Exhibit 10.1
 

 

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CREDIT AGREEMENT
 
by and among
 
COLT DEFENSE LLC
 
as US Borrower,
 
COLT CANADA CORPORATION
 
as Canadian Borrower,
 
COLT FINANCE CORP.
 
as Guarantor,
 
THE LENDERS THAT ARE SIGNATORIES HERETO
 
as the Lenders
 
WELLS FARGO CAPITAL FINANCE, LLC
 
as Agent
 
and
 
WELLS FARGO CAPITAL FINANCE, LLC

as Sole Lead Arranger, Manager and Bookrunner
 

 
 

 
 
Dated as of September 29, 2011
 

 

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TABLE OF CONTENTS
Page              
 
1. DEFINITIONS AND CONSTRUCTION.
1
1.1 Definitions
1
1.2 Accounting Terms
1
1.3 Code
1
1.4 Construction
2
1.5 Schedules and Exhibits
2
 
2. LOANS AND TERMS OF PAYMENT.
 
3
2.1 Revolver Advances.
3
2.2 [Reserved]
4
2.3 Borrowing Procedures and Settlements.
4
2.4 Payments; Reductions of Commitments; Prepayments.
11
2.5 [Reserved.]
15
2.6 Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.
16
2.7 Crediting Payments; Clearance Charge
17
2.8 Designated Account
17
2.9 Maintenance of Loan Account; Statements of Obligations
17
2.10 Fees
18
2.11 Letters of Credit.
19
2.12 LIBOR Option.
24
2.13 Capital Requirements
26
2.14 Joint and Several Liability of Borrowers.
27
2.15 BA Rate Option.
29
 
3. CONDITIONS; TERM OF AGREEMENT.
 
31
3.1 Conditions Precedent to the Initial Extension of Credit
31
3.2 Conditions Precedent to all Extensions of Credit
31
3.3 Maturity
32
3.4 Effect of Maturity
32
3.5 Early Termination by Borrowers
32
 
4. REPRESENTATIONS AND WARRANTIES.
 
32
4.1 Due Organization and Qualification; Subsidiaries
32
4.2 Due Authorization; No Conflict.
33
4.3 Governmental Consents
33
4.4 Binding Obligations; Perfected Liens
34
4.5 Title to Assets; No Encumbrances
34
4.6 Jurisdiction of Organization; Location of Chief Executive Office and
Tangible Assets; Organizational Identification Number; Commercial Tort Claims
34
4.7 Litigation
35
4.8 Compliance with Laws
35
4.9 No Material Adverse Change
35
4.10 Solvency
35
4.11 Employee Benefits
35

 
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4.12 Environmental Condition
35
4.13 Intellectual Property
36
4.14 Leases
36
4.15 Deposit Accounts and Securities Accounts
36
4.16 Complete Disclosure
36
4.17 Material Contracts
36
4.18 Patriot Act; etc
37
4.19 [Reserved]
37
4.20 Payment of Taxes
37
4.21 Margin Stock
37
4.22 Governmental Regulation
37
4.23 OFAC
37
4.24 Employee and Labor Matters
38
4.25 Eligible Accounts
38
4.26 Eligible Inventory
38
4.27 Locations of Inventory and Equipment
38
4.28 Inventory Records
38
4.29 Common Enterprise
38
4.30 Eligible Equipment
39
4.31 Eligible Real Property
39
4.32 Specified Equipment Lease Documents
39
 
5. AFFIRMATIVE COVENANTS.
 
39
5.1 Financial Statements, Reports, Certificates
39
5.2 Collateral Reporting
39
5.3 Existence
39
5.4 Maintenance of Properties
39
5.5 Taxes
39
5.6 Insurance
40
5.7 Inspection
40
5.8 Compliance with Laws
40
5.9 Environmental
40
5.10 Reserved
41
5.11 Formation of Subsidiaries
41
5.12 Further Assurances
42
5.13 Lender Meetings
42
5.14 Material Contracts
42
5.15 Location of Inventory and Equipment
42
 
