTIES OF THE LOAN PARTIES OR
THEIR SUBSIDIARIES AS THE ADMINISTRATIVE AGENT OR REQUIRED LENDERS MAY REQUIRE,
ALL AT SUCH REASONABLE TIMES AND AS OFTEN AS REASONABLY REQUESTED AND IN ANY
EVENT NO LESS FREQUENTLY THAN TWO (2) TIMES DURING ANY CALENDAR YEAR AND, SO
LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, NO
MORE THAN FOUR (4) TIMES DURING ANY CALENDAR YEAR.  THE LOAN PARTIES SHALL PAY
THE REASONABLE FEES (INCLUDING REASONABLE AND CUSTOMARY INTERNALLY ALLOCATED
FEES OF EMPLOYEES OF THE ADMINISTRATIVE AGENT AS TO WHICH INVOICES HAVE BEEN
FURNISHED) AND EXPENSES OF ANY SUCH REPRESENTATIVES RETAINED BY THE
ADMINISTRATIVE AGENT AS TO WHICH INVOICES HAVE BEEN FURNISHED TO CONDUCT ANY
SUCH EVALUATION OR APPRAISAL, INCLUDING THE REASONABLE FEES AND EXPENSES
ASSOCIATED WITH COLLATERAL MONITORING SERVICES PERFORMED BY THE ABL PORTFOLIO
MANAGEMENT GROUP OF THE ADMINISTRATIVE AGENT.  TO THE EXTENT REQUIRED BY THE
ADMINISTRATIVE AGENT IN ITS PERMITTED DISCRETION AS A RESULT OF ANY SUCH
EVALUATION, APPRAISAL OR MONITORING, THE LOAN PARTIES ALSO AGREE TO MODIFY OR
ADJUST THE COMPUTATION OF THE BORROWING BASES (WHICH MAY INCLUDE MAINTAINING
ADDITIONAL RESERVES, MODIFYING THE ADVANCE RATES OR MODIFYING THE ELIGIBILITY
CRITERIA FOR THE COMPONENTS OF THE BORROWING BASES).

 

(C)                                  IN THE EVENT THAT HISTORICAL ACCOUNTING
PRACTICES, SYSTEMS OR RESERVES RELATING TO THE COMPONENTS OF THE BORROWING BASES
ARE MODIFIED IN A MANNER THAT IS ADVERSE TO THE LENDERS IN ANY MATERIAL RESPECT,
THE LOAN PARTIES WILL AGREE TO MAINTAIN SUCH ADDITIONAL RESERVES (FOR PURPOSES
OF COMPUTING THE BORROWING BASES) IN RESPECT TO THE  COMPONENTS OF THE BORROWING
BASES AND MAKE SUCH OTHER ADJUSTMENTS TO ITS PARAMETERS FOR INCLUDING THE
COMPONENTS OF THE BORROWING BASES AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
REQUIRE BASED UPON SUCH MODIFICATIONS.

 

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(D)                                 THE LOAN PARTIES WILL, AND WILL CAUSE THEIR
SUBSIDIARIES TO, GRANT THE ADMINISTRATIVE AGENT ACCESS TO AND THE RIGHT TO
INSPECT ALL REPORTS, AUDITS AND OTHER INTERNAL INFORMATION OF THE LOAN PARTIES
RELATING TO ENVIRONMENTAL MATTERS UPON REASONABLE NOTICE, AND OBTAIN ANY THIRD
PARTY VERIFICATION OF MATTERS RELATING TO COMPLIANCE WITH ENVIRONMENTAL LAWS
REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT AT ANY TIME AND FROM TIME TO
TIME.

 

Section 5.7                                      Maintenance of Concentration
Account; Cash Dominion.

 

(A)                                  WITHIN SIXTY (60) DAYS OF THE CLOSING DATE
(OR SUCH LATER DATE AS THE ADMINISTRATIVE AGENT MAY APPROVE IN ITS EXCLUSIVE
DISCRETION), THE U.S. LOAN PARTIES WILL, AND WILL CAUSE THEIR DOMESTIC
SUBSIDIARIES TO, MAINTAIN WITH THE ADMINISTRATIVE AGENT AN ACCOUNT OR ACCOUNTS
TO BE USED BY THE U.S. LOAN PARTIES AS THEIR PRINCIPAL DOMESTIC CONCENTRATION OR
SWEEP ACCOUNT(S) INTO WHICH SHALL BE DEPOSITED THE AVAILABLE BALANCES FROM THE
COLLECTION ACCOUNTS OF THE U.S. LOAN PARTIES (OTHER THAN CALPINE OR
SMURFIT-STONE PUERTO RICO, INC.) AT THE END OF EACH BUSINESS DAY (AS
CONTEMPLATED BY ARTICLE 7 OF THE SECURITY AND PLEDGE AGREEMENT), NET OF
DISBURSEMENTS PAID IN THE ORDINARY COURSE OF BUSINESS DURING SUCH BUSINESS DAY
AND ALL OF THE U.S. LOAN PARTIES’ AND THEIR DOMESTIC SUBSIDIARIES’ ACCOUNTS
SHALL BE SUBJECT TO A CASH MANAGEMENT SYSTEM SATISFACTORY TO THE ADMINISTRATIVE
AGENT IN ITS EXCLUSIVE DISCRETION, INCLUDING FROM AND AFTER SUCH SIXTIETH (60TH)
DAY, (I) WEEKLY SWEEPS OF AVAILABLE CASH IN EXCESS OF US$50,000,000, SUCH CASH
TO BE APPLIED TO OUTSTANDING U.S. REVOLVING LOANS (WITHOUT A PERMANENT REDUCTION
OF THE U.S. REVOLVING COMMITMENT), AND (II) FULL CASH DOMINION, INCLUDING DAILY
CASH SWEEPS (OTHER THAN CASH OF CALPINE AND OTHER THAN WITH RESPECT TO UP TO
$2,000,000 HELD IN DEPOSIT ACCOUNTS OF SMURFIT-STONE PUERTO RICO, INC.) TO THE
CONCENTRATION ACCOUNT IF EXCESS AVAILABILITY IS LESS THAN US$150,000,000 FOR
THREE CONSECUTIVE DAYS, SUCH CASH TO BE APPLIED TO OUTSTANDING U.S. REVOLVING
LOANS (WITHOUT A PERMANENT REDUCTION OF THE U.S. REVOLVING COMMITMENT).  THE
OBLIGATION OF THE U.S. LOAN PARTIES TO COMPLY WITH CLAUSE (II) OF THE PRECEDING
SENTENCE SHALL CONTINUE UNTIL EXCESS AVAILABILITY HAS EXCEEDED US$150,000,000
FOR SIXTY (60) CONSECUTIVE DAYS.  UPON THE OCCURRENCE OF AN EVENT OF DEFAULT,
ALL OF THE COLLECTIONS AND ACCOUNT BALANCES OF THE U.S. LOAN PARTIES AND THEIR
DOMESTIC SUBSIDIARIES (OTHER THAN CALPINE) SHALL BE SWEPT ON A DAILY BASIS INTO
THE CONCENTRATION ACCOUNT.

 

(B)                                 WITHIN SIXTY (60) DAYS OF THE CLOSING DATE
(OR SUCH LATER DATE AS THE ADMINISTRATIVE AGENT MAY APPROVE IN ITS EXCLUSIVE
DISCRETION), THE CANADIAN LOAN PARTIES WILL, AND WILL CAUSE THEIR CANADIAN
SUBSIDIARIES TO, MAINTAIN WITH JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, OR A
BANK ACCEPTABLE TO THE CANADIAN ADMINISTRATIVE AGENT, AN ACCOUNT OR ACCOUNTS TO
BE USED BY THE CANADIAN LOAN PARTIES AS THEIR PRINCIPAL DOMESTIC CONCENTRATION
OR SWEEP ACCOUNT(S) INTO WHICH SHALL BE DEPOSITED THE AVAILABLE BALANCES FROM
THE COLLECTION ACCOUNTS OF THE CANADIAN LOAN PARTIES AT THE END OF EACH BUSINESS
DAY (AS CONTEMPLATED BY THE CANADIAN SECURITY AGREEMENT), NET OF DISBURSEMENTS
PAID IN THE ORDINARY COURSE OF BUSINESS DURING SUCH BUSINESS DAY AND ALL OF THE
CANADIAN LOAN PARTIES’ AND THEIR CANADIAN SUBSIDIARIES’ ACCOUNTS SHALL BE
SUBJECT TO A CASH MANAGEMENT SYSTEM SATISFACTORY TO THE CANADIAN ADMINISTRATIVE
AGENT IN ITS EXCLUSIVE DISCRETION, INCLUDING FROM AND AFTER SUCH SIXTIETH (60TH)
DAY, FULL CASH DOMINION, INCLUDING DAILY CASH SWEEPS TO THE CANADIAN
CONCENTRATION ACCOUNT IF EXCESS AVAILABILITY IS LESS THAN US$150,000,000 FOR
THREE CONSECUTIVE DAYS, SUCH CASH TO BE APPLIED TO OUTSTANDING CANADIAN
REVOLVING LOANS (WITHOUT A PERMANENT REDUCTION OF THE CANADIAN REVOLVING
COMMITMENT).  THE OBLIGATION OF THE CANADIAN LOAN PARTIES TO REMAIN IN FULL CASH
DOMINION SHALL CONTINUE UNTIL EXCESS AVAILABILITY HAS EXCEEDED US$150,000,000
FOR

 

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SIXTY (60) CONSECUTIVE DAYS.  UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, ALL OF
THE COLLECTIONS AND ACCOUNT BALANCES OF THE CANADIAN LOAN PARTIES AND THEIR
CANADIAN SUBSIDIARIES SHALL BE SWEPT ON A DAILY BASIS INTO THE CANADIAN
CONCENTRATION ACCOUNT.

 

Section 5.8                                  Borrowing Base Certificate.  The
Loan Parties will furnish to the Administrative Agent, no later than (i) the
last Business Day of each week with respect to the immediately preceding week, a
completed Borrowing Base Certificate showing the Borrowing Bases, each as of the
close of business on the last day of such period, (ii) fifteen (15) days
following the last day of the immediately preceding fiscal month, a completed
Borrowing Base Certificate showing the Borrowing Bases, each as of the close of
business on the last day of such period, (iii) if requested by the
Administrative Agent at any other time when the Excess Availability is less than
20% of the Total Revolving Commitment, as soon as reasonably available but in no
event later than three (3) Business Days after such request and (iv) at such
other times as the Loan Parties may elect, a completed Borrowing Base
Certificate showing the Borrowing Bases, each as of the date so requested, in
each case with the information supporting the Borrowing Base calculations
required by Exhibit C-1 and Exhibit C-2 hereto, including the information set
forth on the schedule of reporting requirements attached thereto (in each case,
as modified from time to time by the Administrative Agent in its Permitted
Discretion), all delivered electronically in a file reasonably acceptable to the
Administrative Agent; provided that until the Receivables Securitization
Termination Date, the Loan Parties will deliver daily and monthly (by the
15th day of each month with respect to the immediately preceding fiscal month)
Borrowing Base Certificates.

 

Section 5.9                                    Compliance with Laws.  Comply
with requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including, without limitation, ERISA), except to the
extent that failure to comply herewith could not, in the aggregate, have a
Material Adverse Effect.

 

Section 5.10                              Environmental Laws.

 

(A)                                  EXERCISE ALL REASONABLE DUE DILIGENCE IN
ORDER TO COMPLY IN ALL MATERIAL RESPECTS, AND CAUSE (I) ALL TENANTS UNDER ANY
LEASES OR OCCUPANCY AGREEMENTS AFFECTING ANY PORTION OF THE FACILITIES AND
(II) ALL OTHER PERSONS ON OR OCCUPYING SUCH PROPERTY UNDER THE CONTROL OF ANY
LOAN PARTY, TO COMPLY IN ALL MATERIAL RESPECTS WITH ALL ENVIRONMENTAL LAWS.

 

(B)                                 PROMPTLY TAKE ANY AND ALL NECESSARY REMEDIAL
ACTION IN CONNECTION WITH THE PRESENCE, STORAGE, USE, DISPOSAL, TRANSPORTATION
OR RELEASE OF ANY HAZARDOUS WASTE OR HAZARDOUS SUBSTANCE ON OR UNDER ANY
FACILITY REQUIRED TO COMPLY WITH ALL APPLICABLE ENVIRONMENTAL LAWS AND
GOVERNMENTAL AUTHORIZATIONS UNLESS THE FAILURE TO SO COMPLY COULD NOT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT AND (II) IN THE EVENT THE LOAN
PARTIES TAKE ANY REMEDIAL ACTION WITH RESPECT TO ANY HAZARDOUS WASTE OR
HAZARDOUS SUBSTANCE ON OR UNDER ANY FACILITY, CONDUCT AND COMPLETE SUCH REMEDIAL
ACTION IN MATERIAL COMPLIANCE WITH ALL APPLICABLE ENVIRONMENTAL LAWS AND IN
ACCORDANCE WITH THE POLICIES, ORDERS AND DIRECTIVES OF ANY APPLICABLE
GOVERNMENTAL AUTHORITIES EXCEPT WHEN, AND ONLY TO THE EXTENT THAT, THE LOAN
PARTIES’ LIABILITY FOR SUCH PRESENCE, STORAGE, USE, DISPOSAL, TRANSPORTATION OR
RELEASE OF ANY SUCH HAZARDOUS WASTE OR HAZARDOUS SUBSTANCE IS BEING CONTESTED IN
GOOD FAITH BY THE LOAN PARTIES.

 

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Section 5.11                              Additional Collateral; Further
Assurances.

 

(A)                                  THE U.S. BORROWER AND EACH OTHER U.S. LOAN
PARTY SHALL CAUSE EACH OF ITS DOMESTIC SUBSIDIARIES FORMED OR ACQUIRED AFTER THE
CLOSING DATE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT TO BECOME A U.S.
GUARANTOR, AND THE CANADIAN BORROWER AND EACH OTHER CANADIAN LOAN PARTY SHALL
CAUSE EACH CANADIAN SUBSIDIARY FORMED OR ACQUIRED AFTER THE CLOSING DATE TO
BECOME A CANADIAN GUARANTOR, IN EACH CASE, BY EXECUTING THE LOAN PARTY JOINDER
AGREEMENT SET FORTH AS EXHIBIT F HERETO (THE “LOAN PARTY JOINDER AGREEMENT”) ON
OR BEFORE THE TWENTIETH (20TH) DAY FOLLOWING THE DATE OF SUCH ACQUISITION OR
FORMATION. UPON EXECUTION AND DELIVERY THEREOF, EACH SUCH PERSON (I) SHALL
AUTOMATICALLY BECOME A GUARANTOR HEREUNDER AND THEREUPON SHALL HAVE ALL OF THE
RIGHTS, BENEFITS, DUTIES, AND OBLIGATIONS IN SUCH CAPACITY UNDER THE LOAN
DOCUMENTS AND (II) WILL GRANT LIENS TO THE APPLICABLE AGENT, FOR THE BENEFIT OF
THE APPLICABLE AGENT AND THE SECURED PARTIES, IN ANY PROPERTY OF SUCH LOAN PARTY
WHICH CONSTITUTES COLLATERAL.

 

(B)                                 WITHOUT LIMITING THE FOREGOING, EACH LOAN
PARTY WILL, AND WILL CAUSE EACH SUBSIDIARY TO, EXECUTE AND DELIVER, OR CAUSE TO
BE EXECUTED AND DELIVERED, TO THE APPLICABLE AGENT SUCH DOCUMENTS, AGREEMENTS
AND INSTRUMENTS, AND WILL TAKE OR CAUSE TO BE TAKEN SUCH FURTHER ACTIONS
(INCLUDING THE FILING AND RECORDING OF FINANCING STATEMENTS AND OTHER DOCUMENTS
AND SUCH OTHER ACTIONS OR DELIVERIES OF THE TYPE REQUIRED BY SECTION 4.1, AS
APPLICABLE), WHICH MAY BE REQUIRED BY LAW OR WHICH THE APPLICABLE AGENT MAY,
FROM TIME TO TIME, REASONABLY REQUEST TO CARRY OUT THE TERMS AND CONDITIONS OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO ENSURE PERFECTION AND
PRIORITY OF THE LIENS CREATED OR INTENDED TO BE CREATED BY THE COLLATERAL
DOCUMENTS, ALL AT THE EXPENSE OF THE LOAN PARTIES.

 

(C)                                  EACH LOAN PARTY WILL, AND WILL CAUSE EACH
SUBSIDIARY TO, EXECUTE AND DELIVER, OR CAUSE TO BE EXECUTED AND DELIVERED, TO
THE ADMINISTRATIVE AGENT SUCH DOCUMENTS, AGREEMENTS AND INSTRUMENTS, AND WILL
TAKE OR CAUSE TO BE TAKEN SUCH FURTHER ACTIONS, WHICH MAY BE REQUIRED BY LAW OR
WHICH THE ADMINISTRATIVE AGENT MAY, FROM TIME TO TIME, REASONABLY REQUEST TO
CARRY OUT THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, ALL AT THE EXPENSE OF THE LOAN PARTIES.

 

Section 5.12                              Material Contracts.  Each Loan Party
will, and will cause their Subsidiaries to, preserve and maintain in full force
and effect all contracts necessary or desirable in the normal conduct of their
businesses except where failure to preserve the same could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 5.13                              Receivables Securitization Programs. 
On or before April 1, 2009 or such later date as the Administrative Agent may
approve in writing in its exclusive discretion, each Loan Party will, and will
cause their Subsidiaries to, (a) terminate the Receivables Securitization
Programs, repay all Indebtedness outstanding thereunder, and provide evidence of
such termination and payment in full, as applicable, satisfactory to the
Administrative Agent in its exclusive discretion, (b) with respect to each
Receivables Securitization Entity, either (i) transfer all Accounts or other
assets owned by such Receivables Securitization Entity to a U.S. Loan Party free
and clear of all Liens (other than Liens in favor of the Agents on behalf of the
Secured Parties and Liens in favor of the Pre-Petition Agent on behalf of the
Pre-Petition Secured Lenders and other Permitted Liens that do not have priority
over the Lien in favor of the

 

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Applicable Agent for the benefit of the Secured Parties), or (ii) merge such
Receivables Securitization Entity with and into a U.S. Loan Party, with such
U.S. Loan Party being the surviving entity of such merger, in each case, on
terms satisfactory to the Administrative Agent in its exclusive discretion, and
(c) cause Smurfit-MBI, an Ontario limited partnership, to acquire all of the
interests of Computershare Trust Company of Canada, in its capacity as trustee
of King Street Funding Trust, in all outstanding Accounts and other related
assets that were purchased by Computershare Trust Company of Canada, in its
capacity as trustee of King Street Funding Trust, from Smurfit-MBI, and such
Accounts and other related assets shall be acquired by Smurfit-MBI free and
clear of all Liens (other than Liens in favor of the Agents on behalf of the
Secured Parties and Liens in favor of the Pre-Petition Agent on behalf of the
Pre-Petition Secured Lenders and other Permitted Liens that do not have priority
over the Lien in favor of the Applicable Agent for the benefit of the Secured
Parties), on terms satisfactory to the Administrative Agent in its exclusive
discretion.

 

Section 5.14                              Restructuring Advisors.  Retain
PriceWaterhouse Coopers and Lazard Ltd. or such other third party financial
restructuring advisors as are reasonably satisfactory to the Administrative
Agent in its Permitted Discretion.

 

Section 5.15                              Ratings.   Obtain a rating from S&P
and Moody’s on the Loans no later than ninety (90) days after the Closing Date.

 

SECTION 5.16                              USE OF PROCEEDS.

 

(A)                                  THE PROCEEDS OF THE LOANS AND THE LETTERS
OF CREDIT (INCLUDING DISBURSEMENTS FROM THE U.S. INVESTMENT ACCOUNT, CANADIAN
INVESTMENT ACCOUNT, U.S. TERM LOAN COLLATERAL ACCOUNT OR THE CANADIAN TERM LOAN
COLLATERAL ACCOUNT) WILL BE USED ONLY IN ACCORDANCE WITH THE PURPOSES SET FORTH
IN SECTION 3.10, AND SUCH USE OR USES SHALL BE SUBSTANTIALLY CONSISTENT WITH THE
BUDGET, AS UPDATED FROM TIME TO TIME.

 

(B)                                 NO PART OF THE PROCEEDS OF ANY LOAN AND NO
LETTER OF CREDIT WILL BE USED, WHETHER DIRECTLY OR INDIRECTLY, FOR ANY PURPOSE
THAT CONSTITUTES A VIOLATION OF ANY OF THE REGULATIONS OF THE BOARD, INCLUDING
REGULATIONS T, U AND X.

 

ARTICLE 6. NEGATIVE COVENANTS

 

From the Closing Date and for so long as any Commitment shall be in effect or
any Letter of Credit shall remain outstanding (in a face amount in excess of the
amount of cash then held in the Letter of Credit Account, or in excess of the
face amount of back-to-back letters of credit delivered, in each case pursuant
to Section 2.4(c)) or any amount shall remain outstanding or unpaid under this
Agreement, unless the Required Lenders shall otherwise consent in writing:

 

Section 6.1                                    Liens.  Each of the Loan Parties
will not (and will not apply to the Bankruptcy Court or the Canadian Court for
authority to), and will cause their Subsidiaries not to, incur, create, assume
or suffer to exist any Lien or encumbrance on any asset of the Loan Parties now
owned or hereafter acquired by any Loan Party other than Permitted Liens.

 

Section 6.2                                    Merger, etc.  Each of the Loan
Parties will not (and will not apply to the Bankruptcy Court or the Canadian
Court for authority to), and will cause their Subsidiaries not

 

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to, consolidate, amalgamate, wind-up or merge with or into another Person,
except that, if at the time thereof and immediately after giving effect thereto
no Default or Event of Default shall have occurred and be continuing (i) any
Foreign Subsidiary (other than a Loan Party) may merge with any other Foreign
Subsidiary (other than a Loan Party) and (ii) any Receivables Securitization
Entity may merge into a U.S. Loan Party in a transaction in which the U.S. Loan
Party is the surviving entity.

 

Section 6.3                                    Indebtedness.  Each of the Loan
Parties will not (and will not apply to the Bankruptcy Court or the Canadian
Court for authority to), and will cause their Subsidiaries not to, contract,
create, incur, assume or suffer to exist any Indebtedness, except for (i) the
Secured Obligations; (ii) Indebtedness incurred prior to the Filing Date
(including existing Capital Lease Obligations) of the Loan Parties, including
the Indebtedness listed on Schedule 6.3; (iii) Indebtedness incurred subsequent
to the Filing Date secured by purchase money Liens and Capital Lease Obligations
in an aggregate amount not in excess of US$10,000,000 to the extent permitted by
Section 6.4; (iv) Indebtedness allowed under Section 6.7; (v) other unsecured
Indebtedness incurred subsequent to the Filing Date in an aggregate amount not
to exceed US$5,000,000; (vi) Indebtedness of Foreign Subsidiaries (other than
Canadian Loan Parties) in an aggregate amount not to exceed US$20,000,000
outstanding at any time, provided that such Indebtedness is non-recourse to all
of the Loan Parties; (vii) Indebtedness permitted by Section 6.11; and
(vii) Indebtedness permitted by Section 6.16; and (viii) Indebtedness incurred
to pay annual premiums for property and casualty insurance policies maintained
by the Parent or any Subsidiary not exceeding in an aggregate amount at any time
outstanding US$10,000,000.

