Exhibit 10.2

 

 

 

EXECUTION VERSION

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF JANUARY 31, 2006

AS AMENDED AND RESTATED AS OF OCTOBER 31, 2007

AS FURTHER AMENDED AND RESTATED AS OF July 2, 2010

AS FURTHER AMENDED AND RESTATED AS OF May 31, 2011

by and among

EXOPACK, LLC,

CELLO-FOIL PRODUCTS, INC.,

EXOPACK PERFORMANCE FILMS INC., and

EXOPACK-NEWMARKET, LTD.

as Borrowers

and

THE OTHER PERSONS PARTY HERETO THAT ARE

DESIGNATED AS CREDIT PARTIES

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as US Agent, US L/C Issuer and US Lender

and

GE CANADA FINANCE HOLDING COMPANY,

as Canadian Agent, Canadian L/C Issuer and Canadian Lender

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders

 

 

 

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TABLE OF CONTENTS

 

          Page  

SECTION 1. AMOUNTS AND TERMS OF LOANS

     9   

1.1

   US Loans      9   

1.2

   Canadian Loans      15   

1.3

   Interest and Applicable Margins      21   

1.4

   Fees      24   

1.5

   Payments      26   

1.6

   Prepayments      28   

1.7

   Maturity      32   

1.8

   Eligible Accounts      32   

1.9

   Eligible Inventory      35   

1.10

   Loan Accounts      37   

1.11

   Yield Protection      38   

1.12

   Taxes      39   

1.13

   Borrower Representative      41   

1.14

   Currency Conversions      42   

1.15

   Judgment Currency; Contractual Currency      42   

1.16

   Commitment Increases      43   

SECTION 2. CONDITIONS TO LOANS

     44   

2.1

   Conditions to Initial Loans      44   

2.2

   Conditions to All Loans      44   

2.3

   Reserved      45   

2.4

   Effect of Amendment and Restatement      45   

SECTION 3. REPRESENTATIONS AND WARRANTIES

     46   

3.1

   Organization and Powers      46   

3.2

   Disclosure      47   

3.3

   No Material Adverse Effect      48   

3.4

   No Conflict      48   

3.5

   Financial Statements and Projections      48   

3.6

   Solvency      48   

3.7

   Use of Proceeds; Margin Regulations      48   

3.8

   Brokers      49   

3.9

   Compliance with Laws      49   

3.10

   Intellectual Property      49   

3.11

   Investigations, Audits, Etc.      49   

3.12

   Employee Matters      50   

3.13

   Litigation; Adverse Facts      50   

3.14

   Ownership of Property; Liens      50   

3.15

   Environmental Matters      51   

3.16

   ERISA/Canadian Pension Plans      52   

3.17

   Deposit and Disbursement Accounts      53   

 

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3.18

   Agreements and Other Documents      53   

3.19

   Insurance      53   

3.20

   Taxes and Tax Returns      54   

3.21

   Senior Notes; Related Transactions Documents      54   

3.22

   Senior Indebtedness and Designated Senior Indebtedness      54   

3.23

   Transfer Pricing      55   

SECTION 4. AFFIRMATIVE COVENANTS

     56   

4.1

   Compliance with Laws and Contractual Obligations      56   

4.2

   Insurance; Damage to or Destruction of Collateral      56   

4.3

   Inspection; Lender Meeting      60   

4.4

   Organizational Existence      60   

4.5

   Environmental Matters      60   

4.6

   Landlords’ Agreements, Bailee Letters      61   

4.7

   Conduct of Business      62   

4.8

   Further Assurances      62   

4.9

   Payment of Taxes      64   

4.10

   Cash Management Systems; Bank Accounts      64   

4.11

   Canadian Pension and Benefit Plans      65   

4.12

   Transfer Pricing      65   

4.13

   Maintenance of Accounts      66   

SECTION 5. NEGATIVE COVENANTS

     66   

5.1

   Indebtedness      66   

5.2

   Liens and Related Matters      69   

5.3

   Investments      70   

5.4

   Contingent Obligations      71   

5.5

   Restricted Payments      72   

5.6

   Restriction on Fundamental Changes      74   

5.7

   Disposal of Assets or Subsidiary Stock      77   

5.8

   Transactions with Affiliates      78   

5.9

   Conduct of Business      78   

5.10

   Changes Relating to Indebtedness      79   

5.11

   Fiscal Year      79   

5.12

   Press Release; Public Offering Materials      79   

5.13

   Subsidiaries      79   

5.14

   Deposit Accounts      79   

5.15

   Hazardous Materials      79   

5.16

   ERISA      79   

5.17

   Prepayments of Other Indebtedness      80   

5.18

   Certain Amendments      80   

5.19

   Fixed Charge Coverage Ratio      80   

SECTION 6. REPORTING

     81   

6.1

   Financial Statements and Other Reports      81   

6.2

   Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement      86   

 

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SECTION 7. DEFAULT, RIGHTS AND REMEDIES

     86   

7.1

   Event of Default      86   

7.2

   Suspension or Termination of Commitments      88   

7.3

   Acceleration and other Remedies      89   

7.4

   Performance by Applicable Agent      90   

7.5

   Application of Proceeds      91   

SECTION 8. ASSIGNMENT AND PARTICIPATION

     92   

8.1

   Assignment and Participations      92   

8.2

   Agents      95   

8.3

   Set Off and Sharing of Payments      102   

8.4

   Disbursement of Funds      103   

8.5

   Disbursements of Advances; Payment      104   

8.6

   Collateral Allocation Mechanism      107   

SECTION 9. MISCELLANEOUS

     110   

9.1

   Indemnities      110   

9.2

   Amendments and Waivers      111   

9.3

   Notices; Electronic Communication      112   

9.4

   Failure or Indulgence Not Waiver; Remedies Cumulative      115   

9.5

   Marshaling; Payments Set Aside      116   

9.6

   Severability      116   

9.7

   Lenders’ Obligations Several; Independent Nature of Lenders’ Rights      116
  

9.8

   Headings      116   

9.9

   Applicable Law      116   

9.10

   Successors and Assigns      116   

9.11

   No Fiduciary Relationship; Limited Liability      116   

9.12

   Construction      117   

9.13

   Confidentiality      117   

9.14

   CONSENT TO JURISDICTION      118   

9.15

   WAIVER OF JURY TRIAL      118   

9.16

   Survival of Warranties and Certain Agreements      118   

9.17

   Entire Agreement      119   

9.18

   Counterparts; Effectiveness      119   

9.19

   Replacement of Lenders      119   

9.20

   Delivery of Termination Statements and Releases      121   

9.21

   Subordination of Intercompany Debt      121   

SECTION 10. US CROSS-GUARANTY

     122   

10.1

   US Cross-Guaranty      122   

10.2

   Waivers by US Borrowers      122   

10.3

   Benefit of Guaranty      123   

10.4

   Postponement of Subrogation, Etc.      123   

10.5

   Election of Remedies      123   

10.6

   Limitation      124   

10.7

   Contribution with Respect to US Guaranty Obligations      124   

 

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10.8

   Liability Cumulative      125   

SECTION 11. CANADIAN CROSS-GUARANTY

     125   

11.1

   Canadian Cross-Guaranty      125   

11.2

   Waivers by Canadian Borrowers      126   

11.3

   Benefit of Guaranty      126   

11.4

   Postponement of Subrogation, Etc.      126   

11.5

   Election of Remedies      126   

11.6

   Limitations      127   

11.7

   Contribution with Respect to Canadian Guaranty Obligations      128   

11.8

   Liability Cumulative      128   

 

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INDEX OF APPENDICES

 

Annexes

     

Annex A

   -      Definitions

Annex B

   -      Commitment Amounts

Annex C

   -      Closing Checklist

Annex D

   -      Lenders’ Bank Accounts

Annex E

   -      Compliance Certificate

Exhibits

      Exhibit 1.1(a)(i)    -      US Tranche A Note Exhibit 1.1(a)(ii)    -     
Notice of US Tranche A Revolving Credit Advance Exhibit 1.1(b)(iii)    -     
Request for Letter of Credit Issuance Exhibit 1.1(e)(i)    -      US Tranche A1
Note Exhibit 1.1(e)(ii)    -      Notice of US Tranche A1 Revolving Credit
Advance Exhibit 1.2(a)(i)    -      Canadian Tranche A Note Exhibit 1.2(a)(ii)
   -      Notice of Canadian Tranche A Revolving Credit Advance Exhibit
1.2(e)(i)    -      Canadian Tranche A1 Note Exhibit 1.2(e)(ii)    -      Notice
of Canadian Tranche A1 Revolving Credit Advance Exhibit 1.3(e)    -      Notice
of Continuation/Conversion Exhibit 1.16    -      Commitment Increase Request
Exhibit 5.19    -      Minimum Fixed Charge Coverage Ratio Exhibit 6.1(d)(i)   
-      Canadian Tranche A Borrowing Base Certificate Exhibit 6.1(d)(ii)    -  
   US Tranche A Borrowing Base Certificate Exhibit 6.1(d)(iii)    -     
Canadian Tranche A1 Borrowing Base Certificate Exhibit 6.1(d)(iv)    -      US
Tranche A1 Borrowing Base Certificate Exhibit 8.1    -      Assignment Agreement

Schedules

      Schedule 3.1(a)    -      Jurisdictions of Organization and Qualifications
Schedule 3.1(c)    -      Capitalization Schedule 3.5    -      GAAP Exceptions
Schedule 3.7    -      Use of Proceeds Schedule 3.10    -      Intellectual
Property Schedule 3.11    -      Investigations and Audits Schedule 3.12    -  
   Employee Matters Schedule 3.13    -      Litigation Schedule 3.14    -     
Real Property Schedule 3.15    -      Environmental Matters Schedule 3.16    -  
   ERISA/Canadian Pension Plans Schedule 3.17    -      Deposit and Disbursement
Accounts Schedule 3.18    -      Agreements and Other Documents

 

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Schedule 3.19

   -      Insurance

Schedule 4.7

   -      Corporate and Trade Names

Schedule 4.10

   -      Cash Management Systems

Schedule 5.1

   -      Indebtedness

Schedule 5.2

   -      Liens

Schedule 5.3

   -      Investments

Schedule 5.4

   -      Contingent Obligations

Schedule 5.8

   -      Affiliate Transactions

Schedule 5.9

   -      Business Description

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This THIRD AMENDED AND RESTATED CREDIT AGREEMENT is dated as of January 31,
2006, as amended and restated as of October 31, 2007, as further amended and
restated as of July 2, 2010, and as further amended and restated as of May, 31,
2011 and entered into by and among EXOPACK HOLDING CORP., a Delaware corporation
(“Holdings”), EXOPACK, LLC, a Delaware limited liability company (“Exopack Op
Co”), CELLO-FOIL PRODUCTS, INC., a Michigan corporation (“Cello-Foil” and
together with Exopack Op Co and any other Credit Party (as defined herein) that
becomes a US Borrower hereunder, each, individually, a “US Borrower” and,
collectively and jointly and severally, the “US Borrowers”), EXOPACK-NEWMARKET,
LTD., an Ontario company (“Exopack Canada”), EXOPACK PERFORMANCE FILMS INC., an
Ontario corporation (“Performance Films”, and together with Exopack Canada and
any other Credit Party (as defined below) that becomes a Canadian Borrower
hereunder, each, individually, a “Canadian Borrower” and, collectively and
jointly and severally, the “Canadian Borrowers” and together with the US
Borrowers, each individually a “Borrower” and collectively (but not jointly and
severally) the “Borrowers”), the other persons designated as “Credit Parties” on
the signature pages hereto, the financial institutions who are or hereafter
become parties to this Agreement as Lenders, GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity “GE Capital”),
as a US Lender, as initial US L/C Issuer and as US Agent, and GE CANADA FINANCE
HOLDING COMPANY, a Nova Scotia unlimited liability company (in its individual
capacity, “GE Canada”), as Canadian Agent, as initial Canadian L/C Issuer and a
Canadian Lender.

RECITALS

WHEREAS, Borrowers, the other Credit Parties signatory thereto, Lenders and
Agents are parties to that certain Credit Agreement, dated as of January 31,
2006 as amended and restated as of October 31, 2007, as further amended and
restated as of July 2, 2010 and as further amended, restated, supplemented or
otherwise modified prior to the date hereof (the “Original Credit Agreement”);

WHEREAS, Borrowers have requested that Lenders and Agents further amend and
restate the Original Credit Agreement; and

WHEREAS, upon the terms and subject to the conditions hereinafter set forth,
Lenders and Agents have agreed to so amend and restate the Original Credit
Agreement; and

WHEREAS, Exopack Key Holdings, LLC, a Delaware limited liability company
(“Exopack Holdings”) is willing to continue (a) to guaranty all of the
Obligations; (b) to pledge to Canadian Agent for its benefit and the benefit of
the Canadian Lenders, all of the Stock of its Subsidiaries; (c) to pledge to US
Agent for the benefit of the US Lenders, all of the Stock of its Domestic
Subsidiaries and 65% of the Voting Stock and 100% of the Non-Voting Stock of
each of its first-tier Foreign Subsidiaries; (d) to cause each of its Domestic
Subsidiaries to continue (i) to guaranty the Obligations, (ii) to pledge to
Canadian Agent for its benefit and the benefit of the Canadian Lenders, all of
the Stock of their Subsidiaries, and (iii) to pledge to US Agent for the benefit
of the US Lenders, all of the Stock of each of their Domestic Subsidiaries and
65% of the

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Voting Stock and 100% of the Non-Voting Stock of each of their first-tier
Foreign Subsidiaries; and (e) to cause each of its Canadian Subsidiaries to
continue to guaranty the Canadian Obligations and to pledge to Canadian Agent
all of the Stock of each of their Subsidiaries; and

WHEREAS, US Borrowers and each of the other US Credit Parties desire to continue
to secure all of the Obligations under the Loan Documents by granting to the US
Agent, for the benefit of Agents and Lenders, a security interest in and lien
upon substantially all of their real and personal property; and

WHEREAS, Canadian Borrowers and each of the other Canadian Credit Parties desire
to continue to secure all of the Canadian Obligations under the Loan Documents
by granting to the Canadian Agent, for the benefit of Canadian Agent and
Canadian Lenders, a security interest in and lien upon substantially all of
their property (other than real and personal property, plants and Equipment);
and

WHEREAS, all capitalized terms herein shall have the meanings ascribed thereto
in Annex A hereto which is incorporated herein by reference.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Holdings, Borrowers, the other Credit Parties
party hereto, Lenders, L/C Issuers and Agents agree that the Original Credit
Agreement is amended and restated in its entirety as follows:

SECTION 1.

AMOUNTS AND TERMS OF LOANS

1.1 US Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers and the other
Credit Parties contained herein:

(a) US Tranche A Loan.

(i) Each US Tranche A Lender agrees, severally and not jointly, to make
available to US Borrowers from time to time until the US Tranche A Commitment
Termination Date its Pro Rata Share of advances denominated in Dollars (each a
“US Tranche A Revolving Credit Advance”) requested by US Borrower Representative
on behalf of any US Borrower hereunder. The Pro Rata Share of the US Tranche A
Loan of any US Tranche A Lender shall not at any time exceed its separate US
Tranche A Loan Commitment. Moreover, the US Tranche A Loan outstanding to the US
Borrowers shall not exceed at any time the Aggregate US Tranche A Borrowing
Base. US Tranche A Revolving Credit Advances may be borrowed, repaid and
reborrowed from time to time until the US Tranche A Commitment Termination Date;
provided, that any US Tranche A Revolving Credit Advance to be made at any time
shall not exceed US Tranche A Borrowing Availability at such time. US Tranche A
Borrowing Availability may be further reduced by Reserves imposed by US Agent in
its reasonable credit judgment acting in good faith, and without double-counting
for Reserves already taken into account in determining US Tranche A Borrowing
Availability. The US Tranche A Loan shall be repaid in full on the US Tranche A
Commitment Termination Date. Upon request of a US Tranche A Lender, US Borrowers
shall jointly and severally execute and

 

9

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deliver to such US Tranche A Lender a note to evidence the US Tranche A Loan
Commitment of that US Tranche A Lender. Each such note shall be in the principal
amount of the US Tranche A Loan Commitment of the applicable US Tranche A Lender
denominated in Dollars, dated the date such requesting US Tranche A Lender
became a US Tranche A Lender hereunder and substantially in the form of Exhibit
1.1(a)(i) (each as amended, modified, extended, substituted, or replaced from
time to time, a “US Tranche A Note” and, collectively, the “US Tranche A
Notes”). Other than pursuant to Section 1.1(a)(ii), if at any time (x) the
principal amount of the outstanding US Tranche A Loan exceeds the lesser of the
Aggregate US Tranche A Borrowing Base or the US Tranche A Loan Commitment,
(y) the principal amount of the outstanding US Tranche A Loan of any US Borrower
exceeds that US Borrower’s separate US Tranche A Borrowing Base or (z) the
principal amount of the outstanding US Tranche A Loan together with the Dollar
Equivalent of the principal amount of the Canadian Loan exceeds the US Tranche A
Loan Commitment (any such excess US Tranche A Loan is herein referred to as a
“US Overadvance” and, collectively, as “US Overadvances”), (A) US Tranche A
Lenders shall not be obligated to make US Tranche A Revolving Credit Advances,
and (B) no additional US Letters of Credit shall be issued and, except as
provided in Section 1.1(a)(ii) below, the US Tranche A Loan must be repaid
immediately and US Letters of Credit cash collateralized in an amount sufficient
to eliminate any US Overadvance. All US Overadvances shall constitute US Index
Rate Loans and, at the election of US Agent, shall bear interest at the Default
Rate. US Tranche A Revolving Credit Advances which are to be made as US Index
Rate Loans may be requested in any amount with written notice prior to 1:00 p.m.
(New York time) on the Business Day immediately prior to the Business Day on
which such US Tranche A Revolving Credit Advance is to be made for funding
requests equal to or greater than $1,000,000. For funding requests for such US
Index Rate Loans less than $1,000,000, written notice must be provided by 1:00
p.m. (New York time) on the Business Day on which the US Tranche A Revolving
Credit Advance is to be made. All requests for US Tranche A Revolving Credit
Advances that are to be made as LIBOR Loans shall require at least three
(3) Business Days’ prior written notice from the Business Day on which such US
Tranche A Revolving Credit Advance is to be made. Written notices for funding
requests under the US Tranche A Loan Commitment shall be in the form attached as
Exhibit 1.1(a)(ii) (“Notice of US Tranche A Revolving Credit Advance”).

(ii) If US Borrower Representative on behalf of US Borrowers requests that US
Tranche A Lenders make, or permit to remain outstanding a US Overadvance, US
Agent may, in its sole discretion, elect to make, or permit to remain
outstanding such US Overadvances; provided, however, that US Agent may not cause
US Tranche A Lenders to make, or permit to remain outstanding, (a) a US Tranche
A Loan balance in excess of the aggregate amount of all US Tranche A Loan
Commitments or (b) a US Overadvance in an aggregate amount in excess of 10% of
the US Tranche A Loan Commitment. If a US Overadvance is made, or permitted to
remain outstanding, pursuant to the preceding sentence, then all US Tranche A
Lenders shall be bound to make, or permit to remain outstanding such US
Overadvance based upon their Pro Rata Shares of the US Tranche A Loan
Commitments in accordance with the terms of this Agreement. If a US Overadvance
remains outstanding for more than ninety (90) consecutive days during any one
hundred eighty (180) day period, the US Tranche A Loan must be repaid
immediately in an amount sufficient to eliminate all of such US Overadvance.
Furthermore, Supermajority Lenders may prospectively revoke US Agent’s ability
to make or permit US Overadvances by written notice to US Agent.

 

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(b) US Letters of Credit. The US Tranche A Loan Commitment may, in addition to
US Tranche A Revolving Credit Advances, be utilized (subject to the limitations
imposed by Section 1.1(a)), upon the request of US Borrower Representative on
behalf of the applicable US Borrower, for the issuance of US Letters of Credit.
Immediately upon the issuance by a US L/C Issuer of a US Letter of Credit, and
without further action on the part of US Agent or any of the US Tranche A
Lenders, each US Tranche A Lender shall be deemed to have purchased from such US
L/C Issuer a participation in such US Letter of Credit (or in its obligation
under a risk participation agreement with respect thereto) equal to such US
Tranche A Lender’s Pro Rata Share of the aggregate amount available to be drawn
under such US Letter of Credit.

(i) Maximum Amount. The aggregate amount of US Letter of Credit Obligations with
respect to all US Letters of Credit outstanding or unreimbursed at any time
shall not exceed $10,000,000 (“US L/C Sublimit”).

(ii) Reimbursement. US Borrowers shall be irrevocably and unconditionally
obligated forthwith without presentment, demand, protest or other formalities of
any kind (including for purposes of Section 10), to reimburse any US L/C Issuer
on demand in immediately available funds for any amounts paid by such US L/C
Issuer with respect to each US Letter of Credit, including all reimbursement
payments, Fees, Charges, costs and expenses paid by such US L/C Issuer, without
duplication of fees otherwise paid by any US Borrower. Each US Borrower hereby
authorizes and directs US Agent, at US Agent’s option, to debit such US
Borrower’s accounts (by increasing the outstanding principal balance of the US
Tranche A Revolving Credit Advances made to such US Borrower) in the amount of
any payment made by any US L/C Issuer with respect to any US Letter of Credit
and to pay such amounts to such US L/C Issuer, and a Notice of US Tranche A
Revolving Credit Advance requesting a US Index Rate Loan in such amount shall be
deemed to have been timely given on such date. All amounts paid by a US L/C
Issuer with respect to any US Letter of Credit that are not immediately repaid
by US Borrowers with the proceeds of a US Tranche A Revolving Credit Advance or
otherwise shall bear interest payable on demand at the interest rate applicable
to US Tranche A Revolving Credit Advances which are US Index Rate Loans plus, at
the election of US Agent or Requisite Lenders, an additional two percent
(2.00%) per annum. Each US Tranche A Lender agrees to fund its Pro Rata Share of
any US Tranche A Loan made pursuant to this Section 1.1(b)(ii). In the event US
Agent elects not to debit a US Borrower’s account, such US Borrower fails to
reimburse the applicable US L/C Issuer in full on the date of any payment in
respect of a US Letter of Credit for the benefit of such US Borrower and the
other US Borrowers fail to reimburse the applicable US L/C Issuer in full on the
date of any payment in respect of a US Letter of Credit, US Agent shall promptly
notify each US Tranche A Lender of the amount of such unreimbursed payment and
the accrued interest thereon and each US Tranche A Lender shall, prior to 3:00
p.m. (New York time) on the next Business Day deliver to US Agent an amount
equal to its Pro Rata Share thereof in same day funds. Each US Tranche A Lender
hereby absolutely and unconditionally agrees to pay to the applicable US L/C
Issuer upon demand by such US L/C Issuer such US Tranche A Lender’s Pro Rata
Share of each payment made by such US L/C Issuer in respect of a US Letter of
Credit and not reimbursed within one (1) Business Day by US Borrowers or
satisfied through a debit of US Borrowers’ account. Each US Tranche A Lender
acknowledges and agrees that its obligations pursuant to this subsection in
respect of US Letters of Credit are absolute and unconditional and shall not be
affected by any

 

11

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circumstance whatsoever, including setoff, counterclaim, the occurrence and
continuance of a Default or an Event of Default or any failure by Borrowers to
satisfy any of the conditions set forth in Section 2.2. If any US Tranche A
Lender fails to make available to any US L/C Issuer the amount of such US
Tranche A Lender’s Pro Rata Share of any payments made by such US L/C Issuer in
respect of a US Letter of Credit as provided in this Section 1.1(b)(ii), the
applicable US L/C Issuer shall be entitled to recover such amount on demand from
such US Tranche A Lender together with interest at the US Index Rate.

(iii) Request for US Letters of Credit. US Borrower Representative shall give US
Agent written notice, at least three (3) Business Days prior to the requested
issuance date for any US Letter of Credit, specifying (u) the date such US
Letter of Credit is requested to be issued, (v) the face amount of such US
Letter of Credit, (w) the name and address of the beneficiary, (x) a description
of the transactions proposed to be supported thereby, (y) the US Borrower for
whose account such US Letter of Credit is to be issued and (z) the expiry date
(or extended expiry date) of such US Letter of Credit. Each request by US
Borrower Representative for the issuance of a US Letter of Credit shall be in
the form of Exhibit 1.1(b)(iii). If US Agent informs US Borrower Representative
that no US L/C Issuer can issue the requested US Letter of Credit directly, such
US Borrower Representative may request that a US L/C Issuer arrange for the
issuance of the requested US Letter of Credit under a risk participation
agreement with another financial institution reasonably acceptable to US Agent,
such US L/C Issuer and the US Borrower Representative. The issuance of any US
Letter of Credit under this Agreement shall be subject to satisfaction of the
conditions set forth in Section 2.2 and the conditions that the applicable US
Letter of Credit (i) supports a transaction benefiting US Borrowers or any of
their wholly-owned Subsidiaries and (ii) is in a form and contains such terms
and conditions as are reasonably satisfactory to applicable US L/C Issuer and,
in the case of standby letters of credit, US Agent. The initial notice
requesting the issuance of a US Letter of Credit shall be accompanied by the
form of the US Letter of Credit and the Master Standby Agreement, and an
application for a US Letter of Credit, if any, then required by the US L/C
Issuer completed in a manner reasonably satisfactory to such US L/C Issuer. If
any provision of any application or reimbursement agreement is inconsistent with
the terms of this Agreement, then the provisions of this Agreement, to the
extent of such inconsistency, shall control.

(iv) Expiration Dates of US Letters of Credit. The expiration date of each US
Letter of Credit shall be on a date which is not later than the earlier of
(a) one year from its date of issuance or (b) the tenth (10th) day prior to the
date set forth in clause (a) of the definition of the term US Tranche A
Commitment Termination Date. Notwithstanding the foregoing, a US Letter of
Credit may provide for automatic extensions of its expiration date for one
(1) or more successive one (1) year periods provided that the US L/C Issuer has
the right to terminate such US Letter of Credit on each such annual expiration
date and no renewal term may extend the term of the US Letter of Credit to a
date that is later than the tenth (10th) day prior to the date set forth in
clause (a) of the definition of the term US Tranche A Commitment Termination
Date. The applicable US L/C Issuer may elect not to renew any US Letter of
Credit issued by it and, upon direction by US Agent or Requisite Lenders, shall
not renew any such US Letter of Credit at any time during the continuance of an
Event of Default, provided that, in the case of a direction by US Agent or
Requisite Lenders, the applicable US L/C Issuer receives such directions prior
to the date notice of non-renewal is required to be given by such US L/C Issuer
and such US L/C Issuer has had a reasonable period of time to act on such
notice.

 

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(v) Obligations Absolute. The obligation of US Borrowers to reimburse the US L/C
Issuers, US Agent and US Tranche A Lenders for payments made in respect of US
Letters of Credit issued by any US L/C Issuer shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any Letter of Credit; (b) any amendment or
waiver of or any consent or departure from all or any of the provisions of any
Letter of Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which Borrowers, any of their Subsidiaries or Affiliates
or any other Person may at any time have against any beneficiary of any Letter
of Credit, any Agent, any L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft 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; (e) payment under any Letter of Credit against presentation of a
draft or other document that does not substantially comply with the terms of
such Letter of Credit; or (f) any other act or omission to act or delay of any
kind of any L/C Issuer, any Agent, any Lender or any other Person or any other
event or circumstance whatsoever that might, but for the provisions of this
Section 1.1(b)(v), constitute a legal or equitable discharge of US Borrowers’
obligations hereunder. Without limiting the generality of the foregoing, it is
expressly understood and agreed by US Borrowers that the absolute and
unconditional obligation of US Borrowers to US Agent and US Tranche A Lenders
hereunder to reimburse payments made under a US Letter of Credit will not be
excused by the gross negligence or willful misconduct of the applicable US L/C
Issuer. However, the foregoing shall not be construed to excuse any US L/C
Issuer from claims which US Borrowers may assert against such US L/C Issuer
subject to the terms of the Master Standby Agreement.

(vi) Obligations of US L/C Issuers. Each US L/C Issuer (other than GE Capital)
hereby agrees that it will not issue a US Letter of Credit hereunder until it
has provided US Agent with written notice specifying the amount and intended
issuance date of such US Letter of Credit and US Agent has returned a written
acknowledgment of such notice to US L/C Issuer (such notices and
acknowledgements to be given promptly). Each US L/C Issuer (other than GE
Capital) further agrees to provide to US Agent: (a) a copy of each US Letter of
Credit issued by such US L/C Issuer promptly after its issuance; (b) a weekly
report summarizing available amounts under US Letters of Credit issued by such
US L/C Issuer, the dates and amounts of any draws under such US Letters of
Credit, the effective date of any increase or decrease in the face amount of any
US Letters of Credit during such week and the amount of any unreimbursed draws
under such US Letters of Credit; and (c) such additional information reasonably
requested by US Agent from time to time with respect to the US Letters of Credit
issued by such US L/C Issuer.

 

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(c) Funding Authorization. Subject to the next sentence hereof, the proceeds of
all US Loans made pursuant to this Agreement subsequent to the Closing Date are
to be funded by US Agent by wire transfer to the account designated by US
Borrower Representative below (the “US Disbursement Account”):

 

Bank:

   Bank of America ABA No.:    XXXXXXXXXXXX Bank Address:    101 S. Tryon Street
   Charlotte, North Carolina 28255 Account No.:    XXXXXXXXXXXX

US Borrower Representative shall provide US Agent with written notice of any
change in the foregoing instructions at least three (3) Business Days before the
desired effective date of such change.

(d) In this Agreement whenever it is necessary to compare or add the outstanding
balance of the US Loans or the US Loan Commitments or any portion thereof, to
the outstanding balance of the Canadian Loans or Canadian Commitments, or any
portion thereof, such Revolving Loans and Commitments will be expressed in the
Dollar Equivalent thereof

(e) US Tranche A1 Loan. Each US Tranche A1 Lender agrees, severally and not
jointly, to make available to US Borrowers from time to time until the US
Tranche A1 Commitment Termination Date its Pro Rata Share of advances
denominated in Dollars (each a “US Tranche A1 Revolving Credit Advance”)
requested by US Borrower Representative on behalf of any US Borrower hereunder.
The Pro Rata Share of the US Tranche A1 Loan of any US Tranche A1 Lender shall
not at any time exceed its separate US Tranche A1 Loan Commitment. Moreover, the
US Tranche A1 Loans outstanding to the US Borrowers shall not exceed at any time
the Aggregate US Tranche A1 Borrowing Base. US Tranche A1 Revolving Credit
Advances may be borrowed, repaid and reborrowed from time to time until the US
Tranche A1 Commitment Termination Date; provided, that any US Tranche A1
Revolving Credit Advance to be made at any time shall not exceed US Tranche A1
Borrowing Availability at such time. The US Tranche A1 Loan shall be repaid in
full on the US Tranche A1 Commitment Termination Date. Upon request of a US
Tranche A1 Lender, US Borrowers shall jointly and severally execute and deliver
to such US Tranche A1 Lender a note to evidence the US Tranche A1 Loan
Commitment of that US Tranche A1 Lender. Each such note shall be in the
principal amount of the US Tranche A1 Loan Commitment of the applicable US
Tranche A1 Lender denominated in Dollars, dated the date such requesting US
Tranche A1 Lender became a US Tranche A1 Lender hereunder and substantially in
the form of Exhibit 1.1(e)(i) (each as amended, modified, extended, substituted,
or replaced from time to time, a “US Tranche A1 Note” and, collectively, the “US
Tranche A1 Notes”). US Tranche A1 Revolving Credit Advances which are to be made
as US Index Rate Loans may be requested in any amount with written notice prior
to 1:00 p.m. (New York time) on the Business Day immediately prior to the
Business Day on which the US Tranche A1 Loan is to be made for funding requests
equal to or greater than $1,000,000. For funding requests for such US Index Rate
Loans less than $1,000,000, written notice must be provided by 1:00 p.m. (New
York time) on the Business Day on which the US Tranche A1 Loan is to be made.
All requests for US Tranche A1 Revolving Credit Advances that are to be made as
LIBOR Loans require at least three (3) Business Days’ prior written notice.
Written notices for funding requests under the US Tranche A1 Loan Commitment
shall be in the form attached as Exhibit 1.1(e)(ii) (“Notice of US Tranche A1
Revolving Credit Advance”).

 

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1.2 Canadian Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers and the other
Credit Parties contained herein:

(a) Canadian Tranche A Loan.

(i) Each Canadian Tranche A Lender agrees, severally and not jointly, to make
available to Canadian Borrowers from time to time until the Canadian Tranche A
Commitment Termination Date its Pro Rata Share of advances denominated in
Canadian Dollars (each a “Canadian Tranche A Revolving Credit Advance”)
requested by Canadian Borrower Representative on behalf of any Canadian Borrower
hereunder. The Pro Rata Share of the Canadian Tranche A Loan of any Canadian
Tranche A Lender shall not at any time exceed its separate Canadian Tranche A
Loan Commitment. Moreover, the Canadian Tranche A Loans outstanding to the
Canadian Borrowers shall not exceed at any time the Aggregate Canadian Tranche A
Borrowing Base. Canadian Tranche A Revolving Credit Advances may be borrowed,
repaid and reborrowed from time to time until the Canadian Tranche A Commitment
Termination Date; provided, that any Canadian Tranche A Revolving Credit Advance
to be made at any time shall not exceed Canadian Tranche A Borrowing
Availability at such time. Canadian Tranche A Borrowing Availability may be
further reduced by Reserves imposed by Canadian Agent in its reasonable credit
judgment acting in good faith and without double-counting for Reserves already
taken into account in determining Canadian Tranche A Borrowing Availability. The
Canadian Tranche A Loan shall be repaid in full on the Canadian Tranche A
Commitment Termination Date. Upon request of a Canadian Tranche A Lender, each
Canadian Borrower shall execute and deliver to such Canadian Tranche A Lender a
note to evidence the Canadian Tranche A Loan Commitment of that Canadian Tranche
A Lender. Each such note shall be in the principal amount of the Canadian
Tranche A Loan Commitment of the applicable Canadian Tranche A Lender
denominated in Canadian Dollars, dated the date such requesting Canadian Tranche
A Lender became a Canadian Tranche A Lender hereunder and substantially in the
form of Exhibit 1.2(a)(i) (each as amended, modified, extended, substituted, or
replaced from time to time, a “Canadian Tranche A Note” and, collectively, the
“Canadian Tranche A Notes”). Other than pursuant to Section 1.2(a)(ii), if at
any time (x) the principal amount of the outstanding Canadian Tranche A Loan
exceeds the lesser of the Aggregate Canadian Tranche A Borrowing Base or the
Canadian Tranche A Loan Commitment, (y) the Dollar Equivalent of the principal
amount of the outstanding Canadian Tranche A Loan of any Canadian Borrower
exceeds that Canadian Borrower’s separate Canadian Tranche A Borrowing Base or
(z) the Dollar Equivalent of the principal amount of the outstanding Canadian
Tranche A Loan together with the Dollar Equivalent of the principal amount of
the US Tranche A Loan exceeds the US Tranche A Loan Commitment (any such excess
Canadian Tranche A Loan is herein referred to collectively as “Canadian
Overadvances”), (A) Canadian Tranche A Lenders shall not be obligated to make
Canadian Tranche A Revolving Credit Advances and (B) no additional Canadian
Letters of Credit shall be issued and, except as provided in Section 1.2(a)(ii)
below, the Canadian Tranche A Loan must be repaid immediately and Canadian
Letters of Credit cash collateralized in an amount sufficient to eliminate any
Canadian Overadvance. All Canadian Overadvances shall constitute Canadian Index
Rate Loans and, at the election of Canadian Agent, shall bear interest at the
Default Rate. Canadian Tranche A Revolving Credit Advances which are to be made
as Canadian Index Rate Loans may be requested in any amount with written notice
prior to

 

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1:00 p.m. (Toronto time) on the Business Day immediately prior to the Business
Day on which the Canadian Tranche A Revolving Credit Advances is to be made for
funding requests equal to or greater than Cdn$1,000,000. For funding requests
for such Canadian Index Rate Loans less than Cdn$1,000,000, written notice must
be provided by 1:00 p.m. (Toronto time) on the Business Day on which the
Canadian Tranche A Revolving Credit Advances is to be made. All requests for
Canadian Tranche A Revolving Credit Advances that are to be made as BA Rate
Loans require written notice prior to 1:00 pm (Toronto time) on a Business Day
at least three (3) Business Days’ prior to the Business Day on which such
Canadian Tranche A Revolving Credit Advances is to be made. Written notices for
funding requests under the Canadian Tranche A Loan Commitment shall be in the
form attached as Exhibit 1.2(a)(ii) (“Notice of Canadian Tranche A Revolving
Credit Advance”).

(ii) If Canadian Borrower Representative on behalf of Canadian Borrowers
requests that Canadian Tranche A Lenders make, or permit to remain outstanding a
Canadian Overadvance, Canadian Agent may, in its sole discretion, elect to make,
or permit to remain outstanding such Canadian Overadvances; provided, however,
that Canadian Agent may not cause Canadian Tranche A Lenders to make, or permit
to remain outstanding, (a) a Canadian Tranche A Loan balance in excess of the
aggregate amount of all Canadian Tranche A Loan Commitments or (b) a Canadian
Overadvance in an aggregate amount in excess of 10% of the Canadian Tranche A
Loan Commitment. If a Canadian Overadvance is made, or permitted to remain
outstanding, pursuant to the preceding sentence, then all Canadian Tranche A
Lenders shall be bound to make, or permit to remain outstanding such Canadian
Overadvance based upon their Pro Rata Shares of the Canadian Tranche A Loan
Commitments in accordance with the terms of this Agreement. If a Canadian
Overadvance remains outstanding for more than ninety (90) days during any one
hundred eighty (180) day period, the Canadian Tranche A Loan must be repaid
immediately in an amount sufficient to eliminate all of such Canadian
Overadvance. Furthermore, holders of a majority of the Canadian Tranche A
Commitment may prospectively revoke Canadian Agent’s ability to make or permit
Canadian Overadvances by written notice to Canadian Agent.

(b) Canadian Letters of Credit. The Canadian Tranche A Loan Commitment may, in
addition to Canadian Tranche A Revolving Credit Advances, be utilized (subject
to the limitations imposed by Section 1.1(a)), upon the request of Canadian
Borrower Representative on behalf of the applicable Canadian Borrower, for the
issuance of Canadian Letters of Credit for the benefit of such Canadian
Borrower. Immediately upon the issuance by a Canadian L/C Issuer of a Canadian
Letter of Credit, and without further action on the part of Canadian Agent or
any of the Canadian Tranche A Lenders, each Canadian Tranche A Lender shall be
deemed to have purchased from such Canadian L/C Issuer a participation in such
Canadian Letter of Credit (or in its obligation under a risk participation
agreement with respect thereto) equal to such Canadian Tranche A Lender’s Pro
Rata Share of the aggregate amount available to be drawn under such Canadian
Letter of Credit.

(i) Maximum Amount. The aggregate amount of Canadian Letter of Credit
Obligations with respect to all Canadian Letters of Credit outstanding or
unreimbursed at any time shall not exceed the Dollar Equivalent of $5,000,000
(“Canadian L/C Sublimit”).

 

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(ii) Reimbursement. Each Canadian Borrower shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind (including for purposes of Section 11), to
reimburse any Canadian L/C Issuer on demand in immediately available funds for
any amounts paid by such Canadian L/C Issuer with respect to each Canadian
Letter of Credit for the benefit of such Canadian Borrower, including all
reimbursement payments, Fees, Charges, costs and expenses paid by such Canadian
L/C Issuer, without duplication of fees otherwise paid by any Canadian Borrower.
Each Canadian Borrower hereby authorizes and directs Canadian Agent, at Canadian
Agent’s option, to debit such Canadian Borrower’s accounts (by increasing the
outstanding principal balance of the Canadian Tranche A Revolving Credit
Advances made to such Canadian Borrower) in the amount of any payment made by
any Canadian L/C Issuer with respect to any Canadian Letter of Credit for the
benefit of such Canadian Borrower and to pay such amounts to such Canadian L/C
Issuer, and a Notice of Canadian Tranche A Revolving Credit Advance requesting a
Canadian Index Rate Loan in such amount shall be deemed to have been timely
given on such date. All amounts paid by a Canadian L/C Issuer with respect to
any Canadian Letter of Credit that are not immediately repaid by Canadian
Borrowers with the proceeds of a Canadian Tranche A Revolving Credit Advance or
otherwise shall bear interest payable on demand at the interest rate applicable
to Canadian Tranche A Revolving Credit Advances which are Canadian Index Rate
Loans plus, at the election of Canadian Agent or Requisite Lenders, an
additional two percent (2.00%) per annum. Each Canadian Tranche A Lender agrees
to fund its Pro Rata Share of any Canadian Tranche A Loan made to each Canadian
Borrower pursuant to this Section 1.1(b)(ii). In the event Canadian Agent elects
not to debit a Canadian Borrower’s account, such Canadian Borrower fails to
reimburse the applicable Canadian L/C Issuer in full on the date of any payment
in respect of a Canadian Letter of Credit for the benefit of such Canadian
Borrower and the other Canadian Borrowers fail to reimburse the applicable
Canadian L/C Issuer in full on the date of any payment in respect of a Canadian
Letter of Credit, Canadian Agent shall promptly notify each Canadian Tranche A
Lender of the amount of such unreimbursed payment and the accrued interest
thereon and each Canadian Tranche A Lender shall, prior to 3:00 p.m. (Toronto
time), on the next Business Day deliver to Canadian Agent an amount equal to its
Pro Rata Share thereof in same day funds. Each Canadian Tranche A Lender hereby
absolutely and unconditionally agrees to pay to the applicable Canadian L/C
Issuer upon demand by such Canadian L/C Issuer such Canadian Tranche A Lender’s
Pro Rata Share of each payment made by such Canadian L/C Issuer in respect of a
Canadian Letter of Credit and not reimbursed within one (1) Business Day by
Canadian Borrowers or satisfied through a debit of Canadian Borrowers’ account.
Each Canadian Tranche A Lender acknowledges and agrees that its obligations
pursuant to this subsection in respect of Canadian Letters of Credit are
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including setoff, counterclaim, the occurrence and continuance of a
Default or an Event of Default or any failure by Borrowers to satisfy any of the
conditions set forth in Section 2.2. If any Canadian Tranche A Lender fails to
make available to any Canadian L/C Issuer the amount of such Canadian Tranche A
Lender’s Pro Rata Share of any payments made by such Canadian L/C Issuer in
respect of a Canadian Letter of Credit as provided in this Section 1.1(b)(ii),
the applicable Canadian L/C Issuer shall be entitled to recover such amount on
demand from such Canadian Tranche A Lender together with interest at the
Canadian Index Rate.

 

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(iii) Request for Canadian Letters of Credit. Canadian Borrower Representative
shall give Canadian Agent prior written notice, at least three (3) Business Days
prior to the date on which it requests the issuance of a Canadian Letter of
Credit specifying (u) the date such Canadian Letter of Credit is requested to be
issued, (v) the face amount of such Canadian Letter of Credit, (w) the name and
address of the beneficiary, (x) a description of the transactions proposed to be
supported thereby, (y) the Canadian Borrower for whose account such Canadian
Letter of Credit is to be issued and (z) the expiry date (or extended expiry
date) of the Canadian Letter of Credit. Each request by Canadian Borrower
Representative for the issuance of a Canadian Letter of Credit shall be in the
form of Exhibit 1.1(b)(iii). If Canadian Agent informs Canadian Borrower
Representative that no Canadian L/C Issuer can issue the requested Canadian
Letter of Credit directly, such Canadian Borrower Representative may request
that a Canadian L/C Issuer arrange for the issuance of the requested Canadian
Letter of Credit under a risk participation agreement with another financial
institution resident in Canada for purposes of Part XIII of the ITA reasonably
acceptable to Canadian Agent, Canadian L/C Issuer and the Canadian Borrower
Representative. The issuance of any Canadian Letter of Credit under this
Agreement shall be subject to satisfaction of the conditions set forth in
Section 2.2 and the conditions that the applicable Canadian Letter of Credit
(i) supports a transaction benefiting Canadian Borrowers or any of their
wholly-owned Subsidiaries and (ii) is in a form and contains such terms and
conditions as are reasonably satisfactory to applicable Canadian L/C Issuer and,
in the case of standby letters of credit, Canadian Agent. The initial notice
requesting the issuance of a Canadian Letter of Credit shall be accompanied by
the form of the Canadian Letter of Credit and the Master Standby Agreement, and
an application for a Canadian Letter of Credit, if any, then required by the
applicable Canadian L/C Issuer completed in a manner reasonably satisfactory to
such Canadian L/C Issuer. If any provision of any application or reimbursement
agreement is inconsistent with the terms of this Agreement, then the provisions
of this Agreement, to the extent of such inconsistency, shall control.

(iv) Expiration Dates of Canadian Letters of Credit. The expiration date of each
Canadian Letter of Credit shall be on a date which is not later than the earlier
of (a) one year from its date of issuance or (b) the tenth (10th) day prior to
the date set forth in clause (a) of the definition of the term Canadian Tranche
A Commitment Termination Date. Notwithstanding the foregoing, a Canadian Letter
of Credit may provide for automatic extensions of its expiration date for one
(1) or more successive one (1) year periods provided that the Canadian L/C
Issuer has the right to terminate such Canadian Letter of Credit on each such
annual expiration date and no renewal term may extend the term of the Canadian
Letter of Credit to a date that is later than the tenth (10th) day prior to the
date set forth in clause (a) of the definition of the term Canadian Tranche A
Commitment Termination Date. The applicable Canadian L/C Issuer may elect not to
renew any such Canadian Letter of Credit issued by it and, upon direction by
Canadian Agent or Requisite Lenders, shall not renew any Canadian Letter of
Credit at any time during the continuance of an Event of Default, provided that,
in the case of a direction by Canadian Agent or Requisite Lenders, the
applicable Canadian L/C Issuer receives such directions prior to the date notice
of non-renewal is required to be given by such Canadian L/C Issuer and such
Canadian L/C Issuer has had a reasonable period of time to act on such notice.

(v) Obligations Absolute. The obligation of Canadian Borrowers to reimburse the
Canadian L/C Issuers, Canadian Agent and Canadian Tranche A Lenders for payments
made in respect of Canadian Letters of Credit issued by any Canadian L/C Issuer
shall be unconditional and irrevocable and shall be paid under all circumstances
strictly in accordance

 

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with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any Letter of Credit; (b) any amendment or
waiver of or any consent or departure from all or any of the provisions of any
Letter of Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which Borrowers, any of their Subsidiaries or Affiliates
or any other Person may at any time have against any beneficiary of any Letter
of Credit, any Agent, any L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft 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; (e) payment under any Letter of Credit against presentation of a
draft or other document that does not substantially comply with the terms of
such Letter of Credit; or (f) any other act or omission to act or delay of any
kind of any L/C Issuer, any Agent, any Lender or any other Person or any other
event or circumstance whatsoever that might, but for the provisions of this
Section 1.1(b)(v), constitute a legal or equitable discharge of Canadian
Borrowers’ obligations hereunder. Without limiting the generality of the
foregoing, it is expressly understood and agreed by Canadian Borrowers that the
absolute and unconditional obligation of Canadian Borrowers to Canadian Agent
and Canadian Tranche A Lenders hereunder to reimburse payments made under a
Canadian Letter of Credit will not be excused by the gross negligence or willful
misconduct of the applicable Canadian L/C Issuer. However, the foregoing shall
not be construed to excuse any Canadian L/C Issuer from claims which Canadian
Borrowers may assert against such Canadian L/C Issuer subject to the terms of
the Master Standby Agreement.

(vi) Obligations of Canadian L/C Issuers. Each Canadian L/C Issuer (other than
GE Canada) hereby agrees that it will not issue a Canadian Letter of Credit
hereunder until it has provided Canadian Agent with written notice specifying
the amount and intended issuance date of such Canadian Letter of Credit and
Canadian Agent has returned a written acknowledgment of such notice to Canadian
L/C Issuer (such notices and acknowledgements to be given promptly). Each
Canadian L/C Issuer (other than GE Canada) further agrees to provide to Canadian
Agent: (a) a copy of each Canadian Letter of Credit issued by such Canadian L/C
Issuer promptly after its issuance; (b) a weekly report summarizing available
amounts under Canadian Letters of Credit issued by such Canadian L/C Issuer, the
dates and amounts of any draws under such Canadian Letters of Credit, the
effective date of any increase or decrease in the face amount of any Canadian
Letters of Credit during such week and the amount of any unreimbursed draws
under such Canadian Letters of Credit; and (c) such additional information
reasonably requested by Canadian Agent from time to time with respect to the
Canadian Letters of Credit issued by such Canadian L/C Issuer.

 

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(c) Funding Authorization. Subject to the next sentence hereof, the proceeds of
all Canadian Loans made pursuant to this Agreement subsequent to the Closing
Date are to be funded by Canadian Agent by wire transfer to the applicable
account designated by Canadian Borrower Representative below (the “Canadian
Disbursement Account”):

 

Bank:    Exopack Canada    Bank of America Canada    200 Front Street West   
Toronto, Ontario M5V 3L2    XXXXXXXXXXXXX    Account No.: XXXXXXXXXXXXX   
Exopack Performance Films Inc.    Bank of America Canada    200 Front Street
West    Toronto, Ontario M5V 3L2    XXXXXXXXXXXXX    Account No.: XXXXXXXXXXXXX

Canadian Borrower Representative shall provide Canadian Agent with written
notice of any change in the foregoing instructions at least three (3) Business
Days before the desired effective date of such change.

(d) In this Agreement whenever it is necessary to compare or add the outstanding
balance of the Canadian Loans or Canadian Loan Commitments, or any portion
thereof, to the outstanding balance of the US Loans or the US Loan Commitments,
or any portion thereof, such Revolving Loans and Commitments will be expressed
in the Dollar Equivalent thereof.

(e) Canadian Tranche A1 Loan. Each Canadian Tranche A1 Lender agrees, severally
and not jointly, to make available to Canadian Borrowers from time to time until
the Canadian Tranche A1 Commitment Termination Date its Pro Rata Share of
advances denominated in Canadian Dollars (each a “Canadian Tranche A1 Revolving
Credit Advance”) requested by Canadian Borrower Representative on behalf of any
Canadian Borrower hereunder. The Pro Rata Share of the Canadian Tranche A1 Loan
of any Canadian Tranche A1 Lender shall not at any time exceed its separate
Canadian Tranche A1 Loan Commitment. Moreover, the Canadian Tranche A1 Loans
outstanding to the Canadian Borrowers shall not exceed at any time the Aggregate
Canadian Tranche A1 Borrowing Base. Canadian Tranche A1 Revolving Credit
Advances may be borrowed, repaid and reborrowed from time to time until the
Canadian Tranche A1 Commitment Termination Date; provided, that any Canadian
Tranche A1 Revolving Credit Advance to be made at any time shall not exceed
Canadian Tranche A1 Borrowing Availability at such time. The Canadian Tranche A1
Loan shall be repaid in full on the Canadian Tranche A1 Commitment Termination
Date. Upon request of a Canadian Tranche A1 Lender, each Canadian Borrower shall
execute and deliver to such Canadian Tranche A1 Lender a note to evidence the
Canadian Tranche A1 Loan Commitment of that Canadian Tranche A1 Lender. Each
such note shall be in the principal amount of the Canadian Tranche A1 Loan
Commitment of the applicable Canadian Tranche A1 Lender denominated in Canadian
Dollars, dated the date such requesting Canadian Tranche A1 Lender became a
Canadian Tranche A1 Lender hereunder and substantially in the form of Exhibit
1.2(e)(i) (each as amended, modified, extended, substituted, or replaced from
time to time, a “Canadian Tranche A1 Note” and, collectively, the “Canadian
Tranche A1 Notes”). Canadian Tranche A1 Revolving Credit Advances which are to

 

20

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be made as Canadian Index Rate Loans may be requested in any amount with written
notice prior to 1:00 p.m. (Toronto time) on the Business Day immediately prior
to the Business Day on which the Canadian Tranche A1 Loan is to be made for
funding requests equal to or greater than Cdn$1,000,000. For funding requests
for such Canadian Index Rate Loans less than Cdn$1,000,000, written notice must
be provided by 1:00 p.m. (Toronto time) on the Business Day on which the
Canadian Loan is to be made. All requests for Canadian Tranche A1 Revolving
Credit Advances that are to be made as BA Rate Loans require at least three
(3) Business Days’ prior written notice. Written notices for funding requests
under the Canadian Tranche A1 Loan Commitment shall be in the form attached as
Exhibit 1.2(e)(ii) (“Notice of Canadian Tranche A1 Revolving Credit Advance”).

1.3 Interest and Applicable Margins.

(a) US Borrowers shall pay interest to US Agent, for the ratable benefit of US
Lenders, and Canadian Borrowers shall pay interest to Canadian Agent, for the
ratable benefit of Canadian Lenders, in each case with respect to the various
Loans made by each Lender, in arrears on each applicable Interest Payment Date,
at the following rates: (i) with respect to the US Tranche A Revolving Credit
Advances designated as US Index Rate Loans (and for all other US Obligations not
otherwise set forth below), the US Index Rate plus the Applicable Margin or,
with respect to US Tranche A Revolving Credit Advances designated as LIBOR
Loans, at the election of US Borrower Representative, the applicable LIBOR Rate
plus the Applicable Margin; (ii) with respect to the Canadian Tranche A
Revolving Credit Advances denominated in Canadian Dollars and designated as
Canadian Index Rate Loans (and for all other Canadian Obligations not otherwise
set forth below), the Canadian Index Rate plus the Applicable Margin; (iii) with
respect to Canadian Tranche A Revolving Credit Advances denominated in Canadian
Dollars and designated as BA Rate Loans, at the election of Canadian Borrower
Representative, the applicable BA Rate plus the Applicable Margin, (iv) with
respect to the US Tranche A1 Revolving Credit Advances designated as US Tranche
A1 Index Rate Loans, the US Index Rate plus the Applicable Margin or, with
respect to US Tranche A1 Revolving Credit Advances designated as LIBOR Loans, at
the election of US Borrower Representative, the applicable LIBOR Rate plus the
Applicable Margin, (v) with respect to the Canadian Tranche A1 Revolving Credit
Advances denominated in Canadian Dollars and designated as Canadian Index Rate
Loans, the Canadian Index Rate plus the Applicable Margin, and (vi) with respect
to Canadian Tranche A1 Revolving Credit Advances denominated in Canadian Dollars
and designated as BA Rate Loans, at the election of Canadian Borrower
Representative, the applicable BA Rate plus the Applicable Margin.

(b) If any payment on any Loan becomes due and payable on a day other than a
Business Day, the maturity thereof will be extended to the next succeeding
Business Day (except as set forth in the definition of LIBOR Period) and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.

(c) All computations of Fees calculated on a per annum basis and interest on
LIBOR Loans shall be made by the Applicable Agent on the basis of a 360-day
year. All Interest on US Index Rate Loans and Canadian Loans denominated in
Canadian Dollars subject to interest calculated by reference to the Canadian
Index Rate or the BA Rate shall be calculated on the basis of a 365 day year. In
each case, the calculation shall be made for the actual number

 

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of days occurring in the period for which such Fees and interest are payable.
The US Index Rate and the Canadian Index Rate are floating rates determined for
each day. Each determination by the Applicable Agent of an interest rate and
Fees hereunder shall be presumptive evidence of the correctness of such rates
and Fees.

(d) (1) So long as an Event of Default has occurred and is continuing under
Section 7.1(a), (f) or (g) and without notice of any kind, or (2) so long as any
other Event of Default has occurred and is continuing and at the election of
Applicable Agent (or upon the written request of the Requisite Lenders)
confirmed by written notice from Applicable Agent to Applicable Borrower
Representative, subject to Applicable Law, the interest rates applicable to the
Loans and the Letter of Credit Fees applicable to the Letters of Credit shall be
increased by two percentage points (2%) per annum above the rates of interest or
the rate of such Fee otherwise applicable hereunder (the “Default Rate”), and
all such outstanding non-contingent Obligations shall bear interest at the
Default Rate applicable to such Obligations. Interest and Letter of Credit Fees
at the Default Rate shall accrue in the case of clause (1) above from the
initial date of such Event of Default, and in the case of clause (2) above, from
the date specified by the Applicable Agent, which date shall be no earlier than
the initial date of the applicable Event of Default, and in each case, until
that Event of Default is cured or waived and shall be payable upon demand, but
in any event, shall be payable on the next regularly scheduled payment date set
forth herein for such Obligation.

(e) Applicable Borrower Representative shall have the option to (i) request that
any US Revolving Credit Advance be made as a LIBOR Loan, (ii) request that any
Canadian Revolving Credit Advance be made as a BA Rate Loan, (iii) convert at
any time all or any part of outstanding US Loans from US Index Rate Loans to
LIBOR Loans, (iv) convert at any time all or any part of outstanding Canadian
Loans from Canadian Index Rate Loans to BA Rate Loans, (v) convert any LIBOR
Loan to a US Index Rate Loan, subject to payment of the LIBOR Breakage Costs in
accordance with Section 1.4(e) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, (vi) convert any BA Rate Loan
to a Canadian Index Rate Loan, subject to payment of the BA Rate Breakage Costs
in accordance with Section 1.4(f) if such conversion is made prior to the
expiration of the BA Period applicable thereto, (vii) continue all or any
portion of any LIBOR Loan as a LIBOR Loan upon the expiration of the applicable
LIBOR Period and the succeeding LIBOR Period of that continued LIBOR Loan shall
commence on the first day after the last day of the LIBOR Period of the LIBOR
Loan to be continued, or (vii) continue all or any portion of any BA Rate Loan
as a BA Rate Loan upon the expiration of the applicable BA Period and the
succeeding BA Period of that continued BA Rate Loan shall commence on the first
day after the last day of the BA Period of the BA Rate Loan to be continued. Any
US Loan or group of US Loans having the same proposed LIBOR Period to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of such amount. Any
Canadian Loan or group of Canadian Loans denominated in Canadian Dollars having
the same proposed BA Period to be made or continued as, or converted into, a BA
Rate Loan must be in a minimum amount of Cdn$500,000 and integral multiples of
Cdn$100,000 in excess of such amount. Any such election must be made by 1:00
p.m. (New York time) on the 3rd Business Day prior to (a) in the case of a LIBOR
Loan (1) the date of any proposed US Revolving Credit Advance which is to bear
interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect to any
LIBOR Loans to be continued as such, or (3) the date on

 

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which the US Borrower Representative wishes to convert any US Index Rate Loan to
a LIBOR Loan for a LIBOR Period designated by such Borrower Representative in
such election and (b) in the case of a BA Rate Loan (1) the date of any proposed
Canadian Revolving Credit Advance which is to bear interest at the BA Rate,
(2) the end of each BA Period with respect to any BA Rate Loans to be continued
as such, or (3) the date on which Canadian Borrower Representative wishes to
convert any Canadian Index Rate Loan to a BA Rate Loan for a BA Period
designated by Canadian Borrower Representative in such election. If no election
is received with respect to an existing LIBOR Loan or an existing BA Rate Loan
by 1:00 p.m. (New York time) on the 3rd Business Day prior to the end of the
LIBOR Period or the BA Period, as applicable, with respect thereto, that LIBOR
Loan shall be converted to a US Index Rate Loan at the end of its LIBOR Period
and that BA Rate Loan shall be converted into a Canadian Index Rate Loan at the
end of its BA Period. Applicable Borrower Representative must make such election
by notice to Applicable Agent in writing, by fax or overnight courier. In the
case of any conversion or continuation, such election must be made pursuant to a
written notice (a “Notice of Conversion/Continuation”) in the form of Exhibit
1.3(e). No Loan shall be made, converted into or continued as a LIBOR Loan or a
BA Rate Loan, if an Event of Default has occurred and is continuing and (i) with
respect to the Canadian Loans, Canadian Agent or Canadian Requisite Lenders or
(ii) with respect to the US Loans, US Agent or US Requisite Lenders, have
determined not to make or continue any Loan as a LIBOR Loan or a BA Rate Loan as
a result thereof.

(f) Notwithstanding anything to the contrary set forth in this Section 1.3, if a
court of competent jurisdiction determines in a final order that any rate of
interest payable hereunder exceeds the highest rate of interest permissible
under Applicable Law (the “Maximum Lawful Rate”), then so long as the Maximum
Lawful Rate would be so exceeded, such rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter such rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Applicable Agent
is equal to the total interest that would have been received had such interest
rate payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, such interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.3(a) through (e), unless and
until any rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.3(f), a court of competent
jurisdiction shall determine by a final, non-appealable order that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Applicable
Agent shall, to the extent permitted by applicable law, promptly apply such
excess as specified in Section 1.5 and thereafter shall refund any excess to
Borrowers or as such court of competent jurisdiction may otherwise order.

 

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1.4 Fees.

(a) Fee Letter. US Borrowers shall pay to the Agents, the Fees specified in that
certain fee letter dated as of the Closing Date, among GE Capital, GE Canada and
the Borrowers (the “GE Capital Fee Letter”), at the times specified for payment
therein.

(b) Unused Line Fees. As additional compensation for the Lenders, US Borrowers
shall, jointly and severally, pay to US Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each month prior to the US
Tranche A Commitment Termination Date and on the US Tranche A Commitment
Termination Date, a fee, calculated on the basis of a 360-day year, for
Borrowers’ non-use of available funds in an amount equal to (i) three eighths of
one percent (0.375%) per annum multiplied by (ii) the difference between (x) the
Dollar Equivalent of the Commitments of all Lenders (as it may be reduced from
time to time) and (y) the average for the period of the Dollar Equivalent of the
daily closing balances of the Loans (outstanding during the period for which
such Fee is due).

(c) Unused Accordion Fee. As additional compensation for the Lenders, US
Borrowers shall, jointly and severally, pay to US Agent, for the ratable benefit
of the Lenders, in arrears, on the first Business Day of each month prior to the
US Tranche A Commitment Termination Date and on the US Tranche A Commitment
Termination Date, a fee, calculated on the basis of a 360-day year, for
Borrowers’ non-use of the Aggregate Accordion Commitment in an amount equal to
(i) one quarter of one percent (0.25%) per annum multiplied by (ii) (x) the
Aggregate Accordion Commitment plus the aggregate amount of all Commitments on
the Closing Date minus (y) the average for the period of the Dollar Equivalent
of the daily closing amount of the Commitments (outstanding during the period
for which such Fee is due).

(d) Letter of Credit Fees.

(i) US Borrowers agree to pay to US Agent for the benefit of US Tranche A
Lenders, as compensation to such US Tranche A Lenders for US Letter of Credit
Obligations incurred hereunder, (1) without duplication of costs and expenses
otherwise payable to US Agent or US Tranche A Lenders hereunder, all reasonable
costs and expenses, without duplication of fees otherwise paid by US Borrowers,
incurred by US Agent or any US Tranche A Lender on account of such US Letter of
Credit Obligations, and (2) for each month during which any US Letter of Credit
Obligation shall remain outstanding, a fee (the “US Letter of Credit Fee”) in an
amount equal to the product of the Dollar Equivalent of the average daily
undrawn face amount of all US Letters of Credit issued, guaranteed or supported
by risk participation agreements multiplied by a per annum rate equal to the
Applicable US Tranche A LIBOR Margin from time to time in effect. Such fee shall
be paid to US Agent for the benefit of the US Tranche A Lenders in arrears, on
the first Business Day of each month and on the US Tranche A Commitment
Termination Date. In addition, US Borrowers shall pay to any US L/C Issuer, on
demand, such reasonable fees, without duplication of fees otherwise payable
hereunder (including all per annum fees), charges and expenses of such US L/C
Issuer in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such US Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such US Letter of Credit is
issued.

 

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(ii) Each Canadian Borrower agrees to pay to Canadian Agent for the benefit of
Canadian Tranche A Lenders, as compensation to such Canadian Tranche A Lenders
for Canadian Letter of Credit Obligations incurred for its benefit hereunder,
(1) without duplication of costs and expenses otherwise payable to Canadian
Agent or Canadian Tranche A Lenders hereunder, all reasonable costs and
expenses, without duplication of fees otherwise paid by such Canadian Borrower,
incurred by Canadian Agent or any Canadian Tranche A Lender on account of such
Canadian Letter of Credit Obligations, and (2) for each month during which any
such Canadian Letter of Credit Obligation shall remain outstanding, a fee (the
“Canadian Letter of Credit Fee”) in an amount equal to the product of the Dollar
Equivalent of the average daily undrawn face amount of all of such Canadian
Letters of Credit issued, guaranteed or supported by risk participation
agreements multiplied by a per annum rate equal to the Applicable Tranche A BA
Rate Margin from time to time in effect. Such fee shall be paid to Canadian
Agent for the benefit of the Canadian Tranche A Lenders in arrears, on the first
Business Day of each month and on the Canadian Tranche A Commitment Termination
Date. In addition, each Canadian Borrower shall pay to any Canadian L/C Issuer,
on demand, such reasonable fees, without duplication of fees otherwise payable
hereunder (including all per annum fees), charges and expenses of such Canadian
L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Canadian Borrower’s Canadian Letter of Credit
Obligations or otherwise payable pursuant to the application and related
documentation under which such Canadian Letter of Credit is issued.

(e) LIBOR Breakage Costs. Upon (i) any default by any US Borrower in making any
borrowing of, conversion into or continuation of any LIBOR Loan following US
Borrower Representative’s delivery to US Agent of any LIBOR Loan request in
respect thereof or (ii) any payment of a LIBOR Loan on any day that is not the
last day of the LIBOR Period applicable thereto (regardless of the source of
such prepayment and whether voluntary, by acceleration or otherwise), US
Borrowers shall pay US Agent, for the benefit of all US Lenders that funded or
were prepared to fund any such LIBOR Loan, LIBOR Breakage Costs, if applicable.

(f) BA Rate Breakage Costs. Upon (i) any default by any Canadian Borrower in
making any borrowing of, conversion into or continuation of any BA Rate Loan
following Canadian Borrower Representative’s delivery to Canadian Agent of any
BA Rate Loan request in respect thereof or (ii) any payment of a BA Rate Loan on
any day that is not the last day of the BA Period applicable thereto (regardless
of the source of such prepayment and whether voluntary, by acceleration or
otherwise), Canadian Borrowers shall pay Canadian Agent, for the benefit of all
Canadian Lenders that funded or were prepared to fund any such BA Rate Loan, the
BA Rate Breakage Costs, if applicable.

(g) Expenses and Attorneys’ Fees.

(i) US Borrowers agree to promptly pay all reasonable, out-of-pocket fees,
charges, costs and expenses (including reasonable attorneys’ fees and expenses)
incurred by US Agent in connection with any matters contemplated by or arising
out of the Loan Documents, in connection with the examination, review, due
diligence investigation, documentation, negotiation, closing and syndication of
the transactions contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments, modifications,
consents and waivers. US Borrowers agree to promptly pay all reasonable,
out-of-pocket fees, charges, costs and expenses (including fees, charges, costs
and expenses of

 

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attorneys, auditors appraisers, consultants and advisors) incurred by US Agent
in connection with any amendment, waiver or consent with respect to the Loan
Documents, Event of Default, work-out or action to enforce any Loan Document or
to collect any payments due from US Borrowers or any other US Credit Party. In
addition, in connection with any work-out or action to enforce any Loan Document
or to collect any payments due from US Borrowers or any other US Credit Party,
US Borrowers agree to promptly pay all reasonable, out-of-pocket fees, charges,
costs and expenses, including, without limitation, reasonable attorneys’ fees,
incurred by US Lenders. All fees, charges, costs and expenses for which US
Borrowers are responsible under this Section 1.4(g)(i) shall be deemed part of
the US Obligations when incurred, payable in accordance with the final sentence
of Section 1.5(b) and secured by the US Collateral.

(ii) Canadian Borrowers agree to promptly pay all reasonable, out-of-pocket
fees, charges, costs and expenses (including reasonable attorneys’ fees and
expenses) incurred by Canadian Agent in connection with any matters contemplated
by or arising out of the Loan Documents, in connection with the examination,
review, due diligence investigation, documentation, negotiation, closing and
syndication of the transactions contemplated herein and in connection with the
continued administration of the Loan Documents including any amendments,
modifications, consents and waivers. Canadian Borrowers agree to promptly pay
all reasonable, out-of-pocket fees, charges, costs and expenses (including fees,
charges, costs and expenses of attorneys, auditors appraisers, consultants and
advisors) incurred by Canadian Agent in connection with any amendment, waiver or
consent with respect to the Loan Documents, Event of Default, work-out or action
to enforce any Loan Document or to collect any payments due from Canadian
Borrowers or any other Canadian Credit Party. In addition, in connection with
any work-out or action to enforce any Loan Document or to collect any payments
due from Canadian Borrowers or any other Canadian Credit Party, Canadian
Borrowers agree to promptly pay all reasonable, out-of-pocket fees, charges,
costs and expenses, including, without limitation, reasonable attorneys’ fees,
incurred by Canadian Lenders. All fees, charges, costs and expenses for which
Canadian Borrowers are responsible under this Section 1.4(g)(ii) shall be deemed
part of the Canadian Obligations when incurred, payable in accordance with the
final sentence of Section 1.5(b) and secured by the Collateral.

1.5 Payments.

(a) All payments by Borrowers of the Obligations shall be without deduction,
defense, setoff or counterclaim and shall be made in same day funds and
delivered (i) by the Canadian Borrowers, with respect to the Canadian Tranche A
Loans and Canadian Tranche A1 Loans, to Canadian Agent for the benefit of
Canadian Agent and Canadian Tranche A Lenders and Canadian Tranche A1 Lenders,
as applicable, and (ii) by the US Borrowers, with respect to US Tranche A Loans
and the US Tranche A1 Loans, to US Agent for the benefit of US Agent and US
Tranche A Lenders and US Tranche A1 Lenders, as applicable, in each case by wire
transfer to the following account or such other place as Applicable Agent may
from time to time designate to the Applicable Borrower Representative in
writing.

 

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With respect to the Canadian Tranche A Loans and Canadian Tranche A1 Loans:

Royal Bank of Canada

Swift No. XXXXXXXXXXXXX

XXXXXXXXXXXXX

XXXXXXXXXXXXX

Account Number: XXXXXXXXXXXXX

200 Bay Street Main Floor

Toronto, ON Canada M5J 2K5

Account Name: XXXXXXXXXXXXX

Reference: XXXXXXXXXXXXX

With respect to the US Tranche A Loan and US Tranche A1 Loan:

Deutsche Bank Trust Company Americas

ABA No. XXXXXXXXXXXXX

Account Number: XXXXXXXXXXXXX

60 Wall Street 6th Floor

New York, NY 10005

Account Name: XXXXXXXXXXXXX

Reference: XXXXXXXXXXXXX

(b) Borrowers shall receive credit on the day of receipt for good funds received
by Applicable Agent by 2:00 p.m. (New York time) in the case of US Agent or 2:00
p.m. (Toronto time) in the case of Canadian Agent. In the absence of receipt by
such times, such funds shall be deemed to have been paid on the next Business
Day. Whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, the payment may be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the amount of interest and Fees due hereunder.

(c) US Borrowers hereby authorize US Tranche A Lenders to make US Tranche A
Revolving Credit Advances in Dollars (as US Index Rate Loans), on the basis of
their Pro Rata Shares, for the payment of interest, Fees, expenses and US Letter
of Credit reimbursement obligations and any amounts required to be deposited
with respect to outstanding US Letter of Credit Obligations pursuant to the
terms of this Agreement.

(d) Canadian Borrowers hereby authorize Canadian Tranche A Lenders to make
Canadian Tranche A Revolving Credit Advances in Canadian Dollars as Canadian
Index Rate Loans, on the basis of their Pro Rata Shares, for the payment of
interest, Fees and expenses and Canadian Letter of Credit reimbursement
obligations and any amounts required to be deposited with respect to outstanding
Canadian Letter of Credit Obligations pursuant to the terms of this Agreement.

(e) US Borrowers hereby authorize US Tranche A1 Lenders to make US Tranche A1
Revolving Credit Advances in Dollars (as US Index Rate Loans), on the basis of
their Pro Rata Shares, for the payment of interest, Fees and expenses pursuant
to the terms of this Agreement.

 

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(f) Canadian Borrowers hereby authorize Canadian Tranche A1 Lenders to make
Canadian Tranche A1 Revolving Credit Advances in Canadian Dollars as Canadian
Index Rate Loans, on the basis of their Pro Rata Shares, for the payment of
interest, Fees and expenses pursuant to the terms of this Agreement.

1.6 Prepayments.

(a) Voluntary Prepayments of Loans. At any time, any Borrower may prepay any
Loan, in whole or in part, without premium or penalty subject to the payment of
LIBOR Breakage Costs and BA Rate Breakage Costs, if and to the extent
applicable.

(b) Voluntary Reduction of the Commitments.

(i) At any time, US Borrower Representative on behalf of US Borrowers may
permanently reduce the US Tranche A Loan Commitment without premium or penalty
subject to the payment of LIBOR Breakage Costs, if and to the extent applicable;
provided, however, that the US Tranche A Loan Commitment may not be permanently
reduced to less than the outstanding principal balance of the US Tranche A Loan
as of the date of such reduction (determined after giving effect to all
prepayments and repayments made on such date). Any reduction of the US Tranche A
Loan Commitment shall not result in a pro rata or any other reduction of the US
L/C Sublimit unless so designated in writing by US Borrower Representative or,
unless the US Tranche A Loan Commitment is reduced below $25,000,000, of the
Canadian Commitment. In addition, US Borrower Representative on behalf of US
Borrowers may, at any time terminate the US Tranche A Loan Commitment on at
least ten (10) Business Days’ prior written notice to US Agent, which
termination may be revoked or deferred by US Borrower Representative on behalf
of US Borrowers; provided, that upon such termination, the US Tranche A Loans
and all other US Obligations shall be immediately due and payable in full and
all US Letter of Credit Obligations shall be cash collateralized or otherwise
satisfied in accordance with Section 1.6(g) of this Agreement.

(ii) At any time, Canadian Borrower Representative on behalf of Canadian
Borrowers may permanently reduce the Canadian Tranche A Loan Commitment without
premium or penalty subject to the payment of BA Rate Breakage Costs, if and to
the extent applicable; provided, however, that the Canadian Tranche A Loan
Commitment may not be permanently reduced to less than the outstanding principal
balance of the Canadian Tranche A Loan as of the date of such reduction
(determined after giving effect to all prepayments and repayments made on such
date). Any reduction of the Canadian Tranche A Loan Commitment shall not result
in a pro rata or any other reduction of the Canadian L/C Sublimit unless so
designated in writing by Canadian Borrower Representative or of the US Tranche A
Loan Commitment. In addition, Canadian Borrower Representative on behalf of
Canadian Borrowers may, at any time terminate the Canadian Tranche A Loan
Commitment on at least ten (10) Business Days’ prior written notice to Canadian
Agent, which termination may be revoked or deferred by Canadian Borrower
Representative on behalf of Canadian Borrowers; provided, that upon such
termination, the Canadian Tranche A Loan and all other Canadian Obligations
shall be immediately due and payable in full and all Canadian Letter of Credit
Obligations shall be cash collateralized or otherwise satisfied in accordance
with Section 1.6(g) of this Agreement.

 

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(iii) At any time, US Borrower Representative on behalf of US Borrowers may
permanently reduce the US Tranche A1 Loan Commitment without premium or penalty
subject to the payment of LIBOR Breakage Costs, if and to the extent applicable;
provided, however, that the US Tranche A1 Loan Commitment may not be permanently
reduced to less than the outstanding principal balance of the US Tranche A1 Loan
as of the date of such reduction (determined after giving effect to all
prepayments and repayments made on such date). In addition, US Borrower
Representative on behalf of US Borrowers may, at any time terminate the US
Tranche A1 Loan Commitment on at least ten (10) Business Days’ prior written
notice to US Agent, which termination may be revoked or deferred by US Borrower
Representative on behalf of US Borrowers; provided, that upon such termination,
the US Tranche A1 Loans shall be immediately due and payable in full.

(iv) At any time, Canadian Borrower Representative on behalf of Canadian
Borrowers may permanently reduce the Canadian Tranche A1 Loan Commitment without
premium or penalty subject to the payment of BA Rate Breakage Costs, if and to
the extent applicable; provided, however, that the Canadian Tranche A1 Loan
Commitment may not be permanently reduced to less than the outstanding principal
balance of the Canadian Tranche A1 Loan as of the date of such reduction
(determined after giving effect to all prepayments and repayments made on such
date). In addition, Canadian Borrower Representative on behalf of Canadian
Borrowers may, at any time terminate the Canadian Tranche A1 Loan Commitment on
at least ten (10) Business Days’ prior written notice to Canadian Agent, which
termination may be revoked or deferred by Canadian Borrower Representative on
behalf of Canadian Borrowers; provided, that upon such termination, the Canadian
Tranche A1 Loan shall be immediately due and payable in full.

(v) At any time, US Borrower Representative on behalf of US Borrowers and
Canadian Borrower Representative on behalf of Canadian Borrowers may permanently
reduce or terminate the unused Aggregate Accordion Commitment without premium or
penalty by written notice to the Applicable Agent.

(c) Prepayments from Asset Dispositions.

(i) Except as otherwise provided in Section 1.6(f) hereof, promptly upon receipt
of any Net Proceeds received by any US Credit Party in excess of the Dollar
Equivalent of $5,000,000 in the aggregate during any Fiscal Year, US Borrowers
shall prepay the US Tranche A Loans and US Tranche A1 Loans in an amount equal
to such Net Proceeds, except that US Borrowers or their Subsidiaries may
reinvest all Net Proceeds of any such Asset Disposition, within one hundred
eighty (180) days, in productive replacement fixed assets of a kind then used or
usable in the business of US Borrowers. If US Borrowers do not intend to so
reinvest such Net Proceeds or if the period set forth in the immediately
preceding sentence expires without US Borrowers having reinvested the Net
Proceeds of any such Asset Disposition or if such Net Proceeds are attributable
to a working capital, earnings, balance sheet or similar adjustment under any
acquisition agreement or similar purchase agreement, US Borrowers shall prepay
the US Tranche A Loans and US Tranche A1 Loans in an amount equal to such
remaining Net Proceeds in accordance with Section 1.6(e).

 

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(ii) Except as otherwise provided in Section 1.6(f) hereof, promptly upon
receipt of any Net Proceeds received by any Canadian Credit Party in excess of
the Dollar Equivalent of $5,000,000 in the aggregate during any Fiscal Year,
Canadian Borrowers shall prepay the Canadian Tranche A Loans and Canadian
Tranche A1 Loans in an amount equal to such Net Proceeds, except that Canadian
Borrowers or their Subsidiaries may reinvest all Net Proceeds of any such Asset
Disposition, within one hundred eighty (180) days, in productive replacement
fixed assets of a kind then used or usable in the business of Canadian
Borrowers. If Canadian Borrowers do not intend to so reinvest such Net Proceeds
or if the period set forth in the immediately preceding sentence expires without
Canadian Borrowers having reinvested the Net Proceeds of any such Asset
Disposition or if such Net Proceeds are attributable to a working capital,
earnings, balance sheet or similar adjustment under any acquisition agreement or
similar purchase agreement, Canadian Borrowers shall prepay the Canadian Tranche
A Loans and Canadian Tranche A1 Loans in an amount equal to such remaining Net
Proceeds in accordance with Section 1.6(e).

(d) Reserved.

(e) Application of Proceeds.

(i) With respect to any prepayments made by any US Borrower pursuant to
Section 1.6(c)(i), such prepayments shall be applied as follows: first, to the
US Tranche A1 Revolving Credit Advances outstanding to that US Borrower until
the same have been repaid in full; second, to the principal balance of the US
Tranche A1 Revolving Credit Advances made to each other US Borrower, pro rata,
until the same have been repaid in full; third, to the US Tranche A Revolving
Credit Advances outstanding to that US Borrower until the same have been repaid
in full; and fourth to the principal balance of the US Tranche A Revolving
Credit Advances made to each other US Borrower, pro rata, until the same have
been repaid in full Considering each type of US Tranche A1 Loan and US Tranche A
Loan being prepaid separately, any such prepayment shall be applied first to US
Index Rate Loans of the type required to be prepaid before application to LIBOR
Loans of the type required to be prepaid, in each case in a manner which
minimizes any resulting LIBOR Breakage Costs. The application of prepayments
pursuant to this Section 1.6(e)(i) shall not permanently reduce the Commitments
unless an Event of Default shall have occurred and be continuing.

(ii) With respect to any prepayments required to be made in respect of any
Canadian Borrower pursuant to Section 1.6(c)(ii) such prepayments shall be made
as follows: first, to the Canadian Tranche A1 Revolving Credit Advances
outstanding to that Canadian Borrower until the same have been repaid in full;
second, to the principal balance of the Canadian Tranche A1 Revolving Credit
Advances made to each other Canadian Borrower, pro rata, until the same have
been repaid in full; third, to the Canadian Tranche A Revolving Credit Advances
outstanding to that Canadian Borrower until the same have been repaid in full;
and fourth in respect of the principal balance of the Canadian Tranche A
Revolving Credit Advances made to each other Canadian Borrower, pro rata, until
the same have been repaid in full. Considering each type of Canadian Tranche A1
Loan and Canadian Tranche A Loan being

 

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prepaid separately, any such prepayment shall be applied first to Canadian Index
Rate Loans of the type required to be prepaid before application to BA Rate
Loans of the type required to be prepaid, in each case in a manner which
minimizes any resulting BA Rate Breakage Costs. The application of prepayments
pursuant to this Section 1.6(e)(ii) shall not permanently reduce the Commitments
unless an Event of Default shall have occurred and be continuing.