6. NEGATIVE COVENANTS.
 
43
6.1 Indebtedness
43
6.2 Liens
43
6.3 Restrictions on Fundamental Changes.
43
6.4 Disposal of Assets
43
6.5 Change Name
44
6.6 Nature of Business
44
6.7 Certain Payments of Debt and Amendments
44
6.8 Change of Control
45
6.9 Restricted Payments
45
6.10 Accounting Methods
46
6.11 Investments; Controlled Investments
46

 
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6.12 Transactions with Affiliates
46
6.13 Use of Proceeds
47
6.14 [Reserved]
47
6.15 Senior Note Indenture Secured Debt Cap
47
6.16 Specified Canadian Pension Plans
48
 
7. FINANCIAL COVENANTS.
 
48
 
8. EVENTS OF DEFAULT.
 
48
 
9. RIGHTS AND REMEDIES.
 
50
9.1 Rights and Remedies
50
9.2 Remedies Cumulative
50
9.3 Appointment of a Receiver
51
 
10. WAIVERS; INDEMNIFICATION.
 
51
10.1 Demand; Protest; etc
51
10.2 The Lender Group’s Liability for Collateral
51
10.3 Indemnification
51
 
11. NOTICES.
 
52
 
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
 
53
 
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
 
54
13.1 Assignments and Participations.
54
13.2 Successors
57
 
14. AMENDMENTS; WAIVERS.
 
58
14.1 Amendments and Waivers
58
14.2 Replacement of Certain Lenders.
59
14.3 No Waivers; Cumulative Remedies
60
 
15. AGENT; THE LENDER GROUP.
 
60
15.1 Appointment and Authorization of Agent
60
15.2 Delegation of Duties; Appointment of Subagents
61
15.3 Liability of Agent
61
15.4 Reliance by Agent
62
15.5 Notice of Default or Event of Default
62
15.6 Credit Decision
62
15.7 Costs and Expenses; Indemnification
63
15.8 Agent in Individual Capacity
63
15.9 Successor Agent
64
15.10 Lender in Individual Capacity
64

 
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15.11 Collateral Matters.
65
15.12 Restrictions on Actions by Lenders; Sharing of Payments.
66
15.13 Agency for Perfection
66
15.14 Payments by Agent to the Lenders
67
15.15 Concerning the Collateral and Related Loan Documents
67
15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information
67
15.17 Agent May File Proofs of Claim.
68
15.18 Several Obligations; No Liability
68
15.19 Appointment for the Province of Québec
69
 
16. WITHHOLDING TAXES.
 
70
16.1 No Setoff; Payments
70
16.2 Exemptions
70
16.3 Reductions
71
16.4 Refunds
72
 
17. GENERAL PROVISIONS.
 
72
17.1 Effectiveness
72
17.2 Section Headings
72
17.3 Interpretation
72
17.4 Severability of Provisions
72
17.5 Bank Product Providers
73
17.6 Debtor-Creditor Relationship
73
17.7 Counterparts; Electronic Execution
73
17.8 Revival and Reinstatement of Obligations
74
17.9 Confidentiality.
74
17.10 Lender Group Expenses
75
17.11 Survival
75
17.12 Patriot Act.
75
17.13 Integration
75
17.14 Administrative Borrower as Agent for Borrowers.
76
17.15 Currency Indemnity
76
17.16 Anti-Money Laundering Legislation.
77
17.17 Quebec Interpretation
77

 
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EXHIBITS AND SCHEDULES
 
Exhibit A-1
Form of Assignment and Acceptance
Exhibit B-1
Form of Borrowing Base Certificate
Exhibit B-2
Form of Bank Product Provider Agreement
Exhibit C-1
Form of Compliance Certificate
Exhibit L-1
Form of LIBOR Notice
Exhibit L-2
Form of BA Rate Notice
Schedule A-1
Agent’s Account and Agent’s Canadian Account
Schedule A-2
Authorized Persons
Schedule C-1
Commitments
Schedule D-1
Designated Account
Schedule E-2
Existing Letters of Credit
Schedule F-1
Freight Forwarders
Schedule P-1
Permitted Investments
Schedule P-2
Permitted Liens
Schedule P-3
Permitted Holders
Schedule R-1
Real Property Collateral
Schedule 1.1
Definitions
Schedule 3.1
Conditions Precedent
Schedule 4.1(b)
Capitalization of Loan Parties
Schedule 4.4(b)
UCC Filing Jurisdictions
Schedule 4.6(a)
Jurisdiction of Organization
Schedule 4.6(b)
Chief Executive Offices
Schedule 4.6(c)
Organizational Identification Numbers
Schedule 4.6(d)
Commercial Tort Claims
Schedule 4.6(e)
Location of Assets
Schedule 4.11
Benefit Plans