 

Section 6.4                                    Capital Expenditures.  Each of
the Loan Parties will not (and will not apply to the Bankruptcy Court or the
Canadian Court for authority to), and will cause each of their respective
Subsidiaries not to, make Capital Expenditures during the periods set forth
below, in an aggregate amount (calculated on a consolidated basis) in excess of
the amount specified opposite such period:

 

Period

 

Maximum Capital Expenditures

 

February 1, 2009 to March 31, 2009

 

US$

45,000,000

 

February 1, 2009 to June 30, 2009

 

US$

90,000,000

 

February 1, 2009 to September 30, 2009

 

US$

155,000,000

 

February 1, 2009 to December 31, 2009

 

US$

205,000,000

 

12-month period ended March 31, 2010

 

US$

220,000,000

 

12-month period ended June 30, 2010

 

US$

220,000,000

 

 

SECTION 6.5                                      EBITDA.

 

(A)                                  AS OF THE END OF EACH FISCAL MONTH OF THE
LOAN PARTIES, COMMENCING WITH THE FISCAL MONTH ENDING FEBRUARY 28, 2009, THE
LOAN PARTIES WILL NOT PERMIT CONSOLIDATED EBITDA FOR ANY TWO (2) CONSECUTIVE
CALENDAR MONTHS TO BE NEGATIVE (WITH EACH MONTH MEASURED SEPARATELY AND WITHOUT
GIVING EFFECT TO ANY DOWNTIME CREDIT).

 

(B)                                 AS OF THE END OF EACH FISCAL PERIOD OF THE
LOAN PARTIES, COMMENCING WITH THE FISCAL MONTH ENDING FEBRUARY 28, 2009, THE
LOAN PARTIES WILL NOT PERMIT CONSOLIDATED

 

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EBITDA FOR (I) EACH FISCAL PERIOD BEGINNING ON FEBRUARY 1, 2009 AND ENDING ON A
DATE SET FORTH BELOW ON OR BEFORE DECEMBER 31, 2009, TO BE LESS THAN THE
RESPECTIVE AMOUNTS SPECIFIED OPPOSITE SUCH FISCAL PERIOD, AND (II) FOR EACH
TWELVE-MONTH PERIOD ENDING ON A DATE SET FORTH BELOW AFTER DECEMBER 31, 2009, TO
BE LESS THAN THE RESPECTIVE AMOUNTS SPECIFIED OPPOSITE SUCH PERIOD:

 

Period Ending

 

Cumulative Consolidated EBITDA

 

February 28, 2009

 

US$

17,900,000

 

March 31, 2009

 

US$

40,600,000

 

April 30, 2009

 

US$

59,000,000

 

May 31, 2009

 

US$

82,300,000

 

June 30, 2009

 

US$

112,900,000

 

July 31, 2009

 

US$

144,300,000

 

August 31, 2009

 

US$

188,200,000

 

September 30, 2009

 

US$

221,200,000

 

October 31, 2009

 

US$

261,000,000

 

November 30, 2009

 

US$

288,000,000

 

December 31, 2009

 

US$

314,400,000

 

January 31, 2010

 

US$

344,100,000

 

February 28, 2010

 

US$

349,400,000

 

March 31, 2010

 

US$

355,400,000

 

April 30, 2010

 

US$

357,300,000

 

May 31, 2010

 

US$

361,100,000

 

June 30, 2010

 

US$

366,100,000

 

 

Section 6.6                                  Minimum Liquidity.  The Loan
Parties will not permit the sum of Excess Availability plus Available Cash held
by the Loan Parties to be less than US$50,000,000 for any period of three
(3) consecutive days, provided that such amount shall not be less than
US$30,000,000 on any day.

 

Section 6.7                                  Guarantees and Other Liabilities. 
Each of the Loan Parties will not (and will not apply to the Bankruptcy Court or
the Canadian Court for authority to), and will cause their Subsidiaries not to,
purchase or repurchase (or agree, contingently or otherwise, so to do) the
Indebtedness of, or assume, guarantee (directly or indirectly or by an
instrument having the effect of assuring another’s payment or performance of any
obligation or capability of so doing, or otherwise), endorse or otherwise become
liable, directly or indirectly, for the obligations, stock or dividends of any
Person, except (i) for any guaranty of Indebtedness or other obligations (or
otherwise becoming liable for any of the obligations) of any of the Loan Parties
in the ordinary course of business and consistent with the past business
practices with trade vendors if such Indebtedness or the obligations are
permitted by this Agreement, (ii) by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, and (iii) any guaranty
of Indebtedness of a Foreign Subsidiary that is not a Loan Party by another
Foreign Subsidiary that is not a Loan Party.

 

Section 6.8                                  Chapter 11/CCAA Claims.  Each of
the Loan Parties will not (and will not apply to the Bankruptcy Court or the
Canadian Court for authority to), and will cause their Subsidiaries not to,
incur, create, assume, suffer to exist or permit (i) any other Superpriority

 

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Claim which is pari passu with or senior to the claims of the Administrative
Agent and the Lenders against the Loan Parties hereunder, except for the
Carve-Out or (ii) any court ordered superpriority charge which is pari passu
with or senior to the CCAA DIP Lenders’ Charge against the Canadian Loan
Parties, except for the CCAA Charges.

 

Section 6.9                                  Dividends; Capital Stock.  Each of
the Loan Parties will not (and will not apply to the Bankruptcy Court or the
Canadian Court for authority to), and will cause their Subsidiaries not to,
declare or pay, directly or indirectly, any dividends or make any other
distribution or payment, whether in cash, property, securities or a combination
thereof, with respect to (whether by reduction of capital or otherwise) any
shares of capital stock (or any options, warrants, rights or other equity
securities or agreements relating to any capital stock), or set apart any sum
for the aforesaid purposes on anything other than an arm’s-length basis, except
for dividends or distributions paid in cash by a Subsidiary to a Loan Party or
any other Person that owns capital stock or other equity interests in such
Subsidiary, ratably according to their respective holdings of the type of
capital stock or other equity interests in respect of which such dividend or
distribution is being made.

 

Section 6.10                            Transactions with Affiliates.  Each of
the Loan Parties will not (and will not apply to the Bankruptcy Court or the
Canadian Court for authority to), and will cause their Subsidiaries not to, sell
or transfer any property or assets to, or otherwise engage in or permit to exist
any other material transactions with, any of its Affiliates (other than
transactions (i) among Loan Parties or (ii) among Subsidiaries that are not Loan
Parties) other than in the ordinary course of the Loan Parties’ businesses in
good faith and at commercially reasonable prices and on commercially reasonable
terms and conditions not less favorable to the Loan Parties than could be
obtained on an arm’s-length basis from a non-Affiliate.

 

Section 6.11                            Investments, Loans and Advances.  Each
of the Loan Parties will not (and will not apply to the Bankruptcy Court or the
Canadian Court for authority to), and will cause their Subsidiaries not to,
purchase, hold or acquire any capital stock, evidences of Indebtedness or other
securities of, make or permit to exist any loans or advances to, or make or
permit to exist any investment in, any other Person (all of the foregoing,
“Investments”), except for (i) Investments by U.S. Loan Parties in the Canadian
Borrower or in the U.S. Loan Parties other than Calpine; (ii) Investments by
Canadian Loan Parties in the Canadian Borrower or in the U.S. Loan Parties other
than Calpine; (iii) Permitted Investments; (iv) Indebtedness owed by any Foreign
Subsidiaries (other than the Canadian Loan Parties) in an aggregate amount not
to exceed US$5,000,000 outstanding at any time; (v) Indebtedness owing, or to be
owed by the Canadian Loan Parties (other than the Canadian Borrower) to the U.S.
Loan Parties other than Calpine in an aggregate amount not to exceed
US$10,000,000 outstanding at any time; (vi) Indebtedness owed by the Canadian
Guarantors to the Canadian Borrower in an aggregate amount not to exceed at any
time the lesser of (a) Total Canadian Outstandings and (b) the Canadian
Borrowing Base; (vii) Indebtedness owed by the Canadian Borrower to the U.S.
Loan Parties other than Calpine; (viii) Investments listed on Schedule 6.11;
(ix) additional investments in Foreign Subsidiaries (other than Loan Parties)
and in joint ventures listed on Schedule 6.11 in an aggregate amount not to
exceed US$5,000,000, plus up to an additional US$20,000,000 to the extent not
distributed to Foreign Subsidiaries in the thirty (30) days prior to the Filing
Date; (x) additional investments in Calpine in an aggregate amount not to exceed
US$10,000,000; (xi) Investments consisting of securities or notes received in
settlement of accounts receivable

 

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incurred in the ordinary course of business from a customer that such Loan Party
has reasonably determined is unable to make cash payments in accordance with the
terms of such account receivable; (xii) Investments by Foreign Subsidiaries
(other than Canadian Subsidiaries) in other Foreign Subsidiaries (other than
Canadian Subsidiaries); and (xiii) other Investments in an aggregate amount not
to exceed US$1,000,000.  Each of the Loan Parties will not (and will not apply
to the Bankruptcy Court or the Canadian Court for authority to), and will cause
their Subsidiaries not to, invest amounts on deposit in the U.S. Term Loan
Collateral Account or the U.S. Investment Account in any investment product
other than Permitted Investments described in clauses (i) through (vi) of the
definition thereof.

 

Section 6.12                            Disposition of Assets.  Except as may be
authorized by orders of the Bankruptcy Court or the Canadian Court, as
applicable, and on terms and conditions acceptable to the Administrative Agent,
each of the Loan Parties will not, and will cause their Subsidiaries not to,
sell or otherwise dispose of any assets (including, without limitation, the
capital stock of any Subsidiary of the Loan Parties) except for (i) sales of
Inventory in the ordinary course of business, (ii) sales of surplus assets of
the Loan Parties no longer used in the Loan Parties’ business operations,
(iii) sales of assets listed on Schedule 6.12, (iv) sales and other dispositions
from one Loan Party to another Loan Party, provided, that any such sales or
dispositions shall be in the ordinary course of such Loan Parties’ business,
made in good faith, at commercially reasonable prices and on commercially
reasonable terms and conditions, unless such transactions are between (A) U.S.
Loan Parties and the Canadian Borrower or (B) Canadian Guarantors, (v) sales and
other dispositions from one Foreign Subsidiary (other than Canadian
Subsidiaries) to another Foreign Subsidiary (other than Canadian Subsidiaries),
and (vi) sales of assets having a fair market value not in excess of
US$25,000,000 in the aggregate.

 

Section 6.13                            Nature of Business.  Each of the Loan
Parties will not (and will not apply to the Bankruptcy Court or the Canadian
Court for authority to), and will cause their Subsidiaries not to, modify or
alter in any material manner the nature and type of its business as conducted at
or prior to the Filing Date or the manner in which such business is conducted
(except as required by the Bankruptcy Code or CCAA).

 

Section 6.14                            Restrictive Agreements among Loan
Parties.  Each of the Loan Parties will not (and will not apply to the
Bankruptcy Court or the Canadian Court for authority to), and will cause their
Subsidiaries not to, except for this Agreement or to the extent existing on the
Filing Date and disclosed on Schedule 6.14, permit, place or agree to permit or
place any restrictions on the payment of dividends or other distributions among
the Loan Parties or their Subsidiaries or Affiliates or the making of advances
or any other cash payments among the Loan Parties or their Subsidiaries or
Affiliates.

 

Section 6.15                            Right of Subrogation among Loan
Parties.  Each of the Loan Parties will not (and will not apply to the
Bankruptcy Court or the Canadian Court for authority to), and will cause their
Subsidiaries not to, assert any right of subrogation against any other Loan
Party until all Borrowings and all Letters of Credit are paid in full and the
Commitments are terminated.

 

Section 6.16                            Derivative Agreements.  Each of the Loan
Parties will not (and will not apply to the Bankruptcy Court or the Canadian
Court for authority to), and will cause their

 

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Subsidiaries not to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which any Loan Party or any
Subsidiary has actual exposure (other than those in respect of capital stock of
any Person), and (b) Swap Agreements entered into in order to effectively cap,
collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Loan Party or any Subsidiary,
provided that in each case such Swap Agreements may only be entered into in the
ordinary course of the Loan Parties’ business, consistent with past practices.

 

Section 6.17                            Reorganization Plan.  The Loan Parties
will not (and will not apply to the Bankruptcy Court or the Canadian Court for
authority to), file any Reorganization Plan that does not provide for the
repayment in full in cash on the effective date thereof of all outstanding
Secured Obligations.

 

ARTICLE 7. EVENTS OF DEFAULT

 

Section 7.1                                  Events of Default.  In the case of
the happening of any of the following events and the continuance thereof beyond
the applicable period of grace (if any) set forth below (each, an “Event of
Default”):

 

(A)                                  ANY REPRESENTATION OR WARRANTY MADE BY ANY
LOAN PARTY IN THIS AGREEMENT OR IN ANY LOAN DOCUMENT OR IN CONNECTION WITH THIS
AGREEMENT OR THE CREDIT EXTENSIONS HEREUNDER OR ANY STATEMENT OR REPRESENTATION
MADE IN ANY REPORT, FINANCIAL STATEMENT, CERTIFICATE OR OTHER DOCUMENT FURNISHED
BY ANY LOAN PARTY TO THE LENDERS UNDER OR IN CONNECTION WITH THIS AGREEMENT,
SHALL PROVE TO HAVE BEEN FALSE OR MISLEADING IN ANY MATERIAL RESPECT WHEN MADE
OR DELIVERED; OR

 

(B)                                 DEFAULT SHALL BE MADE IN THE PAYMENT OF ANY
PRINCIPAL OF THE LOANS OR ANY REIMBURSEMENT OBLIGATION OR CASH COLLATERALIZATION
IN RESPECT OF LETTERS OF CREDIT, 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 BY ACCELERATION THEREOF OR OTHERWISE; OR

 

(C)                                  DEFAULT SHALL BE MADE IN THE PAYMENT OF ANY
FEES OR INTEREST ON THE LOANS OR OTHER AMOUNTS PAYABLE BY THE LOAN PARTIES
HEREUNDER (OTHER THAN ANY AMOUNTS REFERRED TO IN CLAUSE (B) OF THIS SECTION),
WHEN AND AS THE SAME SHALL BECOME DUE AND PAYABLE, AND SUCH FAILURE SHALL
CONTINUE UNREMEDIED FOR MORE THAN ONE (1) BUSINESS DAY; OR

 

(D)                                 DEFAULT SHALL BE MADE BY ANY LOAN PARTY, OR
ANY OF THEIR RESPECTIVE SUBSIDIARIES, IN THE DUE OBSERVANCE OR PERFORMANCE OF
ANY COVENANTS, CONDITIONS OR AGREEMENTS CONTAINED IN ARTICLE 6 HEREOF; OR

 

(E)                                  DEFAULT SHALL BE MADE BY ANY LOAN PARTY, OR
ANY OF THEIR RESPECTIVE SUBSIDIARIES, IN THE DUE OBSERVANCE OR PERFORMANCE OF
ANY COVENANT, CONDITION OR AGREEMENT (OTHER THAN THE COVENANTS, CONDITIONS OR
AGREEMENTS CONTAINED IN ARTICLE 6 HEREOF) TO BE OBSERVED OR PERFORMED PURSUANT
TO THE TERMS OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS AND SUCH
DEFAULT SHALL CONTINUE UNREMEDIED FOR MORE THAN TEN (10) DAYS FOLLOWING THE
EARLIER OF (I) NOTICE OF SUCH BREACH BY THE ADMINISTRATIVE AGENT OR ANY LENDER
OR (II) ANY LOAN PARTY HAVING KNOWLEDGE OF SUCH BREACH; OR

 

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(F)            ANY OF THE CASES SHALL BE DISMISSED OR CONVERTED TO A CASE UNDER
CHAPTER 7 OF THE BANKRUPTCY CODE, OR ANY LOAN PARTY SHALL FILE A MOTION OR OTHER
PLEADING SEEKING THE DISMISSAL OF ANY OF THE CASES UNDER SECTION 1112 OF THE
BANKRUPTCY CODE OR OTHERWISE; A TRUSTEE UNDER CHAPTER 7 OR CHAPTER 11 OF THE
BANKRUPTCY CODE, A RESPONSIBLE OFFICER OR AN EXAMINER WITH ENLARGED POWERS
RELATING TO THE OPERATION OF THE BUSINESS (POWERS BEYOND THOSE SET FORTH IN
SECTION 1106(A)(3) AND (4) OF THE BANKRUPTCY CODE) UNDER SECTION 1106(B) OF THE
BANKRUPTCY CODE SHALL BE APPOINTED IN ANY OF THE CASES AND THE ORDER APPOINTING
SUCH TRUSTEE, RESPONSIBLE OFFICER OR EXAMINER SHALL NOT BE REVERSED OR VACATED
WITHIN THIRTY (30) DAYS AFTER THE ENTRY THEREOF; OR A TRUSTEE IN BANKRUPTCY,
RECEIVER, INTERIM RECEIVER, RECEIVER AND MANAGER OR OFFICIAL WITH SIMILAR POWERS
SHALL BE APPOINTED WITH RESPECT TO ANY CANADIAN LOAN PARTY OR ITS ASSETS; OR AN
APPLICATION SHALL BE FILED BY ANY LOAN PARTY FOR THE APPROVAL OF ANY OTHER
SUPERPRIORITY CLAIM (OTHER THAN THE CARVE-OUT) IN ANY OF THE CASES WHICH IS PARI
PASSU WITH OR SENIOR TO THE CLAIMS OF THE ADMINISTRATIVE AGENT AND THE LENDERS
AGAINST ANY LOAN PARTY HEREUNDER, OR THERE SHALL ARISE OR BE GRANTED ANY SUCH
PARI PASSU OR SENIOR SUPERPRIORITY CLAIM WITHOUT THE CONSENT OF THE
ADMINISTRATIVE AGENT IN ITS EXCLUSIVE DISCRETION (PROVIDED THAT THE
ADMINISTRATIVE AGENT’S DISCRETION WITH RESPECT TO THE FOREGOING CLAIMS SHALL BE
LIMITED TO CLAIMS FOR LESS THAN $1,000,000); OR THE BANKRUPTCY COURT SHALL ENTER
AN ORDER TERMINATING THE USE OF CASH COLLATERAL FOR THE PURPOSES DESCRIBED IN
SECTION 3.10; OR A MOTION SHALL BE FILED BY ANY LOAN PARTY IN ANY OF THE
CANADIAN CASES FOR THE APPROVAL OF ANY OTHER SUPERPRIORITY CHARGE OTHER THAN THE
CCAA CHARGES AGAINST ANY OF THE CANADIAN LOAN PARTIES, OR THERE SHALL ARISE ANY
SUCH PARI PASSU OR SENIOR CHARGE WITHOUT THE CONSENT OF THE ADMINISTRATIVE AGENT
IN ITS EXCLUSIVE DISCRETION (PROVIDED THAT THE ADMINISTRATIVE AGENT’S DISCRETION
WITH RESPECT TO THE FOREGOING CLAIMS SHALL BE LIMITED TO CLAIMS FOR LESS THAN
$1,000,000); OR

 

(G)           THE BANKRUPTCY COURT OR THE CANADIAN COURT SHALL ENTER AN ORDER OR
ORDERS GRANTING RELIEF FROM THE AUTOMATIC STAY APPLICABLE UNDER SECTION 362 OF
THE BANKRUPTCY CODE OR THE STAY IN THE INITIAL ORDER, AS APPLICABLE, TO THE
HOLDER OR HOLDERS OF ANY SECURITY INTEREST TO PERMIT FORECLOSURE OR ENFORCEMENT
OF ANY KIND (OR THE GRANTING OF A DEED IN LIEU OF FORECLOSURE OR THE LIKE) ON
ANY ASSETS OF ANY OF THE LOAN PARTIES WHICH HAVE A VALUE IN EXCESS OF
US$5,000,000 IN THE AGGREGATE; OR

 

(H)           A CHANGE OF CONTROL SHALL OCCUR; OR

 

(I)            THE LOAN PARTIES SHALL FAIL TO DELIVER ANY CERTIFIED BORROWING
BASE CERTIFICATE WHEN DUE AND SUCH DEFAULT SHALL CONTINUE UNREMEDIED FOR MORE
THAN (I) ONE (1) BUSINESS DAY WITH RESPECT TO A DAILY BORROWING BASE
CERTIFICATE, (II) THREE (3) BUSINESS DAYS WITH RESPECT TO A WEEKLY BORROWING
BASE CERTIFICATE AND (III) FIVE (5) BUSINESS DAYS WITH RESPECT TO A MONTHLY
BORROWING BASE CERTIFICATE; OR

 

(J)            ANY LOAN DOCUMENT SHALL NOT BE FOR ANY REASON, OR ANY OF THE LOAN
PARTIES SHALL SO ASSERT IN A PLEADING FILED IN ANY COURT, IN FULL FORCE AND
EFFECT AND ENFORCEABLE IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH ITS TERMS; OR

 

(K)           AN ORDER OF THE BANKRUPTCY COURT OR THE CANADIAN COURT SHALL BE
ENTERED REVERSING, AMENDING, SUPPLEMENTING, STAYING FOR A PERIOD IN EXCESS OF
TEN (10) DAYS, VACATING OR OTHERWISE MODIFYING ANY OF THE ORDERS WITHOUT THE
PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT; OR

 

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(L)            ANY JUDGMENT OR ORDER AS TO A POST-PETITION LIABILITY OR DEBT FOR
THE PAYMENT OF MONEY IN EXCESS OF US$1,000,000 SHALL BE RENDERED AGAINST ANY OF
THE LOAN PARTIES OR ANY OF THEIR SUBSIDIARIES AND SUCH JUDGMENT SHALL REMAIN
UNDISCHARGED AND THERE SHALL BE ANY PERIOD OF THIRTY (30) CONSECUTIVE DAYS
DURING WHICH A STAY OF ENFORCEMENT OF SUCH JUDGMENT OR ORDER, BY REASON OF A
PENDING APPEAL OR OTHERWISE, SHALL NOT BE IN EFFECT; OR

 

(M)          ANY NON-MONETARY JUDGMENT OR ORDER WITH RESPECT TO A POST-PETITION
EVENT SHALL BE RENDERED AGAINST ANY LOAN PARTY, OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES, WHICH DOES OR WOULD REASONABLY BE EXPECTED TO CAUSE A MATERIAL
ADVERSE EFFECT; OR

 