(iii) Notwithstanding anything herein to the contrary and so long as no Event of
Default has occurred and is continuing, if the timing and circumstances of a
mandatory prepayment under this Section 1.6 (the required date of any such
payment, a “Prepayment Date”) would otherwise trigger LIBOR Breakage Costs, then
on such prepayment date the Borrowers may, at their option, deposit Dollars into
a cash collateral account maintained by the Applicable Agent in an amount equal
to required prepayment. On the next Interest Payment Date with respect to any
LIBOR Loan in effect, after such prepayment date or on any date on which an
Event of Default exists, the Applicable Agent is irrevocably authorized and
directed to apply funds from such cash collateral account, if any, (and
liquidate investments held in such cash collateral account as necessary) to
prepay LIBOR Loans until the aggregate of such prepayments equals the prepayment
which would have been required on such Prepayment Date but for the operation of
this Section 1.6(e)(iii).

(iv) Notwithstanding anything herein to the contrary and so long as no Event of
Default has occurred and is continuing, if the timing and circumstances of a
mandatory prepayment under this Section 1.6 would otherwise trigger BA Rate
Breakage Costs, then on such prepayment date the Borrowers may, at their option,
deposit Dollars into a cash collateral account maintained by the Applicable
Agent in an amount equal to the required prepayment. On the next Interest
Payment Date with respect to any BA Rate Loan in effect, after such prepayment
date or on any date on which an Event of Default exists, the Applicable Agent is
irrevocably authorized and directed to apply funds from such cash collateral
account, if any, (and liquidate investments held in such cash collateral account
as necessary) to prepay BA Rate Loans until the aggregate of such prepayments
equals the prepayment which would have been required on such Prepayment Date but
for the operation of this Section 1.6(e)(iv).

(f) Application of Prepayments from Insurance Proceeds. Subject to the
Intercreditor Agreement, repayments from insurance with respect to the
Collateral in accordance with Section 4.2, business interruption insurance in
respect of events occurring after the Closing Date or condemnation proceeds with
respect to any Collateral, shall be applied first to the Revolving Credit
Advances of the Borrower that incurred such casualties. None of the US Tranche A
Loan Commitment, the US Tranche A1 Loan Commitment, the Canadian Tranche A Loan
Commitment or the Canadian Tranche A1 Loan Commitment shall be permanently
reduced by the amount of any such prepayments. If such insurance or condemnation
proceeds received by a particular Borrower exceed the outstanding principal
balances of the Loans to that Borrower or if the precise amount of insurance
proceeds allocable to Inventory as compared to Equipment, Fixtures and Real
Property are not otherwise determined, the allocation and application of those
proceeds shall be determined by Applicable Agent acting reasonably and in good
faith, provided that no Canadian Credit Parties shall make any payments to any
persons other than Canadian Lenders or Canadian L/C Issuers.

 

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(g) Letter of Credit Obligations.

(i) In the event any US Letters of Credit are outstanding at the time that the
US Tranche A Loan Commitment is terminated, US Borrowers shall either
(x) deposit with US Agent for the benefit of all US Tranche A Lenders cash in an
amount equal to 105% of the aggregate outstanding US Letter of Credit
Obligations to be available to US Agent to reimburse payments of drafts drawn
under such US Letters of Credit and pay any Fees and expenses related thereto or
(y) provide back-to-back replacement Letters of Credit reasonably acceptable to
US Agent.

(ii) In the event any Canadian Letters of Credit are outstanding at the time
that the Canadian Tranche A Loan Commitment is terminated, each Canadian
Borrower shall either (x) deposit with Canadian Agent for the benefit of all
Canadian Tranche A Lenders cash in an amount equal to 105% of the aggregate
outstanding Canadian Letter of Credit Obligations issued for its benefit to be
available to Canadian Agent to reimburse payments of drafts drawn under such
Canadian Letters of Credit and pay any Fees and expenses related thereto or
(y) provide back-to-back replacement Letters of Credit with respect to all
Letters of Credit issued for its benefit reasonably acceptable to Canadian
Agent.

1.7 Maturity.

(a) All of the US Obligations shall become due and payable as otherwise set
forth herein, but in any event all of the then outstanding US Obligations shall
become due and payable on the US Tranche A Commitment Termination Date. Until
the Termination Date, US Agent shall be entitled to retain the Liens on the
Collateral granted under the US Collateral Documents and the ability to exercise
all rights and remedies available to it under the Loan Documents and applicable
laws. Notwithstanding anything contained in this Agreement to the contrary, upon
any termination of the US Tranche A Loan Commitment, all of the US Obligations
(other than contingent indemnification obligations as to which no claim has been
asserted) shall be due and payable.

(b) All of the Canadian Obligations shall become due and payable as otherwise
set forth herein, but in any event all of the then outstanding Canadian
Obligations shall become due and payable on the Canadian Tranche A Commitment
Termination Date. Until the Termination Date, Canadian Agent shall be entitled
to retain the Liens on the Collateral granted under the Canadian Collateral
Documents and the ability to exercise all rights and remedies available to it
under the Loan Documents and applicable laws. Notwithstanding anything contained
in this Agreement to the contrary, upon any termination of the Canadian Tranche
A Loan Commitment, all of the Canadian Obligations (other than contingent
indemnification obligations as to which no claim has been asserted) shall be due
and payable.

1.8 Eligible Accounts. All of the Accounts owned by each Credit Party and
reflected in the most recent Borrowing Base Certificate delivered by each
Borrower to Applicable Agent shall be “Eligible Accounts” for purposes of this
Agreement, further described in Schedule 1 to Exhibit 6.1(d), except any Account
to which any of the exclusionary criteria set forth below applies. Each Agent
shall have the right to establish or modify or eliminate Reserves against the
applicable Eligible Accounts from time to time in its reasonable credit judgment
acting in good

 

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faith. In addition, the Applicable Agent reserves the right, at any time and
from time to time after the Closing Date and, absent an Event of Default upon
three (3) Business Days’ prior notice to applicable Borrower Representative, to
adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Accounts, in each case in its
reasonable credit judgment acting in good faith, subject to the approval of
Supermajority Lenders in the case of adjustments or new criteria or changes in
advance rates which have the effect of making more credit available. Eligible
Accounts shall not include any Account of any Credit Party:

(a) that does not arise from the sale of goods or the performance of services by
such Credit Party in the ordinary course of its business;

(b) (i) upon which such Credit Party’s right to receive payment is not absolute
or is contingent upon the fulfillment of any condition whatsoever or (ii) as to
which such Credit Party is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process, or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor’s obligation to pay that invoice is subject to such Credit Party’s
completion of further performance under such contract or is subject to the
equitable lien of a surety bond issuer;

(c) to the extent that any defense, counterclaim, setoff or dispute is asserted
as to such Account (it being understood and agreed that (i) only the portion of
the Account that is subject to such defense, counterclaim, setoff or dispute
shall not be an Eligible Account and (ii) the remaining portion of such Account
shall not be rendered ineligible under this clause (c));

(d) that is not a true and correct statement of bona fide indebtedness incurred
in the amount of the Account for merchandise sold to or services rendered and
accepted by the applicable Account Debtor;

(e) with respect to which an invoice has not been sent to the applicable Account
Debtor;

(f) that (i) is not owned by such Credit Party or (ii) is subject to any right,
claim, security interest or other interest of any other Person, other than Liens
in favor of Applicable Agent, on behalf of itself and the applicable Lenders and
Prior Claims that are unregistered and that secure amounts that are not yet due
and payable;

(g) that arises from a sale to any director, officer, other employee or
Affiliate of any Credit Party, or to any entity that has any common officer or
director of any Credit Party, other than any unrelated portfolio company of
Sponsor, Sponsor’s affiliates and any purchaser of Subordinated Debt or the
Senior Notes;

(h) that is the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless Applicable
Agent, in its sole discretion, has agreed to the contrary in writing or such
Credit Party, if necessary, has complied with respect to such obligation with
the Federal Assignment of Claims Act of 1940, or any applicable state, county or
municipal law restricting the assignment thereof with respect to such
obligation;

 

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(i) that is the obligation of an Account Debtor that is the Canadian government
(Her Majesty The Queen in Right of Canada) or a political subdivision thereof,
or any province or territory, or any municipality or department, agency or
instrumentality thereof, unless (i) Lenders have agreed to the contrary in
writing, (ii) such Account is assignable by way of security or (iii) such Credit
Party, if necessary, has complied with the Financial Administration Act (Canada)
and any amendments thereto, or any applicable territorial, provincial, county or
municipal law of similar purpose and effect restricting the assignment thereof
with respect to such obligation;

(j) that is the obligation of an Account Debtor located in a country other than
the United States or Canada unless payment thereof is assured by a letter of
credit assigned and delivered to Applicable Agent, or is covered by adequate
credit insurance for such Account Debtor, each satisfactory to such Agent as to
form, amount and issuer, provided that, obligations of EI Dupont de Nemours, a
Mexican company and, so long as that certain guaranty from Mars, Inc. in favor
of Effem Mexico Inc., a Mexican corporation remains in full force and effect,
Effem Mexico, Inc. shall not be excluded;

(k) to the extent such Credit Party is liable for goods sold or services
rendered by the applicable Account Debtor to such Credit Party but only to the
extent of the potential offset;

(l) that arises with respect to goods that are delivered on a bill-and-hold,
cash-on-delivery basis, guaranteed sale or other terms by reason of which the
payment by the Account Debtor is or may be conditional;

(m) that is in default; provided, that, without limiting the generality of the
foregoing, an Account shall be deemed in default upon the occurrence of any of
the following:

(i) the Account is not paid within the earlier of: 60 days following its due
date or 90 days following its original invoice date, provided that, such
Accounts shall not be excluded so long as they are not past due in accordance
with their terms and are not in an aggregate amount in excess of $1,000,000;

(ii) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or

(iii) a petition is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors until such time, if ever, as such petition is
dismissed;

(n) that is the obligation of an Account Debtor if 50% or more of the Dollar
amount of all Accounts owing by that Account Debtor are ineligible under the
other criteria set forth in this Section 1.8 (other than clauses (a), (b), (d),
(e), (f), or (l) hereof);

(o) as to which Applicable Agent’s Lien thereon, on behalf of itself and the
applicable Lenders, is not a first priority perfected Lien;

 

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(p) as to which any of the representations or warranties in the Loan Documents
are untrue;

(q) to the extent such Account is evidenced by a judgment, Instrument or Chattel
Paper;

(r) to the extent such Account exceeds any credit limit established by the
Applicable Agent, in its reasonable credit judgment acting in good faith,
following prior written or electronic notice of such limit by Applicable Agent
to Applicable Borrower Representative;

(s) to the extent that such Account, together with all other Accounts owing to
such Account Debtor and its Affiliates as of any date of determination exceeds
20% of all Eligible Accounts of all Credit Parties;

(t) that is payable in any currency other than Dollars or Canadian Dollars; or

(u) that is otherwise unacceptable to the Applicable Agent in its reasonable
credit judgment acting in good faith.

For the purpose of valuing Canadian Credit Parties’ Eligible Accounts
denominated in Canadian Dollars, the amount of such Eligible Accounts shall be
converted into the Equivalent Amount thereof in Dollars on the last Business Day
of each Fiscal Month; provided, that Canadian Agent reserves the right to
adjust, at any time in its reasonable credit judgment, the value of Canadian
Dollars of such Eligible Accounts to take into account currency rate exchange
fluctuations since the last valuation thereof.

1.9 Eligible Inventory. All of the Inventory owned by any Credit Party and
reflected in the most recent Borrowing Base Certificate delivered by each
Borrower to Applicable Agent shall be “Eligible Inventory” for purposes of this
Agreement, further described in Schedule 1 to Exhibit 6.1(d), except any
Inventory to which any of the exclusionary criteria set forth below applies.
Applicable Agent shall have the right to establish, modify, or eliminate
Reserves against Eligible Inventory from time to time in its reasonable credit
judgment acting in good faith. In addition, the Applicable Agent reserves the
right, at any time and from time to time after the Closing Date and, absent an
Event of Default upon three (3) Business Days’ prior notice to applicable
Borrower Representative, to adjust any of the criteria set forth below, to
establish new criteria and to adjust advance rates with respect to Eligible
Inventory, in each case, in its reasonable credit judgment acting in good faith,
subject to the approval of Supermajority Lenders in the case of adjustments or
new criteria or changes in advance rates which have the effect of making more
credit available. Eligible Inventory shall not include any Inventory of any
Credit Party that:

(a) is not owned by such Credit Party free and clear of all Liens and rights of
any other Person (including the rights of a purchaser that has made progress
payments and the rights of a surety that has issued a bond to assure such
Borrower’s performance with respect to that Inventory and the rights of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada)),
except the Liens in favor of Applicable Agent, on behalf of the applicable
Secured Parties and Prior Claims that are unregistered and that secure amounts
that are not yet due and payable (other than the claims of suppliers under
Section 81.1 of the Bankruptcy and Insolvency Act (Canada)), except the Liens in
favor of Applicable Agent, on behalf of the applicable Secured Parties and other
Permitted Encumbrances described in clauses (a), (b), (c), (e) and (f)(3) in
such definition;

 

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(b) (i) is not located on premises owned, leased or rented by such Credit Party
and set forth in Disclosure Schedule (3.14) or (ii) is stored at a leased
location, unless (x) the Applicable Agent has given its prior consent thereto,
(y) a reasonably satisfactory landlord waiver has been delivered to Applicable
Agent, or (z) Reserves satisfactory to Applicable Agent have been established
with respect thereto in an amount not to exceed three (3) months rent, (iii) is
stored with a bailee or warehouseman unless a reasonably satisfactory,
acknowledged bailee letter has been received by the Applicable Agent or Reserves
reasonably satisfactory to Applicable Agent have been established with respect
thereto, or (iv) is located at an owned location subject to a mortgage in favor
of a lender other than the Applicable Agent, unless a reasonably satisfactory
mortgagee waiver has been delivered to the Applicable Agent, or (v) is located
at any site if the aggregate book value of Inventory at any such location is
less than $100,000;

(c) is placed on consignment or is in transit, except for Inventory in transit
between United States and Canadian locations of Credit Parties as to which the
Applicable Agent’s Liens have been perfected at origin and destination; and
except for (i) Inventory in transit between domestic locations of Credit
Parties, (ii) work-in-progress inventory of the type and in the amounts
specified in clause (p) of this section, and (iii) consigned Inventory that
arises with respect to goods that are delivered on a bill and hold, cash on
delivery basis or placed on consignment, guaranteed sale or other terms by
reason of which the payment by the Account Debtor is or may be conditional,
provided that in the case of such consigned Inventory, (A) as to each consignee
(it being understood that for the purposes of this paragraph (c), the term
consignee shall include any Person to whom such Credit Party has provided
possession of Inventory prior to the consummation of an irrevocable sale of such
Inventory to such Person), the applicable Credit Party has, at such Credit
Party’s cost and expense (i) conducted Code, PPSA, tax lien and judgment
searches against such consignee, (ii) filed UCC-1 financing statements against
such consignee naming such Credit Party as secured party and Applicable Agent as
assignee of secured party, and (iii) provided to each secured party of record
that has filed a financing statement against such consignee (whether or not such
Inventory is Inventory in the hands of such consignee) a notice, in form and
substance reasonably satisfactory to Applicable Agent, pursuant to Section 9-324
of the Code or similar provision of the PPSA of such Credit Party’s intent to
provide purchase money financing to such consignee and (iv) obtained from such
consignee a letter agreement, in form and substance reasonably satisfactory to
Applicable Agent, in which such consignee acknowledges the Lien of Applicable
Agent and agrees that to the extent that such consignee has not paid the
purchase price of any item of Inventory, Applicable Agent can take possession of
and remove such item of Inventory upon an Event of Default and (B) such Credit
Party holds a perfected first priority security interest against such consignee,
such security interest having been assigned of record to Applicable Agent;

(d) is covered by a negotiable document of title, unless such document has been
delivered to the Applicable Agent with all necessary endorsements, free and
clear of all Liens except those in favor of the Applicable Agent and applicable
Secured Parties;

 

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(e) is excess, obsolete, unsaleable, shopworn, seconds, damaged or unfit for
sale;

(f) consists of display items or packing or shipping materials, manufacturing
supplies or replacement parts;

(g) consists of goods which have been returned by the buyer and are not capable
of readily being resold to another buyer;

(h) is not of a type held for sale in the ordinary course of such Credit Party’s
business;

(i) is not subject to a first priority lien in favor of the Applicable Agent on
behalf of the applicable Secured Parties subject to Permitted Encumbrances;

(j) breaches any of the representations or warranties pertaining to Inventory
set forth in the Loan Documents;

(k) consists of any costs associated with “freight-in” charges;

(l) consists of Hazardous Materials or goods that can be transported or sold
only with licenses that are not readily available;

(m) is not covered by casualty insurance reasonably acceptable to Applicable
Agent;

(n) is otherwise unacceptable to Applicable Agent in its reasonable credit
judgment acting in good faith;

(o) consists of work-in-progress inventory except that work-in-progress
inventory in an amount not to exceed $6,500,000 shall not be excluded; or

(p) consists of raw materials in transit, except raw materials in transit that
are adequately insured and in which such Credit Party has perfected title under
Applicable Law in such raw materials in an amount not to exceed $1,000,000 in
the aggregate.

1.10 Loan Accounts. Each of US Agent and Canadian Agent shall maintain a loan
account (each, a “Loan Account”) on its books for each US Borrower or Canadian
Borrower, as applicable, to account for all applicable Advances, all payments
made by US Borrowers or Canadian Borrowers, as applicable, and all other
applicable debits and credits as provided in this Agreement with respect to the
Loans or any other Obligations. All entries in each Loan Account shall be made
in accordance with US Agent’s or Canadian’s Agent’s, as applicable, customary
accounting practices as in effect from time to time. The balance in each Loan
Account, as recorded on US Agent’s or Canadian Agent’s most recent printout or
other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to US Agent, US Tranche A Lenders and US Tranche A1
Lenders by US Borrowers or Canadian Agent, Canadian Tranche A Lenders and
Canadian Tranche A1 Lenders by Canadian Borrowers; provided that any failure to
so record or any error in so recording shall not limit or otherwise

 

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affect any US Borrower’s duty to pay the US Obligations or any Canadian
Borrower’s duty to pay the Canadian Obligations. US Agent and Canadian Agent
shall render to US Borrower Representative and Canadian Borrower Representative,
respectively, a monthly accounting of transactions with respect to the Loans
setting forth the balance of each Loan Account as to each US Borrower and
Canadian Borrower for the immediately preceding month. Unless Applicable
Borrower Representative notifies Applicable Agent in writing of any objection to
any such accounting (specifically describing the basis for such objection),
within forty-five (45) days after the date thereof, each and every such
accounting shall, absent manifest error, be presumptive evidence of all matters
reflected therein. Only those items expressly objected to in such notice shall
be deemed to be disputed by Borrowers. Notwithstanding any provision herein
contained to the contrary, any Lender may elect (which election may be revoked)
to dispense with the issuance of Notes to that Lender and may rely on the Loan
Account as evidence of the amount of Obligations from time to time owing to it.

1.11 Yield Protection.

(a) Capital Adequacy and Other Adjustments. In the event that any Lender shall
have determined that a Change in Law does or shall have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by such
Lender or any corporation controlling such Lender and thereby reducing the rate
of return on such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder, then US Borrowers in the case of a US Lender or Canadian
Borrowers in the case of a Canadian Lender shall from time to time within
fifteen (15) days after notice and demand from such Lender (together with the
certificate referred to in the next sentence and with a copy to Applicable
Agent) pay to Applicable Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for such reduction; provided that
if the respective Lender has unreasonably delayed or withheld such notice and
demand, the respective Lender shall not be entitled to receive additional
payments pursuant to this Section 1.11(a) for periods occurring prior to the
180th day before the receipt of such notice and demand. A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by such Lender to Applicable Borrower Representative and the
Applicable Agent shall be presumptive evidence of the matters set forth therein.

(b) Increased Funding Costs; Illegality. Notwithstanding anything to the
contrary contained herein, if any Change in Law shall make it unlawful, or any
central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender to agree to make or to make or to continue to fund or maintain
any LIBOR Loan or BA Rate Loan, then, unless that Lender is able to make or to
continue to fund or to maintain such LIBOR Loan or BA Rate Loan, as the case may
be, at another branch or office of that Lender without, in that Lender’s
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to the Applicable Borrower
Representative through Applicable Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Loans or BA
Rate Loans, as the case may be, shall terminate and (ii) each applicable
Borrower shall forthwith prepay in full each such outstanding LIBOR Loans or BA
Rate Loans, as the case may be, owing by such Borrower to such Lender, together
with interest accrued thereon, unless the Applicable Borrower Representative on
behalf of Borrowers, within five (5) Business Days after the delivery of such
notice and demand, converts all affected LIBOR

 

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Loans into US Index Rate Loans and all affected BA Rate Loans into Canadian
Index Rate Loans. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose or
increase reserve requirements (other than as taken into account in the
definition of LIBOR or BA Rate) and the result of any of the foregoing is to
increase the cost to any Agent or any such Lender of issuing any Letter of
Credit or making or continuing any Loan hereunder, as the case may be, or to
reduce any amount receivable hereunder, then (i) US Borrowers shall from time to
time within fifteen (15) days after notice and demand from US Agent to US
Borrower Representative (together with the certificate referred to in the next
sentence) pay to US Agent, for the account of all such affected US Lenders and
(ii) Canadian Borrowers shall from time to time within fifteen (15) days after
notice and demand from Canadian Agent to Canadian Borrower Representative
(together with the certificate referred to in the next sentence) pay to Canadian
Agent, for the account of all such affected Canadian Lenders, additional amounts
sufficient to compensate such Lenders for such increased cost; provided that
Borrowers shall not be liable to pay for any such amounts incurred or accrued
more than 180 days prior to the date on which notice of the event giving rise to
the obligation to make such payment is given to Borrowers. A certificate as to
the amount of such cost and showing the basis of the computation of such cost
submitted by the Applicable Agent on behalf of all such affected Lenders to
Borrowers shall be presumptive evidence of the matters set forth therein.

1.12 Taxes.

(a) No Deductions; Other Taxes. Except as otherwise provided in this
Section 1.12, any and all payments or reimbursements made hereunder (including
any payments made pursuant to Section 10 and 11) or under any other Loan
Document shall be made free and clear of and without deduction for any and all
Charges, present or future, taxes, levies, imposts, deductions or withholdings,
and all liabilities with respect thereto (including any interest, additions to
tax or penalties applicable thereto) of any nature whatsoever imposed by any
Governmental Authority (“Taxes”), excluding (i) such Taxes to the extent imposed
on or measured by an Agent’s or a Lender’s net income, taxable income or a
similar measure or capital (and franchise taxes, branch profits taxes, taxes on
doing business or other taxes imposed in lieu thereof) as a result of a present
or former connection between such Agent or Lender and the jurisdiction of the
Governmental Authority imposing such Tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising from such
Agent or Lender having executed, delivered, performed its obligations or
received a payment under this Agreement or any other Loan Document), (ii) any
U.S. federal withholding tax that is imposed on amounts payable to a Foreign
Lender or to an Agent for the benefit of a Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement, except to the extent that such
Foreign Lender’s assignor (if any) was entitled, at the time of such assignment,
to receive additional amounts from the Borrowers with respect to such
withholding tax pursuant to this Section 1.12(a), (iii) any U.S. federal
withholding tax that is directly attributable to a Foreign Lender’s failure
(other than as a result of a change in law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority) to comply with Section 1.12(d), or (iv) subject to Section 8.6(c),
any Canadian withholding tax imposed on any payment made by any Canadian
Borrower hereunder to any entity, including, without limitation, a Canadian
Lender, the Canadian Agent or a Canadian L/C Issuer, by reason of such entity
not being a Canadian Person at the time such amount is paid or credited (other
than an

 

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assignment to a non-Canadian Person after an Event of Default has occurred and
is continuing), (collectively, together with any related interest, penalties and
additions to tax, “Excluded Taxes,” and all such non-Excluded Taxes being
referred to herein as “Non-Excluded Taxes”).

(b) Additional Payments. If any Borrower shall be required by law to deduct any
Non-Excluded Taxes from or in respect of any sum payable hereunder or under any
other Loan Document to any Lender or any Agent, then (i) the sum payable
hereunder shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
pursuant to this Section 1.12), such Lender or any Agent receives, on an
after-Tax basis, an amount equal to the sum it would have received had no such
deductions in respect of such Non-Excluded Taxes been made; and (ii) all
required deductions shall be withheld and timely paid over to the relevant
Governmental Authority in accordance with applicable law.

(c) Other Taxes. In addition, Borrowers agree to timely pay to the relevant
Governmental Authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration of this Agreement
or any other Loan Document (“Other Taxes”).

(d) Tax Forms.

(i) Prior to becoming a US Lender under this Agreement, within fifteen (15) days
after a reasonable written request of US Borrower Representative or US Agent
from time to time thereafter and at such times after becoming a US Lender under
this Agreement as may be reasonably necessary to ensure that the most recent
forms provided to the US Borrower Representative and US Agent are still valid,
each such Person or Lender that is not in each case a “United States person” (as
such term is defined in IRC Section 7701(a)(30)) for U.S. federal income tax
purposes (a “US Foreign Lender”) shall provide, in accordance with applicable
procedures under U.S. tax law to US Borrower Representative and US Agent, if it
is legally entitled to, two properly completed (including all required
attachments and information) and executed IRS Forms W-8BEN or Forms W-8ECI or
other applicable forms, certificates or documents prescribed by the IRS,
certifying as to such US Foreign Lender’s entitlement to an exemption from, or
reduction in, U.S. withholding tax with respect to payments to be made to such
US Foreign Lender under this Agreement and under the Notes.

(ii) Prior to becoming a US Lender under this Agreement, within fifteen
(15) days after a reasonable written request of US Borrower Representative or US
Agent from time to time thereafter and at such times after becoming a US Lender
under this Agreement as may be reasonably necessary to ensure that the most
recent forms provided to the US Borrower Representative and US Agent are still
valid, each such Person or Lender that is in each case a “United States person”
(as such term is defined in IRC Section 7701(a)(30)) for U.S. federal income tax
purposes provide to US Borrower Representative and US Agent, if it is legally
entitled to, two properly completed and executed IRS Forms W-9, certifying as to
such US Lender’s entitlement to an exemption from U.S. backup withholding tax,
or any successor form.

 

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(iii) Each Canadian Lender, and the successors and assignees of such Canadian
Lender, organized under the laws of a jurisdiction outside of Canada (each, a
“Canadian Foreign Lender” and, together with the US Foreign Lenders, the
“Foreign Lenders”), shall provide to Canadian Borrowers (with a copy to Canadian
Agent), any appropriate certificate or document, certifying as to such Canadian
Foreign Lender’s entitlement to an exemption from Canadian withholding tax with
respect to payments to be made to such Canadian Lender under this Agreement and
under the Notes.

(e) Indemnification. Borrowers will indemnify each Lender and each Agent for the
full amount of Non-Excluded Taxes and Other Taxes (including any Non-Excluded
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 1.12) paid by such Lender or Agent, as the case may be, and any
liability including penalties, interest and expenses, including reasonable
attorney’s fees and expenses) arising therefrom or with respect thereto, whether
or not such Non-Excluded Taxes or Other Taxes were correctly or legally asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payments or liabilities submitted by any Lender or Agent to Applicable Borrower
Representative (with a copy to Agent if applicable) shall be presumptive
evidence of the amount due. Borrowers shall pay such Agent or such Lender, as
the case may be, the amount shown as due on any such certificate within ten
(10) days after the receipt thereof.

(f) Evidencing of Payments. As soon as practicable after any payment of Taxes or
Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Applicable Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Applicable Agent.

1.13 Borrower Representative.

(a) Each US Borrower hereby designates Exopack Op Co (the “US Borrower
Representative”) as its representative and agent on its behalf for the purposes
of issuing Notices of US Tranche A Revolving Credit Advances, Notices of US
Tranche A1 Revolving Credit Advances and Notices of Conversion/Continuation,
giving instructions with respect to the disbursement of the proceeds of the US
Tranche A Loans and US Tranche A1 Loans, selecting interest rate options,
requesting issuance of US Letters of Credit, giving and receiving all other
notices and consents hereunder or under any of the other Loan Documents and
taking all other actions (including in respect of compliance with covenants) on
behalf of any US Borrower or US Borrowers under the Loan Documents. US Borrower
Representative hereby accepts such appointment. US Agent, each US Tranche A
Lender and each US Tranche A1 Lender may regard any notice or other
communication pursuant to any Loan Document from US Borrower Representative as a
notice or communication from all US Borrowers. Each warranty, covenant,
agreement and undertaking made on its behalf by US Borrower Representative shall
be deemed for all purposes to have been made by such US Borrower and shall be
binding upon and enforceable against such US Borrower to the same extent as it
if the same had been made directly by such US Borrower.

 

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(b) Each Canadian Borrower hereby designates Exopack Canada (the “Canadian
Borrower Representative”) as its representative and agent on its behalf for the
purposes of issuing Notices of Canadian Tranche A Revolving Credit Advances,
Notices of Canadian Tranche A1 Revolving Credit Advances and Notices of
Continuations/Conversions, giving instructions with respect to the disbursement
of the proceeds of the Canadian Tranche A Loans and Canadian Tranche A1 Loans,
requesting issuance of Canadian Letters of Credit, selecting interest rate
options, giving and receiving all other notices and consents hereunder or under
any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Canadian Borrower or
Canadian Borrowers under the Loan Documents. Canadian Borrower Representative
hereby accepts such appointment. Canadian Agent, each Canadian Tranche A Lender
and each Canadian Tranche A1 Lender may regard any notice or other communication
pursuant to any Loan Document from Canadian Borrower Representative as a notice
or communication from all Canadian Borrowers. Each warranty, covenant, agreement
and undertaking made on its behalf by Canadian Borrower Representative shall be
deemed for all purposes to have been made by such Canadian Borrower and shall be
binding upon and enforceable against such Canadian Borrower to the same extent
as it if the same had been made directly by such Canadian Borrower.

1.14 Currency Conversions.

Principal, interest, reimbursement obligations, fees, and all other amounts
payable under this Agreement and the other Loan Documents to any Lender shall be
payable in the currency in which such Obligations are denominated. If an Agent
receives any payment from or on behalf of a Credit Party in any currency other
than the currency in which the Obligation is denominated such Agent may convert
the payment (including the proceeds of realization upon any collateral) into the
currency in which such Obligation is denominated at the rate of exchange set out
in Section 1.15(b). For the purpose of such calculations, comparisons,
measurements or determinations, amounts denominated in other currencies shall be
converted in the Equivalent Amount of Dollars on the date of calculation,
comparison, measurement or determination.

1.15 Judgment Currency; Contractual Currency.

(a) If, for the purpose of obtaining or enforcing judgment against any Borrower
in any court in any jurisdiction, it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 1.15 referred to
as the “Judgment Currency”) an amount due under any Loan Document in any
currency (the “Obligation Currency”) other than the Judgment Currency, the
conversion shall be made at the spot rate of exchange prevailing on the Business
Day immediately preceding (i) the date of actual payment of the amount due, in
the case of any proceeding in the courts of any jurisdiction that will give
effect to such conversion being made on such date, or (ii) the date on which the
judgment is given, in the case of any proceeding in the courts of any other
jurisdiction (the applicable date as of which such conversion is made pursuant
to this Section 1.15 being hereinafter in this Section 1.15 referred to as the
“Judgment Conversion Date”).

(b) If, in the case of any proceeding in the court of any jurisdiction referred
to in Section 1.15(a), there is a change in the spot rate of exchange prevailing
between the Judgment Conversion Date and the date of actual receipt for value of
the amount due, the Applicable Borrower shall pay such additional amount (if
any, but in any event not a lesser amount) as may be necessary to ensure that
the amount actually received in the Judgment

 

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Currency, when converted at the spot rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of the Judgment Currency stipulated in the
judgment or judicial order at the spot rate of exchange prevailing on the
Judgment Conversion Date. Any amount due from a Borrower under this
Section 1.15(b) shall be due as a separate debt and shall not be affected by
judgment being obtained for any other amounts due under or in respect of any of
the Loan Documents.

(c) Any amount received or recovered by the Applicable Agent in respect of any
sum expressed to be due to them (whether for itself or as trustee for any other
person) from any Borrower under this Agreement or under any of the other Loan
Documents in a currency other than the currency (the “contractual currency”) in
which such sum is so expressed to be due (whether as a result of, or from the
enforcement of, any judgment or order of a court or tribunal of any
jurisdiction, the winding-up of a Borrower or otherwise) shall only constitute a
discharge of such Borrower to the extent of the amount of the contractual
currency that such Applicable Agent is able, in accordance with its usual
practice, to purchase with the amount of the currency so received or recovered
on the date of receipt or recovery (or, if later, the first date on which such
purchase is practicable). If the amount of the contractual currency so purchased
is less than the amount of the contractual currency so expressed to be due, such
Borrower shall indemnify such Applicable Agent against any loss sustained by it
as a result, including the cost of making any such purchase.

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

1.16 Commitment Increases.

(a) From time to time after the Closing Date and in accordance with this
Section 1.16, the US Borrowers may request an increase to the US Tranche A Loan
Commitment and/or the US Tranche A1 Loan Commitment and the Canadian Borrowers
may request an increase in the Canadian Tranche A Loan Commitment and/or the
Canadian Tranche A1 Loan Commitment (each such increase, a “Commitment
Increase”) so long as the following conditions are satisfied: (i) the applicable
Borrowers deliver to the applicable Agents not later than 1:00pm (New York time)
5 Business Days prior to the Business Day immediately prior to the Business Day
on which the Borrowers request such Commitment Increase to be effective, a
Commitment Increase Request in the form attached as Exhibit 1.16 (“Commitment
Increase Request”); (ii) at the time of and immediately after giving effect to
any such proposed Commitment Increase, no Default or Event of Default shall
exist, (iii) such Commitment Increase is in a minimum amount of $5,000,000 and
integral multiples thereof, and the aggregate amount of all such Commitment
Increases does not exceed the Aggregate Accordion Commitment; (iv) each
condition set forth in Section 2.2 has been met and (v) the applicable Borrowers
pay a commitment increase fee to the Applicable Agents, for the ratable benefit
of the Lenders whose Commitments are being increased, equal to 0.50% multiplied
by the principal amount of such Commitment Increase.

 

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(b) Provided that the conditions set forth in Section 1.16(a) are satisfied,
each Commitment Increase shall be effective as the date specified in the
applicable Commitment Increase Request and on such date the principal amount of
such Commitment Increase shall be ratably allocated to each Lender.

SECTION 2.

CONDITIONS TO LOANS

The obligations of Lenders and L/C Issuers to make Loans and to issue or cause
to be issued Letters of Credit are subject to satisfaction of all of the
applicable conditions set forth below.

2.1 Conditions to Initial Loans.

The obligations of Lenders and L/C Issuers to make the initial Loans and to
issue and cause to be issued Letters of Credit on the Closing Date are, in
addition to the conditions precedent specified in Section 2.2, subject to:

(a) Borrowers shall have delivered all documents listed on, take all actions set
forth on and satisfy all other conditions precedent listed in the Closing
Checklist attached hereto as Annex C, all in form and substance, or in a manner,
satisfactory to Agents and Lenders;

(b) Both before and after giving effect to the Loans and the Related
Transactions, there shall not exist any Default or Event of Default under the
Loan Documents or under any material contract or agreement of Holdings, the
Borrowers or their respective subsidiaries; and the representations and
warranties shall be true and correct in all material respects; and

(c) There shall not exist any action, suit, investigation, litigation or
proceeding pending or, to the knowledge of the Borrowers, threatened in any
court or before any arbitrator or governmental authority that has or could
reasonably be expected to have a Material Adverse Effect on Borrowers and their
Subsidiaries (taken as a whole) or that seeks to enjoin the entry into the Loan
Documents.

2.2 Conditions to All Loans. Except as otherwise expressly provided herein, no
Lender or L/C Issuer shall be obligated to fund any Advance or incur any Letter
of Credit Obligation, if, as of the date thereof (the “Funding Date”):

(a) any representation or warranty by any Credit Party contained herein or in
any other Loan Document is untrue or incorrect in any material respect (without
duplication of any materiality qualifier contained therein) as of such date,
except to the extent that such representation or warranty expressly relates to
an earlier date, and Applicable Agent or Requisite Lenders have determined not
to make such Advance or incur such Letter of Credit Obligation as a result of
the fact that such warranty or representation is untrue or incorrect;

(b) any Default or Event of Default has occurred and is continuing or would
result after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligation), and Applicable Agent or Requisite Lenders shall have
determined not to make any Advance or incur any Letter of Credit Obligation as a
result of that Default or Event of Default; or

 

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(c) after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligations), (i) the Dollar Equivalent of the outstanding amount of the
aggregate US Tranche A Loan would exceed US Tranche A Borrowing Availability
(except as provided in Section 1.1(a)(ii)), (ii) the Dollar Equivalent of the
outstanding amount of the aggregate US Tranche A1 Loan would exceed US Tranche
A1 Borrowing Availability, (iii) the Dollar Equivalent of the outstanding amount
of the aggregate Canadian Tranche A Loan would exceed Canadian Tranche A
Borrowing Availability (except as provided in Section 1.2(a)(ii)), (vi) the
Dollar Equivalent of the outstanding amount of the aggregate Canadian Tranche A1
Loan would exceed Canadian Tranche A1 Borrowing Availability, (v) the Dollar
Equivalent of the outstanding amount of the US Tranche A Loans together with the
Dollar Equivalent of the outstanding amount of the Canadian Tranche A Loans
exceeds the US Tranche A Loan Commitment, (vi) the Dollar Equivalent of the
outstanding amount of the US Tranche A1 Loans together with the Dollar
Equivalent of the outstanding amount of the Canadian Tranche A1 Loans exceeds
the US Tranche A1 Loan Commitment or (vii) the Dollar Equivalent of the
outstanding amount of the US Loans together with the Dollar Equivalent of the
outstanding amount of the Canadian Loans exceeds the sum of the US Tranche A
Loan Commitments and the US Tranche A1 Loan Commitments. For the avoidance of
doubt, it is agreed that the Canadian Tranche A Loan Commitment is a subfacility
of the US Tranche A Loan Commitment and the Canadian Tranche A1 Loan Commitment
is a subfacility of the US Tranche A1 Loan Commitment.

2.3 Reserved.

2.4 Effect of Amendment and Restatement. Upon this Agreement becoming effective
pursuant to Section 2.1, from and after the Closing Date: (a) all US Tranche A
Loan Commitments (as defined in the Original Credit Agreement) shall be deemed
to be US Tranche A Loan Commitments hereunder and reduced to the amounts set
forth on Annex A hereto and all US Tranche A Loans (as defined in the Original
Credit Agreement) shall be deemed to be US Tranche A Loans hereunder; (b) all US
Tranche A1 Loan Commitments (as defined in the Original Credit Agreement) shall
be deemed to be US Tranche A1 Loan Commitments hereunder and reduced to the
amounts set forth on Annex A hereto and all US Tranche A1 Loans (as defined in
the Original Credit Agreement) shall be deemed to be US Tranche A1 Loans
hereunder; (c) all Canadian Tranche A Loan Commitments (as defined in the
Original Credit Agreement) shall be deemed to be Canadian Tranche A Loan
Commitments hereunder and reduced to the amounts set forth on Annex A hereto and
all Canadian Tranche A Loans (as defined in the Original Credit Agreement) shall
be deemed to be Canadian Tranche A Loans hereunder; (d) all Canadian Tranche A1
Loan Commitments (as defined in the Original Credit Agreement) shall be deemed
to be Canadian Tranche A1 Loan Commitments hereunder and reduced to the amounts
set forth on Annex A hereto and all Canadian Tranche A1 Loans (as defined in the
Original Credit Agreement) shall be deemed to be Canadian Tranche A1 Loans
hereunder; (e) all terms and conditions of the Original Credit Agreement and any
other “Loan Document” as defined therein, as amended by this Agreement and the
other Loan Documents being executed and delivered on the Closing Date, shall be
and shall remain in full force and effect, as so amended, and shall constitute
the legal, valid, binding and enforceable obligations of

 

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the Credit Parties party thereto; (f) the terms and conditions of the Original
Credit Agreement shall be amended as set forth herein and, as so amended, shall
be restated in their entirety, but shall be amended only with respect to the
rights, duties and obligations among Borrowers, Lenders and Agent accruing from
and after the Closing Date; (g) this Agreement shall not in any way release or
impair the rights, duties, Obligations or Liens created pursuant to the Original
Credit Agreement or any other Loan Document or affect the relative priorities
thereof, in each case to the extent in force and effect thereunder as of the
Closing Date, except as modified hereby or by documents, instruments and
agreements executed and delivered in connection herewith, and all of such
rights, duties, Obligations and Liens are assumed, ratified and affirmed by the
Borrowers; (h) to the extent expressly provided for in the Original Credit
Agreement, all indemnification obligations of the Credit Parties under the
Original Credit Agreement and any other Loan Documents shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect for the benefit of Lenders, Agents, and any other Person indemnified
under the Original Credit Agreement or any other Loan Document at any time prior
to the Closing Date; (i) the Obligations incurred under the Original Credit
Agreement shall, to the extent outstanding on the Closing Date, continue
outstanding under this Agreement and shall not be deemed to be paid, released,
discharged or otherwise satisfied by the execution of this Agreement, and this
Agreement shall not constitute a refinancing, substitution or novation of such
Obligations or any of the other rights, duties and obligations of the parties
hereunder; (j) the execution, delivery and effectiveness of this Agreement shall
not operate as a waiver of any right, power or remedy of Lenders or Agents under
the Original Credit Agreement, nor constitute a waiver of any covenant,
agreement or obligation under the Original Credit Agreement, except to the
extent that any such covenant, agreement or obligation is no longer set forth
herein or is modified hereby; (k) any and all references in the Loan Documents
to the Original Credit Agreement shall, without further action of the parties,
be deemed a reference to the Original Credit Agreement, as amended and restated
by this Agreement, and as this Agreement shall be further amended or amended and
restated from time to time hereafter and (l) any and all references in the Loan
Documents to the “Closing Date” shall, without further action of the parties, be
deemed a reference to the Original Closing Date.

SECTION 3.

REPRESENTATIONS AND WARRANTIES

To induce US Agent, Canadian Agent and Lenders to enter into the Loan Documents,
to make Loans and to issue or cause to be issued Letters of Credit, US Credit
Parties, jointly (with each other) and severally represent and warrant to the US
Agent and each US Lender, and Canadian Credit Parties jointly (with each other)
and severally represent and warrant to Canadian Agent and each Canadian Lender
that the following statements are and, after giving effect to the Related
Transactions, will be true, correct and complete with respect to all Credit
Parties.

3.1 Organization and Powers.

(a) Each of the Credit Parties and each of their Subsidiaries is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and qualified to do business and in good standing in all
countries, states and provinces where such qualification is required except
where failure to be so qualified or be in good standing would not reasonably be
expected to have a Material Adverse Effect. The jurisdiction of organization and

 

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all jurisdictions in which each Credit Party is qualified to do business as of
the Closing Date are set forth on Schedule 3.1(a). Each of the Credit Parties
and each of their Subsidiaries has all requisite organizational power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into each Loan Document and
Related Transactions Document to which it is a party and to incur the
Obligations, grant liens and security interests in the Collateral and carry out
the Related Transactions.

(b) Executive Offices, Collateral Locations. As of the Closing Date, the current
location of each Credit Party’s chief executive office, principal place of
business, domicile (within the meaning of the Civil Code of Québec) and the
warehouses and premises at which any Collateral is located are set forth on
Schedule 3.1(a), and none of such locations has changed within four (4) months
preceding the Closing Date. Each Credit Party that keeps records in the Province
of Quebec relating to Collateral keeps a duplicate copy thereof at a location
outside the Province of Quebec, as designated on Schedule 3.1(a).

(c) Capitalization. As of the Closing Date: (i) the authorized Stock of each of
the Credit Parties and each of their Subsidiaries is as set forth on Schedule
3.1(c); (ii) all issued and outstanding Stock of each of the Credit Parties and
each of their Subsidiaries is duly authorized and validly issued, fully paid,
nonassessable (as applicable), free and clear of all Liens other than Permitted
Encumbrances under clauses (a) and (e) of the definition thereof and those in
favor of the Agents for the benefit of the applicable Secured Parties, and such
Stock was issued in compliance with all applicable state, provincial, federal
and foreign laws concerning the issuance of securities; (iii) the identity of
the holders of the Stock of each of the Credit Parties and each of their
Subsidiaries and the percentage of their fully-diluted ownership of the Stock of
each of the Credit Parties and each of their Subsidiaries is set forth on
Schedule 3.1(c); and (iv) no Stock of any Credit Party or any of their
Subsidiaries, other than those described above, are issued and outstanding.
Except as provided in Schedule 3.1(c), as of the Closing Date, there are no
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from any
Credit Party or any of their Subsidiaries of any Stock of any such entity.

(d) Binding Obligation. This Agreement is, and the other Loan Documents and the
Related Transactions Documents when executed and delivered will be, the legally
valid and binding obligations of the Credit Parties party thereto, each
enforceable against each of such Credit Parties, as applicable, in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and general principles of equity.

3.2 Disclosure. No representation or warranty of any Credit Party contained in
this Agreement, the Financial Statements referred to in Section 3.5 (other than
Projections, as to which the only representation and warranty made is as set
forth in Section 3.5 hereof), the other Loan Documents or any other document,
certificate or written statement furnished to any Agent or any Lender by or on
behalf of any such Person for use in connection with the Loan Documents contains
any untrue statement of a material fact or omitted, omits or will omit to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in any material respect in light of the circumstances in
which the same were made.

 

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3.3 No Material Adverse Effect. Since the most recent audited Financial
Statements delivered hereunder, there have been no events or changes in facts or
circumstances affecting any Credit Party or any of its Subsidiaries which
individually or in the aggregate have had or would reasonably be expected to
have a Material Adverse Effect.

3.4 No Conflict. The consummation of the Related Transactions does not and will
not (i) violate or conflict with any laws, rules, regulations or orders of any
Governmental Authority or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any
Contractual Obligation or organizational documents of any Credit Party or any of
its Subsidiaries in each case, except if such violations, conflicts, breaches or
defaults have not had and would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or (ii) result in
the creation of a Lien on any assets of any Credit Party (other than Liens
subject to the Intercreditor Agreement).

3.5 Financial Statements and Projections. Except for the Projections or as set
forth on Schedule 3.5, all Financial Statements concerning Holdings and its
Subsidiaries which have been or will hereafter be furnished to any Agent
pursuant to this Agreement, including those listed below, have been or will be
prepared in accordance with GAAP consistently applied (except as disclosed
therein) and do or will present fairly in all material respects the financial
condition of the entities covered thereby as at the dates thereof and the
results of their operations for the periods then ended, subject to, in the case
of unaudited Financial Statements, the absence of footnotes and normal year-end
adjustments.

(a) The consolidated balance sheets at December 31, 2010 and the related
statement of income of Holdings and its Subsidiaries for the Fiscal Year then
ended, audited by PricewaterhouseCoopers LLP.

(b) The consolidated balance sheet at March 31, 2011 and the related statement
of income of Holdings and its Subsidiaries for the three (3) months then ended.

The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 6.1(f) represent and will represent as
of the date thereof the good faith estimate of Borrowers and their senior
management concerning the most probable course of their business and were
prepared on the basis of the assumptions stated therein, and such assumptions
were believed to be reasonable at the time prepared, it being understood and
agreed that Projections are not to be viewed as facts and that actual results
during the period covered by the Projections may differ materially from
projected results.

3.6 Solvency. Each of the Borrowers is, and the Credit Parties and their
Subsidiaries taken as a whole are, Solvent.

3.7 Use of Proceeds; Margin Regulations.

(a) No part of the proceeds of any Loan will be used for “buying” or “carrying”
“margin stock” within the respective meanings of such terms under Regulation U
or for any other purpose that violates the provisions of the regulations of the
Board of Governors of the Federal Reserve System. If requested by any Agent,
each Credit Party will furnish to each Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form
0-1, as applicable, referred to in Regulation U.

 

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(b) Borrowers shall utilize the proceeds of the Loans solely for Permitted
Acquisitions and the financing of Borrowers’ working capital and general
corporate needs. Schedule 3.7 contains a description of Borrowers’ sources and
uses of funds as of May 31, 2011, including Loans and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
detailing how funds from each source are to be transferred for particular uses.

(c) None of Holdings, any Borrower or any of their respective Subsidiaries is
subject to regulation as an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940.

3.8 Brokers. No broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Loans or
the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder’s or brokerage fees in
connection therewith.

3.9 Compliance with Laws. Each Credit Party (i) is in compliance and each of its
Subsidiaries is in compliance with the requirements of all Requirements of Law
(including, without limitation, United States Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, USA Patriot Act of 2001 (31
U.S.C. 5318 et seq.), Criminal Code (Canada), Proceeds of Crime (Money
Laundering) and Terrorist Funding Act (Canada) and the regulations thereunder,
the United Nations Suppression of Terrorism Regulations and the Anti-Terrorism
Act (Canada), in each case, as amended) and the obligations, covenants and
conditions contained in all Contractual Obligations other than those laws,
rules, regulations, orders and provisions of such Contractual Obligations the
noncompliance with which would not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (ii) maintains
and each of its Subsidiaries maintains all licenses, qualifications and permits
required under any Requirement of Law other than any failure to maintain which
would not reasonably be expected to have a Material Adverse Effect.

3.10 Intellectual Property. As of the Closing Date, except as set forth on
Schedule 3.10, each of the Credit Parties and its Subsidiaries owns, is licensed
to use or otherwise has the right to use, all material Intellectual Property
used in or necessary for the conduct of its business as currently conducted that
is material to the financial condition, business or operations of such Credit
Party and its Subsidiaries and all such Intellectual Property that is federally
registered as of the Closing Date is identified on Schedule 3.10 and except as
disclosed on Schedule 3.10 fully protected and/or duly and properly registered,
filed or issued in the applicable office and jurisdictions for such
registrations, filings or issuances. As of the Closing Date, except as disclosed
in Schedule 3.10, to their knowledge, the use of such Intellectual Property by
the Credit Parties and their Subsidiaries and the conduct of their businesses
does not and has not been alleged by any Person to infringe on the rights of any
Person.

3.11 Investigations, Audits, Etc. As of the Closing Date, except as set forth on
Schedule 3.11, no Credit Party or any of their Subsidiaries is the subject of an
audit by the IRS or CRA or, to any Credit Party’s knowledge, any review by the
IRS, CRA or any similar governmental agency or any governmental investigation
concerning the violation or possible violation of any law.

 

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3.12 Employee Matters. As of the Closing Date, except as set forth on Schedule
3.12, (a) no Credit Party or Subsidiary of a Credit Party nor any of their
respective employees is subject to any collective bargaining agreement, (b) no
petition for certification or union election is pending with respect to the
employees of any Credit Party or any of their Subsidiaries and no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of any Credit Party or any of their Subsidiaries,
(c) there are no strikes, slowdowns, or work stoppages pending or, to the best
knowledge of any Credit Party after due inquiry, threatened between any Credit
Party or any of their Subsidiaries and its respective employees, other than
employee grievances arising in the ordinary course of business which would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect and (d) hours worked by and payment made to employees of
each Credit Party and each of their Subsidiaries comply in all material respects
with the Fair Labor Standards Act and each other federal, state, provincial,
local or foreign law applicable to such matters. Except as set forth on Schedule
3.12, none of the Borrowers nor any of their Subsidiaries is party to a material
employment contract.

3.13 Litigation; Adverse Facts. Except as set forth on Schedule 3.13, there are
no judgments outstanding against any Credit Party or any of its Subsidiaries or
affecting any property of any Credit Party or any of its Subsidiaries as of the
Closing Date, nor is there any Litigation pending, or to the knowledge of any
Credit Party after due and diligent investigation threatened, against any Credit
Party or any of its Subsidiaries, in each case which either (x) purport to
affect or pertain to this Agreement, any other Loan Document, any Related
Transactions Document or the transactions contemplated hereby or thereby or
(y) could reasonably be expected to result in any Material Adverse Effect.

3.14 Ownership of Property; Liens. As of the Closing Date, the real estate
listed in Schedule 3.14 (“Real Property”) constitutes all of the real property
owned, leased, subleased, or used by any Credit Party or any of its
Subsidiaries. As of the Closing Date, each of the Credit Parties and each of its
Subsidiaries owns good and marketable fee simple title (or its equivalent under
Applicable Law) to all of its owned Real Property, and valid leasehold interests
in all of its leased Real Property, all as described on Schedule 3.14, subject
to applicable Permitted Encumbrances, and, upon request of the Agents, copies of
all such leases or a summary of terms thereof reasonably satisfactory to Agents
have been delivered to Agents. Schedule 3.14 further describes any Real Property
with respect to which any Credit Party or any of its Subsidiaries is a lessor,
sublessor or assignor as of the Closing Date. As of the Closing Date, each of
the Credit Parties and each of its Subsidiaries also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets subject to applicable Permitted Encumbrances. As of the Closing Date,
none of the properties and assets of any Credit Party or any of its Subsidiaries
are subject to any Liens other than Permitted Encumbrances, and there are no
facts, circumstances or conditions known to any Borrower that are reasonably
likely to result in any Liens (including Liens arising under Environmental Laws)
other than Permitted Encumbrances against the properties or assets of any Credit
Party or any of its Subsidiaries. Each of the Credit Parties and each of its
Subsidiaries has received all deeds, assignments, waivers and consents necessary
to establish and protect such Credit Party’s or Subsidiary’s right, title and
interest in

 

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and to all such Real Property and other properties and assets. As of the Closing
Date, no portion of any Credit Party’s or any of its Subsidiaries’ Real Property
necessary to operate the Borrower’s business in the ordinary course has suffered
any material damage by fire or other material casualty loss that has not
heretofore been repaired and restored or otherwise remedied as reasonably
necessary to operate the Borrowers’ business in the ordinary course. As of the
Closing Date, all material permits required to have been issued or appropriate
to enable the Real Property to be lawfully occupied and used for all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect. As of the Closing Date, no Credit Party and no
Subsidiary of a Credit Party has notice of or knowledge of any pending or
threatened condemnation or eminent domain proceeding on any Mortgaged Property.

3.15 Environmental Matters.

(a) Except as set forth in Schedule 3.15, as of the Closing Date: (i) the Real
Property is free of contamination from any Hazardous Material except for such
contamination that could not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect; (ii) no Credit Party and no
Subsidiary of a Credit Party has caused or suffered to occur any Release of
Hazardous Materials on, at, in, under, above, to, from or about any of their
Real Property where such Release could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect; (iii) the Credit
Parties and their Subsidiaries are and have been in compliance with all
Environmental Laws, except for such noncompliance that could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect; (iv) the Credit Parties and their Subsidiaries have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with
such Environmental Permits could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, and all such
Environmental Permits are valid, uncontested and in good standing; (v) no Credit
Party and no Subsidiary of a Credit Party is involved in operations or knows of
any facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of such
Credit Party or Subsidiary which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, and no Credit Party
or Subsidiary of a Credit Party has permitted any current or former tenant or
occupant of the Real Property to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material that seeks damages, penalties, fines, costs or
expenses that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or which seeks injunctive relief
against, or that alleges criminal misconduct by any Credit Party or any
Subsidiary of a Credit Party; (vii) no notice has been received by any Credit
Party or any Subsidiary of a Credit Party identifying any of them as a
“potentially responsible party” or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any of the Credit
Parties or their Subsidiaries being identified as a “potentially responsible
party” under CERCLA or analogous state statutes except for any such notices that
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect; and (viii) the Credit Parties have
provided to Agent copies of all existing environmental reports, reviews and
audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case in possession of the

 

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Credit Parties relating to any of the Credit Parties or their Subsidiaries other
than any such reports, reviews, audits or information pertaining to actual or
potential Environmental Liabilities that could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

(b) Each Credit Party hereby acknowledges and agrees that to their knowledge
neither Agent (i) is now, and has ever been, in control of any of the Real
Property or affairs of such Credit Party or its Subsidiaries, and (ii) has the
capacity through the provisions of the Loan Documents or otherwise to influence
any Credit Party’s or its Subsidiaries’ conduct with respect to the ownership,
operation or management of any of their Real Property or compliance with
Environmental Laws or Environmental Permits.

3.16 ERISA/Canadian Pension Plans.

(a) Schedule 3.16 lists all Title IV Plans and Multiemployer Plans to which any
Credit Party is subject as of the Closing Date. As of the Closing Date, copies
of all such listed Plans, together with a copy of the three most recent form
IRS/DOL 5500-series for each such Plan, to the extent applicable, have been
delivered to US Agent (to the extent requested by US Agent). Except with respect
to Multiemployer Plans and except as disclosed on Schedule 3.16, each Qualified
Plan has been determined by the IRS to qualify under Section 401(a) of the IRC,
and to the knowledge of the applicable Credit Party, nothing has occurred that
would cause the loss of such qualification. Except as would not reasonably be
expected to have a Material Adverse Effect, each Plan is in material compliance
with the applicable provisions of ERISA and the IRC. Neither any Credit Party
nor ERISA Affiliate has failed to make any contribution or pay any amount due as
required by either Section 412 of the IRC or Section 302 of ERISA or the terms
of any Title IV Plan. No Credit Party has engaged in a “prohibited transaction,”
as defined in Section 406 of ERISA and Section 4975 of the IRC, in connection
with any Plan, that would subject any Credit Party to a material tax on
prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of
the IRC.

(b) As of the Closing Date, except as set forth in Schedule 3.16: (i) no Title
IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Borrower, threatened claims (other than claims for benefits
in the normal course), sanctions, actions or lawsuits, asserted or instituted
against any Plan or any Person as fiduciary or sponsor of any Plan that could
result in liability to a Credit Party; (iv) within the last five years no Title
IV Plan of any Credit Party or ERISA Affiliate has been terminated, whether or
not in a “standard termination” as that term is used in Section 404(b)(1) of
ERISA, that remains unsatisfied or could reasonably be expected to result in
liability to any Credit Party in excess of $500,000, nor has any Title IV Plan
of any Credit Party or ERISA Affiliate (determined at any time within the past
five years) with Unfunded Pension Liabilities been transferred outside of the
“controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate that has or could reasonably be expected to
result in a Material Adverse Effect.

 

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(c) Schedule 3.16 lists all Canadian Pension Plans to which any Credit Party is
subject as of the Closing Date. The Canadian Pension Plans are duly registered
under the ITA and all other applicable laws which require registration.
Borrowers have complied with and performed, in all material respects, all of
their obligations under and in respect of the Canadian Pension Plans and
Canadian Benefit Plans under the terms thereof, any funding agreements and all
applicable laws (including any fiduciary, funding, investment and administration
obligations). All employer and employee payments, contributions or premiums to
be remitted, paid to or in respect of each Canadian Pension Plan or Canadian
Benefit Plan have been paid in a timely fashion in accordance with the terms
thereof, any funding agreement and all applicable laws. There have been no
withdrawals or applications of the assets of the Canadian Pension Plans or the
Canadian Benefit Plans in material violation of applicable law or the applicable
plan documents. There are no outstanding disputes concerning the assets of the
Canadian Pension Plans or the Canadian Benefit Plans. No Canadian Pension Plan
has been wound up in whole or in part and no circumstances exist now or have
existed that would entitle any Governmental Authority to require the full or
partial winding up of any Canadian Pension Plan. Each of the Canadian Pension
Plans is and will be fully funded on a solvency basis (using actuarial methods
and assumptions which are consistent with the valuations last filed with the
applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles).

3.17 Deposit and Disbursement Accounts. Schedule 3.17 lists all banks and other
financial institutions at which any Credit Party maintains deposit, security or
other accounts as of the Closing Date, including any Disbursement Accounts, and
such Schedule correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.

3.18 Agreements and Other Documents. As of the Closing Date, each Credit Party
has provided or made available to each Agent and its counsel, on behalf of
Lenders, promptly upon their request, accurate and complete copies (or
summaries) of all of the following agreements or documents to which it is
subject and each of which is listed in Schedule 3.18: supply agreements and
purchase agreements not terminable by such Credit Party within sixty (60) days
following written notice issued by such Credit Party and involving transactions
in excess of $2,500,000 per annum (other than purchase orders entered into in
the ordinary course of business); leases of Equipment having a remaining term of
one year or longer and requiring aggregate rental and other payments in excess
of $1,000,000 per annum (other than purchase orders entered into in the ordinary
course of business); licenses and permits held by the Credit Parties, the
absence of which would reasonably be expected to have a Material Adverse Effect;
instruments and documents evidencing any Indebtedness or Guaranteed Indebtedness
of such Credit Party and any Lien granted by such Credit Party with respect
thereto; and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.

3.19 Insurance. Each Credit Party represents and warrants that it and each of
its Subsidiaries currently maintains in good repair, working order and condition
(normal wear and tear excepted) all material properties as set forth in
Section 4.2 and maintains all insurance described in such Section. Schedule 3.19
lists all insurance policies of any nature maintained, as of the Closing Date,
for current occurrences by each Credit Party.

 

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3.20 Taxes and Tax Returns.

(a) As of the Closing Date, (i) all Tax Returns required to be filed by the
Credit Parties have been timely and properly filed and (ii) all taxes that are
due (other than taxes being contested in good faith by appropriate proceedings
and for which adequate reserves have been provided for in accordance with GAAP)
have been paid, in each case except where the failure to file Tax Returns or pay
Taxes would not reasonably be expected to have a Material Adverse Effect. No
Governmental Authority has asserted any claim for taxes, or to any Credit
Party’s knowledge, has threatened to assert any claim for taxes that would, if
not paid by a Credit Party, have a Material Adverse Effect. All taxes required
by law to be withheld or collected and remitted (including, without limitation,
income tax, unemployment insurance and workmen’s compensation premiums) with
respect to the Credit Parties have been withheld or collected and paid to the
appropriate Governmental Authorities (or are properly being held for such
payment), except for amounts the nonpayment of which would not be reasonably
likely to have a Material Adverse Effect.

(b) None of the Credit Parties has been notified that either the IRS, CRA or any
other Governmental Authority, has raised, or intends to raise, any adjustments
with respect to Taxes of the Credit Parties, which adjustments would be
reasonably likely to have a Material Adverse Effect.

3.21 Senior Notes; Related Transactions Documents. As of the Closing Date,
Borrowers have delivered to Agents (i) a complete and correct copy of any
amendments, supplements, modifications, assignments of, to, or related to the
Indenture or the form of the Senior Note, made since the Original Closing Date,
including, but not limited to, to the Tender Offer Materials and (ii) a complete
and correct copy of each Related Transactions Document (including all schedules
and all other documents delivered pursuant thereto or in connection therewith).
No Credit Party, and to the knowledge of any Credit Party, no other Person party
thereto is in material default in the performance or compliance with any
provisions thereof. Each of the (i) Indenture and the Senior Notes and (ii) the
Related Transactions Documents and all Indebtedness incurred thereunder comply,
in all material respects, with all applicable laws.

3.22 Senior Indebtedness and Designated Senior Indebtedness. This Agreement
constitutes the “Revolving Credit Agreement” under and as defined in the 2011
Term Loan B Credit Agreement and the “ABL Credit Agreement” under and as defined
in the 2011 Indenture. All present and future Obligations hereunder constitute
indebtedness permitted under Section 7.02(e) of the 2011 Term Loan B Credit
Agreement and constitutes “Permitted Debt” permitted under Section 4.09 of the
2011 Indenture. Any Liens securing the Obligations constitute Liens permitted
under Section 7.01(k) of the 2011 Term Loan B Credit Agreement and constitute
“Permitted Liens” as such term is used in the 2011 Indenture and 2011 High Yield
Notes. Without limiting the foregoing, all present and future Obligations are
hereby designated as indebtedness permitted under Section 7.02(e) of the 2011
Term Loan B Credit Agreement, and all future Liens securing the Obligations are
hereby designated as Liens permitted under Section 7.01(k) of the 2011 Term Loan
B Credit Agreement and all present and future Obligations are hereby designated
as indebtedness permitted under Section 4.09 of the 2011 Indenture, and all
future Liens securing the Obligations are hereby designated as “Permitted Liens”
as such term is used in the 2011 Indenture and 2011 High Yield Notes.

 

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3.23 Transfer Pricing. All amounts that have been directly or indirectly
received by, or credited to, each Canadian Credit Party for property or services
(taken as a whole) provided by such Canadian Credit Party to any US Credit Party
or any other Person not resident in Canada for purposes of the ITA with whom
such Canadian Credit Party is not operating at Arm’s Length are equal to the
amounts that would have been directly or indirectly received by, or credited to,
such Canadian Credit Party for such property or services if that property or
those services (taken as a whole) had been provided to a Person with whom such
Canadian Credit Party is operating at Arm’s Length. The terms and conditions of
all financial arrangements(taken as a whole) entered into between each Canadian
Credit Party and any US Credit Party or other Person not resident in Canada for
purposes of the ITA with whom such Canadian Credit Party is not operating at
Arm’s Length with respect to Property or services (taken as a whole) provided by
such Canadian Credit Party are equivalent to those terms and conditions of
financial arrangements (taken as a whole) with respect to the provision of such
property or services (taken as a whole) that would have been agreed to by such
Canadian Credit Party with any Person with whom such Canadian Credit Party is
operating at Arm’s Length. Each Canadian Credit Party creates or obtains and
maintains the records and documents described in Subsection 247(4) of the ITA in
respect of all property or services provided to, or financial dealings with, any
US Credit Party and any other Person not resident in Canada for purposes of the
ITA with whom such Canadian Credit Party is not operating at Arm’s Length. In
respect of each year in which any Canadian Credit Party has provided property or
services to, or engaged in financial dealings with, any US Credit Party or any
other Person not resident in Canada for purposes of the ITA with whom such
Canadian Credit Party is not operating at Arm’s Length, such Canadian Credit
Party has filed a completed Form T106 (with all required attachments) with the
CRA by the prescribed filing deadline.

3.24 Governmental Authorization; Other Consent. No material approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Credit Party of this Agreement or any other Loan Document or
Related Transactions Document, or for the consummation of the Related
Transactions, (b) the grant by any Credit Party of the Liens granted by it
pursuant to the Collateral Documents, (c) the perfection or maintenance of the
Liens created under the Collateral Documents, or (d) the exercise by either
Agent or any Lender of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents. All applicable
waiting periods in connection with the Related Transactions have expired without
any action having been taken by any Governmental Authority restraining,
preventing or imposing materially adverse conditions upon any Related
Transaction or the rights of the Credit Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.

3.25 Casualty, Etc. Neither the businesses nor the properties of any Credit
Party or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

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3.26 Collateral Documents. The provisions of the Collateral Documents are
effective to create in favor of the Applicable Agent for the benefit of the
applicable Secured Parties a legal, valid and enforceable first priority Lien
(subject to Permitted Encumbrances and, in the case of the Term B Priority
Collateral (as defined in the Intercreditor Agreement), the Intercreditor
Agreement) on all right, title and interest of the respective Credit Parties in
the Collateral described therein. Except for filings completed prior to the
Closing Date and as contemplated hereby and by the Collateral Documents, no
filing or other action will be necessary to perfect or protect such Liens.

SECTION 4.

AFFIRMATIVE COVENANTS

Each US Credit Party jointly and severally agrees with all other US Credit
Parties as to all US Credit Parties, and each Canadian Credit Party jointly and
severally agrees with all other Canadian Credit Parties as to all Canadian
Credit Parties that from and after the Closing Date and until the Termination
Date:

4.1 Compliance with Laws and Contractual Obligations. Each Credit Party will
(a) comply with and shall cause each of its Subsidiaries to comply with (i) all
Requirements of Law (including, without limitation, material laws, rules,
regulations and orders relating to taxes, employer and employee contributions,
securities, employee retirement and welfare benefits, environmental protection
matters and employee health and safety and applicable Canadian laws, if any
and/or any analogous law to which any Credit Party is subject) as now in effect
and which may be imposed in the future in all jurisdictions in which any Credit
Party or any of its Subsidiaries is now doing business or may hereafter be doing
business and (ii) the obligations, covenants and conditions contained in all
Contractual Obligations of such Credit Party or any of its Subsidiaries other
than, in each case, the noncompliance with which would not be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect, and (b) maintain or obtain and shall cause each of its Subsidiaries to
maintain or obtain all licenses, qualifications and permits now held or
hereafter required to be held by such Credit Party or any of its Subsidiaries,
for which the loss, suspension, revocation or failure to obtain or renew, would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. This Section 4.1 shall not preclude any Credit Party or
its Subsidiaries from contesting any taxes or other payments, if they are being
diligently contested in good faith in a manner which stays enforcement thereof
and if appropriate expense provisions have been recorded in conformity with GAAP
and no Lien other than a Permitted Encumbrance in respect thereof has been
created.

4.2 Insurance; Damage to or Destruction of Collateral.

(a) The Credit Parties shall, at their sole cost and expense, maintain the
policies of insurance described on Schedule 3.19 as in effect on the date hereof
or otherwise in form and amounts and with insurers reasonably acceptable to
Agents. Such policies of insurance (or the loss payable and additional insured
endorsements delivered to Applicable Agent) shall contain provisions pursuant to
which the insurer agrees to provide not less than 30 days prior written notice
to Applicable Agent in the event of any non-renewal, cancellation or amendment
of any such insurance policy. Each Agent confirms that the insurance in effect
on the Closing

 

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Date is reasonably acceptable to it. If any Credit Party at any time or times
hereafter shall fail to obtain or maintain any of the policies of insurance
required above or to pay all premiums relating thereto, Applicable Agent may at
any time or times thereafter obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto that such Agent
reasonably deems advisable. No Agent shall have any obligation to obtain
insurance for any Credit Party or pay any premiums therefor. By doing so,
Applicable Agent shall not be deemed to have waived any Default or Event of
Default arising from any Credit Party’s failure to maintain such insurance or
pay any premiums therefor. All sums so disbursed, including reasonable
attorneys’ fees, court costs and other charges related thereto, shall be payable
on demand by Borrowers to Applicable Agent and shall be additional Obligations
hereunder secured by the Collateral. With respect to each Mortgaged Property,
obtain flood insurance in such total amount as is required by Applicable Laws,
if at any time the area in which any improvements located on any Mortgaged
Property is designated a Flood Zone, and otherwise comply with the Flood
Program.

(b) US Agent reserves the right at any time upon any change in any US Credit
Party’s risk profile (including any change in the product mix maintained by any
US Credit Party or any laws affecting the potential liability of such US Credit
Party) to require additional forms and limits of insurance to, in US Agent’s
reasonable opinion, adequately protect US Agent’s and Lenders’ interests in all
or any portion of the US Collateral and to ensure that each US Credit Party is
protected by insurance in amounts and with coverage customary for its industry.
If reasonably requested by US Agent, each US Credit Party shall deliver to US
Agent from time to time a report of a reputable insurance broker, reasonably
satisfactory to US Agent, with respect to its insurance policies.

(c) Canadian Agent reserves the right at any time upon any change in any
Canadian Credit Party’s risk profile (including any change in the product mix
maintained by any Canadian Credit Party or any laws affecting the potential
liability of such Canadian Credit Party) to require additional forms and limits
of insurance to, in Canadian Agent’s reasonable opinion, adequately protect both
Canadian Agent’s and Canadian Lenders’ interests in all or any portion of the
Canadian Collateral and to ensure that each Canadian Credit Party is protected
by insurance in amounts and with coverage customary for its industry. If
reasonably requested by Canadian Agent, each Canadian Credit Party shall deliver
to Canadian Agent from time to time a report of a reputable insurance broker,
reasonably satisfactory to Canadian Agent, with respect to its insurance
policies.

(d) Subject to the terms of the Intercreditor Agreement, each US Credit Party
shall deliver to US Agent, in form and substance reasonably satisfactory to US
Agent, endorsements to (i) all “All Risk” and business interruption insurance
naming US Agent, on behalf of itself and Lenders, as loss payee, and (ii) all
general liability and other liability policies naming US Agent, on behalf of
itself and Lenders, as additional insured. Each US Credit Party irrevocably
makes, constitutes and appoints US Agent (and all officers, employees or agents
designated by US Agent), so long as any Default or Event of Default has occurred
and is continuing or the anticipated insurance proceeds exceed $2,500,000, as
each US Credit Party’s true and lawful agent and attorney-in-fact for the
purpose of making, settling and adjusting claims under such “All Risk” policies
of insurance, endorsing the name of each US Credit Party on any check or other
item of payment for the proceeds of such “All Risk” policies of insurance

 

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and for making all determinations and decisions with respect to such “All Risk”
policies of insurance. US Agent shall have no duty to exercise any rights or
powers granted to it pursuant to the foregoing power-of-attorney. US Borrower
Representative shall promptly notify US Agent of any loss, damage, or
destruction to the US Collateral in the amount of $1,000,000 or more, whether or
not covered by insurance. After deducting from any insurance proceeds the
expenses, if any, incurred by US Agent in the collection or handling thereof, US
Agent may, at its option, apply such proceeds to the reduction of the US
Obligations in accordance with Section 1.6(f), provided that in the case of
insurance proceeds pertaining to any US Credit Party other than a US Borrower,
such insurance proceeds shall be applied to the Loans owing by such US Borrower,
or permit or require each US Credit Party to use such money, or any part
thereof, to replace, repair, restore or rebuild the US Collateral in a diligent
and expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction. Notwithstanding the
foregoing, if the casualty giving rise to such insurance proceeds could not
reasonably be expected to have a Material Adverse Effect and such insurance
proceeds do not exceed $2,500,000 in the aggregate, US Agent shall permit the
applicable US Credit Party to replace, restore, repair or rebuild the property;
provided that if such US Credit Party has not completed or entered into binding
agreements to complete such replacement, restoration, repair or rebuilding
within 180 days after receipt of such proceeds, US Agent may apply such
insurance proceeds to the US Obligations in accordance with Section 1.6(f);
provided further, subject to the terms of the Intercreditor Agreement, that in
the case of insurance proceeds pertaining to any US Credit Party other than a US
Borrower, such insurance proceeds shall be applied to the Loans owing by the US
Borrowers. Subject to the terms of the Intercreditor Agreement, all insurance
proceeds that are to be made available to such US Borrower to replace, repair,
restore or rebuild the US Collateral shall be applied by US Agent to reduce the
outstanding principal balance of the US Loans (which application shall not
result in a permanent reduction of the US Tranche A Loan Commitment or US
Tranche A1 Loan Commitment) and upon such application, US Agent shall establish
a Reserve against the Aggregate US Tranche A Borrowing Base and the US Tranche
A1 Borrowing Base in an amount equal to the amount of such proceeds so applied.
Subject to the terms of the Intercreditor Agreement, all insurance proceeds made
available to any US Credit Party that is not a US Borrower to replace, repair,
restore or rebuild US Collateral shall be deposited in a cash collateral
account, upon terms reasonably satisfactory to the Applicable Agent. Thereafter,
such funds shall be made available to such US Credit Party to provide funds to
replace, repair, restore or rebuild the US Collateral as follows: (i) such US
Borrower shall request a US Tranche A Revolving Credit Advance or release from
the cash collateral account be made to such US Credit Party in the amount
requested to be released; (ii) so long as the conditions set forth in
Section 2.2 have been met, US Tranche A Lenders shall make such US Tranche A
Revolving Credit Advance or US Agent shall release funds from the cash
collateral account; and (iii) in the case of insurance proceeds applied against
the US Tranche A Loan, the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of each such US Tranche A Revolving
Credit Advance. Subject to the Intercreditor Agreement, to the extent not used
to replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 1.6(f); provided that in the case of
insurance proceeds pertaining to any US Credit Party other than a US Borrower,
such insurance proceeds shall be applied to the Loans owing by the US Borrowers.

 

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(e) Each Canadian Credit Party shall deliver to Canadian Agent, in form and
substance reasonably satisfactory to Canadian Agent, endorsements to (i) all
“All Risk” and business interruption insurance naming Canadian Agent, on behalf
of itself and Canadian Lenders, as loss payee, and (ii) all general liability
and other liability policies naming Canadian Agent, on behalf of itself and
Canadian Lenders, as additional insured. Each Canadian Credit Party irrevocably
makes, constitutes and appoints Canadian Agent (and all officers, employees or
agents designated by Canadian Agent), so long as any Default or Event of Default
has occurred and is continuing or the anticipated insurance proceeds exceed
$2,500,000, as each Canadian Credit Party’s true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such “All Risk” policies of insurance, endorsing the name of each Canadian
Credit Party on any check or other item of payment for the proceeds of such “All
Risk” policies of insurance and for making all determinations and decisions with
respect to such “All Risk” policies of insurance. Canadian Agent shall have no
duty to exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Each Canadian Borrower shall promptly notify Canadian Agent
of any loss, damage, or destruction to the Canadian Collateral in the amount of
$1,000,000 or more, whether or not covered by insurance. After deducting from
any insurance proceeds the expenses, if any, incurred by Canadian Agent in the
collection or handling thereof, Canadian Agent may, at its option, apply such
proceeds to the reduction of the Canadian Obligations in accordance with
Section 1.6(f), provided that in the case of insurance proceeds pertaining to
any Canadian Credit Party other than a Canadian Borrower, such insurance
proceeds shall be advanced to a Canadian Borrower to be applied to the Loans
owing by such Canadian Borrower, or permit or require each Canadian Credit Party
to use such money, or any part thereof, to replace, repair, restore or rebuild
the Canadian Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage
or destruction. Notwithstanding the foregoing, if the casualty giving rise to
such insurance proceeds could not reasonably be expected to have a Material
Adverse Effect and such insurance proceeds do not exceed $2,500,000 in the
aggregate, Canadian Agent shall permit the applicable Canadian Credit Party to
replace, restore, repair or rebuild the property; provided that if such Canadian
Credit Party has not completed or entered into binding agreements to complete
such replacement, restoration, repair or rebuilding within 180 days after
receipt of such proceeds, Canadian Agent may apply such insurance proceeds to
the Canadian Obligations in accordance with Section 1.6(f); provided further
that in the case of insurance proceeds pertaining to any Canadian Credit Party
other than a Canadian Borrower, such insurance proceeds shall be applied to the
Loans owing by the Canadian Borrowers. All insurance proceeds that are to be
made available to such Canadian Borrower to replace, repair, restore or rebuild
the Canadian Collateral shall be applied by Canadian Agent to reduce the
outstanding principal balance of the Canadian Loans (which application shall not
result in a permanent reduction of the Canadian Tranche A Loan Commitment or
Canadian Tranche A1 Loan Commitment) and upon such application, Canadian Agent
shall establish a Reserve against the Aggregate Canadian Tranche A Borrowing
Base or the Aggregate Canadian Tranche A1 Borrowing Base in an amount equal to
the amount of such proceeds so applied. All insurance proceeds made available to
any Canadian Credit Party that is not a Canadian Borrower to replace, repair,
restore or rebuild Canadian Collateral shall be deposited in a cash collateral
account. Thereafter, such funds shall be made available to such Canadian Credit
Party to provide funds to replace, repair, restore or rebuild the Canadian
Collateral as follows: (i) such Canadian Borrower shall request a Canadian
Tranche A Revolving Credit Advance or release from the cash collateral account
be made to such Canadian Credit Party in the amount requested to be released;
(ii) so long as the conditions set forth in Section 2.2 have been met, Canadian

 

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Lenders shall make such Canadian Tranche A Revolving Credit Advance or Canadian
Agent shall release funds from the cash collateral account; and (iii) in the
case of insurance proceeds applied against the Canadian Tranche A Loan, the
Reserve established with respect to such insurance proceeds shall be reduced by
the amount of each such Canadian Tranche A Revolving Credit Advance. To the
extent not used to replace, repair, restore or rebuild the Canadian Collateral,
such insurance proceeds shall be applied in accordance with Section 1.6(f);
provided that in the case of insurance proceeds pertaining to any Canadian
Credit Party other than a Canadian Borrower, such insurance proceeds shall be
applied to the Loans owing by the Canadian Borrowers.