 
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Schedule 4.12
Environmental Matters
Schedule 4.13
Intellectual Property
Schedule 4.15
Deposit Accounts and Securities Accounts
Schedule 4.19
Permitted Indebtedness
Schedule 5.1
Financial Statements, Reports, Certificates
Schedule 5.2
Collateral Reporting
Schedule 6.12(e)
Agreements with Affiliates

 
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CREDIT AGREEMENT
 
THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of September  29,
2011, by and among the lenders identified on the signature pages hereof (each of
such lenders, together with their respective successors and permitted assigns,
are referred to hereinafter as a “Lender”, as that term is hereinafter further
defined), Wells Fargo Capital Finance, LLC, a Delaware limited liability
company, as agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), Colt Defense LLC, a Delaware
limited liability company (“Parent” or “US Borrower” as hereinafter further
defined), Colt Canada Corporation, a Nova Scotia corporation (“Colt Canada” or
“Canadian Borrower” as hereinafter further defined and, together with US
Borrower, each individually a “Borrower” and collectively, “Borrowers”), and
Colt Finance Corp., a Delaware corporation (“Guarantor” as hereinafter further
defined).
 
The parties agree as follows:
 
1.  
DEFINITIONS AND CONSTRUCTION.

 
1.1 Definitions.  Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.
 
1.2 Accounting Terms.  Any accounting term used in this Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations hereunder shall be computed
unless otherwise specifically provided herein, in accordance with GAAP as
consistently applied and using the same method for inventory valuation as used
in the preparation of the financial statements of Parent most recently received
by Agent prior to the date hereof; provided, that, upon the adoption by Parent
of IFRS as required by Parent’s independent certified public accountants or in
the event of any change in GAAP after the date hereof that affects the covenants
in Section 7 hereof, Administrative Borrower may by notice to Agent, or Agent
may, and at the request of Required Lenders shall, by notice to Administrative
Borrower require that such covenants be calculated in accordance with GAAP as in
effect, and as applied by Parent and its Subsidiaries, immediately before the
adoption by Parent of IFRS or the applicable change in GAAP became effective,
until either the notice from the applicable party is withdrawn or such covenant
is amended in a manner satisfactory to Parent, Agent and the Required
Lenders.  Notwithstanding anything to the contrary contained herein, all
financial statements delivered hereunder shall be prepared, and all financial
covenants contained herein shall be calculated, without giving effect to any
election under the Statement of Financial Accounting Standards No. 159 (or any
similar accounting principle) permitting a Person to value its financial
liabilities or Indebtedness at the fair value thereof.  Notwithstanding anything
to the contrary contained in GAAP or any interpretations or other pronouncements
by the Financial Accounting Standards Board or otherwise, the term “unqualified
opinion” as used herein to refer to opinions or reports provided by accountants
shall mean an opinion or report that does not include any qualification,
explanation, supplemental comment or other comment concerning the ability of the
applicable person to continue as a going concern or the scope of the
audit.  When used herein, the term “financial statements” shall include the
notes and schedules thereto.  Whenever the term “Parent” or “Borrowers” is used
in respect of a financial covenant or a related definition, it shall be
understood to mean Parent or Borrowers and their Subsidiaries on a consolidated
basis, unless the context clearly requires otherwise.  For purposes of
calculations pursuant to the terms of this Agreement, GAAP will be deemed to
treat operating leases in a manner consistent with the current treatment under
GAAP as in effect on the Closing Date, notwithstanding any modification or
interpretive changes thereto that may occur hereafter.
 