(N)           THE LOAN PARTIES OR ANY OF THEIR SUBSIDIARIES SHALL MAKE ANY
PRE-PETITION PAYMENT (WHETHER BY WAY OF ADEQUATE PROTECTION OR OTHERWISE) OF
PRINCIPAL OR INTEREST OR OTHERWISE ON ACCOUNT OF ANY PRE-PETITION INDEBTEDNESS
OR PAYABLES (INCLUDING, WITHOUT LIMITATION, RECLAMATION CLAIMS) OTHER THAN
PRE-PETITION PAYMENTS AUTHORIZED BY THE BANKRUPTCY COURT OR CANADIAN COURT IN
RESPECT OF (I) ACCRUED PAYROLL AND RELATED EMPLOYEE BENEFIT EXPENSES AS OF THE
FILING DATE, (II) RECLAMATION CLAIMS IN SUCH AMOUNTS AS DETERMINED BY THE LOAN
PARTIES AND AGREED TO BY THE ADMINISTRATIVE AGENT; (III) MATERIALMEN’S,
SHIPPERS, WAREHOUSEMEN’S AND OTHER SIMILAR LIENS AND CERTAIN OTHER PRE-PETITION
CLAIMS PERMITTED BY THE ADMINISTRATIVE AGENT AND AUTHORIZED BY THE BANKRUPTCY
COURT OR CANADIAN COURT IN AN AGGREGATE AMOUNT NOT TO EXCEED $46,000,000,
(IV) THE PAYMENT OF CURRENT INTEREST AND LETTER OF CREDIT FEES (AND THE PAYMENT
OF ALL INTEREST AND FEES THAT ARE ACCRUED AND UNPAID AS OF THE FILING DATE) AT
THE APPLICABLE NON-DEFAULT RATES PROVIDED FOR PURSUANT TO THE PRE-PETITION
CREDIT AGREEMENT, ALL AS DESCRIBED IN THE LOAN PARTIES’ “MOTION FOR AN ORDER
(I) AUTHORIZING DEBTORS TO OBTAIN POST-PETITION FINANCING; (II) GRANTING LIENS,
INCLUDING PRIMING LIENS, AND SUPERPRIORITY CLAIMS PURSUANT TO 11 U.S.C. § 364;
(III) AUTHORIZING USE OF PROCEEDS TO EFFECTUATE PAYOUT OF SECURITIZATION
FACILITIES (IV) AUTHORIZING USE OF CASH COLLATERAL PURSUANT TO 11 U.S.C. § 363;
(V) GRANTING ADEQUATE PROTECTION PURSUANT TO 11 U.S.C. §§ 363 AND 364; AND
(VI) SCHEDULING A FINAL HEARING,” AND AS AUTHORIZED BY THE ORDERS, (V) PAYMENTS
IN RESPECT OF PREPETITION CLAIMS OF TAXING AUTHORITIES IN AN AGGREGATE AMOUNT
NOT TO EXCEED $23,100,000 AS DESCRIBED IN THE LOAN PARTIES’ “MOTION FOR AN ORDER
AUTHORIZING THE PAYMENT OF PREPETITION SALES, USE, PROPERTY, AND OTHER TAXES AND
GOVERNMENTAL CHARGES;” (VI) THE PAYMENT OF PRE-PETITION CLAIMS TO CERTAIN
CRITICAL VENDORS IN AN AGGREGATE AMOUNT NOT TO EXCEED $60,000,00 AS DESCRIBED IN
THE LOAN PARTIES’ “MOTION FOR AN ORDER AUTHORIZING THE PAYMENT OF PREPETITION
CLAIMS OF CERTAIN CRITICAL VENDORS;” (VII) THE PAYMENT OF CERTAIN PRE-PETITION
OBLIGATIONS OWED TO CUSTOMERS AND BROKERS IN AN AGGREGATE AMOUNT NOT TO EXCEED
$23,000,000 AS DESCRIBED IN THE LOAN PARTIES’ “MOTION FOR AN ORDER AUTHORIZING
THE DEBTORS TO HONOR CERTAIN PREPETITION OBLIGATIONS TO CUSTOMERS AND BROKERS
AND TO OTHERWISE CONTINUE PREPETITION CUSTOMER AND BROKER PROGRAMS AND PRACTICES
IN THE ORDINARY COURSE OF BUSINESS;” (VIII) PAYMENT OF PRE-PETITION OBLIGATIONS
IN RESPECT OF INSURANCE PROGRAMS IN AN AGGREGATE AMOUNT NOT TO EXCEED $7,000,000
AS DESCRIBED IN THE LOAN PARTIES’ “MOTION FOR AN ORDER AUTHORIZING THE DEBTORS
TO (I) MAKE INSTALLMENT PAYMENTS UNDER PREPETITION INSURANCE PREMIUM FINANCING
AGREEMENTS, (II) CONTINUE PREPETITION INSURANCE PROGRAMS IN THE ORDINARY COURSE
OF BUSINESS, AND (III) PAY ALL PREPETITION OBLIGATIONS IN RESPECT THEREOF;” OR
(IX) SUCH OTHER ORDERS WHICH ARE SATISFACTORY IN FORM AND SUBSTANCE TO THE
ADMINISTRATIVE AGENT; OR

 

(O)           ANY TERMINATION EVENT DESCRIBED IN CLAUSES (III) OR (IV) OF THE
DEFINITION OF SUCH TERM SHALL HAVE OCCURRED AND SHALL CONTINUE UNREMEDIED FOR
MORE THAN TEN (10) DAYS AND THE SUM (DETERMINED AS OF THE DATE OF OCCURRENCE OF
SUCH TERMINATION EVENT) OF THE INSUFFICIENCY OF

 

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THE PLAN IN RESPECT OF WHICH SUCH TERMINATION EVENT SHALL HAVE OCCURRED AND BE
CONTINUING AND THE INSUFFICIENCY OF ANY AND ALL OTHER PLANS WITH RESPECT TO
WHICH SUCH A TERMINATION EVENT (DESCRIBED IN SUCH CLAUSES (III) OR (IV)) SHALL
HAVE OCCURRED AND THEN EXIST IS EQUAL TO OR GREATER THAN US$1,000,000; OR

 

(P)           (I) ANY LOAN PARTY OR ANY ERISA AFFILIATE THEREOF SHALL HAVE BEEN
NOTIFIED BY THE SPONSOR OF A MULTIEMPLOYER PLAN THAT IT HAS INCURRED WITHDRAWAL
LIABILITY TO SUCH MULTIEMPLOYER PLAN, (II) SUCH LOAN PARTY OR SUCH ERISA
AFFILIATE DOES NOT HAVE REASONABLE GROUNDS TO CONTEST SUCH WITHDRAWAL LIABILITY
AND IS NOT IN FACT CONTESTING SUCH WITHDRAWAL LIABILITY IN A TIMELY AND
APPROPRIATE MANNER, AND (III) THE AMOUNT OF SUCH WITHDRAWAL LIABILITY SPECIFIED
IN SUCH NOTICE, WHEN AGGREGATED WITH ALL OTHER AMOUNTS REQUIRED TO BE PAID TO
MULTIEMPLOYER PLANS IN CONNECTION WITH WITHDRAWAL LIABILITIES (DETERMINED AS OF
THE DATE OF SUCH NOTIFICATION), EXCEEDS US$1,000,000 ALLOCABLE TO POST-PETITION
OBLIGATIONS OR REQUIRES PAYMENTS EXCEEDING US$100,000 PER ANNUM IN EXCESS OF THE
ANNUAL PAYMENTS MADE WITH RESPECT TO SUCH MULTIEMPLOYER PLANS BY SUCH LOAN PARTY
OR SUCH ERISA AFFILIATE FOR THE PLAN YEAR IMMEDIATELY PRECEDING THE PLAN YEAR IN
WHICH SUCH NOTIFICATION IS RECEIVED; OR

 

(Q)           ANY LOAN PARTY OR ANY ERISA AFFILIATE THEREOF SHALL HAVE BEEN
NOTIFIED BY THE SPONSOR OF A MULTIEMPLOYER PLAN THAT SUCH MULTIEMPLOYER PLAN IS
IN REORGANIZATION OR IS BEING TERMINATED, WITHIN THE MEANING OF TITLE IV OF
ERISA, IF AS A RESULT OF SUCH REORGANIZATION OR TERMINATION THE AGGREGATE ANNUAL
CONTRIBUTIONS OF SUCH LOAN PARTY AND ITS ERISA AFFILIATES TO ALL MULTIEMPLOYER
PLANS THAT ARE THEN IN REORGANIZATION OR BEING TERMINATED HAVE BEEN OR WILL BE
INCREASED OVER THE AMOUNTS CONTRIBUTED TO SUCH MULTIEMPLOYER PLANS FOR THE PLAN
YEARS THAT INCLUDE THE CLOSING DATE BY AN AMOUNT EXCEEDING US$1,000,000; OR

 

(R)            ANY LOAN PARTY OR ANY ERISA AFFILIATE THEREOF SHALL HAVE
COMMITTED A FAILURE DESCRIBED IN SECTION 302(F)(1) OF ERISA (OTHER THAN THE
FAILURE TO MAKE ANY CONTRIBUTION ACCRUED AND UNPAID AS OF THE FILING DATE) AND
THE AMOUNT DETERMINED UNDER SECTION 302(F)(3) OF ERISA IS EQUAL TO OR GREATER
THAN US$1,000,000; OR

 

(S)           ANY LOAN PARTY SHALL HAVE FAILED TO MAKE CURRENT SERVICE
CONTRIBUTIONS TO A CANADIAN PENSION PLAN (OTHER THAN THE FAILURE TO MAKE ANY
CONTRIBUTION ACCRUED AND UNPAID AS OF THE FILING DATE); OR

 

(T)            IT SHALL BE DETERMINED (WHETHER BY THE BANKRUPTCY COURT, THE
CANADIAN COURT OR BY ANY OTHER JUDICIAL OR ADMINISTRATIVE FORUM) THAT ANY LOAN
PARTY IS LIABLE FOR THE PAYMENT OF CLAIMS ARISING OUT OF ANY FAILURE TO COMPLY
(OR TO HAVE COMPLIED) WITH APPLICABLE ENVIRONMENTAL LAWS THE PAYMENT OF WHICH
WILL HAVE A MATERIAL ADVERSE EFFECT AND THE ENFORCEMENT THEREOF SHALL NOT HAVE
BEEN STAYED;

 

then, and in every such event and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Lenders, shall, take one or more of the following actions without further order
of or application to the Bankruptcy Court or the Canadian Court, provided that
with respect to item (iv) below and the enforcement of liens or other remedies
with respect to collateral referred to in item (v) below, the Administrative
Agent shall provide the Borrowers (with a copy to counsel for the Official
Creditors’ Committee appointed in any of the U.S. Cases, to the United States
Trustee for the Bankruptcy Court’s

 

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District, and to any monitor in the Canadian Cases) with five (5) business days’
prior written notice (the “Default Notice”), and, solely to the extent required
in the Canadian Cases, with leave of the Canadian Court:  (i) terminate
forthwith the Commitments; (ii) declare the Loans then outstanding to be
forthwith due and payable, whereupon the principal of the Loans together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Loan Parties accrued hereunder and under any other Loan Document, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the Loan
Parties, anything contained herein or in any other Loan Document to the contrary
notwithstanding; (iii) require the Loan Parties upon demand to forthwith deposit
in the Letter of Credit Account or Canadian Letter of Credit Account, as the
case may be, cash in an amount, taken together with any amounts then held in the
Letter of Credit Account or Canadian Letter of Credit Account, as the case may
be, is equal to the greater of (A) an amount, as determined by the Fronting
Banks and the Applicable Agents, equal to the face amount of all outstanding
Letters of Credit issued by the Fronting Banks plus the sum of all projected
contractual obligations to the Applicable Agents, the Fronting Banks and the
Lenders of the Borrowers thereunder through the expiration date(s) of such
Letters of Credit, and (B) 105% of the aggregate Letter of Credit Outstandings
issued by the Fronting Banks (and to the extent the Loan Parties shall fail to
furnish such funds as demanded by the Administrative Agent, the Administrative
Agent shall be authorized to debit the accounts of the Loan Parties maintained
with the Administrative Agent in such amount five (5) Business Days after the
giving of the Default Notice (the “Default Notice Period”)); (iv) set-off
amounts in any Collateral Account or any other accounts maintained with the
Administrative Agent or any other Lender or their Affiliates and apply such
amounts to the obligations of the Loan Parties hereunder and in the other Loan
Documents; or (v) exercise any and all remedies (including, without limitation,
with respect to the Liens in favor of the Agents and the Secured Parties) under
the Loan Documents and under applicable law available to the Administrative
Agent and the Lenders.

 

ARTICLE 8. THE AGENTS

 

Section 8.1             Administration.  The general administration of the Loan
Documents shall be performed by the Administrative Agent.  Each Lender hereby
irrevocably authorizes each Agent, at its discretion, to take or refrain from
taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Loan Documents as are delegated by the terms
hereof or thereof, as appropriate, together with all powers reasonably
incidental thereto (including the release of Collateral in connection with any
transaction that is expressly permitted by the Loan Documents).  The Agents
shall not have any duties or responsibilities except as set forth in this
Agreement and the remaining Loan Documents.

 

Section 8.2             Advances and Payments.  On the date of each Loan, the
Applicable Agent shall be authorized (but not obligated) to advance, for the
account of each of the Lenders, the amount of the Loan to be made by it in
accordance with its Commitment hereunder.  Should the Applicable Agent do so,
each of the Lenders agrees forthwith to reimburse such Agent in immediately
available funds for the amount so advanced on its behalf by such Agent, together
with interest at the Federal Funds Effective Rate if not so reimbursed on the
date due from and including such date but not including the date of
reimbursement.

 

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Section 8.3            Sharing of Setoffs.

 

(A)           EACH U.S. LENDER AGREES THAT IF IT SHALL, THROUGH THE EXERCISE OF
A RIGHT OF BANKER’S LIEN, SETOFF OR COUNTERCLAIM AGAINST THE U.S. LOAN PARTIES
AND THE CANADIAN BORROWER, INCLUDING, BUT NOT LIMITED TO, A SECURED CLAIM OR
OTHER SECURITY OR INTEREST ARISING FROM, OR IN LIEU OF, SUCH SECURED CLAIM AND
RECEIVED BY SUCH U.S. LENDER UNDER ANY APPLICABLE BANKRUPTCY, INSOLVENCY OR
OTHER SIMILAR LAW, OR OTHERWISE, OBTAIN PAYMENT IN RESPECT OF ITS U.S. LOANS AS
A RESULT OF WHICH THE UNPAID PORTION OF ITS U.S. LOANS IS PROPORTIONATELY LESS
THAN THE UNPAID PORTION OF THE U.S. LOANS OF ANY OTHER U.S. LENDER (A) IT SHALL
PROMPTLY PURCHASE AT PAR (AND SHALL BE DEEMED TO HAVE THEREUPON PURCHASED) FROM
SUCH OTHER U.S. LENDER A PARTICIPATION IN THE U.S. LOANS OF SUCH OTHER U.S.
LENDER, SO THAT THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF EACH U.S. LENDER’S U.S.
LOANS AND ITS PARTICIPATION IN U.S. LOANS OF THE OTHER U.S. LENDERS SHALL BE IN
THE SAME PROPORTION TO THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ALL U.S. LOANS
THEN OUTSTANDING AS THE PRINCIPAL AMOUNT OF ITS U.S. LOANS PRIOR TO THE
OBTAINING OF SUCH PAYMENT WAS TO THE PRINCIPAL AMOUNT OF ALL U.S. LOANS
OUTSTANDING PRIOR TO THE OBTAINING OF SUCH PAYMENT AND (B) SUCH OTHER
ADJUSTMENTS SHALL BE MADE FROM TIME TO TIME AS SHALL BE EQUITABLE TO ENSURE THAT
THE U.S. LENDERS SHARE SUCH PAYMENT PRO-RATA, PROVIDED THAT IF ANY SUCH
NON-PRO-RATA PAYMENT IS THEREAFTER RECOVERED OR OTHERWISE SET ASIDE SUCH
PURCHASE OF PARTICIPATIONS SHALL BE RESCINDED (WITHOUT INTEREST).  EACH OF THE
U.S. LOAN PARTIES EXPRESSLY CONSENTS TO THE FOREGOING ARRANGEMENTS AND AGREES
THAT ANY U.S. LENDER HOLDING (OR DEEMED TO BE HOLDING) A PARTICIPATION IN A U.S.
LOAN MAY EXERCISE ANY AND ALL RIGHTS OF BANKER’S LIEN, SETOFF (IN EACH CASE,
SUBJECT TO THE SAME NOTICE REQUIREMENTS AS PERTAIN TO CLAUSE (IV) OF THE
REMEDIAL PROVISIONS OF SECTION 7.1) OR COUNTERCLAIM WITH RESPECT TO ANY AND ALL
MONEYS OWING BY THE U.S. LOAN PARTIES TO SUCH U.S. LENDER AS FULLY AS IF SUCH
U.S. LENDER HELD A PROMISSORY NOTE AND WAS THE ORIGINAL OBLIGEE THEREON, IN THE
AMOUNT OF SUCH PARTICIPATION.

 

(B)           EACH CANADIAN LENDER AGREES THAT IF IT SHALL, THROUGH THE EXERCISE
OF A RIGHT OF BANKER’S LIEN, SETOFF OR COUNTERCLAIM AGAINST THE CANADIAN LOAN
PARTIES AND THE U.S. BORROWER, INCLUDING, BUT NOT LIMITED TO, A SECURED CLAIM OR
OTHER SECURITY OR INTEREST ARISING FROM, OR IN LIEU OF, SUCH SECURED CLAIM AND
RECEIVED BY SUCH CANADIAN LENDER UNDER ANY APPLICABLE BANKRUPTCY, INSOLVENCY OR
OTHER SIMILAR LAW, OR OTHERWISE, OBTAIN PAYMENT IN RESPECT OF ITS CANADIAN LOANS
AS A RESULT OF WHICH THE UNPAID PORTION OF ITS CANADIAN LOANS IS PROPORTIONATELY
LESS THAN THE UNPAID PORTION OF THE CANADIAN LOANS OF ANY OTHER CANADIAN LENDER
(A) IT SHALL PROMPTLY PURCHASE AT PAR (AND SHALL BE DEEMED TO HAVE THEREUPON
PURCHASED) FROM SUCH OTHER CANADIAN LENDER A PARTICIPATION IN THE CANADIAN LOANS
OF SUCH OTHER CANADIAN LENDER, SO THAT THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF
EACH CANADIAN LENDER’S CANADIAN LOANS AND ITS PARTICIPATION IN CANADIAN LOANS OF
THE OTHER CANADIAN LENDERS SHALL BE IN THE SAME PROPORTION TO THE AGGREGATE
UNPAID PRINCIPAL AMOUNT OF ALL CANADIAN LOANS THEN OUTSTANDING AS THE PRINCIPAL
AMOUNT OF ITS CANADIAN LOANS PRIOR TO THE OBTAINING OF SUCH PAYMENT WAS TO THE
PRINCIPAL AMOUNT OF ALL CANADIAN LOANS OUTSTANDING PRIOR TO THE OBTAINING OF
SUCH PAYMENT AND (B) SUCH OTHER ADJUSTMENTS SHALL BE MADE FROM TIME TO TIME AS
SHALL BE EQUITABLE TO ENSURE THAT THE CANADIAN LENDERS SHARE SUCH PAYMENT
PRO-RATA, PROVIDED THAT IF ANY SUCH NON-PRO-RATA PAYMENT IS THEREAFTER RECOVERED
OR OTHERWISE SET ASIDE SUCH PURCHASE OF PARTICIPATIONS SHALL BE RESCINDED
(WITHOUT INTEREST).  EACH OF THE CANADIAN LOAN PARTIES EXPRESSLY CONSENTS TO THE
FOREGOING ARRANGEMENTS AND AGREES THAT ANY CANADIAN LENDER HOLDING (OR DEEMED TO
BE HOLDING) A PARTICIPATION IN A CANADIAN LOAN MAY EXERCISE ANY AND ALL RIGHTS
OF BANKER’S LIEN, SETOFF (IN EACH CASE, SUBJECT TO THE SAME NOTICE REQUIREMENTS
AS PERTAIN TO CLAUSE (IV) OF THE REMEDIAL PROVISIONS OF SECTION 7.1) OR
COUNTERCLAIM WITH RESPECT TO

 

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ANY AND ALL MONEYS OWING BY THE CANADIAN LOAN PARTIES TO SUCH CANADIAN LENDER AS
FULLY AS IF SUCH CANADIAN LENDER HELD A PROMISSORY NOTE AND WAS THE ORIGINAL
OBLIGEE THEREON, IN THE AMOUNT OF SUCH PARTICIPATION.

 

Section 8.4            Agreement of Required Lenders.  Upon any occasion
requiring or permitting an approval, consent, waiver, election or other action
on the part of the Required Lenders, action shall be taken by the Agents for and
on behalf or for the benefit of all Lenders upon the direction of the Required
Lenders, and any such action shall be binding on all Lenders.  No amendment,
modification, consent, or waiver shall be effective except in accordance with
the provisions of Section 9.10.

 

Section 8.5            Liability of Agents.

 

(A)           EACH AGENT, WHEN ACTING ON BEHALF OF THE LENDERS, MAY EXECUTE ANY
OF ITS RESPECTIVE DUTIES UNDER THIS AGREEMENT BY OR THROUGH ANY OF ITS
RESPECTIVE OFFICERS, AGENTS, AND EMPLOYEES, AND NEITHER THE AGENTS NOR THEIR
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES OR AFFILIATES SHALL BE LIABLE TO THE
LENDERS OR ANY OF THEM FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN IN GOOD
FAITH, OR BE RESPONSIBLE TO THE LENDERS OR TO ANY OF THEM FOR THE CONSEQUENCES
OF ANY OVERSIGHT OR ERROR OF JUDGMENT, OR FOR ANY LOSS, UNLESS THE SAME SHALL
HAPPEN THROUGH ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  THE AGENTS AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND AFFILIATES  SHALL IN NO
EVENT BE LIABLE TO THE LENDERS OR TO ANY OF THEM FOR ANY ACTION TAKEN OR OMITTED
TO BE TAKEN BY THEM PURSUANT TO INSTRUCTIONS RECEIVED BY THEM FROM THE REQUIRED
LENDERS OR IN RELIANCE UPON THE ADVICE OF COUNSEL SELECTED BY IT.  WITHOUT
LIMITING THE FOREGOING, NEITHER THE AGENTS, NOR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES SHALL BE RESPONSIBLE TO ANY
LENDER FOR THE DUE EXECUTION, VALIDITY, GENUINENESS, EFFECTIVENESS, SUFFICIENCY,
OR ENFORCEABILITY OF, OR FOR ANY STATEMENT, WARRANTY, OR REPRESENTATION IN, THIS
AGREEMENT, ANY LOAN DOCUMENT OR ANY RELATED AGREEMENT, DOCUMENT OR ORDER, OR
SHALL BE REQUIRED TO ASCERTAIN OR TO MAKE ANY INQUIRY CONCERNING THE PERFORMANCE
OR OBSERVANCE BY THE LOAN PARTIES OF ANY OF THE TERMS, CONDITIONS, COVENANTS, OR
AGREEMENTS OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.

 

(B)           NEITHER THE AGENTS NOR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES SHALL HAVE ANY RESPONSIBILITY TO THE
LOAN PARTIES ON ACCOUNT OF THE FAILURE OR DELAY IN PERFORMANCE OR BREACH BY ANY
LENDER OR BY THE LOAN PARTIES OF ANY OF THEIR OBLIGATIONS UNDER THIS AGREEMENT
OR ANY OF THE LOAN DOCUMENTS OR IN CONNECTION HEREWITH OR THEREWITH.

 

(C)           THE AGENTS, IN THEIR CAPACITY AS AGENTS HEREUNDER, SHALL BE
ENTITLED TO RELY ON ANY COMMUNICATION, INSTRUMENT, OR DOCUMENT REASONABLY
BELIEVED BY SUCH PERSON TO BE GENUINE OR CORRECT AND TO HAVE BEEN SIGNED OR SENT
BY A PERSON OR PERSONS BELIEVED BY SUCH PERSON TO BE THE PROPER PERSON OR
PERSONS, AND SUCH PERSON SHALL BE ENTITLED TO RELY ON ADVICE OF LEGAL COUNSEL,
INDEPENDENT PUBLIC ACCOUNTANTS, AND OTHER PROFESSIONAL ADVISERS AND EXPERTS
SELECTED BY SUCH PERSON.

 

Section 8.6             Reimbursement and Indemnification.  Each Lender agrees
(i) to reimburse (x) the Agents for such Lender’s Applicable Percentage of any
expenses and fees incurred for the benefit of the Lenders under this Agreement
and any of the Loan Documents,

 

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including, without limitation, counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, and any other
expense incurred in connection with the operations or enforcement thereof not
reimbursed by the Loan Parties and (y) the Agents for such Lender’s Applicable
Percentage of any expenses of the Agents incurred for the benefit of the Lenders
that the Loan Parties have agreed to reimburse pursuant to Section 9.5 and has
failed to so reimburse and (ii) to indemnify and hold harmless the Agents and
any of their directors, officers, employees, agents or Affiliates, on demand, in
the amount of its proportionate share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any of them in any way relating to or
arising out of this Agreement or any of the Loan Documents or any action taken
or omitted by it or any of them under this Agreement or any of the Loan
Documents to the extent not reimbursed by the Loan Parties (except such as shall
result from their respective gross negligence or willful misconduct).