4.3 Inspection; Lender Meeting. Each Credit Party shall permit any authorized
representatives of either Agent to visit, audit and inspect any of the
properties of such Credit Party and its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and certified public accountants, at such reasonable times
during normal business hours and as often as may be reasonably requested;
provided that so long as no Event of Default has occurred and is continuing
(i) such audits and inspections shall be conducted no more frequently than once
per Fiscal Year and the applicable Credit Party shall have been given three
(3) Business Days prior notice of such audit or inspection and (ii) with respect
to such discussions with such certified public accounts, the applicable Credit
Party shall have been afforded the opportunity to be present as such
discussions. Representatives of each Lender will be permitted to accompany
representatives of any Agent during each visit, inspection and discussion
referred to in the immediately preceding sentence. In addition to the foregoing,
each Credit Party will participate and will cause key management personnel of
each Credit Party and its Subsidiaries to participate in a meeting with Agents
and Lenders at least once during each year, which meeting shall be held at such
time and such place as may be reasonably requested by any Agent. In addition,
Borrowers agree to reimburse US Agent and/or Canadian Agent in connection with:
(i) the reasonable and documented actual out-of-pocket costs (including
reasonable fees and expenses) of any Collateral audit if a third party auditor
is retained to conduct such audit or (ii) field audit charges as the US Agent
may from time to time establish (which are presently $900 per person per day)
per diem per auditor per audit conducted with respect to any US Credit Party and
field audit charges as the Canadian Agent may from time to time establish (which
are presently $900 per person per day), incurred by Canadian Agent, per diem per
auditor per audit conducted with respect to any Canadian Credit Party, plus, in
each case, actual reasonable, documented out-of-pocket expenses if US Agent’s or
Canadian Agent’s in-house auditors conduct such Collateral audit, in either case
not more than two times in any twelve-month period absent an Event of Default.

4.4 Organizational Existence. Except as otherwise permitted by Section 5.6, each
Credit Party will and will cause its Subsidiaries to at all times preserve and
keep in full force and effect its organizational existence and good standing and
all rights and franchises material to its business.

4.5 Environmental Matters. Each Credit Party shall and shall cause each Person
within its control to: (a) conduct its operations and keep and maintain its real
property in compliance with all applicable Environmental Laws and applicable
Environmental Permits other than noncompliance that would not reasonably be
expected to have a Material Adverse Effect;

 

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(b) implement any and all investigation, remediation, removal and response
actions that are required to comply with applicable Environmental Laws and
applicable Environmental Permits pertaining to the presence, generation,
treatment, storage, use, disposal, transportation or Release of any Hazardous
Material on, at, in, under, above, to or from any of its real property, except
where the failure to do so would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect; (c) notify the
Applicable Agent promptly of any violation of applicable Environmental Laws or
applicable Environmental Permits or any Release on, at, in, under, above, to or
from any real property in each case, which such Credit Party or Person within
its control, first becomes aware of after the Closing Date, that is reasonably
likely to result in Environmental Liabilities to a Credit Party or its
Subsidiaries in excess of the Dollar Equivalent of $300,000 or, and (d) promptly
forward to the Applicable Agent a copy of any written order, notice of actual or
alleged violation or liability, request for information or any written
communication or report received after the Closing Date by such Credit Party or
any Person within its control in connection with any such violation or Release
or any other matter relating to any applicable Environmental Laws or applicable
Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of the Dollar Equivalent of $300,000, in
each case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If any Agent at any time has a reasonable
basis to believe that there may be a violation of any applicable Environmental
Laws or applicable Environmental Permits by any Credit Party or any Person under
its control or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to or from any of its real
property, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party and its Subsidiaries shall, upon such
Agent’s written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, if and to the extent
appropriate, and preparation of such environmental reports, at Borrowers’
expense, as such Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
such Agent and shall be in form and substance reasonably acceptable to such
Agent, and (ii) if the Credit Parties fail to perform (or cause performance of)
any environmental audit under Section 4.5 above within a reasonable time after
receiving a written request from any Agent, Credit Parties shall permit such
Agent or its representatives to have reasonable access to all real property for
the purpose of conducting such environmental audits and testing as such Agent
deems appropriate, including subsurface sampling of soil and groundwater, if and
to the extent appropriate. US Borrowers shall reimburse the US Agent for the
costs of such audits and tests with respect to any US Credit Party’s Real
Property and the same will constitute a part of the US Obligations secured
hereunder. Canadian Borrowers shall reimburse the Canadian Agent for the costs
of such audits and tests with respect to any Canadian Credit Party’s Real
Property and the same will constitute a part of the Obligations secured
hereunder. Each Agent confirms that the environmental reports provided on or
before the Closing Date are satisfactory to it.

4.6 Landlords’ Agreements, Bailee Letters. Each Credit Party shall use
reasonable efforts to obtain a landlord’s agreement or bailee letter, as
applicable, from the lessor of each leased property or bailee with respect to
any warehouse, processor or converter facility or other location where
Collateral with a book value greater than the Dollar Equivalent of $1,000,000 is
stored or located, which agreement or letter shall be reasonably satisfactory in
form and substance to Applicable Agent. With respect to such locations or
warehouse space leased, owned

 

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or where Collateral is stored or located as of the Closing Date and thereafter,
if Applicable Agent has not received a landlord or bailee letter as of the
Closing Date (or, if later, as of the date such location is acquired, leased or
Collateral stored or located), the Eligible Inventory at that location shall, in
Applicable Agent’s discretion, be subject to such Reserves as may be established
by such Agent in its reasonable credit judgment acting in good faith. After the
Closing Date, no real property or warehouse space shall be leased by any Credit
Party or its Subsidiary and no Inventory shall be shipped to a processor or
converter under arrangements established after the Closing Date (excluding
renewals of existing leases and arrangements), in each case where the book value
of Collateral located therein exceeds $750,000 without the prior written consent
of the Applicable Agent (which consent, in such Agent’s discretion, may be
conditioned upon the establishment of Reserves acceptable to such Agent) or,
unless and until a satisfactory landlord agreement or bailee letter, as
appropriate, shall first have been obtained with respect to such location. Each
Credit Party shall and shall cause its Subsidiaries to timely and fully pay and
perform their obligations under all leases and other agreements with respect to
each leased location or public warehouse where any Collateral is or may be
located (other than Collateral in an aggregate amount for all such locations not
to exceed the Dollar Equivalent of $500,000 in the aggregate).

4.7 Conduct of Business. Each Credit Party shall at all times maintain, preserve
and protect all of its assets and properties material in the conduct of its
business, and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with past practices; and
transact business only in such corporate and trade names as are set forth in
Schedule 4.7 or otherwise notified to Applicable Agent in writing fifteen
(15) days prior to its use.

4.8 Further Assurances.

(a) Promptly upon the reasonable request by the Applicable Agent, (a) correct
any material defect or error that may be discovered in any Loan Document or in
the execution, acknowledgment, filing or recordation thereof, and (b) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Applicable Agent may reasonably require from time to
time in order to (i) carry out more effectively the purposes of the Loan
Documents, (ii) to the fullest extent permitted by Applicable Law, subject any
Credit Party’s or any of its Subsidiaries’ properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by any of the
Collateral Documents (subject to limitations hereunder and under the Collateral
Documents), (iii) perfect and maintain the validity, effectiveness and, subject
to the Intercreditor Agreement, priority of any of the Collateral Documents and
any of the Liens intended to be created thereunder and (iv) assure, convey,
grant, assign, transfer, preserve, protect and confirm more effectively unto the
Secured Parties the rights granted or now or hereafter intended to be granted to
the Secured Parties under any Loan Document or under any other instrument
executed in connection with any Loan Document to which any Credit Party or any
of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries
to do so. If the US Agent reasonably determines that it is required by
Applicable Laws to have appraisals prepared in respect of the Real Property of
any Credit Party constituting Collateral, the Borrowers shall provide to the US
Agent appraisals that satisfy the applicable requirements of the Real Estate
Appraisal Reform Amendments of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.

 

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(b) Each US Credit Party shall cause each Person that on or after the Closing
Date becomes, upon its becoming a Domestic Subsidiary of such US Credit Party
(provided that this shall not be construed to constitute consent by any of the
Lenders to any transaction referred to above which is not expressly permitted by
the terms of this Agreement), promptly (but in any event within 30 days after
formation or acquisition) to guaranty the Obligations upon terms in form and
substance reasonably satisfactory to the US Agent, and to (i) grant to US Agent,
for the benefit of the Secured Parties, a first priority security interest
(subject to Permitted Encumbrances) in all or substantially all of the property
of such Domestic Subsidiary (other than Excluded Real Property) to secure the
Obligations (provided that such Domestic Subsidiary shall not be required to
pledge more than 65% of the outstanding Voting Stock and 100% of the Non-Voting
Stock of any Foreign Subsidiary of such Domestic Subsidiary to secure the US
Obligations); (ii) pledge, or cause to be pledged, to US Agent, for the benefit
of Agents and Lenders, all of the Stock of such Domestic Subsidiary to secure
the Obligations; and (iii) pledge, or cause to be pledged, to Canadian Agent,
for the benefit of the Canadian Agent and Canadian Lenders, all of the Stock of
such Domestic Subsidiary to secure the Canadian Obligations. The documentation
for such guaranty, security and pledge shall be substantially similar to the
Loan Documents executed concurrently herewith with such modifications as are
reasonably requested by US Agent.

(c) Each Canadian Credit Party shall except with respect to 3181952 and Exopack
L.P., cause each Person that after the Closing Date becomes, upon its becoming a
Subsidiary of such Credit Party (provided that this shall not be construed to
constitute consent by any of the Lenders to any transaction referred to above
which is not expressly permitted by the terms of this Agreement), promptly (but
in any event within 30 days after formation or acquisition) to guaranty the
Canadian Obligations upon terms in form and substance reasonably satisfactory to
the Canadian Agent, and to (i) grant to Canadian Agent, for the benefit of
Canadian Agent and Canadian Lenders, a first priority security interest (subject
to Permitted Encumbrances) in all or substantially all of the personal property
of such Subsidiary to secure the Canadian Obligations (provided that any
Domestic Subsidiary shall not be required to pledge more than 65% of the
outstanding Voting Stock and 100% of the outstanding Non-Voting Stock of any
Foreign Subsidiary of such Domestic Subsidiary); (ii) except with respect to the
Stock of 3181952 and partnership interests of Exopack L.P., pledge, or cause to
be pledged, to Canadian Agent, for the benefit of Canadian Agent and Canadian
Lenders, all of the Stock of such Subsidiary to secure the Canadian Obligations;
and (iii) except with respect to the Stock of 3181952 and partnership interests
of Exopack L.P., pledge, or cause to be pledged, to US Agent, for the benefit of
US Agent and US Lenders, 65% of the outstanding Voting Stock and 100% of the
Non-Voting Stock of such Subsidiary to secure the US Obligations. The
documentation for such guaranty, security and pledge shall be substantially
similar to the Loan Documents executed concurrently herewith with such
modifications as are reasonably requested by Canadian Agent.

(d) Promptly, and in any event within 30 days of becoming a Domestic Subsidiary
of a US Credit Party, such Domestic Subsidiary shall pledge, or cause to be
pledged, to US Agent, for the benefit of US Agent and US Lenders, 65% of the
outstanding Voting Stock of any Foreign Subsidiary and 100% of the Non-Voting
Stock of any Foreign Subsidiary upon its

 

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becoming a first tier Foreign Subsidiary of such US Credit Party. Promptly, and
in any event within 30 days of becoming a Domestic Subsidiary of a US Credit
Party, such Domestic Subsidiary shall pledge or cause to be pledged to the
Canadian Agent, for the benefit of the Canadian Agent and Canadian Lenders, 100%
of the Stock of any Person upon its becoming a first tier Foreign Subsidiary of
such US Credit Party. The documentation for such guaranty, security and pledge
shall be substantially similar to the Loan Documents executed concurrently
herewith with such modifications as are reasonably requested by US Agent.

(e) with respect to any Lien granted on property (real or personal) pursuant to
Sections 4.8(b), (c) and (d), as soon as reasonably practicable (but in any
event within the time periods set forth therein (or such longer period as the
Applicable Agent may agree in its sole discretion) after the creation thereof,
cause the execution of and delivery to the Applicable Agent, Mortgages, such
documents, instruments, certificates (including but not limited to Flood
Certificates), appraisals, title reports, surveys, engineering, soils and other
reports, environmental assessment reports and other information reasonably
requested by the US Agent (such documents, collectively, the “Mortgage-Related
Documents”), Collateral Document supplements, other security and pledge
agreements, certificates and financing statements as specified by and in form
and substance reasonably satisfactory to the US Agent, securing payment of all
the Obligations of such Subsidiary or such parent, as the case may be, under the
Loan Documents and constituting first priority Liens on all such real and
personal properties (subject to Permitted Encumbrances); provided that Mortgages
shall not be required for any Excluded Real Property.

(f) Each US Credit Party shall, as promptly as practicable (but in any event
within 90 days or such additional time as the US Agent may otherwise agree)
after acquisition of Real Property (other than Excluded Real Property), deliver,
upon the reasonable request of the US Agent in its sole discretion, to the US
Agent with respect to each parcel of Real Property owned or held by the entity
that is the subject of such formation or acquisition, Mortgages and
Mortgage-Related Documents, provided, however, that to the extent that any
Credit Party shall have otherwise received any of the foregoing items with
respect to such Real Property, such items shall, promptly after the receipt
thereof, be delivered to the US Agent.

4.9 Payment of Taxes. Each Credit Party shall properly prepare and file all tax
returns and shall timely pay and discharge (or cause to be paid and discharged)
all material taxes, assessments and governmental and other charges or levies
imposed upon it or upon its income or profits, or upon property belonging to it;
provided that such Credit Party shall not be required to pay any such tax,
assessment, charge or levy that is being contested in good faith by appropriate
proceedings and for which the affected Credit Party shall have set aside on its
books adequate reserves with respect thereto in conformance with GAAP.

4.10 Cash Management Systems; Bank Accounts. Borrowers shall, and shall cause
each other Credit Party to, enter into Control Agreements with respect to each
deposit account maintained by Borrowers or any Subsidiary of a Borrower (other
than any payroll account so long as such payroll account is a zero balance
account and other deposit accounts with an average aggregate daily balance not
to exceed $25,000) as of or after the Closing Date. Each such Control Agreement
shall be in form and substance satisfactory to the Applicable Agent. Each
Borrower shall, and shall cause any Subsidiary to, provide prior written notice
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Applicable Agent before directly or indirectly establishing any new bank account
and prior to the establishment thereof, Applicable Agent, such Borrower or such
Subsidiary and the bank at which the account is to be opened shall enter into a
Control Agreement regarding each such bank account in form and substance
satisfactory to the Applicable Agent pursuant to which such bank
(i) acknowledges the security interest of the Applicable Agent in such bank
account, (ii) agrees to comply with instructions originated by the Applicable
Agent directing disposition of the funds in the bank account without further
consent from Borrowers, and (iii) agrees to subordinate and limit any security
interest the bank may have in the bank account on terms satisfactory to the
Applicable Agent. As of the Closing Date, Borrowers and each other Credit Party
have entered into Control Agreements (which such Control Agreements are
acceptable to Agents) with respect to each deposit account maintained by
Borrowers or any Subsidiary of a Borrower (other than any payroll account so
long as such payroll account is a zero balance account and other deposit
accounts with an average aggregate daily balance not to exceed $25,000) as more
fully set forth on Schedule 4.10 hereto.

4.11 Canadian Pension and Benefit Plans. Canadian Borrowers shall deliver to
Canadian Agent (i) if requested by Canadian Agent, copies of each annual and
other return, report or valuation with respect to each Canadian Pension Plan as
filed with any applicable Governmental Authority; (ii) promptly after receipt
thereof, a copy of any direction, order, notice, ruling or opinion that any
Canadian Credit Party may receive from any applicable Governmental Authority
with respect to any Canadian Pension Plan; and (iii) notification within 30 days
of any increases having a cost to one or more of the Canadian Credit Parties in
excess of Cdn$1,000,000 per annum in the aggregate, in the benefits of any
existing Canadian Pension Plan or Canadian Benefit Plan, or the establishment of
any new Canadian Pension Plan or Canadian Benefit Plan, or the commencement of
contributions to any such plan to which any Canadian Credit Party was not
previously contributing.

4.12 Transfer Pricing. All amounts to be directly or indirectly received by, or
credited to, each Canadian Credit Party for property or services (taken as a
whole) to be provided by such Canadian Credit Party to any US Credit Party or
any other Person not resident in Canada for purposes of the ITA with whom such
Canadian Credit Party is not operating at Arm’s Length shall be equal to the
amounts that would have been directly or indirectly received by, or credited to,
such Canadian Credit Party for such property or services (taken as a whole) if
that property or those services (taken as a whole) were to be provided to a
Person with whom such Canadian Credit Party is operating at Arm’s Length. The
terms and conditions of all financial arrangements (taken as a whole) entered
into between each Canadian Credit Party and any US Credit Party or other Person
not resident in Canada for purposes of the ITA with whom such Canadian Credit
Party is not operating at Arm’s Length with respect to property or services
(taken as a whole) to be provided by such Canadian Credit Party shall be
equivalent to those terms and conditions of financial arrangements (taken as a
whole) with respect to the provision of such Property or services (taken as a
whole) that would have been agreed to by such Canadian Credit Party with any
Person with whom such Canadian Credit Party is operating at Arm’s Length. Each
Canadian Credit Party shall create or obtain and maintain the records and
documents described in subsection 247(4) of the ITA in respect of all property
or services provided to, and financial arrangements with, any US Credit Party
and any other Person not resident in Canada for purposes of the ITA with whom
such Canadian Credit Party is not operating at Arm’s Length. In respect of each
year in which any Canadian Credit Party provides

 

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Property or services to, or engages in financial arrangements with, any US
Credit Party or any other Person not resident in Canada for purposes of the ITA
with whom such Canadian Credit Party is not operating at Arm’s Length, such
Canadian Credit Party shall file a completed Form T106 (with all required
attachments) with the CRA by the prescribed filing deadline.

4.13 Maintenance of Accounts. If an Account owing to a Canadian Borrower
includes a charge for any tax payable to any Governmental Authority, Canadian
Agent is authorized, if Canadian Borrower has not paid such tax, in its sole
discretion, to pay the amount thereof to the proper taxing authority for the
account of the Canadian Borrower and to charge the Canadian Borrower therefor,
except for taxes that (i) are being contested in good faith with reasonable
diligence and by appropriate proceedings and with respect to which Canadian
Borrower maintains reasonable reserves on its books therefor and (ii) would not
reasonably be expected to result in any Lien other than a Permitted Encumbrance.
Notwithstanding the foregoing, if Canadian Agent releases to the Canadian
Borrower an amount in respect of goods and services taxes and sales taxes that
are included in each Account, such Canadian Borrower shall immediately remit
such amount to the proper taxing authority and, if requested by Canadian Agent,
provide Canadian Agent with a receipt therefor. Except as set forth in
Section 1.12, in no event shall Agent or Canadian Agent (or the fondé de
pouvoir, as the case may be) or any Lender be liable for any taxes to any
Government Authority that may be imposed on Borrowers.

4.14 Use of Proceeds. Use the proceeds of the Advances solely for Permitted
Acquisitions and the financing of Borrowers’ working capital and general
corporate needs.

SECTION 5.

NEGATIVE COVENANTS

Each US Credit Party jointly and severally agrees with all other US Credit
Parties as to all US Credit Parties, and each Canadian Credit Party jointly and
severally agrees with all other Canadian Credit Parties as to all Canadian
Credit Parties that from and after the Closing Date and until the Termination
Date:

5.1 Indebtedness. The Credit Parties shall not and shall not cause or permit
their Subsidiaries directly or indirectly to create, incur, assume, or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness
(other than pursuant to a Contingent Obligation permitted under Section 5.4)
except:

(a) Indebtedness described on Schedule 5.1;

(b) the Obligations;

(c) Indebtedness consisting of (i) intercompany loans and advances made by any
Credit Party to any other Credit Party, including, without limitation, the
Existing Subordinated Intercompany Note (other than Holdings or any UK Group
Member), (ii) intercompany loans and advances made by any Credit Party to any UK
Group Member, in an aggregate amount not to exceed $5,000,000 and
(iii) intercompany loans and advances made by any UK Group Member to any Credit
Party, in an aggregate amount not to exceed $5,000,000; provided, that: (i) such
Credit Parties shall have executed and delivered to each other Credit Party on
the Closing Date, or on October 31, 2007, with respect to the Existing
Subordinated

 

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Intercompany Note, as the case may be, or, with respect to any intercompany loan
pursuant to Section 5.1(c)(ii) or (iii), on the date of entering into such
intercompany loan, a demand note (collectively, the “Intercompany Notes”) to
evidence any such intercompany Indebtedness owing at any time by and among them,
which Intercompany Notes shall be in form and substance reasonably satisfactory
to Applicable Agent and shall be pledged and delivered to Applicable Agent
pursuant to the applicable Pledge Agreement or Security Agreement as additional
collateral security for the Obligations; (ii) such Credit Party shall record all
intercompany transactions on its books and records in a manner reasonably
satisfactory to Applicable Agent; (iii) the obligations of such Credit Party
under any such Intercompany Notes shall be on terms, including subordination
terms, reasonably satisfactory to Applicable Agent; (iv) at the time any such
intercompany loan or advance is made by such Credit Party and after giving
effect thereto, such Credit Party shall be Solvent; (v) no Default or Event of
Default would occur and be continuing after giving effect to any such proposed
intercompany loan; and (vi) the aggregate balance of all such intercompany loans
(other than loans permitted under clause (j) below) owing by the Canadian Credit
Parties to US Credit Parties shall not exceed $5,000,000 at any time; and
provided further that, Indebtedness under sub-clauses (i), (j), (k), (l), (m),
(n) and (o) hereof may be documented pursuant to other intercompany notes in a
form acceptable to Applicable Agent which (i) shall be pledged and delivered to
Applicable Agent pursuant to the applicable Pledge Agreement or Security
Agreement as additional collateral and (ii) the obligations of such Credit Party
under any such intercompany notes shall be subordinated to the Obligations
hereunder in a manner reasonably satisfactory to Applicable Agent pursuant to
and in accordance with the terms of the Intercompany Note;

(d) the Senior Notes in an amount not to exceed $28,500,000 in an aggregate
principal amount outstanding at any time on or prior to the 30th day following
the Closing Date;

(e) Indebtedness with respect to Capitalized Leases or purchase money
obligations, in each case, incurred for the purpose of financing all or any part
of the purchase price or cost of design, construction, installation or
improvement or lease of property, plant or equipment used in the business of the
Credit Parties, in an aggregate principal amount not to exceed the greater of
(x) 2.5% of Consolidated Total Assets and (y) $15,000,000 million at any time
outstanding;

(f) Indebtedness with respect to real property in an aggregate amount not to
exceed $25,000,000 in the aggregate secured by such real property, whether
purchase money indebtedness or otherwise, so long as such Indebtedness with
respect to any individual parcel of real property shall not exceed the value
thereof together with the buildings and improvements thereon;

(g) any other unsecured Indebtedness not to exceed the Dollar Equivalent of
$12,000,000 in an aggregate principal amount at any time outstanding; provided
that such other Indebtedness of Foreign Subsidiaries and (other than Canadian
Subsidiaries) Excluded Subsidiaries shall not exceed $2,000,000 in the aggregate
at any time outstanding;

(h) refinancings of Indebtedness permitted under clauses (a), (d) and (e) that
do not accelerate the scheduled dates for payment thereof, increase the
principal amounts thereof, materially increase any interest rate or fees
applicable thereto, add additional obligors therefor, or enhance the collateral
therefor or the priority thereof;

 

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(i) Indebtedness (for the avoidance of doubt, less any interest accruing
thereon) of Exopack Ontario to Exopack Thomasville, in an amount not to exceed
$18,000,000; provided, that Exopack Ontario shall have executed and delivered to
Exopack Thomasville, which shall have pledged and delivered to US Agent, an
intercompany note to evidence such Indebtedness;

(j) Indebtedness (for the avoidance of doubt, less any interest accruing
thereon) of TPG Canada (or any successor thereto) to TPG Enterprises of up to
Cdn $10,000,000 as a result of the TPG Recapitalization; provided, that TPG
Canada shall have executed and delivered to TPG Enterprises, which shall have
pledged and delivered to US Agent, an intercompany note to evidence such
Indebtedness;

(k) (A) Indebtedness of Exopack Canada to TPG Canada of up to Cdn $10,000,000,
as such amount may be increased in accordance with Section 5.5(j), as a result
of the Exopack Canada Consolidation provided, that TPG Canada shall have
contributed such intercompany note to Exopack L.P. in exchange for a 99.99999%
limited partnership interest in Exopack L.P.; and (B) Indebtedness of Exopack
Canada to Exopack L.P. of up to Cdn $10,000,000, as such amount may be increased
in accordance with Section 5.5(j), as a result of the Exopack Canada
Consolidation, provided, that, Exopack Canada shall have executed and delivered
to Exopack L.P. an intercompany note, which shall have been delivered to
Canadian Agent, to evidence such Indebtedness;

(l) Indebtedness of Exopack UK Holdco to the US Borrowers or the Canadian
Borrowers, in an amount not to exceed $10,000,000 in the aggregate, except for
Indebtedness of Exopack UK Holdco to the US Borrowers or Canadian Borrowers
incurred in connection with the Intelicoat Acquisition;

(m) Indebtedness (for the avoidance of doubt, less any interest accruing
thereon) of Performance Films to TPG Enterprises in an amount not to exceed the
greater of the Canadian Dollar Equivalent Amount of $11,000,000 Dollars and
$11,000,000 Canadian Dollars in the aggregate to be incurred in connection with
the Liqui-box Acquisition and the proceeds of which will be used solely to
consummate the Liqui-box Acquisition, which Indebtedness, for the avoidance of
doubt, may be interest-free and which Indebtedness may be replaced at the
discretion of the Credit Parties within seventy (70) days of the Liqui-box
Acquisition Closing Date, with Indebtedness in the same aggregate Canadian
Dollar principal amount that is interest-bearing;

(n) [reserved]

(o) [reserved]

(p) Indebtedness evidenced by the 2011 High Yield Notes in an aggregate amount
not to exceed $235,000,000 and any Permitted Refinancing of such Indebtedness;

 

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(q) Indebtedness incurred under the 2011 Term Loan B Credit Agreement and any
Permitted Refinancing of such Indebtedness in an aggregate amount not to exceed
the Maximum Term B Amount (as defined in the Intercreditor Agreement), provided
that any commitments or loans (including, without limitation, for the avoidance
of doubt, “New Term Commitments” and “New Term Loans” pursuant to Section 2.14
of the 2011 Term Loan B Credit Agreement) made thereunder after the Closing Date
must constitute 2011 Term Loan B Incremental Loans; and

(r) obligations under other Hedging Agreements entered into for the sole purpose
of hedging in the normal course of business and consistent with industry
practices and Cash Management Agreements.

5.2 Liens and Related Matters.

(a) No Liens. The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset of such Credit Party or any
such Subsidiary, whether now owned or hereafter acquired, or any income or
profits therefrom, except Permitted Encumbrances (including, without limitation,
those Liens constituting Permitted Encumbrances existing on the date hereof and
renewals and extensions thereof, as set forth on Schedule 5.2) and Liens
securing Indebtedness permitted under Section 5.1(f).

(b) No Negative Pledges. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly enter into or assume any
agreement (other than the Loan Documents, the 2011 Indenture, the 2011 High
Yield Notes, the 2011 Term Loan B Credit Agreement and agreements entered into
with respect to other Indebtedness permitted under Section 5.1(f) and any
Permitted Refinancing with respect to any of the foregoing) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired and other than (i) provisions restricting subletting
or assignment under any lease governing a leasehold interest or lease of
personal property; (ii) restrictions with respect to a Subsidiary imposed
pursuant to any agreement which has been entered into for the sale or
disposition of all or substantially all of the equity interests or assets of
such Subsidiary, so long as such sale or disposition of all or substantially all
of the equity interests or assets of such Subsidiary is permitted under this
Agreement; and (iii) restrictions on assignments or sublicensing of licensed
Intellectual Property. No reference to Permitted Encumbrances in this Agreement
or any other Loan Document, including any statement or provision as to the
acceptability of any Permitted Encumbrances or the permitted priority thereof,
shall in any way constitute or be construed so as to provide for a subordination
of any rights of the Agents or the Lenders hereunder or arising under any Loan
Documents in favor of any holder of such Permitted Encumbrances or any Lien
ranking in priority to such Permitted Encumbrances.

(c) No Restrictions on Subsidiary Distributions to Borrowers. Except as provided
herein, the Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
(other than the Loan Documents, the Indenture, the 2011 Indenture, the 2011 High
Yield Notes and the 2011 Term Loan B Credit Agreement and any Permitted
Refinancing with respect to any of the foregoing) on the ability of

 

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any such Subsidiary to: (1) pay dividends or make any other distribution on any
of such Subsidiary’s Stock owned by any Borrower or any other Subsidiary;
(2) pay any Indebtedness owed to any Borrower or any other Subsidiary; (3) make
loans or advances to any Borrower or any other Subsidiary; or (4) transfer any
of its property or assets to any Borrower or any other Subsidiary.

5.3 Investments. The Credit Parties shall not and shall not cause or permit
their Subsidiaries to directly or indirectly make or own any Investment in any
Person except:

(a) Borrowers and their Subsidiaries may make and own Investments in Cash
Equivalents subject to Control Agreements in favor of the Applicable Agent;
provided that such Cash Equivalents are not subject to setoff rights except to
the extent expressly permitted in any relevant Control Agreement;

(b) Credit Parties may make intercompany loans to other Credit Parties to the
extent permitted under Section 5.1;

(c) Borrowers and their Subsidiaries may make loans and advances to employees
for moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed the Dollar Equivalent of $2,000,000 in the
aggregate at any time outstanding;

(d) Credit Parties and their Subsidiaries may make capital contributions to
their wholly-owned Subsidiaries that are US Credit Parties in an amount not to
exceed the Dollar Equivalent of $1,000,000 in the aggregate reduced by the
amount of Investments made pursuant to Section 5.3(b);

(e) Investments representing non-cash consideration received in accordance with
Section 5.7;

(f) Investments in Subsidiaries existing on the Closing Date and other
Investments existing on the Closing Date as set forth on Schedule 5.3 and any
renewals, amendments and replacements thereof that do not increase the amount
thereof;

(g) each Credit Party may hold investments comprised of notes payable, or stock
or other securities issued by financially troubled Account Debtors (excluding
Affiliates) to such Credit Party pursuant to agreements with respect to
settlement of such Account Debtor’s Accounts with such Credit Party negotiated
in the ordinary course of business;

(h) Investments consisting of loans by a Borrower to employees of that Borrower
which are used solely by such employees to simultaneously purchase the Stock of
Holdings, provided that Holdings contemporaneously contributes the proceeds of
such Stock to the capital of that Borrower;

(i) Permitted Acquisitions;

(j) Investments consisting of loans made by TPG Enterprises to TPG Canada of up
to Cdn $10,000,000 as part of the TPG Recapitalization;

 

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(k) Borrowers and their Subsidiaries may make advances in the form of a
prepayment of expenses, so long as such expenses were incurred in the ordinary
course of business and are being paid in accordance with customary trade terms
of such Borrower or such Subsidiary;

(l) new investments in Exopack Canada, Performance Films and/or TPG Canada as
part of the Permitted Amalgamation;

(m) other Investments in an amount not to exceed $10,000,000 in the aggregate;
provided that, except for Investments in Exopack UK Holdco made in connection
with the Intelicoat Acquisition, such other Investments in Foreign Subsidiaries
(other than Canadian Subsidiaries) and Excluded Subsidiaries shall not exceed
$5,000,000 in the aggregate at any time outstanding;

(n) Investments consisting of loans made by TPG Canada to Exopack Canada of up
to Cdn $10,000,000 as part of the Exopack Canada Consolidation;

(o) nominal Investments by 3181952 in Exopack L.P. as part of the Exopack Canada
Consolidation;

(p) TPG Enterprises may make capital contributions in TPG Canada, including by
subscribing for additional shares of TPG Canada, in an amount not to exceed the
amount sufficient to permit TPG Canada to make interest payments on the
intercompany loan permitted under Section 5.1(j); and

(q) Investments consisting of loans made by TPG Enterprises to Performance Films
permitted under Section 5.1(m) as part of the Liqui-box Acquisition, to be used
solely to consummate the Liqui-box Acquisition, which loans, for the avoidance
of doubt may be interest-free and which loans may be replaced at the discretion
of the Credit Parties within seventy (70) days of the Liqui-box Acquisition
Closing Date, with Indebtedness in the same aggregate principal amount that are
interest-bearing.

5.4 Contingent Obligations. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly create or become or be
liable with respect to any Contingent Obligation except:

(a) Guaranties of the Obligations pursuant to the Loan Documents;

(b) Letter of Credit Obligations;

(c) those resulting from endorsement of negotiable instruments for collection in
the ordinary course of business;

(d) those existing on the Closing Date and described in Schedule 5.4;

(e) those arising under indemnity agreements to title insurers to cause such
title insurers to issue mortgagee title insurance policies;

 

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(f) those arising with respect to customary indemnification obligations incurred
in connection with Asset Dispositions and to the extent permitted by
Section 5.6(iv), Permitted Acquisitions, in each case permitted hereunder;

(g) Guaranties by Exopack Holdings, Holdings, any Borrower or any of its
Subsidiaries of the Senior Notes and Indebtedness permitted by Section 5.1(p),
(q) and (r) so long as each such entity guarantees the Obligations hereunder;

(h) those incurred with respect to Indebtedness permitted by Section 5.1
provided that (i) any such Contingent Obligation is subordinated to the
Obligations to the same extent as the Indebtedness to which it relates is
subordinated to the Obligations, (ii) no Credit Party may incur Contingent
Obligations under this clause (h) in respect of Indebtedness incurred by any
Person that is not a Credit Party, and (iii) no Credit Party may guarantee
Subordinated Debt of Holdings that is structurally subordinated to the
Obligations; and

(i) any other Contingent Obligation not expressly permitted by clauses
(a) through (h) above, so long as any such other Contingent Obligations, in the
aggregate at any time outstanding, do not exceed the Dollar Equivalent of
$2,500,000 and no Credit Party may incur Contingent Obligations in respect of
Indebtedness incurred by any Person that is not a Credit Party under this clause
(i) and no Credit Party may guarantee Subordinated Debt of Holdings that is
structurally subordinated to the Obligations.

5.5 Restricted Payments. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly declare, order, pay, make or
set apart any sum for any Restricted Payment, except that:

(a) Each Credit Party may make payments and distributions to CPG (whether
directly or through sequential upstream Restricted Payments) that are used by
CPG to pay federal and state income taxes then due and owing, estimated taxes
then due, franchise taxes and other similar licensing expenses incurred in the
ordinary course of business; provided that each Credit Party’s aggregate
contribution to taxes as a result of the filing of a consolidated or combined
return of CPG or of having its income otherwise includable on a tax return of
CPG shall not be greater, nor the aggregate receipt of tax benefits less, than
it would have been had such Credit Party filed a stand-alone return;

(b) Any Borrower may make Tax Distributions (which may be paid annually based on
such Borrower’s audited financial statements or, so long as no Event of Default
is then outstanding, in multiple installments, based on such Borrower’s
good-faith estimate of income to be generated by such Borrower’s business in
such year) to allow its shareholders, members or partners, as the case may be,
to meet their tax obligations on such income in a timely manner less the amount
of Net Tax Benefit realized by such shareholders, members or partners for any
previous tax year, commencing from the tax year immediately prior to the tax
year containing the Closing Date, but only to the extent such Net Tax Benefit
has not already reduced, in any tax year during which this Agreement is in
effect, the amount of any Tax Distribution otherwise permitted hereunder;

 

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(c) Direct or indirect wholly-owned Subsidiaries of Exopack Holdings may make
Restricted Payments to the entity which is the direct owner of the equity of
such wholly-owned Subsidiary; provided that no such Restricted Payment may be
made to any such direct owner which is not a Credit Party;

(d) Credit Parties may make Restricted Payments (whether directly or through
sequential upstream Restricted Payments) to Holdings to enable Holdings to make
payments on the Senior Notes and the 2011 High Yield Notes pursuant to the terms
of the Indenture and the 2011 Indenture, respectively, as in effect on the date
hereof subject to the terms of the Indenture and the 2011 Indenture,
respectively; provided that no part of the proceeds of any Loan may be used to
make such Restricted Payments after acceleration of the Senior Notes and the
2011 High Yield Notes;

(e) the Credit Parties may make principal and interest payments on intercompany
loans permitted under Section 5.1(c), 5.1(j) and 5.1(m);

(f) any Credit Party may pay management fees and reasonable out-of-pocket
expenses payable quarterly pursuant to the Management Services Agreement and may
pay reasonable and customary management consulting fees pursuant to the
Management Services Agreement in an amount not to exceed 1% of the aggregate
consideration (including assumed debt and long-term liabilities) paid to or by
Holdings or any of its Subsidiaries in connection with refinancings,
restructurings, equity or debt offerings, acquisitions, mergers, consolidations,
business combinations, sales and divestitures involving Holding and its
Subsidiaries (whether directly or through sequential upstream Restricted
Payments); provided in each case that no Default or Event of Default has
occurred and is continuing at the time of any such Restricted Payment or would
result after giving effect thereto; provided that it is expressly agreed that
any such management fees or management consulting fees not permitted to be so
paid shall be accrued and paid when such Event of Default has been cured or
waived;

(g) TPG Canada may effect a return of capital to TPG Enterprises as part of the
TPG Recapitalization;

(h) so long as no Event of Default has occurred or is continuing, the Credit
Parties may pay dividends to CPG (whether directly or through sequential
upstream Restricted Payments) for the payment of ordinary course overhead
payments actually incurred by Holdings;

(i) Borrowers may pay dividends to Holdings to permit Holdings to repurchase
Stock owned by employees of Borrowers whose employment with Borrowers and their
Subsidiaries has been terminated, provided that such Restricted Payments shall
not exceed the Dollar Equivalent of $500,000 in any Fiscal Year or $1,000,000
during the term of this Agreement in the aggregate and provided that no Event of
Default exists at the time of such Restricted Payment or would occur as a result
thereof;

(j) Exopack Canada may make interest payments on the intercompany loan permitted
under Section 5.1(k); provided, that the amount of any such interest payments
are in turn loaned to Exopack Canada;

 

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(k) Exopack Canada may pay dividends to TPG Canada in an amount not to exceed
the amount sufficient to permit TPG Canada to make interest payments on
intercompany loans permitted under Section 5.1(j);

(l) [reserved];

(m) [reserved];

(n) [reserved];

(o) Performance Films may make interest payments to TPG Enterprises on the
intercompany loan permitted under Section 5.1(m); and

(p) the Credit Parties may pay the 2011 Dividend provided no portion of the 2011
Dividend may be made using proceeds of any Advance.

5.6 Restriction on Fundamental Changes. The Credit Parties shall not and shall
not cause or permit their Subsidiaries to directly or indirectly: (a) amend,
modify or waive any term or provision of its organizational documents in a
manner materially adverse to the Lenders, including its articles of
incorporation, memorandum of association, certificates of designations
pertaining to preferred stock, by-laws, partnership agreement or operating
agreement in any manner materially adverse to the Agents or Lenders unless
required by law, it being understood and agreed that any such amendment to the
organizational documents of Exopack Canada, TPG Canada or Performance Films to
effectuate the Permitted Amalgamation shall not be considered materially adverse
to any Agent or any Lender and shall be permitted hereunder; (b) enter into any
transaction of merger or consolidation except for the Permitted Amalgamation and
except, upon not less than five (5) Business Days prior written notice to
Agents, (1) any wholly-owned Subsidiary of a Borrower may be merged with or into
such Borrower provided that such Borrower is the surviving entity) or any other
wholly-owned Subsidiary of such Borrower (provided that, in the case of any such
merger of any Domestic Subsidiary with or into a Foreign Subsidiary, the
Domestic Subsidiary is the surviving entity), (2) any of Exopack Canada, TPG
Canada, 3181952 and Performance Films may do all things necessary to amalgamate
with each other so long as such amalgamation is in form and substance reasonably
satisfactory to Agents and (3) TPG Canada, TPG Enterprises, Exopack Canada,
3181952 and Exopack L.P. may consummate the Exopack Canada Consolidation;
(c) liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution); provided, however; any of TPG Canada, Exopack Canada, Exopack
L.P., 3181952 and Performance Films may liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution) so long as such liquidation, wind-up
or dissolution is with and into any other of such entities; or (d) acquire by
purchase or otherwise all or substantially all of the Stock, business or assets
of any other Person except as part of the Permitted Amalgamation.
Notwithstanding the foregoing, (i) any Borrower (or Holdings, so long as
contemporaneously therewith, all assets so acquired are transferred to one or
more Borrowers contemporaneous with the closing of such acquisition), may
acquire all or substantially all of the assets, business or Stock of any Person
(the “Target”) (in each case, a “Permitted Acquisition”) and (ii) Performance
Films may consummate the Liqui-box Acquisition, which shall be deemed a
Permitted Acquisition hereunder, subject to the satisfaction of each of the
following conditions:

(i) Agents shall receive at least 7 Business Days’ prior written notice of such
proposed Permitted Acquisition, which notice shall include a reasonably detailed
description of such proposed Permitted Acquisition;

 

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(ii) such Permitted Acquisition shall only involve assets located in the United
States or Canada (other than assets representing less than 10% of the total
assets acquired with respect to any such Permitted Acquisition) and comprising a
business, or those assets of a business, of the type engaged in by Borrowers as
of the Closing Date, and which business would not subject any Agent or any
Lender to regulatory or third party approvals in connection with the exercise of
its rights and remedies under this Agreement or any other Loan Documents other
than approvals applicable to the exercise of such rights and remedies with
respect to Borrowers prior to such Permitted Acquisition. Notwithstanding the
foregoing limitations, the Intelicoat Acquisition may involve assets located in
the Unites States, Canada or the United Kingdom;

(iii) such Permitted Acquisition shall be consensual and shall have been
approved by the Target’s board of directors;

(iv) no additional Indebtedness, Guaranteed Indebtedness, Contingent Obligations
or other liabilities shall be incurred, assumed or otherwise be reflected on a
consolidated balance sheet of Borrowers and Target after giving effect to such
Permitted Acquisition, except (A) Loans made hereunder and (B) ordinary course
trade payables, accrued expenses and unsecured Indebtedness of the Target to the
extent no Default or Event of Default has occurred and is continuing or would
result after giving effect to such Permitted Acquisition;

(v) the sum of all amounts payable with the proceeds of Loans hereunder in
connection with such Permitted Acquisition (excluding all transaction costs and
including all Indebtedness, liabilities and Contingent Obligations incurred or
assumed in connection therewith or otherwise reflected on a consolidated balance
sheet of Borrowers and Target) shall not exceed $10,000,000 individually and
together with the purchase price for all other Permitted Acquisitions shall not
exceed $25,000,000 in the aggregate during the term hereof. Notwithstanding the
foregoing limitations, the sum of all amounts payable in connection with the
Intelicoat Acquisition shall not exceed $32,500,000, the amounts payable in
connection with the Liqui-box Acquisition shall not exceed $23,500,000 and the
amounts payable in connection with the Bemis Acquisition shall not exceed
$91,000,000; provided that the amounts payable in connection with (a) the
Intelicoat Acquisition, (b) the Liqui-box Acquisition and (c) the Bemis
Acquisition shall not be deducted from the amounts described in the first
sentence of this sub-clause (v);

(vi) the Target shall have positive EBITDA for the twelve month period preceding
such acquisition taking into account verifiable cost addbacks approved by Agents
or the aggregate amount of the borrowing base value of the Target’s assets
(determined in accordance with the borrowing base formula set forth herein) plus
the amount of any additional equity invested in the Target shall be equal to an
amount not less than the purchase price; the assumed and continuing liabilities
of the Target are of a type and in an amount reasonably acceptable to Agents;

 

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(vii) the business and assets acquired in such Permitted Acquisition shall be
free and clear of all Liens (other than Permitted Encumbrances);

(viii) at or prior to the closing of any Permitted Acquisition, Applicable Agent
will be granted a first priority perfected Lien (subject to Permitted
Encumbrances) in all personal property acquired pursuant thereto or in the
personal property and Stock of the Target, and Holdings and Borrowers and the
Target shall have executed such documents and taken such actions as may be
reasonably required by Applicable Agent in connection therewith, in each case
subject to the requirements of Section 4.8;

(ix) Concurrently with delivery of the notice referred to in clause (i) above,
Borrowers shall have delivered to Agents, in form and substance reasonably
satisfactory to Agents:

(A) a pro forma consolidated balance sheet, income statement and cash flow
statement of Holdings and its Subsidiaries (the “Acquisition Pro Forma”), based
on recent financial statements, which shall be complete and shall fairly present
in all material respects the assets, liabilities, financial condition and
results of operations of Holdings and its Subsidiaries in accordance with GAAP
consistently applied, but taking into account such Permitted Acquisition and the
funding of all Loans in connection therewith, and such Acquisition Pro Forma
shall reflect that average daily Aggregate Borrowing Availability for the 30-day
period preceding the consummation of such Permitted Acquisition would have been
equal to or exceeded $4,500,000 on a pro forma basis (after giving effect to
such Permitted Acquisition and all Loans funded in connection therewith as if
made on the first day of such period) and the Acquisition Projections (as
hereinafter defined) shall reflect that such Aggregate Borrowing Availability of
$4,500,000 shall continue for at least 30 days after the consummation of such
Permitted Acquisition, and on a pro forma basis, no Event of Default has
occurred and is continuing or would result after giving effect to such Permitted
Acquisition;

(B) updated versions of the most recently delivered Projections covering the 3
year period commencing on the date of such Permitted Acquisition and otherwise
prepared in accordance with the Projections (the “Acquisition Projections”) and
based upon historical financial data of a recent date reasonably satisfactory to
Agent, taking into account such Permitted Acquisition; and

(C) a certificate of the chief financial officer of Holdings to the effect that:
(w) each Borrower (after taking into consideration all rights of contribution
and indemnity such Borrower has against Holdings and each other Subsidiary of
Holdings) will be Solvent upon the consummation of the Permitted Acquisition;
(x) the Acquisition Pro Forma fairly presents the financial condition of
Holdings and its Subsidiaries (on a consolidated basis) as of the date thereof
after giving effect to the Permitted Acquisition; (y) the Acquisition
Projections were prepared on the basis of the assumptions stated therein, and
such assumptions were believed to be reasonable at the time prepared, it being
understood and agreed that Projections are not to be viewed as facts and that
actual results during the period covered by the Projections may differ
materially from projected results; and (z) Holdings and its Subsidiaries have
completed their due diligence investigation with respect to the Target and such
Permitted Acquisition, which investigation was conducted in a manner similar to
that which would have been conducted by a prudent purchaser of a comparable
business and the results of which investigation were delivered to Agents and
Lenders;

 

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(x) on or prior to the date of such Permitted Acquisition, Agents shall have
received, in form and substance reasonably satisfactory to Agents, copies of the
acquisition agreement and related material agreements and instruments, and all
opinions, certificates, lien search results and other documents reasonably
requested by Agents in connection with the Permitted Acquisition; and

(xi) at the time of such Permitted Acquisition and after giving effect thereto,
no Default or Event of Default has occurred and is continuing;

Notwithstanding the foregoing, the Accounts and Inventory of the Target shall
not be included in Eligible Accounts and Eligible Inventory unless Agents and
Requisite Lenders shall have received appraisals of such Accounts and Inventory
and shall have completed field examinations with respect thereto, in each case
in form and substance satisfactory to Agents.

5.7 Disposal of Assets or Subsidiary Stock. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly convey,
sell, lease, sublease, transfer or otherwise dispose of, or grant any Person an
option to acquire, in one transaction or a series of related transactions, any
of its property, business or assets, whether now owned or hereafter acquired,
except for (a) sales of inventory to customers in the ordinary course of
business and dispositions of obsolete, worn out or damaged equipment not used in
the business; (b) sales or other dispositions of real property and other assets
not constituting Collateral; (c) any condemnation or taking of such assets by
eminent domain proceedings; (d) transfers of shares in Exopack Canada, TPG
Canada and/or Performance Films from any Credit Party to another Credit Party in
order to effectuate the Permitted Amalgamation; (e) Asset Dispositions by
Borrowers and their Subsidiaries (excluding sales of Accounts and Stock of any
of Holdings’ Subsidiaries) if all of the following conditions are met: (i) the
aggregate fair market value of assets sold or otherwise disposed of in any
Fiscal Year does not exceed the Dollar Equivalent of $20,000,000; (ii) the
consideration received is at least equal to the fair market value of such assets
(as determined by the board of directors of the applicable Credit Party in good
faith); (iii) at least 50% of the consideration received is cash; (iv) the Net
Proceeds of such Asset Disposition are applied as, if and to the extent required
by Section 1.6(c); (v) after giving effect to the Asset Disposition and the
repayment of Indebtedness with the proceeds thereof, if applicable, Borrowers
are in compliance on a pro forma basis with the covenants set forth in Section 6
recomputed for the most recently ended quarter for which information is
available; (vi) no Event of Default has occurred and is continuing or would
result from such Asset Disposition and (vii) (1) dispositions of assets as a
result of the consolidation of businesses of Holdings or any of its subsidiaries
located at Newmarket, Ontario and Concord, Ontario; (2) dispositions of assets
as a result of closing manufacturing facilities of Holdings or any of its
Subsidiaries located in Hebron, Kentucky; (3) dispositions of assets as a result
of the closing of the manufacturing facility of Holdings or any of its
Subsidiaries located in Hazelton, Pennsylvania; and (4) contemporaneous
exchanges with third parties of assets in any fiscal year for assets of
reasonably comparable fair market value (net of commissions, relocation costs
and other associated expenses); (f) transfers of shares of TPG Canada, TPG
Enterprises and Exopack Canada from any Credit Party to another Credit Party in
order to effectuate the Exopack Canada Consolidation; (g) transfers of the
assets of TPG Canada to Exopack Canada in order to effectuate the Exopack Canada
Consolidation, and (h) transfers of nominal assets of 3181952 to Exopack L.P. in
order to effectuate the Exopack Canada Consolidation.

 

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5.8 Transactions with Affiliates. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property or the rendering of any management, consulting, investment
banking, advisory or other similar services) with any Affiliate or with any
director, officer or employee of any Credit Party, except (a) as set forth on
Schedule 5.8, (b) transactions in the ordinary course of the business of any
such Credit Party or any of its Subsidiaries and upon fair and reasonable terms
which, if any such transaction exceeds $2,500,000, are fully disclosed to Agents
and in each case are no less favorable to any such Credit Party or any of its
Subsidiaries than would be obtainable in a comparable arm’s length transaction
with a Person that is not an Affiliate, (c) payment of reasonable compensation
to officers and employees for services actually rendered to any such Credit
Party or any of its Subsidiaries; (d) payment of director’s fees not to exceed
the Dollar Equivalent of $250,000 in the aggregate for any Fiscal Year of
Borrowers; (e) intercompany loans permitted in Sections 5.1(c), (i), (j), (k),
(l), (m); (f) guaranties of the Senior Notes, the 2011 High Yield Notes, the
2011 Term Loan B Credit Agreement, the Cash Management Agreements and the
Hedging Agreements to the extent permitted by Section 5.4, (g) Investments
permitted by Sections 5.3 (b), (f), (j), (l), (n), (o), (p), and (q); (h) loans
to employees permitted in Section 5.3, (i) Restricted Payments permitted in
Section 5.5 and the agreements pursuant to which such Restricted Payments are
required to be made, (j) reimbursement of employee travel and lodging costs
incurred in the ordinary course of business, (k) the guaranty of the Obligations
by Credit Parties, (l) employment agreements, equity incentive agreements and
other employee and management arrangements in the ordinary course of business
which are fully disclosed to the Agents, (m) TPG Canada and TPG Enterprises may
effect the TPG Recapitalization, (n) the Credit Parties may effect the Permitted
Amalgamation, (o) Exopack Ontario, Exopack Canada, TPG Enterprises, TPG Canada,
3181952 and Exopack L.P. may consummate the Exopack Canada Consolidation, and
(p) the Credit Parties may consummate the Liqui-box Investment Transaction.

5.9 Conduct of Business. Exopack Holdings shall not engage in any business
activity other than its ownership of the Stock of its Subsidiaries and its
performance of the Loan Documents and Related Transactions Documents. The Credit
Parties shall not and shall not cause or permit their Subsidiaries to directly
or indirectly engage in any business other than businesses of the type described
on Schedule 5.9.

(a) 3181952 shall not incur any liability or engage in any business activity or
otherwise own any assets other than its ownership of the partnership interest in
Exopack L.P and interest payments received on the intercompany note outstanding
under Section 5.1(k)(B).

(b) Exopack L.P. shall not incur any liability or engage in any business
activity or otherwise own any assets other than its ownership of the
intercompany note evidencing the Indebtedness of Exopack Canada (or any
successor thereto) to TPG Canada of up to Cdn $10,000,000 permitted under
Section 5.1(k) (as such amount may be increased in accordance with such Section)
and interest payments received thereon.

 

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5.10 Changes Relating to Indebtedness. The Credit Parties shall not and shall
not cause or permit their Subsidiaries to directly or indirectly change or amend
the terms of any of its Indebtedness permitted by Section 5.1(d) if such change
or amendment would materially adversely affect the Agents or the Lenders.

5.11 Fiscal Year. No Credit Party shall change its Fiscal Year or permit any of
its Subsidiaries to change their respective Fiscal Years.

5.12 Press Release; Public Offering Materials. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will on or after the Closing
Date issue any press releases or other public disclosure, including any
prospectus, proxy statement or other materials filed with any Governmental
Authority relating to a public offering of the Stock of any Credit Party, using
the name of GE Capital, GE Canada or their affiliates known to the Credit
Parties or referring to this Agreement, the other Loan Documents or the Related
Transactions Documents without at least two (2) Business Days’ prior notice to
GE Capital and GE Canada and without the prior written consent of GE Capital and
GE Canada unless (and only to the extent that) such Credit Party or Affiliate is
required to do so under law and then, in any event, such Credit Party or
Affiliate will consult with GE Capital and GE Canada before issuing such press
release or other public disclosure.

5.13 Subsidiaries. The Credit Parties shall not and shall not cause or permit
their Subsidiaries to directly or indirectly establish, create or acquire any
new Subsidiary except (a) as part of the Permitted Amalgamation, (b) the
creation of 3181952 and Exopack L.P. as part of the Exopack Canada
Consolidation, (c) the creation of Exopack UK Holdco and Exopack Coatings as
part of the Intelicoat Acquisition, (d) the creation of Performance Films as
part of the Liqui-box Acquisition or (e) in connection with and to the extent
necessary to consummate one or more Permitted Acquisitions.

5.14 Deposit Accounts. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to establish any new deposit accounts (other than
payroll, employee benefits and other similar trust accounts) without prior
written notice to Applicable Agent and unless such Agent and the bank at which
the account is to be opened enter into a Control Agreement in form and substance
reasonably acceptable to such Agent.

5.15 Hazardous Materials. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to cause or permit a Release of any Hazardous Material
on, at, in, under, above, to, from or about any of the real property where such
Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities by the Credit Parties or any of their Subsidiaries
under, any Environmental Laws or Environmental Permits or (b) otherwise
adversely impact the value or marketability of any of the real property or any
of the Collateral, other than such violations or Environmental Liabilities or
adverse impacts on the value or marketability of the real property or any of the
Collateral that could not reasonably be expected to have a Material Adverse
Effect.

5.16 ERISA. The Credit Parties shall not and shall not cause or permit any ERISA
Affiliate to, cause or permit to occur an ERISA Event or a Canadian Pension
Event to the extent such ERISA Event or such Canadian Pension Event could
reasonably be expected to have a Material Adverse Effect.

 

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5.17 Prepayments of Other Indebtedness. The Credit Parties shall not, directly
or indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any Indebtedness
other than the Obligations, except (a) any Subordinated Debt other than
intercompany Indebtedness expressly permitted under Section 5.1(c); (b) (i) the
mandatory prepayment of Indebtedness outstanding under the 2011 Term Loan B
Credit Agreement, (ii) the voluntary prepayment of Indebtedness outstanding
under the 2011 Term Loan B Credit Agreement, provided that, immediately before
and after making such voluntary prepayment, no Default or Event of Default has
occurred and is continuing, and either (1) there are no outstanding Advances, or
(2) (v) the aggregate balance of all outstanding Advances is equal to or less
than $25,000,000, (w) the Aggregate Borrowing Availability is greater than or
equal to the Voluntary Prepayment Threshold, (x) the average Aggregate Borrowing
Availability for the consecutive ninety (90) day-period ending on the date such
voluntary prepayment is made is greater than or equal to the Voluntary
Prepayment Threshold, (y) the projected average Aggregate Borrowing Availability
for the consecutive ninety (90) day-period commencing on the date such voluntary
prepayment is made is greater than the Voluntary Prepayment Threshold, and
(z) the US Borrowers have certified to the US Agent that the conditions set
forth in clauses (v) through (y) above are satisfied; and (iii) the prepayment
of Indebtedness outstanding under the 2011 Term Loan B Credit Agreement with the
proceeds of Permitted Refinancing thereof in compliance with Section 5.1(p) and
(q); (c) required mandatory repayments or redemptions of Indebtedness
outstanding under the 2011 Indenture or Indebtedness under a Permitted
Refinancing thereof; and (d) regularly scheduled or required repayments or
redemptions of Indebtedness set forth on Schedule 5.1.

5.18 Certain Amendments. (a) The Credit Parties shall not and shall not cause or
permit any of their Subsidiaries to change, modify or amend the terms of the
Management Services Agreement; or (b) amend, modify or change in any manner any
term or condition of the “Loan Documents” (as defined in the 2011 Term Loan B
Credit Agreement), the 2011 Indenture Documents, or any Indebtedness set forth
on Schedule 5.1 (in each case, after the entering into thereof), except for, to
the extent consistent with the Intercreditor Agreement, (i) any Permitted
Refinancing, refinancing, refunding, renewal or extension thereof permitted by
Section 5.1 and (ii) any amendment or modification that is not adverse to the
interests of the Lenders in any material respect (for the avoidance of doubt, a
Permitted Refinancing shall not be considered to be adverse to the interests of
the Lenders for purposes of this Section 5.18) (and, in the case of the 2011
Term Loan B Loan Documents, not prohibited by the Intercreditor Agreement).

5.19 Fixed Charge Coverage Ratio. If at any time that Aggregate Borrowing
Availability is less than $6,250,000, the Credit Parties shall not permit the
Fixed Charge Coverage Ratio for the twelve month period ending on the last day
of any such Fiscal Quarter to be less than 1.00:1.00. “Fixed Charge Coverage
Ratio” shall be calculated in the manner set forth in Exhibit 5.19.

5.20 Use of Proceeds. Use the proceeds of any Advance, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to pay the
2011 Dividend or (ii) to purchase or carry margin stock (within the meaning of
Regulation U) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.

 

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SECTION 6.

REPORTING

Borrowers covenant and agree that from and after the Closing Date until the
Termination Date, Borrowers shall perform and comply with, and shall cause each
of the other Credit Parties to perform and comply with, all covenants in this
Section 6 applicable to such Person.

6.1 Financial Statements and Other Reports. Holdings and Borrowers will
maintain, and cause each of their Subsidiaries to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of Financial Statements in conformity with GAAP
(it being understood that monthly Financial Statements are not required to have
footnote disclosures). US Borrower Representative will deliver each of the
Financial Statements and other reports described below to Agents (and each
Lender in the case of the Financial Statements and other reports described in
Sections 6.1(a), (b), (d), (f), (g), (h), and (k)).

(a) Monthly Financials. As soon as available and in any event within thirty
(30) days after the end of each Fiscal Month (including the last Fiscal Month of
Holdings’ Fiscal Year), US Borrower Representative will deliver (1) the
consolidated balance sheet of Holdings and its Subsidiaries as to the end of
such Fiscal Month, and with respect to each Borrower, consolidating, balance
sheets of Holdings and its Subsidiaries, as at the end of such Fiscal Month, and
the related consolidated and, on a Division-by-Division Basis, consolidating
statements of income, stockholders’ equity and cash flow for such Fiscal Month
and for the period from the beginning of the then current Fiscal Year of
Holdings to the end of such Fiscal Month and (2) a report setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the most recent
Projections for the current Fiscal Year delivered pursuant to Section 6.1(f).

(b) Year-End Financials. As soon as available and in any event within (y) one
hundred and twenty (120) days after the end of the 2005 Fiscal Year of Holdings
and (z) ninety (90) days after the end of each Fiscal Year of Holdings
thereafter, US Borrower Representative will deliver (1) the consolidated balance
sheets of Holdings and its Subsidiaries, as at the end of such year, and the
related consolidated statements of income, stockholders’ equity and cash flow
for such Fiscal Year, (2) a schedule of the outstanding Indebtedness for
borrowed money of Holdings and its Subsidiaries describing in reasonable detail
each such debt issue or loan outstanding and the principal amount and amount of
accrued and unpaid interest with respect to each such debt issue or loan and
(3) a report with respect to the consolidated Financial Statements from
PricewaterhouseCoopers LLP or another firm of Certified Public Accountants
selected by Borrowers and reasonably acceptable to Agents, which report shall be
prepared in accordance with Statement of Auditing Standards No. 58 (the
“Statement”) “Reports on Audited Financial Statements” and such report shall be
“unqualified” (as such term is defined in such Statement).

 

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(c) Accountants’ Reports. Promptly upon receipt thereof, US Borrower
Representative will deliver copies of all significant reports submitted by
Borrowers’ firm of certified public accountants in connection with each annual,
interim or special audit or review of any type of the Financial Statements or
related internal control systems of Holdings made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their services.

(d) Additional Deliveries.

(i) To each Agent, upon any Agent’s request, and in any event no less frequently
than by noon New York time, ten (10) Business Days after the end of each Fiscal
Month, or more frequently as any Agent may request after the existence and
during the continuance of an Event of Default (together with a copy of any of
the following reports requested by any Lender in writing after the Closing
Date), each of the following reports, each of which shall be prepared by
Borrowers as of the last day of the immediately preceding Fiscal Month or the
date 2 days prior to the date of any such request:

(A) a Borrowing Base Certificate with respect to each Borrower, accompanied by
such supporting detail and documentation as shall be requested by any Agent in
its reasonable discretion (in substantially the same form as Exhibits 6.1(d)(i),
6.1(d)(ii), 6.1(d)(iii) and 6.1(d)(iv) (each, a “Borrowing Base Certificate”);

(B) with respect to each Borrower, a summary of Inventory by location and type
with a supporting perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as shall be requested by any Agent in its
reasonable discretion; and

(C) with respect to each Borrower, a monthly trial balance showing Accounts
outstanding aged from invoice date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by such supporting detail and
documentation as shall be requested by any Agent in its reasonable discretion.

(ii) To each Agent, on a monthly basis or at any time after an Event of Default
shall have occurred and is continuing, at such more frequent intervals as any
Agent may request from time to time (together with a copy of all or any part of
such delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to each Borrower, including all additions and
reductions (cash and non-cash) with respect to Accounts of each Borrower, in
each case accompanied by such supporting detail and documentation as shall be
requested by any Agent in its reasonable discretion each of which shall be
prepared by the applicable Borrower as of the last day of the immediately
preceding week or the date 2 days prior to the date of any request;

(iii) To each Agent, at the time of delivery of each of the monthly Financial
Statements delivered pursuant to this Section 6.1:

(A) a reconciliation of the most recent US Tranche A Borrowing Base, US Tranche
A1 Borrowing Base, Canadian Tranche A Borrowing Base, or Canadian Tranche A1
Borrowing Base, as applicable, general ledger and month-end Inventory

 

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reports of each Borrower to each Borrower’s general ledger and monthly Financial
Statements delivered pursuant to this Section 6.1, in each case accompanied by
such supporting detail and documentation as shall be requested by such Agent in
its reasonable discretion;

(B) a reconciliation of the perpetual inventory by location to each Borrower’s
most recent Borrowing Base Certificate, general ledger and monthly Financial
Statements delivered pursuant to this Section 6.1, in each case accompanied by
such supporting detail and documentation as shall be requested by such Agent in
its reasonable discretion;

(C) an aging of accounts payable and a reconciliation of that accounts payable
aging to each Borrower’s general ledger and monthly Financial Statements
delivered pursuant to this Section 6.1, in each case accompanied by such
supporting detail and documentation as shall be requested by such Agent in its
reasonable discretion;

(D) a reconciliation of the outstanding Loans as set forth in the monthly Loan
Account statement provided by Applicable Agent to each Borrower’s general ledger
and monthly Financial Statements delivered pursuant to this Section 6.1, in each
case accompanied by such supporting detail and documentation as shall be
requested by any Agent in its reasonable discretion;

(iv) To each Agent, at the time of delivery of each of the annual Financial
Statements delivered pursuant to Section 6.1, (i) a listing of government
contracts of each Borrower subject to the Federal Assignment of Claims Act of
1940 or similar Applicable Law included in the Borrowing Base; and (ii) a list
of any applications for the registration of any Patent, Trademark or Copyright
filed by any Credit Party with the United States Patent and Trademark Office,
the United States Copyright Office, the Canadian Intellectual Property Office or
any similar office or agency in the prior Fiscal Quarter.

(e) Appraisals; Inspections.

(i) At Borrowers’ expense, at any time while and so long as an Event of Default
shall have occurred and be continuing, and in the absence of a Default or Event
of Default not more than once during each calendar year, any Agent may obtain
appraisal reports in form and substance and from appraisers reasonably
satisfactory to such Agent stating the then current market values of all or any
portion of the personal property owned by any of the Credit Parties.

(ii) Borrowers, at their own expense, shall deliver to each Agent the results of
each physical verification, if any, that Borrowers or any of their Subsidiaries
may in their discretion have made, or caused any other Person to have made on
their behalf, of all or any portion of their Inventory (and, if a Default or an
Event of Default has occurred and is continuing, Borrowers shall, upon the
request of any Agent, conduct, and deliver the results of, such physical
verifications as any Agent may require).

(f) Projections. As soon as available and in any event no later than forty-five
(45) days after the end of each of Borrowers’ Fiscal Years, US Borrower
Representative will deliver Projections of Holdings and its Subsidiaries for the
forthcoming Fiscal Year, Fiscal Month by Fiscal Month.

 

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(g) SEC Notices, SEC Filings and Press Releases. Promptly upon their becoming
available, US Borrower Representative will deliver copies of (1) all Financial
Statements, reports, notices and proxy statements, material reports and material
notices sent or made available by Holdings, Borrowers or any of their
Subsidiaries to their Stockholders, (2) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by Holdings, Borrowers
or any of their Subsidiaries with any securities exchange or with the Securities
and Exchange Commission, any Governmental Authority or any private regulatory
authority, (3) all press releases and other statements made available by
Holdings, Borrowers or any of their Subsidiaries to the public concerning
developments in the business of any such Person and (4) each notice or other
correspondence received from the Securities and Exchange Commission concerning
any investigation or possible investigation or other inquiry by such agency
regarding financial or other operational results of any Credit Party.

(h) Events of Default, Etc. Promptly upon any officer of any Credit Party
obtaining knowledge of any of the following events or conditions, the Applicable
Borrower Representative shall deliver copies of all notices given or received by
such Credit Party or any of its Subsidiaries with respect to any such event or
condition and a certificate of such Borrower Representative’s chief executive
officer specifying the nature and period of existence of such event or condition
and what action Holdings, Borrowers or any of their Subsidiaries has taken, is
taking and proposes to take with respect thereto: (1) any condition or event
that constitutes, or which could reasonably be expected to result in the
occurrence of, an Event of Default or Default; (2) any notice that any Person
has given to any Borrower or any of their Subsidiaries or any other action taken
with respect to a claimed default or event or condition of the type referred to
in Section 7.1(b); or (3) any event or condition that could reasonably be
expected to result in any Material Adverse Effect.

(i) Litigation. Promptly upon any officer of any Credit Party obtaining
knowledge of (1) the institution of any action, charge, claim, demand, suit,
proceeding, petition, governmental investigation, tax audit or arbitration now
pending or, to the best knowledge of such Credit Party, threatened against or
affecting any Credit Party or any of its Subsidiaries or any property of any
Credit Party or any of its Subsidiaries (“Litigation”) not previously disclosed
by any Borrower Representative to Agents that, if determined in a manner adverse
to a Credit Party, could reasonably be expected to have a Material Adverse
Effect or (2) any material and adverse development in any action, suit,
proceeding, governmental investigation or arbitration at any time pending
against or affecting any Credit Party or any property of any Credit Party which,
in each case, would reasonably be expected to have a Material Adverse Effect,
the Applicable Borrower Representative will promptly give notice thereof to
Applicable Agent and provide such other information as may be reasonably
available to them to enable Applicable Agent and its counsel to evaluate such
matter.

(j) Notice of Corporate and other Changes. US Borrower Representative shall
provide prompt written notice of (1) any change after the Closing Date in the
authorized and issued Stock of any Credit Party (other than the issuance of
Stock by Holdings for up to 20% of the fully diluted ownership of Holdings
issued to any officers, directors or employees of any Credit Party) or any
amendment to their articles or certificate of incorporation, by-laws,
partnership agreement or other organizational documents, (2) any Subsidiary
created or acquired by any Credit Party or any of its Subsidiaries after the
Closing Date, such notice, in each case, to

 

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identify the applicable jurisdictions, capital structures or Subsidiaries, as
applicable, and (3) any other event that occurs after the Closing Date which
would cause any of the representations and warranties in Section 3 of this
Agreement or in any other Loan Document to be untrue or misleading in any
material respect. The foregoing notice requirement shall not be construed to
constitute consent by any of the Lenders to any transaction referred to above
which is not expressly permitted by the terms of this Agreement.

(k) Compliance Certificate. Together with each delivery of Financial Statements
pursuant to Section 6.1(a) for the last month of each Fiscal Quarter (other than
the fourth Fiscal Quarter of any year) and Section 6.1(b), Borrowers will
deliver (i) a fully and properly completed Compliance Certificate (in
substantially the same form as Annex E) (the “Compliance Certificate”) signed by
Holdings’ chief executive officer or chief financial officer; provided that
Schedule 2 of the Compliance Certificate shall be delivered only in connection
with the Financial Statements of Holdings and its Subsidiaries delivered
pursuant to Section 6.1(b) and (ii) a copy of management’s discussion and
analysis with respect to such financial statements.

(l) Other Information. With reasonable promptness, US Borrower Representative
will deliver such other information and data with respect to any Credit Party or
any Subsidiary of any Credit Party as from time to time may be reasonably
requested by any Agent.

(m) Taxes. US Borrower Representative shall provide prompt written notice of
(i) the execution or filing with the IRS, CRA or any other Governmental
Authority of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any material Charges by
any Credit Party or any of its Subsidiaries and (ii) any agreement by any Credit
Party or any of its Subsidiaries or request directed to any Credit Party or any
of its Subsidiaries to make any adjustment under IRC Section 481(a) or the ITA,
by reason of a change in accounting method or otherwise, which could reasonably
be expected to have a Material Adverse Effect.

(n) ERISA. With reasonable promptness, US Borrower Representative shall provide
to US Agent copies of the most recent actuarial reports with respect to any
Title IV Plans as they become available. Promptly upon any Credit Party becoming
aware of any fact or condition which could reasonably be expected to result in
an ERISA Event with liability in excess of $5,000,000, US Borrower
Representative shall deliver to US Agent a summary of such facts and
circumstances and any action the Credit Parties intend to take regarding such
facts or conditions.

(o) Environmental Reports. Borrowers shall provide to the US Agent copies of
each environmental site assessment report prepared by or for any Credit Party.

(p) Disposition of Assets. US Borrower Representative shall provide prompt
written notice of the occurrence of any disposition of property or assets for
which the Borrowers are required to make a mandatory prepayment pursuant to
Section 1.6(c).

 

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6.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement. For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to such terms in conformity with
GAAP. Financial statements and other information furnished to Agents pursuant to
Section 6.1 or any other Section (unless specifically indicated otherwise) shall
be prepared in accordance with GAAP as in effect at the time of such
preparation; provided that no Accounting Change shall affect financial
covenants, standards or terms in this Agreement; provided further that Borrowers
shall prepare footnotes to the Financial Statements required to be delivered
hereunder that show the differences between the Financial Statements delivered
(which reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes). All such
adjustments described in clause (c) of the definition of the term Accounting
Changes resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made. Notwithstanding the foregoing, in the event that any Accounting Change
shall occur and such change results in a change in the method of calculation of
the financial covenants, standards or terms in this Agreement, then Borrowers
and Agents agree to negotiate in good faith in order to amend such provisions of
this Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the financial condition of the
Credit Parties shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. Until such time as such an amendment shall
have been executed and delivered by Borrowers, Agents and the Requisite Lenders,
all financial covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Accounting Changes had not occurred.

SECTION 7.

DEFAULT, RIGHTS AND REMEDIES

7.1 Event of Default. “Event of Default” shall mean the occurrence or existence
of any one or more of the following:

(a) Payment. (1) Failure to make any payment of principal of any Loan when due,
or to timely repay Revolving Loans to reduce their balance to the maximum amount
of Revolving Loans then permitted to be outstanding or to reimburse any L/C
Issuer for any payment made by such L/C Issuer under or in respect of any Letter
of Credit when due or (2) failure to pay, within three (3) Business Days after
the due date, any interest or Fees on any Loan or any other amount due under
this Agreement or any of the other Loan Documents; or

(b) Default in Other Agreements. (1) Any Credit Party or any of its Subsidiaries
fails to pay when due or within any applicable grace period any principal or
interest on Indebtedness (other than the Loans) having an outstanding principal
amount in excess of $15,000,000 or any Contingent Obligations or (2) breach or
default of any Credit Party or any of its Subsidiaries, or the occurrence of any
condition or event, with respect to any Indebtedness (other than the Loans) or
any Contingent Obligations, if the effect of such breach, default or occurrence
is to cause or to permit the holder or holders then to cause, Indebtedness
and/or Contingent Obligations having an individual or aggregate principal amount
in excess of $15,000,000 to become or be declared due prior to their stated
maturity; or

 

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(c) Breach of Certain Provisions; Breach of Warranty. Failure of any Credit
Party to perform or comply with any term or condition contained in (1) the GE
Capital Fee Letter which failure continues for more than three (3) Business Days
after the relevant date specified thereunder, (2) Section 6.1 which failure
continues for more than five (5) Business Days after the date specified for
performance or compliance with such term or condition, (3) that portion of
Section 4.2 relating to the Credit Parties’ obligation to maintain insurance, or
(4) Section 4.3, Section 4.4, Section 4.14, Section 5 or Section 6.1 or the
Post-Closing Agreement; or

(d) Borrowing Base Certificate; Breach of Warranty. Any information contained in
any Borrowing Base Certificate is untrue or incorrect in any respect, or any
representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate) made or delivered to any Agent or any Lender by any Credit
Party is untrue or incorrect in any material respect (without duplication of
materiality qualifiers contained therein) as of the date when made or deemed
made; or

(e) Other Defaults Under Loan Documents. Any Credit Party defaults in the
performance of or compliance with any term contained in this Agreement or the
other Loan Documents (other than occurrences described in other provisions of
this Section 7.1 for which a different grace or cure period is specified, or for
which no cure period is specified and which constitute immediate Events of
Default) and such default is not remedied or waived within thirty (30) days
after the earlier of (1) receipt by any Borrower Representative of notice from
any Agent or Requisite Lenders of such default or (2) actual knowledge of any
Borrower or any other Credit Party of such default; or

(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (1) A court enters a
decree or order for relief with respect to any Credit Party in an involuntary
case under the Bankruptcy Code or any other Insolvency Law, which decree or
order is not stayed or other similar relief is not granted under any applicable
federal, state or foreign law; or (2) the continuance of any of the following
events for sixty (60) days unless dismissed, bonded or discharged: (a) an
involuntary case is commenced against any Credit Party, under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or (b) a
decree or order of a court for the appointment of a receiver, receiver and
manager, interim receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over any Credit Party, or over all or a
substantial part of its property, is entered; or (c) a receiver, receiver and
manager, interim receiver, trustee or other custodian is appointed without the
consent of a Credit Party, for all or a substantial part of the property of the
Credit Party; or

(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1) any Credit Party
commences a voluntary case under the Bankruptcy Code or any other Insolvency
Law, or consents to the entry of an order for relief in an involuntary case or
to the conversion of an involuntary case to a voluntary case under any such law
or consents to the appointment of or taking possession by a receiver, trustee,
interim receiver, receiver and manager or other custodian for all or a
substantial part of its property; or (2) any Credit Party makes any assignment
for the benefit of creditors; (3) the Board of Directors of any Credit Party
adopts any resolution or otherwise authorizes action to approve any of the
actions referred to in this Section 7.1(g); (4) any Credit Party becomes unable
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pay its debts as they become due, or (5) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any Credit Party and is not released, vacated or fully
bonded within 30 days after its issue or levy; or

(h) Judgment and Attachments. (i) Any money judgment, writ or warrant of
attachment, or similar process (other than those described elsewhere in this
Section 7.1) involving (1) an amount in any individual case or an amount in the
aggregate at any time in excess of $15,000,000 (in either case to the extent not
adequately covered by insurance in Applicable Agent’s sole discretion as to
which the insurance company has acknowledged coverage) is entered or filed
against one or more of the Credit Parties or any of their respective assets and
remains undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days or in any event later than five (5) Business Days prior to the date of
any proposed sale thereunder; or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or
(B) there is a period of 30 consecutive days during which a stay of enforcement
of such judgment, by reason of a pending appeal or otherwise, is not in effect;
or

(i) Dissolution. Any order, judgment or decree is entered against any Credit
Party decreeing the dissolution or split up of such Credit Party and such order
remains undischarged or unstayed for a period in excess of fifteen (15) days; or

(j) Solvency. Any Borrower or the Credit Parties taken as a whole ceases to be
Solvent, fails to pay its debts as they become due or admits in writing its
present or prospective inability to pay its debts as they become due; or

(k) Invalidity of Loan Documents. Any of the Loan Documents for any reason,
other than a partial or full release in accordance with the terms thereof,
ceases to be in full force and effect or is declared to be null and void, or any
Credit Party denies that it has any further liability under any Loan Documents
to which it is party, or gives notice to such effect; or

(l) Damage; Casualty. Any event occurs, whether or not insured or insurable, as
a result of which revenue-producing activities cease or are substantially
curtailed at any facility of any Credit Party generating more than 20% of the
consolidated revenues of the Credit Parties for the Fiscal Year preceding such
event and such cessation or curtailment continues for more than sixty (60) days;
or

(m) Event of Default. An “event of default” occurs and is continuing under the
Senior Notes, the Indenture, the 2011 High Yield Notes, the 2011 Indenture or
the 2011 Term Loan B Credit Agreement; or

(n) Change of Control. A Change of Control occurs.

7.2 Suspension or Termination of Commitments. Upon the occurrence of any Default
or Event of Default, US Agent may, and at the request of Requisite Lenders, US
Agent shall, without notice or demand, immediately suspend or terminate all or
any portion of US Tranche A Lenders’ obligations to make additional Advances or
issue or cause to be issued US Letters of Credit under the US Tranche A Loan
Commitment; provided that, in the case of a Default, if the

 

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subject condition or event is waived by Requisite Lenders or cured within any
applicable grace or cure period, the US Tranche A Loan Commitment shall be
reinstated. Upon the occurrence of any Default or Event of Default, US Agent
may, and at the request of Requisite Lenders, US Agent shall, without notice or
demand, immediately suspend or terminate all or any portion of US Tranche A1
Lenders’ obligations to make additional Advances under the US Tranche A1 Loan
Commitment; provided that, in the case of a Default, if the subject condition or
event is waived by Requisite Lenders or cured within any applicable grace or
cure period, the US Tranche A1 Loan Commitment shall be reinstated. Upon the
occurrence of any Default or Event of Default, Canadian Agent may, and at the
request of Requisite Lenders, Canadian Agent shall, without notice or demand,
immediately suspend or terminate all or any portion of Canadian Tranche A
Lenders’ obligations to make additional Advances or issue or cause to be issued
Canadian Letters of Credit under the Canadian Tranche A Loan Commitment;
provided that, in the case of a Default, if the subject condition or event is
waived by Requisite Lenders or cured within any applicable grace or cure period,
the Canadian Tranche A Loan Commitment shall be reinstated. Upon the occurrence
of any Default or Event of Default, Canadian Agent may, and at the request of
Requisite Lenders, Canadian Agent shall, without notice or demand, immediately
suspend or terminate all or any portion of Canadian Tranche A1 Lenders’
obligations to make additional Advances under the Canadian Tranche A1 Loan
Commitment; provided that, in the case of a Default, if the subject condition or
event is waived by Requisite Lenders or cured within any applicable grace or
cure period, the Canadian Tranche A1 Loan Commitment shall be reinstated.

7.3 Acceleration and other Remedies.

(a) Upon the occurrence of any Event of Default described in Sections 7.1(f) or
7.1(g), the Commitments shall be immediately terminated and all of the
Obligations, including the Loans, shall automatically become immediately due and
payable, without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other requirements of any kind, all of which are
hereby expressly waived (including for purposes of Section 10 and Section 11) by
Borrowers to the extent permitted by applicable law, and the Commitments shall
thereupon terminate.