1.3 Code.  Any terms used in this Agreement that are defined in the Code shall
be construed and defined as set forth in the Code unless otherwise defined
herein and any terms used in this Agreement
 

 
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that are defined in the PPSA and pertaining to Collateral consisting of assets
of the Canadian Loan Parties shall be construed and defined as set forth in the
PPSA unless otherwise defined herein; provided, however, that to the extent that
the Code is used to define any term herein and such term is defined differently
in different Articles of the Code, the definition of such term contained in
Article 9 of the Code shall govern.
 
1.4 Construction.  Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and  “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.”  The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be.  Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified.  Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein).  The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties.  Any reference herein to any
Person shall be construed to include such Person’s successors and assigns.  An
Event of Default shall exist or continue or be continuing until such Event of
Default is waived in accordance with Section 14.1 or is cured if such Event of
Default is capable of being cured.  Any reference herein or in any other Loan
Document to the satisfaction, repayment, or payment in full of the Obligations,
the Secured Obligations (as defined in the Security Agreement or the Canadian
Security Agreement, as the case may be) or the Guarantied Obligations (as
defined in the Guaranty) shall mean the repayment in full in cash or immediately
available funds (or (a) in the case of contingent reimbursement obligations with
respect to Letters of Credit, providing Letter of Credit Collateralization and
(b) in the case of obligations with respect to Bank Products (other than Hedge
Obligations), providing Bank Product Collateralization) of all of the
Obligations under Hedge Agreements provided by Hedge Providers) other than (i)
unasserted indemnification Obligations, (ii) any Bank Product Obligations (other
than Hedge Obligations) that, at such time, are not due and payable, and (iii)
any Hedge Obligations that, at such time, are allowed by the applicable Hedge
Provider to remain outstanding without being required to be repaid or cash
collateralized.   Unless otherwise indicated herein, all references to time of
day refer to Eastern Standard Time or Eastern daylight saving time, as in effect
in New York City on such day.  For purposes of the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each means “to and
including”; provided, that, with respect to a computation of fees or interest
payable to Agent or any Lender, such period shall in any event consist of at
least one full day.  Unless the context of this Agreement or any other Loan
Document clearly requires otherwise or Agent otherwise determines, amounts
expressed in US Dollars at any time when used with respect to Foreign
Subsidiaries or similar matters shall be deemed to mean the US Dollar Equivalent
of such amounts at such time.
 
1.5 Schedules and Exhibits.  All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.
 

 
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2.  
LOANS AND TERMS OF PAYMENT.

 
2.1 Revolver Advances.
 
(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each US Lender with a US Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make revolving loans (“US
Advances”) to US Borrowers which in the aggregate any time outstanding shall not
to exceed the lesser of:
 
(i) such US Lender’s Revolver Commitment, or
 
(ii) such US Lender’s Pro Rata Share of an amount equal to the lesser of:
 
(A) the amount equal to (1) the Maximum US Revolver Amount less (2) the sum of
the US Letter of Credit Usage at such time, plus the principal amount of Swing
Loans outstanding at such time, and
 
(B) the amount equal to (1) the US Borrowing Base at such time less (2) the sum
of the US Letter of Credit Usage at such time, plus the principal amount of
Swing Loans outstanding at such time.
 
Each US Advance shall be a US Dollar Denominated Loan, and shall be either a
Base Rate Loan or a LIBOR Rate Loan.
 
(b) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Canadian Lender with a Canadian Revolver Commitment
agrees (severally, not jointly or jointly and severally) to make revolving loans
(“Canadian Advances”) to Canadian Borrowers which in the aggregate any time
outstanding shall not to exceed the lesser of:
 
(i) such Canadian Lender’s Canadian Revolver Commitment, or
 
(ii) such Canadian Lender’s Pro Rata Share of an amount equal to the lesser of:
 
(A) the amount equal to (1) the Maximum Canadian Revolver Amount less (2) the
Canadian Letter of Credit Usage at such time, and
 
(B) the amount equal to (1) the Canadian Borrowing Base at such time less (2)
the Canadian Letter of Credit Usage at such time.
 