 

Section 8.7             Rights of Agents.  It is understood and agreed that the
Agents shall have the same rights and powers hereunder (including the right to
give such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with any Loan
Party, as though it were not an Agent hereunder.

 

Section 8.8             Other Duties, etc.  Anything herein to the contrary
notwithstanding, none of the Co-Lead Arrangers, joint bookrunners, syndication
agents, or documentation agents shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as an Agent, a Lender or Fronting Bank
hereunder.

 

Section 8.9             Independent Lenders.  Each Lender acknowledges that it
has decided to enter into this Agreement and to make the Loans hereunder based
on its own analysis of the transactions contemplated hereby and of the
creditworthiness of the Loan Parties and agrees that the Agents shall bear no
responsibility therefor.

 

Section 8.10           Notice of Transfer.  The Administrative Agent may deem
and treat a Lender party to this Agreement as the owner of such Lender’s portion
of the Loans for all purposes, unless and until a written notice of the
assignment or transfer thereof executed by such Lender shall have been received
by the Administrative Agent.

 

Section 8.11           Successor Agents.  Each Agent may resign at any time by
giving written notice thereof to the Lenders and the Loan Parties.  Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor Agent, which shall be reasonably satisfactory to the Loan Parties.  If
no successor Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment, within thirty (30) days after the retiring
Agent’s giving of notice of resignation, the retiring Agent may, on behalf of
the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of a least US$100,000,000, which shall
be reasonably satisfactory to the Loan Parties.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent

 

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shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement.  After any
retiring Agent’s resignation hereunder as 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 Agent under this Agreement.

 

SECTION 8.12          QUEBEC SECURITY.

 

(A)           FOR GREATER CERTAINTY, AND WITHOUT LIMITING THE POWERS OF ANY
AGENT, EACH OF THE AGENTS, THE LENDERS AND THE FRONTING BANKS, FOR THEMSELVES,
AND EACH LENDER FOR EACH OF ITS AFFILIATES, HEREBY IRREVOCABLY CONSTITUTES
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH AS THE HOLDER OF AN IRREVOCABLE POWER
OF ATTORNEY (FONDÉ DE POUVOIR WITHIN THE MEANING OF ARTICLE 2692 OF THE CIVIL
CODE OF QUÉBEC) IN ORDER TO HOLD HYPOTHECS AND SECURITY GRANTED BY ANY LOAN
PARTY ON PROPERTY PURSUANT TO THE LAWS OF THE PROVINCE OF QUÉBEC IN ORDER TO
SECURE OBLIGATIONS OF ANY LOAN PARTY UNDER ANY BOND, DEBENTURE OR SIMILAR TITLE
OF INDEBTEDNESS, ISSUED BY ANY LOAN PARTY, AND HEREBY AGREES THAT JPMORGAN CHASE
BANK, N.A., TORONTO BRANCH MAY ACT AS THE BONDHOLDER AND MANDATARY (I.E. AGENT)
WITH RESPECT TO ANY BOND, DEBENTURE OR SIMILAR TITLE OF INDEBTEDNESS THAT MAY BE
ISSUED BY ANY LOAN PARTY AND PLEDGED IN FAVOUR OF JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, FOR THE BENEFIT OF THE SECURED PARTIES. THE EXECUTION BY
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, ACTING AS FONDÉ DE POUVOIR,
BONDHOLDER AND MANDATARY, PRIOR TO THE EXECUTION OF THIS AGREEMENT OF ANY DEEDS
OF HYPOTHEC OR OTHER SECURITY DOCUMENTS IS HEREBY RATIFIED AND CONFIRMED.

 

(B)           NOTWITHSTANDING THE PROVISIONS OF SECTION 32 OF AN ACT RESPECTING
THE SPECIAL POWERS OF LEGAL PERSONS (QUÉBEC), JPMORGAN CHASE BANK, N.A., TORONTO
BRANCH MAY ACQUIRE AND BE THE HOLDER OF ANY BOND, DEBENTURE OR SIMILAR TITLE OF
INDEBTEDNESS ISSUED BY ANY LOAN PARTY (I.E. THE FONDÉ DE POUVOIR MAY ACQUIRE AND
HOLD THE FIRST BOND, DEBENTURE OR SIMILAR TITLE OF INDEBTEDNESS ISSUED UNDER ANY
DEED OF HYPOTHEC BY ANY LOAN PARTY).

 

(C)           THE CONSTITUTION OF JPMORGAN CHASE BANK, N.A., TORONTO BRANCH AS
FONDÉ DE POUVOIR, AND AS BONDHOLDER AND MANDATARY WITH RESPECT TO ANY BOND,
DEBENTURE, OR SIMILAR TITLE OF INDEBTEDNESS THAT MAY BE ISSUED AND PLEDGED FROM
TIME TO TIME TO JPMORGAN CHASE BANK, N.A., TORONTO BRANCH FOR THE BENEFIT OF THE
SECURED PARTIES, SHALL BE DEEMED TO HAVE BEEN RATIFIED AND CONFIRMED BY EACH
PERSON ACCEPTING AN ASSIGNMENT OF, A PARTICIPATION IN OR AN ARRANGEMENT IN
RESPECT OF, ALL OR ANY PORTION OF ANY SECURED PARTIES’ RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT BY THE EXECUTION OF AN ASSIGNMENT, INCLUDING AN ASSIGNMENT
AND ACCEPTANCE, OR OTHER AGREEMENT PURSUANT TO WHICH IT BECOMES SUCH ASSIGNEE OR
PARTICIPANT, AND BY EACH SUCCESSOR AGENT BY THE EXECUTION OF AN ASSIGNMENT AND
ACCEPTANCE OR OTHER AGREEMENT, OR BY THE COMPLIANCE WITH OTHER FORMALITIES, AS
THE CASE MAY BE, PURSUANT TO WHICH IT BECOMES A SUCCESSOR AGENT UNDER THIS
AGREEMENT.

 

(D)           JPMORGAN CHASE BANK, N.A., TORONTO BRANCH ACTING AS FONDÉ DE
POUVOIR, BONDHOLDER OR MANDATARY SHALL HAVE THE SAME RIGHTS, POWERS, IMMUNITIES,
INDEMNITIES AND EXCLUSIONS FROM LIABILITY AS ARE PRESCRIBED IN FAVOUR OF THE
AGENTS IN THIS AGREEMENT, WHICH SHALL APPLY MUTATIS MUTANDIS TO JPMORGAN CHASE
BANK, N.A., TORONTO BRANCH, ACTING AS FONDÉ DE POUVOIR, BONDHOLDER OR MANDATARY.

 

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ARTICLE 9. MISCELLANEOUS

 

SECTION 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 TELECOPY, AS FOLLOWS:

 

(I)            IF TO THE LOAN PARTIES, TO SMURFIT-STONE CONTAINER CORPORATION AT
SIX CITYPLACE DRIVE, 10TH FLOOR, ST. LOUIS, MO 63141, ATTENTION OF CHIEF
FINANCIAL OFFICER (FAX NO. (314) 787-6162);

 

(II)           IF TO THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT, TO
JPMORGAN CHASE BANK, LOAN AND AGENCY SERVICES GROUP, 1111 FANNIN STREET, 10TH
FLOOR, HOUSTON, TEXAS 77002, ATTENTION OF CHRISTIAN CHO (TELECOPY
NO. 713-427-6307) AND SYLVIA GUTIERREZ (TELECOPY NO. 713-427-6307), WITH A COPY
TO JPMORGAN CHASE BANK, N.A., 277 PARK AVENUE, 8TH FLOOR, NEW YORK, NY 10172,
ATTENTION OF ANN KURINSKAS (TELECOPY NO. 212-622-4556);

 

(III)          IF TO THE CANADIAN ADMINISTRATIVE AGENT OR THE CANADIAN
COLLATERAL AGENT, TO JPMORGAN CHASE BANK, N.A., TORONTO BRANCH 200 BAY STREET,
SUITE 1800, TORONTO, ONTARIO M5J 2J2, ATTENTION OF AMANDA VIDULICH (TELECOPY
NO. 416-981-9128);

 

(IV)          IF TO JPMCB, AS FRONTING BANK WITH RESPECT TO ANY U.S. REVOLVING
FACILITY LETTER OF CREDIT, TO IT AT JPMORGAN CHASE BANK, N.A., 300 SOUTH
RIVERSIDE PLAZA, L/C DEPARTMENT, MAIL CODE: IL1-0236, CHICAGO, IL 60606,
ATTENTION OF FLORO ALCANTARA (TELEPHONE: 312-954-1910) AND ANNETTE BOND
(TELEPHONE: 312-954-3240) FAX: 312-954-0203, WITH A COPY TO JPMORGAN CHASE BANK,
N.A., 277 PARK AVENUE, 8TH FLOOR, NEW YORK, NY 10172, ATTENTION OF ANN KURINSKAS
(TELECOPY NO. 212-622-4556); AND

 

(V)           IF TO JPMCB, AS FRONTING BANK WITH RESPECT TO ANY CANADIAN
REVOLVING FACILITY LETTER OF CREDIT, TO IT AT JPMORGAN CHASE BANK, N.A., TORONTO
BRANCH L/C DEPARTMENT, 200 BAY STREET, FLOOR 18 TORONTO, M5J 2J2, CANADA,
ATTENTION OF JENNIFER MCLAUGHLIN (TELEPHONE: 416-981-2324; FAX: 416-981-2375),
WITH A COPY TO JPMORGAN CHASE BANK, N.A., 277 PARK AVENUE, 8TH FLOOR, NEW YORK,
NY 10172, ATTENTION OF ANN KURINSKAS (TELECOPY NO. 212-622-4556); AND

 

(VI)          IF TO ANY LENDER, TO IT AT ITS ADDRESS (OR TELECOPY NUMBER) SET
FORTH IN ITS ADMINISTRATIVE QUESTIONNAIRE.

 

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(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 2 UNLESS OTHERWISE AGREED BY THE
ADMINISTRATIVE AGENT AND THE APPLICABLE LENDER.  THE ADMINISTRATIVE AGENT OR THE
LOAN PARTIES MAY, IN THEIR RESPECTIVE DISCRETION, AGREE TO ACCEPT NOTICES AND
OTHER COMMUNICATIONS TO IT HEREUNDER BY ELECTRONIC COMMUNICATIONS PURSUANT TO
PROCEDURES APPROVED BY THEM; PROVIDED THAT APPROVAL OF SUCH PROCEDURES MAY BE
LIMITED TO PARTICULAR NOTICES OR COMMUNICATIONS.

 

(C)           ANY PARTY HERETO MAY CHANGE ITS ADDRESS OR TELECOPY 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.

 

Section 9.2            Survival of Agreement, Representations and Warranties,
etc.  All warranties, representations and covenants made by any Loan Party
herein or in any certificate or other instrument delivered by it or on its
behalf in connection with this Agreement shall be considered to have been relied
upon by the Lenders and shall survive the making of the Loans herein
contemplated regardless of any investigation made by any Lender or on its behalf
and shall continue in full force and effect so long as any amount due or to
become due hereunder is outstanding and unpaid and so long as the Commitments
have not been terminated.  All statements in any such certificate or other
instrument shall constitute representations and warranties by the Loan Parties
hereunder with respect to the Loan Parties.

 

Section 9.3            Successors and Assigns.

 

(A)           THE PROVISIONS OF THIS AGREEMENT SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS
PERMITTED HEREBY (INCLUDING ANY AFFILIATE OF A FRONTING BANK THAT ISSUES ANY
LETTER OF CREDIT), EXCEPT THAT (I) THE BORROWERS MAY NOT ASSIGN OR OTHERWISE
TRANSFER ANY OF THEIR RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN
CONSENT OF EACH LENDER (AND ANY ATTEMPTED ASSIGNMENT OR TRANSFER BY THE
BORROWERS WITHOUT SUCH CONSENT SHALL BE NULL AND VOID) AND (II) NO LENDER MAY
ASSIGN OR OTHERWISE TRANSFER ITS RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT IN
ACCORDANCE WITH THIS SECTION.  NOTHING IN THIS AGREEMENT, EXPRESSED OR IMPLIED,
SHALL BE CONSTRUED TO CONFER UPON ANY PERSON (OTHER THAN THE PARTIES HERETO,
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY (INCLUDING ANY
AFFILIATE OF A FRONTING BANK THAT ISSUES ANY LETTER OF CREDIT), PARTICIPANTS (TO
THE EXTENT PROVIDED IN PARAGRAPH (C) OF THIS SECTION) AND, TO THE EXTENT
EXPRESSLY CONTEMPLATED HEREBY, THE RELATED PARTIES OF EACH OF THE ADMINISTRATIVE
AGENT, THE FRONTING BANK(S) AND THE LENDERS) ANY LEGAL OR EQUITABLE RIGHT,
REMEDY OR CLAIM UNDER OR BY REASON OF THIS AGREEMENT.

 

(B)

 

(I)            SUBJECT TO THE CONDITIONS SET FORTH IN PARAGRAPH (B)(II) BELOW,
ANY LENDER MAY ASSIGN TO ONE OR MORE ASSIGNEES (OTHER THAN A LOAN PARTY OR AN
AFFILIATE OF A LOAN PARTY) ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND THE LOANS AT
THE TIME OWING TO IT) WITH THE

 

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PRIOR WRITTEN CONSENT (SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD) OF:

 

(A)          THE ADMINISTRATIVE AGENT, PROVIDED THAT NO CONSENT OF THE
ADMINISTRATIVE AGENT SHALL BE REQUIRED FOR AN ASSIGNMENT OF ALL OR ANY PORTION
OF A TERM LOAN TO A LENDER, AN AFFILIATE OF A LENDER OR AN APPROVED FUND; AND

 

(B)           EACH FRONTING BANK, PROVIDED THAT NO CONSENT OF ANY FRONTING BANK
SHALL BE REQUIRED FOR AN ASSIGNMENT OF ALL OR ANY PORTION OF A TERM LOAN.

 

(II)           ASSIGNMENTS SHALL BE SUBJECT TO THE FOLLOWING ADDITIONAL
CONDITIONS:

 

(A)          EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER OR AN AFFILIATE OF
A LENDER OR AN ASSIGNMENT OF THE ENTIRE REMAINING AMOUNT OF THE ASSIGNING
LENDER’S COMMITMENT OR LOANS OF ANY CLASS, THE AMOUNT OF THE COMMITMENT OR LOANS
OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH ASSIGNMENT (DETERMINED AS OF THE
DATE THE ASSIGNMENT AND ACCEPTANCE WITH RESPECT TO SUCH ASSIGNMENT IS DELIVERED
TO THE ADMINISTRATIVE AGENT) SHALL NOT BE LESS THAN $1,000,000 UNLESS THE
ADMINISTRATIVE AGENT OTHERWISE CONSENTS;

 

(B)           EACH PARTIAL ASSIGNMENT SHALL BE MADE AS AN ASSIGNMENT OF A
PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT, PROVIDED THAT THIS CLAUSE SHALL NOT BE CONSTRUED TO PROHIBIT THE
ASSIGNMENT OF A PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND
OBLIGATIONS IN RESPECT OF ONE CLASS OF COMMITMENTS OR LOANS;

 

(C)           THE PARTIES TO EACH ASSIGNMENT SHALL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT AN ASSIGNMENT AND ACCEPTANCE, TOGETHER WITH A PROCESSING
AND RECORDATION FEE OF $3,500;

 

(D)          THE ASSIGNEE, IF IT SHALL NOT BE A LENDER, SHALL DELIVER TO THE
ADMINISTRATIVE AGENT AN ADMINISTRATIVE QUESTIONNAIRE IN WHICH THE ASSIGNEE
DESIGNATES ONE OR MORE CREDIT CONTACTS TO WHOM ALL SYNDICATE-LEVEL INFORMATION
(WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES) WILL BE MADE AVAILABLE AND
WHO MAY RECEIVE SUCH INFORMATION IN ACCORDANCE WITH THE ASSIGNEE’S COMPLIANCE
PROCEDURES AND APPLICABLE LAWS, INCLUDING FEDERAL AND STATE SECURITIES LAWS;

 

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(E)           NO SUCH ASSIGNMENT SHALL BE MADE TO A LOAN PARTY OR ANY AFFILIATE
OF A LOAN PARTY; AND

 

(F)           WITH THE EXCEPTION OF ASSIGNMENTS FROM THE CONVERTING LENDERS
NECESSARY TO EFFECT FURTHER ALLOCATIONS OF THE COMMITMENTS AND THE LOANS, AND
EXCEPT AS DIRECTED BY THE ADMINISTRATIVE AGENT PURSUANT TO SECTION 9.3(E), NO
SUCH ASSIGNMENTS SHALL BE MADE PRIOR TO THE EARLIER OF (I) THE DATE THE
BANKRUPTCY COURT ENTERS THE FINAL ORDER OR (II) THE DATE THE ADMINISTRATIVE
AGENT DECLARES IN WRITING THE SYNDICATION OF THE COMMITMENTS TO BE COMPLETE.

 

For the purposes of this Section 9.3(b), the term “Approved Fund” has the
following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

(III)          SUBJECT TO ACCEPTANCE AND RECORDING THEREOF PURSUANT TO PARAGRAPH
(B)(IV) OF THIS SECTION, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN EACH
ASSIGNMENT AND ACCEPTANCE THE ASSIGNEE THEREUNDER SHALL BE A PARTY HERETO AND,
TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH ASSIGNMENT AND ACCEPTANCE, HAVE
THE RIGHTS AND OBLIGATIONS OF A LENDER UNDER THIS AGREEMENT, AND THE ASSIGNING
LENDER THEREUNDER SHALL, TO THE EXTENT OF THE INTEREST ASSIGNED BY SUCH
ASSIGNMENT AND ACCEPTANCE, BE RELEASED FROM ITS OBLIGATIONS UNDER THIS AGREEMENT
(AND, IN THE CASE OF AN ASSIGNMENT AND ACCEPTANCE 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
SECTION 2.15, SECTION 2.16, SECTION 2.19, SECTION 9.5, SECTION 9.6).  ANY
ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT
THAT DOES NOT COMPLY WITH THIS SECTION 9.3 SHALL BE TREATED FOR PURPOSES OF THIS
AGREEMENT AS A SALE BY SUCH LENDER OF A PARTICIPATION IN SUCH RIGHTS AND
OBLIGATIONS IN ACCORDANCE WITH PARAGRAPH (C) OF THIS SECTION.

 

(IV)          THE ADMINISTRATIVE AGENT, ACTING FOR THIS PURPOSE AS AN AGENT OF
THE BORROWERS, SHALL MAINTAIN AT ONE OF ITS OFFICES A COPY OF EACH ASSIGNMENT
AND ACCEPTANCE 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
LOANS AND PAYMENTS MADE BY THE FRONTING BANK(S) PURSUANT TO A LETTER OF CREDIT
OWING TO, EACH LENDER PURSUANT TO THE TERMS HEREOF FROM TIME TO TIME (THE
“REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE, AND THE
BORROWERS, THE ADMINISTRATIVE AGENT, THE FRONTING BANK(S) AND

 

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THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER
PURSUANT TO THE TERMS HEREOF AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS
AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE REGISTER SHALL BE
AVAILABLE FOR INSPECTION BY THE BORROWERS, THE FRONTING BANK(S) AND ANY LENDER,
AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

(V)           UPON ITS RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ACCEPTANCE
EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE, THE ASSIGNEE’S COMPLETED
ADMINISTRATIVE QUESTIONNAIRE (UNLESS THE ASSIGNEE SHALL ALREADY BE A LENDER
HEREUNDER), THE PROCESSING AND RECORDATION FEE REFERRED TO IN PARAGRAPH (B) OF
THIS SECTION AND ANY WRITTEN CONSENT TO SUCH ASSIGNMENT REQUIRED BY PARAGRAPH
(B) OF THIS SECTION, THE ADMINISTRATIVE AGENT SHALL ACCEPT SUCH ASSIGNMENT AND
ACCEPTANCE AND RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER;
PROVIDED THAT IF EITHER THE ASSIGNING LENDER OR THE ASSIGNEE SHALL HAVE FAILED
TO MAKE ANY PAYMENT REQUIRED TO BE MADE BY IT UNDER THIS AGREEMENT, THE
ADMINISTRATIVE AGENT SHALL HAVE NO OBLIGATION TO ACCEPT SUCH ASSIGNMENT AND
ACCEPTANCE AND RECORD THE INFORMATION THEREIN IN THE REGISTER UNLESS AND UNTIL
SUCH PAYMENT SHALL HAVE BEEN MADE IN FULL, TOGETHER WITH ALL ACCRUED INTEREST
THEREON.  NO ASSIGNMENT SHALL BE EFFECTIVE FOR PURPOSES OF THIS AGREEMENT UNLESS
IT HAS BEEN RECORDED IN THE REGISTER AS PROVIDED IN THIS PARAGRAPH.

 

(C)           ANY LENDER MAY, WITHOUT THE CONSENT OF THE BORROWERS, THE
ADMINISTRATIVE AGENT, OR THE FRONTING BANKS, SELL PARTICIPATIONS TO ONE OR MORE
BANKS OR OTHER ENTITIES (A “PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS
COMMITMENT AND THE LOANS OWING TO IT); PROVIDED THAT (A) SUCH LENDER’S
OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN UNCHANGED, (B) SUCH LENDER SHALL
REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE PERFORMANCE OF
SUCH OBLIGATIONS AND (C) THE BORROWERS, THE ADMINISTRATIVE AGENT, THE FRONTING
BANK(S) 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 9.10(A) THAT AFFECTS SUCH PARTICIPANT.  THE LOAN PARTIES AGREE THAT EACH
PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF SECTION 2.15, SECTION 2.16 AND
SECTION 2.19 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD ACQUIRED ITS
INTEREST BY ASSIGNMENT PURSUANT TO PARAGRAPH (B) OF THIS SECTION.  TO THE EXTENT
PERMITTED BY LAW, EACH PARTICIPANT ALSO SHALL BE ENTITLED TO THE BENEFITS OF
SECTION 2.26 AS THOUGH IT WERE A LENDER, PROVIDED SUCH PARTICIPANT AGREES TO BE
SUBJECT TO SECTION 8.3 AS THOUGH IT WERE A LENDER.

 

(D)           ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN A SECURITY INTEREST IN
ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO SECURE OBLIGATIONS OF
SUCH LENDER, INCLUDING

 

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WITHOUT LIMITATION ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A FEDERAL
RESERVE BANK, AND THIS SECTION SHALL NOT APPLY TO ANY SUCH PLEDGE OR ASSIGNMENT
OF A SECURITY INTEREST; PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT OF A SECURITY
INTEREST SHALL RELEASE A LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER OR
SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR SUCH LENDER AS A PARTY HERETO.

 

(E)           EACH LENDER HAVING A COMMITMENT ON THE CLOSING DATE (A “CLOSING
DATE LENDER”), HEREBY AGREES TO EXECUTE AND DELIVER, AT ANY TIME AND FROM TIME
TO TIME ON OR PRIOR TO THE DATE THE BANKRUPTCY COURT ENTERS THE FINAL ORDER,
SUCH ASSIGNMENTS AND ACCEPTANCES AS THE ADMINISTRATIVE AGENT MAY DIRECT IN ORDER
TO EFFECT SECONDARY ALLOCATIONS OF THE COMMITMENTS TO OTHER PERSONS WHO SHALL
BECOME LENDERS HEREUNDER.  THE CLOSING DATE LENDERS SHALL EFFECT SUCH
ASSIGNMENTS WITH THE PAYMENT OF A CORRESPONDING AMOUNT OF FEES TO MARKET AS THE
ADMINISTRATIVE AGENT MAY DIRECT, BUT WHICH FEES, AS PAID BY A CLOSING DATE
LENDER, SHALL BE NO GREATER THAN THE AMOUNT OF FEES TO MARKET RECEIVED BY SUCH
CLOSING DATE LENDER IN CONNECTION WITH SUCH CLOSING DATE LENDER’S INITIAL
COMMITMENTS UNDER THIS AGREEMENT.