(b) Upon the occurrence and during the continuance of any Event of Default other
than those described in Section 7.1(f) and 7.1(g), US Agent or Canadian Agent,
as applicable, may and at the request of the Requisite Lenders, US Agent or
Canadian Agent, as the case may be, shall, by written notice to the Applicable
Borrower Representative (i) reduce the aggregate amount of the US Tranche A Loan
Commitment, US Tranche A1 Loan Commitment, Canadian Tranche A Loan Commitment or
Canadian Tranche A1 Loan Commitment, as applicable, from time to time,
(ii) declare all or any portion of the US Tranche A Loan, US Tranche A1 Loan.
Canadian Tranche A Loan or Canadian Tranche A1 Loan, as the case may be, and all
or any portion of the other Obligations to be, and the same shall forthwith
become, immediately due and payable together with accrued interest thereon
(“Acceleration of US Obligations” or “Acceleration of Canadian Obligations”, as
applicable), (iii) terminate all or any portion of the obligations of US Agent,
L/C Issuers, US Tranche A Lenders and US Tranche A1 Lenders or Canadian Agent,
Canadian Tranche A Lenders and Canadian Tranche A1 Lenders, as the case may be,
to make Advances, (iv) demand that US Borrowers immediately deliver cash to US
Agent for the benefit of the US L/C Issuers (and US Borrowers shall then
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deliver) in an amount equal to 105% of the aggregate outstanding US Letter of
Credit Obligations, (v) demand that Canadian Borrowers immediately deliver cash
to Canadian Agent for the benefit of the Canadian L/C Issuers (and Canadian
Borrowers shall then immediately so deliver) in an amount equal to 105% of the
aggregate outstanding Canadian Letter of Credit Obligations, (vi) appoint
investigative accountants to conduct an investigation of any Canadian Borrower’s
business and assets, or for such other purposes as the Canadian Agent may
specify, the fees and costs of such investigative accountants to be for such
Borrower’s account (the Canadian Agent shall not be obliged to disclose to any
Borrower any reports or other findings of such investigative accountants) and
(vii) exercise any other remedies which may be available under the Loan
Documents or applicable law.

(c) Each US Borrower hereby grants to US Agent, for the benefit of US L/C
Issuers and each US Tranche A Lender with a participation in any US Letters of
Credit then outstanding, a security interest in such cash collateral described
in clause (b) above to secure all of the US Letter of Credit Obligations. Any
such cash collateral shall be made available by US Agent to US L/C Issuers to
reimburse US L/C Issuers for payments of drafts drawn under such US Letters of
Credit and any Fees, Charges and expenses of US L/C Issuers with respect to such
US Letters of Credit and the unused portion thereof, after all such US Letters
of Credit shall have expired or been fully drawn upon, shall be applied to repay
any other US Obligations. After all such US Letters of Credit shall have expired
or been fully drawn upon and all Obligations shall have been satisfied and paid
in full, the balance, if any, of such cash collateral shall be returned to US
Borrowers. US Borrowers shall from time to time execute and deliver to US Agent
such further documents and instruments as US Agent may request with respect to
such cash collateral.

(d) Each Canadian Borrower hereby grants to Canadian Agent, for the benefit of
Canadian L/C Issuers and each Canadian Tranche A Lender with a participation in
any Canadian Letters of Credit then outstanding, a security interest in such
cash collateral described in clause (b) above to secure all of the Canadian
Letter of Credit Obligations. Any such cash collateral shall be made available
by Canadian Agent to Canadian L/C Issuers to reimburse Canadian L/C Issuers for
payments of drafts drawn under such Canadian Letters of Credit and any Fees,
Charges and expenses of Canadian L/C Issuers with respect to such Canadian
Letters of Credit and the unused portion thereof, after all such Canadian
Letters of Credit shall have expired or been fully drawn upon, shall be applied
to repay any other Canadian Obligations. After all such Canadian Letters of
Credit shall have expired or been fully drawn upon and all Canadian Obligations
shall have been satisfied and paid in full, the balance, if any, of such cash
collateral shall be returned to Canadian Borrowers. Canadian Borrowers shall
from time to time execute and deliver to Canadian Agent such further documents
and instruments as Canadian Agent may request with respect to such cash
collateral.

7.4 Performance by Applicable Agent. So long as an Event of Default has occurred
and is continuing, if any Credit Party shall fail to perform any covenant, duty
or agreement contained in any of the Loan Documents, Applicable Agent may
perform or attempt to perform such covenant, duty or agreement on behalf of such
Credit Party after the expiration of any cure or grace periods set forth herein
to the extent necessary to protect the Collateral, the value thereof or the
priority of the Applicable Agent’s Liens therein. In such event, such Credit
Party shall, at the request of Applicable Agent promptly pay any amount
reasonably expended by Applicable Agent in such performance or attempted
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with interest thereon at the highest rate of interest in effect upon the
occurrence of an Event of Default as specified in Section 1.3(d) from the date
of such expenditure until paid. Notwithstanding the foregoing, it is expressly
agreed that no Agent shall have any liability or responsibility for the
performance of any obligation of any Credit Party under this Agreement or any
other Loan Document.

7.5 Application of Proceeds. Notwithstanding anything to the contrary contained
in this Agreement, upon the occurrence and during the continuance of an Event of
Default,

(a) Borrowers irrevocably waive the right to direct the application of any and
all payments at any time or times thereafter received by Applicable Agent from
or on behalf of Borrowers, and Applicable Agent shall have the continuing and
exclusive right to apply and to reapply any and all payments received at any
time or times after the occurrence and during the continuance of an Event of
Default.

(b) Following Acceleration of US Obligations, the proceeds of any sale of, or
other realization upon, all or any part of the US Collateral to the extent
allocated to the Obligations pursuant to the Intercreditor Agreement shall be
applied: first, to all costs and expenses incurred by or owing to US Agent, any
US Tranche A Lender and any US Tranche A1 Lender with respect to this Agreement,
the other Loan Documents or the US Collateral; second, to accrued and unpaid
interest and Fees with respect to the US Obligations (including any interest
which but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); third, to the principal amount of the US Tranche A1Loans outstanding;
fourth, to the principal amount of all other US Obligations outstanding (other
than US Obligations owed to any US Lender under a US Interest Rate Agreement)
and to cash collateralize outstanding US Letters of Credit (pro rata among all
such US Obligations (based upon the principal amount thereof or the outstanding
face amount of such US Letters of Credit, as applicable); fifth to any other US
Obligations of US Borrowers owing to US Agent or any US Lender under the Loan
Documents or any US Interest Rate Agreement and sixth to any other Obligations
of US Borrowers owing to Agents or any Lender under the Loan Documents. Any
balance remaining shall be delivered to US Borrowers or to whomever may be
lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct.

(c) Following Acceleration of Canadian Obligations, the proceeds of any sale of,
or other realization upon, all or any part of the Canadian Collateral to the
extent allocated to the Obligations pursuant to the Intercreditor Agreement
shall be applied: first, to all costs and expenses incurred by or owing to
Canadian Agent, and any Canadian Tranche A Lender and any Canadian Tranche A1
Lender with respect to this Agreement, the other Loan Documents or the Canadian
Collateral; second, to accrued and unpaid interest and Fees with respect to the
Canadian Obligations (including any interest which but for the provisions of any
Insolvency Law, would have accrued on such amounts); third, to the principal
amount of the Canadian Tranche A1 Loans outstanding; fourth, to the principal
amount of all other Canadian Obligations outstanding and to cash collateralize
outstanding Canadian Letters of Credit (pro rata among all such Canadian
Obligations (based upon the principal amount thereof or the outstanding face
amount of such Canadian Letters of Credit, as applicable); and fifth to any
other Canadian Obligations of Canadian Borrowers owing to Canadian Agent or any
Canadian Lender under the Loan Documents. Any balance remaining shall be
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whomever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct. The proceeds of any sale of or other
realization upon assets of a Canadian Borrower shall in all cases be applied
first to repay obligations of such Canadian Borrower in the order specified and
shall thereafter be made available to the other Canadian Borrowers to pay other
Canadian obligations.

SECTION 8.

ASSIGNMENT AND PARTICIPATION

8.1 Assignment and Participations.

(a) Subject to the terms of this Section 8.1, any Lender may make an assignment
to a Qualified Assignee of, or sale of participations in, at any time or times,
the Loan Documents, Loans, Letter of Credit Obligations and any Commitment or
any portion thereof or interest therein, including any Lender’s rights, title,
interests, remedies, powers or duties thereunder. Any assignment by a Lender
shall: (i) require the consent of Applicable Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee, and which
consent is not required for an assignment between Lenders or from a Lender to an
Affiliate of a Lender) and the execution of an assignment agreement (an
“Assignment Agreement” substantially in the form attached hereto as Exhibit 8.1
and otherwise in form and substance reasonably satisfactory to, and acknowledged
by, Applicable Agent); (ii) be conditioned on such assignee Lender representing
to the assigning Lender and Applicable Agent and the Borrowers that it is
purchasing the applicable Loans to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof;
(iii) except with respect to any assignment by a Lender to an Affiliate of such
Lender, after giving effect to any such partial assignment, the assignee Lender
shall have Commitments in an amount at least equal to $5,000,000 and the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; (iv) require a payment by the assigning Lender or assignee Lender,
but not any Credit Party, to Applicable Agent of an assignment fee of $3,500 and
(v) so long as no Event of Default has occurred and is continuing, require the
consent of Applicable Borrower Representative (which consent is not required for
an assignment between Lenders or from a Lender to an Affiliate of a Lender that
is controlled by or under common control with such Lender), which shall not be
unreasonably withheld or delayed. Notwithstanding the above, Applicable Agent
may in its sole and absolute discretion permit any assignment by a Lender to a
Person or Persons that are not Qualified Assignees, subject to Applicable
Borrower Representative’s consent rights as set forth above. In the case of an
assignment by a Lender that has become effective under this Section 8.1, (i) the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder and (ii) the assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof and the Loans, Letter of Credit Obligations and
other interests assigned by it from and after the effective date of such
assignment. Borrowers hereby acknowledge and agree that any assignment shall
give rise to a direct obligation of Borrowers to the assignee and that the
assignee shall be considered to be a “Lender”; provided that prior to the
occurrence of an Event of Default which is continuing, no assignee shall be
entitled to receive any greater amount pursuant to Section 1.12 than the Lender
from which such interest in this Agreement was assigned would have been entitled
to receive. In all instances, each Lender’s liability to make Loans hereunder
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Lender’s Pro Rata Share of the applicable Commitment. In the event Applicable
Agent or any Lender assigns or otherwise transfers all or any part of the
Obligations, Applicable Agent or any such Lender shall so notify Borrowers and
Borrowers shall, upon the request of Applicable Agent or such Lender, execute
new Notes in exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 8.1(a), (a) any Lender may at any time
pledge the Obligations held by it and such Lender’s rights under this Agreement
and the other Loan Documents to a Federal Reserve Bank or Bank of Canada,
(b) any Lender that is an investment fund may assign the Obligations held by it
and such Lender’s rights under this Agreement and the other Loan Documents to
another investment fund managed by the same investment advisor or pledge such
Obligations and rights to a trustee for the benefit of its investors and (c) any
Lender may assign the Obligations to an Affiliate of such Lender or to a Person
that is a Lender prior to the date of such assignment.

(b) Any participation by a Lender of all or any part of its Commitments shall be
made with the understanding that all amounts payable by Borrowers hereunder
shall be determined as if that Lender had not sold such participation, and that
the holder of any such participation shall not be entitled to require such
Lender to take or omit to take any action hereunder except actions directly
affecting (i) any reduction in the principal amount of, or interest rate or Fees
payable with respect to, any Loan in which such holder participates, (ii) any
extension of the scheduled amortization of the principal amount of any Loan in
which such holder participates or the final maturity date thereof, and (iii) any
release of all or substantially all of the Collateral (other than in accordance
with the terms of this Agreement, the Collateral Documents or the other Loan
Documents). Solely for purposes of Sections 1.11, 1.12, 8.3 and 9.1, Borrowers
acknowledge and agree that a participation shall give rise to a direct
obligation of Borrowers to the participant and the participant shall be
considered to be a “Lender” (and as a US Lender, US Tranche A Lender, US Tranche
A1 Lender, Canadian Lender, Canadian Tranche A Lender, Canadian Tranche A1
Lender, US Foreign Lender and Canadian Foreign Lender, as the case may be);
provided that prior to the occurrence of an Event of Default which is
continuing, no participant shall be entitled to receive any greater amount
pursuant to Section 1.12 than the Lender from which such participation was
acquired would have been entitled to receive. Except as set forth in the
preceding sentence no Borrower or any other Credit Party shall have any
obligation or duty to any participant. No Agent or Lender (other than the Lender
selling a participation) shall have any duty to any participant and may continue
to deal solely with the Lender selling a participation as if no such sale had
occurred.

(c) Except as expressly provided in this Section 8.1, no Lender shall, as
between Borrowers and that Lender, or Applicable Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.

(d) Each Credit Party shall assist each Lender permitted to sell assignments or
participations under this Section 8.1 as required to enable the assigning or
selling Lender to effect any such assignment or participation, including the
execution and delivery of any and all agreements, notes and other documents and
instruments as shall be reasonably requested and the prompt preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants, all on a timetable reasonably
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Applicable Agent in its sole discretion. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of the Credit Parties and their respective affairs contained in any
selling materials provided by it and all other information provided by it and
included in such materials, except that any Projections delivered by Borrowers
shall only be certified by Borrowers as having been prepared by Borrowers in
compliance with the representations contained in Section 3.5. US Agent shall
maintain, on behalf of US Borrowers, in its offices located at GE Corporate
Financial Services, 201 Merritt 7, P.O. Box 5201, Norwalk, CT 06856 a “register”
for recording the name, address, commitment and Loans owing to each US Lender.
The entries in such register shall be conclusive evidence of the amounts due and
owing to each US Lender in the absence of manifest error. US Borrowers, US Agent
and each US Lender may treat each Person whose name is recorded in such register
pursuant to the terms hereof as a US Lender for all purposes of this Agreement.
The register described herein shall be available for inspection by US Borrowers
and any US Lender at any reasonable time upon reasonable prior notice. Canadian
Agent shall maintain, on behalf of Canadian Borrowers, in its offices located at
GE Corporate Financial Services, 201 Merritt 7, P.O. Box 5201, Norwalk, CT 06856
a “register” for recording the name, address, commitment and Loans owing to each
Canadian Lender. The entries in such register shall be conclusive evidence of
the amounts due and owing to each Canadian Lender in the absence of manifest
error. Canadian Borrowers, Canadian Agent and each Canadian Lender may treat
each Person whose name is recorded in such register pursuant to the terms hereof
as a Canadian Lender for all purposes of this Agreement. The register described
herein shall be available for inspection by Canadian Borrowers and any Canadian
Lender, at any reasonable time upon reasonable prior notice.

(e) A Lender may furnish any information concerning Credit Parties in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 9.13.

(f) Notwithstanding Section 8.1(b) above, each Canadian Lender or other Person
holding an interest in a Canadian Loan or a Canadian Letter of Credit shall give
Canadian Borrower Representative prior written notice of:

(i) any assignment, conveyance, grant, sale or other transfer of any kind
(including by way of grant of participation) of any interest in any Canadian
Loan or any Canadian Letter of Credit to a Person that is not a Canadian Person;

(ii) any change in the office or other place of business through which such
Person holds any interest in any Canadian Loan or Canadian Letter of Credit such
that the Person is no longer considered a Canadian Person; and

(iii) any change in the status of such Person such that such Person ceases to be
a Canadian Person.

In any such case, such notice shall also state, to the best of the knowledge of
the transferor. whether the transferee (in the case of (i)) or the Person (in
the case of (ii) or (iii)) is entitled to a reduced rate of Canadian withholding
tax under a double tax treaty between Canada and the jurisdiction of residence
of such Person.

 

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8.2 Agents.

(a) Appointment. Each Lender and GE Canada hereby designates and appoints GE
Capital as its agent, and each Canadian Lender hereby appoints GE Canada as its
agent, in each case, under this Agreement and the other Loan Documents. Each
Lender and GE Canada hereby irrevocably authorizes US Agent to execute and
deliver the US Collateral Documents entered into by any US Credit Party for the
benefit of Agents and Lenders, and each Canadian Lender hereby irrevocably
authorizes Canadian Agent to execute and deliver the Canadian Collateral
Documents entered into by any Canadian Credit Party for the benefit of Canadian
Agent and Canadian Lenders, and to take such action or to refrain from taking
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto. US Agent
and Canadian Agent are authorized and empowered to amend, modify, or waive any
provisions of this Agreement or the other Loan Documents on behalf of Lenders or
Canadian Lenders, as the case requires, subject to the requirement that certain
of such Lenders’ consent be obtained in certain instances as provided in this
Section 8.2 and Section 9.2. The provisions of this Section 8.2 are solely for
the benefit of US Agent, Canadian Agent and Lenders and neither Borrowers nor
any other Credit Party shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing their functions and duties under this
Agreement, US Agent and Canadian Agent shall act solely as agents of Lenders and
do not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Borrower or any other Credit
Party. US Agent and Canadian Agent may perform any of their duties hereunder, or
under the Loan Documents, by or through their agents or employees.

(b) Nature of Duties. The duties of US Agent and Canadian Agent shall be
mechanical and administrative in nature. No Agent shall have by reason of this
Agreement a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, express or implied, is intended to or
shall be construed to impose upon US Agent or Canadian Agent any obligations in
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of each Credit Party in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of each Credit Party, and no Agent shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto
(other than as expressly required herein). If US Agent or Canadian Agent, as the
case may be, seeks the consent or approval of any Lender, to the taking or
refraining from taking any action hereunder, then US Agent or Canadian Agent, as
the case may be, shall send notice thereof to each Lender. US Agent shall
promptly notify each US Lender any time that the Requisite Lenders or the
Supermajority Lenders have instructed US Agent to act or refrain from acting
pursuant hereto. Canadian Agent shall promptly notify each Canadian Lender any
time that the Requisite Lenders or Supermajority Lenders have instructed
Canadian Agent to act or refrain from acting pursuant hereto.

 

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(c) Rights, Exculpation, Etc. of US Agent and Canadian Agent. Neither US Agent
nor Canadian Agent nor any of their respective officers, directors, employees or
agents shall be liable to any Lender for any action taken or omitted by them
hereunder or under any of the Loan Documents, or in connection herewith or
therewith, except that US Agent or Canadian Agent, as the case may be, shall be
liable to the extent of its own gross negligence or willful misconduct as
determined by a final non-appealable order by a court of competent jurisdiction.
No Agent shall be liable for any apportionment or distribution of payments made
by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them). In no event shall any Agent be liable for
punitive, special, consequential, incidental, exemplary or other similar
damages. In performing their respective functions and duties hereunder, US Agent
and Canadian Agent shall exercise the same care which they would in dealing with
loans for their own account, but neither US Agent, Canadian Agent nor any of
their respective agents or representatives shall be responsible to any Lender
for any recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility,
or sufficiency of this Agreement or any of the Loan Documents or the
transactions contemplated thereby, or for the financial condition of any Credit
Party. No Agent shall be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of any Credit
Party, or the existence or possible existence of any Default or Event of
Default. US Agent may at any time request instructions from Requisite Lenders,
Supermajority Lenders or all affected Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the Loan Documents
US Agent is permitted or required to take or to grant. Canadian Agent may at any
time request instructions from Requisite Lenders, Supermajority Lenders or all
affected Lenders with respect to any actions or approvals which by the terms of
this Agreement or of any of the Loan Documents Canadian Agent is permitted or
required to take or to grant. If such instructions are promptly requested, US
Agent and Canadian Agent, as the case may be, shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from the Requisite Lenders or such other portion of
the Lenders as shall be prescribed by this Agreement, as the case may be.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of Requisite Lenders, Supermajority Lenders or all
affected Lenders, as the case may be; and, notwithstanding the instructions of
Requisite Lenders, Supermajority Lenders or all affected Lenders, as the case
may be, no Agent shall have any obligation to take any action if it believes, in
good faith, that such action is deemed to be illegal by such Agent, or exposes
such Agent to any liability for which it has not received satisfactory
indemnification in accordance with Section 8.2(e).

(d) Reliance. Each Agent shall be entitled to rely, and shall be fully protected
in relying, upon any written or oral notices, statements, certificates, orders
or other documents or any telephone message or other communication (including
any writing, telex, fax or telegram) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by

 

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the proper Person, and with respect to all matters pertaining to this Agreement
or any of the Loan Documents and its duties hereunder or thereunder. Each Agent
shall be entitled to rely upon the advice of legal counsel, independent
accountants, and other experts selected by such Agent in its sole discretion.

(e) Indemnification. Lenders will reimburse and indemnify US Agent and Canadian
Agent, as applicable, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses (including, without limitation, reasonable attorneys’ fees and
reasonable expenses), advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against US Agent or Canadian
Agent in any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by US Agent or Canadian Agent under
this Agreement or any of the Loan Documents, in proportion to each Lender’s Pro
Rata Share, but only to the extent that any of the foregoing is not reimbursed
by Borrowers; provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements to the extent
resulting from US Agent’s or Canadian Agent’s, as the case may be, gross
negligence or willful misconduct as determined by a final non-appealable order
by a court of competent jurisdiction. If any indemnity furnished to US Agent or
Canadian Agent for any purpose shall, in the opinion of US Agent or Canadian
Agent, respectively, be insufficient or become impaired, US Agent or Canadian
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against even if so directed by the Requisite Lenders or such
other portion of the Lenders as shall be prescribed by this Agreement, until
such additional indemnity is furnished. The obligations of Lenders under this
Section 8.2(e) shall survive the payment in full of the Obligations and the
termination of this Agreement.

(f) GE Capital and GE Canada Individually. With respect to its Commitments
hereunder, each of GE Capital and GE Canada shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms “US Lenders, “US Tranche A Lenders”, “US Tranche A1 Lenders”, “Lenders”,
“Requisite Lenders”, “Supermajority Lenders” or any similar terms shall, unless
the context clearly otherwise indicates, include GE Capital in its individual
capacity as a US Tranche A Lender, US Tranche A1 Lender, Supermajority Lender or
one of the Requisite Lenders, or Lenders. The terms “Canadian Lenders”,
“Canadian Tranche A Lenders”, “Canadian Tranche A1 Lenders”, “Lenders”,
“Requisite Lenders”, “Supermajority Lenders” or any similar terms shall, unless
the context clearly otherwise indicates, include GE Canada in its individual
capacity as a Canadian Lender, Canadian Tranche A Lender, Canadian Tranche A1
Lenders, Requisite Lender, Supermajority Lenders or one of the Lenders. GE
Capital and GE Canada, either directly or through strategic affiliations, may
lend money to, acquire equity or other ownership interests in, provide advisory
services to and generally engage in any kind of banking, trust or other business
with any Credit Party as if it were not acting as US Agent or Canadian Agent,
respectively, pursuant hereto and without any duty to account therefor to
Applicable Lenders. GE Capital and GE Canada, either directly or through
strategic affiliations, may accept fees and other consideration from any Credit
Party for services in connection with this Agreement or otherwise without having
to account for the same to Applicable Lenders.

 

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(g) Successor US Agent or Canadian Agent.

(i) Resignation. US Agent or Canadian Agent may resign from the performance of
all its agency functions and duties hereunder at any time by giving at least
thirty (30) Business Days’ prior written notice to Applicable Borrower
Representative, Lenders and US Agent or Canadian Agent, as the case may be. Such
resignation shall take effect upon the acceptance by a successor US Agent or
Canadian Agent, as the case may be, of appointment pursuant to clause (ii) below
or as otherwise provided in clause (ii) below.

(ii) Appointment of Successor. Upon any such notice of resignation pursuant to
clause (i) above, Requisite Lenders shall appoint a successor US Agent or
Canadian Agent (which shall be a Canadian Person), respectively, which, unless
an Event of Default has occurred and is continuing, shall be reasonably
acceptable to US Borrowers or Canadian Borrowers, as the case may be. If a
successor US Agent or Canadian Agent shall not have been so appointed within the
thirty (30) Business Day period referred to in clause (i) above, the retiring US
Agent or Canadian Agent, respectively, upon notice to Applicable Borrower
Representative, shall then appoint a successor US Agent or Canadian Agent (which
shall be a Canadian Person), as the case may be, who shall serve as US Agent or
Canadian Agent, respectively, until such time, if any, as Requisite Lenders,
appoint a successor US Agent or Canadian Agent, respectively, as provided above.

(iii) Successor US Agent or Canadian Agent. Upon the acceptance of any
appointment as US Agent or Canadian Agent under the Loan Documents by a
successor US Agent or Canadian Agent, as the case may be, such successor US
Agent or Canadian Agent as the case may be, shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
US Agent or Canadian Agent, as the case may be, and the retiring US Agent or
Canadian Agent as the case may be, shall be discharged from its duties and
obligations under the Loan Documents. After any retiring US Agent’s resignation
as US Agent, any retiring Canadian Agent resignation as Canadian Agent, the
provisions of this Section 8.2 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it in its capacity as US Agent or
Canadian Agent, as the case may be.

(h) Collateral Matters.

(i) Release of Collateral.

(A) Lenders and Canadian Agent hereby irrevocably authorize US Agent, at its
option and in its discretion, to release any Lien granted to or held by US Agent
upon any Collateral (w) on the Termination Date, (x) constituting property being
sold or disposed of if Borrowers (or any of them) certify to US Agent that the
sale or disposition is made in compliance with the provisions of this Agreement
(and US Agent may rely in good faith conclusively on any such certificate,
without further inquiry) (y) in accordance with the terms of the Intercreditor
Agreement or (z) in accordance with the provisions of the next sentence. In
addition, with the consent of Requisite Lenders, during any Fiscal Year US Agent
may release any Lien granted to or held by US Agent upon any Collateral having a
book value not greater than ten percent (10%) of the total book value of all
Collateral as of the first day of such Fiscal Year.

 

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(B) Canadian Lenders hereby irrevocably authorize Canadian Agent, at its option
and in its discretion, to release any Lien granted to or held by Canadian Agent
upon any Canadian Collateral (x) on the Termination Date or (y) constituting
property being sold or disposed of if Canadian Borrowers (or any of them)
certify to Canadian Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and Canadian Agent may rely in good faith
conclusively on any such certificate, without further inquiry) or (z) in
accordance with the provisions of the next sentence. In addition, with the
consent of Requisite Lenders, during any Fiscal Year Canadian Agent may release
any Lien granted to or held by Canadian Agent upon any Collateral having a book
value not greater than ten percent (10%) of the total book value of all Canadian
Collateral as of the first day of such Fiscal Year.

(ii) Confirmation of Authority; Execution of Releases. Without in any manner
limiting any Applicable Agent’s authority to act without any specific or further
authorization or consent by Lenders (as set forth in this Section 8.2(h)), each
Applicable Lender agrees to confirm in writing, upon request by Applicable Agent
or Applicable Borrower Representative, the authority to release any Collateral
conferred upon US Agent or Canadian Agent under clause (i) of Section 8.2(h).
Upon receipt by US Agent or Canadian Agent of any required confirmation from the
Requisite Lenders of its authority to release any particular item or types of
Collateral, and upon at least ten (10) Business Days’ prior written request by
Applicable Borrower Representative, such Agent shall (and is hereby irrevocably
authorized by Lenders to) execute such documents as may be necessary to evidence
the release of the Liens granted to such Agent upon such Collateral; provided,
however, that (x) no Agent shall be required to execute any such document on
terms which, in its opinion, would expose it to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
any Credit Party in respect of), all interests retained by any Credit Party,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.

(iii) Absence of Duty. No Agent shall have any obligation whatsoever to any
Lender or any other Person to assure that the property covered by the Collateral
Documents exists or is owned by any Credit Party, or is cared for, protected or
insured or has been encumbered or that the Liens granted to such Agent have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to US Agent or Canadian Agent, as the case may be, in this
Section 8.2(h) or in any of the Loan Documents, it being understood and agreed
that in respect of the property covered by the Collateral Documents or any act,
omission or event related thereto, each Agent may act in any manner its may deem
appropriate, in its discretion, given its own interest in property covered by
the Collateral Documents as one of the Lenders and that no Agent shall have any
duty or liability whatsoever to any of the other Lenders, provided that Agents
shall exercise the same care which they would in dealing with loans for their
own, respective, account.

 

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(i) Agency for Perfection.

(i) US Agent and each US Lender hereby appoints each other US Lender and
Canadian Agent and each Canadian Lender hereby appoint each other Canadian
Lender as agent for the purpose of perfecting Applicable Agent’s security
interest in assets which, in accordance with the Code or PPSA in any applicable
jurisdiction (or its equivalent under Canadian or other law) can be perfected by
possession or control. Should any US Lender (other than US Agent or Canadian
Agent) or any Canadian Lender (other than Canadian Agent) obtain possession or
control of any such assets, such Lender shall notify Applicable Agent thereof,
and, promptly upon Applicable Agent’s request therefor, shall deliver such
assets to Applicable Agent or in accordance with Applicable Agent’s instructions
or transfer control to Applicable Agent in accordance with Applicable Agent’s
instructions. Each Lender agrees that it will not have any right individually to
enforce or seek to enforce any Collateral Document or to realize upon any
collateral security for the US Loans or Canadian Loans, as the case may be,
unless instructed to do so by Applicable Agent in writing, it being understood
and agreed that such rights and remedies may be exercised only by Applicable
Agent.

(ii) Canadian Agent and each Canadian Lender hereby appoints US Agent as agent
for the purpose of perfecting its security interest in assets which, in
accordance with the Code or PPSA in any applicable jurisdiction (or its
equivalent under Canadian or other law) can be perfected by possession or
control. Should any Canadian Agent or any Canadian Lender obtain possession or
control of any such assets, Canadian Agent or such Lender, as applicable shall
notify US Agent thereof, and, promptly upon US Agent’s request therefor, shall
deliver such assets to US Agent or in accordance with US Agent’s instructions or
transfer control to US Agent in accordance with US Agent’s instructions.
Canadian Agent and each Canadian Lender agrees that it will not have any right
individually to enforce or seek to enforce any US Collateral Document or to
realize upon any collateral security for the Canadian Loans granted pursuant
thereto unless instructed to do so by US Agent in writing, it being understood
and agreed that such rights and remedies may be exercised only by US Agent.

(j) Notice of Default. Neither US Agent nor Canadian Agent shall be deemed to
have knowledge or notice or be actually aware of the occurrence of any Default
or Event of Default except (as to US Agent and Canadian Agent, respectively,
only) with respect to defaults in the payment of principal, interest and Fees
required to be paid to US Agent or Canadian Agent for the account of US Lenders
or Canadian Lenders, respectively, unless US Agent or Canadian Agent, as the
case may be, shall have received written notice from a Lender or Borrower
Representative referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. Applicable Agent
will use reasonable efforts to notify each US Lender or Canadian Lender, as the
case may be, of its receipt of any such notice, unless such notice is with
respect to defaults in the payment of principal, interest and fees, in which
case Applicable Agent will notify each US Lender or Canadian Lender, as the case
may be, of its receipt of such notice. Applicable Agent shall take such action
with respect to such Default or Event of Default as may be requested by
Requisite Lenders in accordance with Section 7. Unless and until Applicable
Agent has received any such request, Applicable Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interests of US Lenders or Canadian Lenders, as the case may be.

 

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(k) Lender Actions Against Collateral. Each Lender agrees that it will not take
any action, nor institute any actions or proceedings, with respect to the Loans,
against any Borrower or any Credit Party hereunder or under the other Loan
Documents without the consent of the Requisite Lenders. With respect to any
action by US Agent or Canadian Agent to enforce its and the Lenders’ rights and
remedies, under this Agreement and the other Loan Documents, each Lender hereby
consents to the jurisdiction of the court in which such action is maintained,
and agrees to deliver its Notes to US Agent or Canadian Agent, as the case may
be, to the extent necessary to enforce the rights and remedies of US Agent or
Canadian Agent, as the case may be, for the benefit of the Lenders under any
Loan Document in accordance with the provisions hereof.

(l) Agent Reports. Each Lender may from time to time receive one or more reports
or other information (each, a “Report”) prepared by or on behalf of any Agent
(or one or more of such Agent’s Affiliates). With respect to each Report, each
Lender hereby agrees that:

(i) No Agent (nor any Agent’s Affiliate) shall have any duties or obligations in
connection with or as a result of a Lender receiving a copy of a Report, which
will be provided solely as a courtesy, without consideration. Each Lender will
perform its own diligence and will make its own independent investigation of the
operations, financial conditions and affairs of the Credit Parties and will not
rely on any Report or make any claim that it has done so. In addition, each
Lender releases, and agrees that it will not assert, any claim against any Agent
(or one or more of any Agent’s Affiliates) that in any way relates to any Report
or arises out of a Lender having access to any Report or any discussion of its
contents, and each Lender agrees to indemnify and hold harmless each Agent (and
each Agent’s Affiliates) and their respective officers, directors, employees,
agents and attorneys from all claims, liabilities and expenses relating to a
breach by a Lender or any of its personnel of this Section 8.2(l) or otherwise
arising out of a Lender’s access to any Report or any discussion of its
contents;

(ii) Each Report may not be complete and certain information and findings
obtained by any Agent (or one or more of any Agent’s Affiliates) regarding the
operations and condition of the Credit Parties may not be reflected in each
Report. No Agent (nor any Agent’s Affiliates) makes any representations or
warranties of any kind with respect to (i) any existing or proposed financing;
(ii) the accuracy or completeness of the information contained in any Report or
in any other related documentation; (iii) the scope or adequacy of any Agent’s
(and any Agent’s Affiliates’) due diligence, or the presence or absence of any
errors or omissions contained in any Report or in any other related
documentation; and (iv) any work performed by any Agent (or one or more of any
Agent’s Affiliates) in connection with or using any Report or any related
documentation; and

(iii) Each Lender agrees to safeguard each Report and any related documentation
with the same care which it uses with respect to information of its own which it
does not desire to disseminate or publish, and agrees not to reproduce or
distribute or provide copies of or disclose any Report or any other related
documentation or any related discussions to anyone.

 

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8.3 Set Off and Sharing of Payments.

(a) Subject to Section 8.2(k), in addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each US Lender is hereby
authorized by US Borrowers at any time or from time to time, with reasonably
prompt subsequent notice to US Borrower Representative (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (A) balances held by such US Lender at any
of its offices for the account of any US Borrower or any of its Domestic
Subsidiaries (regardless of whether such balances are then due to any US
Borrower or its Domestic Subsidiaries), and (B) other property at any time held
or owing by such US Lender to or for the credit or for the account of any US
Borrower or any of its Domestic Subsidiaries, against and on account of any of
the Obligations; except that no US Lender shall exercise any such right without
the prior written consent of US Agent. Notwithstanding anything herein to the
contrary, the failure to give notice of any set off and application made by such
US Lender to US Borrower Representative shall not affect the validity of such
set off and application. Any US Lender exercising a right to set off shall
purchase for cash (and the other US Lenders shall sell) interests in each of
such other US Tranche A Lender’s and US Tranche A1 Lender’s Pro Rata Share of
the US Obligations as would be necessary to cause all US Lenders to share the
amount so set off with each other US Lender entitled to share in the amount so
set off in accordance with their respective Pro Rata Shares. US Borrowers agree,
to the fullest extent permitted by law, that any US Lender may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of the
US Obligations and upon doing so shall deliver such amount so set off to the US
Agent for the benefit of all US Lenders entitled to share in the amount so set
off in accordance with their Pro Rata Shares.

(b) Subject to Section 8.2(k), in addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each Canadian Lender is hereby
authorized by Canadian Borrowers at any time or from time to time, with
reasonably prompt subsequent notice to Canadian Borrower Representative (any
prior or contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (A) balances held by such Canadian Lender
at any of its offices for the account of any Canadian Borrower or any of its
Canadian Subsidiaries (regardless of whether such balances are then due to any
Canadian Borrower or its Canadian Subsidiaries), and (B) other property at any
time held or owing by such Canadian Lender to or for the credit or for the
account of any Canadian Borrower or any of its Canadian Subsidiaries, against
and on account of any of the Canadian Obligations; except that no Canadian
Lender shall exercise any such right without the prior written consent of
Canadian Agent. Notwithstanding anything herein to the contrary, the failure to
give notice of any set off and application made by such Canadian Lender to
Canadian Borrower Representative shall not affect the validity of such set off
and application. Any Canadian Lender exercising a right to set off shall
purchase for cash (and the other Canadian Lenders shall sell) interests in each
of such other Canadian Tranche A Lender’s and Canadian Tranche A1 Lender’s Pro
Rata Share of the Canadian Obligations as would be necessary to cause all
Canadian Lenders to share the amount so set off with each other Canadian Lender
entitled to share in the amount so set off in accordance with their respective
Pro Rata Shares. Canadian Borrowers agree, to the fullest extent permitted by
law, that any Canadian Lender may exercise its right to set off with respect to
amounts in excess of its Pro Rata Share of the Canadian Obligations and upon
doing so shall deliver such amount so set off to the Canadian Agent for the
benefit of all Canadian Lenders entitled to share in the amount so set off in
accordance with their Pro Rata Shares.

 

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8.4 Disbursement of Funds.

(a) US Agent may, on behalf of US Lenders, disburse funds to US Borrowers for
Loans requested. Each US Lender shall reimburse US Agent on demand for all funds
disbursed on its behalf by US Agent, or if US Agent so requests, each US Lender
will remit to US Agent its Pro Rata Share of any Loan before US Agent disburses
same to US Borrowers. If US Agent elects to require that each US Lender make
funds available to US Agent prior to a disbursement by US Agent to US Borrowers,
US Agent shall advise each US Lender by telephone or fax of the amount of such
US Lender’s Pro Rata Share of the Loan requested by US Borrower Representative
no later than 1:00 p.m. (New York time) on the Funding Date applicable thereto,
and each such US Lender shall pay US Agent such US Lender’s Pro Rata Share of
such requested Loan, in same day funds, by wire transfer to US Agent’s account
on such Funding Date. If any US Lender fails to pay the amount of its Pro Rata
Share within one (1) Business Day after US Agent’s demand, US Agent shall
promptly notify US Borrower Representative, and US Borrowers shall immediately
repay such amount to US Agent. Any repayment required pursuant to this
Section 8.4 shall be without premium or penalty. Nothing in this Section 8.4 or
elsewhere in this Agreement or the other Loan Documents, including the
provisions of Section 8.5, shall be deemed to require US Agent to advance funds
on behalf of any US Lender or to relieve any US Lender from its obligation to
fulfill its commitments hereunder or to prejudice any rights that Agent or US
Borrowers may have against any US Lender as a result of any default by such US
Lender hereunder.

(b) Canadian Agent may, on behalf of Canadian Lenders, disburse funds to
Canadian Borrowers for Loans requested. Each Canadian Lender shall reimburse
Canadian Agent on demand for all funds disbursed on its behalf by Canadian
Agent, or if Canadian Agent so requests, each Canadian Lender will remit to
Canadian Agent its Pro Rata Share of any Loan before Canadian Agent disburses
same to Canadian Borrowers. If Canadian Agent elects to require that each
Canadian Lender make funds available to Canadian Agent prior to a disbursement
by Canadian Agent to Canadian Borrowers, Canadian Agent shall advise each
Canadian Lender by telephone or fax of the amount of such Canadian Lender’s Pro
Rata Share of the Loan requested by Canadian Borrower Representative no later
than 1:00 p.m. (Toronto time) on the Funding Date applicable thereto, and each
such Canadian Lender shall pay Canadian Agent such Canadian Lender’s Pro Rata
Share of such requested Loan, in same day funds, by wire transfer to Canadian
Agent’s account on such Funding Date. If any Canadian Lender fails to pay the
amount of its Pro Rata Share within one (1) Business Day after Canadian Agent’s
demand, Canadian Agent shall promptly notify Canadian Borrower Representative,
and Canadian Borrowers shall immediately repay such amount to Canadian Agent.
Any repayment required pursuant to this Section 8.4 shall be without premium or
penalty. Nothing in this Section 8.4 or elsewhere in this Agreement or the other
Loan Documents, including the provisions of Section 8.5, shall be deemed to
require Canadian Agent to advance funds on behalf of any Canadian Lender or to
relieve any Canadian Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights that Agent or Canadian Borrowers may have
against any Canadian Lender as a result of any default by such Canadian Lender
hereunder.

 

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8.5 Disbursements of Advances; Payment.

(a) Advances; Payments.

(i) US Agent shall notify US Tranche A Lenders, promptly after receipt of a
Notice of US Tranche A Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of a US Tranche A Revolving Credit
Advance is received, by fax, telephone or other similar form of transmission.
Each US Tranche A Lender shall make the amount of such US Tranche A Lender’s Pro
Rata Share of such US Tranche A Revolving Credit Advance available to US Agent
in same day funds by wire transfer to US Agent’s account as set forth in
Section 1.5 not later than 3:00 p.m. (New York time) on the requested Funding
Date in the case of a US Index Rate Loan and not later than 11:00 a.m. (New York
time) on the requested Funding Date in the case of a LIBOR Loan. After receipt
of such wire transfers (or, in the US Agent’s sole discretion, before receipt of
such wire transfers), subject to the terms hereof, US Agent shall make the
requested US Tranche A Revolving Credit Advance to a US Borrower as designated
by US Borrower Representative in the Notice of US Tranche A Revolving Credit
Advance. All payments by each US Tranche A Lender shall be made without setoff,
counterclaim or deduction of any kind. US Agent shall notify US Tranche A1
Lenders, promptly after receipt of a Notice of US Tranche A1 Revolving Credit
Advance and in any event prior to 1:00 p.m. (New York time) on the date such
Notice of a US Tranche A1 Revolving Credit Advance is received, by fax,
telephone or other similar form of transmission. Each US Tranche A1 Lender shall
make the amount of such US Tranche A1 Lender’s Pro Rata Share of such US Tranche
A1 Revolving Credit Advance available to US Agent in same day funds by wire
transfer to US Agent’s account as set forth in Section 1.5 not later than 3:00
p.m. (New York time) on the requested Funding Date in the case of a US Index
Rate Loan and not later than 11:00 a.m. (New York time) on the requested Funding
Date in the case of a LIBOR Loan. After receipt of such wire transfers (or, in
the US Agent’s sole discretion, before receipt of such wire transfers), subject
to the terms hereof, US Agent shall make the requested US Tranche A1 Revolving
Credit Advance to a US Borrower as designated by US Borrower Representative in
the Notice of US Tranche A1 Revolving Credit Advance. All payments by each US
Tranche A1 Lender shall be made without setoff, counterclaim or deduction of any
kind.

(ii) At least once each calendar week or more frequently at US Agent’s election
(each, a “US Settlement Date”), US Agent shall advise each US Lender by
telephone or fax of the amount of such US Lender’s Pro Rata Share of principal,
interest and Fees paid for the benefit of US Lenders with respect to each
applicable Loan. Provided that each US Tranche A Lender and US Tranche A1
Lender, as the case may be, has funded all payments, US Tranche A Revolving
Credit Advances and US Tranche A1 Revolving Credit Advances, as applicable,
required to be made by it and funded all purchases of participations required to
be funded by it under this Agreement and the other Loan Documents as of such US
Settlement Date, US Agent shall pay to each US Tranche A Lender and US Tranche
A1 Lender such US Lender’s Pro Rata Share of principal, interest and Fees paid
by US Borrowers since the previous US Settlement Date for the benefit of such US
Lender on the Loans held by it. Such payments shall be made by wire transfer to
such Lender’s account (as specified by such US Lender in Annex D or the
applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on the
next Business Day following each US Settlement Date. To the extent that any US
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or US Tranche A1 Lender (a “US Non-Funding Lender”) has failed to fund all such
payments, US Tranche A Revolving Credit Advances or US Tranche A1 Revolving
Credit Advances, as the case may be, or failed to fund the purchase of all such
participations required to be funded by such US Lender pursuant to this
Agreement, US Agent shall be entitled to set off the funding shortfall against
that US Non-Funding Lender’s Pro Rata Share of all payments received from US
Borrowers.

(iii) Canadian Agent shall notify Canadian Tranche A Lenders, promptly after
receipt of a Notice of Canadian Tranche A Revolving Credit Advance and in any
event prior to 1:00 p.m. (Toronto time) on the date such Notice of a Canadian
Tranche A Revolving Credit Advance is received, by fax, telephone or other
similar form of transmission. Each Canadian Tranche A Lender shall make the
amount of such Canadian Tranche A Lender’s Pro Rata Share of such Canadian
Tranche A Revolving Credit Advance available to Canadian Agent in same day funds
by wire transfer to Canadian Agent’s account as set forth in Section 1.5 not
later than 3:00 p.m. (Toronto time) on the requested Funding Date in the case of
a Canadian Index Rate Loan and not later than 11:00 a.m. (Toronto time) on the
requested Funding Date in the case of a BA Rate Loan. After receipt of such wire
transfers (or, in the Canadian Agent’s sole discretion, before receipt of such
wire transfers), subject to the terms hereof, Canadian Agent shall make the
requested Canadian Tranche A Revolving Credit Advance to a Canadian Borrower as
designated by Canadian Borrower Representative in the Notice of Tranche A
Canadian Revolving Credit Advance. All payments by each Canadian Tranche A
Lender shall be made without setoff, counterclaim or deduction of any kind.
Canadian Agent shall notify Canadian Tranche A1 Lenders, promptly after receipt
of a Notice of Canadian Tranche A1 Revolving Credit Advance and in any event
prior to 1:00 p.m. (Toronto time) on the date such Notice of a Canadian Tranche
A1 Revolving Credit Advance is received, by fax, telephone or other similar form
of transmission. Each Canadian Tranche A1 Lender shall make the amount of such
Canadian Tranche A1 Lender’s Pro Rata Share of such Canadian Tranche A1
Revolving Credit Advance available to Canadian Agent in same day funds by wire
transfer to Canadian Agent’s account as set forth in Section 1.5 not later than
3:00 p.m. (Toronto time) on the requested Funding Date in the case of a Canadian
Index Rate Loan and not later than 11:00 a.m. (Toronto time) on the requested
Funding Date in the case of a BA Rate Loan. After receipt of such wire transfers
(or, in the Canadian Agent’s sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Canadian Agent shall make the requested
Canadian Tranche A1 Revolving Credit Advance to a Canadian Borrower as
designated by Canadian Borrower Representative in the Notice of Tranche A1
Canadian Revolving Credit Advance. All payments by each Canadian Tranche A1
Lender shall be made without setoff, counterclaim or deduction of any kind.

(iv) At least once each calendar week or more frequently at Canadian Agent’s
election (each, a “Canadian Settlement Date”), Canadian Agent shall advise each
Canadian Lender by telephone or fax of the amount of such Canadian Lender’s Pro
Rata Share of principal, interest and Fees paid for the benefit of Canadian
Lenders with respect to each applicable Loan. Provided that each Canadian
Tranche A Lender and Canadian Tranche A1 Lender, as the case may be, has funded
all payments, Canadian Tranche A Revolving Credit Advances and Canadian Tranche
A1 Revolving Credit Advances, as applicable, required to be made by it and
funded all purchases of participations required to be funded by it under this
Agreement and the other Loan Documents as of such Canadian Settlement Date,
Canadian Agent

 

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shall pay to each Canadian Tranche A Lender and Canadian Tranche A1 Lender such
Canadian Lender’s Pro Rata Share of principal, interest and Fees paid by
Canadian Borrowers since the previous Canadian Settlement Date for the benefit
of such Canadian Lender on the Loans held by it. Such payments shall be made by
wire transfer to such Canadian Lender’s account (as specified by such Canadian
Lender in Annex D or the applicable Assignment Agreement) not later than 2:00
p.m. (Toronto time) on the next Business Day following each Canadian Settlement
Date. To the extent that any Canadian Tranche A Lender or Canadian Tranche A1
Lender (a “Canadian Non-Funding Lender”) has failed to fund all such payments,
Canadian Tranche A Revolving Credit Advances and Canadian Tranche A1 Revolving
Credit Advances or failed to fund the purchase of all such participations
required to be funded by such Canadian Lender pursuant to this Agreement,
Canadian Agent shall be entitled to set off the funding shortfall against that
Canadian Non-Funding Lender’s Pro Rata Share of all payments received from
Canadian Borrowers.

(b) Availability of Lender’s Pro Rata Share. US Agent may assume that each US
Tranche A Lender and each US Tranche A1 Lender will make its Pro Rata Share of
each US Tranche A Revolving Credit Advance and each US Tranche A1 Revolving
Credit Advance, as applicable, available to US Agent on each Funding Date and
Canadian Agent may assume that each Canadian Tranche A Lender and each Canadian
Tranche A1 Lender will make its Pro Rata Share of each Canadian Tranche A
Revolving Credit Advance and Canadian Tranche A1 Revolving Credit Advance, as
applicable, available to Canadian Agent on each Funding Date. If such Pro Rata
Share is not, in fact, paid to Applicable Agent by such Lender when due,
Applicable Agent will be entitled to recover such amount on demand from such
Lender without setoff, counterclaim or deduction of any kind. If any Lender
fails to pay the amount of its Pro Rata Share forthwith upon Applicable Agent’s
demand, Applicable Agent shall promptly notify Applicable Borrower
Representative and US Borrowers or Canadian Borrowers, as the case may be, shall
immediately repay such amount to Applicable Agent. Nothing in this
Section 8.5(b) or elsewhere in this Agreement or the other Loan Documents shall
be deemed to require Applicable Agent to advance funds on behalf of any Lender
or to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrowers may have against any Lender
as a result of any default by such Lender hereunder. To the extent that
Applicable Agent advances funds to the applicable Borrowers on behalf of any
Lender and is not reimbursed therefor on the same Business Day as such Advance
is made, such Agent shall be entitled to retain for its account all interest
accrued on such Advance until reimbursed by the applicable Lender.

(c) Return of Payments.

(i) Each US Lender will repay to US Agent on demand any portion of such amount
that US Agent has distributed to such Lender, together with interest at such
rate, if any, as US Agent is required to pay to any US Borrower or such other
Person, without setoff, counterclaim or deduction of any kind; and

(ii) If any Agent determines at any time that any amount received by such Agent
under this Agreement must be returned to any Credit Party or paid to any other
Person pursuant to any Insolvency Law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, such Agent
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distribute any portion thereof to any Lender. In addition, (i) each US Lender
will repay to US Agent on demand any portion of such amount that US Agent has
distributed to such US Lender, together with interest at such rate, if any, as
US Agent is required to pay to any US Borrower or such other Person, without
setoff, counterclaim or deduction of any kind and (ii) each Canadian Lender will
repay to Canadian Agent on demand any portion of such amount that Canadian Agent
has distributed to such Canadian Lender, together with interest at such rate, if
any, as Canadian Agent is required to pay to any Canadian Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.

(d) Non-Funding Lenders.

(i) The failure of any US Non-Funding Lender to make any US Tranche A Revolving
Credit Advance, US Tranche A1 Revolving Credit Advance or any payment required
by it hereunder on the date specified therefor shall not relieve any other US
Lender (each such other US Lender, an “Other US Lender”) of its obligations to
make such Advance or fund the purchase of any such participation on such date,
but neither any Other US Lender nor US Agent shall be responsible for the
failure of any US Non-Funding Lender to make an Advance, fund the purchase of a
participation or make any other payment required hereunder. Notwithstanding
anything set forth herein to the contrary, a US Non-Funding Lender shall not
have any voting or consent rights under or with respect to any Loan Document or
constitute a “Lender”, “US Lender”, “US Tranche A Lender”, “US Tranche A1
Lender” or a “Revolving Lender” (or be included in the calculation of “Requisite
Lenders” or “Supermajority Lenders” hereunder) for any voting or consent rights
under or with respect to any Loan Document.

(ii) The failure of any Canadian Non-Funding Lender to make any Canadian Tranche
A Revolving Credit Advance, Canadian Tranche A1 Revolving Credit Advance or any
payment required by it hereunder on the date specified therefor shall not
relieve any other Canadian Lender (each such other Canadian Lender, an “Other
Canadian Lender”) of its obligations to make such Advance or fund the purchase
of any such participation on such date, but neither any Other Canadian Lender
nor Canadian Agent shall be responsible for the failure of any Canadian
Non-Funding Lender to make an Advance, fund the purchase of a participation or
make any other payment required hereunder. Notwithstanding anything set forth
herein to the contrary, a Canadian Non-Funding Lender shall not have any voting
or consent rights under or with respect to any Loan Document or constitute a
“Lender”, “Canadian Lender”, “Canadian Tranche A Lender”, “Canadian Tranche A1
Lender” or “Revolving Lender” (or be included in the calculation of “Requisite
Lenders” or “Supermajority Lenders” hereunder) for any voting or consent rights
under or with respect to any Loan Document.

8.6 Collateral Allocation Mechanism.

(a) Implementation of CAM. (i) On the CAM Exchange Date, (A) the Lenders shall
automatically and without further act (and without regard to the provisions of
Section 8.1) 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
Specified Obligations of each Credit Party in respect of each such Credit
Facility), such Lender shall hold an interest in every one of the Credit
Facilities (including the Specified Obligations of each Credit Party in respect
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and each L/C Reserve Account established pursuant to paragraph (b) below),
whether or not such Lender shall previously have participated therein, equal to
such Lender’s CAM Percentage thereof, provided that such CAM Exchange will not
affect the aggregate amount payable to the US Lenders or the aggregate amount
payable to the Canadian Lenders under the Loan Documents. Each Lender and each
Credit 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 interest in any Credit
Facility. Each Credit Party agrees from time to time to execute and deliver to
the Applicable Agent all promissory notes and other instruments and documents as
the Applicable Agent shall reasonably request to evidence and confirm the
respective interests of the Lenders after giving effect to the CAM Exchange, and
each Lender agrees to surrender any promissory notes originally received by it
in connection with its Loans hereunder to the Applicable Agent against delivery
of new promissory notes evidencing its interests in the Credit Facilities;
provided, however, that the failure of any Credit Party to execute or deliver or
of any Lender to accept any such promissory note, instrument or document shall
not affect the validity or effectiveness of the CAM Exchange. As a result of the
CAM Exchange, upon and after the CAM Exchange Date, each payment received by
either Agent pursuant to any Loan Document in respect of the Specified
Obligations, and each distribution made by either Agent pursuant to any Loan
Document in respect of the Specified 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 CAM Exchange Date, including by
way of setoff, in respect of a Specified Obligation shall be paid over to the
Applicable Agent for distribution to the Lenders in accordance herewith.

(b) Letters of Credit.

(i) In the event that on the CAM Exchange Date any Letter of Credit shall be
outstanding and undrawn in whole or in part, or any amount drawn under a Letter
of Credit shall be unpaid, each Lender shall, before giving effect to the CAM
Exchange, promptly pay over to the Applicable Agent, in immediately available
funds and in the currency that such Letters of Credit are denominated, an amount
equal to such Lender’s Pro Rata Share (as defined in clause (A) (a) of the
definition of Pro Rata Share), of such Letter of Credit’s undrawn face amount or
(to the extent it has not already done so) such Letter of Credit’s unpaid
drawing, as the case may be, together with interest thereon from the CAM
Exchange Date to the date on which such amount shall be paid to the Applicable
Agent at the rate that would be applicable at the time to a US Index Rate Loans
in a principal amount equal to such amount. The Applicable Agent shall establish
a separate account or accounts for each Lender (each, an “L/C Reserve Account”)
for the amounts received with respect to each such Letter of Credit pursuant to
the preceding sentence. The Applicable Agent shall deposit in each Lender’s L/C
Reserve Account such Lender’s CAM Percentage of the amounts received from the
Lenders as provided above. The Applicable Agent shall have sole dominion and
control over each L/C Reserve Account, and the amounts deposited in each L/C
Reserve Account shall be held in such L/C Reserve Account until withdrawn as
provided in paragraphs (ii), (iii), (iv) or (v) below. The Applicable Agent
shall maintain records enabling the Applicable Agent to determine the amounts
paid over to it and deposited in the L/C 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
L/C Reserve Account shall be held as a reserve against the Letter of Credit
Obligations, shall be the property of such Lender, shall not constitute Loans to
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rise to any claim of or against any Credit Party and shall not give rise to any
obligation on the part of any Borrower to pay interest to such Lender or any
other obligation of any Credit Party, 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 Sections 1.1(b).

(ii) In the event that after the CAM Exchange Date any drawing shall be made in
respect of a Letter of Credit, the Agents shall, at the request of the L/C
Issuer withdraw from the L/C Reserve Accounts of Lenders any amounts, up to the
amount of each 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
L/C Issuer in satisfaction of the reimbursement obligations of the Lenders under
Section 1.1(b) (but not of the Borrowers under Section 1.1(b)). In the event any
Lender shall default on its obligation to pay over any amount to the Applicable
Agent in respect of any Letter of Credit as provided in this Section 8.6, the
L/C Issuer 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 1.1(b) but shall have no claim against any other
Lender in respect of such defaulted amount, notwithstanding the exchange of
interests in the reimbursement obligations pursuant to this Section 8.6. 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.

(iii) In the event that after the CAM Exchange Date any Letter of Credit shall
expire undrawn, the Agents shall withdraw from the L/C Reserve Accounts of
Lenders the amounts remaining on deposit therein in respect of such Letter of
Credit and distribute such amount to Lenders.

(iv) With the prior written approval of the Agents and the L/C Issuers, any
Lender may withdraw the amount held in its L/C 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 Applicable Agent, for
the account of the L/C Issuer on demand, its CAM Percentage of such drawing.

(v) Pending the withdrawal by any Lender of any amounts from its L/C Reserve
Account as contemplated by the above paragraphs, the Applicable Agent will, at
the direction of such Lender and subject to such rules as the Applicable Agent
may prescribe for the avoidance of inconvenience, invest such amounts in Cash
Equivalents. Each Lender that has not withdrawn the amounts in its L/C Reserve
Account as provided in paragraph (iv) above shall have the right, at intervals
reasonably specified by the Applicable Agent, to withdraw the earnings on
investments so made by the Applicable Agent with amounts in its L/C Reserve
Account and to retain such earnings for its own account.

(c) Net Payments Upon Implementation of CAM Exchange. Notwithstanding any other
provision of this Agreement (except the sentence directly following this
sentence), if, as a result of Section 8.6, any US Borrower or Canadian Borrower
is required to withhold Taxes (other than Excluded Taxes described in clause
(i) of Section 1.12(a)) from amounts payable to the Applicable Agent or any
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Applicable Agent or such Lender shall be increased so that such Applicable Agent
or Lender receives an amount, on an after-Tax basis, equal to the sum it would
have received had no such withholdings been made; provided, however, that the US
Borrowers and the Canadian Borrowers shall not be required to increase any such
amounts payable to such Lender with respect to such Taxes as a direct result of
the implementation of the CAM Exchange (but, rather, shall be required to
increase any such amounts payable to such Lender to the extent required by
Section 1.12) if such Lender was prior to or on the CAM Exchange Date already a
Lender with respect to such US Borrower or Canadian Borrower, as applicable. If
a Foreign Lender is eligible for an exemption from, or reduced rate of,
withholding tax on payments by the US Borrower or Canadian Borrower, as
applicable, under this Agreement, such Borrower shall not be required to
increase any such amounts payable to such Lender if such Lender fails to comply
with the requirements of Section 1.12(d).

SECTION 9.

MISCELLANEOUS

9.1 Indemnities.

(a) US Borrowers agree, jointly and severally, to indemnify, pay, and hold each
Agent, each Lender, each L/C Issuer and their respective Affiliates, officers,
directors, employees, agents, and attorneys (the “US Indemnitees”) harmless from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, and costs and expenses (including all
reasonable fees and expenses of counsel to such Indemnitees) of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against any
US Indemnitee as a result of such US Indemnitees being a party to this Agreement
or the transactions consummated pursuant to this Agreement or otherwise relating
to any of the Loan Documents or Related Transactions; provided, that US
Borrowers shall have no obligation to a US Indemnitee hereunder with respect to
liabilities to the extent resulting from the gross negligence or willful
misconduct of that Indemnitee as determined by a court of competent
jurisdiction; provided, further, that such amounts payable under this
Section 9.1(a) shall be without duplication of amounts to which such Indemnitee
is entitled under Section 1.12 and shall exclude Excluded Taxes.

(b) Canadian Borrowers agree, jointly and severally, to indemnify, pay, and hold
Canadian Agent, each Canadian Lender, and their respective Affiliates, officers,
directors, employees, agents, and attorneys (the “Canadian Indemnitees”)
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, and costs and expenses (including
all reasonable fees and expenses of counsel to such Indemnitees) of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against any
Canadian Indemnitee as a result of such Canadian Indemnitees being a party to
this Agreement or the transactions consummated pursuant to this Agreement or
otherwise relating to any of the Loan Documents or Related Transactions;
provided, that Canadian Borrowers shall have no obligation to a Canadian
Indemnitee hereunder with respect to liabilities to the extent resulting from
the gross negligence or willful misconduct of that Canadian Indemnitee as
determined by a court of competent jurisdiction; provided, further, that such
amounts payable under this Section 9.1(a) shall be without duplication of
amounts to which such Indemnitee is entitled under Section 1.12 and shall
exclude Excluded Taxes.

 

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9.2 Amendments and Waivers.

(a) Except for actions expressly permitted to be taken by US Agent or Canadian
Agent, as the case may be, no amendment, modification, termination or waiver of
any provision of this Agreement or any other Loan Document, or any consent to
any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Borrowers, and by Requisite
Lenders, Supermajority Lenders or all affected Lenders, as applicable. Except as
set forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.

(b) No amendment, modification, termination or waiver of or consent with respect
to any provision of this Agreement that increases the percentage advance rates
set forth in the definition of US Tranche A Borrowing Base, US Tranche A1
Borrowing Base, Canadian Tranche A Borrowing Base, Canadian Tranche A1 Borrowing
Base, Aggregate US Borrowing Base, Aggregate US Tranche A Borrowing Base,
Aggregate US Tranche A1 Borrowing Base, Aggregate Canadian Borrowing Base,
Aggregate Canadian Tranche A Borrowing Base, or Aggregate Canadian Tranche A1
Borrowing Base or that makes less restrictive the nondiscretionary criteria for
exclusion from Eligible Accounts and Eligible Inventory set forth in Section 1.8
or Section 1.9, as applicable, shall be effective unless the same shall be in
writing and signed by Agents, Supermajority Lenders and Borrowers. No amendment,
modification, termination or waiver of or consent with respect to any provision
of this Agreement that waives compliance with the conditions precedent set forth
in Section 2.2 to the making of any Loan or the incurrence of any Letter of
Credit Obligations shall be effective unless the same shall be in writing and
signed by Agents, Requisite Lenders and Borrowers. Notwithstanding anything
contained in this Agreement to the contrary, no waiver or consent with respect
to any Default or any Event of Default shall be effective for purposes of the
conditions precedent to the making of Loans or the incurrence of Letter of
Credit Obligations set forth in Section 2.2 unless the same shall be in writing
and signed by Agents, Requisite Lenders and Borrowers.

(c) No amendment, modification, termination or waiver shall, unless in writing
and signed by each Agent and each Lender directly affected thereby: (i) increase
the principal amount, or postpone or extend the scheduled date of expiration, of
any Lender’s Commitment (which action shall be deemed to directly affect all
Lenders); (ii) reduce the principal of, rate of interest on (other than any
determination or waiver to charge or not charge interest at the Default Rate) or
Fees payable with respect to any Loan or Letter of Credit Obligations of any
affected Lender; (iii) extend any scheduled payment date or final maturity date
of the principal amount of any Loan of any affected Lender or postpone or extend
the scheduled date of expiration of any Letter of Credit beyond the date set
forth in clause (b) of the initial sentence of Section 1.1(b)(iv) or
Section 1.2(b)(iv), as applicable; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender (which action
shall be deemed only to affect those Lenders to whom such payments are made);
(v) release any Guaranty or, except as otherwise permitted in Section 5.7 or
Section 8.2(h), release Collateral (which action shall be deemed to directly
affect all Lenders); (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder (which action shall be
deemed to directly affect all Lenders); and (vii) amend or waive this
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definitions of the terms “Requisite Lenders” or “Supermajority Lenders” insofar
as such definitions affect the substance of this Section 9.2 or the term “Pro
Rata Share” (which action shall be deemed to directly affect all Lenders).
Furthermore, no amendment, modification, termination or waiver affecting the
rights or duties of any Agent or L/C Issuers under this Agreement or any other
Loan Document shall be effective unless in writing and signed by such Agent or
L/C Issuers, as the case may be, in addition to Lenders required hereinabove to
take such action. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall be
required for Applicable Agent to take additional Collateral pursuant to any Loan
Document. No amendment, modification, termination or waiver of any provision of
any Note shall be effective without the written concurrence of the holder of
that Note. No notice to or demand on any Credit Party in any case shall entitle
such Credit Party or any other Credit Party to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 9.2
shall be binding upon each holder of the Notes at the time outstanding and each
future holder of the Notes.

9.3 Notices; Electronic Communication.

(a) Addresses. All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to the respective party as set forth below and otherwise to the party to be
notified at its address specified opposite its name on the signature page hereof
or of any applicable Assignment Agreement, (ii) posted to any
E-SystemIntralinks® (to the extent such system is available and set up by or at
the direction of the Applicable Agent or (prior to posting) in an appropriate
location by uploading such notice, demand, request, direction or other
communication to www.intralinks.com, faxing it to 866-545-6600 with an
appropriate bar-coded fax coversheet or using such other means of posting to
Intralinks® as may be available and reasonably acceptable to the Applicable
Agent prior to such posting), (iii) posted to any other E-System set up by or at
the direction of the Applicable Agent in an appropriate location or
(iv) addressed to such other address as shall be notified in writing (A) in the
case of the Borrowers, the Applicable Agent, to the other parties hereto and
(B) in the case of all other parties, to the Applicable Borrower Representative
and the Applicable Agent. Transmission by electronic mail (including E-Fax, even
if transmitted to the fax numbers set forth in clause (i) above) shall not be
sufficient or effective to transmit any such notice under this Section 9.3(a)
unless such transmission is an available means to post to any E-System.

 

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Notices shall be addressed as follows:

If to Borrower Representatives:

Exopack Holding Corp.

2800 W. Higgins Road, Suite 435

Hoffman Estates, IL 60169

ATTN: Eric Lynch

Fax: (864) 596-7474

Electronic address: eric.lynch@exopack.com

With a copy to:

Sun Capital Partners, Inc.

5200 Town Center Circle, Suite 600

Boca Raton, FL 33486

ATTN: Jeremy Stone

Fax: (561) 394-0540

Electronic address: jstone@suncappart.com

And to:

Morgan Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Attn: Patricia F. Brennan

Electronic address: pbrennan@morganlewis.com

If to US Agent or GE Capital:

GENERAL ELECTRIC CORPORATION

500 West Monroe Street

Chicago, Illinois

ATTN: Exopack Account Officer

Fax: (312) 463-3840

Electronic address: Jack.Morrone@ge.com

With a copy to:

GENERAL ELECTRIC CAPITAL

CORPORATION

401 Merritt 7

Norwalk, CT 06851

Attn: Barbara Gould

Facsimile: (203) 956-4216

 

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and

GENERAL ELECTRIC CAPITAL

CORPORATION

500 West Monroe Street

Chicago, Illinois 60661

ATTN: Corporate Counsel

Fax: (312) 441-6876

If to Canadian Agent or GE Canada:

GE Canada Finance Holding Company

123 Front Street East, Suite 1400

Toronto, ON M5J 2M2

Attn: Exopack Account Officer

Facsimile: (416) 202-6215

Electronic address: Italo.Fortino@ge.com

If to a Lender:

To the address set forth on the signature page hereto or in the applicable
Assignment Agreement

(b) Effectiveness. All communications described in Section 9.3(a) above and all
other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received
(i) if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one Business Day after delivery to such courier service,
(iii) if delivered by mail, when deposited in the mails and, (iv) if delivered
by facsimile (other than to post to an E-System pursuant to clause (ii) or
(iii) of Section 9.3(a) above), upon sender’s receipt of confirmation of proper
transmission, and (v) if delivered by posting to any E-System, on the later of
the date of such posting in an appropriate location and the date access to such
posting is given to the recipient thereof in accordance with the standard
procedures applicable to such E-System; provided, however, that no
communications to any Agent pursuant to Section 2 or Section 8 shall be
effective until received by such Agent.

(c) Electronic Transmissions.

(i) Authorization. Subject to the provisions of Section 9.3(a), each of the
Agents, the Borrowers, the Lenders, the L/C Issuers and each of their authorized
representatives is authorized (but not required) to transmit, post or otherwise
make or communicate, in its sole discretion, Electronic Transmissions in
connection with any Loan Document and the transactions contemplated therein.
Each of Holdings, the Borrowers and each Credit Party hereby acknowledges and
agrees, and each of Holdings and the Borrowers shall cause each other Credit
Party to acknowledge and agree, that the use of Electronic Transmissions is not
necessarily secure and that there are risks associated with such use, including
risks of interception, disclosure and abuse and each indicates it assumes and
accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.

 

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(ii) Signatures. Subject to the provisions of Section 9.3(a) above, (A) no
posting to any E-System shall be denied legal effect merely because it is made
electronically, (B) each E Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a “signature” and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a “writing”,
in each case including pursuant to any Loan Document, any applicable provision
of any UCC, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter, (ii) each such posting that is
not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which each Credit
Party may rely and assume the authenticity thereof, (iii) each such posting
containing a signature, a reproduction of a signature or an E-Signature shall,
for all intents and purposes, have the same effect and weight as a signed paper
original and (iv) each party hereto or beneficiary hereto agrees not to contest
the validity or enforceability of any posting on any E-System or E-Signature on
any such posting under the provisions of any applicable Requirement of Law
requiring certain documents to be in writing or signed; provided, however, that
nothing herein shall limit such party’s or beneficiary’s right to contest
whether any posting to any E-System or E-Signature has been altered after
transmission.

(iii) Separate Agreements. All uses of an E-System shall be governed by and
subject to, in addition to this Section 9.3, separate terms and conditions
posted or referenced in such E-System and related Contractual Obligations
executed by Credit Parties in connection with the use of such E-System.

(iv) LIMITATION OF LIABILITY. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL
BE PROVIDED “AS IS” AND “AS AVAILABLE”. NO AGENT OR ANY OF ITS RELATED PERSONS
WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC
TRANSMISSION, AND EACH DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN.
NO WARRANTY OF ANY KIND IS MADE BY THE ANY AGENT OR ANY OF ITS RELATED PERSONS
IN CONNECTION WITH ANY E SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS. Each of
Holdings, the Borrowers and each Credit Party agrees (and each of Holdings and
the Borrowers shall cause each other Credit Party to agree) that no Agent has
responsibility for maintaining or providing any equipment, software, services or
any testing required in connection with any Electronic Transmission or otherwise
required for any E-System.

9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of any Agent or any Lender to exercise, nor any partial exercise of,
any power, right or privilege hereunder or under any other Loan Documents shall
impair such power, right, or privilege or be construed to be a waiver of any
Default or Event of Default. All rights and remedies existing hereunder or under
any other Loan Document are cumulative to and not exclusive of any rights or
remedies otherwise available.

 

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9.5 Marshaling; Payments Set Aside. No Agent nor any Lender shall be under any
obligation to marshal any assets in payment of any or all of the Obligations. To
the extent that Borrowers make payment(s) or any Agent enforces its Liens or any
Agent or any Lender exercises its right of set-off, and such payment(s) or the
proceeds of such enforcement or set-off is subsequently invalidated, declared to
be fraudulent or preferential, set aside, or required to be repaid by anyone
(whether as a result of any demand, litigation, settlement or otherwise), then
to the extent of such recovery, the Obligations or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or set-off had not occurred.

9.6 Severability. The invalidity, illegality, or unenforceability in any
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.

9.7 Lenders’ Obligations Several; Independent Nature of Lenders’ Rights. The
obligation of each Lender hereunder is several and not joint and no Lender shall
be responsible for the obligation or commitment of any other Lender hereunder.
In the event that any Lender at any time should fail to make a Loan as herein
provided, the Lenders, or any of them, at their sole option, may make the Loan
that was to have been made by the Lender so failing to make such Loan. Nothing
contained in any Loan Document and no action taken by any Agent or any Lender
pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.

9.8 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.

9.9 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS WHICH
DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

9.10 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns except that Borrowers may not assign, transfer, hypothecate or otherwise
convey their rights or obligations hereunder without the written consent of all
Lenders and any such purported assignment without such written consent shall be
void.

9.11 No Fiduciary Relationship; Limited Liability. No provision in the Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty owing to any Credit Party by any Agent or any Lender.
Borrowers and each other Credit Party agree that no Agent nor any Lender shall
have liability to Borrowers or any other Credit Party (whether sounding in tort,
contract or otherwise) for losses suffered by Borrowers or any

 

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other Credit Party in connection with, arising out of, or in any way related to
the transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless and to the extent that it is determined that such losses resulted from
the gross negligence or willful misconduct of the party from which recovery is
sought as determined by a final non-appealable order by a court of competent
jurisdiction. Neither Agent nor any Lender shall have any liability with respect
to, and Borrowers and each other Credit Party hereby waive, release and agree
not to sue for, any special, indirect or consequential damages suffered by
Borrowers and any other Credit Party in connection with, arising out of, or in
any way related to the Loan Documents or the transactions contemplated thereby.

9.12 Construction. Each Agent, each Lender, Borrowers and each other Credit
Party acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by each Agent, each Lender, Borrowers and each other Credit
Party.

9.13 Confidentiality. Until the Termination Date, each Agent and each Lender
agree to exercise their best efforts to keep confidential any non-public
information delivered pursuant to the Loan Documents and identified as such by
Borrowers and not to disclose such information to Persons other than to
potential assignees or participants or to any Affiliate of, or Persons employed
by or engaged, by a Agent, a Lender or any of their respective Affiliates, or a
Lender’s assignees or participants including attorneys, auditors, professional
consultants, rating agencies, insurance industry associations and portfolio
management services. The confidentiality provisions contained in this
Section 9.13 shall not apply to disclosures (i) required to be made by any Agent
or any Lender to any regulatory or governmental agency or pursuant to law, rule,
regulations or legal process or (ii) consisting of general portfolio information
that does not specifically identify Borrowers. Each Credit Party consents to the
publication by any Agent or any Lender after the Closing Date of a tombstone or
similar advertising material relating to the financing transactions contemplated
by this Agreement. Such Agent or such Lender shall provide a draft of any such
tombstone or similar advertising material to each Credit Party for review and
comment prior to the publication thereof. Any Agent may provide to industry
trade organizations information with respect to the Credit Facility that is
necessary and customary for inclusion in league table measurements. The
obligations of Agents and Lenders under this Section 9.13 shall supersede and
replace the obligations of Agents and Lenders under any confidentiality
agreement in respect of this financing executed and delivered by any Agent or
any Lender prior to the date hereof. Notwithstanding anything to the contrary
set forth herein or in any other agreement to which the parties hereto are
parties or by which they are bound, the obligations of confidentiality contained
herein and therein, as they relate to the transactions contemplated by this
Agreement, shall not apply to the federal tax structure or federal tax treatment
of the transactions contemplated by this Agreement, and each party hereto (and
any employee, representative, or agent of any party hereto) may disclose to any
and all persons, without limitation of any kind, the federal tax structure and
federal tax treatment of the transactions contemplated by this Agreement. The
preceding sentence is intended to cause the transaction contemplated by this
Agreement to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
IRC, and shall be construed

 

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in a manner consistent with such purpose. In addition, each party hereto
acknowledges that it has no proprietary or exclusive rights to the federal tax
structure of the transaction contemplated by this Agreement or any federal tax
matter or federal tax idea related to the transaction contemplated by this
Agreement.

9.14 CONSENT TO JURISDICTION. BORROWERS AND CREDIT PARTIES HEREBY CONSENT TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY, STATE
OF NEW YORK AND IRREVOCABLY AGREE THAT, ALL ACTIONS OR PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS. BORROWERS AND CREDIT PARTIES EXPRESSLY SUBMIT AND CONSENT TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS. BORROWERS AND CREDIT PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY
AND ALL PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
BORROWERS AND CREDIT PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO BORROWER REPRESENTATIVE, AT THE ADDRESS SET FORTH IN
THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE
SAME HAS BEEN POSTED; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE US AGENT OR CANADIAN AGENT FROM BRINGING SUIT OR OTHER
LEGAL ACTIONS IN ANY JURISDICTION OR TO REALIZE ON COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS OR TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF THE US AGENT, CANADIAN AGENT OR US AGENT.

9.15 WAIVER OF JURY TRIAL. BORROWERS, CREDIT PARTIES, AGENTS AND EACH LENDER
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
BORROWERS, CREDIT PARTIES, AGENTS AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWERS, CREDIT PARTIES, AGENTS AND EACH LENDER WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.

9.16 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrowers
set forth in Sections 1.4(g), 1.11, 1.12 and 9.1 shall survive the repayment of
the Obligations and the termination of this Agreement.

 

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9.17 Entire Agreement. This Agreement, the Notes and the other Loan Documents
embody the entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings, whether oral or
written, relating to the subject matter hereof (other than the GE Capital Fee
Letter), and may not be contradicted or varied by evidence of prior,
contemporaneous, or subsequent oral agreements or discussions of the parties
hereto. All Exhibits, Schedules and Annexes referred to herein are incorporated
in this Agreement by reference and constitute a part of this Agreement.

9.18 Counterparts; Effectiveness. This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one in the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.

9.19 Replacement of Lenders.

(a) Within fifteen (15) days after receipt by Applicable Borrower Representative
of written notice and demand from any Lender for payment pursuant to
Section 1.11 or 1.12 or, as provided in Section 9.19(c), in the case of certain
refusals by any Lender to consent to certain proposed amendments, modifications,
terminations or waivers with respect to this Agreement that have been approved
by Requisite Lenders, Supermajority Lenders or all affected Lenders, as
applicable (any such Lender demanding such payment or refusing to so consent
being referred to herein as an “Affected Lender”), Borrowers may, at their
option, notify Applicable Agent and such Affected Lender of its intention to do
one of the following:

(i) Borrowers may obtain, at Borrowers’ expense, a replacement Lender
(“Replacement Lender”) for such Affected Lender, which Replacement Lender shall
be reasonably satisfactory to Applicable Agent. In the event Borrowers obtain a
Replacement Lender that will purchase all outstanding Obligations owed to such
Affected Lender and assume its Commitments hereunder within ninety (90) days
following notice of Borrowers’ intention to do so, the Affected Lender shall
sell and assign all of its rights and delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of
Section 8.1, provided that Borrowers have reimbursed such Affected Lender for
any administrative fee payable pursuant to Section 8.1 and, in any case where
such replacement occurs as the result of a demand for payment pursuant to
Section 1.11 or 1.12, paid all amounts required to be paid to such Affected
Lender pursuant to Section 1.11 or 1.12 through the date of such sale and
assignment; or

(ii) Borrowers may, with Applicable Agent’s consent, prepay in full all
outstanding Obligations owed to such Affected Lender and terminate such Affected
Lender’s Pro Rata Share of the Commitments, in which case the Commitments will
be reduced by the amount of such Pro Rata Share. Borrowers shall, within ninety
(90) days following notice of their intention to do so, prepay in full all
outstanding Obligations owed to such Affected Lender (including, in any case
where such prepayment occurs as the result of a demand for payment for increased
costs, such Affected Lender’s increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment), and
terminate such Affected Lender’s obligations under the Commitments.

 

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(b) In the case of a US Non-Funding Lender pursuant to Section 8.5(a)(i) or a
Canadian Non-Funding Lender pursuant to Section 8.5(a)(ii), at Applicable
Borrower Representative’s request, Applicable Agent or a Person acceptable to
Applicable Agent who, in the case of a purchase from a Canadian Non-Funding
Lender, shall be a Canadian Person, shall have the right with Applicable Agent’s
consent and in Applicable Agent’s sole discretion (but shall have no obligation)
to purchase from any US Non-Funding Lender or any Canadian Non-Funding Lender,
as the case may be, and each US Non-Funding Lender or Canadian Non-Funding
Lender, as applicable, agrees that it shall, at Applicable Agent’s request, sell
and assign to such Agent or such Person, all of the Loans and Commitments of
that US Non-Funding Lender or Canadian Non-Funding Lender, as applicable, for an
amount equal to the principal balance of all Loans held by such US Non-Funding
Lender or Canadian Non-Funding Lender, as applicable, and all accrued interest
and Fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.

(c) If, in connection with any proposed amendment, modification, waiver or
termination pursuant to Section 9.2 (a “Proposed Change”):

(i) requiring the consent of all affected Lenders, the consent of Requisite
Lenders is obtained, but the consent of other Lenders whose consent is required
is not obtained (any such Lender whose consent is not obtained as described in
this clause (i) and in clause (ii) below being referred to as a “Non-Consenting
Lender”), or

(ii) requiring the consent of Supermajority Lender, the consent of Requisite
Lenders, is obtained, but the consent of Supermajority Lenders, is not obtained,
then, so long as the Applicable Agent is not a Non-Consenting Lender, at the
Applicable Borrower Representative’s request the Applicable Agent, or a Person
reasonably acceptable to Applicable Agent who, if the Non-Consenting Lender is a
Canadian Lender, shall be a Canadian Person, shall have the right with
Applicable Agent’s consent and in Applicable Agent’s sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon such Agent’s request, sell
and assign to such Agent or such Person, all (except as provided in the
immediately succeeding sentence) of the Loans and Commitments of such
Non-Consenting Lenders for an amount equal to the principal balance of all Loans
held by the Non-Consenting Lenders and all accrued interest and Fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement. If such Non-Consenting
Lender holds (i) Canadian Tranche A Loans and/or Canadian Tranche A1 Loans and
(ii) US Tranche A Loans and/or US Tranche A1 Loans (x) clause (b)(i) above
applies, and the consent of all Lenders is required or clause (b)(ii) above
applies and the consent of Supermajority Lenders is required, then all Loans and
Commitments of such Non-Consenting Lender must be sold and assigned, (y) clause
(b)(i) above applies and the consent of all US Lenders is required, then only
the US Tranche A Loans, US Tranche A1 Loans and US Commitments of such
Non-Consenting Lender must be sold and assigned, and (z) clause (b)(i) above
applies and the consent of all Canadian Lenders is required, then only the
Canadian Tranche A Loans, Canadian Tranche A1 Loans and Canadian Commitments of
such Non-Consenting Lender must be sold and assigned.