Each Canadian Advance shall be either a US Dollar Denominated Loan (which shall
be either a Base Rate Loan or a LIBOR Rate Loan) or a Canadian Dollar
Denominated Loan (which shall be either a Base Rate Loan or a BA Rate Loan).
 
(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement.  The outstanding principal amount of the Advances,
together with interest accrued thereon, shall be due and payable on the Maturity
Date or, if earlier, on the date on which they are declared due and payable
pursuant to the terms of this Agreement.
 
(d) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right (but not the obligation), in its Permitted Discretion, to
establish, increase, reduce, eliminate, or otherwise adjust reserves (without
duplication) from time to time against the US Borrowing Base or the Canadian
Borrowing Base in such amounts, and with respect to such matters, as Agent in
its Permitted Discretion shall deem necessary or appropriate, including (i)
reserves in an amount equal to the Bank Product Reserve Amount and the amount of
the Dilution Reserve, (ii) reserves with respect to (A) sums that
 

 
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Parent or its Subsidiaries are required to pay under this Agreement or any other
Loan Document (such as taxes, assessments, insurance premiums, or, in the case
of leased assets, rents or other amounts payable under such leases) and has
failed to pay when due, and (B) amounts owing by Parent or its Subsidiaries to
any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than a Permitted Lien which is a permitted purchase money Lien
or the interest of a lessor under a Capital Lease), which Lien or trust, in the
Permitted Discretion of Agent likely would have a priority superior to Agent’s
Liens (such as Priority Payables or Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes that may be pari passu
or given priority under applicable law) in and to such item of the Collateral,
(iii) reserves to reflect that the net orderly liquidation value of the
Equipment or fair market value of any of the Real Property as set forth in the
most recent acceptable appraisals received by Agent with respect thereto has
declined so that the then outstanding amount of Canadian Fixed Asset
Availability or US Equipment Availability is greater than such percentage with
respect to such appraised values as Agent used in establishing the original
principal amount of the Canadian Fixed Asset Availability or US Equipment
Availability multiplied by such appraised values, and (iv) reserves up to the
aggregate unpaid amount of all obligations owing by Parent under the Specified
Equipment Lease Documents.  To the extent that an event, condition or matter as
to any Eligible Accounts, Eligible Equipment, Eligible Real Property or Eligible
Inventory is addressed pursuant to the treatment thereof within the applicable
definition of such terms, Agent shall not also establish a reserve to address
the same event, condition or matter.  The amount of any reserve established by
Agent shall have a reasonable relationship to the event, condition or other
matter which is the basis for such reserve as determined by Agent in its
Permitted Discretion and to the extent that such reserve is in respect of
amounts that may be payable to third parties Agent may, at its option (without
duplication), deduct such reserve from the Maximum US Revolver Amount or the
Maximum Canadian Revolver Amount.
 
2.2  [Reserved].
 
2.3 Borrowing Procedures and Settlements.
 
(a) Requests for Revolving Borrowing.  To request an Advance or Swing Loan, the
applicable Borrower (or Administrative Borrower on behalf of such Borrower)
shall notify Agent of such request by telephone (a) in the case of a LIBOR Rate
Loan or a BA Rate Loan, not later than 11:00 a.m., New York time, three (3)
Business Days before the date of the proposed LIBOR Rate Loan or a BA Rate Loan
or (b) in the case of a Base Rate Loan (including a Swing Loan), not later than
11:00 a.m. on the same Business Day as the date of the proposed Base Rate
Loan.  Each such telephonic request shall be irrevocable and to the extent
required by Agent, shall be confirmed promptly by hand delivery or facsimile to
Agent of a written request in a form approved by Agent and signed by or on
behalf of Borrowers.  Each such telephonic and written request shall specify the
following information:
 
(i)           the Borrower requesting such Advance or Swing Loan;
 
(ii)           whether such Loan is an Advance or Swing Loan;
 
(iii)           the aggregate amount of such Advance or Swing Loan;
 
(iv)           the date of such Advance or Swing Loan, which shall be a Business
Day;
 
(v)           whether such Advance or Swing Loan is to be a Base Rate Loan, a BA
Rate Loan or a LIBOR Rate Loan;
 

 
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(vi)           in the case of a LIBOR Rate Loan or a BA Rate Loan, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term “Interest Period”; and
 
(vii)           in the case of each Canadian Advance, whether such Canadian
Advance is to be a US Dollar Denominated Loan or a Canadian Dollar Denominated
Loan.
 