 

Section 9.4            Confidentiality.  Each Agent, the Fronting Banks and each
of the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (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 in accordance
herewith), (b) to the extent requested by any regulatory authority, (c) to the
extent required by Requirement of 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 hereunder or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any assignee of or participant in, or
any prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Loan Parties and
their obligations, (g) with the consent of the Borrowers 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 any Agent, any Fronting Bank
or any Lender on a non-confidential basis from a source other than the
Borrowers. For the purposes of this Section, “Information” means all information
received from the Borrowers or any of their Subsidiaries relating to the
Borrowers or any of their Subsidiaries or any of their respective businesses,
other than any such information that is available to any Agent, any Fronting
Bank or any Lender on a non-confidential basis and not known by such Person to
be in contravention of any applicable confidentiality or similar provision prior
to disclosure by the Borrowers. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

EACH AGENT, EACH FRONTING BANK AND EACH OF THE LENDERS ACKNOWLEDGES THAT
INFORMATION FURNISHED TO IT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING ANY OF THE LOAN

 

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PARTIES OR THEIR SUBSIDIARIES AND THEIR RESPECTIVE RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
LOAN PARTIES OR THE AGENTS PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS
AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION ABOUT THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE LOAN PARTIES
AND THE AGENTS THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A
CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC
INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

Section 9.5            Expenses.  Whether or not the transactions hereby
contemplated shall be consummated, the Loan Parties’ agree to pay all reasonable
expenses incurred by each Agent and the Co-Lead Arrangers (including, without
limitation, the reasonable fees and disbursements of Bryan Cave LLP, counsel for
the Administrative Agent, any other local counsel that such Agent shall retain
(including Canadian and Delaware counsel) and any internal or third-party
appraisers, consultants and auditors advising such Agent and the Co-Lead
Arrangers and their counsel) in connection with the preparation, execution,
delivery and administration of this Agreement and the other Loan Documents, the
making of the Loans and the issuance of the Letters of Credit, the perfection of
the Liens contemplated hereby, the syndication of the transactions contemplated
hereby, the costs, fees and expenses of each Agent and the Co-Lead Arrangers in
connection with the initial and periodic collateral reviews and appraisals,
field audits, monitoring of assets (including collateral monitoring fees of or
incurred by the Administrative Agent) and publicity expenses, and, following the
occurrence of an Event of Default, all expenses incurred by the Lenders and each
Agent in the enforcement or protection of the rights of any one or more of the
Lenders or such Agent in connection with this Agreement or the other Loan
Documents, including but not limited to the fees and disbursements of any
counsel for the Lenders or such Agent.  Such payments by the Loan Parties shall
be made upon delivery of a statement setting forth such costs and expenses. 
Whether or not the transactions hereby contemplated shall be consummated, the
Loan Parties agree to reimburse the Administrative Agent and the Co-Lead
Arrangers for the expenses set forth in the Commitment Letter and the
reimbursement provisions thereof are hereby incorporated herein by reference. 
The obligations of the Loan Parties under this Section shall survive the
termination of this Agreement or the payment of the Loans.

 

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Section 9.6            Indemnity.

 

(A)           EACH OF THE LOAN PARTIES AGREE TO INDEMNIFY AND HOLD HARMLESS EACH
AGENT, THE CO-LEAD ARRANGERS AND THE LENDERS AND THEIR DIRECTORS, OFFICERS,
EMPLOYEES, TRUSTEES, ADVISORS, AGENTS AND AFFILIATES (EACH AN “INDEMNIFIED
PARTY”) FROM AND AGAINST ANY AND ALL EXPENSES, LOSSES, CLAIMS, DAMAGES AND
LIABILITIES INCURRED BY SUCH INDEMNIFIED PARTY ARISING OUT OF CLAIMS MADE BY ANY
PERSON IN ANY WAY RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, BUT
EXCLUDING THEREFROM ALL EXPENSES, LOSSES, CLAIMS, DAMAGES, AND LIABILITIES TO
THE EXTENT THAT THEY ARE DETERMINED BY THE FINAL JUDGMENT OF A COURT OF
COMPETENT JURISDICTION TO HAVE RESULTED FROM (I) THE WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE OF SUCH INDEMNIFIED PARTY OR (II) AN ACTION COMMENCED BY SUCH
INDEMNIFIED PARTY AGAINST A LOAN PARTY AND WHICH ACTION RESULTS IN A FINAL
JUDGMENT IN FAVOR OF SUCH LOAN PARTY.  THE OBLIGATIONS OF THE LOAN PARTIES UNDER
THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF
THE LOANS.

 

(B)           TO THE EXTENT THAT A BORROWER FAILS TO PAY ANY AMOUNT REQUIRED TO
BE PAID BY IT TO THE APPLICABLE AGENT OR A FRONTING BANK UNDER SECTION 9.5 OR
PARAGRAPH (A) OF THIS SECTION, EACH LENDER SEVERALLY AGREES TO PAY TO THE
APPLICABLE AGENT OR THE FRONTING BANK, AS THE CASE MAY BE, SUCH LENDER’S
APPLICABLE PERCENTAGE (DETERMINED AS OF THE TIME THAT THE APPLICABLE
UNREIMBURSED EXPENSE OR INDEMNITY PAYMENT IS SOUGHT) OF SUCH UNPAID AMOUNT;
PROVIDED THAT THE UNREIMBURSED EXPENSE OR INDEMNIFIED LOSS, CLAIM, DAMAGE,
LIABILITY OR RELATED EXPENSE, AS THE CASE MAY BE, WAS INCURRED BY OR ASSERTED
AGAINST THE APPLICABLE AGENT OR THE FRONTING BANK IN ITS CAPACITY AS SUCH.

 

(C)           TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO LOAN PARTY, AGENT OR
ANY OF THE LENDERS SHALL ASSERT, AND EACH LOAN PARTY, AGENT AND LENDER HEREBY
WAIVES, ANY CLAIM AGAINST ANY OTHER LOAN PARTY, AGENT OR ANY LENDER, ON ANY
THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
(AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR
AS A RESULT OF, THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY, ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREOF EXCEPT
TO THE EXTENT SUCH DAMAGES WOULD OTHERWISE BE SUBJECT TO INDEMNITY HEREUNDER.

 

Section 9.7            Choice of Law.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL, UNLESS OTHERWISE SPECIFIED THEREIN, IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE AND
THE BANKRUPTCY CODE.

 

Section 9.8            No Waiver.  No failure on the part of any Agent or any of
the Lenders to exercise, and no delay in exercising, any right, power or remedy
hereunder or any of the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.  All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.

 

Section 9.9            Extension of Maturity.  Should any payment of principal
of or interest or any other amount due hereunder become due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.

 

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Section 9.10                                Amendments, etc.

 

(A)                                  NO MODIFICATION, AMENDMENT OR WAIVER OF ANY
PROVISION OF THIS AGREEMENT, THE SECURITY AND PLEDGE AGREEMENT OR ANY OTHER LOAN
DOCUMENT, AND NO CONSENT TO ANY DEPARTURE BY THE LOAN PARTIES THEREFROM, SHALL
IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING AND SIGNED BY THE
REQUIRED LENDERS, AND THEN SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN THE
SPECIFIC INSTANCE AND FOR THE PURPOSE FOR WHICH GIVEN; PROVIDED, HOWEVER, THAT
NO SUCH MODIFICATION OR AMENDMENT SHALL WITHOUT THE WRITTEN CONSENT OF EACH
LENDER AFFECTED THEREBY (X) INCREASE THE COMMITMENT OF SUCH LENDER (IT BEING
UNDERSTOOD THAT A WAIVER OF AN EVENT OF DEFAULT SHALL NOT CONSTITUTE AN INCREASE
IN THE COMMITMENT OF A LENDER), OR (Y) REDUCE THE PRINCIPAL AMOUNT OF ANY LOAN
(OR ANY UNREIMBURSED LETTER OF CREDIT) OR THE RATE OF INTEREST PAYABLE THEREON,
OR EXTEND ANY DATE FOR THE PAYMENT OF INTEREST, PRINCIPAL OR FEES HEREUNDER OR
REDUCE ANY FEES PAYABLE HEREUNDER OR EXTEND THE FINAL MATURITY OF THE LOAN
PARTIES’ OBLIGATIONS HEREUNDER (SUBJECT TO SECTION 2.30 AND SECTION 2.31); AND,
PROVIDED, FURTHER, THAT NO SUCH MODIFICATION OR AMENDMENT SHALL WITHOUT THE
WRITTEN CONSENT OF (A) ALL OF THE LENDERS (I) AMEND OR MODIFY ANY PROVISION OF
THIS AGREEMENT WHICH PROVIDES FOR THE UNANIMOUS CONSENT OR APPROVAL OF THE
LENDERS OR THE CONSENT OR APPROVAL OF EACH AFFECTED LENDER, (II) AMEND THIS
SECTION 9.10 OR THE DEFINITION OF REQUIRED LENDERS OR SUPER-MAJORITY LENDERS,
(III) AMEND OR MODIFY THE SUPERPRIORITY CLAIM STATUS OF THE LENDERS CONTEMPLATED
BY SECTION 2.24, (IV) INCREASE THE TOTAL REVOLVING COMMITMENT BY AN AMOUNT IN
EXCESS OF US$100,000,000, (V) RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL
FROM THE LIENS CREATED HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS OR (B) THE
SUPER-MAJORITY LENDERS (I) RELEASE ANY MATERIAL PORTION (BUT LESS THAN ALL OR
SUBSTANTIALLY ALL) OF THE COLLATERAL FROM THE LIENS CREATED HEREUNDER AND UNDER
THE OTHER LOAN DOCUMENTS (OTHER THAN WITH RESPECT TO ASSET SALES PERMITTED UNDER
SECTION 6.12), (II) RELEASE ANY LOAN PARTY FROM ITS JOINT AND SEVERAL
OBLIGATIONS UNDER ARTICLE 10, (III) ALTER THE ELIGIBILITY STANDARDS OR AMEND ANY
OF THE COMPONENT DEFINITIONS USED IN DETERMINING THE BORROWING BASES IN A MANNER
WHICH WOULD INCREASE THE AMOUNT OF THE BORROWING BASES, (IV) INCREASE THE TOTAL
REVOLVING COMMITMENT BY AN AMOUNT UP TO US$100,000,000, (V) INCREASE THE ADVANCE
RATES IN CALCULATION OF THE BORROWING BASES, (VI) CHANGE SECTION 7.1(F) OR
(VII) CHANGE SECTION 2.33.  NO SUCH AMENDMENT OR MODIFICATION MAY ADVERSELY
AFFECT THE RIGHTS AND OBLIGATIONS OF THE AGENTS OR ANY FRONTING BANK HEREUNDER
WITHOUT ITS PRIOR WRITTEN CONSENT.  NO NOTICE TO OR DEMAND ON ANY LOAN PARTY
SHALL ENTITLE ANY LOAN PARTY TO ANY OTHER OR FURTHER NOTICE OR DEMAND IN THE
SAME, SIMILAR OR OTHER CIRCUMSTANCES.  EACH ASSIGNEE UNDER SECTION 9.3 SHALL BE
BOUND BY ANY AMENDMENT, MODIFICATION, WAIVER, OR CONSENT AUTHORIZED AS PROVIDED
HEREIN, AND ANY CONSENT BY A LENDER SHALL BIND ANY PERSON SUBSEQUENTLY ACQUIRING
AN INTEREST ON THE LOANS HELD BY SUCH LENDER.  NO AMENDMENT TO THIS AGREEMENT
SHALL BE EFFECTIVE AGAINST ANY LOAN PARTY UNLESS IN WRITING AND SIGNED BY SUCH
LOAN PARTY.  THE ADMINISTRATIVE AGENT SHALL PROVIDE WRITTEN NOTICE TO THE
MONITOR IN THE CANADIAN CASES PROMPTLY FOLLOWING ANY REQUEST FROM THE CANADIAN
LOAN PARTIES PURSUANT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FOR
THE CONSENT OF THE LENDERS TO RELEASE ANY MATERIAL PORTION OF OR ALL OR
SUBSTANTIALLY ALL OF THE COLLATERAL FROM THE LIENS IN FAVOR OF THE AGENTS ON
BEHALF OF THE SECURED PARTIES OR FOR THE RELEASE OF THE PROCEEDS OF SUCH
COLLATERAL FROM SUCH LIENS.

 

(B)                                 NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN SECTION 9.10(A), IN THE EVENT THAT ANY LOAN PARTY REQUESTS THAT
THIS AGREEMENT BE MODIFIED OR AMENDED IN A MANNER WHICH WOULD REQUIRE THE
UNANIMOUS CONSENT OF ALL OF THE LENDERS OR THE CONSENT OF THE SUPER-MAJORITY
LENDERS AND SUCH MODIFICATION OR AMENDMENT IS AGREED TO BY THE CONSENTING
LENDERS

 

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(AS HEREINAFTER DEFINED), THEN WITH THE CONSENT OF THE LOAN PARTIES AND THE
CONSENTING LENDERS, THE LOAN PARTIES AND THE CONSENTING LENDERS SHALL BE
PERMITTED TO AMEND THE AGREEMENT WITHOUT THE CONSENT OF THE LENDER OR LENDERS
WHICH DID NOT AGREE TO THE MODIFICATION OR AMENDMENT REQUESTED BY SUCH LOAN
PARTY (SUCH LENDER OR LENDERS, COLLECTIVELY THE “MINORITY LENDERS”) TO PROVIDE
FOR (W) THE TERMINATION OF THE COMMITMENT OF EACH OF THE MINORITY LENDERS,
(X) THE ADDITION TO THIS AGREEMENT OF ONE OR MORE OTHER FINANCIAL INSTITUTIONS
(EACH OF WHICH SHALL BE AN ELIGIBLE ASSIGNEE), OR AN INCREASE IN THE REVOLVING
COMMITMENT OF ONE OR MORE OF THE CONSENTING LENDERS, SO THAT THE TOTAL REVOLVING
COMMITMENT AFTER GIVING EFFECT TO SUCH AMENDMENT SHALL BE IN THE SAME AMOUNT AS
THE TOTAL REVOLVING COMMITMENT IMMEDIATELY BEFORE GIVING EFFECT TO SUCH
AMENDMENT, (Y) IF ANY LOANS ARE OUTSTANDING AT THE TIME OF SUCH AMENDMENT, THE
MAKING OF SUCH ADDITIONAL LOANS BY SUCH NEW FINANCIAL INSTITUTIONS OR CONSENTING
LENDER OR LENDERS, AS THE CASE MAY BE, AS MAY BE NECESSARY TO REPAY IN FULL THE
OUTSTANDING LOANS OF THE MINORITY LENDERS IMMEDIATELY BEFORE GIVING EFFECT TO
SUCH AMENDMENT AND (Z) SUCH OTHER MODIFICATIONS TO THIS AGREEMENT AS MAY BE
APPROPRIATE.  AS USED HEREIN, THE TERM “CONSENTING LENDERS” SHALL MEAN, AT ANY
TIME, LENDERS HAVING AGGREGATE TOTAL CANADIAN OUTSTANDINGS, TOTAL U.S.
OUTSTANDINGS AND UNUSED COMMITMENTS REPRESENTING MORE THAN 66-2/3% OF THE
AGGREGATE TOTAL CANADIAN OUTSTANDINGS, TOTAL U.S. OUTSTANDINGS AND UNUSED
COMMITMENTS AT SUCH TIME.

 

Section 9.11                                Severability.  Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 9.12                                Headings. Section headings used
herein are for convenience only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.

 

Section 9.13                                Execution in Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same instrument.

 

Section 9.14                                Prior Agreements; Inconsistencies. 
This Agreement represents the entire agreement of the parties with regard to the
subject matter hereof and the terms of any letters and other documentation
entered into between any Loan Party and any Lender or the Administrative Agent
prior to the execution of this Agreement which relate to Loans to be made
hereunder shall be replaced by the terms of this Agreement (except as otherwise
expressly provided herein with respect to the Commitment Letter and the fee
letter referred to therein, including without limitation the provisions of
Section 2.20).  In the event of any conflicts between the express provisions of
this Agreement and the Orders, the provisions of the Orders shall control to the
extent of any such inconsistency.  In the event of any conflicts between the
express provisions of this Agreement and the Security Agreement, the provisions
of this Agreement shall control to the extent of any such inconsistency.

 

Section 9.15                                Further Assurances.  Whenever and so
often as reasonably requested by an Agent, the Loan Parties will promptly
execute and deliver or cause to be executed and delivered all such other and
further instruments, documents or assurances, and promptly do or

 

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cause to be done all such other and further things as may be necessary and
reasonably required in order to further and more fully vest in the Agents all
rights, interests, powers, benefits, privileges and advantages conferred or
intended to be conferred by this Agreement and the other Loan Documents.

 

Section 9.16                                Waiver of Jury Trial.  EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

Section 9.17                                Subordination of Intercompany
Indebtedness.  Each of the Loan Parties agree that any and all Intercompany
Indebtedness owed to any Loan Party shall be subordinate and subject in right of
payment to the prior payment, in full and in cash, of all Secured Obligations. 
Notwithstanding any right of any Loan Party to ask, demand, sue for, take or
receive any payment in respect of any Intercompany Indebtedness owed to any Loan
Party, any and all rights, liens and security interests of any Loan Party,
whether now or hereafter arising and howsoever existing, in any assets of any
other Subsidiary of Parent (whether constituting part of the Collateral given to
the Agents for the benefit of the Secured Parties to secure payment of all or
any part of the Secured Obligations or otherwise) shall be and are subordinated
to the rights of the Agents and the Secured Parties in those assets.  No Loan
Party shall have any right to possession of any such asset or to foreclose upon
any such asset, whether by judicial action or otherwise, unless and until all of
the Secured Obligations (other than unasserted contingent indemnity obligations)
shall have been fully paid and satisfied and all financing arrangements among
the Loan Parties and the Lenders have been terminated.  So long as any Event of
Default shall have occurred and be continuing, then, any payment or distribution
of any kind or character, either in cash, securities or other property, which
shall be payable or deliverable upon or with respect to any Intercompany
Indebtedness owed by any Loan Party shall be paid or delivered directly to the
Administrative Agent for application on any of the Secured Obligations, due or
to become due, until such Secured Obligations (other than contingent indemnity
obligations) shall have first been fully paid and satisfied.  Each of the Loan
Parties irrevocably authorize and empower the Administrative Agent to demand,
sue for, collect and receive every such payment or distribution and give
acquittance therefor and to make and present for and on behalf of any Loan Party
such proofs of claim and take such other action, in the Administrative Agent’s
own name or in the name of the applicable Loan Party or otherwise, as the
Administrative Agent may deem necessary or advisable for the enforcement of this
Section 9.17.  The Administrative Agent may vote such proofs of claim in any
such proceeding, receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
apply the same on account of any of the Secured Obligations.  Should any
payment, distribution, security or instrument or proceeds thereof be received by
any Loan Party upon or with respect to the Intercompany Indebtedness at any time
an Event of Default shall have occurred and be continuing and prior to the
satisfaction of all of the Secured Obligations and the termination of all
financing arrangements among the Loan Parties and the Lenders, the applicable
Loan Party shall receive and hold the same in trust, as trustee, for the benefit
of the Lenders and shall so long as any Event of Default shall have occurred and
be continuing promptly deliver the same to the Administrative Agent, for the
benefit of the Lenders, in precisely the form received (except for the
endorsement or assignment of the applicable Loan Party where necessary), for
application to any of the Secured Obligations,

 

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due or not due, and, until so delivered, the same shall be held in trust by the
applicable Loan Party as the property of the Lenders.  If any Loan Party fails
to make any such endorsement or assignment to the Administrative Agent, the
Administrative Agent or any of its officers or employees are irrevocably
authorized to make the same.  So long as any Event of Default shall have
occurred and be continuing, the Loan Parties agree that until the Secured
Obligations have been paid in full (in cash) and satisfied and all financing
arrangements among the Loan Parties and the Lenders have been terminated, the
Loan Parties will neither assign nor transfer to any Person (other than the
Administrative Agent) any claim the Loan Parties have or may have against any
other Subsidiary of the Parent.

 

Section 9.18                                Certain Post Closing Matters.