 

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9.20 Delivery of Termination Statements and Releases. On the Termination Date
Applicable Agent shall deliver to Applicable Borrower Representative termination
statements, releases and other documents necessary or appropriate to evidence
the termination of the Liens securing payment of the Obligations.

9.21 Subordination of Intercompany Debt.

(a) Each Credit Party hereby agrees that any intercompany Indebtedness or other
intercompany payables or receivables, or intercompany advances directly or
indirectly made by or owed to such Credit Party by any other Credit Party
(collectively, “Intercompany Debt”), of whatever nature at any time outstanding
shall be subordinate and subject in right of payment to the prior payment in
full in cash of the Obligations. Each Credit Party hereby agrees that it will
not, while any Event of Default is continuing, accept any payment, including by
offset, on any Intercompany Debt until the Termination Date, in each case,
except with the prior written consent of Applicable Agent.

(b) In the event that any payment on any Intercompany Debt shall be received by
a Credit Party other than as permitted by this Section 9.21 before the
Termination Date, such Credit Party shall receive such payments and hold the
same in trust for, segregate the same from its own assets and shall immediately
pay over to, the Applicable Agent for the benefit of the Applicable Agent and US
Lenders or the Canadian Lenders, as the case may be, all such sums to the extent
necessary so that such Agent and such Lenders shall have been paid in full, in
cash, all Obligations owed or which may become owing.

(c) Upon any payment or distribution of any assets of any Credit Party of any
kind or character, whether in cash, property or securities by set-off,
recoupment or otherwise, to creditors in any liquidation or other winding-up of
such Credit Party or in the event of any Proceeding, Agents and Lenders shall
first be entitled to receive payment in full in cash, in accordance with the
terms of the Obligations and of this Agreement, of all amounts payable under or
in respect of such Obligations, before any payment or distribution is made on,
or in respect of, any Intercompany Debt, in any such Proceeding, any
distribution or payment, to which any Agent or any Lender would be entitled
except for the provisions hereof shall be paid by such Credit Party, or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution directly to Applicable Agent (for the
benefit of Applicable Agent and the Lenders, as applicable) to the extent
necessary to pay all such Obligations in full in cash, after giving effect to
any concurrent payment or distribution to Agents and Lenders (or to Agents for
the benefit of Agents and Lenders).

 

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9.22 Intercreditor Agreement. Reference is made to the Intercreditor Agreement.
Each Lender hereunder (a) consents to the subordination of Liens provided for in
the Intercreditor Agreement, (b) agrees that it will be bound by, and will take
no actions contrary to, the provisions of the Intercreditor Agreement,
(c) authorizes and instructs the US Agent to enter into the Intercreditor
Agreement as ABL Agent and (d) acknowledges (or is deemed to acknowledge) that a
copy of the Intercreditor Agreement was delivered, or made available, to such
Lender. Each Lender hereby acknowledges that it has received and reviewed the
Intercreditor Agreement.

9.23 Time of the Essence. Time is of the essence of the Loan Documents.

SECTION 10.

US CROSS-GUARANTY

10.1 US Cross-Guaranty. Each US Borrower hereby agrees that such US Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agents and Lenders and their respective successors and assigns,
the full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agents
and Lenders by each other Borrower. Each US Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 10 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Section 10 shall be absolute and
unconditional, irrespective of, and unaffected by,

(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, this Agreement, any other Loan Document or any other
agreement, document or instrument to which any Borrower is or may become a
party;

(b) the absence of any action to enforce this Agreement (including this
Section 10) or any other Loan Document or the waiver or consent by any Agent or
Lender with respect to any of the provisions thereof;

(c) the existence, value or condition of, or failure to perfect its Lien
against, any security for the Obligations or any action, or the absence of any
action, by any Agent or US Lender or Canadian Lender in respect thereof
(including the release of any such security);

(d) the insolvency of any Credit Party; or

(e) any other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.

Each US Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.

10.2 Waivers by US Borrowers. Each US Borrower expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel Agents or US Lenders to marshal assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any

 

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security for the payment and performance of the Obligations guaranteed hereunder
before proceeding against, or as a condition to proceeding against, such
Borrower. It is agreed among each Borrower, Agent and Lenders that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement and
the other Loan Documents and that, but for the provisions of this Section 10 and
such waivers, Agent and Lenders would decline to enter into this Agreement.

10.3 Benefit of Guaranty. Each US Borrower agrees that the provisions of this
Section 10 are for the benefit of Agents and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other US Borrower and Agents or Lenders, the
obligations of such other US Borrower under the Loan Documents.

10.4 Postponement of Subrogation, Etc. Notwithstanding anything to the contrary
in this Agreement or in any other Loan Document, and except as set forth in
Section 10.7, each US Borrower hereby waives until the Termination Date all
rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor. Each US Borrower acknowledges and
agrees that this waiver is intended to benefit Agents and Lenders and shall not
limit or otherwise affect such US Borrower’s liability hereunder or the
enforceability of this Section 10, and that Agents, Lenders and their respective
successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this Section 10.4.

10.5 Election of Remedies. If any Agent or any Lender may, under applicable law,
proceed to realize its benefits under any of the Loan Documents giving such
Agent or such Lender a Lien upon any Collateral, whether owned by any US
Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, any Agent or any Lender may, at its sole
option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Section 10. If, in the
exercise of any of its rights and remedies, any Agent or any Lender shall
forfeit any of its rights or remedies, including its right to enter a deficiency
judgment against any US Borrower or any other Person, whether because of any
applicable laws pertaining to “election of remedies” or the like, each US
Borrower hereby consents to such action by such Agent or such Lender and waives
any claim based upon such action, even if such action by such Agent or such
Lender shall result in a full or partial loss of any rights of subrogation that
each US Borrower might otherwise have had but for such action by such Agent or
such Lender. Any election of remedies that results in the denial or impairment
of the right of any Agent or any Lender to seek a deficiency judgment against
any US Borrower shall not impair any other US Borrower’s obligation to pay the
full amount of the Obligations. In the event any Agent or any Lender shall bid
at any foreclosure or trustee’s sale or at any private sale permitted by law or
the Loan Documents, such Agent or such Lender may bid all or less than the
amount of the Obligations guaranteed hereunder and the amount of such bid need
not be paid by such Agent or such Lender but shall be credited against the
Obligations guaranteed hereunder. The amount of the successful bid at any such
sale, whether any Agent, any Lender or any other party is the successful bidder,
shall be conclusively deemed to be the fair market value of the Collateral and
the difference between such bid amount and the remaining balance of the
Obligations shall be conclusively deemed to be the amount of the Obligations
guaranteed under this Section 10, notwithstanding that any present or future law
or court decision or ruling may have the effect of reducing the amount of any
deficiency claim to which any Agent or any Lender might otherwise be entitled
but for such bidding at any such sale.

 

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10.6 Limitation. Notwithstanding any provision herein contained to the contrary,
each US Borrower’s liability under this Section 10 (which liability is in any
event in addition to amounts for which such US Borrower is primarily liable
under Section 1) shall be limited to an amount not to exceed as of any date of
determination the greater of:

(a) the net amount of all Loans advanced to any other Borrower under this
Agreement and then re-loaned or otherwise transferred to, or for the benefit of,
such Borrower; and

(b) the amount that could be claimed by Agents and Lenders from such US Borrower
under this Section 10 without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law after taking into account, among other things, such US
Borrower’s right of contribution and indemnification from each other US Borrower
under Section 10.7.

10.7 Contribution with Respect to US Guaranty Obligations.

(a) To the extent that any US Borrower shall make a payment under this
Section 10 of all or any of the US Obligations (other than Loans made to that US
Borrower for which it is primarily liable) (a “US Guarantor Payment”) that,
taking into account all other US Guarantor Payments then previously or
concurrently made by any other US Borrower, exceeds the amount that such US
Borrower would otherwise have paid if each US Borrower had paid the aggregate US
Obligations satisfied by such US Guarantor Payment in the same proportion that
such US Borrower’s “US Allocable Amount” (as defined below) (as determined
immediately prior to such US Guarantor Payment) bore to the aggregate US
Allocable Amounts of each of the US Borrowers as determined immediately prior to
the making of such US Guarantor Payment, then, following payment in full in cash
of the US Obligations and termination of the US Tranche A Loan Commitments, the
US Tranche A1 Loan Commitments and US Letters of Credit, such US Borrower shall
be entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other US Borrower for the amount of such excess, pro rata
based upon their respective US Allocable Amounts in effect immediately prior to
such US Guarantor Payment.

(b) As of any date of determination, the “US Allocable Amount” of any US
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such US Borrower under this Section 10 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.

(c) This Section 10.7 is intended only to define the relative rights of US
Borrowers and nothing set forth in this Section 10.7 is intended to or shall
impair the obligations of US Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 10.1. Nothing contained in this
Section 10.7 shall limit the liability of any US Borrower to pay the Loans made
directly or indirectly to that US Borrower and accrued interest, Fees and
expenses with respect thereto for which such US Borrower shall be primarily
liable.

 

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(d) the parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the US Borrower to which
such contribution and indemnification is owing.

(e) The rights of the indemnifying US Borrowers against other US Credit Parties
under this Section 10.7 shall be exercisable upon the full payment in cash of
the US Obligations and the termination of the US Tranche A Loan Commitments, the
US Tranche A1 Loan Commitments and US Letters of Credit.

10.8 Liability Cumulative. The liability of US Borrowers under this Section 10
is in addition to and shall be cumulative with all liabilities of each US
Borrower to Agents and Lenders under this Agreement and the other Loan Documents
to which such US Borrower is a party or in respect of any Obligations or
obligation of the other US Borrower, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.

SECTION 11.

CANADIAN CROSS-GUARANTY

11.1 Canadian Cross-Guaranty. Each of the Canadian Borrowers hereby agrees that
such Canadian Borrower is liable for, and hereby absolutely and unconditionally
guarantees to Canadian Agent and Canadian Lenders and their respective
successors and assigns, the full and prompt payment (whether at stated maturity,
by acceleration or otherwise) and performance of, all Canadian Obligations owed
or hereafter owing to Canadian Agent and Canadian Lenders by each other Canadian
Borrower. Each Canadian Borrower agrees that its guaranty obligation hereunder
is a continuing guaranty of payment and performance and not of collection, that
its obligations under this Section 11 shall not be discharged until payment and
performance, in full, of the Canadian Obligations has occurred, and that its
obligations under this Section 11 shall be absolute and unconditional,
irrespective of, and unaffected by,

(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, this Agreement, any other Loan Document or any other
agreement, document or instrument to which any Canadian Borrower is or may
become a party;

(b) the absence of any action to enforce this Agreement (including this
Section 11) or any other Loan Document or the waiver or consent by Canadian
Agent or any Canadian Lender with respect to any of the provisions thereof;

(c) the existence, value or condition of, or failure to perfect its Lien
against, any security for the Canadian Obligations or any action, or the absence
of any action, by Canadian Agent or any Canadian Lender in respect thereof
(including the release of any such security);

(d) the insolvency of any Credit Party; or

 

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(e) any other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.

Each Canadian Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Canadian Obligations guaranteed hereunder.

11.2 Waivers by Canadian Borrowers. Each Canadian Borrower expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, to compel Canadian Agent or Canadian Lenders
to marshal assets or to proceed in respect of the Canadian Obligations
guaranteed hereunder against any other Canadian Credit Party, any other party or
against any security for the payment and performance of the Canadian Obligations
guaranteed hereunder before proceeding against, or as a condition to proceeding
against, such Canadian Borrower. It is agreed among each Canadian Borrower,
Canadian Agent and Canadian Lenders that the foregoing waivers are of the
essence of the transaction contemplated by this Agreement and the other Loan
Documents and that, but for the provisions of this Section 11 and such waivers,
Canadian Agent and Canadian Lenders would decline to enter into this Agreement.

11.3 Benefit of Guaranty. Each Canadian Borrower agrees that the provisions of
this Section 11 are for the benefit of Canadian Agent and Canadian Lenders and
their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any other Canadian Borrower and
Canadian Agent or Canadian Lenders, the obligations of such other Canadian
Borrower under the Loan Documents.

11.4 Postponement of Subrogation, Etc. Notwithstanding anything to the contrary
in this Agreement or in any other Loan Document, and except as set forth in
Section 11.7, each Canadian Borrower hereby waives until the Canadian Commitment
Termination Date all rights at law or in equity to subrogation, reimbursement,
exoneration, contribution, indemnification or set off and any and all defenses
available to a surety, guarantor or accommodation co-obligor. Each Canadian
Borrower acknowledges and agrees that this waiver is intended to benefit
Canadian Agent and Canadian Lenders and shall not limit or otherwise affect such
Canadian Borrower’s liability hereunder or the enforceability of this
Section 11, and that Canadian Agent, Canadian Lenders and their respective
successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this Section 11.4.

11.5 Election of Remedies. If Canadian Agent or any Canadian Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Canadian Agent or such Canadian Lender a Lien upon any Canadian
Collateral, whether owned by any Canadian Borrower or by any other Person,
either by judicial foreclosure or by non-judicial sale or enforcement, Canadian
Agent or any Canadian Lender may, at its sole option, determine which of its
remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 11. If, in the exercise of any of its rights and
remedies, Canadian Agent or any Canadian Lender shall forfeit any of its rights
or remedies, including its right to enter a deficiency judgment against any
Canadian Borrower or any other Person, whether because of any applicable laws
pertaining to “election of remedies” or the like, each Canadian Borrower hereby
consents to such action by Canadian Agent or such Canadian Lender and waives any
claim based upon such action, even if such action by Canadian Agent or such
Canadian Lender

 

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shall result in a full or partial loss of any rights of subrogation that each
Canadian Borrower might otherwise have had but for such action by Canadian Agent
or such Canadian Lender. Any election of remedies that results in the denial or
impairment of the right of Canadian Agent or any Canadian Lender to seek a
deficiency judgment against any Canadian Borrower shall not impair any other
Canadian Borrower’s obligation to pay the full amount of the Canadian
Obligations. In the event Canadian Agent or any Canadian Lender shall bid at any
foreclosure or trustee’s sale or at any private sale permitted by law or the
Loan Documents, Canadian Agent or such Canadian Lender may bid all or less than
the amount of the Canadian Obligations guaranteed hereunder and the amount of
such bid need not be paid by Canadian Agent or such Canadian Lender but shall be
credited against the Canadian Obligations guaranteed hereunder. The amount of
the successful bid at any such sale, whether Canadian Agent, any Canadian Lender
or any other party is the successful bidder, shall be conclusively deemed to be
the fair market value of the Canadian Collateral and the difference between such
bid amount and the remaining balance of the Canadian Obligations shall be
conclusively deemed to be the amount of the Canadian Obligations guaranteed
under this Section 11, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Canadian Agent or any Canadian Lender might otherwise be entitled
but for such bidding at any such sale.

11.6 Limitations.

(a) Notwithstanding any provision herein contained to the contrary, each
Canadian Borrower’s liability under this Section 11 (which liability is in any
event in addition to amounts for which such Canadian Borrower is primarily
liable under Section 1) shall be limited to an amount not to exceed as of any
date of determination the greater of:

(i) the net amount of all Canadian Loans advanced to any other Canadian Borrower
under this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Canadian Borrower; and

(ii) the amount that could be claimed by Canadian Agent and Canadian Lenders
from such Canadian Borrower under this Section 11 without rendering such claim
voidable or avoidable under any Insolvency Law or similar statute or common law
after taking into account, among other things, such Canadian Borrower’s right of
contribution and indemnification from each other Canadian Borrower under
Section 11.7.

(iii) Further, notwithstanding any provision herein contained to the contrary,
but without duplication of Section 11.6(a), (i) each Canadian Borrower’s
liability under this Section 11 shall be further limited to the extent necessary
after taking into account, among other things, the limitation on liability set
forth in Section 11.6(a) and such Canadian Borrower’s right of contribution and
indemnification from each other Canadian Borrower under Section 11.7, so that
the enforcement of such liability shall not cause such Canadian Borrower’s net
assets to become lower than the minimum capital required under any Insolvency
Law.

 

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11.7 Contribution with Respect to Canadian Guaranty Obligations.

(a) To the extent that any Canadian Borrower shall make a payment under this
Section 11 of all or any of the Canadian Obligations (other than Loans made to
that Canadian Borrower for which it is primarily liable) (a “Canadian Guarantor
Payment”) that, taking into account all other Canadian Guarantor Payments then
previously or concurrently made by any other Canadian Borrower, exceeds the
amount that such Canadian Borrower would otherwise have paid if each Canadian
Borrower had paid the aggregate Canadian Obligations satisfied by such Canadian
Guarantor Payment in the same proportion that such Canadian Borrower’s “Canadian
Allocable Amount” (as defined below) (as determined immediately prior to such
Canadian Guarantor Payment) bore to the aggregate Canadian Allocable Amounts of
each of the Canadian Borrowers as determined immediately prior to the making of
such Canadian Guarantor Payment, then, following payment in full in cash of the
Canadian Obligations and termination of the Canadian Tranche A Loan Commitments
and Canadian Tranche A1 Loan Commitments, such Canadian Borrower shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Canadian Borrower for the amount of such excess, pro
rata based upon their respective Canadian Allocable Amounts in effect
immediately prior to such Canadian Guarantor Payment.

(b) As of any date of determination, the “Canadian Allocable Amount” of any
Canadian Borrower shall be equal to the maximum amount of the claim that could
then be recovered from such Canadian Borrower under this Section 11 without
rendering such claim voidable or avoidable under any Insolvency Law or similar
statue or common law after taking into account, among other things, such
Canadian Borrower’s right of contribution and indemnification from each other
Canadian Borrower under this Section 11.7.

(c) This Section 11.7 is intended only to define the relative rights of Canadian
Borrowers and nothing set forth in this Section 11.7 is intended to or shall
impair the obligations of Canadian Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 11.1. Nothing contained in this
Section 11.7 shall limit the liability of any Canadian Borrower to pay the Loans
made directly or indirectly to that Canadian Borrower and accrued interest, Fees
and expenses with respect thereto for which such Canadian Borrower shall be
primarily liable.

(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Canadian Borrower to
which such contribution and indemnification is owing.

(e) The rights of the indemnifying Canadian Borrowers against other Canadian
Credit Parties under this Section 11.7 shall be exercisable upon the full
payment in cash of the Canadian Obligations and the termination of the Canadian
Tranche A Loan Commitments, the Canadian Tranche A1 Loan Commitments and
Canadian Letters of Credit.

11.8 Liability Cumulative. The liability of Canadian Borrowers under this
Section 11 is in addition to and shall be cumulative with all liabilities of
each Canadian Borrower to Canadian Agent and Canadian Lenders under this
Agreement and the other Loan Documents to which such Canadian Borrower is a
party or in respect of any Canadian Obligations or obligation of the other
Canadian Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.

[Signature pages follow.]

 

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Witness the due execution hereof by the respective duly authorized officers of
the undersigned as of the date first written above.

 

BORROWERS: EXOPACK, LLC By:   /s/ Jack E. Knott Name:   Jack E. Knott Title:  
Chief Executive Officer CELLO-FOIL PRODUCTS, INC. By:   /s/ Jack E. Knott Name:
  Jack E. Knott Title:   Chief Executive Officer EXOPACK-NEWMARKET, LTD. By:  
/s/ Jack E. Knott Name:   Jack E. Knott Title:   Chief Executive Officer EXOPACK
PERFORMANCE FILMS INC. By:   /s/ Jack E. Knott Name:   Jack E. Knott Title:  
Chief Executive Officer

[Signature Page to Credit Agreement]

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CREDIT PARTIES: EXOPACK HOLDING CORP. By:   /s/ Jack E. Knott Name:   Jack E.
Knott Title:   Chief Executive Officer EXOPACK KEY HOLDINGS, LLC By:   /s/ Jack
E. Knott Name:   Jack E. Knott Title:   Chief Executive Officer TPG GROUP
HOLDING CORP. By:   /s/ Jack E. Knott Name:   Jack E. Knott Title:   Chief
Executive Officer TPG ENTERPRISES, INC. By:   /s/ Jack E. Knott Name:   Jack E.
Knott Title:   Chief Executive Officer CELLO-FOIL HOLDING CORP. By:   /s/ Jack
E. Knott Name:   Jack E. Knott Title:   Chief Executive Officer

[Signature Page to Credit Agreement]

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TPG (US), INC. By:   /s/ Jack E. Knott Name:   Jack E. Knott Title:   Chief
Executive Officer EXOPACK-THOMASVILLE, LLC By:   /s/ Jack E. Knott Name:   Jack
E. Knott Title:   Chief Executive Officer EXOPACK-HEBRON, L.L.C. By:   /s/ Jack
E. Knott Name:   Jack E. Knott Title:   Chief Executive Officer EXOPACK-ONTARIO,
INC. By:   /s/ Jack E. Knott Name:   Jack E. Knott Title:   Chief Executive
Officer EXOPACK-TECHNOLOGY, LLC By:   /s/ Jack E. Knott Name:   Jack E. Knott
Title:   Chief Executive Officer

[Signature Page to Credit Agreement]

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THE PACKAGING GROUP (CANADA) CORPORATION By:   /s/ Jack E. Knott Name:   Jack E.
Knott Title:   Chief Executive Officer EXOPACK ADVANCED COATINGS, LLC By:   /s/
Jack E. Knott Name:   Jack E. Knott Title:   Chief Executive Officer INTELICOAT
TECHNOLOGIES IMAGE PRODUCTS MATTHEWS LLC By:   /s/ Jack E. Knott Name:   Jack E.
Knott Title:   Chief Executive Officer

[Signature Page to Credit Agreement]

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GENERAL ELECTRIC CAPITAL CORPORATION,

as US Agent, US L/C Issuer, a US Tranche A

Lender and a US Tranche A1 Lender

By:   /s/ Jack F. Morrone Name:   Jack F. Morrone Title:   Its Duly Authorized
Signatory GE CANADA FINANCE HOLDING COMPANY, a Nova Scotia unlimited liability
company, as Canadian Agent, Canadian L/C Issuer, a Canadian Tranche A Lender and
a Canadian Tranche A1 Lender By:   /s/ Italo Fortino Name:   Italo Fortino
Title:   Its Duly Authorized Signatory

[Signature Page to Credit Agreement]

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ANNEX A

to

CREDIT AGREEMENT

DEFINITIONS

Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings and
all references to Sections, Exhibits, Schedules, Subschedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules, Subschedules
or Annexes of or to this Agreement:

“2011 Dividend” means the dividend, in an amount not to exceed $150,000,000,
paid by Holdings to Exopack Holdings on the Closing Date and thereafter from
Exopack Holdings to CPG or Exopack Op Co (or any successor thereto) and Sponsor
(or other co-investors), solely with the proceeds from borrowings under the 2011
Term Loan B Credit Agreement and issuance of the 2011 High Yield Notes.

“2011 High Yield Notes” means the 10% unsecured notes of Holdings due May 31,
2018 in an aggregate principal amount of $235,000,000 issued and sold on the
Closing Date pursuant to the 2011 Indenture Documents.

“2011 Indenture” means the indenture entered into with respect to the 2011 High
Yield Notes and pursuant to which the same shall be issued.

“2011 Indenture Documents” means the 2011 Indenture, the 2011 High Yield Notes
and all other agreements, instruments and other documents pursuant to which the
2011 High Yield Notes have been or will be issued or otherwise setting forth the
terms of the 2011 High Yield Notes.

“2011 Term Loan B Credit Agreement” means the Credit Agreement, dated as of
May 31, 2011, among the US Borrowers as borrowers, Holdings, Exopack Holdings,
certain subsidiaries of Exopack Holdings as guarantors, the lenders party
thereto and Bank of America, N.A. as administrative agent.

“2011 Term Loan B Incremental Loan” means any loan incurred pursuant to the 2011
Term Loan B Credit Agreement after the Closing Date, provided that each of the
following conditions is satisfied or waived by the US Agent: (i) no Default or
Event of Default (each as defined hereunder, under the 2011 Term Loan B Credit
Agreement and under the 2011 Indenture) shall occur or be continuing on the day
such loan is made or as a result of the making of such loan; (ii) after giving
pro forma effect to the incurrence of such loan and the use of proceeds thereof,
Holdings and its Subsidiaries shall have a Consolidated Senior Secured Leverage
Ratio (as defined in the 2011 Term Loan B Credit Agreement) for the period
ending on the last day of the Fiscal Quarter last ended of not greater than
3.00:1.00 (calculated as if the incurrence of such loan and the anticipated use
of the proceeds thereof had occurred on the last day of such Fiscal Quarter) and
the US Borrowers shall have provided the US Agent a certificate, certifying the
same; (iii) the aggregate amount of all such loans is equal to or less than
$75,000,000; and (iv) such loan is otherwise on terms no less favorable to the
Borrowers, than

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those applicable to the Term Loans made on the Closing Date (the “Outstanding
Term Loans”), except with respect to the interest rates to be applied to such
loans, provided that, in any case, such loan may not: (y) have a weighted
average maturity (measured as of the date of such refinancing or extension) or
maturity shorter than that of the Outstanding Term Loans or (x) be secured by
any property or any Lien other than those securing the Outstanding Term Loans.

“2011 Term Loan B Loan Documents” means the “Loan Documents” as defined in the
2011 Term Loan B Credit Agreement.

“3181952” means 3181952, an unlimited liability company incorporated under the
laws of Nova Scotia.

“Acceleration of US Obligations” has the meaning ascribed to it in
Section 7.3(b).

“Account Debtor” means any Person who may become obligated to any Credit Party
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangibles (including a payment intangible).

“Accounting Changes” means: (a) changes in accounting principles required by
GAAP and implemented by Holdings or any of its Subsidiaries; (b) changes in
accounting principles recommended by Holdings’ certified public accountants and
implemented by Holdings or any Borrower; and (c) changes in carrying value of
Holdings’, any Borrower’s or any of their Subsidiaries’ assets, liabilities or
equity accounts resulting from the application of purchase accounting principles
(A.P.B. 16 and/or 17, FASB 141 and EITF 88-16 and FASB 109) to the Related
Transactions.

“Accounts” means all “accounts,” as such term is defined in the Code, the PPSA
and all “claims” for the purpose of the Civil Code of Quebec (or similar
Applicable Law), now owned or hereafter acquired by any Credit Party, including
(a) all accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party’s rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party’s rights to any goods represented by any of the foregoing
(including unpaid sellers’ rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.

“Acquisition Pro Forma” has the meaning ascribed to it in Section 5.6(ix)(A).

“Acquisition Projections” has the meaning ascribed to it in Section 5.6(ix)(B).

 

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“Advances” means any US Tranche A Revolving Credit Advance, US Tranche A1
Revolving Credit Advance, Canadian Tranche A Revolving Credit Advance and/or
Canadian Tranche A1Revolving Credit Advance, as the context may require.

“Affected Lender” has the meaning ascribed to it in Section 9.19(a).

“Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, 10% or more of the Stock having ordinary voting power in the
election of directors of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, and (c) each of such
Person’s officers, directors, joint venturers and partners. For the purposes of
this definition, “control” of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term “Affiliate” shall specifically
exclude each Agent and each Lender, each unrelated portfolio company of Sponsor,
Sponsor’s affiliates and any purchaser of the Subordinated Debt, the Senior
Notes, the 2011 Notes or Indebtedness pursuant to the 2011 Term Loan B Credit
Agreement.

“Agents” means, collectively, the US Agent and the Canadian Agent.

“Aggregate Accordion Commitment means $25,000,000, as the same may be adjusted,
if at all, from time to time in accordance with this Agreement.

“Aggregate Borrowing Availability” means, at any given time, the sum of the US
Tranche A Borrowing Availability, US Tranche A1 Borrowing Availability, Canadian
Tranche A Borrowing Availability and Canadian Tranche A1 Borrowing Availability.

“Aggregate Canadian Borrowing Base” means as of any date of determination, the
sum of the Aggregate Canadian Tranche A Borrowing Base plus the Aggregate
Canadian Tranche A1 Borrowing Base.

“Aggregate Canadian Tranche A Borrowing Base” means as of any date of
determination, an amount equal to (i) the sum of the Canadian Tranche A
Borrowing Base of each Canadian Borrower less (ii) all Reserves applicable to
the Canadian Borrowers.

“Aggregate Canadian Tranche A1 Borrowing Base” means as of any date of
determination, an amount equal to (i) the sum of the Canadian Tranche A1
Borrowing Base of each Canadian Borrower less (ii) all Reserves applicable to
the Canadian Borrowers.

“Aggregate US Borrowing Base” means as of any date of determination, the sum of
the Aggregate US Tranche A Borrowing Base plus the Aggregate US Tranche A1
Borrowing Base.

“Aggregate US Tranche A Borrowing Base” means as of any date of determination,
an amount equal to the sum of the US Tranche A Borrowing Base of each US
Borrower; less all Reserves applicable to the US Borrowers.

 

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“Aggregate US Tranche A1 Borrowing Base” means as of any date of determination,
an amount equal to (i) the sum of the US Tranche A1 Borrowing Base of each US
Borrower; less (ii) all Reserves applicable to the US Borrowers.

“Agreement” means this Amended and Restated Credit Agreement (including all
Schedules, Subschedules, Annexes and Exhibits hereto), as the same may be
amended, supplemented, restated or otherwise modified from time to time.

“Applicable Agent” means (i) with respect to the Canadian Borrowers, Canadian
Credit Parties, Canadian Lenders or Canadian Loans, Canadian Agent and (ii) with
respect to the US Borrowers, US Credit Parties, US Lenders, or US Loans, US
Agent.

“Applicable Borrower Representative” means (i) with respect to the Canadian
Borrowers, Canadian Credit Parties, Canadian Lenders, Canadian Tranche A
Lenders, Canadian Tranche A1 Lenders, Canadian Tranche A Loans and Canadian
Tranche A1 Loans, Canadian Borrower Representative and (ii) with respect to the
US Borrowers, US Credit Parties, US Lenders, US Tranche A Lender, US Tranche A1
Lender, US Tranche A Loans and US Tranche A1 Loans, US Borrower Representative.

“Applicable Canadian Tranche A Index Margin” means the per annum interest rate
margin from time to time in effect and payable in addition to the Canadian Index
Rate applicable to the Canadian Tranche A Loan, as determined by reference to
Section 1.3(a).

“Applicable Canadian Tranche A1 Index Margin” means the per annum interest rate
margin from time to time in effect and payable in addition to the Canadian Index
Rate applicable to the Canadian Tranche A1 Loan, as determined by reference to
Section 1.3(a).

“Applicable Law” means, in respect of any provision of law referred to herein,
the law applicable in each relevant jurisdiction to the issue or topic addressed
in such provision of law.

“Applicable Margin” means, with respect to Advances, a percentage per annum
equal to (a) during the period commencing on the Closing Date and ending on the
next date of determination, the percentage set forth in the applicable column
opposite Level II in the tables set forth in clause (b) below (the “Pricing
Grid”) and (b) thereafter, as of each date of determination (and until the next
such date of determination), a percentage per annum equal to the percentage set
forth below in the applicable column opposite the level corresponding to the
average Utilization Level for the most recently ended Fiscal Quarter:

 

LEVEL

  

UTILIZATION LEVEL

   INDEX RATE     LIBOR         US
Tranche  A
Revolving
Credit
Advance     US Tranche
A1
Revolving
Credit
Advance     US
Tranche  A
Revolving
Credit
Advance     US
Tranche A1
Revolving
Credit
Advance  

I

   Greater than or equal to 50%      1.50 %      2.00 %      2.50 %      3.00 % 

II

   Less than 50%      1.25 %      1.75 %      2.25 %      2.75 % 

 

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LEVEL

  

UTILIZATION LEVEL

   INDEX RATE     BA RATE         Canadian
Tranche A
Revolving
Credit
Advance     Canadian
Tranche A1
Revolving
Credit
Advance     Canadian
Tranche A
Revolving
Credit
Advance     Canadian
Tranche A1
Revolving
Credit
Advance  

I

   Greater than or equal to 50%      1.50 %      2.00 %      2.50 %      3.00 % 

II

   Less than 50%      1.25 %      1.75 %      2.25 %      2.75 % 

Each date of determination for the “Applicable Margin” shall be the date that is
3 Business Days after delivery by the Borrowers to the Agents of a new Borrowing
Base Certificate, pursuant to Section 6.1(d), for the last month of any Fiscal
Quarter; provided, however, that if at any time the Borrowers shall have failed
to deliver any such Borrowing Base Certificate when so required, the Applicable
Margin shall be at Level I as set forth in the Pricing Grid until such time as
such Borrowing Base Certificate is delivered, at which time the Applicable
Margin shall be determined as provided above. Notwithstanding anything to the
contrary set forth in this Agreement (including the Utilization Level at any
time), the Applicable Margin shall equal the percentage set forth in the
appropriate column opposite Level I in the Pricing Grid, effective immediately
upon (x) the occurrence of any Event of Default under Section 7.1(f) or
Section 7.1(g) or (y) the delivery of a notice by either Agent or the Required
Lenders to either Borrower Representative during the continuance of any other
Event of Default and, in each case, for as long as such Event of Default shall
be continuing and (b) in the event that any Borrowing Base Certificate is
inaccurate (regardless of whether this Agreement or any Commitments are in
effect when such in accuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of a higher Applicable Margin for any period
(an “Applicable Period”) than the Applicable Margin applied for such Applicable
Period, then (x) the Borrowers shall immediately deliver to the Agents a
corrected Borrowing Base Certificate for such Applicable Period, (y) the
Applicable Margin shall be determined based on the corrected Borrowing Base
Certificate for such Applicable Period and (z) the Borrower shall immediately
pay to the Applicable Agent (for the account of the Lenders that hold the
Commitments and Advances at the time such payment is received, regardless of
whether those Lenders held the Commitments and Advances during the Applicable
Period) the accrued additional interest owing as a result of such increased
Applicable Margin for such Applicable Period. This paragraph shall not limit the
rights of the Agents or the Lenders with respect to Section 1.3 and Article 7
hereof, and shall survive the termination of this Agreement.

“Applied Accordion Commitment” means, as of any date, the amount of the
Aggregate Accordion Commitment utilized by the Borrowers pursuant to
Section 1.16.

“Arm’s Length” has the meaning such term has for purposes of the ITA.

“Asset Disposition” means the disposition whether by sale, lease, transfer,
loss, damage, destruction, casualty, condemnation or otherwise of any of the
following: (a) any of the Stock or other equity or ownership interest of any of
Borrowers’ Subsidiaries or (b) any or all of the assets of Borrowers or any of
their Subsidiaries other than sales and dispositions described in
Section 5.7(a).

 

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“Assignment Agreement” has the meaning given to such term in Section 8.1.

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§ 101 et seq. or other applicable bankruptcy, insolvency or similar
laws.

“BA Period” means with respect to any BA Rate Loan bearing interest at a rate
based on the BA Rate, a period of 30, 60 or 90 days commencing on a Business Day
selected by Canadian Borrower Representative in its irrevocable Notice of
Canadian Tranche A Revolving Credit Advance, Notice of Canadian Tranche A1
Revolving Credit Advance or Notice of Conversion/Continuation with respect to
such BA Rate Loan delivered to Canadian Agent in accordance with Section 1.2 or
1.3 (as applicable), provided that the foregoing provision relating to BA
Periods is subject to the following:

 

  (a) any BA Period that would otherwise extend beyond the Canadian Tranche A
Commitment Termination Date or the Canadian Tranche A1 Commitment Termination
Date shall end on the Business Day immediately preceding such date;

 

  (b) Canadian Borrower Representative shall select BA Periods so as not to
require a payment or prepayment of any BA Rate Loan during a BA Period for such
Canadian Loan; and

 

  (c) Canadian Borrower Representative shall select BA Periods so there shall be
no more than five (5) separate BA Rate Loans in existence at any one time.

“BA Rate” means, in respect of any BA Period applicable to a BA Rate Loan, the
rate per annum determined by Canadian Agent by reference to the average rate
quoted on the Reuters Monitor Screen (Page CDOR, or such other Page as may
replace such Page on such Screen for the purpose of displaying Canadian
interbank bid rates for Canadian Dollar bankers’ acceptances) applicable to
Canadian Dollar bankers’ acceptances with a term comparable to such BA Period as
of 11:00 a.m. (Toronto time) two (2) Business Days before the first day of such
BA Period. If for any reason the Reuters Monitor Screen rates are unavailable,
BA Rate means the rate of interest determined by Canadian Agent that is equal to
the arithmetic mean (rounded upwards to the nearest basis point) of the rates
quoted by The Bank of Nova Scotia, Royal Bank of Canada and Canadian Imperial
Bank of Commerce in respect of Canadian Dollar bankers’ acceptances with a term
comparable to such BA Period. No adjustment shall be made to account for the
difference between the number of days in a year on which the rates referred to
in this definition are based and the number of days in a year on the basis of
which interest is calculated in this Agreement.

“BA Rate Breakage Costs” means an amount equal to the amount of any losses,
expenses, liabilities (including, without limitation, any loss (including
interest paid) and lost opportunity cost in connection with the re-employment of
such funds) that any Canadian Lender may sustain as a result of (i) any default
by any Canadian Borrower in making any borrowing of,

 

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conversion into or continuation of any BA Rate Loan following Canadian Borrower
Representative’s delivery to Canadian Agent of any BA Rate Loan request in
respect thereof or (ii) any payment of a BA Rate Loan on any day that is not the
last day of the BA Period applicable thereto (regardless of the source of such
prepayment and whether voluntary, by acceleration or otherwise). For purposes of
calculating amounts payable to a Canadian Lender under Section 1.4(f), each
Canadian Lender shall be deemed to have actually funded its relevant BA Rate
Loan through the purchase of a deposit bearing interest at the BA Rate in an
amount equal to the amount of that BA Rate Loan and having a maturity and
repricing characteristics comparable to the relevant BA Period; provided,
however, that each Canadian Lender may fund each of its BA Rate Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under Section 1.4(f).

“BA Rate Loan means a Canadian Tranche A Revolving Credit Advance or a Canadian
Tranche A1 Revolving Credit Advance denominated in Canadian Dollars which bears
interest at a rate based on the BA Rate.

“Bemis Acquisition” means the acquisition by Holdings, and/or certain of its
Subsidiaries or Affiliates of the Business (as defined in the Bemis Purchase
Agreement) of Bemis Company, Inc., a Missouri corporation (“Bemis”), and certain
of its subsidiaries and affiliates pursuant to and in accordance with the Bemis
Purchase Agreement.

“Bemis Purchase Agreement” means that certain Asset Purchase Agreement, dated as
of June 11, 2010, by and between and Holdings and Bemis, as amended by that
certain Amendment, dated as of June 29, 2010, including any amendments, waivers,
supplements and modifications on terms not materially adverse to the interests
of the Lenders.

“BIA” shall mean the Bankruptcy and Insolvency Act (Canada), and any successor
act or statute.

“Borrower” and “Borrowers” have the respective meanings ascribed to them in the
preamble to this Agreement.

“Borrower Representative” means, either US Borrower Representative or Canadian
Borrower representative as the context may require.

“Borrowing Base” shall mean the Canadian Tranche A Borrowing Base, the Canadian
Tranche A1 Borrowing Base, the US Tranche A Borrowing Base and the US Tranche A1
Borrowing Base, as the context may require.

“Borrowing Base Certificate” has the meaning ascribed to it in Section 6.1(d).

“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the State of New York and the
Province of Ontario and in reference to LIBOR Loans shall mean any such day that
is also a LIBOR Business Day.

“CAM” shall mean the mechanism for the allocation and exchange of interests in
the Credit Facilities and collections thereunder established under Section 8.6.

 

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“CAM Exchange” shall mean the exchange of the Lenders’ interests provided for in
Section 8.6.

“CAM Exchange Date” shall mean the date on which (a) any event referred to in
Section 7.1(f) or (g) shall occur or (b) an Acceleration of U.S. Obligations or
an Acceleration of Canadian Obligations shall occur.

“CAM Percentage” shall mean, as to each Lender, a fraction, expressed as a
decimal, of which (a) the numerator shall be the aggregate Dollar Equivalent of
the Specified Obligations owed to such Lender and such Lender’s participation in
the aggregate Letters of Credit immediately prior to the CAM Exchange Date and
(b) the denominator shall be the aggregate Dollar Equivalent of the Specified
Obligations owed to all the Lenders and the aggregate Letters of Credit
immediately prior to such CAM Exchange Date.

“Canadian Agent” means GE Canada in its capacity as Canadian Agent for Canadian
Lenders or its successor appointed pursuant to Section 8.2 which successor shall
be a Canadian Person.

“Canadian Allocable Amount” has the meaning ascribed to it in Section 11.1(a).

“Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral
or written, formal or informal, funded or unfunded, insured or uninsured,
providing employee benefits, including medical, hospital care, dental, sickness,
accident, disability, life insurance, pension, retirement or savings benefits,
under which a Person has any liability with respect to any employee or former
employee, but excluding any Canadian Pension Plans and any plan fund, program or
policy established pursuant to statute and administered by a Governmental
Authority.

“Canadian Borrowers” has the meaning ascribed thereto in the preamble to this
Agreement.

“Canadian Borrower Representative” means Exopack Canada in its capacity as
Canadian Borrower Representative pursuant to the provisions of Section 1.13(b).

“Canadian Collateral” means the property covered by the Canadian Security
Agreements and the other Canadian Collateral Documents and any other personal
property (other than real property, plants, Equipment and immovable property),
tangible or intangible, moveable, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Canadian Agent, on behalf of itself and Canadian Lenders, to secure the Canadian
Obligations or any portion thereof.

“Canadian Collateral Documents” means the Canadian Security Agreements, the
Canadian Patent Security Agreements, the Canadian Trademark Security Agreements,
the Canadian Copyright Security Agreements and all similar agreements entered
into guaranteeing payment of, or granting a Lien upon property as security for
payment of, the Canadian Obligations or any portion thereof.

 

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“Canadian Copyright Security Agreements” means the Canadian Copyright Security
Agreements, if any, made in favor of Canadian Agent, on behalf of itself and
Canadian Lenders, by each applicable Canadian Credit Party.

“Canadian Credit Party” means the Canadian Borrowers and each of their
Subsidiaries that is a Guarantor with respect to Canadian Obligations.

“Canadian Disbursement Account” has the meaning ascribed to it in
Section 1.2(c).

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

“Canadian Foreign Lender” has the meaning ascribed to it in Section 1.12(d).

“Canadian Guarantor Payment” has the meaning ascribed to it in Section 11.7(a).

“Canadian Guarantors” means each Canadian Subsidiary of Holdings (other than
Canadian Borrowers), if any, and each other Person, if any, that executes a
guaranty or other similar agreement in favor of Canadian Agent, for itself and
the ratable benefit of Canadian Lenders guarantying the Canadian Obligations, in
connection with the transactions contemplated by this Agreement and the other
Loan Documents.

“Canadian Guaranty” means the guaranty, dated as of the Original Closing Date,
executed by each Canadian Subsidiary of Holdings (other than Canadian Borrowers)
in favor of Canadian Agent, on behalf of itself and Canadian Lenders.

“Canadian Indemnitees” has the meaning ascribed to it in Section 9.1(b).

“Canadian Index Rate” means a floating rate of interest per annum equal to the
higher of (i) the rate established by the Canadian Agent as the reference rate
then in effect for determining interest rates on Canadian Dollar denominated
commercial loans made by commercial banks in Canada and (ii) the BA Rate in
respect of a BA period for 30 days, plus 1.00%.

“Canadian Index Rate Loan” means a Canadian Loan denominated in Canadian Dollars
that bears interest at a rate based on the Canadian Index Rate.

“Canadian L/C Issuer” means GE Canada Finance Holding Company or a Subsidiary
thereof or a bank or other legally authorized Person selected by or acceptable
to Canadian Agent in its sole discretion, in such Person’s capacity as an issuer
of Canadian Letters of Credit hereunder provided that such Canadian Issuer shall
at all times be a Canadian Person.

“Canadian L/C Sublimit” has the meaning ascribed to it in Section 1.2(b)(i).

“Canadian Lenders” means the Canadian Tranche A Lenders and the Canadian Tranche
A1 Lenders.

“Canadian Letters of Credit” means standby letters of credit issued for the
account of Canadian Borrowers by Canadian L/C Issuers pursuant to the terms of
this Agreement Tranche A Lenders have incurred Canadian Letter of Credit
Obligations.

 

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“Canadian Letter of Credit Fee” has the meaning ascribed to it in
Section 1.4(d)(iii).

“Canadian Letter of Credit Obligations” means all outstanding obligations
incurred by Canadian Agent and Canadian Tranche A Lenders at the request of
Canadian Borrower Representative, whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance of Canadian Letters
of Credit by Canadian L/C Issuers or the purchase of a participation as set
forth in Section 1.2(b) with respect to any Canadian Letter of Credit. The
amount of such Canadian Letter of Credit Obligations shall equal the maximum
amount that may be payable by Canadian Agent and Canadian Tranche A Lenders
thereupon or pursuant thereto.

“Canadian Loans” means the Canadian Tranche A Loans and the Canadian Tranche A1
Loans.

“Canadian Loan Commitments” means the Canadian Tranche A Loan Commitment and the
Canadian Tranche A1 Loan Commitment.

“Canadian Non-Funding Lender” has the meaning ascribed to it in
Section 8.5(a)(iv).

“Canadian Notes” means the Canadian Tranche A Notes and the Canadian Tranche A1
Notes.

“Canadian Obligations” means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable), including Canadian
Letter of Credit Obligations, owing by any Credit Party to Canadian Agent or any
Canadian Lender, and all covenants and duties regarding such amounts, of any
kind or nature, present or future, whether or not evidenced by any note,
agreement or other instrument, arising under this Agreement or any of the other
Loan Documents. This term includes all principal, interest (including all
interest that accrues after the commencement of any case or proceeding by or
against any Canadian Credit Party in bankruptcy, whether or not allowed in such
case or proceeding), Fees, Charges, expenses, attorneys’ fees and any other sum
chargeable to any Canadian Credit Party under this Agreement or any of the other
Loan Documents.

“Canadian Overadvance” has the meaning ascribed to it in Section 1.2(a)(i).

“Canadian Patent Security Agreements” means the Canadian Patent Security
Agreements, if any, made in favor of Canadian Agent, on behalf of itself and
Canadian Lenders, by each applicable Canadian Credit Party.

“Canadian Pension Event” means (i) the termination in whole or in part of any
Canadian Pension Plan, (ii) the determination of a going concern unfunded
liability or a solvency deficiency in respect of any Canadian Pension Plan in an
actuarial report on the Canadian Pension Plan filed with the applicable
Governmental Authority, (iii) the failure of any Credit Party to make minimum
required contributions to amortize any funding deficiencies under a Canadian
Pension Plan within the time period required by law or failure by any Credit
Party to make a required contribution under any Canadian Pension Plan which
could result in the imposition of a Lien upon the assets of a Credit Party, or
(iv) any Credit Party makes any improper withdrawals or application of assets of
a Canadian Pension Plan.

 

10

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“Canadian Pension Plan” means each pension plan required to be registered under
Canadian federal, provincial or territorial law (including, without limitation,
under the Pension Benefits Act (Ontario) or the ITA) that is maintained or
contributed to by a Canadian Credit Party for its employees or former employees,
but does not include the Canada Pension Plan or the Quebec Pension Plan as
maintained by the Government of Canada or the Province of Quebec, respectively.

“Canadian Person” means a resident of Canada for purposes of the ITA or an
authorized foreign bank for purposes of the ITA that receives each amount paid
or credited to it hereunder in respect of its Canadian banking business for
purposes of the ITA.

“Canadian Pledge Agreement” means the US Pledge Agreement (Canadian Pledged
Entities), dated as of January 31, 2006, executed by TPG Enterprises and
Exopack-Ontario in favor of the Canadian Agent.

“Canadian Security Agreement” means the Security Agreement, dated as of the
Original Closing Date, executed by each Canadian Credit Party in favor of
Canadian Agent, on behalf of itself and Canadian Lenders and each other
agreement now or hereafter executed and delivered by any Canadian Subsidiary
that creates a mortgage, charge, security interest or other Lien over any assets
of such Canadian Subsidiary for the benefit of Canadian Agent and Canadian
Lenders to secure the Canadian Obligations.

“Canadian Settlement Date” has the meaning ascribed to it in Section 8.5(a)(iv).

“Canadian Subsidiary” means each Subsidiary of Holdings organized under the laws
of Canada or any province or territory thereof.

“Canadian Trademark Security Agreements” means the Canadian Trademark Security
Agreements, if any, made in favor of Canadian Agent, on behalf of itself and
Canadian Lenders, by each applicable Canadian Credit Party.

“Canadian Tranche A Borrowing Availability” means, at any time the lesser of
(i) the amount of the Canadian Tranche A Loan Commitment of all Canadian Tranche
A Lenders at such time and (ii) the Aggregate Canadian Tranche A Borrowing Base
at such time, in each case less the sum of (x) the amount of the outstanding
Canadian Tranche A Loan at such time, plus (y) Reserves imposed by Canadian
Agent at such time in accordance with the terms hereof.

“Canadian Tranche A Borrowing Base” means, for any Canadian Borrower, as of any
date of determination by Canadian Agent, from time to time, an amount equal to
the sum at such time of:

 

  (a) up to 85% of the book value of the Eligible Accounts of such Canadian
Borrower and its Canadian Subsidiaries (which for the avoidance of doubt,
includes direct and indirect Canadian Subsidiaries) and TPG Canada;

 

11

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  (b) up to the lesser of (i) 62.5% of the book value of the Eligible Inventory
of such Canadian Borrower and its Canadian Subsidiaries (which for the avoidance
of doubt, includes direct and indirect Canadian Subsidiaries) and TPG Canada
consisting of raw materials (other than Eligible Inventory consisting of raw
materials in-transit pursuant to Section 1.9(p)) and finished goods valued at
the lower of cost (determined on a first-in, first-out basis) or market and
(ii) 85% of the NOLV of such Eligible Inventory (such amount, the “Canadian
Tranche A Raw Materials Advance Rate”);

 

  (c) up to 45% of the book value of the Eligible Inventory of such Canadian
Borrower and its Canadian Subsidiaries (which for the avoidance of doubt,
includes direct and indirect Canadian Subsidiaries) and TPG Canada consisting of
work in process (eligible pursuant to Section 1.9(o); and;

 

  (d) up to the inverse of the then applicable Canadian Tranche A Raw Materials
Advance Rate on the Eligible Inventory of such Canadian Borrower and its
Canadian Subsidiaries (which for the avoidance of doubt, includes direct and
indirect Canadian Subsidiaries) and TPG Canada consisting of raw materials
in-transit (eligible pursuant to Section 1.9(p)), in an amount not to exceed
$1,000,000 in the aggregate .

“Canadian Tranche A Commitment Termination Date” means the earliest of (a) May
31, 2016, (b) the date of termination (whichever is earliest) of Canadian
Lenders’ obligations to make Canadian Tranche A Revolving Credit Advances or
incur Canadian Letter of Credit Obligations or permit existing Canadian Tranche
A Loans to remain outstanding, in each case, pursuant to Section 7.2 or
Section 7.3, and (c) the date of (i) payment in full by Canadian Borrowers of
Canadian Tranche A Revolving Credit Advances, (ii) the cancellation and return
(or stand-by guarantee) of all Canadian Letters of Credit or the cash
collateralization of all Canadian Letter of Credit Obligations pursuant to
Section 1.6(g), and (iii) the permanent reduction of the Canadian Tranche A
Commitments to zero dollars ($0).

“Canadian Tranche A Lenders” means GE Canada, the other Lenders named on the
signature pages of this Agreement as Canadian Tranche A Lenders (in such
capacity only), and, if any such Canadian Tranche A Lender shall assign all or
any portion of the Canadian Obligations in accordance with the terms hereof,
such term shall include any such assignee of such Canadian Tranche A Lender
provided that, unless an Event of Default has occurred and is continuing, each
Canadian Tranche A Lender shall at all times be a Canadian Person.

“Canadian Tranche A Loan” means, at any time, the sum of (i) the aggregate
amount of Canadian Tranche A Revolving Credit Advances outstanding to Canadian
Borrowers plus (ii) the aggregate Canadian Letter of Credit Obligations incurred
on behalf of Canadian Borrowers. Unless the context otherwise requires,
references to the outstanding principal balance of the Canadian Tranche A Loan
shall include the outstanding balance of Canadian Letter of Credit Obligations.

 

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“Canadian Tranche A Loan Commitment” means (a) as to any Canadian Tranche A
Lender, the commitment of such Canadian Tranche A Lender to make its Pro Rata
Share of Canadian Tranche A Revolving Credit Advances or incur its Pro Rata
Share of Canadian Letter of Credit Obligations as set forth on Annex B or in the
most recent Assignment Agreement, if any, executed by such Canadian Tranche A
Lender and (b) as to all Canadian Tranche A Lenders, the aggregate commitment of
all Canadian Tranche A Lenders to make the Canadian Tranche A Revolving Credit
Advances or incur Canadian Letter of Credit Obligations, which aggregate
commitment shall be fifteen million Dollars ($15,000,000) or the Canadian Dollar
equivalent thereof on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with this Agreement.

“Canadian Tranche A Note” has the meaning ascribed to it in Section 1.2(a)(i).

“Canadian Tranche A Raw Materials Advance Rate” has the meaning ascribed to it
in the definition of “Canadian Tranche A Borrowing Base”.

“Canadian Tranche A Revolving Credit Advance” has the meaning ascribed to it in
Section 1.2(a)(i).

“Canadian Tranche A1 Borrowing Availability” means, at any time the lesser of
(i) the amount of the Canadian Tranche A1 Loan Commitment of all Canadian
Tranche A1 Lenders at such time and (ii) the Aggregate Canadian Tranche A1
Borrowing Base at such time, in each case less the sum of (x) the amount of the
outstanding Canadian Tranche A1 Loan at such time, plus (y) Reserves imposed by
Canadian Agent in its reasonable credit judgment at such time in accordance with
the terms hereof.

“Canadian Tranche A1 Borrowing Base” means, for any Canadian Borrower, as of any
date of determination by Canadian Agent, from time to time, an amount equal to
the sum at such time of:

 

  (a) up to an additional 5% of the book value of the Eligible Accounts of such
Canadian Borrower and its Canadian Subsidiaries (which for the avoidance of
doubt, includes direct and indirect Canadian Subsidiaries) and TPG Canada at
such time; and

 

  (b) up to the lesser of (i) an additional 5% of the book value of the Eligible
Inventory of such Canadian Borrower and its Canadian Subsidiaries (which for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada consisting of raw materials and finished goods valued at the lower of
cost (determined on a first-in, first-out basis) or market and (ii) an
additional 5% of the NOLV of such Eligible Inventory.

“Canadian Tranche A1 Commitment Termination Date” means the earliest of (a) May
31, 2016, (b) the date of termination (whichever is earliest) of Canadian
Tranche A1 Lenders’ obligations to make Canadian Tranche A1 Revolving Credit
Advances or permit existing Canadian Tranche A1 Loans to remain outstanding, in
each case, pursuant to Section 7.2 or Section 7.3, and (c) the date of
(i) payment in full by Canadian Borrowers of Canadian Tranche A1 Revolving
Credit Advances, and (ii) the permanent reduction of the Canadian Tranche A1
Commitments to zero dollars ($0).

 

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“Canadian Tranche A1 Lenders” means GE Canada, the other Lenders named on the
signature pages of this Agreement as Canadian Tranche A1 Lenders (in such
capacity only), and, if any such Canadian Tranche A1 Lender shall assign all or
any portion of the Canadian Obligations in accordance with the terms hereof,
such term shall include any such assignee of such Canadian Tranche A1 Lender
provided that, unless an Event of Default has occurred and is continuing, each
Canadian Tranche A1 Lender shall at all times be a Canadian Person.

“Canadian Tranche A1 Loan” means, at any time, the sum of the aggregate amount
of Canadian Tranche A1 Revolving Credit Advances outstanding to Canadian
Borrowers.

“Canadian Tranche A1 Loan Commitment” means (a) as to any Canadian Tranche A1
Lender, the commitment of such Canadian Tranche A1 Lender to make its Pro Rata
Share of Canadian Tranche A1 Revolving Credit Advances as set forth on Annex B
or in the most recent Assignment Agreement, if any, executed by such Canadian
Tranche A1 Lender and (b) as to all Canadian Tranche A1 Lenders, the aggregate
commitment of all Canadian Tranche A1 Lenders to make the Canadian Tranche A1
Revolving Credit Advances, which aggregate commitment shall be Five Million
Dollars ($5,000,000) or the Canadian Dollar equivalent thereof on the Closing
Date, as such amount may be adjusted, if at all, from time to time in accordance
with this Agreement.

“Canadian Tranche A1 Note” has the meaning ascribed to it in Section 1.2(e).

“Canadian Tranche A1 Revolving Credit Advance” has the meaning ascribed to it in
Section 1.2(e).

“Capital Expenditures” means, without duplication, any expenditure or commitment
to expend money for any purchase or other acquisition of any asset which should
be classified as a fixed or capital asset on a consolidated balance sheet of
Holdings and its Subsidiaries prepared in accordance with GAAP plus deposits
made during the applicable measuring period in connection with fixed assets;
less deposits of a prior period included above less Net Proceeds of Asset
Dispositions which Borrowers are permitted to reinvest under Section 1.6(c) and
are included in the expenditures above.

“Capital Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.

Capital Lease Obligation” means, with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.

Cash Equivalents” means: (i) marketable securities (A) issued or directly and
unconditionally guaranteed as to interest and principal by the United States
government or Canadian government or (B) issued by any agency of the United
States government or Canadian government the obligations of which are backed by
the full faith and credit of the United States

 

14

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or Canada, in each case maturing within one (1) year after acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of
America, any province or territory of Canada, or any political subdivision of
any such state, province, territory or any public instrumentality thereof, in
each case maturing within one year after acquisition thereof and having, at the
time of acquisition, a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (iii) commercial paper maturing no more than one year from the date of
acquisition and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’
acceptances issued or accepted by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or Canada that is at least (A) “adequately capitalized” (as
defined in the regulations of its primary Federal banking regulator) and (B) has
Tier 1 capital (as defined in such regulations) of not less than $250,000,000,
in each case maturing within one year after issuance or acceptance thereof; and
(v) shares of any money market mutual or similar funds registered under the
Investment Company Act of 1940 that (A) has substantially all of its assets
invested continuously in the types of investments referred to in clauses
(i) through (iv) above, (B) has net assets of not less than $500,000,000 and
(C) has the highest rating obtainable from either S&P or Moody’s.

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements that constitute
“Obligations” as defined in the 2011 Term Loan B Credit Agreement.

“Cello-Foil” has the meaning given to such term in the recitals to this
Agreement.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a “Change in Law”, regardless of the date enacted, adopted or
issued.

“Change of Control” means any event, transaction or occurrence as a result of
which (a) the Sponsor ceases to own and control directly or indirectly all of
the economic and voting rights associated with ownership of at least fifty one
percent (51%) of all classes of the outstanding Stock of Holdings on a fully
diluted basis, (b) Holdings ceases to own and control directly or indirectly all
of the economic and voting rights associated with all of the outstanding Stock
of any Borrower, (c) any Borrower ceases to own and control all of the economic
and voting rights associated with all of the outstanding Stock of any of its
Subsidiaries, (d) any “Change of Control” shall occur (as such term is defined
in

 

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the Indenture or any other agreement governing the Senior Notes), (e) any
“Change of Control” shall occur (as such term is defined in the 2011 Indenture,
any other 2011 Indenture Document or any other agreement governing the 2011 High
Yield Notes), and (f) any “Change of Control” shall occur (as such term is
defined in the 2011 Term Loan B Credit Agreement or any agreement executed in
connection therewith).

“Charges” means all federal, state, provincial, territory, county, city,
municipal, local, foreign or other governmental taxes (including premiums and
other amounts owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of any Credit Party, (d) any Credit Party’s ownership or use of any
properties or other assets, or (e) any other aspect of any Credit Party’s
business.

“Chattel Paper” means any “chattel paper,” as such term is defined in the Code,
the PPSA (or similar Applicable Law), including electronic chattel paper, now
owned or hereafter acquired by any Credit Party, wherever located.

“Closing Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex C.

“Closing Date” means May 31, 2011.

“Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, any Agent’s or any Lender’s Lien on any Collateral is governed by
the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “Code” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.

“Collateral” means the Canadian Collateral and the US Collateral, as the context
may require.

“Collection Account” means that certain account of US Agent, account number
XXXXXXXXXXXXX in the name of US Agent at Deutsche Bank Trust Company Americas in
New York, New York ABA No. XXXXXXXXXXXXX, or such other account as may be
specified in writing by US Agent as the “Collection Account”, which account
shall not be maintained at an office of a Lender.

“Collateral Documents” means the Canadian Collateral Documents and the US
Collateral Documents, as the context may require.

“Commitments” means, collectively, the Canadian Tranche A Loan Commitments, the
Canadian Tranche A1 Loan Commitments, the US Tranche A Loan Commitments and the
US Tranche A1 Loan Commitments which shall be equal to $75,000,000 on the
Closing Date and may be increased by up to $25,000,000 pursuant to Section 1.6.

 

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“Commitment Increase Request” has the meaning ascribed to it in Section 1.16(a).

“Commitment Termination Dates” means, collectively, the US Tranche A Commitment
Termination Date, the US Tranche A1 Commitment Termination Date, the Canadian
Tranche A Commitment Termination Date and the Canadian Tranche A1 Commitment
Termination Date.

“Communication” means any notice, information or other communication required or
permitted to be given or made under this Agreement, but excluding any Loan
Document requested by Agent to be delivered solely in a signed writing,
including without limitation, any Note, power of attorney, or Patent Security
Agreement, Trademark Security Agreement or Copyright Security Agreement.

“Consent Solicitation” means the solicitation by Holdings from the holders of
outstanding Senior Notes of consents to certain amendments to the Indenture in
accordance with the terms of the Tender Offer Materials.

“Compliance Certificate” has the meaning ascribed to it in Section 6.1(k).

“Consolidated Net Income” means, with respect to any specified Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

 

  (1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or similar distributions
paid in cash to the specified Person or a Restricted Subsidiary of the Person;

 

  (2) the Net Income of any Restricted Subsidiary will be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental regulation applicable to that
Restricted Subsidiary or its stockholders, except that such exclusion shall not
apply to the extent such dividends or distributions are actually received by
such Person;

 

  (3) the cumulative effect of a change in accounting principles will be
excluded;

 

  (4) the effect of purchase accounting adjustments required or permitted by
GAAP in connection with (i) the Transactions (as such term is defined in the
2011 Indenture) and (ii) the Bemis Acquisition, shall be excluded;

 

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  (5) any goodwill impairment charges will be excluded;

 

  (6) non-cash compensation charges or other non-cash expenses or charges
arising from the grant or issuance of stock, stock options or other equity-based
awards to directors, officers or employees of Holdings and its Restricted
Subsidiaries will be excluded; and

 

  (7) payments of fees and expenses made by Holdings in connection with the
consummation of the Transactions for such period will be excluded.

“Consolidated Total Assets” means, as of any date of determination, the total
amount of assets that would appear on a consolidated balance sheet of Holdings
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability of that Person: (i) with respect to Guaranteed Indebtedness and with
respect to any Indebtedness, lease, dividend or other obligation of another
Person if the purpose or intent of the Person incurring such liability, or the
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (iii) under
any foreign exchange contract, currency swap agreement, interest rate swap
agreement (including US Interest Rate Agreements) or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, (iv) any agreement, contract or
transaction involving commodity options or future contracts, (v) to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, or (vi) pursuant to any agreement to
purchase, repurchase or otherwise acquire any obligation or any property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed.

“Contractual Obligations” means, as applied to any Person, any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject including the Related
Transactions Documents.

“Control Agreement” means a deposit account, securities account or commodities
account control agreements by and among the applicable Credit Party, Applicable
Agent and the depository, securities intermediary or commodities intermediary,
and each in form and substance satisfactory in all respects to Applicable Agent
and in any event providing to Applicable Agent “control” of such deposit
account, securities or commodities account within the meaning of Articles 8 and
9 of the Code (or similar provisions of its equivalent under Applicable Law).

 

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“Copyright License” means any and all rights now owned or hereafter acquired by
any Credit Party under any written agreement granting any right to such Credit
Party to use any Copyright or Copyright registration owned by a third party.

“Copyright Security Agreements” means the US Copyright Security Agreements and
the Canadian Copyright Security Agreements.

“Copyrights” means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or Canadian Intellectual Property Office or in any similar office or agency of
the United States, any state or territory thereof, or any other country or any
political subdivision thereof; and (b) all reissues, extensions or renewals
thereof.

“CPG” means CPG Finance, Inc., a Delaware corporation.

“CRA” means the Canada Revenue Agency.

“Credit Facility” shall mean the US Commitments and extensions of credit
thereunder and/or the Canadian Commitments and extensions of credit thereunder,
as the context may require.

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

“Default” means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.

“Default Rate” has the meaning ascribed to it in Section 1.3(d).

“Disbursement Accounts” means the US Disbursement Account and the Canadian
Disbursement Account, as the context may require.

“Disclosure Schedules” means the Schedules prepared by Borrowers and denominated
as Schedules 3.1(a) through 5.9 in the index to this Agreement.

“Division-by-Division Basis” means (a) with respect to Projections prepared and
delivered hereunder on or prior to the Closing Date, each of Holdings and its
Subsidiaries and the Performance Films Group viewed as divisions of the Credit
Parties and (b) with respect to Projections prepared and delivered hereunder
after the Closing Date, each of the Credit Parties’ “plastics division” and
“paper division” viewed as divisions of the Credit Parties without regard to the
legal entities included therein.

“Documents” means any “document,” as such term is defined in the Code, the PPSA
(or similar Applicable Law), including electronic documents, now owned or
hereafter acquired by any Credit Party, wherever located.

 

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“Dollar Equivalent” means the amount in Dollars for any amount denominated in
Dollars and the Equivalent Amount in Dollars of any amount denominated in any
other currency.

“Dollars” or “$” means lawful currency of the United States of America.

“Domestic Subsidiaries” means any Subsidiary organized under the laws of a
jurisdiction in the United States of America.

“EBITDA” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus, without
duplication:

 

  (1) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Restricted Subsidiaries in connection with an Asset
Disposition, to the extent such losses were deducted in computing such
Consolidated Net Income, plus

 

  (2) provision for taxes (including, without limitation, the Michigan Single
Business Tax) based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus

 

  (3) the Fixed Charges (as such term is defined in the 2011 Indenture) of such
Person and its Restricted Subsidiaries for such period, to the extent that such
Fixed Charges were deducted in computing such Consolidated Net Income; plus

 

  (4) non-recurring expenses and charges resulting from equity offerings,
investments, mergers, recapitalizations, option buyouts, dispositions, asset
acquisitions and similar transactions involving such Person or its Restricted
Subsidiaries for such period, in each case to the extent deducted in computing
Consolidated Net Income; plus

 

  (5) non-recurring restructuring charges or reserves, including severance,
plant closings, restructurings and consolidations and other like items for such
period in an aggregate amount not to exceed $7,500,000 per annum, to the extent
such restructuring charges or reserves, including, without limitation,
severance, plant closings, restructurings and consolidations and other like
items were deducted in computing Consolidated Net Income; plus

 

  (6) payments pursuant to the Management Services Agreement for such period,
subject to the limitations set forth in the definition of “Permitted Payments to
Parent” in the 2011 Term Loan B Credit Agreement, to the extent such payments
were deducted in computing Consolidated Net Income; plus

 

20

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  (7) depreciation, amortization (including amortization of intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period, to the
extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income; plus

 

  (8) other nonrecurring expenses that in the opinion of management, subject to
the approval of the Applicable Agent, are appropriate additions to Consolidated
Net Income to the extent that such nonrecurring expenses were deducted in
computing such Consolidated Net Income; minus

 

  (9) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business.

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

“Eligible Accounts” has the meaning ascribed to it in Section 1.8.

“Eligible Inventory” has the meaning ascribed to it in Section 1.9.

“Environmental Laws” means all Requirements of Law and permits imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources,
including CERCLA, the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), the Toxic
Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C.
§§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the
Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all regulations
promulgated under any of the foregoing, all analogous Requirements of Law and
permits and any environmental transfer of ownership notification or approval
statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6
et seq.).

“Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of legal counsel,
experts and consultants), fines, penalties, sanctions and interest incurred as a
result of or related to any claim,

 

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suit, action, administrative order, investigation, proceeding or demand by any
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or regulation or equity or common law,
including any arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release or threatened Release or presence of
a Hazardous Material whether on, at, in, under, from or about or in the vicinity
of any real or personal property.

“Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.

“Equipment” means all “equipment,” as such term is defined in the Code, the PPSA
(or similar Applicable Law), now owned or hereafter acquired by any Credit
Party, wherever located and, in any event, including all such Credit Party’s
machinery and equipment, including processing equipment, conveyors, machine
tools, data processing and computer equipment, including embedded software and
peripheral equipment and all engineering, processing and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks, forklifts,
molds, dies, stamps, motor vehicles, rolling stock and other equipment of every
kind and nature, trade fixtures and fixtures not forming a part of real
property, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.

“Equivalent Amount” means, on any date of determination, with respect to
obligations or valuations denominated in one currency (the “first currency”),
the amount of another currency (the “second currency”) which would result from
the conversion of the relevant amount of the first currency into the second
currency, at the rate used by Applicable Agent’s treasury function on such date
or, if such date is not a Business Day, on the Business Day immediately
preceding such date of determination, or at such other rate as may have been
agreed in writing between the Applicable Borrower(s) and Applicable Agent.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and all regulations promulgated thereunder.

“ERISA Affiliate” means, with respect to any Credit Party, any trade or business
(whether or not incorporated) that, together with such Credit Party, are treated
as a single employer under Section 4001(b)(1) of ERISA or Sections 414(b), (c),
(m) or (o) of the IRC.

“ERISA Event” means, with respect to any Credit Party or any ERISA Affiliate,
(a) any event described in Section 4043 of ERISA with respect to a Title IV
Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure

 

22

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by any Credit Party or ERISA Affiliate to make when due required contributions
to a Multiemployer Plan or Title IV Plan unless such failure is cured within 30
days; (g) any other event or condition that might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA;
(h) the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan’s qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.

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

“E-System” means any electronic system, including Intralinks® and any other
Internet or extranet-based site, whether such electronic system is owned,
operated or hosted by the Agents or any other Person, providing for access to
data protected by passcodes or other security system.

“Effective Yield” means, as to any Indebtedness owing to any Person (an
“Obligee”), the effective yield on such Indebtedness as determined by the
Applicable Agent, taking into account the applicable interest rate margins, any
interest rate floors or similar devices and all fees, including upfront or
similar fees or original issue discount (amortized over the shorter of (x) the
weighted average life to maturity of such Indebtedness and (y) the four years
following the date of incurrence thereof) payable generally to Obligees, but
excluding any arrangement, structuring or other fees payable in connection
therewith that are not generally shared with the relevant Obligees and customary
consent fees paid generally to consenting Obligees.

“Event of Default” has the meaning ascribed to it in Section 7.1.

“Excluded Subsidiaries” means Exopack L.P., 3181952, Exopack UK Holdco, UK
Holdco and UK Engineered Films.

“Excluded Real Property” means Real Property with a Fair Market Value of less
than $2,000,000.

“Excluded Tax” has the meaning ascribed to it in Section 1.12(a).

“Existing Subordinated Intercompany Note” means that certain Subordinated Demand
Promissory Note, dated as of October 31, 2007, by and among each of the
“Obligors” and “Holders” (in each case as defined therein) thereunder as of the
date thereof.

“Exopack Canada” has the meaning given to such term in the recitals to this
Agreement.

“Exopack Canada Consolidation” means the consolidation of the businesses of TPG
Canada and Exopack Canada.

 

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“Exopack Coatings” means Exopack Advanced Coatings, LLC, a Delaware limited
liability company.

“Exopack Holdings” has the meaning given to such term in the recitals to this
Agreement.

“Exopack L.P.” means Exopack L.P., an Ontario limited partnership.

“Exopack Op Co” has the meaning given to such term in the recitals to this
Agreement.

“Exopack Ontario” means Exopack-Ontario, Inc., a California corporation.

“Exopack Thomasville” means Exopack-Thomasville, LLC, a Delaware limited
liability company.

“Exopack UK Holdco” means Exopack Advanced Coatings Ltd. (formerly known as
Exopack Holdings UK, Ltd.), a company organized under the laws of England and
Wales.

“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et
seq.

“Fair Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party, as determined in good faith by the board of directors of
Holdings.

“Federal Funds Rate” means, for any day, a floating rate equal to the weighted
average of the rates on overnight federal funds transactions among members of
the Federal Reserve System, as determined by Agent in its sole discretion, which
determination shall be final, binding and conclusive (absent manifest error).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System.

“Fees” means any and all fees payable to Agents or any Lender pursuant to this
Agreement or any of the other Loan Documents.

“Financial Statements” means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Holdings, Borrowers
and their Subsidiaries delivered in accordance with Section 6.1.

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

“Fiscal Year” means any of the annual accounting periods of Holdings ending on
December 31 of each year.

“Fixtures” means all “fixtures” as such term is defined in the Code, the PPSA
(or similar Applicable Law), now owned or hereafter acquired by any Credit
Party.

 

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“Flood Certificate” means a “Standard Flood Hazard Determination Form” of the
Federal Emergency Management Agency and any successor Governmental Authority
performing a similar function.

“Flood Program” means the National Flood Insurance Program created by the U.S.
Congress pursuant to the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994
and the Flood Insurance Reform Act of 2004, in each case as amended from time to
time, and any successor statutes.

“Flood Zone” means areas having special flood hazards as described in the
National Flood Insurance Act of 1968, as amended from time to time, and any
successor statute.

“Foreign Lender” has the meaning ascribed to it in Section 1.12(d).

“Foreign Subsidiary” means any direct or indirect Subsidiary of Holdings
organized under the laws of a jurisdiction outside of the United States.

“Funded Debt” means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and that by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person’s
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations (including Letter of Credit Obligations).

“Funding Date” has the meaning ascribed to it in Section 2.2.

“GAAP” means generally accepted accounting principles in the case of Canadian
Borrower, in Canada, and in the case of US Borrowers, in the United States of
America, as in effect from time to time, consistently applied.

“GE Canada” has the meaning ascribed to it in the recitals to this Agreement.

“GE Capital” has the meaning ascribed to it in the recitals to this Agreement.

“GE Capital Fee Letter” has the meaning ascribed to it in Section 1.4(a).

“General Intangibles” means “general intangibles,” as such term is defined in
the Code, and “intangibles” as defined in the PPSA (or, in each case, similar
Applicable Law), now owned or hereafter acquired by any Credit Party, including
all right, title and interest that such Credit Party may now or hereafter have
in or under any Contractual Obligation, all payment intangibles, customer lists,
Licenses, Copyrights, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data,

 

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skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Credit Party or any
computer bureau or service company from time to time acting for such Credit
Party.

“Goods” means any “goods,” as such term is defined in the Code, the PPSA (or
similar Applicable Law), now owned or hereafter acquired by any Credit Party,
wherever located, including embedded software to the extent included in “goods”
as defined in the Code, the PPSA (or similar Applicable Law), manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.

“Governmental Authority” means any nation or government, any state, province or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease,
dividend, or other obligation (“primary obligation”) of any other Person (the
“primary obligor”) in any manner, including any obligation or arrangement of
such Person to (a) purchase or repurchase any such primary obligation,
(b) advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.

“Guaranties” means, collectively, the Canadian Guaranty, the US Guaranty, and
any other guaranty executed by any Guarantor in favor of any Agent and any
Lenders in respect of the Obligations.

 

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“Guarantors” means Holdings, each US Guarantor, each Canadian Guarantor, and
each other Person, if any, that executes a guaranty or other similar agreement
in favor of any Agent, for itself and the ratable benefit of any Lenders, in
connection with the transactions contemplated by this Agreement and the other
Loan Documents.

“Guaranty Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person for any Indebtedness, lease,
dividend or other obligation (the “primary obligation”) of another Person (the
“primary obligor”), if the purpose or intent of such Person in incurring such
liability, or the economic effect thereof, is to guarantee such primary
obligation or provide support, assurance or comfort to the holder of such
primary obligation or to protect or indemnify such holder against loss with
respect to such primary obligation, including (a) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of any primary obligation, (b) the incurrence of reimbursement
obligations with respect to any letter of credit or bank guarantee in support of
any primary obligation, (c) the existence of any Lien, or any right, contingent
or otherwise, to receive a Lien, on the property of such Person securing any
part of any primary obligation and (d) any liability of such Person for a
primary obligation through any Contractual Obligation (contingent or otherwise)
or other arrangement (i) to purchase, repurchase or otherwise acquire such
primary obligation or any security therefor or to provide funds for the payment
or discharge of such primary obligation (whether in the form of a loan, advance,
stock purchase, capital contribution or otherwise), (ii) to maintain the
solvency, working capital, equity capital or any balance sheet item, level of
income or cash flow, liquidity or financial condition of any primary obligor,
(iii) to make take-or-pay or similar payments, if required, regardless of
non-performance by any other party to any Contractual Obligation, (iv) to
purchase, sell or lease (as lessor or lessee) any property, or to purchase or
sell services, primarily for the purpose of enabling the primary obligor to
satisfy such primary obligation or to protect the holder of such primary
obligation against loss or (v) to supply funds to or in any other manner invest
in, such primary obligor (including to pay for property or services irrespective
of whether such property is received or such services are rendered); provided,
however, that “Guaranty Obligations” shall not include (x) endorsements for
collection or deposit in the ordinary course of business and (y) product
warranties given in the ordinary course of business. The outstanding amount of
any Guaranty Obligation shall equal the outstanding amount of the primary
obligation so guaranteed or otherwise supported or, if lower, the stated maximum
amount for which such Person may be liable under such Guaranty Obligation.

“Hazardous Material” means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a “solid
waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“dangerous goods,” “extremely hazardous waste,” “restricted hazardous waste,”
“pollutant,” “contaminant,” “hazardous constituent,” “special waste,” “toxic
substance” or other similar term or phrase under any Environmental Laws, or
(b) petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (“PCB’s”), or any radioactive substance.

“Hedging Agreement” means any Interest Rate Contract, foreign exchange, swap,
option or forward contract, spot, cap, floor or collar transaction, any other
derivative instrument and any other similar speculative transaction and any
other similar agreement or arrangement designed to alter the risks of any Person
arising from fluctuations in any underlying variable.

 

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“Holdings” has the meaning ascribed thereto in the recitals to this Agreement.

“Indebtedness” means, with respect to any Person, without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than six (6) months unless
being contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers’ acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness 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), (e) all Capital Lease Obligations and the present
value (discounted at the US Index Rate as in effect on the Closing Date) of
future rental payments under all synthetic leases, (f) all obligations of such
Person under commodity purchase or option agreements or other commodity price
hedging arrangements, in each case whether contingent or matured, (g) all net
payment obligations of such Person under any foreign exchange contract, currency
swap agreement, interest rate swap (including US Interest Rate Agreements), cap
or collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, (h) all Indebtedness
referred to 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 or other assets (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, (i) “earnouts” and similar payment obligations
excluding bonus, phantom stock or other similar compensation payments owed to
employees, or officers and incurred in the ordinary course of business, and
(j) the Obligations.

“Indemnitees” shall mean the US Indemnitees and Canadian Indemnitees.

“Indenture” means that certain Indenture, dated as of the Original Closing Date,
by and among Holdings, the guarantors from time to time party thereto and The
Bank Of New York Trust Company, N.A., as Trustee, pursuant to which the Senior
Notes have been issued.

“Indenture Amendment” shall mean the amendment to the Indenture entered into in
connection with the Consent Solicitation.

“Insolvency Law” shall mean any applicable insolvency or other similar law of
any jurisdiction, including any other law of any jurisdiction permitting a
debtor to obtain a stay or a compromise of the claims of its creditors against
it and, for greater certainty, shall include the Companies Creditors Assignment
Act (Canada) and the BIA.

 

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“Instruments” means all “instruments,” as such term is defined in the Code (or
similar Applicable Law), now owned or hereafter acquired by any Credit Party,
wherever located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.

“Intelicoat Acquisition” means the acquisition by Holdings, Exopack UK Holdco
and Exopack Coatings of (i) 100% of the Stock of each of Matthews, UK Holdco and
U.K. Engineered Films and (ii) the other Acquired Assets (as defined in the
Intelicoat Purchase Agreement) of the Sellers, in each case pursuant to and in
accordance with the terms of the Intelicoat Purchase Agreement.

“Intelicoat Purchase Agreement” means that certain Purchase Agreement, dated as
of August 6, 2007, by and among Holdings, Exopack UK Holdco, Exopack Coatings
and Sellers.

“Intellectual Property” means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks.

“Intercompany Debt” has the meaning ascribed to it in Section 9.21.

“Intercompany Notes” has the meaning ascribed to it in Section 5.1(c).

“Intercreditor Agreement” means the Intercreditor Agreement, dated May 31, 2011,
among Holdings, the affiliates of Holdings party thereto, the US Agent and Bank
of America, N.A. as administrative agent under the 2011 Term Loan B Credit
Agreement.

“Interest Payment Date” means (a) as to any US Index Rate Loan or Canadian Index
Rate Loan, the first Business Day of each month to occur while such Loan is
outstanding, and (b) as to any LIBOR Loan or BA Rate Loan, the last day of the
applicable LIBOR Period or BA Period; provided, that in the case of any LIBOR
Period or BA Period greater than three months in duration, interest shall be
payable at three month intervals and on the last day of such LIBOR Period or BA
Period, as applicable; provided further that, in addition to the foregoing, each
of (x) the date upon which all of the Commitments have been terminated and the
Loans have been paid in full and (y) each Commitment Termination Date shall be
deemed to be an “Interest Payment Date” with respect to any interest that has
then accrued under this Agreement.

“Interest Rate Contracts” means all interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and interest rate insurance.

“Inventory” means any “inventory,” as such term is defined in the Code, the PPSA
(or similar Applicable Law), now owned or hereafter acquired by any Credit
Party, wherever located, including inventory, merchandise, goods and other
personal property that are held by or on behalf of any Credit Party for sale or
lease or are furnished or are to be furnished under a contract of service, or
that constitute raw materials, work in process, finished goods, returned goods,
supplies or materials of any kind, nature or description used or consumed or to
be used or consumed in such Credit Party’s business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.

 

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“Investment” means (i) any direct or indirect purchase or other acquisition by
Borrowers or any of their Subsidiaries of any Stock, or other ownership interest
in, any other Person, and (ii) any direct or indirect loan, advance or capital
contribution by Borrowers or any of their Subsidiaries to any other Person,
including all indebtedness and accounts receivable due from that other Person
that are not current assets and did not arise from sales to that other Person in
the ordinary course of business.

“Investment Property” means all “investment property,” as such term is defined
in the Code, the PPSA (or similar Applicable Law), now owned or hereafter
acquired by any Credit Party, wherever located, including: (i) all securities,
whether certificated or uncertificated, including stocks, bonds, interests in
limited liability companies, partnership interests, treasuries, certificates of
deposit, and mutual fund shares; (ii) all securities entitlements of any Credit
Party, including the rights of such Credit Party to any securities account and
the financial assets held by a securities intermediary in such securities
account and any free credit balance or other money owing by any securities
intermediary with respect to that account; (iii) all securities accounts of any
Credit Party; (iv) all commodity contracts of any Credit Party; and (v) all
commodity accounts held by any Credit Party.

“IRC” means the Internal Revenue Code of 1986, as amended, and all regulations
promulgated thereunder.

“IRS” means the United States Internal Revenue Service.

“ITA” means the Income Tax Act (Canada), as amended from time to time.

“Judgment Conversion Date” has the meaning ascribed to it in Section 1.15(a).

“Judgment Currency” has the meaning ascribed to it in Section 1.15(a).

“L/C Issuers” means, collectively, the US L/C Issuers and the Canadian L/C
Issuers.

“L/C Reserve Account has the meaning ascribed to it in Section 8.6(b).

“Lenders means US Lenders and Canadian Lenders.

“Letters of Credit” means, collectively, the US Letters of Credit and the
Canadian Letters of Credit.

“Letter of Credit Obligations” means, collectively, the US Letter of Credit
Obligations and the Canadian Letter of Credit Obligations.

“LIBOR Breakage Costs” means an amount equal to the amount of any losses,
expenses, liabilities (including, without limitation, any loss (including
interest paid) and lost opportunity cost (consisting of the present value of the
difference between the LIBOR Rate in effect for the LIBOR Period and any lower
LIBOR Rate in effect at the time of prepayment for the remainder of that LIBOR
Period) in connection with the re-employment of such funds) that any Lender may
sustain as a result of (a) any default by any Borrower in making any borrowing
of, conversion into or continuation of any LIBOR Loan following Borrower
Representative’s delivery to Agent of any LIBOR Loan request in respect thereof
or (b) any payment of a LIBOR Loan on any day that is not the last day of the
LIBOR Period applicable thereto (regardless of the

 

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source of such prepayment and whether voluntary, by acceleration or otherwise).
For purposes of calculating amounts payable to a Lender under Section 1.4(e),
each Lender shall be deemed to have actually funded its relevant LIBOR Loan
through the purchase of a deposit bearing interest at LIBOR in an amount equal
to the amount of that LIBOR Loan and having a maturity and repricing
characteristics comparable to the relevant LIBOR Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under Section 1.4(e).

“LIBOR Business Day” means a Business Day on which banks in the City of London
are generally open for interbank or foreign exchange transactions.

“LIBOR Loans” means a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.

“LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on
a LIBOR Business Day selected by US Borrower Representative pursuant to this
Agreement and ending one, two, three or six months thereafter, as selected by US
Borrower Representative’s irrevocable notice to US Agent as set forth in
Section 1.3(e); provided, that the foregoing provision relating to LIBOR Periods
is subject to the following:

 

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

 

  (b) any LIBOR Period that would otherwise extend beyond the date set forth in
clause (a) of the definition of “US Tranche A Commitment Termination Date” or
“US Tranche A1 Commitment Termination Date” shall end two (2) LIBOR Business
Days prior to such date;

 

  (c) any LIBOR Period that begins on the last LIBOR Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such LIBOR Period) shall end on the last LIBOR
Business Day of a calendar month;

 

  (d) US Borrower Representative shall select LIBOR Periods so as not to require
a payment or prepayment of any LIBOR Loan during a LIBOR Period for such Loan;
and

 

  (e) US Borrower Representative shall select LIBOR Periods so that there shall
be no more than 5 separate LIBOR Loans in existence at any one time.

 

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“LIBOR Rate” means for each LIBOR Period, a rate of interest determined by Agent
equal to:

 

  (a) the offered rate for deposits in United States Dollars for the applicable
LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time),
on the second full LIBOR Business Day next preceding the first day of such LIBOR
Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by

 

  (b) a number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on the
day that is two (2) LIBOR Business Days prior to the beginning of such LIBOR
Period (including basic, supplemental, marginal and emergency reserves under any
regulations of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Federal Reserve Board that are required to be maintained by
a member bank of the Federal Reserve System.

If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be available to US Agent.

“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.

“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable
law of any jurisdiction).

“Litigation” has the meaning ascribed to it in Section 6.1(i).

“Liqui-box Acquisition” means the acquisition by Performance Films of the
Business (as defined in the Liqui-box Purchase Agreement) of the Liqui-box
Sellers, in each case pursuant to and in accordance with the terms of the
Liqui-box Purchase Agreement.

“Liqui-box Acquisition Closing Date” means the date upon which the Liqui-box
Acquisition shall be consummated in accordance with and pursuant to the terms of
the Liqui-box Purchase Agreement.

“Liqui-box Acquisition Investment Transaction” means (i) the dividend by Exopack
Op Co to Holdings in an amount equal to or less than $16,000,000, (the “Exopack
Dividend”), (ii) immediately thereafter the subsequent contribution by Holdings
to Cello-Foil Holding Corp. of all of the proceeds of the Exopack Dividend to
TPG Group Holding Corp. (the “Holdings Contribution”), (iii) immediately
thereafter the subsequent contribution by TPG Group Holding

 

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Corp. of all of the proceeds of the Holdings Contribution to TPG Enterprises,
(the “TPG Contribution”), and (iv) immediately thereafter the subscription by
TPG Enterprises for common shares of Performance Films for cash subscription
proceeds not to exceed the greater of $5,000,000 Dollars and $5,000,000 Canadian
Dollars, all of the proceeds of which shall be used solely to consummate the
Liqui-box Acquisition.

“Liqui-box Purchase Agreement” means that certain Asset Purchase Agreement,
dated as of October 31, 2007, by and among Performance Films and Liqui-box
Sellers.

“Liqui-box Sellers” means Liqui-Box Canada, Inc.

“Loan Account” as the meaning ascribed to it in Section 1.10.

“Loan Documents” means this Agreement, the Notes, the Collateral Documents, the
GE Capital Fee Letter, the Intercreditor Agreement, the Post-Closing Agreement,
the subordination provisions applicable to any Subordinated Debt and
intercreditor provisions applicable to any Indebtedness that is pari passu in
right of payment to the Obligations and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, any Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Credit Party, or any employee of any Credit Party, and delivered
to any Agent or any Lender in connection with this Agreement or the transactions
contemplated thereby. Any reference in this Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto,
and shall refer to this Agreement or such Loan Document as the same may be in
effect at any and all times such reference becomes operative.

“Loans” means the US Tranche A Loan, the US Tranche A1 Loan, the Canadian
Tranche A Loans and the Canadian Tranche A1 Loans.

“Management Services Agreement” means the consulting agreement dated May 31,
2011 between Holdings and Sun Capital Partners Management IV, LLC, as in effect
on the Closing Date.

“Master Standby Agreement” means the Master Agreement for Standby Letters of
Credit dated as of the Closing Date between US Borrowers and/or Canadian
Borrowers, as Joint Applicants, and GE Capital and/or GE Canada, as LC Issuer,
as the same may be amended, restated, modified and/or supplemented from time to
time including, without limitation, by joinder thereto.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or financial or other condition of any Borrower or of the
Credit Parties taken as a whole, (b) Borrowers’ ability to pay any of the Loans
or any of the other Obligations in accordance with the terms of this Agreement,
(c) the Collateral or any Agent’s Liens, on behalf of itself and Lenders, on the
Collateral or the priority of such Liens, or (d) any Agent’s or any Lender’s
rights and remedies under this Agreement and the other Loan Documents.

 

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“Matthews” means Intelicoat Technologies Image Products Matthews LLC, a Delaware
limited liability company.

“Maximum Lawful Rate” has the meaning ascribed to it in Section 1.3(f).

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means an agreement, including a fee and/or leasehold mortgage, deed
of trust, trust deed, deed to secure debt or any other document, creating and
evidencing a Lien on a Mortgaged Property, as applicable, which shall be in a
form reasonably satisfactory to the US Agent.

“Mortgaged Property” means (a) each Real Property identified on Schedule 3.14
(other than Excluded Real Property) and (b) each Real Property, if any, which
shall be subject to a Mortgage delivered after the Closing Date pursuant to
Section 4.8.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section
(3)(7) of ERISA, and to which any Credit Party or ERISA Affiliate is making, is
obligated to make or has made or been obligated to make in the past five years
contributions on behalf of participants who are or were employed by any of them
or withdrawal liability payments.

“Net Income” means, with respect to any specified Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:

 

  (a) any gain (but not loss), together with any related provision for taxes on
such gain (but not loss), realized in connection with: (a) any Asset
Disposition; or (b) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and

 

  (b) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.

“Net Proceeds” means (i) cash proceeds received by Borrowers or any of their
Subsidiaries from any Asset Disposition (including insurance proceeds, awards of
condemnation, and payments under notes or other debt securities received in
connection with any Asset Disposition), net of (a) the costs of such Asset
Disposition (including taxes attributable to such sale, lease or transfer) and
any commissions and other customary transaction fees, costs and expenses, other
than any costs payable to any Affiliate of a Credit Party, (b) amounts applied
to repayment of Indebtedness (other than the Obligations) secured by a Lien
permitted under this Agreement on the asset or property disposed, (c) any
amounts required to be held in escrow until such time as such amounts are
released from escrow whereupon such amounts shall be considered Net Proceeds and
(d) any amounts otherwise constituting Net Proceeds from the Asset Disposition
of Term Loan B Priority Collateral (as such term is defined in the Intercreditor
Agreement) to the extent required to prepay obligations under the 2011 Term Loan
B Credit Agreement, and (ii) cash proceeds attributable to any working capital,
earnings, balance sheet or similar adjustment under any acquisition agreement or
similar purchase agreement.

 

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“Net Tax Benefit” means (a) the total amount of reduction in such shareholders’,
members’, or partners’, as the case may be, income tax liability previously
realized as a result of any loss generated by Borrowers’ business during any
prior tax year, assuming in calculating such amount that the full amount of such
loss has been used to reduce such shareholders’, members’, or partners’, as the
case may be, adjusted gross income in the same tax year that such loss was
generated by Borrowers’ business, plus, (b) the amount by which (i) the
aggregate amount of Tax Distributions made, based on good faith estimates, to
such shareholders’, members’, or partners’, as the case may be, in such tax year
is in excess of (ii) the tax obligations owing by such shareholders’, members’,
or partners’, as the case may be, for income generated by Borrowers’ business
during such year; provided, however, to the extent that any loss is generated by
Borrowers’ business during any tax year and such loss is included in clause
(a) above in calculating Net Tax Benefit, then the amount to be used in clause
(b)(ii) above in calculating the Net Tax Benefit shall be deemed to be zero
dollars ($0).

“NOLV” means, at any time, with respect to any Inventory, the net orderly
liquidation value of such Inventory made most recently at or prior to such time
in writing by an independent appraiser selected by Applicable Agent.

“Non-Consenting Lender” has the meaning given to such term in Section 9.19(c).

“Non-Excluded Taxes” has the meaning ascribed to it in Section 1.12(a).

“Non-Tendered Senior Notes” shall mean any outstanding Senior Notes not validly
tendered or validly tendered and subsequently withdrawn pursuant to the Tender
Offer.

“Non-Voting Stock” of any Person means Stock of such Person other than the
Voting Stock of such Person.

“Notes” means, collectively, the US Tranche A Notes, the US Tranche A1 Notes,
the Canadian Tranche A Notes and the Canadian Tranche A1 Notes.

“Notice of Canadian Tranche A Revolving Credit Advance” has the meaning ascribed
to it in Section 1.2(a)(i).

“Notice of Canadian Tranche A1 Revolving Credit Advance” has the meaning
ascribed to it in Section 1.2(e).

“Notice of Conversion/Continuation” has the meaning ascribed to it in
Section 1.3(e).

“Notice of US Tranche A Revolving Credit Advance” has the meaning ascribed to it
in Section 1.1(a).

“Notice of US Tranche A1 Revolving Credit Advance” has the meaning ascribed to
it in Section 1.1(e)

“Obligation Currency” has the meaning ascribed to it in Section 1.15(a).

“Obligations” means, collectively, the US Obligations and the Canadian
Obligations.

 

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“Original Closing Date” means January 31, 2006.

“Original Credit Agreement” has the meaning assigned to such term in the
recitals of this Agreement.

“Other Canadian Lender” has the meaning ascribed to it in Section 8.5(d).

“Other US Lender” has the meaning ascribed to it in Section 8.5(d).

“Other Taxes” has the meaning ascribed to it in Section 1.12(c).

“Patent License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right to such Credit Party with
respect to any invention on which a Patent owned by a third party is in
existence.

“Patent Security Agreements” means the US Patent Security Agreements and the
Canadian Patent Security Agreements.

“Patents” means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States,
Canada or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States, Canada or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office, the Canadian Intellectual Property Office or
in any similar office or agency of the United States, Canada any State or any
other country, and (b) all reissues, continuations, continuations-in-part or
extensions thereof.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Performance Films” has the meaning given to such term in the recitals to this
Agreement.

“Permitted Acquisition” has the meaning given to such term in Section 5.6.

“Permitted Amalgamation” means (i) the continuance of any one or more of Exopack
Canada, TPG Canada and Performance Films from its respective jurisdiction or
organization on the date hereof to another Canadian jurisdiction and the
amalgamation of any of Exopack Canada, TPG Canada and Performance Films pursuant
to the laws of the applicable Canadian jurisdiction or (ii) the liquidation,
wind-up or dissolution of any of Exopack Canada, TPG Canada and Performance
Films with and into any other of such entities.

“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes,
assessments or governmental charges or levies not yet due and payable or Liens
for taxes, assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, excluding federal income tax Liens and
Liens in favor of the PBGC under ERISA; (b) Liens in respect of property or
assets of any Borrower or any of its Subsidiaries imposed by law which were
incurred in the ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money, such as carriers’, materialmen’s,
warehousemen’s and

 

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mechanics’ Liens, statutory and common law landlord’s Liens, and other similar
Liens arising in the ordinary course of business, and which either (1) do not in
the aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of any
Borrower or any of its Subsidiaries or (2) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such Lien; (c) Liens
created by or pursuant to this Agreement, the Collateral Documents or the other
Loan Documents; (d) Liens in existence on the Closing Date which are listed, and
the property subject thereto described, on Schedule 5.2, without giving effect
to any extensions or renewals thereof except to the extent that extensions or
renewals of the underlying secured obligations are permitted hereunder;
(e) Liens arising from judgments, decrees, awards or attachments in
circumstances not constituting an Event of Default, provided that the amount of
cash and property (determined on a fair market value basis) deposited or
delivered to secure the respective judgment or decree or subject to attachment
shall not exceed $250,000 or the Dollar Equivalent thereof in the aggregate at
any time; (f) Liens (other than any Lien imposed by ERISA) (1) incurred or
deposits made in the ordinary course of business in connection with general
insurance maintained by any Borrower and its Subsidiaries, (2) incurred or
deposits made in the ordinary course of business of any Borrower and its
Subsidiaries in connection with workers’ compensation, unemployment insurance
and other types of social security, (3) to secure the performance by any
Borrower and its Subsidiaries of tenders, statutory obligations (other than
excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money) to the extent incurred in the ordinary course of business,
(4) to secure the performance by any Borrower and its Subsidiaries of leases of
real property, to the extent incurred or made in the ordinary course of business
consistent with past practices, and (5) other deposits not to exceed $250,000 in
the aggregate; (g) licenses, sublicenses, leases or subleases granted to third
Persons in the ordinary course of business not interfering in any material
respect with the business of any Borrower or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or irregularities in
title, encroachments and other similar charges or encumbrances, in each case not
securing Indebtedness and not interfering in any material respect with the
ordinary conduct of the business of any Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements regarding
operating leases; (j) Liens created pursuant to or in connection with leases or
Capital Leases or purchase money Indebtedness contemplated by Sections 5.1 (a),
(e) and (f) or otherwise permitted pursuant to this Agreement, provided that
(1) such Liens only serve to secure the payment of rent or Indebtedness arising
under such leases or Capital Leases and (2) the Liens encumbering the assets
leased or purported to be leased under such leases or Capital Leases do not
encumber any other assets of any Borrower or any of its Subsidiaries (other than
letters of credit, payment undertaking agreements, guaranteed investment
contracts, deposits of cash or Cash Equivalents and other credit support
arrangements, in each case having an aggregate value not exceeding the fair
market value of the assets leased or purported to be leased under such leases or
Capital Leases (each of such values determined at the time when the lease
agreement relating to the relevant lease or Capital Lease is signed and
delivered)); (k) (1) liens, encumbrances, hypothecs and other matters affecting
title to any real property, (2) as to any particular real property at any time,
such easements, encroachments, covenants, rights of way, minor defects,
irregularities or encumbrances on title which would not reasonably be expected
to materially impair such real property for the purpose for which it is held by
the

 

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mortgagor or grantor thereof, (3) zoning and other municipal ordinances which
are not violated in any material respect by the existing improvements and the
present use made by the mortgagor or grantor thereof of the premises,
(4) general real estate taxes and assessments not yet delinquent, and (5) any
Lien that would be disclosed on a true, correct and complete survey of the real
property that does not materially affect the use or enjoyment of the real
property as it is currently being used; (l) Liens arising pursuant to purchase
money security interests securing Indebtedness representing the purchase price
(or financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Closing Date, provided that (1) any such
Liens attach only to the assets so purchased, upgrades thereon and, if the asset
so purchased is an upgrade, the original asset itself (and such other assets
financed by the same financing source), (2) the Indebtedness (other than
Indebtedness incurred from the same financing source to purchase other assets
and excluding Indebtedness representing obligations to pay installation and
delivery charges for the property so purchased) secured by any such Lien does
not exceed 100% of the lesser of the fair market value or the purchase price of
the property being purchased at the time of the incurrence of such Indebtedness
and (3) the Indebtedness secured thereby is permitted to be incurred pursuant to
this Agreement; (m) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by any Borrower or any of its Subsidiaries in the
ordinary course of business; and (n) rights of setoff upon deposits of cash in
favor of banks or other depository institutions as permitted by any Control
Agreement or, with respect to deposits of cash not subject to a Control
Agreement, customary rights of setoff in favor of such banks or depository
institutions; (o) Liens securing Indebtedness incurred by the US Borrowers
pursuant to the 2011 Term Loan B Credit Agreement, any Cash Management Agreement
and any Hedging Agreement, to the extent subject to the terms and conditions of
the Intercreditor Agreement provided that such Liens do not encumber any asset
that does not constitute Collateral; (p) Liens securing Indebtedness or leases
that refinance, refund, extend, renew and/or replace Indebtedness or leases
secured by Liens described in clauses (a) through (n) above and (q) Liens
created by or pursuant to that certain Cash Pledge and Security Agreement, dated
as of October 13, 2005, by and between Exopack Op Co and The CIT Group/Business
Credit, Inc., provided that the amount of cash deposited or delivered pursuant
thereto shall not exceed $2,250,000 or the Dollar Equivalent thereof in the
aggregate at any time.

“Permitted Indebtedness” means any Indebtedness of any Credit Party that is not
prohibited by Section 5.1 or any other provision of any Loan Document.

“Permitted Refinancing” means Indebtedness constituting a refinancing or
extension of Permitted Indebtedness that (a) has an aggregate outstanding
principal amount not greater than the aggregate principal amount of such
Permitted Indebtedness outstanding at the time of such refinancing or extension,
(b) has a weighted average maturity (measured as of the date of such refinancing
or extension) and maturity no shorter than that of such Permitted Indebtedness,
(c) is not entered into as part of a sale and leaseback transaction, (d) is not
secured by any property or any Lien other than those securing such Permitted
Indebtedness, (e) is otherwise on terms no less favorable to the Credit Parties,
taken as a whole, than those of such Permitted Indebtedness and (f) has an
Effective Yield not greater than the Effective Yield of such Permitted
Indebtedness; provided, however, that, no Guaranty Obligation for such
Indebtedness shall constitute part of such Permitted Refinancing unless similar
Guaranty Obligations with respect to such Permitted Indebtedness existed and
constituted Permitted Indebtedness prior to such refinancing or extension.

 

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“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).

“Plan” means, at any time, an “employee benefit plan,” as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of its employees.

“Pledge Agreements” means the US Pledge Agreement, the Canadian Pledge
Agreement, the UK Shareholder Pledge and any other pledge agreement entered into
after the Closing Date by any Credit Party in favor of an Agent or any Lender.

“Post-Closing Agreement” means the (i) the agreement, dated the date hereof, by
and among the Credit Parties and the US Agent setting forth the obligations of
the Credit Parties to be completed within the times set forth therein; and
(ii) the agreement, dated the date hereof, by and among the Credit Parties and
the Canadian Agent setting forth the obligations of the Credit Parties to be
completed within the times set forth therein.

“PPSA” means the Personal Property Security Act as the same may, from time to
time, be in effect in the Province of Ontario; provided, that in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of any Lender’s security interest in any Collateral is
governed by the Personal Property Security Act as in effect in a jurisdiction
other than the Province of Ontario, the term “PPSA” shall mean the Personal
Property Security Act or a similar act or statute as in effect in such other
jurisdiction for purposes of the provisions of this Agreement relating to such
attachment, perfection or priority and for purposes of definition related to
such provisions.

“Prepayment Date” has the meaning ascribed to it in Section 1.6(e)(iii).

“Prior Claims” means any claim secured by a Lien with superior priority to the
Liens securing the Obligations.

“Pro Rata Share” means (A) with respect to all matters relating to any Lender
(a) with respect to the Revolving Loan prior to the occurrence of the Commitment
Termination Dates, the percentage obtained by dividing (i) the Revolving Loan
Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments of
all Lenders, and (b) with respect to the Revolving Loan on and after the
occurrence of the Commitment Termination Dates, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Revolving Loan
(including Letter of Credit Obligations) held by that Lender by (ii) the
outstanding principal balance of the Revolving Loan (including Letter of Credit
Obligations) held by all Lenders, as such percentages may be adjusted by
assignments pursuant to Section 8.1; (B) with respect to all matters relating to
any US Tranche A Lender only (a) with respect to the US Tranche A Loan prior to
the occurrence of the US Tranche A Commitment Termination Date, the percentage
obtained by dividing (i) the US Tranche A Loan Commitment of that US Tranche A
Lender by (ii) the aggregate US Tranche A Loan Commitments of all US Tranche A
Lenders, (b) with respect to

 

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the US Tranche A Loan on and after the occurrence of the US Tranche A Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the US Tranche A Loan held by that US Tranche A
Lender, by (ii) the outstanding principal balance of the US Tranche A Loan held
by all US Tranche A Lenders, as such percentages may be adjusted by assignments
pursuant to Section 8.1, (C) with respect to all matters relating to any US
Tranche A1 Lender only (a) with respect to the US Tranche A1 Loan prior to the
occurrence of the US Tranche A1 Commitment Termination Date, the percentage
obtained by dividing (i) the US Tranche A1 Loan Commitment of that US Tranche A1
Lender by (ii) the aggregate US Tranche A1 Loan Commitments of all US Tranche A1
Lenders, (b) with respect to the US Tranche A1 Loan on and after the occurrence
of the US Tranche A1 Commitment Termination Date, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the US Tranche A1
Loan held by that US Tranche A1 Lender, by (ii) the outstanding principal
balance of the US Tranche A1 Loan held by all US Tranche A1 Lenders, as such
percentages may be adjusted by assignments pursuant to Section 8.1, (D) with
respect to all matters relating to any Canadian Tranche A Lender only (a) with
respect to all Canadian Tranche A Loans prior to the occurrence of the Canadian
Tranche A Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate Canadian Tranche A Loan Commitments of that Canadian Tranche A
Lender by (ii) the aggregate Canadian Tranche A Loan Commitments of all Canadian
Tranche A Lenders, and (b) with respect to all Canadian Tranche A Loans on and
after the occurrence of the Canadian Tranche A Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Canadian Tranche A Loans held by that Canadian Tranche A Lender, by
(ii) the outstanding principal balance of the Canadian Tranche A Loans held by
all Canadian Tranche A Lenders, as such percentages may be adjusted by
assignments pursuant to Section 8.1. and (E) with respect to all matters
relating to any Canadian Tranche A1 Lender only (a) with respect to all Canadian
Tranche A1 Loans prior to the occurrence of the Canadian Tranche A1 Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate Canadian
Tranche A1 Loan Commitments of that Canadian Tranche A1 Lender by (ii) the
aggregate Canadian Tranche A1 Loan Commitments of all Canadian Tranche A1
Lenders, and (b) with respect to all Canadian Tranche A1 Loans on and after the
occurrence of the Canadian Tranche A1 Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Canadian Tranche A1 Loans held by that Canadian Tranche A1 Lender, by
(ii) the outstanding principal balance of the Canadian Tranche A1 Loans held by
all Canadian Tranche A1 Lenders, as such percentages may be adjusted by
assignments pursuant to Section 8.1.

“Proceeding” means a proceeding under the United States Bankruptcy Code,
Insolvency Laws or any similar law in any jurisdiction, in which any Credit
Party or any Subsidiary thereof is a debtor.

“Projections” means Holdings’ forecasted consolidated and consolidating:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
Division-by-Division basis, if applicable, and otherwise consistent with the
historical Financial Statements of Holdings, together with appropriate
supporting details and a statement of underlying assumptions.

“Proposed Change” has the meaning ascribed to it in Section 9.19(c).

 

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“Qualified Assignee” means (a) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, and (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an “accredited
investor” (as defined in Regulation D under the Securities Act of 1933 or in
respect of Canadian Loans, the Ontario Securities Commission Rule 45-501) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Moody’s at the date that it becomes a Lender and
which, in each case, through its applicable lending office, is capable of
lending to Borrowers without the imposition of any withholding or similar taxes;
provided that such Person shall not be a Qualified Assignee if the assigning
Lender is entitled to receive additional amounts from the Borrowers under
Section 1.12 hereof immediately prior to such assignment in an amount greater
than the amount imposed by such assignee; and provided, further, that no Person
that (directly or through an Affiliate) holds a cash Investment in the
Subordinated Debt or equity of any Credit Party in excess of 20% of its
Commitments or cash Investment in the Loans shall be a Qualified Assignee.

“Qualified Plan” means a Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.

“Real Property” has the meaning ascribed to it in Section 3.14.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect.

“Related Transactions” means (i) the execution and delivery of all of the
Related Transactions Documents, the consummation of the transactions
contemplated thereby and the payment of the 2011 Dividend and the payment of all
Fees, costs and expenses associated with the foregoing on the Closing Date and
(ii) the execution and delivery of this Agreement and each Loan Document and the
performance of each transaction contemplated thereby.

“Related Transactions Documents” means the 2011 High Yield Notes, the 2011
Indenture, the 2011 Term Loan B Credit Agreement and the agreements executed in
connection therewith.

“Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.

“Replacement Lender” has the meaning ascribed to it in Section 9.19(a).

“Report” has the meaning ascribed to it in Section 8.2(1).

 

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“Requirements of Law” means, with respect to any Person, collectively, the
common law and all federal, state, local, foreign, multinational or
international laws, statutes, codes, treaties, standards, rules and regulations,
guidelines, ordinances, orders, judgments, writs, injunctions, decrees
(including administrative or judicial precedents or authorities) and the
interpretation or administration thereof by, and other determinations,
directives, requirements or requests of, any Governmental Authority, in each
case whether or not having the force of law and that are applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.

“Requisite Lenders” means Lenders having (a) more than 50% of the Commitments of
all Lenders, or (b) if the Commitments have been terminated, more than 50% of
the aggregate outstanding amount of the Loans.

“Reserves” means, with respect to any Borrowing Base (a) reserves established by
Applicable Agent from time to time against Eligible Accounts and Eligible
Inventory pursuant to Exhibit 6.1(d) and (b) such other reserves against
Eligible Accounts, Eligible Inventory, Aggregate Borrowing Availability, US
Tranche A Borrowing Availability, US Tranche A1 Borrowing Availability, Canadian
Tranche A Borrowing Availability, or Canadian Tranche A1 Borrowing Availability
that Applicable Agent may, in its reasonable credit judgment acting in good
faith, establish from time to time without double-counting. Without limiting the
generality of the foregoing, Reserves established to ensure the payment of
accrued Interest Expenses or Indebtedness shall be deemed to be a reasonable
exercise of Applicable Agent’s credit judgment.

“Restricted Payment” means, with respect to any Credit Party (a) the declaration
or payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of Stock;
(b) the declaration or payment of the 2011 Dividend; (c) any payment on account
of the purchase, redemption, defeasance, sinking fund or other retirement of
such Credit Party’s Stock or any other payment or distribution made in respect
thereof, either directly or indirectly; (d) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any
Subordinated Debt; (e) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Stock of such Credit Party now or hereafter outstanding;
(f) any payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any shares of such Credit
Party’s Stock or of a claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission; (g) any
payment, loan, contribution, or other transfer of funds or other property to any
Stockholder of such Credit Party other than payment of compensation in the
ordinary course of business to Stockholders who are employees of such Credit
Party; and (h) any payment of management fees (or other fees of a similar
nature), out-of-pocket expenses in connection therewith and indemnities payable
in connection with any management services, consulting or like agreement by such
Credit Party to any Stockholder of such Credit Party or its Affiliates.

“Restricted Subsidiaries” has the meaning given to such term in the 2011
Indenture.

 

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“Revolving Credit Advances” means the Canadian Tranche A Revolving Credit
Advances, the Canadian Tranche A1 Revolving Credit Advances, the US Tranche A
Revolving Credit Advances and the US Tranche A1 Revolving Credit Advances.

“Revolving Lenders” means, collectively, the US Tranche A Lenders, the US
Tranche A1 Lenders, the Canadian Tranche A Lenders and the Canadian Tranche A1
Lenders.

“Revolving Loan” means, collectively, the US Tranche A Loan, the US Tranche A1
Loan, the Canadian Tranche A Loan and the Canadian Tranche A1 Loan.

“Revolving Loan Commitment” means, collectively, the US Tranche A Loan
Commitment, US Tranche A1 Loan Commitment, the Canadian Tranche A Loan
Commitment and Canadian Tranche A1 Loan Commitment.

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

“Secured Parties” means US Agent and US Lenders and Canadian Agent and Canadian
Lenders, as the context may require.

“Security Agreements” means, collectively, the US Security Agreement and the
Canadian Security Agreement.

“Sellers” means, collectively, Intelicoat Technologies Image Products Holdco
LLC, a Delaware limited liability company, and Image Products Group LLC, a
Delaware limited liability company.

“Senior Notes” means those certain 111/4% Senior Unsecured Notes due 2014 issued
by Holdings in an aggregate original principal amount up to $245,000,000, as
amended and as may be further amended or supplemented from time to time pursuant
to the terms hereof and the terms of the Indenture.

“Settlement Date” means the US Settlement Date or Canadian Settlement Date, as
the context may require.

“Software” means all “software” as such term is defined in the Code, the PPSA
(or similar Applicable Law), now owned or hereafter acquired by any Credit
Party, other than software embedded in any category of Goods, including all
computer programs and all supporting information provided in connection with a
transaction related to any program.

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the present fair saleable value of the property of such Person is
greater than the total amount of liabilities, including subordinated and
contingent liabilities, of such Person; (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts and liabilities,
including subordinated and contingent liabilities as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay as such debts and
liabilities mature; (d) such Person is not engaged in a business or transaction,
and

 

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is not about to engage in a business or transaction, for which such Person’s
property would constitute an unreasonably small capital; and (e) such Person is
able to pay its debts and liabilities, contingent obligations and other
commitments as they mature in the ordinary course of business. The amount of
contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that
would be reasonably be expected to become an actual or matured liability.

“Specified Obligations” means Obligations consisting of (a) the principal and
interest on Loans and (b) reimbursement obligations in respect of Letters of
Credit.

“Sponsor” means, collectively, Sun Capital Partners III, LP, Sun Capital
Partners II QP, LP and Sun Capital Partners IV, LP.

“Statement” has the meaning ascribed to it in Section 6.1(b).

“Stock” means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock, convertible preferred equity certificates, preferred equity certificates
(other than PEC’s) or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934).

“Stockholder” means, with respect to any Person, each holder of Stock of such
Person.

“Subordinated Debt” means any Indebtedness of any Credit Party subordinated to
the Obligations as to right and time of payment and as to any other rights and
remedies thereunder and having such other terms as are satisfactory to Agents
and Requisite Lenders.

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, Stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of
50% or more of such Stock whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership or limited liability company in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such Person is a general partner
or may exercise the powers of a general partner. Unless the context otherwise
requires, each reference to a Subsidiary shall be a reference to a Subsidiary of
Holdings. Notwithstanding the foregoing, the Excluded Subsidiaries shall not be
considered “Subsidiaries” for purposes of this Agreement.

“Supermajority Lenders” means Lenders having (a) 65% or more of the Commitments
of all Lenders, or (b) if the Commitments have been terminated, 65% or more of
the aggregate outstanding amount of the Loans.

 

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“Target” has the meaning ascribed to it in Section 5.6.

“Taxes” has the meaning ascribed to it in Section 1.12(a).

“Tax Distributions” means, for so long as any Borrowers is a Subchapter S
corporation, limited liability company or partnership dividends and/or
distributions paid by such Borrower to its shareholders, members or general
partners, as the case may be, in an amount equal to the product of (a) taxable
income related to such persons’ ownership interest in such Borrower multiplied
by (b) the sum of the highest effective individual federal and state income tax
rates in a state in which any such shareholder, member or general partner, as
the case may be, resides which were applicable in such year.

“Tax Returns” means all reports, returns, information returns, claims for
refund, elections, estimated Tax filings or payments, requests for extension,
documents, statements, declarations and certifications and other information
required to be filed with respect to Taxes, including attachments thereto and
amendments thereof.

“Tender Offer” shall mean the offer by Holdings to repurchase up to any and all
of the outstanding Senior Notes pursuant to the Tender Offer Materials.

“Tender Offer Materials” means the Offer to Purchase and Consent Solicitation
Statement and Letter of Transmittal and Consent dated May 6, 2011.

“Tender Offer Notes Repurchase” shall mean the repurchase by Holdings on the
Closing Date of all of the Senior Notes validly tendered and not withdrawn
pursuant to the Tender Offer and the payment of all related tender premiums and
accrued and unpaid interest owing in connection therewith.

“Termination Date” means the date on which (a) the Loans have been indefeasibly
repaid in full, (b) all other Obligations under this Agreement and the other
Loan Documents have been completely discharged (other than contingent
indemnification obligations as to which no unsatisfied claim has been asserted),
(c) all Letter of Credit Obligations have been cash collateralized in the amount
set forth in Section 1.6(g), cancelled or, with the consent of US Agent in each
instance, backed by standby letters of credit acceptable to US Agent, (d) all
Commitments have been terminated and (e) Agents and Lenders have been released
by Credit Parties of all claims against Agents and Lenders.

“Title IV Plan” means a Plan (other than a Multiemployer Plan), that is covered
by Title IV of ERISA or Section 412 of the IRC, and that any Credit Party or
ERISA Affiliate maintains, contributes to or has an obligation to contribute to
on behalf of participants who are or were employed by any of them.

“TPG” has the meaning given to such term in the recitals to this Agreement.

“TPG Canada” means The Packaging Group (Canada) Corporation, a Nova Scotia
unlimited liability company.

“TPG Enterprises” means TPG Enterprises, Inc., a Delaware corporation.

 

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“TPG Recapitalization” means the recapitalization of TPG Canada with the result
being that the amount of paid up capital of TPG Canada for the purposes of the
ITA is reduced by approximately two-thirds of the amount thereof on the Closing
Date and an amount equal to such reduction is paid to TPG Enterprises as a
return of capital and an amount equal to such return of capital is lent by TPG
Enterprises to TPG Canada on an interest bearing basis.

“Trademark Security Agreements” means the US Trademark Security Agreements and
Canadian Trademark Security Agreements.

“Trademark License” means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to such Credit Party
to use any Trademark owned by a third party.

“Trademarks” means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all trademarks, trade names, corporate names,
business names, trade styles, service marks, logos, internet domain names, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office, the Canadian
Intellectual Property Office or in any similar office or agency of the United
States, Canada any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals thereof;
and (c) all goodwill associated with or symbolized by any of the foregoing.

“UK Group Member” means Exopack UK Holdco and each of its Subsidiaries.

“UK Holdco” means Intelicoat Technologies EF Holdco Ltd., a company organized
under the laws of England and Wales.

“U.K. Engineered Films” means Intelicoat Technologies Engineered Films Ltd., a
company organized under the laws of England and Wales.

“UK Shareholder Pledge” means the UK Shareholder Pledge Agreement dated as of
October 3, 2007, executed by US Borrower, pledging 65% of the Stock of Exopack
UK Holdco in favor of US Agent, on behalf of itself and US Lenders.

“Unfunded Pension Liability” means, at any time, the aggregate amount, if any,
of the amount by which the present value of all accrued benefits under each
Title IV Plan exceeds the fair market value of all assets of such Title IV Plan
allocable to such benefits in accordance with Title IV of ERISA, all determined
as of the most recent valuation date for each such Title IV Plan using the
actuarial assumptions for purposes of determining the funded status of such
Title IV Plan under Section 412 of the IRC.

“US” means the United States of America.

“US Agent” means GE Capital in its capacity as US Agent for US Lenders or its
successor appointed pursuant to Section 8.2.

 

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“US Allocable Amount” has the meaning ascribed to it in Section 10.7(b).

“US Borrowers” has the meaning ascribed thereto in the recitals to this
Agreement.

“US Borrower Representative” means Exopack Op Co, in its capacity as US Borrower
Representative pursuant to the provisions of Section 1.13(a).

“US Collateral” means the property covered by the US Security Agreement and the
other US Collateral Documents and any other property, tangible or intangible,
now existing or hereafter acquired, that may at any time be or become subject to
a security interest or Lien in favor of US Agent, on behalf of itself and
Lenders, to secure the Obligations or any portion thereof.

“US Collateral Documents” means the US Security Agreement, the US Guaranty, the
US Pledge Agreement, the Patent Security Agreements, the Trademark Security
Agreements, the Copyright Security Agreements, the Mortgages, and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations or any portion thereof or
reaffirming the grant of any such Liens.

“US Copyright Security Agreements” means the US Copyright Security Agreements,
if any, made in favor of US Agent, on behalf of itself and Lenders, by each
applicable US Credit Party.

“US Credit Parties” means Exopack Holdings and its Domestic Subsidiaries.

“US Disbursement Account” has the meaning ascribed to it in Section 1.1(c).

“US Foreign Lender” has the meaning ascribed to it in Section 1.12(d).

“US Guarantor Payment” has the meaning ascribed to it in Section 10.7(a).

“US Guarantors” means each of Exopack Holdings, Holdings and each Domestic
Subsidiary of Holdings and each other Person, if any, that executes a guaranty
or other similar agreement in favor of US Agent, for itself and the ratable
benefit of Lenders guarantying the Obligations, in connection with the
transactions contemplated by this Agreement and the other Loan Documents.

“US Guaranty” means the Guaranty, dated as of the Original Closing Date,
executed by each Domestic Subsidiary of Holdings (other than US Borrowers) in
favor of US Agent, on behalf of Agents and Lenders, as reaffirmed on the Closing
Date.

“US Indemnitees” has the meaning ascribed to it in Section 9.1(a).

“US Index Rate” means, for any day, a floating rate equal to the higher of
(i) the rate publicly quoted from time to time by The Wall Street Journal as the
“base rate on corporate loans posted by at least 75% of the nation’s 30 largest
banks” (or, if The Wall Street Journal ceases quoting a base rate of the type
described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
“Selected Interest Rates” as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in this Agreement based upon the US Index Rate shall
take effect at the time of such change in the US Index Rate.

 

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“US Index Rate Loan” means a Loan or portion thereof bearing interest by
reference to the US Index Rate.

“US Interest Rate Agreement” means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or similar agreement or
arrangement designed to protect US Borrowers against fluctuations in interest
rates entered into between one or more US Borrowers and one or more US Lenders
to the extent permitted hereunder.

“US L/C Issuer” means GE Capital or a Subsidiary thereof or a bank or other
legally authorized Person selected by or acceptable to US Agent in its sole
discretion, in such Person’s capacity as an issuer of US Letters of Credit
hereunder.

“US L/C Sublimit” has the meaning ascribed to it in Section 1.1(b)(i).

“US Lenders” means the US Tranche A Lenders and the US Tranche A1 Lenders.

“US Letters of Credit” means standby letters of credit issued for the account of
US Borrowers by US L/C Issuers for which US Agent and US Tranche A Lenders have
incurred US Letter of Credit Obligations.

“US Letters of Credit Fee” has the meaning ascribed to it in Section 1.4(d).

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

“US Loans” means the US Tranche A Loans and the US Tranche A1 Loans.

“US Loan Commitments” means the US Tranche A Loan Commitment and the US Tranche
A1 Loan Commitment.

“US Non-Funding Lender” has the meaning ascribed to it in Section 8.5(a).

“US Notes” means the US Tranche A Notes and the US Tranche A1 Notes.

“US Obligations” means all loans, advances, debts, liabilities and obligations,
for the performance of covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then required or contingent, or such
amounts are liquidated or determinable), including US Letter of Credit
Obligations, owing by any US Credit Party to US Agent or any US Lender, and all
covenants and duties regarding such amounts, of any kind or

 

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nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under this Agreement or any of the other Loan
Documents and all liabilities and obligations of the US Credit Parties under the
US Interest Rate Agreements to the extent the counterparty is a US Lender. This
term includes all principal, interest (including all interest that accrues after
the commencement of any case or proceeding by or against any US Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), Fees, Charges,
expenses, attorneys’ fees and any other sum chargeable to any US Credit Party
under this Agreement or any of the other Loan Documents.

“US Overadvance” has the meaning ascribed to it in Section 1.1(a).

“US Patent Security Agreement” means the US Patent Security Agreement, if any,
made in favor of US Agent, on behalf of itself and Lenders, by each applicable
US Credit Party.

“US Pledge Agreement” means the Amended and Restated Pledge Agreement dated as
of the Closing Date, executed by each of Exopack Holdings, Holdings and each US
Credit Party in favor of US Agent, on behalf of itself, US Lenders, the Canadian
Agent and Canadian Lenders.

“US Security Agreement” means the Amended and Restated Security Agreement dated
as of the Closing Date, by and among US Agent, on behalf of itself and Lenders,
and each US Credit Party that is a signatory thereto.

“US Settlement Date” has the meaning ascribed to it in Section 8.5(a)(ii).

“US Trademark Security Agreements” means the US Trademark Security Agreements,
if any, made in favor of US Agent, on behalf of itself and Lenders, by each
applicable US Credit Party.

“US Tranche A Borrowing Availability” means, at any time the lesser of (i) the
amount of the US Tranche A Loan Commitment of all US Tranche A Lenders at such
time and (ii) the Aggregate US Tranche A Borrowing Base at such time, in each
case less the sum of (x) the amount of the outstanding US Tranche A Loan
(including, without duplication, US Letter of Credit Obligations) plus the
Dollar Equivalent of the outstanding Canadian Tranche A Loans at such time, plus
(y) Reserves imposed by Agents in their reasonable credit judgment at such time
in accordance with the terms hereof.

“US Tranche A Borrowing Base” means, for any US Borrower, as of any date of
determination by US Agent, from time to time, an amount equal to the sum at such
time of:

 

  (a) up to 85% of the book value of the Eligible Accounts of such US Borrower
and its Domestic Subsidiaries (which for the avoidance of doubt, includes direct
and indirect Domestic Subsidiaries) at such time;

 

  (b) up to the lesser of (i) 62.5% of the book value of the Eligible Inventory
of such US Borrower and its Domestic Subsidiaries (which for the avoidance of
doubt, includes direct and indirect Domestic Subsidiaries but excluding any UK
Group Member) consisting of raw materials (other than Eligible Inventory
consisting of raw materials in-transit, eligible pursuant to Section 1.9(p)) and
finished goods valued at the lower of cost (determined on a first-in, first-out
basis) or market and (ii) 85% of the NOLV of such Eligible Inventory (such
amount the “US Tranche A Raw Materials Advance Rate”);

 

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  (c) up to 45% of the book value of the Eligible Inventory of such US Borrower
and its Domestic Subsidiaries (which for the avoidance of doubt, includes direct
and indirect Domestic Subsidiaries) consisting of work in process (eligible
pursuant to Section 1.9(o)) in an amount not to exceed $6,500,000 in the
aggregate; and

 

  (d) up to the inverse of the then applicable US Tranche A Raw Materials
Advance Rate on the Eligible Inventory of such US Borrower and its Domestic
Subsidiaries (which for the avoidance of doubt, includes direct and indirect
Domestic Subsidiaries) consisting of raw materials in-transit (eligible pursuant
to Section 1.9(p)), in an amount not to exceed $1,000,000 in the aggregate.

Notwithstanding the foregoing, no assets or receivables of any UK Group Member
generated pursuant to Section 5.1(c)(ii) or (iii) shall be included in the US
Tranche A Borrowing Base until the Agents shall have completed reasonably
satisfactory audits and appraisals of such assets and receivables.

“US Tranche A Commitment Termination Date” means the earliest of (a) May 31,
2016, (b) the date of termination (whichever is earliest) of US Tranche A
Lenders’ obligations to make US Tranche A Revolving Credit Advances or incur US
Letter of Credit Obligations or permit existing US Tranche A Loans to remain
outstanding, in each case, pursuant to Section 7.2 or Section 7.3, and (c) the
date of (i) payment in full by US Borrowers of the US Tranche A Loans, (ii) the
cancellation and return (or stand-by guarantee) of all US Letters of Credit or
the cash collateralization of all US Letter of Credit Obligations pursuant to
Section 1.6(g), and (iii) the permanent reduction of the US Tranche A Loan
Commitments to zero dollars ($0).

“US Tranche A Lenders” means GE Capital, the other Lenders named on the
signature pages of this Agreement as US Tranche A Lenders (in such capacity
only), and, if any such US Tranche A Lender shall assign all or any portion of
the US Obligations in accordance with the terms hereof, such term shall include
any assignee of such US Tranche A Lender.

“US Tranche A Loans” means, at any time, the sum of (i) the aggregate amount of
US Tranche A Revolving Credit Advances outstanding to US Borrowers plus (ii) the
aggregate US Letter of Credit Obligations incurred on behalf of US Borrowers.
Unless the context otherwise requires, references to the outstanding principal
balance of the US Tranche A Loan shall include the outstanding balance of US
Letter of Credit Obligations.

“US Tranche A Loan Commitment” means (a) as to any US Tranche A Lender, the
commitment of such US Tranche A Lender to make its Pro Rata Share of US Tranche
A Revolving Credit Advances or incur its Pro Rata Share of US Letter of Credit
Obligations as set forth on Annex B or in the most recent Assignment Agreement,
if any, executed by such US

 

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Tranche A Lender and (b) as to all US Tranche A Lenders, the aggregate
commitment of all US Tranche A Lenders to make the US Tranche A Revolving Credit
Advances or incur US Letter of Credit Obligations, which aggregate commitment
shall be the Dollar Equivalent of Seventy Million Dollars ($70,000,000) on the
Closing Date, as such amount may be adjusted, if at all, from time to time in
accordance with this Agreement.

“US Tranche A Notes” has the meaning ascribed to it in Section 1.1(a).

“US Tranche A Raw Materials Advance Rate” has the meaning ascribed to it in the
definition of “US Tranche A Borrowing Base”.

“US Tranche A Revolving Credit Advances” has the meaning ascribed to it in
Section 1.1(a).

“US Tranche A1 Borrowing Availability” means, at any time the lesser of (i) the
amount of the US Tranche A1 Loan Commitment of all US Tranche A1 Lenders at such
time and (ii) the Aggregate US Tranche A1 Borrowing Base at such time, in each
case less the sum of (x) the amount of the outstanding US Tranche A1 Loan plus
the Dollar Equivalent of the outstanding Canadian Tranche A1 Loans at such time
plus (y) Reserves imposed by Agents in their reasonable credit judgment at such
time in accordance with the terms hereof.

“US Tranche A1 Borrowing Base” means, for any US Borrower, as of any date of
determination by US Agent, from time to time, an amount equal to the sum at such
time of:

(a) up to an additional 5% of the book value of the Eligible Accounts of such US
Borrower and its Domestic Subsidiaries (which for the avoidance of doubt,
includes direct and indirect Domestic Subsidiaries) at such time; and

(b) up to the lesser of (i) an additional 5% of the book value of the Eligible
Inventory of such US Borrower and its Domestic Subsidiaries (which for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries but
excluding any UK Group Member) consisting of raw materials and finished goods
valued at the lower of cost (determined on a first-in, first-out basis) or
market and (ii) an additional 5% of the NOLV of such Eligible Inventory.

Notwithstanding the foregoing, no assets or receivables of any UK Group Member
generated pursuant to Section 5.1(c)(ii) or (iii) shall be included in the US
Tranche A1 Borrowing Base until the Agents shall have completed reasonably
satisfactory audits and appraisals of such assets and receivables.

“US Tranche A1 Commitment Termination Date” means the earliest of (a) May 31,
2016, (b) the date of termination (whichever is earliest) of US Tranche A1
Lenders’ obligations to make US Tranche A1 Revolving Credit Advances or permit
existing US Tranche A1 Loans to remain outstanding, in each case, pursuant to
Section 7.2 or Section 7.3, and (c) the date of (i) payment in full by US
Borrowers of the US Tranche A1 Loans, and (ii) the permanent reduction of the US
Tranche A1 Loan Commitments to zero dollars ($0).

 

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“US Tranche A1 Lenders” means GE Capital, the other Lenders named on the
signature pages of this Agreement as US Tranche A1 Lenders (in such capacity
only), and, if any such US Tranche A1 Lender shall assign all or any portion of
the US Obligations in accordance with the terms hereof, such term shall include
any assignee of such US Tranche A1 Lender.

“US Tranche A1 Loan Commitment” means (a) as to any US Tranche A1 Lender, the
commitment of such US Tranche A1 Lender to make its Pro Rata Share of US Tranche
A1 Revolving Credit Advances as set forth on Annex B or in the most recent
Assignment Agreement, if any, executed by such US Tranche A1 Lender and (b) as
to all US Tranche A1 Lenders, the aggregate commitment of all US Tranche A1
Lenders to make the US Tranche A1 Revolving Credit Advances, which aggregate
commitment shall be the Dollar Equivalent of Five Million Dollars ($5,000,000)
on the Closing Date, as such amount may be adjusted, if at all, from time to
time in accordance with this Agreement.

“US Tranche A1 Loans” means, at any time, the aggregate amount of US Tranche A1
Revolving Credit Advances outstanding to US Borrowers.

“US Tranche A1 Notes” has the meaning ascribed to it in Section 1.1(e).

“US Tranche A1 Revolving Credit Advances” has the meaning ascribed to it in
Section 1.1(e).

“Utilization Level” shall mean, as of any date of determination, a fraction,
expressed as a percentage, of which (x) the numerator shall be (i) the aggregate
amount of Advances outstanding as of such date of determination plus (ii) the
face amount of all undrawn Letters of Credit outstanding as of such date of
determination and (b) the denominator shall be the Aggregate Borrowing
Availability as of such date of determination.

“Welfare Plan” means a Plan described in Section 3(1) of ERISA.

“Voluntary Prepayment Threshold” means, as of any date of determination, the
greater of (x) $37,500,000 and (y) 50% of the Commitments.

“Voting Stock” of any Person means Stock having the right to vote for election
of directors of such Person under ordinary circumstances.

Rules of construction with respect to accounting terms used in this Agreement or
the other Loan Documents shall be as set forth or referred to in this Annex A.
All other undefined terms contained in any of the Loan Documents shall, unless
the context indicates otherwise, have the meanings provided for by the Code to
the extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in this Agreement or any of the Appendices to a section,
subsection or clause refer to such section, subsection or clause as contained in
this Agreement. The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in this Agreement or any such Annex, Exhibit or Schedule.

 

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Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the word “or”
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance. Definitions of agreements and instruments in Annex A shall mean
and refer to such agreements and instruments as amended, modified, supplemented,
restated, substituted or replaced from time to time in accordance with their
respective terms and the terms of this Agreement and the other Loan Documents.
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to in this Agreement shall be made, without giving
effect to any election under Accounting Standards Codification 825-10 (or any
other Financial Accounting Standard having a similar result or effect) to value
any Indebtedness or other liabilities of any Credit Party or any Subsidiary of
any Credit Party at “fair value.”

 

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ANNEX B

to

CREDIT AGREEMENT

COMMITMENT AMOUNTS

 

    

Lender

US Tranche A Loan Commitment $70,000,000

   GENERAL ELECTRIC CAPITAL CORPORATION

US Tranche A1 Loan Commitment $5,000,000

   GENERAL ELECTRIC CAPITAL CORPORATION

Canadian Tranche A Loan Commitment $15,000,000

   GE CANADA FINANCE HOLDING COMPANY

Canadian Tranche A1 Loan Commitment $5,000,000

   GE CANADA FINANCE HOLDING COMPANY

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

ANNEX C

to

CREDIT AGREEMENT

CLOSING CHECKLIST

 

A. DOCUMENTS

1. Credit Agreement: This Agreement or counterparts hereof shall have been duly
executed by, and delivered to, each Credit Party, Agents and Lenders.

2. Fee Letter: The fee letter, dated as of the date hereof, among GE Capital, GE
Canada and the Borrowers shall have been duly executed and delivered by such
parties.

3. Revolving Notes: Duly executed originals of the US Notes and Canadian Notes
for each applicable Lender, dated the date hereof, if requested by the
respective Lenders, shall have been delivered to the Applicable Agent.

4. Intercreditor Agreement: Duly executed originals of the Intercreditor
Agreement, dated as of the date hereof, by and among the Agents and the
administrative agent under the 2011 Term Loan B Credit Agreement.

5. US Reaffirmation: Duly executed originals of Reaffirmation of the US
Collateral Documents, dated the date hereof, shall have been delivered to the
Applicable Agent.

6. Canadian Reaffirmation: Duly executed originals of Reaffirmation of the
Canadian Collateral Documents, dated the date hereof, shall have been delivered
to the Applicable Agent.

7. Lien Searches: Copies of UCC, Intellectual Property and other appropriate
search reports and of all effective prior filings listed therein, together with
evidence of the termination of such prior filings and other documents with
respect to the priority of the security interest of the Agents in the
Collateral, in each case as may be reasonably requested by the Agents.

8. US Security Agreement:

(a) Duly executed originals of the US Security Agreement, dated the date hereof,
shall have been delivered to the Applicable Agent; and

(b) Evidence satisfactory to the Applicable Agent shall have been delivered to
the Applicable Agent that such Agent has a valid and perfected (to the extent
possible under applicable law following filing of UCC financing statements)
first priority security interest in the Collateral (other than with respect to
Term B Priority Collateral (as defined in the Intercreditor Agreement),
including such documents as Applicable Agent may request in order to perfect its
security interests in the Collateral.

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9. US Pledge Agreement: Duly executed originals of the US Pledge Agreement,
dated the date hereof, shall have been delivered to the Applicable Agent.

10. Post-Closing Agreements: Duly executed originals of each Post-Closing
Agreement, dated the date hereof, shall have been delivered to the Applicable
Agent.

11. Certificate of Formation and Good Standing: For each Credit Party, (a) its
articles or certificate of incorporation or certificate of formation or
equivalent organizational document, as applicable, and all amendments thereto,
(b) good standing certificates or similar certificates (including verification
of tax status) in its state, province or jurisdiction of incorporation or
formation, as applicable, but only if such concept has legal consequence in such
state, province or jurisdiction and (c) good standing certificates or similar
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
but only if such concept has legal consequence in such jurisdiction except, with
respect to foreign qualifications, where the failure to be in good standing
could not reasonably be expected to have a Material Adverse Effect, each dated a
recent date prior to the date hereof and certified by the applicable Secretary
of State or other authorized Governmental Authority shall have been delivered to
Agents.

12. By-laws and Resolutions: For each Credit Party, (a) its by-laws or operating
agreement, or equivalent organizational documents, as applicable, together with
all amendments thereto and (b) resolutions of such Person’s Board of Directors,
Board of Members or equivalent body, as applicable, approving and authorizing
the execution, delivery and performance of the Loan Documents to which it is a
party and the transactions to be consummated in connection therewith, each
certified as of the date hereof by such Person’s secretary or an assistant
secretary or other officer acceptable to the Applicable Agent as being in full
force and effect without any modification or amendment shall have been delivered
to Agents.

13. Incumbency Certificates: For each Credit Party, signature and incumbency
certificates of the officers of such Person executing any of the Loan Documents,
certified as of the date hereof by such Person’s secretary or an assistant
secretary or other officer acceptable to the Applicable Agent as being true,
accurate, correct and complete shall have been delivered to Agents.

14. Opinions of Counsel: Duly executed originals of opinions of (i) Morgan,
Lewis & Bockius LLP, including, without limitation, as to no conflict with
applicable law or other material agreements and no conflict with the Related
Transactions Documents, (ii) Blake, Cassels & Graydon LLP, (iii) Cox and Palmer
and (iv) Kreis, Enderle, Hudgins & Borsos, P.C., counsel for the Credit Parties,
dated the date hereof, shall have been delivered to Agents, together with such
other opinions as the Agents may reasonably require and, which shall be in form
and substance reasonably satisfactory to the Agents.

15. Officer’s Certificate: Duly executed originals of a certificate of an
authorized officer of Holdings, dated the Closing Date, shall have been
delivered to Agents, certifying on behalf of each Credit Party that, (a) since
December 31, 2010, there have been no events or changes in facts or
circumstances affecting any Credit Party or any of its Subsidiaries which in

 

2

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

the aggregate have had a Material Adverse Effect and that, as of the Closing
Date; (b) both before and after giving effect to the Closing Date, there has
been no Default or Event of Default under the Loan Documents or under any
material contract or agreement of Holdings, the Borrowers or their respective
Subsidiaries; (c) all representations and warranties are true and correct in all
material respects; and (d) as of the Closing Date, there shall not exist any
action, suit, investigation, litigation or proceeding pending or, to the
knowledge of the Borrowers, threatened in any court or before any arbitrator or
governmental authority that has or could reasonably be expected to have a
Material Adverse Effect on Borrowers and their Subsidiaries (taken as a whole)
or that seeks to enjoin the entry into the Loan Documents.

16. Related Transactions Documents: Duly executed copies of each Related
Transactions Document shall have been delivered to the US Agent.

17. Approvals: Copies of all governmental approvals necessary to consummate the
Related Transactions shall have been delivered to Agents.

18. Insurance. Insurance certificates in form and substance satisfactory to the
Agents demonstrating that the insurance policies required by Section 4.2(d) are
in full force and effect together with endorsements required by Section 4.2(d);
and

19. Solvency Opinion: A copy of the Solvency Opinion, dated May 31, 2011, from
Duff & Phelps, LLC , delivered in connection with the Related Transactions.

 

B. NON-DOCUMENTARY CONDITIONS

20. Payment of Fees: Borrowers shall have paid the Fees required to be paid on
the Closing Date, including but not limited to such Fees specified in the GE
Capital Fee Letter, and all expenses that shall then be payable hereunder.

21. Related Transactions: All conditions precedent to the Related Transactions
Documents shall have been satisfied, and substantially concurrently with the
effectiveness of this Agreement, Holdings shall have issued the 2011 High Yield
Notes and shall have incurred the Indebtedness under the 2011 Term Loan B Credit
Agreement, and certain Borrowers shall have received gross proceeds therefrom in
the aggregate amount of $585,000,000, the Borrowers shall have purchased at
least $291,512,000 of the Senior Notes and the 2011 Dividend shall be paid.

22. Tender Offer: Either (i)(x) at least a majority of the aggregate principal
amount of the outstanding Senior Notes shall have been validly tendered and not
withdrawn pursuant to the Tender Offer and, on or prior to the Closing Date,
shall be repurchased pursuant to the Tender Offer Notes Repurchase and (y) the
Indenture Amendment shall have been entered into (and be in full force and
effect), all to the reasonable satisfaction of the US Agent or (ii) on or prior
to the Closing Date, Holdings shall defease or satisfy and discharge all of the
Non-Tendered Notes in accordance with the terms of the Indenture such that, in
the case of this subclause (ii), after giving effect thereto, all outstanding
Senior Notes shall have been repurchased pursuant to the Tender Offer Notes
Repurchase or defeased or satisfied and discharged in accordance with the terms
of the Indenture.

 

3

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

ANNEX D

to

CREDIT AGREEMENT

WIRE TRANSFER INFORMATION

US Agent:

 

Name:

   General Electric Capital Corporation

Bank:

   Deutsche Bank Trust Company Americas    Newark, New Jersey

ABA #:

   XXXXXXXXXXXXXX

Account #:

   XXXXXXXXXXXXXX

Account Name:

   XXXXXXXXXXXXXX

Reference:

   XXXXXXXXXXXXXX

Canadian Agent:

  

Name:

   GE Canada Finance Company

Bank:

   Royal Bank Of Canada – Main Branch    Toronto, Ontario M5J 2J5

Bank Swift:

   XXXXXXXXXXXXXX    XXXXXXXXXXXXXX    XXXXXXXXXXXXXX

Account #:

   XXXXXXXXXXXXXX

Account Name:

   XXXXXXXXXXXXXX

Reference:

   XXXXXXXXXXXXXX

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

ANNEX E

to

CREDIT AGREEMENT

Form of Compliance Certificate

 

2

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

EXHIBIT 5.19

MINIMUM FIXED CHARGE COVERAGE RATIO

 

EBITDA (calculated in the relevant Compliance Certificate)

   $ __________    Less:  any provision for income taxes (whether paid or
payable in cash)      __________      

Capital Expenditures other than the portion thereof funded by third party
financing

     __________   

Operating Cash Flow

   $ __________      

Fixed Charge Coverage Ratio is defined as follows:

  

Interest expense (whether cash or non-cash) deducted in the determination of
Consolidated Net Income, including interest expense with respect to any Funded
Debt and interest expense that has been capitalized

   $ __________   

Less:  Amortization of capitalized fees and expenses incurred with respect to
the Related Transactions included in interest expense above

     __________   

Amortization of any original discount attributable to any Funded Debt or
warrants included in interest expense above

     __________      

Interest paid in kind and included in interest expense above

     __________   

Interest Expense

   $ __________       Plus:  Scheduled payments of principal with respect to all
Indebtedness      __________   

Fixed Charges

   $ __________      

Fixed Charge Coverage Ratio (Operating Cash Flow from above, divided by Fixed
Charges)

     __________      

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

EXHIBIT 1.1(a)(i)

FORM OF US TRANCHE A NOTE

[New York, New York]

 

$                        May             , 2011

FOR VALUE RECEIVED, each of the undersigned (each individually a “Borrower” and
collectively, the “Borrowers”), HEREBY PROMISES TO PAY              (“Lender”),
at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation,
as US Agent for US Lenders (“US Agent”), at its address at [299 Park Avenue, New
York, New York 10171], or at such other place as US Agent may designate from
time to time in writing, in lawful money of the United States of America and in
immediately available funds, the amount of              ($            ) or, if
less, the aggregate unpaid amount of all US Tranche A Revolving Credit Advances
made to the undersigned under the “Credit Agreement” (as hereinafter defined).
All capitalized terms used but not otherwise defined herein have the meanings
given to them in the Credit Agreement or in Annex A thereto.

This US Tranche A Note is one of the US Notes issued pursuant to that certain
Third Amended and Restated Credit Agreement dated as of January 31, 2006, as
amended and restated as of October 31, 2007, as further amended and restated as
of July 2, 2010 and as further amended and restated as of May 31, 2011, by and
among, among others, the Borrowers, the other Persons named therein as Credit
Parties, US Agent, GE Canada Finance Holding Company, a Nova Scotia unlimited
liability company, in its capacity as Canadian Agent for the Canadian Lenders,
Lender, the persons signatory thereto from time to time as US Lenders, and the
other Persons signatory thereto from time to time as Canadian Lenders (including
all annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the “Credit Agreement”), and is
entitled to the benefit and security of the Credit Agreement and all of the
other Loan Documents referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid. The date and amount of
each US Tranche A Revolving Credit Advance made by US Lenders to US Borrowers,
the rates of interest applicable thereto and each payment made on account of the
principal thereof, shall be recorded by US Agent on its books; provided that the
failure of US Agent to make any such recordation shall not affect the
obligations of US Borrowers to make a payment when due of any amount owing under
the Credit Agreement or this US Tranche A Note in respect of the US Tranche A
Revolving Credit Advances made by US Lender to US Borrowers.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Credit Agreement, the terms of
which are hereby incorporated herein by reference. Interest thereon shall be
paid until such principal amount is paid in full at such interest rates and at
such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by
reference.

If any payment on this US Tranche A Note becomes due and payable on a day other
than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

US Tranche A Note

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

Upon and after the occurrence of any Event of Default, this US Tranche A Note
may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by US
Borrowers), be declared, and immediately shall become, due and payable.

Time is of the essence of this US Tranche A Note.

Except as provided in the Credit Agreement, this US Tranche A Note may not be
assigned by Lender to any Person.

This US Tranche A Note and the other US Tranche A Notes issued pursuant to the
Credit Agreement are amendments and replacements of the “US Notes” issued
pursuant to the Original Credit Agreement and are not intended by the parties to
be, and shall not be construed to be, a novation of the Indebtedness outstanding
under the Original Credit Agreement or the “US Notes” issued thereunder or an
accord and satisfaction in regard thereto.

THIS US TRANCHE A NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

 

EXOPACK, LLC By:     Name:     Title:     CELLO-FOIL PRODUCTS, INC. By:    
Name:     Title:    

 

2

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

EXHIBIT 1.1(a)(ii)

FORM OF NOTICE OF US TRANCHE A REVOLVING CREDIT ADVANCE

                         ,             

General Electric Capital Corporation,

for itself, as US Lender, and as US Agent

for US Lenders

299 Park Avenue

New York, New York 10171

Attention:             Exopack Account Officer

Ladies and Gentlemen:

The undersigned, Exopack, LLC (“US Borrower Representative”) refers to the Third
Amended and Restated Credit Agreement dated as of January 31, 2006, as amended
and restated as of October 31, 2007, as further amended and restated as of
July 2, 2010 and as further amended and restated as of May 31, 2011, (the
“Credit Agreement,” the terms defined therein being used herein as therein
defined), by and among the undersigned, the other persons named therein as
Borrowers, the other Credit Parties signatory thereto, General Electric Capital
Corporation, for itself, as a US Lender, and as US Agent for the US Lenders, GE
Canada Finance Holding Company, for itself, as Canadian Lender, and as Canadian
Agent for the Canadian Lenders, the US Lenders and the Canadian Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 1.1(a) of the Credit
Agreement, that the undersigned hereby requests a US Tranche A Revolving Credit
Advance under the Credit Agreement, and in that connection sets forth below the
information relating to such US Tranche A Revolving Credit Advance as required
by Section 1.1(a) of the Credit Agreement:

 

  (i) The date of the requested US Tranche A Revolving Credit Advance is
                             ,             

 

  (ii) The aggregate amount of the requested US Tranche A Revolving Credit
Advance is $                    .

 

  (iii) The requested US Tranche A Revolving Credit Advance is a [US Index Rate
Loan][LIBOR Loan].

 

  (iv) The US Borrower for such requested US Tranche A Revolving Credit Advance
is:                     .

 

  (v) [The applicable LIBOR Period for such loan is [one][two][three][six]
month[s].]

 

  (vi) The requested US Tranche A Revolving Credit Advance is to be sent to:

Bank of America

101 S. Tryon Street

Charlotte, North Carolina 28255

ABA No.: XXXXXXXXXXXXX

Account No.: XXXXXXXXXXXXX

Notice of US Tranche A Revolving Credit Advance

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

The undersigned hereby certifies that all of the conditions set forth in
Section 2.2 of the Credit Agreement are satisfied in all material respects on
the date hereof, and will be satisfied in all material respects on the date of
the requested US Tranche A Revolving Credit Advance, before and after giving
effect thereto and to the application of the proceeds therefrom.

 

US BORROWER REPRESENTATIVE: EXOPACK, LLC By:           Name:       Title:    

 

4

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

EXHIBIT 1.1(b)(iii)

FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT

                    ,             

General Electric Capital Corporation,

for itself, as US Lender, and as US Agent

for US Lenders

500 West Monroe Street

Chicago, Illinois 60661

Attention:     [Name of US Borrower Representative].

                       Account Manager

Ladies and Gentlemen:

The undersigned, [                    ] (“US Borrower Representative”) refers to
the Third Amended and Restated Credit Agreement dated as of January 31, 2006, as
amended and restated as of October 31, 2007, as further amended and restated as
of July 2, 2010 and as further amended and restated as of May 31, 2011, (the
“Credit Agreement,” the terms defined therein being used herein as therein
defined), by and among the undersigned, the other persons named therein as
Borrowers, the other Credit Parties signatory thereto, General Electric Capital
Corporation, for itself, as US Lender, and as US Agent for US Lenders, GE Canada
Finance Holding Company, for itself, as Canadian Lender and as Canadian Agent
for Canadian Lenders, US Lenders and Canadian Lenders, and hereby requests,
pursuant to Section 1.1(b) of the Credit Agreement, the issuance of a Letter of
Credit under the Credit Agreement, and in that connection sets forth below the
information relating to such Letter of Credit as required by Section 1.1(b)(iii)
of the Credit Agreement:

 

  (i) The date of issuance [or effective date of increase or extension] of the
requested Letter of Credit is                     ,             .

 

  (ii) The amount [or the amount of increase] of the Letter of Credit is
$                    .

 

  (iii) The name of the beneficiary of the Letter of Credit is:
                    .

 

  (iv) The transaction(s) for which such Letter of Credit is to be issued is
described as follows: [                    ].

 

  (v) The Borrower for whose account such Letter of Credit is to be issued
is:            .

 

  (vi) The expiry [or extended expiry] date of such Letter of Credit
is:            .

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

The undersigned hereby certifies that all of the conditions set forth in
Section 2.2 of the Credit Agreement are satisfied on the date hereof, and will
be satisfied on the date of the requested Letter of Credit, before and after
giving effect thereto and to the issuance thereof.

 

EXOPACK, LLC By:     Name:     Title:    

Request for Issuance of Letter of Credit

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

EXHIBIT 1.1(e)(i)

FORM OF US TRANCHE A1 NOTE

[New York, New York]

 

$                    

   May     , 2011

FOR VALUE RECEIVED, each of the undersigned (each individually a “Borrower” and
collectively, the “Borrowers”), HEREBY PROMISES TO PAY                     
(“Lender”), at the offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as US Agent for US Lenders (“US Agent”), at its address at [299
Park Avenue, New York, New York 10171], or at such other place as US Agent may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of                     
($                    ) or, if less, the aggregate unpaid amount of all US
Tranche A1 Revolving Credit Advances made to the undersigned under the “Credit
Agreement” (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Credit Agreement
or in Annex A thereto.

This US Tranche A1 Note is one of the US Notes issued pursuant to that certain
Third Amended and Restated Credit Agreement dated as of January 31, 2006, as
amended and restated as of October 31, 2007, as further amended and restated as
of July 2, 2010 and as further amended and restated as of May 31, 2011, by and
among, among others, the Borrowers, the other Persons named therein as Credit
Parties, US Agent, GE Canada Finance Holding Company, a Nova Scotia unlimited
liability company, in its capacity as Canadian Agent for the Canadian Lenders,
Lender, the persons signatory thereto from time to time as US Lenders, and the
other Persons signatory thereto from time to time as Canadian Lenders (including
all annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the “Credit Agreement”), and is
entitled to the benefit and security of the Credit Agreement and all of the
other Loan Documents referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid. The date and amount of
each US Tranche A1 Revolving Credit Advance made by US Lenders to US Borrowers,
the rates of interest applicable thereto and each payment made on account of the
principal thereof, shall be recorded by US Agent on its books; provided that the
failure of US Agent to make any such recordation shall not affect the
obligations of US Borrowers to make a payment when due of any amount owing under
the Credit Agreement or this US Tranche A1 Note in respect of the US Tranche A1
Revolving Credit Advances made by US Lender to US Borrowers.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Credit Agreement, the terms of
which are hereby incorporated herein by reference. Interest thereon shall be
paid until such principal amount is paid in full at such interest rates and at
such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by
reference.

If any payment on this US Tranche A1 Note becomes due and payable on a day other
than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

US Tranche A1 Note

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

Upon and after the occurrence of any Event of Default, this US Tranche A1 Note
may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by US
Borrowers), be declared, and immediately shall become, due and payable.

Time is of the essence of this US Tranche A1 Note.

Except as provided in the Credit Agreement, this US Tranche A1 Note may not be
assigned by Lender to any Person.

This US Tranche A1 Note and the other US Tranche A1 Notes issued pursuant to the
Credit Agreement are amendments and replacements of the “US Notes” issued
pursuant to the Original Credit Agreement and are not intended by the parties to
be, and shall not be construed to be, a novation of the Indebtedness outstanding
under the Original Credit Agreement or the “US Notes” issued thereunder or an
accord and satisfaction in regard thereto.

THIS US TRANCHE A1 NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

 

EXOPACK, LLC By:     Name:     Title:    

 

CELLO-FOIL PRODUCTS, INC. By:     Name:     Title:    

 

8

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

EXHIBIT 1.1(e)(ii)

FORM OF NOTICE OF US TRANCHE A1 REVOLVING CREDIT ADVANCE

                         ,             

General Electric Capital Corporation,

       for itself, as US Lender, and as US Agent

       for US Lenders

299 Park Avenue

New York, New York 10171

 

Attention: Exopack Account Officer

Ladies and Gentlemen:

The undersigned, Exopack, LLC (“US Borrower Representative”) refers to the Third
Amended and Restated Credit Agreement dated as of January 31, 2006, as amended
and restated as of October 31, 2007, as further amended and restated as of
July 2, 2010 and as further amended and restated as of May 31, 2011, (the
“Credit Agreement,” the terms defined therein being used herein as therein
defined), by and among the undersigned, the other persons named therein as
Borrowers, the other Credit Parties signatory thereto, General Electric Capital
Corporation, for itself, as a US Lender, and as US Agent for the US Lenders, GE
Canada Finance Holding Company, for itself, as Canadian Lender, and as Canadian
Agent for the Canadian Lenders, the US Lenders and the Canadian Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 1.1(e) of the Credit
Agreement, that the undersigned hereby requests a US Tranche A1 Revolving Credit
Advance under the Credit Agreement, and in that connection sets forth below the
information relating to such US Tranche A1 Revolving Credit Advance as required
by Section 1.1(e) of the Credit Agreement:

 

  (i) The date of the requested US Tranche A1 Revolving Credit Advance is
                         ,             

 

  (ii) The aggregate amount of the requested US Tranche A1 Revolving Credit
Advance is $                    .

 

  (iii) The requested US Tranche A1 Revolving Credit Advance is a [US Index Rate
Loan][LIBOR Loan].

 

  (iv) The US Borrower for such requested US Tranche A1 Revolving Credit Advance
is:                     .

 

  (v) [The applicable LIBOR Period for such loan is [one][two][three][six]
month[s].]

 

  (vi) The requested US Tranche A1 Revolving Credit Advance is to be sent to:

Bank of America

101 S. Tryon Street

Charlotte, North Carolina 28255

Notice of US Tranche A1 Revolving Credit Advance

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

  ABA No.: XXXXXXXXXXXXX     Account No.: XXXXXXXXXXXXX  

The undersigned hereby certifies that all of the conditions set forth in
Section 2.2 of the Credit Agreement are satisfied in all material respects on
the date hereof, and will be satisfied in all material respects on the date of
the requested US Tranche A1 Revolving Credit Advance, before and after giving
effect thereto and to the application of the proceeds therefrom.

 

US BORROWER REPRESENTATIVE:

 

EXOPACK, LLC

By:     Name:     Title:    

 

10

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

EXHIBIT 1.2(a)(i)

FORM OF CANADIAN TRANCHE A NOTE

[New York, New York]

 

$            

   May         , 2011

FOR VALUE RECEIVED, each of the undersigned (each individually a “Canadian
Borrower” and collectively, the “Canadian Borrowers”) HEREBY PROMISES TO PAY
                     (“Lender”), at the offices of GE CANADA FINANCE HOLDING
COMPANY, a Nova Scotia unlimited liability company, as Canadian Agent for
Canadian Tranche A Lenders (“Canadian Agent”), at its address at 123 Front
Street East, Suite 1400, Toronto, ON M5J 2M2, or at such other place as Canadian
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of
            ($            ) or, if less, the aggregate unpaid amount of all
Canadian Tranche A Revolving Credit Advances made to the undersigned under the
“Credit Agreement” (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Credit Agreement
or in Annex A thereto.

This Canadian Tranche A Note is one of the Canadian Notes issued pursuant to
that certain Third Amended and Restated Credit Agreement dated as of January 31,
2006, as amended and restated as of October 31, 2007, as further amended and
restated as of July 2, 2010 and as further amended and restated as of May 31,
2011, by and among, among others, Canadian Borrowers, the other Persons named
therein as Credit Parties, Canadian Agent, General Electric Capital Corporation,
a Delaware corporation, in its capacity as US Agent for the US Lenders, the
persons signatory thereto from time to time as Canadian Lenders, and the other
Persons signatory thereto from time to time as US Lenders (including all
annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the “Credit Agreement”), and is
entitled to the benefit and security of the Credit Agreement and all of the
other Loan Documents referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid. The date and amount of
each Canadian Tranche A Revolving Credit Advance made by Canadian Lenders to
Canadian Borrowers, the rates of interest applicable thereto and each payment
made on account of the principal thereof, shall be recorded by Canadian Agent on
its books; provided that the failure of Canadian Agent to make any such
recordation shall not affect the obligations of Canadian Borrowers to make a
payment when due of any amount owing under the Credit Agreement or this Canadian
Tranche A Note in respect of the Canadian Tranche A Revolving Credit Advances
made by Canadian Lender to Canadian Borrowers.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Credit Agreement, the terms of
which are hereby incorporated herein by reference. Interest thereon shall be
paid until such principal amount is paid in full at such interest rates and at
such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by
reference.

If any payment on this Canadian Tranche A Note becomes due and payable on a day
other than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

Canadian Tranche A Note

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

Upon and after the occurrence of any Event of Default, this Canadian Tranche A
Note may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Canadian
Borrowers), be declared, and immediately shall become, due and payable.

Time is of the essence of this Canadian Tranche A Note.

Except as provided in the Credit Agreement, this Canadian Tranche A Note may not
be assigned by Lender to any Person.