 

(A)                                  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT, WITHIN THE TIME PERIODS SET FORTH BELOW OR SUCH
LATER DATE TO WHICH THE ADMINISTRATIVE AGENT MAY, IN ITS EXCLUSIVE DISCRETION,
AGREE IN WRITING, THE LOAN PARTIES SHALL DELIVER TO THE ADMINISTRATIVE AGENT:

 

(I)                                     WITHIN NINETY (90) DAYS AFTER THE
CLOSING DATE, MORTGAGES IN FAVOR OF THE APPLICABLE AGENT AND IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT ON SUCH ELIGIBLE
REAL PROPERTY OF THE LOAN PARTIES AS MAY THEN CONSTITUTE ALL OR ANY PART OF THE
U.S. PP&E COMPONENT OR THE CANADIAN PP&E COMPONENT, TOGETHER WITH SUCH UPDATED
TITLE COMMITMENTS AND RELATED REAL ESTATE DUE DILIGENCE MATERIALS AS THE
ADMINISTRATIVE AGENT MAY REQUEST IN ACCORDANCE WITH THE DEFINITION OF ELIGIBLE
REAL PROPERTY;

 

(II)                                  WITHIN SIXTY (60) DAYS AFTER THE CLOSING
DATE, ACCOUNT CONTROL AGREEMENTS IN FAVOR OF THE APPLICABLE AGENT AND IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT ON DEPOSIT
ACCOUNTS AND SECURITIES ACCOUNTS OF THE LOAN PARTIES MAINTAINED WITH ANY
INSTITUTION OTHER THAN SUCH APPLICABLE AGENT;

 

(III)                               WITHIN TEN (10) DAYS AFTER THE CLOSING DATE,
THE FORM OF FINAL ORDER, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT IN IS EXCLUSIVE DISCRETION, WHICH SHALL BE ATTACHED HERETO
AS EXHIBIT A-3, DELIVERY OF WHICH WAS TEMPORARILY WAIVED BY THE LENDERS FOR THE
PURPOSES OF EFFECTUATING THE CLOSING DATE;

 

(IV)                              WITHIN THREE (3) BUSINESS DAYS AFTER THE
BANKRUPTCY COURT ENTERS THE U.S. INTERIM ORDER, ORDERS SHALL HAVE BEEN MADE IN
THE RECOGNITION CASES RECOGNIZING THE U.S. CASES OF SMURFIT-MBI AND SLP FINANCE
GENERAL PARTNERSHIP AND GRANTING CHARGES OVER THE ASSETS OF EACH OF SMURFIT-MBI
AND SLP FINANCE GENERAL PARTNERSHIP AND OTHERWISE IN FORM SATISFACTORY TO THE
ADMINISTRATIVE AGENT, WHICH ORDERS SHALL BE IN FULL FORCE AND EFFECT AND SHALL
NOT HAVE BEEN STAYED, REVERSED, MODIFIED, OR AMENDED IN

 

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ANY RESPECT WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT;

 

(V)                               WITHIN FIFTEEN (15) DAYS AFTER THE CLOSING
DATE, CERTIFICATES REPRESENTING OWNERSHIP INTERESTS IN PLEDGED COLLATERAL (AS
DEFINED IN THE SECURITY AND PLEDGE AGREEMENT) THAT ARE REQUIRED TO BE DELIVERED
TO THE ADMINISTRATIVE AGENT PURSUANT TO THE SECURITY AND PLEDGE AGREEMENT,
TOGETHER WITH AN UPDATE TO EXHIBIT E TO THE SECURITY AND PLEDGE AGREEMENT
PROVIDING THE INFORMATION CONTEMPLATED BY BUT NOT INCLUDED ON SUCH EXHIBIT E AS
OF THE CLOSING DATE;

 

(VI)                            ON OR BEFORE MARCH 27, 2009, (A) EVIDENCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT IN ITS EXCLUSIVE DISCRETION THAT
SMURFIT-STONE PUERTO RICO, INC. HAS REMEDIED ITS FAILURE TO BE IN GOOD STANDING
UNDER THE LAW OF ITS JURISDICTION OF ORGANIZATION AND UNTIL THE ADMINISTRATIVE
AGENT RECEIVES SUCH EVIDENCE, NO ASSETS OF SMURFIT-STONE PUERTO RICO, INC. WILL
BE INCLUDED IN THE U.S. BORROWING BASE AND (B) THE ORGANIZATIONAL DOCUMENTS AND
CERTIFICATE OF GOOD STANDING OR SIMILAR CERTIFICATE FOR SMURFIT-STONE PUERTO
RICO, INC.;

 

(VII)                         WITHIN NINETY (90) DAYS AFTER THE CLOSING DATE,
(A) A MORTGAGE GRANTED BY MBI LIMITED/LIMITÉE, IN ITS CAPACITY AS GENERAL
PARTNER OF SMURFIT-MBI, IN FAVOUR OF THE CANADIAN COLLATERAL AGENT IN RESPECT OF
THE PROPERTY MUNICIPALLY KNOWN AS 8150 PARKHILL DRIVE, MILTON, ONTARIO, AND
(B) A DEED OF HYPOTHEC AND ISSUE OF BONDS BY THE CANADIAN BORROWER IN FAVOUR OF
THE CANADIAN COLLATERAL AGENT, AS FONDÉ DE POUVOIR, IN RESPECT OF THE PROPERTY
MUNICIPALLY KNOWN AS 15400 SHERBROOKE STREET EAST, MONTREAL, QUEBEC, AND SUCH
OTHER DOCUMENTS RELATED THERETO, IN EACH CASE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE CANADIAN ADMINISTRATIVE AGENT, TOGETHER WITH SUCH TITLE
INSURANCE POLICIES AND RELATED REAL ESTATE DUE DILIGENCE MATERIALS AND OTHER
MATERIALS AS THE CANADIAN ADMINISTRATIVE AGENT MAY REQUEST;

 

(VIII)                      WITHIN FIFTEEN (15) DAYS AFTER THE CLOSING DATE,
(A) PLEDGED SECURITY CERTIFICATES (AS DEFINED IN THE CANADIAN SECURITY
AGREEMENT) REQUIRED TO BE DELIVERED TO THE CANADIAN COLLATERAL AGENT PURSUANT TO
THE CANADIAN SECURITY AGREEMENT AND OTHER MATERIALS AS MAY BE REQUIRED TO
PROVIDE THE CANADIAN COLLATERAL AGENT WITH CONTROL OVER SUCH PLEDGED SECURITY
CERTIFICATES, AND (B) EACH INSTRUMENT EVIDENCING OBLIGATIONS OWING TO ANY
CANADIAN LOAN PARTY IN A PRINCIPAL AMOUNT IN EXCESS OF $1,000,000 INCLUDED IN OR
RELATED TO THE COLLATERAL (AS DEFINED IN THE CANADIAN SECURITY AGREEMENT)
ENDORSED AND/OR ACCOMPANIED BY SUCH INSTRUMENTS OF ASSIGNMENT AND TRANSFER IN
SUCH FORM AND SUBSTANCE AS THE CANADIAN COLLATERAL AGENT MAY REASONABLY REQUEST
PURSUANT TO THE

 

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CANADIAN SECURITY AGREEMENT, TOGETHER WITH AN UPDATE TO SCHEDULE A OF THE
CANADIAN SECURITY AGREEMENT PROVIDING THE INFORMATION CONTEMPLATED BY BUT NOT
INCLUDED ON SUCH SCHEDULE A AS OF THE CLOSING DATE;

 

(IX)                             WITHIN ONE (1) DAY AFTER THE CLOSING DATE,
COPIES CERTIFIED BY THE SECRETARY OF STATE OF THE STATE OF DELAWARE OF (X) THE
CERTIFICATE OF MERGER OF SSCE FUNDING, LLC WITH AND INTO STONE RECEIVABLES LLC
AND (Y) THE CERTIFICATE OF MERGER OF STONE RECEIVABLES LLC WITH AND INTO
SMURFIT-STONE CONTAINER ENTERPRISES, INC.;

 

(X)                                WITHIN THREE (3) BUSINESS DAYS AFTER THE
CLOSING DATE, THE TERMINATION AND REASSIGNMENT AGREEMENT WITH RESPECT TO THE
TERMINATION OF THE CANADIAN RECEIVABLES SECURITIZATION PROGRAM IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(XI)                             WITHIN THREE (3) BUSINESS DAYS AFTER THE
CLOSING DATE, THE AMENDED AND RESTATED INITIAL ORDER IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT; AND

 

(XII)                         ON OR BEFORE THE DATE THE BANKRUPTCY COURT ENTERS
THE FINAL ORDER, A CROSS BORDER PROTOCOL WITH RESPECT TO PROCEEDINGS IN THE
CASES BEFORE THE CANADIAN COURT AND THE BANKRUPTCY COURT IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(B)                                 ALL CONDITIONS PRECEDENT AND REPRESENTATIONS
CONTAINED IN THE LOAN DOCUMENTS SHALL BE DEEMED MODIFIED TO THE EXTENT NECESSARY
TO EFFECT THE FOREGOING (AND TO PERMIT THE TAKING OF THE ACTIONS DESCRIBED ABOVE
WITHIN THE TIME PERIODS REQUIRED ABOVE); PROVIDED, THAT TO THE EXTENT ANY
REPRESENTATION AND WARRANTY WOULD NOT BE TRUE BECAUSE THE FOREGOING ACTIONS WERE
NOT TAKEN ON THE CLOSING DATE, THE RESPECTIVE REPRESENTATION AND WARRANTY SHALL
BE REQUIRED TO BE TRUE AND CORRECT AT THE TIME THE RESPECTIVE ACTION IS TAKEN IN
ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS SECTION 9.18.  THE ACCEPTANCE
OF THE BENEFITS OF THE MAKING OF EACH LOAN AND THE ISSUANCE OF EACH LETTER OF
CREDIT SHALL CONSTITUTE A REPRESENTATION, WARRANTY AND COVENANT BY THE LOAN
PARTIES TO EACH OF THE LENDERS THAT THE ACTIONS REQUIRED PURSUANT TO THIS
SECTION 9.18 WILL BE TAKEN WITHIN THE RELEVANT TIME PERIODS REFERRED TO IN THIS
SECTION 9.18 AND THAT, AT SUCH TIME, ALL REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT SHALL THEN BE TRUE AND CORRECT WITHOUT ANY
MODIFICATION PURSUANT TO THIS SECTION 9.18.

 

Section 9.19                                USA Patriot Act.  Each Lender hereby
notifies the Loan Parties that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Patriot Act”), it is required to obtain, verify and record information that
identifies the Loan Parties, which information includes the name and address of
the Loan Parties and other information that will allow such Lender to identify
the Loan Parties in accordance with the Patriot Act.

 

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SECTION 9.20                                JUDGMENT CURRENCY.  (A)          
EXCEPT AS OTHERWISE PROVIDED IN SECTION 11.3, THE LOAN PARTIES’ OBLIGATIONS
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS TO MAKE PAYMENTS IN DOLLARS OR IN
CANADIAN DOLLARS (THE “OBLIGATION CURRENCY”) SHALL NOT BE DISCHARGED OR
SATISFIED BY ANY TENDER OR RECOVERY PURSUANT TO ANY JUDGMENT EXPRESSED IN OR
CONVERTED INTO ANY CURRENCY OTHER THAN THE OBLIGATION CURRENCY, EXCEPT TO THE
EXTENT THAT SUCH TENDER OR RECOVERY RESULTS IN THE EFFECTIVE RECEIPT BY THE
APPLICABLE AGENT, THE APPLICABLE FRONTING BANK OR THE APPLICABLE LENDER OF THE
FULL AMOUNT OF THE OBLIGATION CURRENCY EXPRESSED TO BE PAYABLE TO THE APPLICABLE
AGENT, THE APPLICABLE FRONTING BANK OR THE APPLICABLE LENDER UNDER THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS.  IF, FOR THE PURPOSE OF OBTAINING OR
ENFORCING JUDGMENT AGAINST ANY LOAN PARTY IN ANY COURT OR IN ANY JURISDICTION,
IT BECOMES NECESSARY TO CONVERT INTO OR FROM ANY CURRENCY OTHER THAN THE
OBLIGATION CURRENCY (SUCH OTHER CURRENCY BEING HEREINAFTER REFERRED TO AS THE
“JUDGMENT CURRENCY”) AN AMOUNT DUE IN THE OBLIGATION CURRENCY, THE CONVERSION
SHALL BE MADE, AT THE EXCHANGE RATE, IN THE CASE OF CANADIAN DOLLARS OR DOLLARS,
AND, IN THE CASE OF OTHER CURRENCIES, THE RATE OF EXCHANGE (AS QUOTED BY THE
ADMINISTRATIVE AGENT OR IF THE ADMINISTRATIVE AGENT DOES NOT QUOTE A RATE OF
EXCHANGE ON SUCH CURRENCY, BY A KNOWN DEALER IN SUCH CURRENCY DESIGNATED BY THE
ADMINISTRATIVE AGENT) DETERMINED, IN EACH CASE, AS OF THE DATE IMMEDIATELY
PRECEDING THE DAY ON WHICH THE JUDGMENT IS GIVEN (SUCH BUSINESS DAY BEING
HEREINAFTER REFERRED TO AS THE “JUDGMENT CURRENCY CONVERSION DATE”).

 

(B)                                 IF THERE IS A CHANGE IN THE RATE OF EXCHANGE
PREVAILING BETWEEN THE JUDGMENT CURRENCY CONVERSION DATE AND THE DATE OF ACTUAL
PAYMENT OF THE AMOUNT DUE, THE LOAN PARTIES COVENANT AND AGREE TO PAY, OR CAUSE
TO BE PAID, SUCH ADDITIONAL AMOUNTS, IF ANY (BUT IN ANY EVENT NOT A LESSER
AMOUNT), AS MAY BE NECESSARY TO ENSURE THAT THE AMOUNT PAID IN THE JUDGMENT
CURRENCY, WHEN CONVERTED AT THE RATE OF EXCHANGE PREVAILING ON THE DATE OF
PAYMENT, WILL PRODUCE THE AMOUNT OF THE OBLIGATION CURRENCY WHICH COULD HAVE
BEEN PURCHASED WITH THE AMOUNT OF JUDGMENT CURRENCY STIPULATED IN THE JUDGMENT
OR JUDICIAL AWARD AT THE RATE OF EXCHANGE PREVAILING ON THE JUDGMENT CURRENCY
CONVERSION DATE.

 

(C)                                  FOR PURPOSES OF DETERMINING THE AMOUNT OF
ANY PAYMENT IN THE OBLIGATION CURRENCY UNDER THIS SECTION 9.20, THE RATE OF
EXCHANGE USED SHALL TAKE INTO ACCOUNT ANY PREMIUM AND COSTS PAYABLE IN
CONNECTION WITH THE PURCHASE OF THE OBLIGATION CURRENCY.

 

Section 9.21                                Several Obligations; Nonreliance;
Violation of Law. The respective obligations of the Lenders hereunder are
several and not joint and the failure of any Lender to make any Loan or perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. Each Lender hereby represents that it is not relying
on or looking to any margin stock for the repayment of the Borrowings provided
for herein. Anything contained in this Agreement to the contrary
notwithstanding, neither any Fronting Bank nor any Lender shall be obligated to
extend credit to the Borrowers in violation of any Requirement of Law.

 

SECTION 9.22                                CANADIAN ANTI-MONEY LAUNDERING
LEGISLATION.

 

(A)                                  EACH OF THE CANADIAN LOAN PARTIES
ACKNOWLEDGES THAT, PURSUANT TO THE PROCEEDS OF CRIME (MONEY LAUNDERING) AND
TERRORIST FINANCING ACT (CANADA) AND OTHER APPLICABLE ANTI-MONEY LAUNDERING,
ANTI-TERRORIST FINANCING, GOVERNMENT SANCTION AND “KNOW YOUR CLIENT” LAWS,
WHETHER WITHIN CANADA OR ELSEWHERE (COLLECTIVELY, INCLUDING ANY GUIDELINES OR

 

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ORDERS THEREUNDER, “AML LEGISLATION”), THE APPLICABLE AGENT AND THE LENDERS MAY
BE REQUIRED TO OBTAIN, VERIFY AND RECORD INFORMATION REGARDING SUCH CANADIAN
LOAN PARTY, ITS DIRECTORS, AUTHORIZED SIGNING OFFICERS, DIRECT OR INDIRECT
SHAREHOLDERS OR OTHER PERSONS IN CONTROL OF SUCH CANADIAN LOAN PARTY, AND THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE CANADIAN LOAN PARTIES SHALL
PROMPTLY PROVIDE ALL SUCH INFORMATION, INCLUDING SUPPORTING DOCUMENTATION AND
OTHER EVIDENCE, AS MAY BE REASONABLY REQUESTED BY ANY LENDER OR THE APPLICABLE
AGENT, OR ANY PROSPECTIVE ASSIGN OR PARTICIPANT OF A LENDER OR THE APPLICABLE
AGENT, IN ORDER TO COMPLY WITH ANY APPLICABLE AML LEGISLATION, WHETHER NOW OR
HEREAFTER IN EXISTENCE.

 

(B)                                 IF THE APPLICABLE AGENT HAS ASCERTAINED THE
IDENTITY OF ANY CANADIAN LOAN PARTY OR ANY AUTHORIZED SIGNATORIES OF SUCH
CANADIAN LOAN PARTY FOR THE PURPOSES OF APPLICABLE AML LEGISLATION, THEN THE
APPLICABLE AGENT:

 

 (i)                                  shall be deemed to have done so as an
agent for each Lender, and this Agreement shall constitute a “written agreement”
in such regard between each Lender and such Applicable Agent within the meaning
of applicable AML Legislation; and

 

(ii)                                  shall provide to each Lender copies of all
information obtained in such regard without any representation or warranty as to
its accuracy or completeness.

 

Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each of the Lenders agrees that the Applicable Agent has no obligation
to ascertain the identity of any Canadian Loan Party or any authorized
signatories of such Canadian Loan Party on behalf of any Lender, or to confirm
the completeness or accuracy of any information it obtains from such Canadian
Loan Party or any such authorized signatory in doing so.

 

SECTION 9.23                                CONVERSION.

 

(A)                                  IN CONNECTION WITH THE COMPLETION OF
SYNDICATION EFFORTS, ON A DATE DESIGNATED BY THE ADMINISTRATIVE AGENT ON NOT
LESS THAN ONE (1) BUSINESS DAYS NOTICE TO THE U.S. BORROWER, THE CONVERTING
LENDERS AND BANK OF AMERICA, N.A., AND WHICH DATE SHALL BE NO LATER THAN THE
LATER OF (I) THE DATE THE BANKRUPTCY COURT ENTERS THE FINAL ORDER AND (II) FORTY
(40) DAYS AFTER THE CLOSING DATE (THE “CONVERSION DATE”), TO THE EXTENT THE
PERCENTAGE OBTAINED BY DIVIDING THE U.S. REVOLVING COMMITMENT OF A CONVERTING
LENDER ON THE CLOSING DATE BY THE AGGREGATE COMMITMENTS OF SUCH CONVERTING
LENDER ON THE CLOSING DATE (IMMEDIATELY PRIOR TO THE INITIAL FUNDING OF THE TERM
LOANS) IS GREATER THAN 33.333%, THE CONVERTING LENDERS MAY ELECT TO DECREASE
THEIR U.S. TRANCHE A REVOLVING COMMITMENTS BY AN AMOUNT TO BE SPECIFIED BY EACH
SUCH CONVERTING LENDER AND INCREASE THEIR OUTSTANDING U.S. TERM LOANS BY THE
AMOUNT OF SUCH DECREASE (EACH, A “U.S. TERM LOAN CONVERSION”), PROVIDED, THAT
THE AMOUNT OF A U.S. TERM LOAN CONVERSION BY A CONVERTING LENDER SHALL NOT
RESULT IN THE PERCENTAGE OBTAINED BY DIVIDING THE U.S. REVOLVING COMMITMENT OF A
CONVERTING LENDER (AFTER GIVING EFFECT TO SUCH U.S. TERM LOAN CONVERSION) BY THE
AGGREGATE REVOLVING COMMITMENTS AND TERM LOANS OF SUCH CONVERTING LENDER AT THE
TIME OF SUCH CONVERSION (AFTER GIVING EFFECT TO ANY ASSIGNMENTS BY SUCH
CONVERTING LENDER AFTER THE CLOSING DATE AND ON OR PRIOR TO SUCH DATE, THE “U.S.
REVOLVING CREDIT HOLD PERCENTAGE”) TO BE LESS THAN 33.333%; PROVIDED, FURTHER,
THAT NO U.S. TERM LOAN

 

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CONVERSION SHALL RESULT IN THE AGGREGATE PRINCIPAL AMOUNT OF THE U.S. TRANCHE A
REVOLVING LOANS TO BE GREATER THAN (X) PRIOR TO THE EXPIRATION OF THE INTERIM
PERIOD, THE INTERIM U.S. TRANCHE A REVOLVING COMMITMENT (AFTER GIVING EFFECT TO
SUCH CONVERSION), AND (Y) FROM AND AFTER THE EXPIRATION OF THE INTERIM PERIOD,
THE U.S. TRANCHE A REVOLVING COMMITMENT (AS SUCH U.S. TRANCHE A REVOLVING
COMMITMENT MAY BE REDUCED FROM TIME TO TIME PURSUANT TO THE TERMS OF THIS
AGREEMENT AND AFTER GIVING EFFECT TO SUCH CONVERSION); AND PROVIDED, FURTHER,
THAT IF THE U.S. REVOLVING CREDIT HOLD PERCENTAGE OF THE CONVERTING LENDERS IS
LESS THAN THE PERCENTAGE OBTAINED BY DIVIDING THE U.S. REVOLVING COMMITMENT OF
BANK OF AMERICA, N.A. BY THE AGGREGATE REVOLVING COMMITMENTS AND TERM LOANS OF
BANK OF AMERICA, N.A. AT THE TIME OF SUCH CONVERSION, BANK OF AMERICA, N.A.
SHALL BE DEEMED TO BE A CONVERTING LENDER AND MAY DECREASE SUCH AMOUNT OF ITS
U.S. TRANCHE A REVOLVING COMMITMENT (AND THEREBY INCREASE ITS OUTSTANDING U.S.
TERM LOANS BY SUCH AMOUNT) AS MAY BE NECESSARY TO REDUCE ITS U.S. REVOLVING
CREDIT HOLD PERCENTAGE TO NOT LESS THAN THE U.S. REVOLVING CREDIT HOLD
PERCENTAGE OF THE OTHER CONVERTING LENDERS.  TO EFFECT A U.S. TERM LOAN
CONVERSION, A CONVERTING LENDER SHALL PROVIDE WRITTEN NOTICE (A “U.S. CONVERSION
NOTICE”) TO THE U.S. BORROWER, THE OTHER CONVERTING LENDERS AND THE
ADMINISTRATIVE AGENT ON OR PRIOR TO THE CONVERSION DATE SETTING FORTH THE
PERCENTAGE OF SUCH CONVERTING LENDER’S U.S. TRANCHE A REVOLVING COMMITMENT THAT
WILL BE CONVERTED TO A U.S. TERM LOAN.  ON THE DATE OF THE ADMINISTRATIVE
AGENT’S DELIVERY OF NOTICE REGARDING THE ESTABLISHMENT OF THE CONVERSION DATE,
JPMCB AND DEUTSCHE BANK TRUST COMPANY AMERICAS SHALL ADVISE BANK OF AMERICA,
N.A. OF THE U.S. REVOLVING CREDIT HOLD PERCENTAGE.  EACH U.S. CONVERSION NOTICE
RECEIVED BY THE ADMINISTRATIVE AGENT SHALL BE IRREVOCABLE.

 

(B)                                 SUBJECT TO THE LIMITATIONS SET FORTH IN
SECTION 9.23(A) ABOVE, ON THE CONVERSION DATE SPECIFIED BY A CONVERTING LENDER
IN ITS U.S. CONVERSION NOTICE:

 

(I)                                     SUCH CONVERTING LENDER SHALL MAKE AN
AMOUNT AVAILABLE TO THE ADMINISTRATIVE AGENT AT ITS OFFICE MOST RECENTLY
DESIGNATED FOR SUCH PURPOSE, NO LATER THAN 12:00 NOON, NEW YORK CITY TIME, IN
U.S. DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS, EQUAL TO (A) THE PERCENTAGE OF
SUCH CONVERTING LENDER’S U.S. TRANCHE A REVOLVING COMMITMENT THAT WILL BE
CONVERTED TO A U.S. TERM LOAN MULTIPLIED BY (B) THE DIFFERENCE BETWEEN (X) THE
U.S. TRANCHE A REVOLVING COMMITMENT OF SUCH CONVERTING LENDER ON SUCH DATE (AS
DETERMINED IMMEDIATELY PRIOR TO ANY U.S. TERM LOAN CONVERSIONS ON SUCH DATE),
MINUS (Y) THE AGGREGATE OUTSTANDING U.S. TRANCHE A REVOLVING LOANS OF SUCH
CONVERTING LENDER ON SUCH DATE (PRIOR TO GIVING EFFECT TO ANY CONVERSION OF U.S.
TRANCHE A REVOLVING LOANS TO U.S. TERM LOANS AS PROVIDED IN CLAUSE
(II)(Y) BELOW); PROVIDED, THAT, IF THE FOREGOING AMOUNT IS ZERO, THE CONVERTING
LENDER SHALL NOT BE REQUIRED TO MAKE ANY AMOUNT AVAILABLE TO THE ADMINISTRATIVE
AGENT;

 

(II)                                  UPON THE ADMINISTRATIVE AGENT’S RECEIPT OF
FUNDS PURSUANT TO CLAUSE (I) ABOVE, IF APPLICABLE, (X) THE ADMINISTRATIVE AGENT
SHALL DEPOSIT SUCH FUNDS IN THE U.S. TERM LOAN COLLATERAL ACCOUNT AND SUCH FUNDS
SHALL BE DEEMED TO BE AN OUTSTANDING U.S. TERM LOAN (SUBJECT TO DISBURSEMENT TO
THE U.S. BORROWER AS PROVIDED IN

 

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SECTION 2.7(C)), (Y) AN AMOUNT EQUAL TO (A) THE PERCENTAGE OF SUCH CONVERTING
LENDER’S U.S. TRANCHE A REVOLVING COMMITMENT THAT WILL BE CONVERTED TO A U.S.
TERM LOAN MULTIPLIED BY (B) THE AGGREGATE OUTSTANDING U.S. TRANCHE A REVOLVING
LOANS OF SUCH CONVERTING LENDER ON SUCH DATE (PRIOR TO GIVING EFFECT TO ANY
CONVERSION OF U.S. TRANCHE A REVOLVING LOANS TO U.S. TERM LOANS AS PROVIDED IN
THIS CLAUSE (Y)) SHALL BE DEEMED TO BE AN OUTSTANDING U.S. TERM LOAN AND SHALL
CEASE TO BE A U.S. TRANCHE A REVOLVING LOAN, AND (Z) THE U.S. TRANCHE A
REVOLVING COMMITMENT OF SUCH CONVERTING LENDER SHALL BE REDUCED PERMANENTLY IN
AN AMOUNT EQUAL TO THE AMOUNT OF SUCH CONVERTING LENDER’S U.S. TRANCHE A
REVOLVING COMMITMENT THAT WAS CONVERTED TO A U.S. TERM LOAN; AND

 

(III)                               EACH U.S. TERM LOAN MADE PURSUANT TO CLAUSE
(I) ABOVE OR DEEMED TO BE MADE PURSUANT TO CLAUSE (II) ABOVE SHALL BE AN ABR
LOAN (WHICH ABR LOAN MAY BE CONVERTED IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT).

 

(C)                                  IN CONNECTION WITH THE COMPLETION OF
SYNDICATION EFFORTS, ON THE CONVERSION DATE, TO THE EXTENT THE PERCENTAGE
OBTAINED BY DIVIDING THE CANADIAN REVOLVING COMMITMENT OF A CONVERTING LENDER ON
THE CLOSING DATE BY THE AGGREGATE COMMITMENTS OF SUCH CONVERTING LENDER ON THE
CLOSING DATE (IMMEDIATELY PRIOR TO THE INITIAL FUNDING OF THE TERM LOANS) IS
GREATER THAN 8.666%, THE CONVERTING LENDERS MAY ELECT TO DECREASE THEIR CANADIAN
REVOLVING COMMITMENTS BY AN AMOUNT TO BE SPECIFIED BY EACH SUCH CONVERTING
LENDER AND INCREASE THEIR OUTSTANDING CANADIAN TERM LOANS BY THE AMOUNT OF SUCH
DECREASE (EACH, A “CANADIAN TERM LOAN CONVERSION”), PROVIDED, THAT THE AMOUNT OF
A CANADIAN TERM LOAN CONVERSION BY A CONVERTING LENDER SHALL NOT RESULT IN THE
PERCENTAGE OBTAINED BY DIVIDING THE CANADIAN REVOLVING COMMITMENT OF A
CONVERTING LENDER (AFTER GIVING EFFECT TO SUCH CANADIAN TERM LOAN CONVERSION) BY
THE AGGREGATE REVOLVING COMMITMENTS AND TERM LOANS OF SUCH CONVERTING LENDER AT
THE TIME OF SUCH CONVERSION (AFTER GIVING EFFECT TO ANY ASSIGNMENTS BY SUCH
CONVERTING LENDER AFTER THE CLOSING DATE AND ON OR PRIOR TO SUCH DATE, THE
“CANADIAN REVOLVING CREDIT HOLD PERCENTAGE”) TO BE LESS THAN 8.666%; PROVIDED,
FURTHER, THAT NO CANADIAN TERM LOAN CONVERSION SHALL RESULT IN THE CANADIAN
REVOLVING CREDIT UTILIZATION TO BE GREATER THAN (X) PRIOR TO THE EXPIRATION OF
THE INTERIM PERIOD, THE INTERIM CANADIAN REVOLVING COMMITMENT (AFTER GIVING
EFFECT TO SUCH CONVERSION), AND (Y) FROM AND AFTER THE EXPIRATION OF THE INTERIM
PERIOD, THE CANADIAN REVOLVING COMMITMENT (AS SUCH CANADIAN REVOLVING COMMITMENT
MAY BE REDUCED FROM TIME TO TIME PURSUANT TO THE TERMS OF THIS AGREEMENT AND
AFTER GIVING EFFECT TO SUCH CONVERSION); AND PROVIDED, FURTHER, THAT IF THE
CANADIAN REVOLVING CREDIT HOLD PERCENTAGE OF THE CONVERTING LENDERS IS LESS THAN
THE PERCENTAGE OBTAINED BY DIVIDING THE CANADIAN REVOLVING COMMITMENT OF BANK OF
AMERICA, N.A., CANADA BRANCH, BY THE AGGREGATE REVOLVING COMMITMENTS AND TERM
LOANS OF BANK OF AMERICA, N.A., CANADA BRANCH, AT THE TIME OF SUCH CONVERSION,
BANK OF AMERICA, N.A., CANADA BRANCH, SHALL BE DEEMED TO BE A CONVERTING LENDER
AND MAY DECREASE SUCH AMOUNT OF ITS CANADIAN REVOLVING COMMITMENT (AND THEREBY
INCREASE ITS OUTSTANDING CANADIAN TERM LOANS BY SUCH AMOUNT) AS MAY BE NECESSARY
TO REDUCE ITS CANADIAN REVOLVING CREDIT HOLD PERCENTAGE TO NOT LESS THAN THE
CANADIAN REVOLVING CREDIT HOLD PERCENTAGE OF THE OTHER CONVERTING LENDERS.  TO
EFFECT A CANADIAN TERM LOAN CONVERSION,

 

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A CONVERTING LENDER SHALL PROVIDE WRITTEN NOTICE (A “CANADIAN CONVERSION
NOTICE”) TO THE CANADIAN BORROWER, THE OTHER CONVERTING LENDERS AND THE CANADIAN
ADMINISTRATIVE AGENT ON OR PRIOR TO THE CONVERSION DATE SETTING FORTH THE
PERCENTAGE OF SUCH CONVERTING LENDER’S CANADIAN REVOLVING COMMITMENT THAT WILL
BE CONVERTED TO A CANADIAN TERM LOAN.  ON THE DATE OF THE ADMINISTRATIVE AGENT’S
DELIVERY OF NOTICE REGARDING THE ESTABLISHMENT OF THE CONVERSION DATE, JPMCB AND
DEUTSCHE BANK TRUST COMPANY AMERICAS SHALL ADVISE BANK OF AMERICA, N.A., CANADA
BRANCH, OF THE CANADIAN REVOLVING CREDIT HOLD PERCENTAGE.  EACH CANADIAN
CONVERSION NOTICE RECEIVED BY THE CANADIAN ADMINISTRATIVE AGENT SHALL BE
IRREVOCABLE.

 

(D)                                 SUBJECT TO THE LIMITATIONS SET FORTH IN
SECTION 9.23(C) ABOVE, ON THE CONVERSION DATE SPECIFIED BY A CONVERTING LENDER
IN ITS CANADIAN CONVERSION NOTICE:

 

(I)                                     SUCH CONVERTING LENDER SHALL MAKE AN
AMOUNT AVAILABLE TO THE CANADIAN ADMINISTRATIVE AGENT AT ITS OFFICE MOST
RECENTLY DESIGNATED FOR SUCH PURPOSE, NO LATER THAN 12:00 NOON, NEW YORK CITY
TIME, IN U.S. DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS, EQUAL TO (A) THE
PERCENTAGE OF SUCH CONVERTING LENDER’S CANADIAN REVOLVING COMMITMENT THAT WILL
BE CONVERTED TO A CANADIAN TERM LOAN MULTIPLIED BY (B) THE DIFFERENCE BETWEEN
(X) THE CANADIAN REVOLVING COMMITMENT OF SUCH CONVERTING LENDER ON SUCH DATE (AS
DETERMINED IMMEDIATELY PRIOR TO ANY CANADIAN TERM LOAN CONVERSIONS ON SUCH
DATE), MINUS (Y) THE AGGREGATE OUTSTANDING CANADIAN REVOLVING LOANS OF SUCH
CONVERTING LENDER ON SUCH DATE (PRIOR TO GIVING EFFECT TO ANY CONVERSION OF
CANADIAN REVOLVING LOANS TO CANADIAN TERM LOANS AS PROVIDED IN CLAUSE
(II)(Y) BELOW); PROVIDED, THAT, IF THE FOREGOING AMOUNT IS ZERO, THE CONVERTING
LENDER SHALL NOT BE REQUIRED TO MAKE ANY AMOUNT AVAILABLE TO THE CANADIAN
ADMINISTRATIVE AGENT;

 

(II)                                  UPON THE CANADIAN ADMINISTRATIVE AGENT’S
RECEIPT OF FUNDS PURSUANT TO CLAUSE (I) ABOVE, IF APPLICABLE, (X) THE CANADIAN
ADMINISTRATIVE AGENT SHALL DEPOSIT SUCH FUNDS IN THE CANADIAN TERM LOAN
COLLATERAL ACCOUNT AND SUCH FUNDS SHALL BE DEEMED TO BE AN OUTSTANDING CANADIAN
TERM LOAN (SUBJECT TO DISBURSEMENT TO THE CANADIAN BORROWER AS PROVIDED IN
SECTION 2.7(D)), (Y) AN AMOUNT EQUAL TO (A) THE PERCENTAGE OF SUCH CONVERTING
LENDER’S CANADIAN REVOLVING COMMITMENT THAT WILL BE CONVERTED TO A CANADIAN TERM
LOAN MULTIPLIED BY (B) THE AGGREGATE OUTSTANDING CANADIAN REVOLVING LOANS OF
SUCH CONVERTING LENDER ON SUCH DATE (PRIOR TO GIVING EFFECT TO ANY CONVERSION OF
CANADIAN REVOLVING LOANS TO CANADIAN TERM LOANS AS PROVIDED IN THIS CLAUSE (Y))
SHALL BE DEEMED TO BE AN OUTSTANDING CANADIAN TERM LOAN AND SHALL CEASE TO BE A
CANADIAN REVOLVING LOAN, AND (Z) THE CANADIAN REVOLVING COMMITMENT OF SUCH
CONVERTING LENDER SHALL BE REDUCED PERMANENTLY IN AN AMOUNT EQUAL TO THE AMOUNT
OF SUCH CONVERTING LENDER’S CANADIAN REVOLVING COMMITMENT THAT WAS CONVERTED TO
A CANADIAN TERM LOAN;

 

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(III)                               EACH CANADIAN TERM LOAN MADE PURSUANT TO
CLAUSE (I) ABOVE OR DEEMED TO BE MADE PURSUANT TO CLAUSE (II) ABOVE SHALL BE AN
ABR LOAN (WHICH ABR LOAN MAY BE CONVERTED IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT); AND

 

(IV)                              EACH CANADIAN REVOLVING LENDER’S UNDIVIDED
INTEREST AND PARTICIPATION IN EACH CANADIAN REVOLVING FACILITY LETTER OF CREDIT
PURSUANT TO SECTION 2.4(F) SHALL BE ADJUSTED TO ACCOUNT FOR THE REDUCTION IN THE
AGGREGATE CANADIAN REVOLVING COMMITMENT.

 

Section 9.24                                Restated Agreement.  Each reference
to the Prior Agreement in any other Loan Document shall, without further
amendment, be deemed to be a reference to this Agreement.

 

ARTICLE 10. GUARANTY

 

Section 10.1                                U.S. Guaranty.  Each of the
Borrowers and the U.S. Guarantors, each in its capacity as a Guarantor, hereby
agrees that it is jointly and severally liable for, and, as primary obligor and
not merely as surety, absolutely and unconditionally guarantees to the
Administrative Agent (for the benefit of the Secured Parties) the prompt payment
when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all costs and expenses
including, without limitation, all court costs and attorneys’ and paralegals’
fees (including allocated costs of in-house counsel and paralegals) and expenses
paid or incurred by the Secured Parties in endeavoring to collect all or any
part of the Secured Obligations from, or in prosecuting any action against, any
Borrower, any other Guarantor or any other guarantor of all or any part of the
Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “U.S. Guaranteed Obligations”).  Each of the
Borrowers and the U.S. Guarantors further agrees that the U.S. Guaranteed
Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee
notwithstanding any such extension or renewal. All terms of this Guaranty apply
to and may be enforced by or on behalf of any domestic or foreign branch or
Affiliate of any Lender that extended any portion of the Secured Obligations.

 

Section 10.2                                Canadian Guaranty.  Each of the
Canadian Guarantors, each in its capacity as a Guarantor, hereby agrees that it
is jointly and severally liable for, and, as primary obligor and not merely as
surety, absolutely and unconditionally guarantees to the Canadian Administrative
Agent (for the benefit of the Secured Parties) the prompt payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all times
thereafter, of the Canadian Secured Obligations and all costs and expenses
including, without limitation, all court costs and attorneys’ and paralegals’
fees (including allocated costs of in-house counsel and paralegals) and expenses
paid or incurred by the Secured Parties in endeavoring to collect all or any
part of the Canadian Secured Obligations from, or in prosecuting any action
against, the Canadian Borrower, any other Canadian Guarantor or any other
guarantor of all or any part of the Canadian Secured Obligations (such costs and
expenses, together with the Canadian Secured Obligations, collectively the
“Canadian Guaranteed Obligations”, and, together with the U.S. Guaranteed
Obligations, the “Guaranteed Obligations”). Each of the Canadian Guarantors

 

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further agrees that the Canadian Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Guaranty apply to and may be enforced by or on behalf
of any domestic or foreign branch or Affiliate of any Lender that extended any
portion of the Canadian Secured Obligations.

 

Section 10.3                                Guaranty of Payment.  This Guaranty
is a guaranty of payment and not of collection. Each Guarantor waives any right
to require any Secured Party to sue any Loan Party, any other guarantor, or any
other person obligated for all or any part of the Guaranteed Obligations (each,
an “Obligated Party”), or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Obligations.

 

SECTION 10.4                                NO DISCHARGE OR DIMINISHMENT OF
GUARANTY.

 

(A)                                  EXCEPT AS OTHERWISE PROVIDED FOR HEREIN,
THE OBLIGATIONS OF EACH GUARANTOR HEREUNDER ARE UNCONDITIONAL AND ABSOLUTE AND
NOT SUBJECT TO ANY REDUCTION, LIMITATION, IMPAIRMENT OR TERMINATION FOR ANY
REASON (OTHER THAN THE INDEFEASIBLE PAYMENT IN FULL IN CASH OF THE GUARANTEED
OBLIGATIONS), INCLUDING:  (I) ANY CLAIM OF WAIVER, RELEASE, EXTENSION, RENEWAL,
SETTLEMENT, SURRENDER, ALTERATION, OR COMPROMISE OF ANY OF THE GUARANTEED
OBLIGATIONS, BY OPERATION OF LAW OR OTHERWISE; (II) ANY CHANGE IN THE CORPORATE
EXISTENCE, STRUCTURE OR OWNERSHIP OF ANY LOAN PARTY OR ANY OTHER GUARANTOR OF OR
OTHER PERSON LIABLE FOR ANY OF THE GUARANTEED OBLIGATIONS; (III) ANY INSOLVENCY,
BANKRUPTCY, REORGANIZATION OR OTHER SIMILAR PROCEEDING AFFECTING ANY OBLIGATED
PARTY, OR THEIR ASSETS OR ANY RESULTING RELEASE OR DISCHARGE OF ANY OBLIGATION
OF ANY OBLIGATED PARTY; OR (IV) THE EXISTENCE OF ANY CLAIM, SETOFF OR OTHER
RIGHTS WHICH ANY GUARANTOR MAY HAVE AT ANY TIME AGAINST ANY OBLIGATED PARTY, THE
AGENTS, ANY FRONTING BANK, ANY LENDER, OR ANY OTHER PERSON, WHETHER IN
CONNECTION HEREWITH OR IN ANY UNRELATED TRANSACTIONS.

 

(B)                                 THE OBLIGATIONS OF EACH GUARANTOR HEREUNDER
ARE NOT SUBJECT TO ANY DEFENSE OR SETOFF, COUNTERCLAIM, RECOUPMENT, OR
TERMINATION WHATSOEVER BY REASON OF THE INVALIDITY, ILLEGALITY, OR
UNENFORCEABILITY OF ANY OF THE GUARANTEED OBLIGATIONS OR OTHERWISE, OR ANY
PROVISION OF APPLICABLE LAW OR REGULATION PURPORTING TO PROHIBIT PAYMENT BY ANY
OBLIGATED PARTY, OF THE GUARANTEED OBLIGATIONS OR ANY PART THEREOF.

 

(C)                                  FURTHER, THE OBLIGATIONS OF ANY GUARANTOR
HEREUNDER ARE NOT DISCHARGED OR IMPAIRED OR OTHERWISE AFFECTED BY: (I) THE
FAILURE OF ANY SECURED PARTY TO ASSERT ANY CLAIM OR DEMAND OR TO ENFORCE ANY
REMEDY WITH RESPECT TO ALL OR ANY PART OF THE GUARANTEED OBLIGATIONS; (II) ANY
WAIVER OR MODIFICATION OF OR SUPPLEMENT TO ANY PROVISION OF ANY AGREEMENT
RELATING TO THE GUARANTEED OBLIGATIONS; (III) ANY RELEASE, NON-PERFECTION, OR
INVALIDITY OF ANY INDIRECT OR DIRECT SECURITY FOR THE OBLIGATIONS OF ANY LOAN
PARTY FOR ALL OR ANY PART OF THE GUARANTEED OBLIGATIONS OR ANY OBLIGATIONS OF
ANY OTHER GUARANTOR OF OR OTHER PERSON LIABLE FOR ANY OF THE GUARANTEED
OBLIGATIONS; (IV) ANY ACTION OR FAILURE TO ACT BY ANY SECURED PARTY WITH RESPECT
TO ANY COLLATERAL SECURING ANY PART OF THE GUARANTEED OBLIGATIONS; OR (V) ANY
DEFAULT, FAILURE OR DELAY, WILLFUL OR OTHERWISE, IN THE PAYMENT OR PERFORMANCE
OF ANY OF THE GUARANTEED OBLIGATIONS, OR ANY OTHER CIRCUMSTANCE, ACT, OMISSION
OR DELAY THAT MIGHT IN ANY MANNER OR TO ANY EXTENT VARY THE RISK OF SUCH
GUARANTOR OR THAT WOULD OTHERWISE OPERATE AS A DISCHARGE OF ANY GUARANTOR AS A
MATTER OF LAW OR EQUITY (OTHER THAN THE INDEFEASIBLE PAYMENT IN FULL IN CASH OF
THE GUARANTEED OBLIGATIONS).

 

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Section 10.5                                Defenses Waived.  To the fullest
extent permitted by applicable law, each Guarantor hereby waives any defense
based on or arising out of any defense of any Borrower or any other Guarantor or
the unenforceability of all or any part of the Guaranteed Obligations from any
cause, or the cessation from any cause of the liability of any Borrower or any
other Guarantor, other than the indefeasible payment in full in cash of the
Guaranteed Obligations. Without limiting the generality of the foregoing, each
Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and, to the fullest extent permitted by law, any notice not provided for herein,
as well as any requirement that at any time any action be taken by any person
against any Obligated Party, or any other person.  Each Agent may, at its
election, foreclose on any Collateral held by it by one or more judicial or
nonjudicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral
securing all or a part of the Guaranteed Obligations, compromise or adjust any
part of the Guaranteed Obligations, make any other accommodation with any
Obligated Party or exercise any other right or remedy available to it against
any Obligated Party, without affecting or impairing in any way the liability of
such Guarantor under this Guaranty except to the extent the Guaranteed
Obligations have been fully and indefeasibly paid in cash.  To the fullest
extent permitted by applicable law, each Guarantor waives any defense arising
out of any such election even though that election may operate, pursuant to
applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against any Obligated
Party or any security.

 

Section 10.6                                Rights of Subrogation.  No Guarantor
will assert any right, claim or cause of action, including, without limitation,
a claim of subrogation, contribution or indemnification that it has against any
Obligated Party, or any Collateral, until the Guaranteed Obligations have been
paid in full and the Commitments have been terminated.

 

Section 10.7                                Reinstatement; Stay of
Acceleration.  If at any time any payment of any portion of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, or reorganization of any Loan Party or otherwise, each
Guarantor’s obligations under this Guaranty with respect to that payment shall
be reinstated at such time as though the payment had not been made and whether
or not any Secured Party is in possession of this Guaranty.  If acceleration of
the time for payment of any of the Guaranteed Obligations is stayed upon the
insolvency, bankruptcy or reorganization of any Loan Party, all such amounts
otherwise subject to acceleration under the terms of any agreement relating to
the Guaranteed Obligations shall nonetheless be payable by the Guarantors
forthwith on demand by the Lender.

 

Section 10.8                                Information.  Each Guarantor assumes
all responsibility for being and keeping itself informed of the Borrowers’
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks that each Guarantor assumes and incurs under this Guaranty,
and agrees that no Secured Party shall have any duty to advise any Guarantor of
information known to it regarding those circumstances or risks.

 

Section 10.9                                Termination.  Each Guarantor
acknowledges and agrees that this Guaranty is irrevocable until the Guaranteed
Obligations have been paid in full and the Commitments have been terminated. The
Lenders may continue to make loans or extend credit

 

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to the Borrowers based on this Guaranty. Each Guarantor will continue to be
liable to the Lenders for any Guaranteed Obligations created, assumed or
committed from time to time, and all subsequent renewals, extensions,
modifications and amendments with respect to, or substitutions for, all or any
part of that Guaranteed Obligations.

 

Section 10.10                          Taxes.  All payments of the Guaranteed
Obligations will be made by each Guarantor free and clear of and without
deduction for any Taxes in accordance with Section 2.19.

 

Section 10.11                          Maximum Liability.  The provisions of
this Guaranty are severable, and in any action or proceeding involving any
corporate law of any Governmental Authority, or any state, provincial, regional,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Guarantor under
this Guaranty would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of such Guarantor’s liability under this
Guaranty, then, notwithstanding any other provision of this Guaranty to the
contrary, the amount of such liability shall, without any further action by the
Guarantors or the Lenders, be automatically limited and reduced to the highest
amount that is valid and enforceable as determined in such action or proceeding
(such highest amount determined hereunder being the relevant Guarantor’s
“Maximum Liability”.  This Section with respect to the Maximum Liability of each
Guarantor is intended solely to preserve the rights of the Lenders to the
maximum extent not subject to avoidance under applicable law, and no Guarantor
nor any other person or entity shall have any right or claim under this
Section with respect to such Maximum Liability, except to the extent necessary
so that the obligations of any Guarantor hereunder shall not be rendered
voidable under applicable law. Each Guarantor agrees that the Guaranteed
Obligations may at any time and from time to time exceed the Maximum Liability
of each Guarantor without impairing this Guaranty or affecting the rights and
remedies of the Lenders hereunder, provided that, nothing in this sentence shall
be construed to increase any Guarantor’s obligations hereunder beyond its
Maximum Liability.

 

Section 10.12                          Contribution.  In the event any Guarantor
(a “Paying Guarantor”) shall make any payment or payments under this Guaranty or
shall suffer any loss as a result of any realization upon any collateral granted
by it to secure its obligations under this Guaranty, each other Guarantor (each
a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount
equal to such Non-Paying Guarantor’s “Contribution Percentage” of such payment
or payments made, or losses suffered, by such Paying Guarantor.  For purposes of
this ARTICLE 10, each Non-Paying Guarantor’s “Contribution Percentage” with
respect to any such payment or loss by a Paying Guarantor shall be determined as
of the date on which such payment or loss was made by reference to the ratio of
(i) such Non-Paying Guarantor’s Maximum Liability as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Borrowers after the Closing Date (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrowers after the Closing Date (whether by loan, capital
infusion or by other means).  Nothing in this

 

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provision shall affect any Guarantor’s several liability for the entire amount
of the Guaranteed Obligations (up to such Guarantor’s Maximum Liability).  Each
of the Guarantors covenants and agrees that its right to receive any
contribution under this Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations.  This provision is for the benefit of both the Agents,
the Fronting Banks, the Lenders and the Guarantors and may be enforced by any
one, or more, or all of them in accordance with the terms hereof.

 

Section 10.13                          Liability Cumulative.  The liability of
each Loan Party as a Guarantor under this ARTICLE 10 is in addition to and shall
be cumulative with all liabilities of each Loan Party to the Agents, the
Fronting Banks and the Lenders under this Agreement and the other Loan Documents
to which such Loan Party is a party or in respect of any obligations or
liabilities of the other Loan Parties, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.

 

ARTICLE 11. COLLECTION ALLOCATION MECHANISM

 

SECTION 11.1                                IMPLEMENTATION OF CAM.