This Canadian Tranche A Note and the other Canadian Tranche A Notes issued
pursuant to the Credit Agreement are amendments and replacements of the
“Canadian Notes” issued pursuant to the Original Credit Agreement and are not
intended by the parties to be, and shall not be construed to be, a novation of
the Indebtedness outstanding under the Original Credit Agreement or the
“Canadian Notes” issued thereunder or an accord and satisfaction in regard
thereto.

THIS CANADIAN TRANCHE A NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

 

EXOPACK-NEWMARKET, LTD. By:     Name:     Title:    

 

EXOPACK PERFORMANCE FILMS INC. By:     Name:     Title:    

 

12

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

EXHIBIT 1.2(a)(ii)

FORM OF NOTICE OF CANADIAN TRANCHE A REVOLVING CREDIT ADVANCE

                 ,             

GE Canada Finance Holding Company,

       for itself, as Canadian Lender, and as Canadian Agent

       for Canadian Lenders

123 Front Street East, Suite 1400

Toronto, ON M5J 2M2

 

Attention:

  

Exopack-Newmarket, Ltd.

   Account Officer

Ladies and Gentlemen:

The undersigned, Exopack-Newmarket, Ltd. (“Canadian Borrower Representative”)
refers to the Third Amended and Restated Credit Agreement dated as of
January 31, 2006, as amended and restated as of October 31, 2007, as further
amended and restated as of July 2, 2010 and as further amended and restated as
of May 31, 2011, (the “Credit Agreement,” the terms defined therein being used
herein as therein defined), by and among the undersigned, the other persons
named therein as Borrowers, the other Credit Parties signatory thereto, General
Electric Capital Corporation, for itself, as a US Lender, and as US Agent for
the US Lenders, GE Canada Finance Holding Company, for itself, as Canadian
Lender, and as Canadian Agent for the Canadian Lenders, the US Lenders and the
Canadian Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 1.2(a) of the Credit Agreement, that the undersigned hereby requests a
Canadian Tranche A Revolving Credit Advance under the Credit Agreement, and in
that connection sets forth below the information relating to such Canadian
Tranche A Revolving Credit Advance as required by Section 1.2(a) of the Credit
Agreement:

 

  (vii) The date of the requested Canadian Tranche A Revolving Credit Advance is
                    ,             

 

  (viii) The aggregate amount of the requested Canadian Tranche A Revolving
Credit Advance is $            .

 

  (ix) The requested Canadian Tranche A Revolving Credit Advance is a [Canadian
Index Rate Loan][BA Rate Loan].

 

  (x) The Canadian Borrower for such requested Canadian Tranche A Revolving
Credit Advance is:             .

 

  (xi) [The applicable BA Period is [30, 60 or 90 days]:             ]

 

  (xii) The requested Canadian Tranche A Revolving Credit Advance is to be sent
to:

 

  [Bank of America Canada Branch     200 Front Street West  

Notice of Canadian Tranche A Revolving Credit Advance

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

  Toronto, Ontario M5V 3L2     XXXXXXXXXXXXX     Account No.: XXXXXXXXXXXXX]  

The undersigned hereby certifies that all of the conditions set forth in
Section 2.2 of the Credit Agreement are satisfied in all material respects on
the date hereof, and will be satisfied in all material respects on the date of
the requested Canadian Tranche A Revolving Credit Advance, before and after
giving effect thereto and to the application of the proceeds therefrom.

 

CANADIAN BORROWER REPRESENTATIVE: EXOPACK-NEWMARKET, LTD. By:     Name:    
Title:    

 

14

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

EXHIBIT 1.2(e)(i)

FORM OF CANADIAN TRANCHE A1 NOTE

[New York, New York]

 

$__________    May ___, 2011

FOR VALUE RECEIVED, each of the undersigned (each individually a “Canadian
Borrower” and collectively, the “Canadian Borrowers”) HEREBY PROMISES TO PAY
             (“Lender”), at the offices of GE CANADA FINANCE HOLDING COMPANY, a
Nova Scotia unlimited liability company, as Canadian Agent for Canadian Tranche
A1 Lenders (“Canadian Agent”), at its address at 123 Front Street East, Suite
1400, Toronto, ON M5J 2M2, or at such other place as Canadian Agent may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, the amount of
            ($            ) or, if less, the aggregate unpaid amount of all
Canadian Tranche A1 Revolving Credit Advances made to the undersigned under the
“Credit Agreement” (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Credit Agreement
or in Annex A thereto.

This Canadian Tranche A1 Note is one of the Canadian Notes issued pursuant to
that certain Third Amended and Restated Credit Agreement dated as of January 31,
2006, as amended and restated as of October 31, 2007, as further amended and
restated as of July 2, 2010 and as further amended and restated as of May 31,
2011, by and among, among others, Canadian Borrowers, the other Persons named
therein as Credit Parties, Canadian Agent, General Electric Capital Corporation,
a Delaware corporation, in its capacity as US Agent for the US Lenders, the
persons signatory thereto from time to time as Canadian Lenders, and the other
Persons signatory thereto from time to time as US Lenders (including all
annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the “Credit Agreement”), and is
entitled to the benefit and security of the Credit Agreement and all of the
other Loan Documents referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid. The date and amount of
each Canadian Tranche A1 Revolving Credit Advance made by Canadian Lenders to
Canadian Borrowers, the rates of interest applicable thereto and each payment
made on account of the principal thereof, shall be recorded by Canadian Agent on
its books; provided that the failure of Canadian Agent to make any such
recordation shall not affect the obligations of Canadian Borrowers to make a
payment when due of any amount owing under the Credit Agreement or this Canadian
Tranche A1 Note in respect of the Canadian Tranche A1 Revolving Credit Advances
made by Canadian Lender to Canadian Borrowers.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Credit Agreement, the terms of
which are hereby incorporated herein by reference. Interest thereon shall be
paid until such principal amount is paid in full at such interest rates and at
such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by
reference.

Canadian Tranche A1 Note

 

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

If any payment on this Canadian Tranche A1 Note becomes due and payable on a day
other than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

Upon and after the occurrence of any Event of Default, this Canadian Tranche A1
Note may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Canadian
Borrowers), be declared, and immediately shall become, due and payable.

Time is of the essence of this Canadian Tranche A1 Note.

Except as provided in the Credit Agreement, this Canadian Tranche A1 Note may
not be assigned by Lender to any Person.

This Canadian Tranche A1 Note and the other Canadian Tranche A1 Notes issued
pursuant to the Credit Agreement are amendments and replacements of the
“Canadian Notes” issued pursuant to the Original Credit Agreement and are not
intended by the parties to be, and shall not be construed to be, a novation of
the Indebtedness outstanding under the Original Credit Agreement or the
“Canadian Notes” issued thereunder or an accord and satisfaction in regard
thereto.

THIS CANADIAN TRANCHE A1 NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

 

EXOPACK-NEWMARKET, LTD. By:     Name:     Title:    

 

EXOPACK PERFORMANCE FILMS INC. By:     Name:     Title:    

 

16

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

EXHIBIT 1.2(e)(ii)

FORM OF NOTICE OF CANADIAN TRANCHE A1 REVOLVING CREDIT ADVANCE

                         ,         

GE Canada Finance Holding Company,

       for itself, as Canadian Lender, and as Canadian Agent

       for Canadian Lenders

123 Front Street East, Suite 1400

Toronto, ON M5J 2M2

 

Attention:

   Exopack-Newmarket, Ltd.    Account Officer

Ladies and Gentlemen:

The undersigned, Exopack-Newmarket, Ltd. (“Canadian Borrower Representative”)
refers to the Third Amended and Restated Credit Agreement dated as of
January 31, 2006, as amended and restated as of October 31, 2007, as further
amended and restated as of July 2, 2010 and as further amended and restated as
of May 31, 2011 (the “Credit Agreement,” the terms defined therein being used
herein as therein defined), by and among the undersigned, the other persons
named therein as Borrowers, the other Credit Parties signatory thereto, General
Electric Capital Corporation, for itself, as a US Lender, and as US Agent for
the US Lenders, GE Canada Finance Holding Company, for itself, as Canadian
Lender, and as Canadian Agent for the Canadian Lenders, the US Lenders and the
Canadian Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 1.2(f) of the Credit Agreement, that the undersigned hereby requests a
Canadian Tranche A1 Revolving Credit Advance under the Credit Agreement, and in
that connection sets forth below the information relating to such Canadian
Tranche A1 Revolving Credit Advance as required by Section 1.2(f) of the Credit
Agreement:

 

  (xiii) The date of the requested Canadian Tranche A1 Revolving Credit Advance
is                          ,         

 

  (xiv) The aggregate amount of the requested Canadian Tranche A1 Revolving
Credit Advance is $            .

 

  (xv) The requested Canadian Tranche A1 Revolving Credit Advance is a [Canadian
Index Rate Loan][BA Rate Loan].

 

  (xvi) The Canadian Borrower for such requested Canadian Tranche A1 Revolving
Credit Advance is:             .

 

  (xvii) [The applicable BA Period is [30, 60 or 90 days]:             ]

 

  (xviii) The requested Canadian Tranche A1 Revolving Credit Advance is to be
sent to:

 

  [Bank of America Canada Branch     200 Front Street West     Toronto, Ontario
M5V 3L2     XXXXXXXXXXXXX     Account No.: XXXXXXXXXXXXX]  

Notice of Canadian Tranche A1 Revolving Credit Advance

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

The undersigned hereby certifies that all of the conditions set forth in
Section 2.2 of the Credit Agreement are satisfied in all material respects on
the date hereof, and will be satisfied in all material respects on the date of
the requested Canadian Tranche A1 Revolving Credit Advance, before and after
giving effect thereto and to the application of the proceeds therefrom.

 

CANADIAN BORROWER REPRESENTATIVE: EXOPACK-NEWMARKET, LTD. By:     Name:    
Title:    

 

18

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

EXHIBIT 1.3(e)

FORM OF NOTICE OF CONVERSION/CONTINUATION

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of January 31, 2006, as amended and restated as of October 31, 2007, as
further amended and restated as of July 2, 2010 and as further amended and
restated as of May 31, 2011, by and among the undersigned (“[US] [Canadian]
Borrower Representative”), the other Persons named therein as Borrowers, the
other Persons named therein as Credit Parties, General Electric Capital
Corporation (“US Agent”), GE Canada Finance Holding Company (“Canadian Agent”),
the US Lenders from time to time signatory thereto and the Canadian Lenders from
time to time signatory thereto (including all annexes, exhibits or schedules
thereto, and as from time to time amended, restated, supplemented or otherwise
modified, the “Credit Agreement”). Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.

[US] [Canadian] Borrower Representative hereby gives irrevocable notice,
pursuant to Section 1.3(e) of the Credit Agreement, of its request to:

(a) on [     date     ] convert $[            ] of the aggregate outstanding
principal amount of the [            ] Loan, bearing interest at the
[            ] Rate, into a(n) [            ] Loan [and, in the case of a LIBOR
Loan, having a LIBOR Period of [            ] month(s)] [and, in the case of a
BA Rate Loan, having a BA Period of [            ] month(s)];

[(b) on [     date     ] continue $[            ] of the aggregate outstanding
principal amount of the [            ] Loan, [bearing interest at the LIBOR
Rate, as a LIBOR Loan having a LIBOR Period of [            ] month(s)] [bearing
interest at the BA Rate as a BA Rate Loan having a BA Period of [            ]
month(s)].

[US] [Canadian] Borrower Representative certifies that the conversion and/or
continuation of the Loans requested above is for the separate account(s) of the
following Borrowers[s] in the following [respective] amount[s]: [Name:
$            ] and [Name: $            ].

[US] [Canadian] Borrower Representative hereby (i) certifies that all of the
conditions set forth in Section 2.2 of the Credit Agreement are satisfied in all
material respects on the date hereof, and will be satisfied in all material
respects on the date of the requested conversion/continuation, before and after
giving effect thereto and (ii) reaffirms the cross-guaranty provisions set forth
in Section 10 or 11, as applicable, of the Credit Agreement and the guaranty and
continuance of Applicable Agents’ Liens, pursuant to the Collateral Documents.

 

[US] [CANADIAN] [BORROWER REPRESENTATIVE] By:     Name:     Title:    

Notice of Canadian Tranche A1 Revolving Credit Advance

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

EXHIBIT 1.16

FORM OF COMMITMENT INCREASE REQUEST

                    ,         

General Electric Capital Corporation,

       for itself, as US Lender, and as US Agent

       for US Lenders

299 Park Avenue

New York, New York 10171

Attention: Exopack Account Officer

Ladies and Gentlemen:

The undersigned, [            ] [(“US Borrower Representative”)] [(“Canadian
Borrower Representative”)] refers to the Third Amended and Restated Credit
Agreement dated as of January 31, 2006, as amended and restated as of
October 31, 2007, as further amended and restated as of July 2, 2010 and as
further amended and restated as of May 31, 2011, (the “Credit Agreement,” the
terms defined therein being used herein as therein defined), by and among the
undersigned, the other persons named therein as Borrowers, the other Credit
Parties signatory thereto, General Electric Capital Corporation, for itself, as
US Lender, and as US Agent for US Lenders, GE Canada Finance Holding Company,
for itself, as Canadian Lender and as Canadian Agent for Canadian Lenders, the
US Lenders and the Canadian Lenders, and hereby requests, pursuant to
Section 1.16(a) of the Credit Agreement, an increase to the [US Tranche A Loan
Commitment][and the][US Tranche A1 Loan Commitment][Canadian Tranche A Loan
Commitment][and the][Canadian Tranche A1 Loan Commitment] under the Credit
Agreement, and in that connection sets forth below the information relating to
such Commitment Increase as required by Section 1.16(a) of the Credit Agreement:

(i) The date of the requested Commitment Increase is                     ,
        1.

(ii) The amount of the requested Commitment Increase is $            2.

The undersigned hereby certifies that all of the conditions set forth in
Sections 1.16 and 2.2 of the Credit Agreement are satisfied on the date hereof,
and will be satisfied on the date of the requested Commitment Increase, before
and after giving effect thereto and to the issuance thereof.

 

[                                         ] By:       Name:   Title:

 

1 

Request shall be delivered not later than 1:00 p.m. (New York time) 5 Business
Days prior to the Business Day immediately prior to the Business Day on which
the Borrowers request such Commitment Increase to be effective.

2 

Minimum amount of Commitment Increase Request shall be $5,000,000 and shall be
in integral multiples thereof. The aggregate amount of all Commitment Increases
shall not exceed the Aggregate Accordion Commitment.

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

EXHIBIT 5.19

MINIMUM FIXED CHARGE COVERAGE RATIO

 

(a) EBITDA (calculated in the relevant Compliance Certificate)    $             
   Less:   any provision for income taxes (whether paid or payable in cash)     
           Capital Expenditures other than the portion thereof funded by third
party financing               Operating Cash Flow:    $                         
  (b) Fixed Charge Coverage Ratio is defined as follows:    Interest expense
(whether cash or non-cash) deducted in the determination of Consolidated Net
Income, including interest expense with respect to any Funded Debt and interest
expense that has been capitalized    $                 Less:   Amortization of
capitalized fees and expenses incurred with respect to the Related Transactions
included in interest expense above                 Amortization of any original
discount attributable to any Funded Debt or warrants included in interest
expense above                 Interest paid in kind and included in interest
expense above               Interest Expense    $                 Plus:  
Scheduled payments of principal with respect to all Indebtedness              
Fixed Charges:    $                            Fixed Charge Coverage Ratio
(Operating Cash Flow from (a) above, divided by Fixed Charges from (b) above):
             

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

EXHIBIT 6.1(d)(i)

FORM OF CANADIAN TRANCHE A BORROWING BASE CERTIFICATE

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of January 31, 2006, as amended and restated as of October 31, 2007, as
further amended and restated as of July 2, 2010 and as further amended and
restated as of May 31, 2011, by and among the undersigned (“Canadian Borrower”),
the other Persons named therein as Borrowers, the other Persons named therein as
Credit Parties, General Electric Capital Corporation (“US Agent”), GE Canada
Finance Holding Company (“Canadian Agent”) and the Persons signatory thereto
from time to time as Lenders (including all annexes, exhibits and schedules
thereto, and as from time to time amended, restated, supplemented or otherwise
modified, the “Credit Agreement”). Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.

The undersigned, being the chief financial officer or chief executive officer of
Canadian Borrower, hereby certifies that the Canadian Tranche A Borrowing Base
calculated herein is true and correct in all respects and, without limiting the
generality of the foregoing, with respect to the information supporting the
determination of Eligible Accounts and Eligible Inventory.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Borrowing
Base Certificate as of the date first set forth above.

 

[EXOPACK-NEWMARKET, LTD.] [EXOPACK PERFORMANCE FILMS INC.] By:     Title:    

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

SCHEDULE 1

to Exhibit 6.1(d)(i)

FORM OF CANADIAN TRANCHE A BORROWING BASE CALCULATION

 

Accounts of Canadian Borrowers, their Canadian Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada reflected as accounts receivable on Canadian Borrowers, their Canadian
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Canadian Subsidiaries) and TPG Canada’s consolidating balance sheet (as of the
date above), but solely to the extent of the unpaid portion of the obligations
stated on the respective invoices issued to a customer of Canadian Borrowers,
their Canadian Subsidiaries (which, for the avoidance of doubt, includes direct
and indirect Canadian Subsidiaries) and TPG Canada with respect to inventory
sold and shipped or services performed in the ordinary course of business, net
of any credits, rebates or offsets owed by Canadian Borrowers, their Canadian
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Canadian Subsidiaries) and TPG Canada to the respective customer.   
$                 Less:   Ineligible Accounts:                 Accounts that do
not arise from the sale of goods or the performance of services by such Credit
Party in the ordinary course of its business;    $                   Accounts
(i) upon which such Credit Party’s right to receive payment is not absolute or
is contingent upon the fulfillment of any condition whatsoever or (ii) as to
which such Credit Party is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process, or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor’s obligation to pay that invoice is subject to such Credit Party’s
completion of further performance under such contract or is subject to the
equitable lien of a surety bond issuer;    $                   Any Account to
the extent that any defense, counterclaim, setoff or dispute is asserted as to
such Account (it being understood and agreed that (i) only the portion of the
Account that is subject to such defense, counterclaim, setoff or dispute shall
not be an Eligible Account and (ii) the remaining portion of such Account shall
not be rendered ineligible under this clause);    $                   Accounts
that are not true and correct statements of bona fide indebtedness incurred in
the amount of such Account for merchandise sold to or services rendered and
accepted by the applicable Account Debtor;    $                

 

6.1(d)(i)-2

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

  Accounts with respect to which an invoice has not been sent to the applicable
Account Debtor;    $                   Accounts that (i) are not owned by such
Credit Party or (ii) are subject to any right, claim, security interest or other
interest of any other Person, other than Liens in favor of Canadian Agent, on
behalf of itself and applicable Lenders and Prior Claims that are unregistered
and that secure amounts that are not yet due and payable;    $                  
Accounts that arise from a sale to any director, officer, other employee or
Affiliate of such Credit Party, or to any entity that has any common officer or
director with such Credit Party other than any unrelated portfolio company of
Sponsor, Sponsor’s affiliates and any purchaser of the Subordinated Debt or the
Senior Notes;    $                   Accounts that are the obligation of an
Account Debtor that is the United States government or a political subdivision
thereof, or any state, county or municipality or department, agency or
instrumentality thereof unless Canadian Agent, in its sole discretion, has
agreed to the contrary in writing or such Credit Party, if necessary, has
complied with respect to such obligation with the Federal Assignment of Claims
Act of 1940, or any applicable state, county or municipal law restricting the
assignment thereof with respect to such obligation;    $                  
Accounts that are the obligation of an Account Debtor that is the Canadian
government (Her Majesty The Queen in Right of Canada) or a political subdivision
thereof, or any province or territory, or any municipality or department, agency
or instrumentality thereof, unless (i) Lenders have agreed to the contrary in
writing, (ii) such Account is assignable by way of security or (iii) such Credit
Party, if necessary, has complied with the Financial Administration Act (Canada)
and any amendments thereto, or any applicable territorial, provincial, county or
municipal law of similar purpose and effect restricting the assignment thereof
with respect to such obligation;    $                   Accounts that are the
obligation of an Account Debtor located in a country other than the United
States or Canada unless payment thereof is assured by a letter of credit
assigned and delivered to Canadian Agent or is covered by adequate credit
insurance for such Account Debtor, each satisfactory to Canadian Agent as to
form, amount and issuer; provided that, obligations of EI Dupont de Nemours, a
Mexican company and, so long as that certain guaranty from Mars, Inc. in favor
of Effem Mexico Inc., a Mexican corporation remains in full force and effect,
Effem Mexico, Inc. shall not be excluded;    $                   Accounts to the
extent such Credit Party is liable for goods sold or services rendered by the
applicable Account Debtor to such Credit Party but only to the extent of the
potential offset;    $                

 

6.1(d)(i)-3

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

  Accounts that arise with respect to goods that are delivered on a bill and
hold, cash on delivery basis, guaranteed sale or other terms by reason of which
the payment by the Account Debtor is or may be conditional;    $                
 

Accounts that are in default; provided, that, without limiting the generality of
the foregoing, an Account shall be deemed in default upon the occurrence of any
of the following:

 

(i) the Account is not paid within the earlier of: 60 days following its due
date or 90 days following its original invoice date; provided that, such
Accounts shall not be excluded so long as they are not past due in accordance
with their terms and are not in an aggregate amount in excess of $1,000,000;

 

(ii) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or

 

(iii) a petition is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors until such time, if ever, as such petition is
dismissed;

   $                   Accounts that are the obligations of an Account Debtor if
50% or more of the Dollar amount of all Accounts owing by that Account Debtor
are ineligible under the other criteria set forth in Section 1.8 of the Credit
Agreement (other than clauses (a), (b), (d), (e), (f) or (l) thereof);   
$                   Accounts as to which Canadian Agent’s Lien thereon, on
behalf of itself and Lenders, is not a first priority perfected Lien;   
$                   Accounts as to which any of the representations or
warranties in the Loan Documents are untrue;    $                   Accounts to
the extent such Accounts are evidenced by a judgment, Instrument or Chattel
Paper;    $                   Accounts to the extent such Account exceeds any
credit limit established by Canadian Agent, in its reasonable credit judgment
acting in good faith, following prior written or electronic notice of such limit
by Canadian Agent to Canadian Borrower Representative;    $                  
Accounts to the extent that such Account, together with all other Accounts owing
to such Account Debtor and its Affiliates as of any date of determination exceed
20% of all Eligible Accounts of all Credit Parties    $                

 

6.1(d)(i)-4

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

  Accounts that are payable in any currency other than Dollars or Canadian
Dollars; or    $                   Accounts that are otherwise unacceptable to
Canadian Agent in its reasonable credit judgment acting in good faith.   
$                 Total Ineligible Accounts    $                 Total Eligible
Accounts (Accounts less Total Ineligible Accounts)    $                

Advance Rate

up to 85% of the book value of the Eligible Accounts of Canadian Borrowers,
their Canadian Subsidiaries (which, for the avoidance of doubt, includes direct
and indirect Canadian Subsidiaries) and TPG Canada

   Accounts Availability    $                 Inventory owned by, and in the
possession of Canadian Borrowers, their Canadian Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada, reflected as inventory on the Canadian Borrowers, their Canadian
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Canadian Subsidiaries) and TPG Canada’s consolidating balance sheet (as of the
date above), valued at the lower of cost or market (including adequate reserves
for obsolete, slow moving or excess quantities), on a first-in, first-out basis
   $                  

Less:     Ineligible Inventory:

 

Inventory that is not owned by such Credit Party free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Credit Party’s performance with respect to that Inventory and the rights of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada)),
except the Liens in favor of Canadian Agent, on behalf of the Lenders and Prior
Claims that are unregistered and that secure amounts that are not yet due and
payable (other than the claims of suppliers under Section 81.1 of the Bankruptcy
and Insolvency Act (Canada)), except the Liens in favor of Canadian Agent, on
behalf of itself and the Lenders and other Permitted Encumbrances described in
clauses (a), (b), (c), (e) and (f)(3) in such definition;

        $                

 

6.1(d)(i)-5

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

  Inventory that (i) is not located on premises owned, leased or rented by such
Credit Party and set forth in Disclosure Schedule (3.14) of the Credit Agreement
or (ii) is stored at a leased location, unless (x) the Canadian Agent has given
its prior consent thereto, (y) a reasonably satisfactory landlord waiver has
been delivered to Canadian Agent, or (z) Reserves satisfactory to Canadian Agent
have been established with respect thereto in an amount not to exceed three (3)
months rent, (iii) is stored with a bailee or warehouseman unless a reasonably
satisfactory, acknowledged bailee letter has been received by the Canadian Agent
or Reserves reasonably satisfactory to Canadian Agent have been established with
respect thereto, or (iv) is located at an owned location subject to a mortgage
in favor of a lender other than the Canadian Agent, unless a reasonably
satisfactory mortgagee waiver has been delivered to the Canadian Agent, or (v)
is located at any site if the aggregate book value of Inventory at any such
location is less than $100,000;    $                

 

6.1(d)(i)-6

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

  Inventory that is placed on consignment or is in transit, except for Inventory
in transit between United States and Canadian locations of Credit Parties as to
which the Canadian Agent’s Liens have been perfected at origin and destination;
and except for (i) Inventory in transit between domestic locations of Credit
Parties and (ii) consigned Inventory that arises with respect to goods that are
delivered on a bill and hold, cash on delivery basis or placed on consignment,
guaranteed sale or other terms by reason of which the payment by the Account
Debtor is or may be conditional, provided that in the case of such consigned
Inventory, (A) as to each consignee (it being understood that for the purposes
of this paragraph, the term consignee shall include any Person to whom such
Credit Party has provided possession of Inventory prior to the consummation of
an irrevocable sale of such Inventory to such Person), the applicable Credit
Party has, at such Credit Party’s cost and expense (i) conducted Code, PPSA, tax
lien and judgment searches against such consignee, (ii) filed UCC-1 financing
statements against such consignee naming such Credit Party as secured party and
Canadian Agent as assignee of secured party, and (iii) provided to each secured
party of record that has filed a financing statement against such consignee
(whether or not such Inventory is Inventory in the hands of such consignee) a
notice, in form and substance reasonably satisfactory to Canadian Agent,
pursuant to Section 9-324 of the Code or similar provision of the PPSA of such
Credit Party’s intent to provide purchase money financing to such consignee and
(iv) obtained from such consignee a letter agreement, in form and substance
reasonably satisfactory to Canadian Agent, in which such consignee acknowledges
the Lien of Canadian Agent and agrees that to the extent that such consignee has
not paid the purchase price of any item of Inventory, Canadian Agent can take
possession of and remove such item of Inventory upon an Event of Default and
(B) such Credit Party holds a perfected first priority security interest against
such consignee, such security interest having been assigned of record to
Canadian Agent;    $                   Inventory that is covered by a negotiable
document of title, unless such document has been delivered to Canadian Agent
with all necessary endorsements, free and clear of all Liens except those in
favor of Canadian Agent and Lenders;    $                   Inventory that is
excess, obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale;   
$                   Inventory that consists of display items or packing or
shipping materials, manufacturing supplies or replacement parts;   
$                   Inventory that consists of goods which have been returned by
the buyer and are not capable of readily being resold to another buyer;   
$                

 

6.1(d)(i)-7

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

  Inventory that is not of a type held for sale in the ordinary course of such
Credit Party’s business;    $                   Inventory that is not subject to
a first priority lien in favor of Canadian Agent on behalf of itself and Lenders
subject to Permitted Encumbrances;    $                   Inventory that
breaches any of the representations or warranties pertaining to Inventory set
forth in the Loan Documents;    $                   Inventory that consists of
any costs associated with “freight-in” charges;    $                   Inventory
that consists of Hazardous Materials or goods that can be transported or sold
only with licenses that are not readily available;    $                  
Inventory that is not covered by casualty insurance reasonably acceptable to
Canadian Agent;    $                   Inventory that is otherwise unacceptable
to Canadian Agent in its reasonable credit judgment acting in good faith;   
$                   Inventory that consists of work in process in an amount not
to exceed $6,500,000 in the aggregate; or    $                   Inventory that
consists of raw materials in-transit, except raw materials in-transit that are
adequately insured and in which such Credit Party has perfected title under
Applicable Law in such raw materials in an amount not to exceed $1,000,000 in
the aggregate.    $                 Total Ineligible Inventory   
$                 Total Eligible Inventory (Inventory less Total Ineligible
Inventory)    $                

 

6.1(d)(i)-8

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

 

Advance Rate

 

(a)     up to the lesser of (i) 62.5% of the book value of the Eligible
Inventory of such Canadian Borrower, its Canadian Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada consisting of raw materials (other than Eligible Inventory consisting of
raw materials in-transit pursuant to Section 1.9(p) of the Credit Agreement) and
finished goods valued at the lower of cost (determined on a first-in, first-out
basis) or market and (ii) 85% of the NOLV of such Eligible Inventory (such
amount the “Canadian Tranche A Raw Materials Advance Rate”);

 

(b)     up to 45% of the book value of the Eligible Inventory of such Canadian
Borrower and its Canadian Subsidiaries (which for the avoidance of doubt,
includes direct and indirect Canadian Subsidiaries) and TPG Canada consisting of
work in process (eligible pursuant to Section 1.9(o) of the Credit Agreement);

 

(c)     up to the inverse of the then applicable Canadian Tranche A Raw
Materials Advance Rate on the Eligible Inventory of such Canadian Borrower and
its Canadian Subsidiaries (which for the avoidance of doubt, includes direct and
indirect Canadian Subsidiaries) and TPG Canada consisting of raw materials
in-transit (eligible pursuant to Section 1.9(p) of the Credit Agreement), in an
amount not to exceed $1,000,000 in the aggregate.

   Inventory Availability (sum of (a) and (b) and (c) above)   
$                 Borrowing Base (Accounts Availability plus Inventory
Availability)    $                

 

6.1(d)(i)-9

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

EXHIBIT 6.1(d)(ii)

FORM OF US TRANCHE A BORROWING BASE CERTIFICATE

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of January 31, 2006, as amended and restated as of October 31, 2007, as
further amended and restated as of July 2, 2010 and as further amended and
restated as of May 31, 2011, by and among the undersigned (“US Borrower”), the
other Persons named therein as Borrowers, the other Persons named therein as
Credit Parties, General Electric Capital Corporation (“US Agent”), GE Canada
Finance Holding Company (“Canadian Agent”) and the Persons signatory thereto
from time to time as Lenders (including all annexes, exhibits and schedules
thereto, and as from time to time amended, restated, supplemented or otherwise
modified, the “Credit Agreement”). Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.

The undersigned, being the chief financial officer or chief executive officer of
US Borrower, hereby certifies that the US Tranche A Borrowing Base calculated
herein is true and correct in all respects and, without limiting the generality
of the foregoing, with respect to the information supporting the determination
of Eligible Accounts and Eligible Inventory.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Borrowing
Base Certificate as of the date first set forth above.

 

[EXOPACK, LLC] [CELLO-FOIL PRODUCTS, INC.] By:     Title:    

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

SCHEDULE 1

to Exhibit 6.1(d)(ii)

FORM OF US TRANCHE A BORROWING BASE CALCULATION

 

  Accounts of US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries)
reflected as accounts receivable on US Borrowers and their Domestic
Subsidiaries’ (which, for the avoidance of doubt, includes direct and indirect
Domestic Subsidiaries) consolidating balance sheet (as of the date above), but
solely to the extent of the unpaid portion of the obligations stated on the
respective invoices issued to a customer of US Borrowers and their Domestic
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Domestic Subsidiaries) with respect to inventory sold and shipped or services
performed in the ordinary course of business, net of any credits, rebates or
offsets owed by US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries) to the
respective customer.    $                   Less:     Ineligible Accounts:   
            Accounts that do not arise from the sale of goods or the performance
of services by such Credit Party in the ordinary course of its business;   
$                   Accounts (i) upon which such Credit Party’s right to receive
payment is not absolute or is contingent upon the fulfillment of any condition
whatsoever or (ii) as to which such Credit Party is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process, or (iii) if the Account represents a progress billing consisting of an
invoice for goods sold or used or services rendered pursuant to a contract under
which the Account Debtor’s obligation to pay that invoice is subject to such
Credit Party’s completion of further performance under such contract or is
subject to the equitable lien of a surety bond issuer;    $                  
Any Account to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account (it being understood and agreed that (i) only the
portion of the Account that is subject to such defense, counterclaim, setoff or
dispute shall not be an Eligible Account and (ii) the remaining portion of such
Account shall not be rendered ineligible under this clause);   
$                   Accounts that are not true and correct statements of bona
fide indebtedness incurred in the amount of such Account for merchandise sold to
or services rendered and accepted by the applicable Account Debtor;   
$                

 

6.1(d)(ii)-2

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

  Accounts with respect to which an invoice has not been sent to the applicable
Account Debtor;    $                   Accounts that (i) are not owned by such
Credit Party or (ii) are subject to any right, claim, security interest or other
interest of any other Person, other than Liens in favor of US Agent, on behalf
of itself and applicable Lenders and Prior Claims that are unregistered and that
secure amounts that are not yet due and payable;    $                   Accounts
that arise from a sale to any director, officer, other employee or Affiliate of
such Credit Party, or to any entity that has any common officer or director with
such Credit Party other than any unrelated portfolio company of Sponsor,
Sponsor’s affiliates and any purchaser of the Subordinated Debt or the Senior
Notes;    $                   Accounts that are the obligation of an Account
Debtor that is the United States government or a political subdivision thereof,
or any state, county or municipality or department, agency or instrumentality
thereof unless US Agent, in its sole discretion, has agreed to the contrary in
writing or such Credit Party, if necessary, has complied with respect to such
obligation with the Federal Assignment of Claims Act of 1940, or any applicable
state, county or municipal law restricting the assignment thereof with respect
to such obligation;    $                   Accounts that are the obligation of
an Account Debtor that is the Canadian government (Her Majesty The Queen in
Right of Canada) or a political subdivision thereof, or any province or
territory, or any municipality or department, agency or instrumentality thereof,
unless (i) Lenders have agreed to the contrary in writing, (ii) such Account is
assignable by way of security or (iii) such Credit Party, if necessary, has
complied with the Financial Administration Act (Canada) and any amendments
thereto, or any applicable territorial, provincial, county or municipal law of
similar purpose and effect restricting the assignment thereof with respect to
such obligation;    $                   Accounts that are the obligation of an
Account Debtor located in a country other than the United States or Canada
unless payment thereof is assured by a letter of credit assigned and delivered
to US Agent or is covered by adequate credit insurance for such Account Debtor,
each satisfactory to US Agent as to form, amount and issuer; provided that,
obligations of EI Dupont de Nemours, a Mexican company and, so long as that
certain guaranty from Mars, Inc. in favor of Effem Mexico Inc., a Mexican
corporation remains in full force and effect, Effem Mexico, Inc. shall not be
excluded;    $                   Accounts to the extent such Credit Party is
liable for goods sold or services rendered by the applicable Account Debtor to
such Credit Party but only to the extent of the potential offset;   
$                

 

6.1(d)(ii)-3

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

  Accounts that arise with respect to goods that are delivered on a bill and
hold, cash on delivery basis, guaranteed sale or other terms by reason of which
the payment by the Account Debtor is or may be conditional;    $                
 

Accounts that are in default; provided, that, without limiting the generality of
the foregoing, an Account shall be deemed in default upon the occurrence of any
of the following:

 

(i) the Account is not paid within the earlier of: 60 days following its due
date or 90 days following its original invoice date; provided that, such
Accounts shall not be excluded so long as they are not past due in accordance
with their terms and are not in an aggregate amount in excess of $1,000,000;

 

(ii) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or

 

(iii) a petition is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors until such time, if ever, as such petition is
dismissed;

   $                   Accounts that are the obligations of an Account Debtor if
50% or more of the Dollar amount of all Accounts owing by that Account Debtor
are ineligible under the other criteria set forth in Section 1.8 of the Credit
Agreement (other than clauses (a), (b), (d), (e), (f) or (l) thereof);   
$                   Accounts as to which US Agent’s Lien thereon, on behalf of
itself and Lenders, is not a first priority perfected Lien;    $                
  Accounts as to which any of the representations or warranties in the Loan
Documents are untrue;    $                   Accounts to the extent such
Accounts are evidenced by a judgment, Instrument or Chattel Paper;   
$                   Accounts to the extent such Account exceeds any credit limit
established by US Agent, in its reasonable credit judgment acting in good faith,
following prior written or electronic notice of such limit by US Agent to US
Borrower Representative;    $                   Accounts to the extent that such
Account, together with all other Accounts owing to such Account Debtor and its
Affiliates as of any date of determination exceed 20% of all Eligible Accounts
of all Credit Parties    $                

 

6.1(d)(ii)-4

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

  Accounts that are payable in any currency other than Dollars or Canadian
Dollars; or    $                   Accounts that are otherwise unacceptable to
US Agent in its reasonable credit judgment acting in good faith.   
$                

Total Ineligible Accounts

   $                

Total Eligible Accounts (Accounts less Total Ineligible Accounts)

   $                

Advance Rate

 

up to 85% of the book value of the Eligible Accounts of US Borrowers and their
Domestic Subsidiaries (which, for the avoidance of doubt, includes direct and
indirect Domestic Subsidiaries) at such time

   Accounts Availability    $                 Inventory owned by, and in the
possession of US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries),
reflected as inventory on the US Borrowers and their Domestic Subsidiaries’
(which, for the avoidance of doubt, includes direct and indirect Domestic
Subsidiaries) consolidating balance sheet (as of the date above), valued at the
lower of cost or market (including adequate reserves for obsolete, slow moving
or excess quantities), on a first-in, first-out basis    $                  

Less:     Ineligible Inventory:

 

Inventory that is not owned by such Credit Party free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Credit Party’s performance with respect to that Inventory and the rights of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada)),
except the Liens in favor of US Agent, on behalf of the Lenders and Prior Claims
that are unregistered and that secure amounts that are not yet due and payable
(other than the claims of suppliers under Section 81.1 of the Bankruptcy and
Insolvency Act (Canada)), except the Liens in favor of US Agent, on behalf of
itself and the Lenders and other Permitted Encumbrances described in clauses
(a), (b), (c), (e) and (f)(3) in such definition;

   $                

 

6.1(d)(ii)-5

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

  Inventory that (i) is not located on premises owned, leased or rented by such
Credit Party and set forth in Disclosure Schedule (3.14) of the Credit Agreement
or (ii) is stored at a leased location, unless (x) the US Agent has given its
prior consent thereto, (y) a reasonably satisfactory landlord waiver has been
delivered to US Agent, or (z) Reserves satisfactory to US Agent have been
established with respect thereto in an amount not to exceed three (3) months
rent, (iii) is stored with a bailee or warehouseman unless a reasonably
satisfactory, acknowledged bailee letter has been received by the US Agent or
Reserves reasonably satisfactory to US Agent have been established with respect
thereto, or (iv) is located at an owned location subject to a mortgage in favor
of a lender other than the US Agent, unless a reasonably satisfactory mortgagee
waiver has been delivered to the US Agent, or (v) is located at any site if the
aggregate book value of Inventory at any such location is less than $100,000;   
$                   Inventory that is placed on consignment or is in transit,
except for Inventory in transit between United States and Canadian locations of
Credit Parties as to which the US Agent’s Liens have been perfected at origin
and destination; and except for (i) Inventory in transit between domestic
locations of Credit Parties and (ii) consigned Inventory that arises with
respect to goods that are delivered on a bill and hold, cash on delivery basis
or placed on consignment, guaranteed sale or other terms by reason of which the
payment by the Account Debtor is or may be conditional, provided that in the
case of such consigned Inventory, (A) as to each consignee (it being understood
that for the purposes of this paragraph, the term consignee shall include any
Person to whom such Credit Party has provided possession of Inventory prior to
the consummation of an irrevocable sale of such Inventory to such Person), the
applicable Credit Party has, at such Credit Party’s cost and expense
(i) conducted Code, PPSA, tax lien and judgment searches against such consignee,
(ii) filed UCC-1 financing statements against such consignee naming such Credit
Party as secured party and US Agent as assignee of secured party, and
(iii) provided to each secured party of record that has filed a financing
statement against such consignee (whether or not such Inventory is Inventory in
the hands of such consignee) a notice, in form and substance reasonably
satisfactory to US Agent, pursuant to Section 9-324 of the Code or similar
provision of the PPSA of such Credit Party’s intent to provide purchase money
financing to such consignee and (iv) obtained from such consignee a letter
agreement, in form and substance reasonably satisfactory to US Agent, in which
such consignee acknowledges the Lien of US Agent and agrees that to the extent
that such consignee has not paid the purchase price of any item of Inventory, US
Agent can take possession of and remove such item of Inventory upon an Event of
Default and (B) such Credit Party holds a perfected first priority security
interest against such consignee, such security interest having been assigned of
record to US Agent;    $                

 

6.1(d)(ii)-6

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

Inventory that is covered by a negotiable document of title, unless such
document has been delivered to US Agent with all necessary endorsements, free
and clear of all Liens except those in favor of US Agent and Lenders;

   $ ___________   

Inventory that is excess, obsolete, unsaleable, shopworn, seconds, damaged or
unfit for sale;

   $ ___________   

Inventory that consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts;

   $ ___________   

Inventory that consists of goods which have been returned by the buyer and are
not capable of readily being resold to another buyer;

   $ ___________   

Inventory that is not of a type held for sale in the ordinary course of such
Credit Party’s business;

   $ ___________   

Inventory that is not subject to a first priority lien in favor of US Agent on
behalf of itself and Lenders subject to Permitted Encumbrances;

   $ ___________   

Inventory that breaches any of the representations or warranties pertaining to
Inventory set forth in the Loan Documents;

   $ ___________   

Inventory that consists of any costs associated with “freight-in” charges;

   $ ___________   

Inventory that consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;

   $ ___________   

Inventory that is not covered by casualty insurance reasonably acceptable to US
Agent;

   $ ___________   

Inventory that is otherwise unacceptable to US Agent in its reasonable credit
judgment acting in good faith;

   $ ___________   

Inventory that consists of work in process in an amount not to exceed $6,500,000
in the aggregate; or

   $ ___________   

Inventory that consists of raw materials in-transit, except raw materials
in-transit that are adequately insured and in which such Credit Party has
perfected title under Applicable Law in such raw materials in an amount not to
exceed $1,000,000 in the aggregate.

   $ ___________    Total Ineligible Inventory    $ ___________    Total
Eligible Inventory (Inventory less Total Ineligible Inventory)    $ ___________
  

 

6.1(d)(ii)-7

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

Advance Rate

 

(a)     up to the lesser of (i) 62.5% of the book value of the Eligible
Inventory of US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries but
excluding any UK Group Member) consisting of raw materials (other than Eligible
Inventory consisting of raw materials in-transit pursuant to Section 1.9(p) of
the Credit Agreement) and finished goods valued at the lower of cost (determined
on a first-in, first-out basis) or market and (ii) 85% of the NOLV of such
Eligible Inventory (such amount the “US Tranche A Raw Materials Advance Rate”);

 

(b)     up to 45% of the book value of the Eligible Inventory of such US
Borrower and its Domestic Subsidiaries (which for the avoidance of doubt,
includes direct and indirect Domestic Subsidiaries) consisting of work in
process (eligible pursuant to Section 1.9(o) of the Credit Agreement) in an
amount not to exceed $6,500,000 in the aggregate;

 

(c)     up to the inverse of the then applicable US Tranche A Raw Materials
Advance Rate on the Eligible Inventory of such US Borrower and its Domestic
Subsidiaries (which for the avoidance of doubt, includes direct and indirect
Domestic Subsidiaries) consisting of raw materials in-transit (eligible pursuant
to Section 1.9(p) of the Credit Agreement), in an amount not to exceed
$1,000,000 in the aggregate.

   Inventory Availability (sum of (a) and (b) and (c) above)    $ ____________
  

Notwithstanding the foregoing, (i) no assets or receivables of any UK Group
Member generated pursuant to Section 5.1(c)(ii) or (iii) of the Credit Agreement
shall be included in the US Tranche A Borrowing Base and (ii) no assets or
receivables acquired in the Bemis Acquisition shall be included in the US
Tranche A Borrowing Base until the Agents shall have completed reasonably
satisfactory audits and appraisals of such assets and receivables.

 

Borrowing Base (Accounts Availability plus Inventory Availability)

   $ ____________   

 

6.1(d)(ii)-8

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

EXHIBIT 6.1(d)(iii)

FORM OF CANADIAN TRANCHE A1 BORROWING BASE CERTIFICATE

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of January 31, 2006, as amended and restated as of October 31, 2007, as
further amended and restated as of July 2, 2010 and as further amended and
restated as of May 31, 2011 by and among the undersigned (“Canadian Borrower”),
the other Persons named therein as Borrowers, the other Persons named therein as
Credit Parties, General Electric Capital Corporation (“US Agent”), GE Canada
Finance Holding Company (“Canadian Agent”) and the Persons signatory thereto
from time to time as Lenders (including all annexes, exhibits and schedules
thereto, and as from time to time amended, restated, supplemented or otherwise
modified, the “Credit Agreement”). Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.

The undersigned, being the chief financial officer or chief executive officer of
Canadian Borrower, hereby certifies that the Canadian Tranche A1 Borrowing Base
calculated herein is true and correct in all respects and, without limiting the
generality of the foregoing, with respect to the information supporting the
determination of Eligible Accounts and Eligible Inventory.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Borrowing
Base Certificate as of the date first set forth above.

 

[EXOPACK-NEWMARKET, LTD.]

[EXOPACK PERFORMANCE FILMS INC.]

By:     Title:    

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

SCHEDULE 1

to Exhibit 6.1(d)(iii)

FORM OF CANADIAN TRANCHE A1 BORROWING BASE CALCULATION

 

Accounts of Canadian Borrowers, their Canadian Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada reflected as accounts receivable on Canadian Borrowers, their Canadian
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Canadian Subsidiaries) and TPG Canada’s consolidating balance sheet (as of the
date above), but solely to the extent of the unpaid portion of the obligations
stated on the respective invoices issued to a customer of Canadian Borrowers,
their Canadian Subsidiaries (which, for the avoidance of doubt, includes direct
and indirect Canadian Subsidiaries) and TPG Canada with respect to inventory
sold and shipped or services performed in the ordinary course of business, net
of any credits, rebates or offsets owed by Canadian Borrowers, their Canadian
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Canadian Subsidiaries) and TPG Canada to the respective customer.    $
___________   

Less:     Ineligible Accounts:

 

Accounts that do not arise from the sale of goods or the performance of services
by such Credit Party in the ordinary course of its business;

   $ ___________   

Accounts (i) upon which such Credit Party’s right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which such Credit Party is not able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial process, or
(iii) if the Account represents a progress billing consisting of an invoice for
goods sold or used or services rendered pursuant to a contract under which the
Account Debtor’s obligation to pay that invoice is subject to such Credit
Party’s completion of further performance under such contract or is subject to
the equitable lien of a surety bond issuer;

   $ ___________   

Any Account to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account (it being understood and agreed that (i) only the
portion of the Account that is subject to such defense, counterclaim, setoff or
dispute shall not be an Eligible Account and (ii) the remaining portion of such
Account shall not be rendered ineligible under this clause);

   $ ___________   

Accounts that are not true and correct statements of bona fide indebtedness
incurred in the amount of such Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor;

   $ ___________   

 

6.1(d)(iii)-2

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

Accounts with respect to which an invoice has not been sent to the applicable
Account Debtor;

   $ ____________   

Accounts that (i) are not owned by such Credit Party or (ii) are subject to any
right, claim, security interest or other interest of any other Person, other
than Liens in favor of Canadian Agent, on behalf of itself and applicable
Lenders and Prior Claims that are unregistered and that secure amounts that are
not yet due and payable;

   $ ____________   

Accounts that arise from a sale to any director, officer, other employee or
Affiliate of such Credit Party, or to any entity that has any common officer or
director with such Credit Party other than any unrelated portfolio company of
Sponsor, Sponsor’s affiliates and any purchaser of the Subordinated Debt or the
Senior Notes;

   $ ____________   

Accounts that are the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless Canadian
Agent, in its sole discretion, has agreed to the contrary in writing or such
Credit Party, if necessary, has complied with respect to such obligation with
the Federal Assignment of Claims Act of 1940, or any applicable state, county or
municipal law restricting the assignment thereof with respect to such
obligation;

   $ ____________   

Accounts that are the obligation of an Account Debtor that is the Canadian
government (Her Majesty The Queen in Right of Canada) or a political subdivision
thereof, or any province or territory, or any municipality or department, agency
or instrumentality thereof, unless (i) Lenders have agreed to the contrary in
writing, (ii) such Account is assignable by way of security or (iii) such Credit
Party, if necessary, has complied with the Financial Administration Act (Canada)
and any amendments thereto, or any applicable territorial, provincial, county or
municipal law of similar purpose and effect restricting the assignment thereof
with respect to such obligation;

   $ ____________   

Accounts that are the obligation of an Account Debtor located in a country other
than the United States or Canada unless payment thereof is assured by a letter
of credit assigned and delivered to Canadian Agent or is covered by adequate
credit insurance for such Account Debtor, each satisfactory to Canadian Agent as
to form, amount and issuer; provided that, obligations of EI Dupont de Nemours,
a Mexican company and, so long as that certain guaranty from Mars, Inc. in favor
of Effem Mexico Inc., a Mexican corporation remains in full force and effect,
Effem Mexico, Inc. shall not be excluded;

   $ ____________   

Accounts to the extent such Credit Party is liable for goods sold or services
rendered by the applicable Account Debtor to such Credit Party but only to the
extent of the potential offset;

   $ ____________   

 

6.1(d)(iii)-3

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

Accounts that arise with respect to goods that are delivered on a bill and hold,
cash on delivery basis, guaranteed sale or other terms by reason of which the
payment by the Account Debtor is or may be conditional;

   $ ____________   

Accounts that are in default; provided, that, without limiting the generality of
the foregoing, an Account shall be deemed in default upon the occurrence of any
of the following:

 

(i) the Account is not paid within the earlier of: 60 days following its due
date or 90 days following its original invoice date; provided that, such
Accounts shall not be excluded so long as they are not past due in accordance
with their terms and are not in an aggregate amount in excess of $1,000,000;

 

(ii) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or

 

(iii) a petition is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors until such time, if ever, as such petition is
dismissed;

   $ ____________   

Accounts that are the obligations of an Account Debtor if 50% or more of the
Dollar amount of all Accounts owing by that Account Debtor are ineligible under
the other criteria set forth in Section 1.8 of the Credit Agreement (other than
clauses (a), (b), (d), (e), (f) or (l) thereof);

   $ ____________   

Accounts as to which Canadian Agent’s Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;

   $ ____________   

Accounts as to which any of the representations or warranties in the Loan
Documents are untrue;

   $ ____________   

Accounts to the extent such Accounts are evidenced by a judgment, Instrument or
Chattel Paper;

   $ ____________   

Accounts to the extent such Account exceeds any credit limit established by
Canadian Agent, in its reasonable credit judgment acting in good faith,
following prior written or electronic notice of such limit by Canadian Agent to
Canadian Borrower Representative;

   $ ____________   

Accounts to the extent that such Account, together with all other Accounts owing
to such Account Debtor and its Affiliates as of any date of determination exceed
20% of all Eligible Accounts of all Credit Parties

   $ ____________   

 

6.1(d)(iii)-4

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

Accounts that are payable in any currency other than Dollars or Canadian
Dollars; or

   $ ___________   

Accounts that are otherwise unacceptable to Canadian Agent in its reasonable
credit judgment acting in good faith.

   $ ___________    Total Ineligible Accounts    $ ___________    Total Eligible
Accounts (Accounts less Total Ineligible Accounts)    $ ___________   

Advance Rate

up to an additional 5% of the book value of the Eligible Accounts of Canadian
Borrowers, their Canadian Subsidiaries (which, for the avoidance of doubt,
includes direct and indirect Canadian Subsidiaries) and TPG Canada at such time

   Accounts Availability    $ ___________    Inventory owned by, and in the
possession of Canadian Borrowers, their Canadian Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada, reflected as inventory on the Canadian Borrowers, their Canadian
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Canadian Subsidiaries) and TPG Canada’s consolidating balance sheet (as of the
date above), valued at the lower of cost or market (including adequate reserves
for obsolete, slow moving or excess quantities), on a first-in, first-out basis
   $ ___________   

Less:     Ineligible Inventory:

 

Inventory that is not owned by such Credit Party free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Credit Party’s performance with respect to that Inventory and the rights of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada)),
except the Liens in favor of Canadian Agent, on behalf of the Lenders and Prior
Claims that are unregistered and that secure amounts that are not yet due and
payable (other than the claims of suppliers under Section 81.1 of the Bankruptcy
and Insolvency Act (Canada)), except the Liens in favor of Canadian Agent, on
behalf of itself and the Lenders and other Permitted Encumbrances described in
clauses (a), (b), (c), (e) and (f)(3) in such definition;

   $ ___________   

 

6.1(d)(iii)-5

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

Inventory that (i) is not located on premises owned, leased or rented by such
Credit Party and set forth in Disclosure Schedule (3.14) of the Credit Agreement
or (ii) is stored at a leased location, unless (x) the Canadian Agent has given
its prior consent thereto, (y) a reasonably satisfactory landlord waiver has
been delivered to Canadian Agent, or (z) Reserves satisfactory to Canadian Agent
have been established with respect thereto in an amount not to exceed three (3)
months rent, (iii) is stored with a bailee or warehouseman unless a reasonably
satisfactory, acknowledged bailee letter has been received by the Canadian Agent
or Reserves reasonably satisfactory to Canadian Agent have been established with
respect thereto, or (iv) is located at an owned location subject to a mortgage
in favor of a lender other than the Canadian Agent, unless a reasonably
satisfactory mortgagee waiver has been delivered to the Canadian Agent, or (v)
is located at any site if the aggregate book value of Inventory at any such
location is less than $100,000;

   $ ___________   

 

6.1(d)(iii)-6

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

Inventory that is placed on consignment or is in transit, except for Inventory
in transit between United States and Canadian locations of Credit Parties as to
which the Canadian Agent’s Liens have been perfected at origin and destination;
and except for (i) Inventory in transit between domestic locations of Credit
Parties and (ii) consigned Inventory that arises with respect to goods that are
delivered on a bill and hold, cash on delivery basis or placed on consignment,
guaranteed sale or other terms by reason of which the payment by the Account
Debtor is or may be conditional, provided that in the case of such consigned
Inventory, (A) as to each consignee (it being understood that for the purposes
of this paragraph, the term consignee shall include any Person to whom such
Credit Party has provided possession of Inventory prior to the consummation of
an irrevocable sale of such Inventory to such Person), the applicable Credit
Party has, at such Credit Party’s cost and expense (i) conducted Code, PPSA, tax
lien and judgment searches against such consignee, (ii) filed UCC-1 financing
statements against such consignee naming such Credit Party as secured party and
Canadian Agent as assignee of secured party, and (iii) provided to each secured
party of record that has filed a financing statement against such consignee
(whether or not such Inventory is Inventory in the hands of such consignee) a
notice, in form and substance reasonably satisfactory to Canadian Agent,
pursuant to Section 9-324 of the Code or similar provision of the PPSA of such
Credit Party’s intent to provide purchase money financing to such consignee and
(iv) obtained from such consignee a letter agreement, in form and substance
reasonably satisfactory to Canadian Agent, in which such consignee acknowledges
the Lien of Canadian Agent and agrees that to the extent that such consignee has
not paid the purchase price of any item of Inventory, Canadian Agent can take
possession of and remove such item of Inventory upon an Event of Default and
(B) such Credit Party holds a perfected first priority security interest against
such consignee, such security interest having been assigned of record to
Canadian Agent;

   $ ___________   

Inventory that is covered by a negotiable document of title, unless such
document has been delivered to Canadian Agent with all necessary endorsements,
free and clear of all Liens except those in favor of Canadian Agent and Lenders;

   $ ___________   

Inventory that is excess, obsolete, unsaleable, shopworn, seconds, damaged or
unfit for sale;

   $ ___________   

Inventory that consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts;

   $ ___________   

Inventory that consists of goods which have been returned by the buyer and are
not capable of readily being resold to another buyer;

   $ ___________   

 

6.1(d)(iii)-7

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

Inventory that is not of a type held for sale in the ordinary course of such
Credit Party’s business;

   $ ___________   

Inventory that is not subject to a first priority lien in favor of Canadian
Agent on behalf of itself and Lenders subject to Permitted Encumbrances;

   $ ___________   

Inventory that breaches any of the representations or warranties pertaining to
Inventory set forth in the Loan Documents;

   $ ___________   

Inventory that consists of any costs associated with “freight-in” charges;

   $ ___________   

Inventory that consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;

   $ ___________   

Inventory that is not covered by casualty insurance reasonably acceptable to
Canadian Agent;

   $ ___________   

Inventory that is otherwise unacceptable to Canadian Agent in its reasonable
credit judgment acting in good faith;

   $ ___________   

Inventory that consists of work-in-progress inventory in an amount not to exceed
$6,500,000; or

   $ ___________   

Inventory that consists of raw materials in transit, except raw materials in
transit that are adequately insured and in which such Credit Party has perfected
title under Applicable Law in such raw materials in an amount not to exceed
$1,000,000 in the aggregate.

   $ ___________    Total Ineligible Inventory    $ ___________    Total
Eligible Inventory (Inventory less Total Ineligible Inventory)    $ ___________
  

Advance Rate

 

up to the lesser of (i) an additional 5% of the book value of the Eligible
Inventory of Canadian Borrowers, their Canadian Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Canadian Subsidiaries) and TPG
Canada consisting of raw materials and finished goods valued at the lower of
cost (determined on a first-in, first-out basis) or market and (ii) an
additional 5% of the NOLV of such Eligible Inventory.

   Inventory Availability (sum of (a) and (b) above)    $ ___________   
Borrowing Base (Accounts Availability plus Inventory Availability)    $
___________   

 

6.1(d)(iii)-8

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

EXHIBIT 6.1(d)(iv)

FORM OF US TRANCHE A1 BORROWING BASE CERTIFICATE

Reference is made to that certain Third Amended and Restated Credit Agreement
dated as of January 31, 2006, as amended and restated as of October 31, 2007, as
further amended and restated as of July 2, 2010 and as further amended and
restated as of May 31, 2011, by and among the undersigned (“US Borrower”), the
other Persons named therein as Borrowers, the other Persons named therein as
Credit Parties, General Electric Capital Corporation (“US Agent”), GE Canada
Finance Holding Company (“Canadian Agent”) and the Persons signatory thereto
from time to time as Lenders (including all annexes, exhibits and schedules
thereto, and as from time to time amended, restated, supplemented or otherwise
modified, the “Credit Agreement”). Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.

The undersigned, being the chief financial officer or chief executive officer of
US Borrower, hereby certifies that the US Tranche A1 Borrowing Base calculated
herein is true and correct in all respects and, without limiting the generality
of the foregoing, with respect to the information supporting the determination
of Eligible Accounts and Eligible Inventory.

IN WITNESS WHEREOF, the undersigned has executed and delivered this Borrowing
Base Certificate as of the date first set forth above.

 

[EXOPACK, LLC]

[CELLO-FOIL PRODUCTS, INC.]

By:    

Title:    

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

SCHEDULE 1

to Exhibit 6.1(d)(iv)

FORM OF US TRANCHE A1 BORROWING BASE CALCULATION

 

Accounts of US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries)
reflected as accounts receivable on US Borrowers and their Domestic
Subsidiaries’ (which, for the avoidance of doubt, includes direct and indirect
Domestic Subsidiaries) consolidating balance sheet (as of the date above), but
solely to the extent of the unpaid portion of the obligations stated on the
respective invoices issued to a customer of US Borrowers and their Domestic
Subsidiaries (which, for the avoidance of doubt, includes direct and indirect
Domestic Subsidiaries) with respect to inventory sold and shipped or services
performed in the ordinary course of business, net of any credits, rebates or
offsets owed by US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries) to the
respective customer.    $
____________
  
Less:     Ineligible Accounts:   

Accounts that do not arise from the sale of goods or the performance of services
by such Credit Party in the ordinary course of its business;

   $ ____________   

Accounts (i) upon which such Credit Party’s right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which such Credit Party is not able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial process, or
(iii) if the Account represents a progress billing consisting of an invoice for
goods sold or used or services rendered pursuant to a contract under which the
Account Debtor’s obligation to pay that invoice is subject to such Credit
Party’s completion of further performance under such contract or is subject to
the equitable lien of a surety bond issuer;

   $ ____________   

Any Account to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account (it being understood and agreed that (i) only the
portion of the Account that is subject to such defense, counterclaim, setoff or
dispute shall not be an Eligible Account and (ii) the remaining portion of such
Account shall not be rendered ineligible under this clause);

   $ ____________   

Accounts that are not true and correct statements of bona fide indebtedness
incurred in the amount of such Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor;

   $ ____________   

 

6.1(d)(iv)-2

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

Accounts with respect to which an invoice has not been sent to the applicable
Account Debtor;

   $ _____________   

Accounts that (i) are not owned by such Credit Party or (ii) are subject to any
right, claim, security interest or other interest of any other Person, other
than Liens in favor of US Agent, on behalf of itself and applicable Lenders and
Prior Claims that are unregistered and that secure amounts that are not yet due
and payable;

   $ _____________   

Accounts that arise from a sale to any director, officer, other employee or
Affiliate of such Credit Party, or to any entity that has any common officer or
director with such Credit Party other than any unrelated portfolio company of
Sponsor, Sponsor’s affiliates and any purchaser of the Subordinated Debt or the
Senior Notes;

   $ _____________   

Accounts that are the obligation of an Account Debtor that is the United States
government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless US Agent,
in its sole discretion, has agreed to the contrary in writing or such Credit
Party, if necessary, has complied with respect to such obligation with the
Federal Assignment of Claims Act of 1940, or any applicable state, county or
municipal law restricting the assignment thereof with respect to such
obligation;

   $ _____________   

Accounts that are the obligation of an Account Debtor that is the Canadian
government (Her Majesty The Queen in Right of Canada) or a political subdivision
thereof, or any province or territory, or any municipality or department, agency
or instrumentality thereof, unless (i) Lenders have agreed to the contrary in
writing, (ii) such Account is assignable by way of security or (iii) such Credit
Party, if necessary, has complied with the Financial Administration Act (Canada)
and any amendments thereto, or any applicable territorial, provincial, county or
municipal law of similar purpose and effect restricting the assignment thereof
with respect to such obligation;

   $ _____________   

Accounts that are the obligation of an Account Debtor located in a country other
than the United States or Canada unless payment thereof is assured by a letter
of credit assigned and delivered to US Agent or is covered by adequate credit
insurance for such Account Debtor, each satisfactory to US Agent as to form,
amount and issuer; provided that, obligations of EI Dupont de Nemours, a Mexican
company and, so long as that certain guaranty from Mars, Inc. in favor of Effem
Mexico Inc., a Mexican corporation remains in full force and effect, Effem
Mexico, Inc. shall not be excluded;

   $ _____________   

Accounts to the extent such Credit Party is liable for goods sold or services
rendered by the applicable Account Debtor to such Credit Party but only to the
extent of the potential offset;

   $ _____________   

 

6.1(d)(iv)-3

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

Accounts that arise with respect to goods that are delivered on a bill and hold,
cash on delivery basis, guaranteed sale or other terms by reason of which the
payment by the Account Debtor is or may be conditional;

   $ ____________   

Accounts that are in default; provided, that, without limiting the generality of
the foregoing, an Account shall be deemed in default upon the occurrence of any
of the following:

 

(i) the Account is not paid within the earlier of: 60 days following its due
date or 90 days following its original invoice date; provided that, such
Accounts shall not be excluded so long as they are not past due in accordance
with their terms and are not in an aggregate amount in excess of $1,000,000;

 

(ii) the Account Debtor obligated upon such Account suspends business, makes a
general assignment for the benefit of creditors or fails to pay its debts
generally as they come due; or

 

(iii) a petition is filed by or against any Account Debtor obligated upon such
Account under any bankruptcy law or any other federal, state or foreign
(including any provincial) receivership, insolvency relief or other law or laws
for the relief of debtors until such time, if ever, as such petition is
dismissed;

   $ ____________   

Accounts that are the obligations of an Account Debtor if 50% or more of the
Dollar amount of all Accounts owing by that Account Debtor are ineligible under
the other criteria set forth in Section 1.8 of the Credit Agreement (other than
clauses (a), (b), (d), (e), (f) or (l) thereof);

   $ ____________   

Accounts as to which US Agent’s Lien thereon, on behalf of itself and Lenders,
is not a first priority perfected Lien;

   $ ____________   

Accounts as to which any of the representations or warranties in the Loan
Documents are untrue;

   $ ____________   

Accounts to the extent such Accounts are evidenced by a judgment, Instrument or
Chattel Paper;

   $ ____________   

Accounts to the extent such Account exceeds any credit limit established by US
Agent, in its reasonable credit judgment acting in good faith, following prior
written or electronic notice of such limit by US Agent to US Borrower
Representative;

   $ ____________   

Accounts to the extent that such Account, together with all other Accounts owing
to such Account Debtor and its Affiliates as of any date of determination exceed
20% of all Eligible Accounts of all Credit Parties

   $ ____________   

 

6.1(d)(iv)-4

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

Accounts that are payable in any currency other than Dollars or Canadian
Dollars; or

   $ ____________   

Accounts that are otherwise unacceptable to US Agent in its reasonable credit
judgment acting in good faith.

   $ ____________    Total Ineligible Accounts    $ ____________    Total
Eligible Accounts (Accounts less Total Ineligible Accounts)    $ ____________   

Advance Rate

 

up to an additional 5% of the book value of the Eligible Accounts of US
Borrowers and their Domestic Subsidiaries (which, for the avoidance of doubt,
includes direct and indirect Domestic Subsidiaries) at such time

   Accounts Availability    $ ____________    Inventory owned by, and in the
possession of US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries),
reflected as inventory on the US Borrowers and their Domestic Subsidiaries’
(which, for the avoidance of doubt, includes direct and indirect Domestic
Subsidiaries) consolidating balance sheet (as of the date above), valued at the
lower of cost or market (including adequate reserves for obsolete, slow moving
or excess quantities), on a first-in, first-out basis    $ ____________   

Less:     Ineligible Inventory:

  

Inventory that is not owned by such Credit Party free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Credit Party’s performance with respect to that Inventory and the rights of
suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada)),
except the Liens in favor of US Agent, on behalf of the Lenders and Prior Claims
that are unregistered and that secure amounts that are not yet due and payable
(other than the claims of suppliers under Section 81.1 of the Bankruptcy and
Insolvency Act (Canada)), except the Liens in favor of US Agent, on behalf of
itself and the Lenders and other Permitted Encumbrances described in clauses
(a), (b), (c), (e) and (f)(3) in such definition;

   $ ____________   

 

6.1(d)(iv)-5

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

Inventory that (i) is not located on premises owned, leased or rented by such
Credit Party and set forth in Disclosure Schedule (3.14) of the Credit Agreement
or (ii) is stored at a leased location, unless (x) the US Agent has given its
prior consent thereto, (y) a reasonably satisfactory landlord waiver has been
delivered to US Agent, or (z) Reserves satisfactory to US Agent have been
established with respect thereto in an amount not to exceed three (3) months
rent, (iii) is stored with a bailee or warehouseman unless a reasonably
satisfactory, acknowledged bailee letter has been received by the US Agent or
Reserves reasonably satisfactory to US Agent have been established with respect
thereto, or (iv) is located at an owned location subject to a mortgage in favor
of a lender other than the US Agent, unless a reasonably satisfactory mortgagee
waiver has been delivered to the US Agent, or (v) is located at any site if the
aggregate book value of Inventory at any such location is less than $100,000;

   $ ___________   

Inventory that is placed on consignment or is in transit, except for Inventory
in transit between United States and Canadian locations of Credit Parties as to
which the US Agent’s Liens have been perfected at origin and destination; and
except for (i) Inventory in transit between domestic locations of Credit Parties
and (ii) consigned Inventory that arises with respect to goods that are
delivered on a bill and hold, cash on delivery basis or placed on consignment,
guaranteed sale or other terms by reason of which the payment by the Account
Debtor is or may be conditional, provided that in the case of such consigned
Inventory, (A) as to each consignee (it being understood that for the purposes
of this paragraph, the term consignee shall include any Person to whom such
Credit Party has provided possession of Inventory prior to the consummation of
an irrevocable sale of such Inventory to such Person), the applicable Credit
Party has, at such Credit Party’s cost and expense (i) conducted Code, PPSA, tax
lien and judgment searches against such consignee, (ii) filed UCC-1 financing
statements against such consignee naming such Credit Party as secured party and
US Agent as assignee of secured party, and (iii) provided to each secured party
of record that has filed a financing statement against such consignee (whether
or not such Inventory is Inventory in the hands of such consignee) a notice, in
form and substance reasonably satisfactory to US Agent, pursuant to Section
9-324 of the Code or similar provision of the PPSA of such Credit Party’s intent
to provide purchase money financing to such consignee and (iv) obtained from
such consignee a letter agreement, in form and substance reasonably satisfactory
to US Agent, in which such consignee acknowledges the Lien of US Agent and
agrees that to the extent that such consignee has not paid the purchase price of
any item of Inventory, US Agent can take possession of and remove such item of
Inventory upon an Event of Default and (B) such Credit Party holds a perfected
first priority security interest against such consignee, such security interest
having been assigned of record to US Agent;

   $ ___________   

 

6.1(d)(iv)-6

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

Inventory that is covered by a negotiable document of title, unless such
document has been delivered to US Agent with all necessary endorsements, free
and clear of all Liens except those in favor of US Agent and Lenders;

   $ ____________   

Inventory that is excess, obsolete, unsaleable, shopworn, seconds, damaged or
unfit for sale;

   $ ____________   

Inventory that consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts;

   $ ____________   

Inventory that consists of goods which have been returned by the buyer and are
not capable of readily being resold to another buyer;

   $ ____________   

Inventory that is not of a type held for sale in the ordinary course of such
Credit Party’s business;

   $ ____________   

Inventory that is not subject to a first priority lien in favor of US Agent on
behalf of itself and Lenders subject to Permitted Encumbrances;

   $ ____________   

Inventory that breaches any of the representations or warranties pertaining to
Inventory set forth in the Loan Documents;

   $ ____________   

Inventory that consists of any costs associated with “freight-in” charges;

   $ ____________   

Inventory that consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;

   $ ____________   

Inventory that is not covered by casualty insurance reasonably acceptable to US
Agent;

   $ ____________   

Inventory that is otherwise unacceptable to US Agent in its reasonable credit
judgment acting in good faith;

   $ ____________   

Inventory that consists of work-in-progress in an amount not to exceed
$6,500,000; or

   $ ____________   

Inventory that consists of raw materials in transit, except raw materials in
transit that are adequately insured and in which such Credit Party has perfected
title under Applicable Law in such raw materials in an amount not to exceed
$1,000,000 in the aggregate.

   $ ____________   

Total Ineligible Inventory

   $ ____________    Total Eligible Inventory (Inventory less Total Ineligible
Inventory)    $ ____________   

 

6.1(d)(iv)-7

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

Advance Rate

   up to the lesser of (i) an additional 5% of the book value of the Eligible
Inventory of US Borrowers and their Domestic Subsidiaries (which, for the
avoidance of doubt, includes direct and indirect Domestic Subsidiaries but
excluding any UK Group Member) consisting of raw materials (other than Eligible
Inventory consisting of raw materials in-transit pursuant to Section 1.9(p) of
the Credit Agreement) and finished goods valued at the lower of cost (determined
on a first-in, first-out basis) or market and (ii) an additional 5% of the NOLV
of such Eligible Inventory.   

Inventory Availability (sum of (a) and (b) above)

   $ ____________    Notwithstanding the foregoing, (i) no assets or receivables
of any UK Group Member generated pursuant to Section 5.1(c)(ii) or (iii) of the
Credit Agreement shall be included in the US Tranche A Borrowing Base and
(ii) no assets or receivables acquired in the Bemis Acquisition shall be
included in the US Tranche A Borrowing Base until the Agents shall have
completed reasonably satisfactory audits and appraisals of such assets and
receivables.   

Borrowing Base (Accounts Availability plus Inventory Availability)

   $ ____________   

 

6.1(d)(iv)-8

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

EXHIBIT 8.1

FORM OF ASSIGNMENT AGREEMENT

This ASSIGNMENT, dated as of the Effective Date, is entered into between the
Assignor and the Assignee (each as defined below).

The parties hereto hereby agree as follows:

 

Borrowers:

  EXOPACK, LLC, a Delaware limited liability company; CELLO-FOIL PRODUCTS, INC.,
a Michigan corporation; EXOPACK-NEWMARKET, LTD., an Ontario company; and EXOPACK
PERFORMANCE FILMS INC., an Ontario corporation (the “Borrowers”)

Applicable Agent:

  [General Electric Capital Corporation, as US agent for the US Lenders and L/C
Issuer (in such capacity and together with its successors and permitted assigns,
the “US Agent”)] / [GE Canada Finance Holding Company, as Canadian Agent for the
Canadian Lenders (in such capacity and together with its successors and
permitted assigns, the “Canadian Agent”)]

Credit Agreement:

  Third Amended and Restated Credit Agreement dated as of January 31, 2006, as
amended and restated as of October 31, 2007, as further amended and restated as
of July 2, 2010 and as further amended and restated as of May 31, 2011, among
the Borrowers, the other credit parties signatory thereto, the US Agent,
Canadian Agent, US lenders and Canadian Lenders (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; capitalized terms used herein without definition are used as defined
in the Credit Agreement)

[Trade Date:

  _________, ____]1

Effective Date:

  _________, ____2

 

1 

Insert for informational purposes only if needed to determine other arrangements
between the assignor and the assignee.

2 

To be filled out by Applicable Agent upon entry in the Loan Account.

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

Assignor

(collectively, the

“Assignors”)3

  

Assignee

(collectively, the

“Assignees”)4

   Loan
Assigned5      Aggregate
amount of
Commitments
or principal
amount of
Loans for all
Lenders      Aggregate
amount of
Commitments6
or principal
amount of
Loans
Assigned7      Percentage
Assigned8  

[Name of Assignor]

  

[Name of Assignee]

[Affiliate] of

[Name of Lender]

      $ ____________       $ ____________         __._________ % 

[Name of Assignor]

  

[Name of Assignee]

[Affiliate] of

[Name of Lender]

      $ ____________       $ ____________         __._________ % 

[Name of Assignor]

  

[Name of Assignee]

[Affiliate] of

[Name of Lender]

      $ ____________       $ ____________         __._________ % 

[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

 

3 

List each Assignor, as appropriate.

4 

List each Assignee, as appropriate.

5 

Fill in the appropriate defined term for the type of facilities under the Credit
Agreement that are being assigned under this Assignment. (e.g., “US Loan”,
“Canadian Loan”, etc.)

6 

Includes Loans and interests, participations and obligations to participate in
Letter of Credit Obligations, if applicable.

7 

Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date. The aggregate
amounts are inserted for informational purposes only to help in calculating the
percentages assigned which, themselves, are for informational purposes only.

8 

Set forth, to at least 9 decimals, the Assigned Interest as a percentage of the
aggregate Commitment or Loans in the Credit Facility. This percentage is set
forth for informational purposes only and is not intended to be binding. The
assignments are based on the amounts assigned not on the percentages listed in
this column.

 

6.1(d)(iv)-3

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

Section 1. Assignment. Each Assignor hereby sells and assigns to the Assignee
set forth above opposite such Assignor, and such Assignee hereby purchases and
assumes from such Assignor, such Assignor’s rights and obligations in its
capacity as Lender under the Credit Agreement (including Liabilities owing to or
by such Assignor thereunder) and the other Loan Documents, in each case to the
extent related to the amounts identified above opposite such Assignor (such
Assignor’s “Assigned Interest”).

Section 2. Representations, Warranties and Covenants of Assignors. Each Assignor
severally but not jointly (a) represents and warrants to its corresponding
Assignee and the [US] [Canadian] Agent that (i) it has full power and authority,
and has taken all actions necessary for it, to execute and deliver this
Assignment and to consummate the transactions contemplated hereby and (ii) it is
the legal and beneficial owner of its Assigned Interest and that such Assigned
Interest is free and clear of any Lien and other adverse claims, (b) makes no
other representation or warranty and assumes no responsibility, including with
respect to the aggregate amount of the Loans, the percentage of the Loans
represented by the amounts assigned, any statements, representations and
warranties made in or in connection with any Loan Document or any other document
or information furnished pursuant thereto, the execution, legality, validity,
enforceability or genuineness of any Loan Document or any document or
information provided in connection therewith and the existence, nature or value
of any Collateral, (c) assumes no responsibility (and makes no representation or
warranty) with respect to the financial condition of any Credit Party or the
performance or nonperformance by any Credit Party of any obligation under any
Loan Document or any document provided in connection therewith and (d) attaches
any Notes held by it evidencing at least in part the Assigned Interest of such
Assignor (or, if applicable, an affidavit of loss or similar affidavit therefor)
and requests that the [US] [Canadian] Agent exchange such Notes for new Notes in
accordance with Sections 1.1 or 1.2 of the Credit Agreement, as applicable.

Section 3. Representations, Warranties and Covenants of Assignees. Each Assignee
severally but not jointly (a) represents and warrants to its corresponding
Assignor and the [US/Canadian] Agent that (i) it has full power and authority,
and has taken all actions necessary for such Assignee, to execute and deliver
this Assignment and to consummate the transactions contemplated hereby, (ii) to
the extent indicated above, is an Affiliate or an Approved Fund of the Lender
set forth above and (iii) it is sophisticated with respect to decisions to
acquire assets of the type represented by the Assigned Interest assigned to it
hereunder and either such Assignee or the Person exercising discretion in making
the decision for such assignment is experienced in acquiring assets of such
type, (b) appoints and authorizes the [US] [Canadian] Agent to take such action
as administrative agent and collateral agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the [US] [Canadian] Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto, (c) shall perform in accordance with their terms all obligations that,
by the terms of the Loan Documents, are required to be performed by it as a
Lender, (d) confirms it has received such documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and shall continue to make its own credit decisions in taking or
not taking any action under any Loan Document independently and without reliance
upon any Secured Party and based on such documents and information as it shall
deem appropriate at the time, (e) acknowledges and agrees that, as a Lender, it
may receive material non-public information and confidential information
concerning the Loan Parties and their Affiliates and Securities and agrees to
use such information in accordance with Section 9.13 of the Credit Agreement,
(f) specifies as its applicable lending offices (and addresses for notices) the
offices at the addresses set forth beneath its name on the signature pages
hereof, (g) shall pay to the [US] [Canadian] Agent an assignment fee in the
amount of $3,500 to the extent such fee is required to be paid under
Section 8.1(a) of the Credit Agreement and (h) to the extent required pursuant
to Section 1.12(d) of the Credit Agreement, attaches two completed originals of
Forms W-8ECI, W-8BEN or W-9.

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

Section 4. Determination of Effective Date; Loan Account. Following the due
execution and delivery of this Assignment by each Assignor, each Assignee and,
to the extent required by Section 8.1(a) of the Credit Agreement, the Borrowers,
this Assignment (including its attachments) will be delivered to the [US]
[Canadian] Agent for its acceptance and recording in the Loan Account. The
effective date of this Assignment (the “Effective Date”) shall be the later of
(i) the acceptance of this Assignment by the [US] [Canadian] Agent and (ii) the
recording of this Assignment in the Loan Account. The [US] [Canadian] Agent
shall insert the Effective Date when known in the space provided therefor at the
beginning of this Assignment.

Section 5. Effect. As of the Effective Date, (a) each Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment, have the
rights and obligations of a Lender under the Credit Agreement and (b) each
Assignor shall, to the extent provided in this Assignment, relinquish its rights
(except those surviving the termination of the Commitments and payment in full
of the Obligations) and be released from its obligations under the Loan
Documents other than those obligations relating to events and circumstances
occurring prior to the Effective Date.

Section 6. Distribution of Payments. On and after the Effective Date, the [US]
[Canadian] Agent shall make all payments under the Loan Documents in respect of
each Assigned Interest of any Assignor (a) in the case of amounts accrued to but
excluding the Effective Date, to such Assignor and (b) otherwise, to the
corresponding Assignee.

Section 7. Miscellaneous. This Assignment is a Loan Document and, as such, is
subject to certain provisions of the Credit Agreement, including Sections 9.14
(Consent to Jurisdiction) and 9.15 (Waiver of Jury Trial) thereof. On and after
the Effective Date, this Assignment shall be binding upon, and inure to the
benefit of, the Assignors, Assignees, the [US] [Canadian] Agent and their
Related Persons and their successors and assigns. This Assignment shall be
governed by, and be construed and interpreted in accordance with, the law of the
State of New York. This Assignment may be executed in any number of counterparts
and by different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart. Delivery of
an executed signature page of this Assignment by facsimile transmission or
Electronic Transmission shall be as effective as delivery of a manually executed
counterpart of this Assignment.