 

(A)                                  ON THE TERMINATION DATE, THE LENDERS SHALL
AUTOMATICALLY AND WITHOUT FURTHER ACT (AND WITHOUT REGARD TO THE PROVISIONS OF 
SECTION 9.3) BE DEEMED TO HAVE EXCHANGED INTERESTS IN THE CREDIT FACILITIES SUCH
THAT IN LIEU OF THE INTEREST OF EACH LENDER IN EACH CREDIT FACILITY IN WHICH IT
SHALL PARTICIPATE AS OF SUCH DATE (INCLUDING SUCH LENDER’S INTEREST IN THE
OBLIGATIONS OF EACH LOAN PARTY IN RESPECT OF EACH SUCH CREDIT FACILITY), SUCH
LENDER SHALL HOLD AN INTEREST IN EVERY ONE OF THE CREDIT FACILITIES (INCLUDING
THE OBLIGATIONS OF EACH LOAN PARTY IN RESPECT OF EACH SUCH CREDIT FACILITY),
WHETHER OR NOT SUCH LENDER SHALL PREVIOUSLY HAVE PARTICIPATED THEREIN, EQUAL TO
SUCH LENDER’S CAM PERCENTAGE THEREOF.  EACH LENDER AND EACH LOAN PARTY HEREBY
CONSENTS AND AGREES TO THE CAM EXCHANGE, AND EACH LENDER AGREES THAT THE CAM
EXCHANGE SHALL BE BINDING UPON ITS SUCCESSORS AND ASSIGNS AND ANY PERSON THAT
ACQUIRES A PARTICIPATION IN ITS INTERESTS IN ANY CREDIT FACILITY.  EACH LOAN
PARTY AGREES FROM TIME TO TIME TO EXECUTE AND DELIVER TO THE ADMINISTRATIVE
AGENT ALL INSTRUMENTS AND DOCUMENTS AS THE ADMINISTRATIVE AGENT SHALL REASONABLY
REQUEST TO EVIDENCE AND CONFIRM THE RESPECTIVE INTERESTS OF THE LENDERS AFTER
GIVING EFFECT TO THE CAM EXCHANGE.

 

(B)                                 AS A RESULT OF THE CAM EXCHANGE, UPON AND
AFTER THE TERMINATION DATE, EACH PAYMENT RECEIVED BY THE ADMINISTRATIVE AGENT
PURSUANT TO ANY LOAN DOCUMENT IN RESPECT OF THE OBLIGATIONS, AND EACH
DISTRIBUTION MADE BY THE ADMINISTRATIVE AGENT IN RESPECT OF THE OBLIGATIONS,
SHALL BE DISTRIBUTED TO THE LENDERS PRO RATA IN ACCORDANCE WITH THEIR RESPECTIVE
CAM PERCENTAGES.  ANY DIRECT PAYMENT RECEIVED BY A LENDER UPON OR AFTER THE
TERMINATION DATE, INCLUDING BY WAY OF SETOFF, IN RESPECT OF THE OBLIGATIONS
SHALL BE PAID OVER TO THE ADMINISTRATIVE AGENT FOR DISTRIBUTION TO THE LENDERS
IN ACCORDANCE HEREWITH.

 

SECTION 11.2                                LETTERS OF CREDIT.

 

(A)                                  IN THE EVENT THAT ON THE TERMINATION DATE
ANY LETTER OF CREDIT SHALL BE OUTSTANDING AND UNDRAWN IN WHOLE OR IN PART, OR
ANY AMOUNT DRAWN UNDER ANY SUCH LETTER OF CREDIT SHALL NOT HAVE BEEN REIMBURSED
BY THE APPLICABLE BORROWER OR WITH THE PROCEEDS OF A

 

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REVOLVING LOAN, EACH LENDER HAVING, ON SUCH DATE AND PRIOR TO GIVING EFFECT TO
THE CAM EXCHANGE, LETTER OF CREDIT OUTSTANDINGS WITH RESPECT TO SUCH LETTER OF
CREDIT SHALL PROMPTLY PAY OVER TO THE ADMINISTRATIVE AGENT, IN IMMEDIATELY
AVAILABLE FUNDS, IN THE CASE OF ANY UNDRAWN AMOUNT, AND IN DOLLARS, IN THE CASE
OF ANY UNREIMBURSED AMOUNT, AN AMOUNT EQUAL TO SUCH LENDER’S APPLICABLE
PERCENTAGE OF SUCH UNDRAWN FACE AMOUNT OR (TO THE EXTENT IT HAS NOT ALREADY DONE
SO) SUCH UNREIMBURSED DRAWING, AS THE CASE MAY BE, TOGETHER WITH INTEREST
THEREON FROM THE TERMINATION DATE TO THE DATE ON WHICH SUCH AMOUNT SHALL BE PAID
TO THE ADMINISTRATIVE AGENT AT THE RATE THAT WOULD BE APPLICABLE AT THE TIME TO
AN ABR LOAN IN A PRINCIPAL AMOUNT EQUAL TO SUCH AMOUNT.  THE ADMINISTRATIVE
AGENT SHALL ESTABLISH A SEPARATE ACCOUNT OR ACCOUNTS FOR EACH LENDER (EACH, AN
“LC RESERVE ACCOUNT”) FOR THE AMOUNTS RECEIVED WITH RESPECT TO EACH SUCH LETTER
OF CREDIT PURSUANT TO THE PRECEDING SENTENCE.  THE ADMINISTRATIVE AGENT SHALL
DEPOSIT IN EACH LENDER’S LC RESERVE ACCOUNT SUCH LENDER’S CAM PERCENTAGE OF THE
AMOUNTS RECEIVED FROM THE LENDERS AS PROVIDED ABOVE.  THE ADMINISTRATIVE AGENT
SHALL HAVE SOLE DOMINION AND CONTROL OVER EACH LC RESERVE ACCOUNT, AND THE
AMOUNTS DEPOSITED IN EACH LC RESERVE ACCOUNT SHALL BE HELD IN SUCH LC RESERVE
ACCOUNT UNTIL WITHDRAWN AS PROVIDED IN  PARAGRAPH (B),  (C),  (D)  OR  (E) 
BELOW.  THE ADMINISTRATIVE AGENT SHALL MAINTAIN RECORDS ENABLING IT TO DETERMINE
THE AMOUNTS PAID OVER TO IT AND DEPOSITED IN THE LC RESERVE ACCOUNTS IN RESPECT
OF EACH LETTER OF CREDIT AND THE AMOUNTS ON DEPOSIT IN RESPECT OF EACH LETTER OF
CREDIT ATTRIBUTABLE TO EACH LENDER’S CAM PERCENTAGE.  THE AMOUNTS HELD IN EACH
LENDER’S LC RESERVE ACCOUNT SHALL BE HELD AS A RESERVE AGAINST THE OUTSTANDING
LETTER OF CREDIT OUTSTANDINGS, SHALL BE THE PROPERTY OF SUCH LENDER, SHALL NOT
CONSTITUTE LOANS TO OR GIVE RISE TO ANY CLAIM OF OR AGAINST ANY LOAN PARTY AND
SHALL NOT GIVE RISE TO ANY OBLIGATION ON THE PART OF EITHER BORROWER TO PAY
INTEREST TO SUCH LENDER, IT BEING AGREED THAT THE REIMBURSEMENT OBLIGATIONS IN
RESPECT OF LETTERS OF CREDIT SHALL ARISE ONLY AT SUCH TIMES AS DRAWINGS ARE MADE
THEREUNDER, AS PROVIDED IN  ARTICLE 2.

 

(B)                                 IN THE EVENT THAT ON OR AFTER THE
TERMINATION DATE ANY DRAWING SHALL BE MADE IN RESPECT OF A LETTER OF CREDIT, THE
ADMINISTRATIVE AGENT SHALL, AT THE REQUEST OF THE APPLICABLE FRONTING BANK,
WITHDRAW FROM THE LC RESERVE ACCOUNT OF EACH LENDER ANY AMOUNTS, UP TO THE
AMOUNT OF SUCH LENDER’S CAM PERCENTAGE OF SUCH DRAWING, DEPOSITED IN RESPECT OF
SUCH LETTER OF CREDIT AND REMAINING ON DEPOSIT AND DELIVER SUCH AMOUNTS TO THE
APPLICABLE FRONTING BANK IN SATISFACTION OF THE REIMBURSEMENT OBLIGATIONS OF THE
LENDERS UNDER SECTION 2.4(G) (BUT NOT OF EITHER BORROWER UNDER 
SECTION 2.4(E)).  IN THE EVENT ANY LENDER SHALL DEFAULT ON ITS OBLIGATION TO PAY
OVER ANY AMOUNT TO THE ADMINISTRATIVE AGENT IN RESPECT OF ANY LETTER OF CREDIT
AS PROVIDED IN THIS SECTION 11.2, THE APPLICABLE FRONTING BANK SHALL, IN THE
EVENT OF A DRAWING THEREUNDER, HAVE A CLAIM AGAINST SUCH LENDER TO THE SAME
EXTENT AS IF SUCH LENDER HAD DEFAULTED ON ITS OBLIGATIONS UNDER SECTION 2.4(G),
BUT SHALL HAVE NO CLAIM AGAINST ANY OTHER LENDER IN RESPECT OF SUCH DEFAULTED
AMOUNT, NOTWITHSTANDING THE EXCHANGE OF INTERESTS IN THE APPLICABLE BORROWER’S
REIMBURSEMENT OBLIGATIONS PURSUANT  SECTION 11.1.  EACH OTHER LENDER SHALL HAVE
A CLAIM AGAINST SUCH DEFAULTING LENDER FOR ANY DAMAGES SUSTAINED BY IT AS A
RESULT OF SUCH DEFAULT, INCLUDING, IN THE EVENT SUCH LETTER OF CREDIT SHALL
EXPIRE UNDRAWN, ITS CAM PERCENTAGE OF THE DEFAULTED AMOUNT.

 

(C)                                  IN THE EVENT THAT AFTER THE TERMINATION
DATE ANY LETTER OF CREDIT SHALL EXPIRE UNDRAWN, THE ADMINISTRATIVE AGENT SHALL
WITHDRAW FROM THE LC RESERVE ACCOUNT OF EACH LENDER THE AMOUNT REMAINING ON
DEPOSIT THEREIN IN RESPECT OF SUCH LETTER OF CREDIT AND DISTRIBUTE SUCH AMOUNT
TO SUCH LENDER.

 

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(D)                                 WITH THE PRIOR WRITTEN APPROVAL OF THE
ADMINISTRATIVE AGENT AND THE APPLICABLE FRONTING BANK (NOT TO BE UNREASONABLY
WITHHELD), ANY LENDER MAY WITHDRAW THE AMOUNT HELD IN ITS LC RESERVE ACCOUNT IN
RESPECT OF THE UNDRAWN AMOUNT OF ANY LETTER OF CREDIT.  ANY LENDER MAKING SUCH A
WITHDRAWAL SHALL BE UNCONDITIONALLY OBLIGATED, IN THE EVENT THERE SHALL
SUBSEQUENTLY BE A DRAWING UNDER SUCH LETTER OF CREDIT, TO PAY OVER TO THE
ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE APPLICABLE FRONTING BANK, ON
DEMAND, ITS CAM PERCENTAGE OF SUCH DRAWING.

 

(E)                                  PENDING THE WITHDRAWAL BY ANY LENDER OF ANY
AMOUNTS FROM ITS LC RESERVE ACCOUNT AS CONTEMPLATED BY THE ABOVE PARAGRAPHS, THE
ADMINISTRATIVE AGENT WILL, AT THE DIRECTION OF SUCH LENDER AND SUBJECT TO SUCH
RULES AS THE ADMINISTRATIVE AGENT MAY PRESCRIBE FOR THE AVOIDANCE OF
INCONVENIENCE, INVEST SUCH AMOUNTS IN PERMITTED INVESTMENTS.  EACH LENDER WHICH
HAS NOT WITHDRAWN ITS CAM PERCENTAGE OF AMOUNTS IN ITS LC RESERVE ACCOUNT AS
PROVIDED IN  PARAGRAPH (D)  ABOVE SHALL HAVE THE RIGHT, AT INTERVALS REASONABLY
SPECIFIED BY THE ADMINISTRATIVE AGENT, TO WITHDRAW THE EARNINGS ON INVESTMENTS
SO MADE BY THE ADMINISTRATIVE AGENT WITH AMOUNTS IN ITS LC RESERVE ACCOUNT AND
TO RETAIN SUCH EARNINGS FOR ITS OWN ACCOUNT.

 

Section 11.3                                Conversion.  In the event the
Termination Date shall occur, Obligations owed by the Loan Parties denominated
in any currency other than Dollars (other than, for the avoidance of doubt,
obligations in respect of undrawn Canadian Revolving Facility Letters of Credit
denominated in Canadian Dollars) shall, automatically and with no further act
required, be converted to obligations of the same Loan Parties denominated in
Dollars.  Such conversion shall be effected based upon the Exchange Rates in
effect with respect to the relevant currencies on the Termination Date.  On and
after any such conversion, all amounts accruing and owed to any Lender in
respect of its Obligations shall accrue and be payable in Dollars at the rates
otherwise applicable hereunder (and, in the case of interest on Loans, at the
default rate applicable to ABR Loans hereunder).  Notwithstanding the foregoing
provisions of this Section 11.3, any Lender may, by notice to the Borrowers and
the Administrative Agent prior to the Termination Date, elect not to have the
provisions of this  Section 11.3 apply with respect to all Obligations owed to
such Lender immediately following the Termination Date, and, if such notice is
given, all Obligations owed to such Lender immediately following the Termination
Date shall remain designated in their original currencies.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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Exhibit A-1

 

Form of U.S. Interim Order

 

Exhibit A-2

 

Form of Initial Order

 

Exhibit A-3

 

Form of Final Order

 

Exhibit B-1

 

Form of Security and Pledge Agreement

 

Exhibit B-2

 

Form of Canadian Security Agreement

 

Exhibit C-1

 

Form of Weekly Borrowing Base Certificate

 

Exhibit C-2

 

Form of Monthly Borrowing Base Certificate

 

Exhibit D

 

Form of Opinion of Counsel

 

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Exhibit E

 

Form of Assignment and Acceptance

 

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Amended and Restated Credit Agreement identified
below (as amended, 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 forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Acceptance as if set forth herein in full.

 

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

 

1.

 

Assignor:

 

 

 

 

 

 

 

2.

 

Assignee:

 

 

 

 

 

 

[and is an Affiliate/Approved Fund of [identify Lender]]

 

 

 

 

 

3.

 

Borrowers:

 

SMURFIT-STONE CONTAINER ENTERPRISES, INC. and SMURFIT-STONE CONTAINER CANADA
INC.

 

 

 

 

 

4.

 

Administrative Agent:

 

JPMORGAN CHASE BANK, N.A., as the administrative agent under the Credit
Agreement

 

 

 

 

 

5.

 

Credit Agreement:

 

The US$750,000,000 Amended and Restated Credit Agreement dated as of
February [     ], 2009 among SMURFIT-STONE

 

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

 

CONTAINER ENTERPRISES, INC., SMURFIT-STONE CONTAINER CANADA INC., the other Loan
Parties parties thereto, the Lenders parties thereto, JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, and the other agents parties thereto

 

6.                                       Assigned Interest:

 

Facility Assigned
(e.g. “U.S. Tranche A
Revolving Commitment,”
“U.S. Tranche B Revolving
Commitment,” “Canadian
Revolving Commitment,”
“U.S. Term Loans,” or
“Canadian Term Loans”)

 

Aggregate Amount of
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loans
Assigned

 

Percentage Assigned
of
Commitment/Loans
set forth, to at least 9
decimals, as a
percentage of the
Commitment/Loans
of all Lenders
thereunder

 

 

 

$

 

 

$

 

 

 

%

 

 

$

 

 

$

 

 

 

%

 

 

$

 

 

$

 

 

 

%

 

Effective Date:                                         , 20

 

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates on or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Company, the Loan Parties and their Related
Parties or their respective securities) will be made available and who may
receive such information in accordance with the Assignee’s compliance procedures
and applicable laws, including Federal and state securities laws.

 

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

 

ASSIGNOR

 

 

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

Title:

 

 

 

ASSIGNEE

 

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

By:

 

 

Title:

 

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

 

[Consented to and] Accepted:

 

 

 

[JPMORGAN CHASE BANK, N.A., as

 

Administrative Agent]

 

 

 

 

 

By

 

 

Title:

 

 

 

 

 

[Consented to:]

 

 

 

[JPMORGAN CHASE BANK, N.A., as Fronting Bank]

 

 

 

 

 

By

 

 

Title:

 

 

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

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

 

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 Acceptance and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of any
Borrower, any of their Subsidiaries or Affiliates or any other Person obligated
in respect of any Loan Document or (iv) the performance or observance by any
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.1 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
Acceptance and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) attached to the Assignment and
Acceptance is any documentation required to be delivered by it pursuant to the
terms of Section 2.19(f), 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.

 

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,

 

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fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.

 

3.  General Provisions. This Assignment and Acceptance shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.  This Assignment and Acceptance 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 Acceptance by
facsimile shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.  This Assignment and Acceptance shall be
governed by, and construed in accordance with, the law of the State of New York
applicable to contracts made and to be performed wholly within such state and
the Bankruptcy Code.

 

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Exhibit F

 

Form of Loan Party Joinder Agreement

 

THIS LOAN PARTY JOINDER AGREEMENT (this “Agreement”), dated as of
                                    , is entered into between
                      , a                        (the “New Subsidiary”) and
JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the
“Administrative Agent”) under that certain Amended and Restated Credit
Agreement, dated as of February [    ], 2009, among SMURFIT-STONE CONTAINER
ENTERPRISES, INC., a Delaware corporation, SMURFIT-STONE CONTAINER CANADA INC.,
a corporation continued under the Companies Act (Nova Scotia) (collectively, the
“Borrowers”), SMURFIT-STONE CONTAINER CORPORATION, a Delaware corporation, the
other Loan Parties party thereto, the Lenders party thereto, the Administrative
Agent and JPMORGAN CHASE BANK N.A., TORONTO BRANCH, as Canadian Administrative
Agent (as the same may be amended, modified, extended or restated from time to
time, the “Credit Agreement”). All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.

 

The New Subsidiary and the Administrative Agent, for the benefit of the Lenders,
hereby agree as follows:

 

1.             [Use for Domestic Subsidiaries: The New Subsidiary hereby
acknowledges, agrees and confirms that, by its execution of this Agreement, the
New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and
a “U.S. Guarantor” for all purposes of the Credit Agreement and shall have all
of the obligations of a Loan Party and a U.S. Guarantor thereunder as if it had
executed the Credit Agreement.  The New Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Credit Agreement, including without limitation
(a) all of the representations and warranties of the Loan Parties set forth in
Article III of the Credit Agreement, (b) all of the covenants set forth in
Articles V and VI of the Credit Agreement, and (c) all of the guaranty
obligations applicable to U.S. Guarantors set forth in Article X of the Credit
Agreement.  Without limiting the generality of the foregoing terms of this
paragraph 1, the New Subsidiary, subject to the limitations set forth in
Section 10.11 of the Credit Agreement, hereby guarantees, jointly and severally
with the Borrowers and other U.S. Guarantors, to the Administrative Agent and
the Lenders, as provided in Article X of the Credit Agreement, the prompt
payment and performance of the U.S. Guaranteed Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) strictly in accordance with the terms thereof and agrees that if any
of the U.S. Guaranteed Obligations are not paid or performed in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise), the New Subsidiary will, jointly and severally together with the
Borrowers and other U.S. Guarantors, promptly pay and perform the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the U.S. Guaranteed Obligations, the same will
be promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration or otherwise) in accordance with the terms of such
extension or renewal.]

 

1.             [Use for Canadian Subsidiaries: The New Subsidiary hereby
acknowledges, agrees and confirms that, by its execution of this Agreement, the
New Subsidiary will be deemed

 

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to be a Loan Party under the Credit Agreement and a “Canadian Guarantor” for all
purposes of the Credit Agreement and shall have all of the obligations of a Loan
Party and a Canadian Guarantor thereunder as if it had executed the Credit
Agreement.  The New Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Credit Agreement, including without limitation (a) all of the
representations and warranties of the Loan Parties set forth in Article III of
the Credit Agreement, (b) all of the covenants set forth in Articles V and VI of
the Credit Agreement, and (c) all of the guaranty obligations applicable to the
Canadian Guarantors set forth in Article X of the Credit Agreement.  Without
limiting the generality of the foregoing terms of this paragraph 1, the New
Subsidiary, subject to the limitations set forth in Section 10.11 of the Credit
Agreement, hereby guarantees, jointly and severally with the other Canadian
Guarantors, to the Administrative Agent and the Lenders, as provided in
Article X of the Credit Agreement, the prompt payment and performance of the
Canadian Guaranteed Obligations in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration or otherwise) strictly in accordance
with the terms thereof and agrees that if any of the Canadian Guaranteed
Obligations are not paid or performed in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise), the New
Subsidiary will, jointly and severally together with the other Canadian
Guarantors, promptly pay and perform the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Canadian Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, as a mandatory prepayment, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.]

 

2.             If required, the New Subsidiary is, simultaneously with the
execution of this Agreement, executing and delivering such Collateral Documents
(and such other documents and instruments) as requested by the Administrative
Agent in accordance with the Credit Agreement.

 

3.             The address of the New Subsidiary for purposes of Section 9.1 of
the Credit Agreement is as follows:

 

 

Attention:

 

4.             The New Subsidiary hereby waives acceptance by the Administrative
Agent and the Lenders of the guaranty by the New Subsidiary upon the execution
of this Agreement by the New Subsidiary.

 

5.             This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument.

 

6.             THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

 

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

 

 

 

[NEW SUBSIDIARY]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Acknowledged and accepted:

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

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Exhibit G

 

Form of Compliance Certificate

 

To:                              The Administrative Agent and the Lenders

parties to the Credit Agreement described below

 

This Compliance Certificate (this “Certificate”) is furnished pursuant to that
certain Amended and Restated Credit Agreement dated as of February [    ], 2009
(as amended, modified, restated, renewed or extended from time to time, the
“Agreement”) among Smurfit-Stone Container Enterprises, Inc., a Delaware
corporation (the “U.S. Borrower”), Smurfit-Stone Container Canada Inc., a
company continued under the Companies Act (Nova Scotia) (the “Canadian
Borrower”), Smurfit-Stone Container Corporation, a Delaware corporation (the
“Parent”), the other Loan Parties party thereto, the Lenders party thereto,
JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent for the
Lenders, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian
Administrative Agent and Canadian Collateral Agent for the Lenders.  Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF EACH LOAN
PARTY, THAT:

 

1.     I am the duly elected                of the Parent;

 

2.     I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Loan Parties and their Subsidiaries during the accounting
period covered by the attached financial statements [for quarterly or monthly
financial statements add: and such financial statements present fairly in all
material respects the financial condition and results of operations of the Loan
Parties and their consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes];

 

3.     The examinations described in paragraph 2 did not disclose, except as set
forth below, and I have no knowledge of (i) the existence of any condition or
event which constitutes a Default or Event of Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate or (ii) any change in GAAP or in the application
thereof that has occurred since the date of the audited financial statements
referred to in Section 3.4 of the Agreement;

 

4.     I hereby certify that no Loan Party has changed (i) its name, (ii) its
chief executive office, (iii) principal place of business, (iv) the type of
entity it is or (v) its state of incorporation or organization without having
given the Administrative Agent the notice required by Section 4.15 of the
Security and Pledge Agreement and/or Section 6 of the Canadian Security
Agreement, as applicable; and

 

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5. Schedule I attached hereto sets forth financial data and computations
evidencing the Loan Parties’ compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.

 

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the (i) nature of the condition or event, the period during which it has
existed and the action which the Loan Parties have taken, are taking, or propose
to take with respect to each such condition or event or (ii) the change in GAAP
or the application thereof and the effect of such change on the attached
financial statements:

 

 

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this          day of
                        , 20    .

 

 

SMURFIT-STONE CONTAINER CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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