[SIGNATURE PAGES FOLLOW]

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

 

[NAME OF ASSIGNOR]

as Assignor

By:    

Name:    

Title:    

 

[NAME OF ASSIGNEE]

as Assignee

By:    

Name:    

Title:    

 

Lending Office for LIBOR Loans or BA Rate Loans:9

[Insert Address (including contact name, fax number and e-mail address)]

 

Lending Office (and address for notices) for any other purpose:

[Insert Address (including contact name, fax number and e-mail address)]

 

 

9 

Insert for each Assignee.

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

ACCEPTED and AGREED this      day of                          :

[GENERAL ELECTRIC CAPITAL CORPORATION,

as US Agent]

[GE CANADA FINANCE HOLDING COMPANY,

as Canadian Agent]

 

BY:       NAME:       TITLE:    

 

[EXOPACK, LLC By:       Name:   ]   Title:    

 

[EXOPACK-NEWMARKET, LTD.   By:         Name:         Title:   ]10  

 

10 

Consent of Applicable Borrower Representative Required so long as no Default or
Event of Default has occurred and is continuing. Such consent is not required
for an assignment between Lenders or from a Lender to an Affiliate of a Lender
that is controlled by or under common control with such Lender, which consent
shall not be unreasonably withheld or delayed.

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

SCHEDULES TO EXOPACK CREDIT FACILITY

 

Schedules       

Schedule 3.1(a)

  -     

Jurisdictions of Organization and Qualifications

Schedule 3.1(c)

  -     

Capitalization

Schedule 3.5

  -     

GAAP Exceptions

Schedule 3.7

  -     

Use of Proceeds

Schedule 3.10

  -     

Intellectual Property

Schedule 3.11

  -     

Investigations and Audits

Schedule 3.12

  -     

Employee Matters

Schedule 3.13

  -     

Litigation

Schedule 3.14

  -     

Real Property

Schedule 3.15

  -     

Environmental Matters

Schedule 3.16

  -     

ERISA/Canadian Pension Plans

Schedule 3.17

  -     

Deposit and Disbursement Accounts

Schedule 3.18

  -     

Agreements and Other Documents

Schedule 3.19

  -     

Insurance

Schedule 4.7

  -     

Corporate and Trade Names

Schedule 4.10

  -     

Cash Management Systems

Schedule 5.1

  -     

Indebtedness

Schedule 5.2

  -     

Liens

Schedule 5.3

  -     

Investments

Schedule 5.4

  -     

Contingent Obligations

Schedule 5.8

  -     

Affiliate Transactions

Schedule 5.9

  -     

Business Description

 

8

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

Schedule 3.1(a)

 

1. The jurisdiction of organization and all jurisdictions in which each Credit
Party is qualified to do business as of the Closing Date, current location of
each Credit Party’s chief executive office, principal place of business,
domicile (within the meaning of the Civil Code of Québec)

 

Item

  

Entity

  

Jurisdiction

of

Organization

  

Foreign Qualification

  

Chief

Executive

Office

  

Principal

Place of Business

  

Domicile1

1.    Exopack Key Holdings, LLC    Delaware    Florida    3070 Southport Road,
Spartanburg, SC 29302    3070 Southport Road, Spartanburg, SC 29302    N/A 2.   
Exopack Holding Corp.    Delaware    South Carolina, Florida, Oklahoma    3070
Southport Road, Spartanburg, SC 29302    3070 Southport Road, Spartanburg, SC
29302    N/A 3.    Exopack, LLC    Delaware    Arkansas, California, Georgia,
Indiana, Iowa, New Jersey, Oklahoma, Pennsylvania, South Carolina, Texas,
Wisconsin    3070 Southport Road, Spartanburg, SC 29302    3070 Southport Road,
Spartanburg, SC 29302    N/A 4.    Exopack-Hebron, L.L.C.    Delaware    Ohio,
South Carolina    3070 Southport Road, Spartanburg, SC 29302    3070 Southport
Road, Spartanburg, SC 29302    N/A 5.    Exopack-Thomasville, LLC    Delaware   
Texas, North Carolina    3070 Southport Road, Spartanburg, SC 29302    3070
Southport Road, Spartanburg, SC 29302    N/A 6.    Exopack-Ontario, Inc.   
California    None    3070 Southport Road, Spartanburg, SC 29302    3070
Southport Road, Spartanburg, SC 29302    N/A

 

1 

Within the meaning of the Civil Code of Quèbec.

 

9

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

Schedule 3.1(a)

 

Item

  

Entity

  

Jurisdiction

of

Organization

  

Foreign Qualification

  

Chief

Executive

Office

  

Principal

Place of Business

  

Domicile1

7.    Exopack-Newmarket, Ltd.    Ontario, Canada    None    300 Spinnaker Way,
Concord, Ontario L4K 4W1    300 Spinnaker Way, Concord, Ontario L4K 4W1    300
Spinnaker Way, Concord, Ontario L4K 4W1

 

10

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

Schedule 3.1(a)

 

8.    Exopack-Technology, LLC    California    None    3070 Southport Road,
Spartanburg, SC 29302    3070 Southport Road, Spartanburg, SC 29302    N/A 9.   
Cello-Foil Holding Corp.    Delaware    Michigan, Florida    155 Brook Street,
Battle Creek, MI 49017    155 Brook Street, Battle Creek, MI 49017    N/A 10.   
Cello-Foil Products, Inc.    Michigan    Georgia    155 Brook Street, Battle
Creek, MI 49017    155 Brook Street, Battle Creek, MI 49017    N/A 11.    TPG
Group Holding Corp.    Delaware    Florida    3070 Southport Road, Spartanburg,
SC 29302    3070 Southport Road, Spartanburg, SC 29302    N/A 12.    TPG (US),
Inc.    Delaware    None    3070 Southport Road, Spartanburg, SC 29302    3070
Southport Road, Spartanburg, SC 29302    N/A 13.    TPG Enterprises, Inc.   
Delaware    None    3070 Southport Road, Spartanburg, SC 29302    3070 Southport
Road, Spartanburg, SC 29302    N/A 14.    The Packaging Group (Canada)
Corporation    Nova Scotia, Canada    Ontario, Canada    300 Spinnaker Way
Concord, Ontario, L4K 4W12    300 Spinnaker Way Concord, Ontario, L4K 4W12   
Suite 1100, 1959 Upper Water Street, Halifax, Nova Scotia, B3J 3E5 15.   
Exopack Advanced Coatings, LLC    Delaware    North Carolina    3070 Southport
Road, Spartanburg, SC 29302    3070 Southport Road, Spartanburg, SC 29302    N/A
16.    Intelicoat Technologies Image Products Matthews LLC    Delaware    North
Carolina    3070 Southport Road, Spartanburg, SC 29302    700 Crestdale Road,
Matthews, NC 28105    N/A 17.    Exopack Performance Films Inc.    Ontario,
Canada    None    201 South Blair St., Whitby, Ontario L1N 5S6    201 South
Blair St., Whitby, Ontario L1N 5S6    201 South Blair St., Whitby, Ontario L1N
5S6

 

2 

Minute books are located at the registered office/domicile. The head office and
main business are located and accounts are issued out of 300 Spinnaker Way,
Concord, Ontario, L4K 4W1.

 

11

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

Schedule 3.1(a)

 

2. Warehouses and premises at which any Collateral is located as of the Closing
Date

 

  a. Locations of Collateral in Possession of Exopack Key Holdings, LLC or any
Subsidiary

 

State/Province; City

  

Address

California; Hanford

   10801 Iona Avenue 93230

California; Ontario

   5601 Santa Ana Street 91761

Georgia; Albany

   1801 Oak Haven Drive 31701

Georgia; Albany

   1747 Oak Haven Drive 31701

Georgia; Griffin

   1304 Arthur K. Bolton Parkway 30224

Georgia; Savannah (Garden City)

   108 Airport Industrial Drive 31408

Georgia; Tifton

   390 Southwell Boulevard 31794

Georgia; Tifton

   375 Southwell Boulevard 31794

Iowa; Sibley

   1400 Chase Boulevard 51249

Indiana; Seymour

   2200 D Avenue E 47274

Indiana; Seymour

   2212 4th Avenue 47274

Michigan; Battle Creek

   155 Brook Street 49017

Michigan; Battle Creek

   Rail Pit, 4950 W. Dickman Road 49015

Michigan; Battle Creek

   North Warehouse, 4950 W. Dickman Road 49015

Michigan; Battle Creek

   South Warehouse, 4950 W. Dickman Road 49015

North Carolina; Thomasville

   1308 Blair Street 27360

North Carolina; Matthews

   700 Crestdale St. 28106

Ontario; Concord

   300 Spinnaker Way L4K 4W1

Ontario; Whitby

   201 South Blair Street L1N 5S6

Pennsylvania; Hazelton

   3 Maplewood Drive 18202

South Carolina; Spartanburg

   3070 Southport Road 29302

South Carolina; Spartanburg

   345 Cedar Springs Avenue 29302

South Carolina; Spartanburg

   1078 Union St. 29302-3318

Texas; Longview

   900 Jordan Valley Road 75604

Wisconsin; Tomah

   501 Williams Street 54660

 

12

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

Schedule 3.1(a)

 

  b. Locations of Collateral in Possession of Persons other than Exopack Key
Holdings, LLC or any Subsidiary:

 

Loan Party

  

Name

  

Address

  

Purpose

Exopack, LLC    CertainTeed    Athena Industrial Park, Athens, GA    Consignment
   Karchner Warehouse    11 Maplewood Dr., Hazleton, PA    Inventory Storage   
CertainTeed    1220 Oak Hill Rd., Mountaintop, PA    Consignment    CertainTeed
   103 Funston Road, Kansas City, KS    Consignment    Columbus Container (1)   
2212 Fourth Ave., Seymour, IN    Inventory/Consignment    Holman Warehouse   
222430 76th Ave, Kent, WA    Inventory Storage    Warehouse Specialties, Inc.   
5915 N. Marine Drive, Portland, OR    Consignment    Twin Brick Warehouse (3)   
101 South Tift Ave, Tifton, GA    Inventory Storage    CertainTeed    17775 Ave
23 1/2, Chowchilla, CA    Consignment    LeMars Public Storage    1889 24th ST
SW, LeMars, IA    Inventory Storage    Hill’s Pet    151 Turner Court, Bowling
Green, KY 42101    Consignment    Hill’s Pet    2325 Union Pike, Richmond, IN
47374    Consignment    Hill’s Pet    6041 South Malt Ave., Los Angeles, CA
90040    Consignment    Tift Warehouse    PO Box 7328 Tifton, GA 31793   
Inventory Storage    Penn Warehousing & Distribution    2147 S. Columbus Blvd.,
Philadelphia, PA 19148    Inventory Storage    Absopure    8835 General Dr.,
Plymouth, MI 48170    Consignment    Waters of America    7359 Hazelwood Ave.,
Hazelwood, MO 63042    Consignment    Hydration Source    10409 Sanden Dr.,
Dallas, TX 75238    Consignment    Hydration Source    4324 Leckron Rd.,
Modesto, CA 95357    Consignment    Classic Packaging    4058 Highway 79, Homer,
LA 71040    Toll Laminator    Hill’s CJ Foods    121 Main Street, Bern, KS 66408
   Consignment    Riverside logistics    310 Second St Bldg 3, Boscobel WI 53805
   Toller    Astro Storage and Warehousing    115 Balmorak Ave, Cornwall,
Ontario K6H 3G6    Consignment    Ozburn-Hessey Logistics    4060 East Jurupa
St, Ontario, CA 91761    Consignment

 

13

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

Schedule 3.1(c)

 

Loan Party

  

Name

  

Address

  

Purpose

   LaserSharp FlexPack Services    3500 Willow Lake Blvd, Suite 700, Vadnais
Heights, MN    Processor    Vacumet Corp    7929 Troon Circle SW Austell, GA
30168    Processor    Celplast Metalized Prod    67 Commander Blvd Unit 4,
Toronto Ontario M1A 3M7    Processor    Diamond Packaging    2855 Shemmer Road,
Northbrook, IL 60062    Processor    Pacon    79 Main St. Suite 202, Farmingham,
MA 01702    Processor    Checker Logistics    1725 Dixie Road, Neenah, WI 54957
   Storage    Southernwise Warehouse    504 Carver Road, Griffin, GA   
Inventory Storage    Hills Pet    1730 E Logan Ave, Emporia KS 66801   
Consignment    Jacobson Warehouse    3811 Dixon St., Des Moines, IA 50313   
Inventory Storage    Farmer John Warehouse    3049 E. Vernon Ave. Los Angeles,
CA 90058    Consignment Exopack Performance Films Inc.    Celplast    67
Commander Blvd, Toronto, Ontario M1S 3M7    Toller The Packaging Group (Canada)
Corporation    n/a    140-9969 River Road, Delta, BC L4K 4W1, Canada   
Inventory Storage Exopack Advanced Coatings, LLC    Interfilm    127
Turningstone Ct., Greenville, SC 29611    Film Slitter    Penn Color    2801
Richmond Rd., Hatfield, PA 19440    Mixer    Stahl    Industrias Quimicas No.
105, 50200 Toluca, Edo de Mexico, Mexico    Mixer    MacDermid Printing
Solutions    5700 Commerce Blvd, Morristown, TN 37814   

Consignment

Inventory Storage

   Techni-Met    300 Lamberton Road, Windsor, CT 06095    Toller Cello-Foil
Products, Inc.    Behnke Warehouse    186 Nevada St., Battlecreek, MI   
Obsolete cylinder storage    Behnke Warehouse    433 E. Michigan Ave., Battle
Creek, MI    Inventory Storage

 

14

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

Schedule 3.1(c)

Capitalization

 

1. The authorized Stock of each of the Credit Parties and each of their
Subsidiaries:

 

Entity

  

Authorized Stock

Exopack Advanced Coatings, LLC    Uncertificated Exopack Key Holdings, LLC   
Uncertificated Cello-Foil Holding Corp.    3,000,000 Cello-Foil Products, Inc.
   3,000,000 Exopack Holding Corp.    3,000,000 Exopack-Technology, LLC   
Uncertificated Exopack, LLC    Uncertificated Exopack-Hebron, L.L.C.   
Uncertificated Exopack-Newmarket, Ltd.    Unlimited Exopack-Ontario, Inc.   
1,000 Exopack-Thomasville, LLC    Uncertificated Intelicoat Technologies Image
Products Matthews LLC    Uncertificated TPG Group Holding Corp.    1,000 TPG
(US), Inc.    1,000 TPG Enterprises, Inc.    1,000 The Packaging Group (Canada)
Corporation    100,000,000 Exopack Performance Films Inc.    Unlimited Exopack
Advanced Coatings Ltd.    3,000,000

 

15

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

Schedule 3.1(c)

 

Intelicoat Technologies EF Holdco Ltd.    1,000

Exopack Advanced Coatings

(North Wales) Ltd.

(f/k/a/ Intelicoat Technologies Engineered Films Limited)

   1,000 3189152    100,000,000 Exopack L.P.    Unlimited

 

16

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

Schedule 3.1(c)

 

2. Identity of the holders of the Stock of each of the Credit Parties and each
of their Subsidiaries and the percentage of their fully-diluted ownership of the
Stock or uncertificated LLC interest of each of the Credit Parties and each of
their Subsidiaries:

 

  a. Exopack Advanced Coatings, LLC

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack, LLC

   100%    Intelicoat Technologies Image Products Matthews LLC    100%

 

  b. Exopack Key Holdings, LLC

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

CPG Finance, Inc.

   100%    Exopack Holding Corp.    100%

 

  c. Exopack Holding Corp.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack Key Holdings, LLC

   100%    Cello-Foil Holding Corp.    100%       Exopack, LLC    100%

 

  d. Exopack, LLC

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack Holding Corp.

   100%    Exopack-Thomasville, LLC    100%       Exopack-Hebron, L.L.C.    100%
      Exopack-Ontario, Inc.    100%       Exopack Advanced Coatings, LLC    100%
      Exopack Advanced Coatings Ltd.    100%

 

  e. Exopack-Ontario, Inc.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack, LLC

   100%    Exopack-Technology, LLC    100%

 

17

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

Schedule 3.1(c)

 

  f. Exopack-Thomasville, LLC

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack, LLC

   100%    None    N/A

 

  g. Exopack-Hebron, L.L.C.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack, LLC

   100%    None    N/A

 

  h. Exopack-Newmarket, Ltd.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

The Packaging Group (Canada) Corporation

   100%    None    N/A

 

  i. Exopack-Technology, LLC

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack-Ontario, Inc.

   100%    None    N/A

 

  j. Cello-Foil Holding Corp.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack Holding Corp.

   100%    Cello-Foil Products, Inc.    100%       TPG Group Holding Corp.   
100%

 

  k. Intelicoat Technologies Image Products Matthews LLC

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack Advanced Coatings, LLC

   100%    None    N/A

 

  l. Cello-Foil Products, Inc.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Cello-Foil Holding Corp.

   100%    None    N/A

 

18

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

Schedule 3.1(c)

 

  m. TPG Group Holding Corp.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Cello-Foil Holding Corp.

   100%    TPG Enterprises, Inc.    100%       TPG (US), Inc.    100%

 

  n. TPG (US), Inc.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

TPG Group Holding Corp.

   100%    None    N/A

 

  o. TPG Enterprises, Inc.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

TPG Group Holding Corp.

   100%    The Packaging Group (Canada) Corporation    100%       Exopack
Performance Films Inc.    100%

 

  p. The Packaging Group (Canada) Corporation

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

TPG Enterprises, Inc.

   100%    3181952 Nova Scotia Company    100%       Exopack-Newmarket Ltd.   
100%       Exopack, L.P.    99.99%

 

  q. Exopack Performance Films Inc.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

TPG Enterprises, Inc.

   100%    None    N/A

 

  r. 3181952 Nova Scotia Company

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

The Packaging Group (Canada) Corporation    100%    None    N/A       Exopack
L.P.    .01%

 

19

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

  s. Exopack L.P.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

The Packaging Group (Canada) Corporation    99.99%    None    N/A 318952 Nova
Scotia Company    .01%    None    N/A

 

  t. Exopack Advanced Coatings Ltd.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack, LLC    100%    Intelicoat Technologies EF Holdco. Ltd    100%

 

  u. Intelicoat Technologies EF Holdco Ltd.

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Exopack Advanced Coatings Ltd.    100%   

Exopack Advanced Coatings (North Wales) Ltd.

(f/k/a/ Intelicoat Technologies Engineered Films Limited)

   100%

 

  v. Exopack Advanced Coatings (North Wales) Ltd. (f/k/a Intelicoat Technologies
Engineered Films Limited)

 

Record Owner

  

Ownership

  

Subsidiaries

  

Ownership

Intelicoat Technologies EF Holdco Ltd.    100%    None    N/A

 

3. Preemptive or other outstanding rights, options, warrants, conversion rights
or similar agreements or understandings for the purchase or acquisition from any
Credit Party or any of their Subsidiaries of any Stock of any such entity as of
the Closing Date:

None.

 

20

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

Schedule 3.5

SECTION 12. GAAP EXCEPTIONS

None.

 

21

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

Schedule 3.7

Use of Proceeds

(See attached)

 

22

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

Schedule 3.10

Intellectual Property

 

1) Copyrights:

 

Owner

  

Title

   Reg. No. Cello-Foil Products, Inc.    Quality assurance lab database:
instruction manual    TXu001108708

 

2) Trademarks:

Owner: Exopack, LLC

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 1.   CLEARSHIELD    76552803

10/20/2003

   3042255

1/10/2006

   REGISTERED 2.   HALO    77264525

8/26/2007

   3914651

2/1/2011

   REGISTERED 3.   I-VAC    76623326

12/6/2004

   3200077

1/23/2007

   REGISTERED 4.   LASERTEAR    76454119

10/1/2002

   2907014

11/30/2004

   REGISTERED 5.   MARAFLEX    72057657

8/22/1958

   679632

6/2/1959

   REGISTERED

RENEWED

6.  

MATTEFX

LOGO [g192853g23z32.jpg]

   77624246

12/1/2008

   —      PENDING

ITU

 

23

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

Schedule 3.10

Owner: Exopack-Technology, LLC

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 1.
 

CEDEX

LOGO [g192853g25p36.jpg]

   77811502

8/24/2009

   —      PENDING

ITU

2.  

DESIGN ONLY

LOGO [g192853g01u21.jpg]

   78079895

8/17/2001

   2765640

9/16/2003

   REGISTERED 3.   EXOPACK    78079904

8/17/2001

   2765641

9/16/2003

   REGISTERED 4.   INSTA-BOWL    85056597

6/7/2010

   —      PENDING

ITU

5.   POLARFLEX    77748938

6/1/2009

   —      PENDING

 

24

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

Schedule 3.10

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 6.   SEAL ‘N VENT    78619093

4/28/2005

   3319958

10/23/2007

   REGISTERED 7.   SEAL ‘N VENT    78619213

4/28/2005

   3319960

10/23/2007

   REGISTERED 8.   SHUR-SEAL    78303799

9/22/2003

   3220481

3/20/2007

   REGISTERED

Owner: Exopack Advanced Coatings, LLC

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 1.  

DURATOOL

   74116644

11/19/1990

   1749153

1/26/1993

   REGISTERED 2.  

DURATOOL ECLIPSE

   76490607

2/19/2003

   2996339

9/20/2005

   REGISTERED 3.  

INSPIRE

   76543292

9/8/2003

   3151256

10/3/2006

   REGISTERED 4.  

REFLEX

   75176177

10/3/1996

   2067371

6/3/1997

   REGISTERED

 

25

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

Schedule 3.10

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 5.  

STRAT FX

   77077033

1/5/2007

   3293301

9/18/2007

   REGISTERED 6.  

TECNILITH

   73289213

12/10/1980

   1246122

7/26/1983

   REGISTERED 7.  

Z-FLO CONDUCTIVE FILMS AND FOILS

   77808358

8/19/2009

   3901524

1/4/2011

   REGISTERED

Owner: Cello-Foil Products, Inc.

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 1.  

CF

   71683354

3/14/1955

   635356

10/9/1956

   REGISTERED

RENEWED

Owner: Exopack Performance Films, Inc.

 

Trademark/

Image if any

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 1.   

DARTEK

   72421305

04/13/1972

   963,900

07/17/1973

   REGISTERED

 

26

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

Schedule 3.10

 

3) Patents:

Owner: Exopack, LLC

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

1.    BAGS HAVING COMPOSITE STRUCTURES AND RELATED METHODS    12556151

9/9/2009

   —      PENDING 2.    DIENOPHILE ADDITIVES TO POLYVINYLIDENE CHLORIDE
COPOLYMERS    09649895

8/28/2000

   6514626

2/4/2003

   REGISTERED 3.    DIENOPHILE ADDITIVES TO POLYVINYLIDENE CHLORIDE COPOLYMERS
   10341702

1/14/2003

   6911242

6/28/2005

   REGISTERED 4.    DUAL SCORED EASY OPEN FILM    11286958

11/23/2005

   7531228

5/12/2009

   REGISTERED 5.    EASY-OPENING RECLOSABLE PACKAGE    08947679

7/2/1997

   5882749

3/16/1999

   REGISTERED 6.    ENCAPSULATED BARRIER FOR FLEXIBLE FILMS AND A METHOD OF
MAKING AND USING THE SAME    10918958

8/16/2004

   7384679

6/10/2008

   REGISTERED 7.    ENCAPSULATED BARRIER FOR FLEXIBLE FILMS AND A METHOD OF
MAKING THE SAME    09650385

8/29/2000

   6500514

12/31/2002

   REGISTERED

 

27

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

8.    ENCAPSULATED BARRIER FOR FLEXIBLE FILMS AND A METHOD OF MAKING THE SAME   
10325002

12/20/2002

   6911244

6/28/2005

   REGISTERED 9.    FILM STRUCTURES AND PACKAGES THEREFROM USEFUL FOR PACKAGING
RESPIRING FOOD PRODUCTS    10668427

9/23/2003

   7008677

3/7/2006

   REGISTERED 10.    FILM STRUCTURES AND PACKAGES THEREFROM USEFUL FOR RESPIRING
FOOD PRODUCTS THAT RELEASE CO2 AMOUNTS    12259512

10/28/2008

   —      PENDING 11.    HEAT SHRINKABLE BARRIER BAGS    09105623

6/26/1998

   6074715

6/13/2000

   REGISTERED 12.    HEAT SHRINKABLE BARRIER BAGS    09573596

5/18/2000

   6544660

4/8/2003

   REGISTERED 13.    HEAT SHRINKABLE BARRIER BAGS WITH ANTI BLOCK ADDITIVES   
09758843

1/11/2001

   6531198

3/11/2003

   REGISTERED 14.    HEAT SHRINKABLE FILM STRUCTURES WITH IMPROVED SEALABILITY
AND TOUGHNESS    08884121

6/27/1997

   6051292

4/18/2000

   REGISTERED 15.    HEAT SHRINKABLE FILM STRUCTURES WITH IMPROVED SEALABILITY
AND TOUGHNESS    09443904

11/19/1999

   6753054

6/22/2004

   REGISTERED

 

28

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 16.    LAMINATE ANTIOXIDANT FILM    09887836

6/22/2001

   7101624

9/5/2006

   REGISTERED 17.    LASER SCORED PACKAGE    07771977

10/2/1991

   5229180

7/20/1993

   REGISTERED 18.    LASER SCORING OF PACKAGING SUBSTRATES    07720121

7/1/1991

   5158499

10/27/1992

   REGISTERED 19.    LASER SCORING OF PACKAGING SUBSTRATES    08270782

7/5/1994

   5630308

5/20/1997

   REGISTERED 20.    METHODS FOR MAKING MULTIPLE LAYER SHEET MATERIALS   
083776057

1/20/1995

   5705111

1/6/1998

   REGISTERED 21.    MICROWAVABLE BAGS FOR USE WITH LIQUID OIL AND RELATED
METHODS    12581279

10/19/2009

   —      PENDING 22.    MULTILAYER BARRIER STRUCTURES, METHODS OF MAKING THE
SAME AND PACKAGES MADE THEREFROM    11029200

1/4/2005

   —      PENDING 23.    MULTILAYER STRUCTURES, PACKAGES, AND METHODS OF MAKING
MULTILAYER STRUCTURES    11029195

1/4/2005

   —      PENDING

 

29

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date    Status 24.    MULTI-LAYER THERMOPLASTIC FILMS AND PACKAGES MADE
THEREFROM    09369980

7/30/1999

   7316833

1/8/2008

   REGISTERED 25.    MULTI-LAYERED BAGS AND METHODS OF MANUFACTURING THE SAME   
12341080

12/22/2008

   —      PENDING 26.    MULTI-LAYERED BAGS AND METHODS OF MANUFACTURING THE
SAME    12335414

12/15/2008

   —      PENDING 27.    PACKAGING MATERIAL FOR FORMING AN EASY-OPENING
RECLOSABLE PACKAGING MATERIAL AND PACKAGE    08999707

11/3/1997

   5882789

3/16/1999

   REGISTERED 28.    POLYAMIDE STRUCTURES FOR THE PACKAGING OF MOISTURE
CONTAINING PRODUCTS    12349357

1/6/2009

   —      PENDING 29.    POLYMERIC FILM STRUCTURES USEFUL AS SHRINK BAGS   
09329415

6/10/1999

   6706343

3/16/2004

   REGISTERED 30.    POLYMERIC FILM STRUCTURES USEFUL AS SHRINK BAGS    09591244

6/9/2000

   6770338

8/3/2004

   REGISTERED

 

30

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

31.    STRUCTURES OF POLYMERS MADE FROM SINGLE SITE CATALYSTS    09144713

9/1/1998

   6270867

8/7/2001

  

REGISTERED

Post-Closing Date issues to be resolved: File assignment or name change
documentation with the USPTO to correct break in chain of title from American
National Can Company to Alcan Packaging Flexible France.

32.    STRUCTURES OF POLYMERS MADE FROM SINGLE SITE CATALYSTS    09006700

1/14/1998

   6437064

8/20/2002

   REGISTERED 33.    STRUCTURES OF POLYMERS MADE FROM SINGLE SITE CATALYSTS   
09684567

10/6/2000

   6511568

1/28/2003

  

REGISTERED

Post-Closing Date issues to be resolved: File assignment or name change
documentation with the USPTO to correct break in chain of title from Pechiney
Plastic Packaging, Inc. to Alcan Packaging Flexible France.

34.    STRUCTURES OF POLYMERS MADE FROM SINGLE SITE CATALYSTS    10136962

5/2/2002

   6645641

11/11/2003

  

REGISTERED

Post-Closing Date issues to be resolved: File assignment or name change
documentation with the USPTO to correct break in chain of title from Pechiney
Plastic Packaging, Inc. to Alcan Packaging Flexible France.

35.    TEAR TAPE FOR PLASTIC PACKAGING    09400806

9/22/1999

   6316036

11/13/2001

   REGISTERED

 

31

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

36.    TEAR TAPE FOR PLASTIC PACKAGING    09352897

7/13/1999

   6416841

7/9/2002

   REGISTERED 37.    TEAR TAPE FOR PLASTIC PACKAGING    09925560

8/9/2001

   6749877

6/15/2004

   REGISTERED 38.    THERMOFORMABLE MULTILAYER POLYMERIC FILM    08602256

2/15/1996

   6068933

5/30/2000

   REGISTERED 39.    THERMOFORMABLE MULTILAYER POLYMERIC FILM    09411671

10/4/1999

   6562476

5/13/2003

   REGISTERED 40.    THERMOFORMABLE MULTILAYER POLYMERIC FILM    10131954

4/25/2002

   6942927

9/13/2005

   REGISTERED 41.    MULTI-LAYER LOW TEMPERATURE SHRINK FILM    13036974

02/28/2011

      PENDING 42.    OZONE APPLICATOR AND METHOD FOR POLYMER OXIDATION   
12922202

09/13/2010

      PENDING 43.    BAGS HAVING ADHESIVE DRYING STRUCTURES AND RELATED METHODS
   12625960

11/25/2009

      PENDING

 

32

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

Schedule 3.10

Owner: Exopack-Technology, LLC

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

1.   

BAG FOR MICROWAVE COOKING

   08282647

7/29/1994

   5488220

1/30/1996

   REGISTERED 2.   

BAG HAVING AN IMPROVED HEAT SEAL CLOSURE AND ASSOCIATED METHODS

   11265946

11/3/2005

   7544403

6/9/2009

   REGISTERED 3.   

BAG HAVING RECLOSABLE SEAL AND ASSOCIATED METHODS

   10383929

3/7/2003

   6969196

11/29/2005

   REGISTERED 4.   

BAG WITH ARCUATE-TRANSITION TEAR LINE

   09858984

5/16/2001

   6402379

6/11/2002

   REGISTERED 5.   

BAG WITH REENFORCED HANDLE AND RESEALABLE POUR SPOUT OPENING

   08509831

8/1/1995

   5558438

9/24/1996

   REGISTERED 6.   

BAG WITH REENFORCED HANDLE AND RESEALABLE POUR SPOUT OPENING

   08621575

3/26/1996

   5611626

3/18/1997

   REGISTERED 7.   

BAG WITH TEAR-RESISTANT HANDLE

   09261986

 3/4/1999

   6065871

5/23/2000

   REGISTERED

 

33

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date      Registration
Number
Registration
Date     

Status

8.   

BAG WITH TEAR-RESISTANT HANDLE

    

 

09512712

2/24/2000

  

  

    

 

6231232

5/15/2001

  

  

   REGISTERED 9.   

ELASTOMER AND POLYOLEFIN RESIN BASED FILMS AND ASSOCIATED METHODS

    

 

11352066

2/10/2006

  

  

    

 

7582341

9/1/2009

  

  

   REGISTERED 10.   

ELASTOMER AND POLYOLEFIN RESIN BASED FILMS AND ASSOCIATED METHODS

    

 

10760337

8/1/2006

  

  

    

 

7083838

8/1/2006

  

  

   REGISTERED 11.   

ENHANCED SLIDER ZIPPER MULTIWALL BAG AND ASSOCIATED METHODS

    

 

10860366

6/3/2004

  

  

    

 

7090904

8/15/2006

  

  

   REGISTERED 12.   

ENVIRONMENTALLY FRIENDLY PINCH BOTTOM BAG ASSEMBLY AND METHOD OF MAKING

    

 

08146961

11/10/1993

  

  

    

 

5529396

6/25/1996

  

  

   REGISTERED 13.   

ENVIRONMENTALLY FRIENDLY PINCH BOTTOM BAG ASSEMBLY AND METHOD OF MAKING

    

 

08468444

6/6/1995

  

  

    

 

5728037

3/17/1998

  

  

   REGISTERED 14.   

FLEXIBLE HINGED HANDLE AND CARRYING BAG EMPLOYING THE SAME

    

 

09522698

3/10/2000

  

  

    

 

6374461

4/23/2002

  

  

   REGISTERED 15.   

GUSSETED BAG WITH ANTI-LEAK FEATURE

    

 

09304178

5/3/1999

  

  

    

 

6046443

4/4/2000

  

  

   REGISTERED

 

34

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

16.   

HEAVY DUTY BAG WITH EASILY- REMOVABLE CORNER FOR POURING

   08500173

7/10/1995

   5593229

1/14/1997

  

REGISTERED

Post-Closing Date issues to be resolved:

 

Brief: Security Interest

Assignor: Rex International, Inc., f/k/a Rex-Rosenlew International, Inc.

Assignee: Fleet Capital Corporation

Signed: 8/15/2000

Recorded: 11/14/2000

Reel/Frame: 011306/0928

 

Brief: Security Interest

Assignor: Plassein International of Thomasville, Inc. f/k/a Rex International,
Inc.

Assignee: Fleet Capital Corporation

Signed: 5/14/2003

Recorded: 5/20/2003

Reel/Frame: 014066/0876

17.   

LAMINATED BAG WALL CONSTRUCTION

   08810043

 3/4/1997

   5871790

2/16/1999

   REGISTERED 18.   

LOAD CARRYING BAG WITH PERFORATED TEAR LINE OPENING

   08167757

12/15/1993

   5482376

1/9/1996

   REGISTERED 19.   

LOAD CARRYING BAG WITH PERFORATED TEAR LINE OPENING

   08417407

4/5/1995

   5601369

2/11/1997

   REGISTERED 20.    LOW-GLOSS DRY-ERASE COATING FORMULATION    11767139

6/22/2007

   —      PENDING

 

35

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

21.   

METHOD OF FORMING A BAG

   11201871

8/11/2005

   7322921

1/29/2008

   REGISTERED 22.   

METHOD OF FORMING A BAG HAVING A RECLOSABLE SEAL

   11265620

11/2/2005

   7549269

6/23/2009

   REGISTERED 23.   

METHOD OF FORMING A BURST-RESISTANT EASY-OPEN CORNER IN A HEAVY DUTY BAG

   10649715

8/26/2003

   7037250

5/2/2006

   REGISTERED 24.   

MICROWAVABLE BAG FOR COOKING AND SERVING FOOD

   08666895

6/20/1996

   5770839

6/23/1998

   REGISTERED 25.   

MULTIPLY BAG WITH TEAR STRIP OPENING MECHANISM

   09373256

3/12/1999

   6213644

4/10/2001

   REGISTERED 26.   

MULTIWALL BAG WITH ZIPPER AND FIN

   10290681

11/8/2002

   6979482

12/27/2005

   REGISTERED 27.   

MULTIWALL VENTED BAG, VENTED BAG FORMING APPARATUS, AND ASSOCIATED METHODS

   10421607

4/23/2003

   6986605

1/17/2006

   REGISTERED 28.   

NON-FLUOROCARBON OIL AND GREASE BARRIER METHODS OF APPLICATION AND PACKAGING

   10200209

7/22/2002

   6893686

5/17/2005

   REGISTERED 29.   

PERFORATION BLADE FOR FORMING A BURST-RESISTANT EASY-OPEN CORNER IN A HEAVY DUTY
BAG

   09934417

8/21/2001

   6609999

8/26/2003

   REGISTERED

 

36

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

Schedule 3.10

 

Patent Title

   Application
Number
Application
Date    Registration
Number
Registration
Date   

Status

30.   

SIDE GUSSET BAG WITH CONVENIENT CARRY HANDLE

   09650478

8/29/2000

   6299351

10/9/2001

   REGISTERED 31.   

TAMPER EVIDENT MULTI-WALL PACKAGING AND ASSOCIATED METHODS

   12021296

1/28/2008

   7563027

7/21/2009

   REGISTERED 32.   

TAMPER EVIDENT MULTI-WALL PACKAGING AND ASSOCIATED METHODS

   10366490

2/13/2003

   6994471

2/7/2006

   REGISTERED

Owner: Exopack Advanced Coatings, LLC

 

Patent Title

   Application
Number
Application
Date      Registration
Number
Registration
Date     

Status

1.    CURRENT COLLECTOR HAVING A CONDUCTIVE PRIMER LAYER     

 

08284300

8/2/1994

  

  

    

 

5478676

12/26/1995

  

  

  

REGISTERED

 

Post-Closing Date issues to be resolved:

 

Brief: Security Interest

Assignor: Image Products Group LLC

Assignee: Congress Financial Corporation

Signed: 6/19/2002

Recorded: 7/15/2002

Reel/Frame: 013036/0434

2.    OVERCOATS FOR DIAZO-CONTAINING LAYERS WITH CHEMICALS AND ABRASION
RESISTANCE     

 

07694064

5/1/1991

  

  

    

 

5382495

1/17/1995

  

  

  

REGISTERED

 

Post-Closing Date issues to be resolved:

 

Brief: Security Interest

Assignor: Image Products Group LLC

Assignee: Congress Financial Corporation

Signed: 6/19/2002

Recorded: 7/15/2002

Reel/Frame: 013036/0434

 

37

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

Schedule 3.10

Owner: Exopack Performance Films, Inc.

 

Patent Title

   Application
Number
Application  Date    Registration
Number
Registration
Date   

Status

1.

   POLYAMIDE RELEASE FILM FOR USE IN THE PRODUCTION OF MOLDED COMPOSITE PRODUCTS
   08828919

03/28/1997

   5959031

09/28/1999

   REGISTERED

2.

   POLYAMIDE RELEASE FILM FOR USE IN THE PRODUCTION OF MOLDED COMPOSITE PRODUCTS
   09349168

07/09/1999

   6251974

06/26/2001

   REGISTERED

3.

   HIGH TEMPERATURE AND HIGH HUMIDITY RELEASE COATING FOR POLYMER FILM   
10543165

05/26/2006

   7662322

02/16/2010

   REGISTERED

 

4) Licenses

 

Item

  

Description

1.    Product Development and Sales Agreement dated October 29, 1993 between
Morton International, Inc. and Union Camp Corporation (assigned to Exopack). 2.
   Joint Development Agreement dated November 20, 2000 between International
Paper Company and Actinic, Inc. 3.    License and Development Agreement dated
June 1, 2003 between Pactiv Corporation, on the one hand, and Exopack and Hebron
(f/k/a Specialty Films & Associates, LLC), on the other hand.

 

38

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

Schedule 3.10

 

  4.   License Agreement dated April 4, 2002 between UV Color, Inc. and Exopack.
  5.   Joint Development Agreement – Flexible Packaging dated June 24, 2005
between Exopack and Shandong Shouguang JianYuanChun Co.Ltd.   6.   International
Program License Agreement dated May 21, 2003 between Exopack and Navision a/s.
  7.   Master Customer Agreement for Axapta for Converting System dated May 21,
2003 between Concord Business Systems, Inc. and Exopack.   8.   Software
License, Services and Maintenance Agreement dated August 9, 2001 between Exopack
(f/k/a Exo-Tech Packaging) and J.D. Edwards.   9.   Microsoft Business Agreement
dated February 26, 2002 between MSLI, GP and Exopack. 10.   Confidentiality
Agreement dated October 25, 2002 between Plassein International (assigned to
Thomasville) and Cargill. 11.   Unexecuted License Agreement for use of Repasack
recycling trademarks in Europe. 12.   Non-Exclusive License Agreement, between
Cargill, Inc. and Rex International (predecessor to Plassein International,
assigned to Thomasville) [no date, unexecuted copy]. 13.   Non-Exclusive License
Agreement, between Salerno Plastics, Ltd. and Rex International (predecessor to
Plassein International, assigned to Thomasville) [no date, unexecuted copy]. 14.
  Assignment, Transfer and License Agreement dated as of September 1, 2004
between Actinic, Inc. and Exopack LLC. 15.   Trademark Usage Agreement dated
September 1, 2005, between Shurfine Foods, Inc. and Exopack-Technology LLC. 16.
  License Agreement dated May 13, 1989, between KCL Corporation and Union Camp
Corporation. 17.   Joint Development Agreement Addendum No. 1 dated February 24,
2003, between Color Converting Industries, L.L.C. and Exopack. 18.  
Confidentiality, Nondisclosure and Limited Use Agreement dated August 8, 2003,
between Exopack and FlexSol Packaging Corp. 19.   License Authorization Grant
dated November 8, 2005 between McAfee, Inc. and Cello-Foil Products, Inc. 20.  
Software License Agreement dated January 21, 2000, between JB Systems, Inc., DHA
Mainsaver and Cello-Foil Products, Inc. 21.   Dedicated Access Agreement dated
April 2, 2003, between Corecomm – Voyager. and Cello-Foil Products, Inc. 22.  
Master Software License Agreement dated August 31, 2000 between Peregrine
Connectivity, Inc. and Cello-Foil Products, Inc.

 

39

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

Schedule 3.10

 

23.    Software Schedule to the Master Software License Agreement dated
August 31, 2000 between Peregrine Connectivity, Inc. and Cello-Foil Products,
Inc. 24.    Purchase Order dated November 20, 2000, between Harbinger
Corporation and Cello-Foil Products, Inc. 25.    License Agreement and Order
Form between Computer Associated Internal, Inc. and EDS for the exclusive use
and benefit of Cello-Foil Products, Inc. 26.    Addendum to License Agreement
and Order Form between Computer Associated Internal, Inc. and EDS for the
exclusive use and benefit of Cello-Foil Products, Inc. 27.    Master License
Agreement dated July 27, 2005 between Option Software, Inc. and Cello-Foil
Products, Inc. 28.    Vsupport Certificate (expiration date March 25, 2004)
between VERITAS Software Global Corporation and Cello-Foil Products, Inc. for
the product of BACKUP EXEC,WIN,MICROSOFT EXCHANGE SVR AGENT W/ CLIENT ACCESS
LIC,V9.0 -VS2 1 Y 29.    Vsupport Certificate (expiration date March 25, 2004)
between VERITAS Software Global Corporation and Cello-Foil Products, Inc. for
the product of BACKUP EXEC,WIN,SVRS,V9.0 -VS2 1 Y 30.    Software License
Certificate (order date March 25, 2003) between VERITAS Software Global
Corporation and Cello-Foil Products, Inc. for the product of BACKUP
EXEC,WIN,SVRS,V9.0,LICENSE COMPETITIVE UPG 31.    VERISTAS VIP Program License
between VERITAS Software Global Corporation and Cello-Foil Products, Inc. 32.   
Software License Certificate (order date March 25, 2003) between VERITAS
Software Global Corporation and Cello-Foil Products, Inc. for the product of
BACKUP EXEC,WIN,MICROSOFT EXCHANGE SVR AGENT W/ CLIENT ACCESS LIC,V9.0,LIC 33.
   License Agreement between Microsoft Corporation and Cello-Foil Products, Inc.
for the following intellectual properties: Office 97 standard, Office 2000
standard, Office 2000 professional, Office XP standard, Office 2003 standard,
Office 2003 professional, BackOffice 2.5, Exchange Server 5.5, SQL Server 7.0,
Visio 2000, Visio 2003, Windows 2003 (CAL). Windows Server 2003, Windows
Terminal Server 2003 (CAL), Project 2000, Publisher 98, Visual Studio Net Pro
2003, Windows-98 and Windows XP Professional. 34.    License Agreements entered
into by Exopack-Newmarket, LLC for the following intellectual properties:
Acrobat, ACT!, ADP PC/Payroll for Windows – Client, APICS Supply Chain Creates
Net Value CD, Backup Exec Win NT/2000, Backup Exec Win NT/2000 exchange agent,
Backup Exec Win NT/2000 open file agent, Backup Exec Win NT/2000 remote agent,
Bar-One Print only, Bar-One ProPlus, CADWizz, DesignCAD Express, MS Project
Standard 2003, MS Visual Basic, MS Win 2000 Pro, MS Win 2000 Server, MS-Office
95, MS-Office 97, MS-Office2000Premium, MS-Office2000Pro, MS-Office2000Std,
MS-Windows 95, MS-Windows 98, NT 4.0 Server, NT 4.0 Workstation, SmartDraw
Standard (2 concurrent users), SmartDraw Standard (Jim McMullan’s copy),
Sterling Commerce - Gentran/EDI, and Visio. 35.    License Agreements entered
into by The Packaging Group (Canada) for the following intellectual properties:
pcAnywhere 10.5 Host Only, Antivirus Enterprise Edition 9.0 Gold, Maint 1YR RNW,
and pcAnywhere 10.5 Host & Remote.

 

40

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

Schedule 3.10

 

5) As of the Closing Date, except as disclosed below, (i) each of the Credit
Parties and its Subsidiaries owns, is licensed to use or otherwise has the right
to use, all material Intellectual Property used in or necessary for the conduct
of its business as currently conducted that is material to the financial
condition, business or operations of such Credit Party and its Subsidiaries and
(ii) to their knowledge, the use of the Intellectual Property by the Credit
parties and their Subsidiaries and the conduct of their business does not and
has not been alleged by any Person to infringe on the rights of any Person.

a) Exopack-Technology, LLC et al. (plaintiffs) v. Packaging Concepts, Inc.
(defendant) v. General Mills (third party defendant), filed August 12, 2005,
U.S. District Court, Southern District of Texas, alleging infringement of U.S.
Patent Nos. 5,488,220 and 6,046,443. General Mills and PCI allege that at least
certain claims of the patents-in-suit are invalid based on prior art, obvious
extension of prior art, or sale of product with such claims more than a year
prior to the patent application filing date.

b) Letter dated August 2, 2005, and December 5, 2005, to Masterfoods USA, Inc.
and Exopack, LLC, respectively, from Frost Brown Todd, LLC (on behalf of MDH
Packaging Corporation (“MDH”)) regarding U.S. Patent No. 4,971,454 (the “454
patent”). MDH claims that a bag with a recloseable opening (manufactured by
Exopack and sold by Exopack to Masterfoods USA for use in distribution of its
dog food products) falls within the scope of the claims of the ‘454 patent.
Exopack believes that the bag does not fall within the scope of the claims of
the ‘454 patent and has informed Masterfoods and counsel to MDH of the same. At
the present time, it appears that MDH is choosing to pursue Masterfoods directly
as a user of the bags, rather than Exopack as a manufacturer/seller of the bags.
Exopack is contractually obligated to indemnify Masterfoods for such claims of
intellectual property infringement.

c) In mid-2001 and early 2002, Exopack received notices from MDH alleging that
Exopack was in violation of or was planning to violate the terms of an exclusive
license to certain closure technology allegedly licensed to MDH by KCL, and that
Exopack was infringing or was planning to infringe the underlying patent
covering such closure technology. Exopack responded that it was the owner of a
license from KCL through its predecessors in interest, Union Camp Corporation
and International Paper. The parties then commenced negotiations of a materials
supply and replacement licensing arrangement, which, due to lack of Exopack
customer demand for such materials, never was completed.

d) In connection with a dispute between Exopack and Actinic Inc. regarding
ownership of a bag coating invention, Exopack and Actinic reached a settlement
of Exopack’s misappropriation claims against Actinic. In connection with the
settlement, the parties executed an agreement perpetually and exclusively
licensing to Exopack all intellectual property rights in Actinic’s patent, plus
improvements, including an option for Exopack to require assignment of patent in
question. Exopack was also granted an exclusive license to Actinic’s proprietary
ink blend.

 

41

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

Schedule 3.10

e) In mid to late 2003, FlexSol Corporation alleged orally that it had developed
a high clarity shrink film product similar to a product developed by Exopack
(i.e., the subject of a published Exopack patent application). Exopack
understands that FlexSol Corporation may have filed a patent application for the
product FlexSol allegedly invented. Exopack was the first to file for patent
protection and believes it reduced its product to practice before FlexSol
reduced the product it allegedly invented to practice. FlexSol maintains that it
invented this product prior to Exopack.

 

42

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

Schedule 3.11

Investigations and Audits

None.

 

43

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

Schedule 3.12

Employee Matters

 

(a) Credit Party, Subsidiary and/or employee collective bargaining agreements as
of the Closing Date:

Agreement dated March 1, 2007 expiring February 28, 2012, between Local 2-0150
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union (USW), AFL-CIO, CLC & Cello
Foil Products.

Collective Bargaining Agreement between Cello-Foil Products, Inc. and Graphics
Communications Union, AFL-CIO, Local Union No. 135-C, effective February 5, 2011
– February 4, 2016.

Collective Bargaining Agreement between Intelicoat Technologies Image Products
Matthews LLC and the Communication Workers of America and its Matthews, North
Carolina Local Union No. 3603 for the period of June 27, 2009 through June 26,
2012.

Collective Bargaining Agreement between Exopack and Graphics Communications
Union, AFL-CIO, Local 77-8, effective July 1, 2010 through June 30, 2013

Collective Bargaining Agreement between Exopack and Local 2-0148 United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers International Union (USW), AFL-CIO, CLC, effective March 1, 2010 through
February 28, 2012.

 

(b) Petitions for certification of a union or union election made to any Credit
Party or Subsidiary:

None.

 

(c) Pending or threatened strikes, slowdowns or work stoppages between any
Credit Party or Subsidiary and any of its employees, other than employee
grievances arising in the ordinary course of business which could have a
Materially Adverse Effect:

None.

 

44

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

Schedule 3.12

 

(d) Non-compliance with Fair Labor Standards Act and each other federal, state,
provincial, local or foreign law by any Credit Party or Subsidiary:

None.

 

(e) Material employment contracts Borrower and/or any Subsidiaries is party to
as of the Closing Date:

Separation Benefit Agreement dated December 12, 2005 between Exopack and Jack
Knott.

Separation Benefit Agreement dated December 12, 2005 between Exopack and Bob
Arvanites.

Separation Benefit Agreement dated November 11, 2008 between Exopack and Tom
Vale.

Separation Benefit Agreement dated March 29, 2010 between Exopack and Scott
Ross.

Separation Benefit Agreement dated April 15, 2011 between Exopack and Eric
Lynch.

Confidential Termination Agreement dated May 26, 2010 between Exopack and Allen
Ling.

Confidential Termination Agreement dated May 26, 2010 between Exopack and Leroy
Stevenson.

 

45

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

Schedule 3.12

Termination Letter dated May 17, 2010 between Exopack Canada and Eldon Smith.

Termination Letter dated June 14, 2010 between Exopack Canada and Steve Vemb.

Confidential Termination Agreement dated November 4, 2010 between Exopack and
Alfred McLellan.

Confidential Termination Agreement dated January 18, 2011 between Exopack Canada
and George Choo Chong.

Confidential Termination Agreement dated May 2, 2011 between Exopack and Randy
Clift.

Confidential Termination Agreement dated May 4, 2011 between Exopack and Donny
Prevo.

 

46

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

Schedule 3.13

Litigation

None.

 

47

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

Schedule 3.14

Real Estate

 

1. Real property owned, leased, subleased, or used by any Credit Party or any of
its Subsidiaries:

(a) Owned Real Property

 

Item

  

Credit Party

  

Property Location (Address including zip code)

1.    Cello-Foil Products, Inc.    155 Brook Street
Battle Creek, MI 49017 2.    Cello-Foil Products, Inc.    1801 Oak Haven Drive
Albany, GA 31701 3.    Exopack, LLC   

3070 Southport Road

Spartanburg, SC 29302

4.    Exopack, LLC   

345 Cedar Springs Avenue

Spartanburg, SC 29302

5.    Exopack, LLC   

1400 Chase Boulevard

Sibley, IA 51249

6.    Exopack, LLC   

3 Maplewood Drive

Hazleton, PA 18202

7.    Exopack, LLC   

10801 Iona Avenue

Hanford, CA 93230

8.    Exopack, LLC   

501 Williams Street

Tomah, WI 54660

9.    Exopack, LLC   

1304 Arthur K. Bolton Parkway

Griffin, GA 30224

10.    Exopack, LLC   

390 Southwell Boulevard

Tifton, GA 31794

11.    Exopack, LLC   

2200 D Avenue E

Seymour, Indiana 47274

 

48

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

Schedule 3.14

 

Item

  

Credit Party

  

Property Location (Address including zip code)

12.    Exopack, LLC   

271 River Street

Menasha, WI 54952

13.    Exopack-Thomasville, LLC   

900 Jordan Valley Road

Longview, TX 75604-5225

14.    Exopack Performance Films Inc.   

201 South Blair Street

Whitby, Ontario L1N 5S6

(b) Leased Real Property

 

Item

  

Credit Party

  

Property

Location

(Address

including zip

code)

  

County

  

Name and Address of Lessor

1.    Cello-Foil Products, Inc.   

Rail Pit

4950 W. Dickman Road Battle Creek, MI 49015

   Calhoun   

City of Battle Creek, N/K/A Battle Creek Unlimited, Inc.

4950 West Dickman Road

Battle Creek, MI 49015

Attention: Industrial Park Marketing Director

2.    Cello-Foil Products, Inc.    North Warehouse 4950 W. Dickman Road Battle
Creek, MI 49015    Calhoun   

City of Battle Creek, N/K/A Battle Creek Unlimited, Inc.

4950 West Dickman Road

Battle Creek, MI 49015

Attention: Industrial Park Marketing Director

3.    Cello-Foil Products, Inc.    South Warehouse 4950 W. Dickman Road Battle
Creek, MI 49015    Calhoun   

City of Battle Creek, N/K/A Battle Creek Unlimited, Inc.

4950 West Dickman Road

Battle Creek, MI 49015

Attention: Industrial Park Marketing Director

 

49

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

Schedule 3.14

 

Item

  

Credit Party

  

Property

Location

(Address

including zip

code)

  

County

  

Name and Address of Lessor

4.    Cello-Foil Products, Inc.   

1747 Oak Haven Drive

Albany, GA 31707

   Dougherty   

Albany Dougherty Payroll Development Authority

222 Pine Avenue

Albany, GA 31701

5.    Exopack, LLC   

2212 4th Avenue

Seymour, Indiana 47274

   Jackson   

Columbus Container, Inc.

3460 Commerce Drive

Columbus, Indiana 47201

6.    Exopack, LLC    108 Airport Park Drive, Garden City, GA 31408    Chatham
  

Albert R. Howard

P.O. Box 606

Portal, GA 30450

7.    Exopack, LLC    101 South Tift Avenue, Tifton, GA 31794    Tift   

Frances R. Bowen

c/o Harry B. Bowen

1918 Shoreham

Drive Charlotte, NC 28211

8.    Exopack, LLC   

375 Southwell Blvd.

Tifton, GA 31794

   Tift   

Tift County Development Authority

P.O. Box 7238

Tifton, GA 31793

Attention: Fern Bowen

9.    Exopack, LLC   

1078 Union St.

Spartanburg, SC

29302-3318

   Spartanburg   

Cleveland S. Harley

1078 Union Street

Spartanburg, SC 29302

 

50

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

Schedule 3.14

 

Item

  

Credit Party

  

Property

Location

(Address

including zip

code)

  

County

  

Name and Address of Lessor

10.    Exopack, LLC   

905 West Verdigris Parkway

Catoosa, OK 74015

   Rogers   

The City of Tulsa-Rogers County Port Authority and Tulsa’s Port of Catoosa
Facilities Authority

5350 Cimarron Road

Catoosa, OK 74015

11.    Exopack, LLC   

1725 Dixie Road

Neenah, WI 54956

   Winnebago   

Checker Logistics

1725 Dixie Road

Neenah, WI 54956

12.    Exopack, LLC   

3811 Dixon Street

Des Moines, IA 50313

   Polk   

Jacobson Warehouse

3811 Dixon Street

Des Moines, IA 50313

Attention: Mark Larson

13.    Exopack, LLC   

222430 76th Ave.

Kent, WA 98032

   King   

Holman Warehouse

222430 76th Ave.

Kent, WA 98032

14.    Exopack, LLC   

1889 24th St. SW

LeMars, IA 51031

   Plymouth   

LeMars Public Storage

1889 24th St. SW

LeMars IA 51031

15.    Exopack, LLC   

504 Carver Road

Griffin, GA 30224

   Spalding   

Southerwise

504 Carver Road

Griffin, GA 30224

16.    Exopack, LLC   

730 A Avenue

Seymour, IN 47274

   Jackson   

Ranger Warehouse

730 A Avenue

Seymour, IN 47274

 

51

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

Schedule 3.14

 

Item

  

Credit Party

  

Property

Location

(Address

including zip

code)

  

County

  

Name and Address of Lessor

17.    Exopack, LLC   

11 Maplewood Drive

Hazleton, PA 18202

   Luzerne   

Karchner Warehouse

11 Maplewood Drive

Hazleton, PA 18202

18.    Exopack, LLC   

310 Second Street, Bldg 3

Boscobel, WI 53805

   Grant   

Riverside Logistics

310 Second Street, Bldg 3

Boscobel, WI 53805

19.    Exopack, LLC   

Offsite Warehouse

115 Balmoral Ave.

Cornwall, Ontario K6H 3G6

   Ontario, Canada   

Astro Storage and Warehousing

115 Balmoral Ave.

Cornwall, Ontario K6H 3G6

20.    Exopack Holding Corp.   

8600 West Bryn Mawr Ave.,

8th Floor

Chicago, IL 60631

   Cook   

PR II Presidents Plaza JV, LLC

35361 Eagle Way

Chicago, IL 60678

21.    Exopack Holding Corp.   

2800 West Higgins Road,

Suite 435

Hoffman Estates, IL 60169

   Cook   

Newtower Trust Company Multi-Employer Property Trust

c/o Hamilton Partners, Inc.

300 Park Blvd.

Itasca, IL 60143

Attention: Senior Asset Manager

 

52

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

Schedule 3.14

 

Item

  

Credit Party

  

Property

Location

(Address

including zip

code)

  

County

  

Name and Address of Lessor

22.    Exopack-Ontario, Inc.   

5601 Santa Ana Street,

Ontario, CA 91761

   San Bernardino   

Westates Holdings, LLC

988 Villa Montes Circle Corona, California 92879

23.    Exopack-Thomasville, LLC   

1308 Blair Street

Thomasville, NC 27360

   Davidson    F. Stuart Kennedy and Helen J. Kennedy P.O. Box 1050 1100 Dover
Drive Thomasville, NC 27360 24.    The Packaging Group (Canada) Corporation   
300 Spinnaker Way Concord, Ontario L4K 4W1    City of Vaughan, Ontario, Canada
  

Spinnaker Langstaff Investments Limited

3625 Dufferin Street, Suite 503

Downsview, Ontario M3K 1N4

25.    The Packaging Group (Canada) Corporation   

360 Spinnaker Way

Vaughan, Ontario L4K 4W1

   City of Vaughan, Ontario, Canada   

Spinnaker Langstaff Investments Limited and 360 Spinnaker Portfolio, Inc.

3625 Dufferin Street, Suite 500

Downsview, Ontario M3K 1N4

26.    Intelicoat Technologies Image Products Matthews LLC   

Facility

700 Crestdale Road, Matthews, NC 80105

   Mecklenburg   

Lakestar Properties, LLC

4583 Highway 9 North

Howell, New Jersey 07731

 

53

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

Schedule 3.14

(c) Real Property in which Credit Party or Subsidiary is a lessor, sublessor or
assignor

The property described in #26 above in the list of Leased Real Property is
subleased to Kamazu Fashion Inc.

Portions of the property described in #12 above in the list of Owned Real
Property is leased to Bemis Company, Inc.

 

54

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

Schedule 3.15

Environmental Matters

(a) None.

 

55

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

Schedule 3.16

ERISA / Canadian Pension Plans

 

a) Title IV Plans and Multiemployer Plans to which any Credit Party is subject
as of the Closing Date:

 

Entity

  

Plan

Exopack, LLC

   Savings Plans for the Companies of Exopack

Exopack, LLC

   Retirement Plan of Exopack, LLC

Exceptions:

(i) Exopack, LLC

(a) The new Savings Plan for the Companies of Exopack does not have an IRS
determination letter. Exopack, LLC filed a request for a determination letter
with respect to the plan’s qualified status in 2010, as per IRS guidelines.

(ii) TPG Enterprises, Inc.

TPG does not maintain any retirement benefit plans.

 

b) Unfunded Pension Liabilities, ERISA Events and Claims, etc.

None.

 

c) Canadian Pension Plans to which any Credit Party is subject as of the Closing
Date:

 

Entity

  

Plan

Exopack, LLC

   Registered Retirement Savings Plan
(no employer match)

Exopack Performance Films Inc.

   Defined Contribution Pension Plan

 

56

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

Schedule 3.17

Deposit Accounts, Securities Accounts and Commodity Accounts

Deposit Accounts – Attached.

Securities Accounts – None.

Commodity Accounts – None.

 

57

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

Schedule 3.17

 

Account Owner

  

Description

  

Depositary Bank

Exopack, LLC

   Hanford Payroll    Union Bank of California

Exopack, LLC

   Hazleton Payroll    Susquehanna Bank PA

Exopack, LLC

   Sibley Payroll    Sibley State Bank

Exopack, LLC

   Spartanburg Payroll    Bank of America

Exopack, LLC

   Tifton Payroll    Bank of America

Exopack, LLC

   CRC Disbursement    Bank of America

Exopack-Thomasville, LLC

   Thomasville Salaried Payroll    Bank of America

Exopack-Thomasville, LLC

   Thomasville Hourly Payroll    Bank of America

Exopack-Ontario, Inc.

   Ontario Salaried Payroll    Bank of America

Exopack-Ontario, Inc.

   Ontario Hourly Payroll    Bank of America

Exopack, LLC

   Albany Disbursement    Bank of America

Cello Foil Products, Inc.

   Battle Creek Disbursement    Bank of America

Exopack, LLC

   Master/Operating Account    Bank of America

Exopack, LLC

   Blocked Account/Lockbox    Bank of America

Exopack, LLC

   Salaried Payroll Account    Bank of America

Exopack, LLC

   Accounts Payable Account    Bank of America

Exopack, LLC

   GE Sweep/Blocked Account    Bank of America

Exopack, LLC

   Lockbox Account (to be closed)    Bank of America

Exopack-Hebron, LLC

   Lockbox Account    Bank of America

Exopack Advanced Coatings, LLC

   Lockbox Acct    Bank of America

Exopack Advanced Coatings, LLC

   Disbursement Acct    Bank of America

Exopack Performance Films Inc.

   Lockbox Account / CAD    Bank of America Canada

Exopack Performance Films Inc.

   Lockbox Account / USD    Bank of America Canada

Exopack Performance Films Inc.

   Disbursement Account / CAD    Bank of America Canada

Exopack Performance Films Inc.

   Disbursement Account / USD    Bank of America Canada

Exopack Newmarket, Ltd.

   Lockbox Account / CAD    Bank of America Canada

Exopack Newmarket, Ltd.

   Lockbox Account / USD    Bank of America Canada

Exopack Newmarket, Ltd.

   Disbursement Account / CAD    Bank of America Canada

Exopack Newmarket, Ltd.

   Disbursement Account USD    Bank of America Canada

The Packaging Group (Canada)
Corporation

   Concord Lockbox Account / CAD    Bank of Montreal

The Packaging Group (Canada) Corporation

   Concord Lockbox Account / USD    Bank of Montreal

The Packaging Group (Canada) Corporation

   Concord Disbursement Account / CAD    Bank of Montreal

The Packaging Group (Canada) Corporation

   Concord Disbursement Account / USD    Bank of Montreal

Exopack Performance Films Inc.

   EPF Lockbox Account / CAD    Bank of Montreal

Exopack Performance Films Inc.

   EPF Lockbox Account / USD    Bank of Montreal

Exopack Performance Films Inc.

   EPF Disbursement Account / CAD    Bank of Montreal

Exopack Performance Films Inc.

   EPF Disbursement Account / USD    Bank of Montreal

 

58

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

Schedule 3.17

Union Bank of California

225 W. 7th St.

Hanford, CA 93230

559-582-1085

Chris Sulfita

Susquehanna Bank PA

9 East Main St.

Lititz, PA 17543

570-450-2180

Susan Nataro

Sibley State Bank

803 4th Ave.

Sibley, IA 51249

712-754-2677

Doris Hoffman

Bank of America

101 S. Tryon St.

Charlotte, NC 28255

864-370-6738

Stacy Brandon

Bank of America Canada

200 Front St, West 26th Fl

Toroto, ON

M5V 3L2

Canada

312-992-6262

Eric Marmol

Bank of Montreal

First Canadian Place

100 King Street West

Toronto, ON

M5X 1A3

Canada

416-867-4776

Sherri Munroe

Agreements and Other Documents

 

1. Supply agreements and purchase agreements not terminable by such Credit Party
within sixty (60) days following written notice issued by such Credit Party and
involving transactions in excess of $2,500,000 per annum (other than purchase
orders entered into in the ordinary course of business):

 

59

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

Schedule 3.18

 

Item

  

Description

1    Supply Agreement Schedule by and between Exopack, LLC and Coca-Cola
Bottlers’ Sales & Services Company LLC, dated October 15, 2007. 2    Supply
Agreement by and between Exopack, LLC and Henkel Consumer Goods, Inc, dated May
1, 2009. 3    Purchase Agreement by and between Exopack, LLC and Risenta AB,
dated February 1, 2009. 4    Supply Agreement by and between Exopack, LLC and
Archer-Daniels-Midland Company, dated January 1, 2008. 5    Purchase Agreement
by and between Exopack, LLC and U.S. Smokeless Tobacco Manufacturing Company,
dated January 1, 2008. 6    Letter of Agreement by and between Exopack, LLC and
Diamond V, Inc. , dated February 1, 2010. 7    Packaging Agreement by and
between Exopack, LLC and E.E. Du Pont de Nemours and Company, dated July 1,
2005. 8    Supply Agreement by and between Exopack, LLC and Hubbard Feeds, Inc.,
dated July 1, 2009. 9    Supply Agreement by and between Exopack, LLC and
Mccormick & Co., Inc., dated October 1, 2008. 10    Purchase Contract by and
between Exopack and Monsanto Company, dated June 1, 2008. 11    Corporate
Purchasing Agreement by and between Exopack, LLC and Baker Hughes Oilfield
Operations, Inc., dated February 1, 2009. 12    Alliance Agreement by and
between Exopack Thomasville, LLC and Exopack Ontario, LLC and Cargill
Incorporated, dated July 11, 2005. 13    Supply Agreement by and between
Exopack, LLC and Certainteed Corporation Insulation Group, dated January 1,
2010. 14    Supply and Services Agreement by and between Exopack, LLC and Holcim
Group Support, Inc., dated December 1, 2009. 15    Purchase and Supply Agreement
by and between Exopack, LLC and Lafarge North America, dated January 1, 2009. 16
   Supply Agreement by and between Exopack, LLC and Ravago Shared Services LLC,
dated May 1, 2009. 17    Supply Agreement by and between Exopack-Thomasville,
LLC and Luzenac America, Inc., dated November 1, 2009. 18    Products and
Services Supply Agreement by and between Exopack-Thomasville, LLC and U.S. Borax
Inc., dated November 1, 2006. 19    Purchase Agreement by and between Exopack,
LLC and US Silica Company, dated January 1, 2010. 20    Supply Agreement by and
between Exopack, LLC and Hexion Specialty Chemicals, Inc, dated March 1, 2009.
21    Supply Agreement by and between Exopack Advanced Coatings, LLC & Exopack
Advanced Coatings, LTDand Insight Equity A.P. X, LP (DBA) Vision-Ease Lens,
dated January 1, 2008. 22    Supply Agreement by and between Exopack Holding
Corp. and Josgood Electronic Co.,LTD, dated March 2011. 23    Supply Agreement
by and between Exopack Performance Films and Liqui-Box Canada Inc., dated
November 28, 2007. 24    Supplier Agreement by and between Exopack Performance
Films and Sabic Innovative Plastics US LLC (DBA Sabic Polymershapes), dated
January 12, 2009. 25    Supply Agreement between Exopack Canfor, Tolko, Premium
One, dated January 1, 2008 26    Consignment Agreement between Exopack and
Chevron, dated April 1, 2009. (Partially Executed)

 

60

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

Schedule 3.18

 

27    Purchase Agreement between Exopack and DuPont Canada, dated November 28,
2007. 28    Purchase Agreement between Exopack and Fraser Paper, dated January
1, 2007. 29    Supply Agreement between Exopack and INX International Ink Co,
dated July 1, 2010. 30    Supply and Purchase Agreement between Exopack and
Kapstone, dated January 1, 2009. 31    Consignment Agreement between Exopack and
Longview Fibre Paper & Packaging, Inc. dated January 1, 2006. 32    Letter of
Intent between Exopack and M33, dated January 1, 2010. 33    Supply Agreement
between Exopack and Spartan Industrial Supply Co. Inc., dated October 6, 2003.
34    Letter of Understanding between Exopack and Sun Chemical Corporation,
dated April 29, 2010. 35    Strategic Alliance Agreement between Exopack and
Wongi thru June 30, 2011. 36    Strategic Alliance Agreement between Exopack and
Indevco thru June 30, 2011. 37    Strategic Alliance Agreement between Exopack
and Supernova/Indopoly thru June 30, 2011. 38    Strategic Alliance Agreement
between Exopack and Veriplast thru June 30, 2011. 39    Strategic Alliance
Agreement between Exopack and Positive Packaging June 30, 2011. 40    Supply
Agreement between Exopack and Norstar dated January 1, 2009. 41    Supply
Agreement between Exopack and Gortons dated January 1, 2009. 42    Supply
Agreement between Exopack and Kraft dated December 31, 2010. 43    Supply
Agreement between Exopack and Masters Gallery dated October 1, 2005. 44   
Supply Agreement between Exopack and Sargento dated September 1, 2006.

 

2. Leases of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $1,000,000 per annum
(other than purchase orders entered into in the ordinary course of business):

 

  a. Lease between GE Capital and Exopack, LLC for in-line pasted valve bag
making equipment in Exopack’s Tifton, GA facility.

 

  b. Lease between Deutsche Leasing USA, Inc. and Exopack for in-line pasted
value bag making equipment in Exopack’s Hanford, CA facility.

 

  c. Lease between ICON Capital Corp. and Exopack for a 3-layer blown film
extension line in Exopack’s Griffin, GA facility and an 8-color printing press
in Exopack’s Spartanburg, SC facility.

 

  d. Lease between Peoples Capital and Leasing and Exopack for one new ten color
flexo press in Exopack’s Battle Creek, MI facility and one ten color press in
Exopack’s Albany, GA facility.

 

  e. Lease between GE Credit Corp. and Exopack for two film extrusion lines and
one 1200KVA UPS in Exopack’s Tulsa, OK facility.

 

61

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

Schedule 3.18

 

3. Licenses and permits held by the Credit Parties, the absence of which would
reasonably be expected to have a Material Adverse Effect:

 

  a. Air operating permits held by Exopack, LLC, Cello-Foil Products, Inc and
their respective subsidiaries.

 

4. Instruments and documents evidencing any Indebtedness or Guaranteed
Indebtedness of such Credit Party and any Lien granted by such Credit Party with
respect thereto:

 

  a) $300,000 CAD Standby Letter of Credit by Cello-Foil Holding Corp. for the
benefit of Bank Spinnaker Langstaff Investments, Letter of Credit Number
SM218117, issued by Wachovia Bank.

 

  b) $35,000 Standby Letter of Credit by Exopack, LLC for the benefit of Royal
Indemnity Co., Letter of Credit Number S817488, issued by ABN Amro Bank.

 

  c) $375,000 Standby Letter of Credit by Exopack, LLC for the benefit of
Federal Insurance Co., Letter of Credit Number S871442, issued by ABN Amro Bank.

 

  d) $1,950,000 Standby Letter of Credit by Exopack, LLC for the benefit of
United States Fire Insurance, Letter of Credit Number SE446661W, issued by
Wachovia Bank.

 

  e) $100,000 Standby Letter of Credit by Cello-Foil Holding Corp. for the
benefit of Michigan Dept. of Labor and Economic Growth, Letter of Credit Number
SM218121, issued by Wachovia Bank.

 

  f) $65,000 Standby Letter of Credit by Exopack, LLC for the benefit of
Southern California Edison, Letter of Credit Number SM236908, issued by ABN Amro
Bank.

 

  g) $205,000 CAD Standby Letter of Credit by Exopack Performance Films Inc. for
the benefit of Whitby Hydro Electric Corporation, Letter of Credit Number
SM229006W, issued by Wachovia Bank.

 

  h) $350,000 Standby Letter of Credit by Exopack, LLC for the benefit of
Polyplex Americas, Letter of Credit Number SE450717 issued by Wells Fargo Bank.

 

  i) $755,950 Standby Letter of Credit by Exopack, LLC for the benefit of
General Electric Credit Corp of TN, Letter of Credit Number SE450900W, issued by
Wells Fargo Bank.

 

5. Instruments and agreements evidencing the issuance of any equity securities,
warrants, rights or options to purchase equity securities of such Credit Party:

None.

 

62

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Schedule 3.19

Insurance

(See attached)

 

63

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Schedule 4.7

Corporate and Trade Names

 

Exopack Key Holdings, LLC

Exopack Holding Corp.

Exopack, LLC

Exopack-Hebron, L.L.C.

Exopack-Thomasville, LLC

Exopack-Ontario, Inc.

Exopack-Newmarket, Ltd.

Exopack-Technology, LLC

Cello-Foil Holding Corp.

Cello-Foil Products, Inc.

TPG Group Holding Corp.

TPG (US), Inc.

TPG Enterprises, Inc.

The Packaging Group (Canada) Corporation

Intelicoat Technologies Image Products Matthews LLC

Exopack Advanced Coatings, LLC

Exopack Performance Films Inc.

 

64

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Schedule 4.10

Cash Management Systems

 

Bank

  

Type of Account

   Account Number  

Bank of America

   GE Sweep/Blocked Account      XXXXXXXXXXXXX       Lockbox/Blocked Account   
  XXXXXXXXXXXXX       Lockbox/Blocked Account      XXXXXXXXXXXXX      
Lockbox/Blocked Account      XXXXXXXXXXXXX   

Bank of America – Canada

   Lockbox/Blocked Account      XXXXXXXXXXXXX       Lockbox/Blocked Account     
XXXXXXXXXXXXX       Lockbox/Blocked Account      XXXXXXXXXXXXX      
Lockbox/Blocked Account      XXXXXXXXXXXXX   

Bank of Montreal

   CAD Lockbox/Blocked Account      XXXXXXXXXXXXX       USD Lockbox/Blocked
Account      XXXXXXXXXXXXX       CAD Lockbox/Blocked Account      XXXXXXXXXXXXX
      USD Lockbox/Blocked Account      XXXXXXXXXXXXX   

 

65

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Schedule 5.1

Existing Indebtedness Pursuant to Section 5.1(a)

 

a) $300,000 CAD Standby Letter of Credit by Cello-Foil Holding Corp. for the
benefit of Bank Spinnaker Langstaff Investments, Letter of Credit Number
SM218117, issued by Wachovia Bank.

 

b) $35,000 Standby Letter of Credit by Exopack, LLC for the benefit of Royal
Indemnity Co., Letter of Credit Number S817488, issued by ABN Amro Bank.

 

c) $375,000 Standby Letter of Credit by Exopack, LLC for the benefit of Federal
Insurance Co., Letter of Credit Number S871442, issued by ABN Amro Bank.

 

d) $1,950,000 Standby Letter of Credit by Exopack, LLC for the benefit of United
States Fire Insurance, Letter of Credit Number SE446661W, issued by Wachovia
Bank.

 

e) $100,000 Standby Letter of Credit by Cello-Foil Holding Corp. for the benefit
of Michigan Dept. of Labor and Economic Growth, Letter of Credit Number
SM218121, issued by Wachovia Bank.

 

f) $65,000 Standby Letter of Credit by Exopack, LLC for the benefit of Southern
California Edison, Letter of Credit Number SM236908, issued by ABN Amro Bank.

 

g) $205,000 CAD Standby Letter of Credit by Exopack Performance Films Inc. for
the benefit of Whitby Hydro Electric Corporation, Letter of Credit Number
SM229006W, issued by Wachovia Bank.

 

h) $350,000 Standby Letter of Credit by Exopack, LLC for the benefit of Polyplex
Americas, Letter of Credit Number SE450717 issued by Wells Fargo Bank.

 

Lessee

  

Lessor

  

Collateral

  

Maturity Date

   Outstanding
Amount (as of
March  31, 2011
unless otherwise
indicated)

Exopack, LLC

  

GE Capital Public Finance

   Manufacturing facility located at 905 W. Verdigis Road, Catoosa, Oklahoma   
October 31, 2023 with two additional options to renew for a period of 5 years
each    $4,383,770

(as of
May 31, 2011)

 

66

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Schedule 3.19

 

Lessee

  

Lessor

  

Collateral

  

Maturity Date

   Outstanding
Amount (as of
March  31, 2011
unless otherwise
indicated)

Exopack, LLC

  

GE Credit Corp.

   One 2008 7-layer film line manufactured by Kuhne, one 2003 7-layer film line
manufactured by Kuhne, and one 1200KVA Clean Source UPS    November 30, 2014   
$3,038,193
(as of
May 27,
2011)

Exopack Holding Corp.

  

People’s Capital

and Leasing Corp.

255 Bank St.

Waterbury, CT 06702

   One new Windmoeller and Hoelsher 41 inch Miraflex CM10 ten color flexo press.
Serial No. 54.697 and one new Windmoeller and Hoelsher 67 inch Novoflex CL10   
July 5, 2015    $4,119,677
(as of
May 31,
2011)

 

67

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Schedule 5.2

Liens

 

DEBTOR

  

JURISDICTION

   SECURED PARTY    LIEN TYPE    FILING INFO    COLLATERAL
DESCRIPTION

Exopack, LLC

   Spartanburg County, SC    Plaintiff:

Irotas
Manufacturing
Co.

   Suits    2010CP4204159

Filed: 8-6-10

   Common pleas;
debt collection

Exopack, LLC

   Delaware Secretary of State    Starlinger & Co.

Gesellschaft
M.B.H.

   UCC / Federal
Tax Liens    20112014226

Filed: 5-26-2011

   TubeTec 150
Tubing Machine

Exopack-

Thomasville, LLC

   Spartanburg County, SC    Plaintiff:

Irotas
Manufacturing
Co.

   Suits    2010CP4204159

Filed: 8-6-2010

   See results
under Exopack
LLC

 

68

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Schedule 5.3

Investments

Exopack has invested in a joint venture, Cedex Plastics s.a.l., with the Indevco
Group, to establish polyethylene extrusion capacity in the Middle East region.

 

69

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Schedule 5.4

Contingent Obligations

 

1. $300,000 CAD Standby Letter of Credit by Cello-Foil Holding Corp. for the
benefit of Bank Spinnaker Langstaff Investments, Letter of Credit Number
SM218117, issued by Wachovia Bank.

 

2. $35,000 Standby Letter of Credit by Exopack, LLC for the benefit of Royal
Indemnity Co., Letter of Credit Number S817488, issued by ABN Amro Bank.

 

3. $375,000 Standby Letter of Credit by Exopack, LLC for the benefit of Federal
Insurance Co., Letter of Credit Number S871442, issued by ABN Amro Bank.

 

4. $1,950,000 Standby Letter of Credit by Exopack, LLC for the benefit of United
States Fire Insurance, Letter of Credit Number SE446661W, issued by Wachovia
Bank.

 

5. $100,000 Standby Letter of Credit by Cello-Foil Holding Corp. for the benefit
of Michigan Dept. of Labor and Economic Growth, Letter of Credit Number
SM218121, issued by Wachovia Bank.

 

6. $65,000 Standby Letter of Credit by Exopack, LLC for the benefit of Southern
California Edison, Letter of Credit Number SM236908, issued by ABN Amro Bank.

 

7. $205,000 CAD Standby Letter of Credit by Exopack Performance Films Inc. for
the benefit of Whitby Hydro Electric Corporation, Letter of Credit Number
SM229006W, issued by Wachovia Bank.

 

8. $350,000 Standby Letter of Credit by Exopack, LLC for the benefit of Polyplex
Americas, Letter of Credit Number SE450717 issued by Wells Fargo Bank.

 

9. $755,950 Standby Letter of Credit by Exopack, LLC for the benefit of General
Electric Credit Corp of TN, Letter of Credit Number SE450900W, issued by Wells
Fargo Bank.

 

70

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Schedule 5.8

Affiliate Transactions

Consulting Agreement dated as of the Closing Date, between Exopack Holding Corp.
and Sun Capital Partners Management IV, LLC.

Exopack has invested in a joint venture, Cedex Plastics s.a.l., with the Indevco
Group, to establish polyethylene extrusion capacity in the Middle East region.

 

71

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Schedule 5.8

Business Description

Exopack designs, manufactures and supplies paper and plastic flexible packaging
to over 1,200 active customers in a variety of industries, including food,
medical, pet foods, chemicals, beverages, microwaveable and lawn and garden,
among others.

 

72