If no election as to whether an Advance is to be a BA Rate Loan or LIBOR Rate
Loan is specified in the applicable request, then the requested Advance shall be
a Base Rate Loan.  If no Interest Period is specified with respect to any
request for a LIBOR Rate Loan or a BA Rate Loan, then the applicable Borrower
shall be deemed to have selected an Interest Period of one month’s
duration.  Promptly following receipt of a request for an Advance in accordance
with this Section, Agent shall advise each applicable Lender of the details
thereof and of the amount of such Lender’s Advance to be made as part of the
request.  All Loans and Letters of Credit under this Agreement shall be
conclusively presumed to have been made to, and at the request of and for the
benefit of, any Borrower or Guarantor when deposited to the credit of any
Borrower or Guarantor or otherwise disbursed or established in accordance with
the instructions of any Borrower or Guarantor or in accordance with the terms
and conditions of this Agreement.
 
(b) Making of Swing Loans.  Subject to the terms and conditions contained
herein, the Swing Lender agrees that it will make a US Advance (any such US
Advance made solely by Swing Lender pursuant to this Section 2.3(b) being
referred to as a “Swing Loan”) to US Borrowers from time to time in amounts
requested by any US Borrower (or Administrative Borrower on behalf of US
Borrowers) up to the aggregate amount outstanding equal to the Swing Loan Limit,
provided, that, after giving effect to any such Swing Loan, the aggregate
principal amount of the US Advances, Swing Loans and US Letter of Credit Usage
outstanding at any time shall not exceed the lesser of the US Borrowing Base at
such time or Maximum US Revolver Amount at such time.  Anything contained herein
to the contrary notwithstanding, the Swing Lender may, but shall not be
obligated to, make Swing Loans at any time that one or more of the US Lenders is
a Defaulting Lender.  Each Swing Loan shall be deemed to be a US Advance
hereunder and shall be subject to all the terms and conditions (including
Section 3) applicable to other US Advances, except that all payments on any
Swing Loan shall be payable to Swing Lender solely for its own account.  Subject
to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall
not be obligated to make any Swing Loan if Swing Lender has actual knowledge
that (i) one or more of the applicable conditions precedent set forth in Section
3.1 or 3.2 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date.  Swing Lender shall not otherwise be required
to determine whether the applicable conditions precedent set forth in Section
3.1 or 3.2 have been satisfied on the Funding Date applicable thereto prior to
making any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens,
constitute US Advances and Obligations hereunder, and bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans.  Upon the
making of a Swing Loan, without further action by any party hereto, each US
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from Swing Line Lender, without recourse or warranty, an undivided
interest and participation to the extent of such Lender’s Pro Rata Share in such
Swing Loan.  To the extent that there is no Settlement in accordance with
Section 2.3(c) hereof, the applicable Swing Line Lender may at any time, require
the applicable US Lenders to fund their participations.  From and after the
date, if any, on which any US Lender has funded its participation in any Swing
Loan, Agent shall promptly distribute to such US Lender, not less than weekly,
such Lender’s Pro Rata Share of all payments of principal and interest received
by Agent in respect of such Swing Loan.
 

 
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(c) Making of Advances.
 
(i) Promptly after receipt of a request for a Borrowing of an Advance pursuant
to Section 2.3(a), Agent shall notify the applicable Lenders by telecopy,
telephone, or other similar form of transmission, of the requested
Borrowing.  Each applicable Lender shall make the amount of such Lender’s Pro
Rata Share of the requested Borrowing available to Agent in immediately
available funds, to Agent’s Account or Agent’s Canadian Account, as applicable,
not later than 2:00 p.m. (New York time) on the Funding Date applicable
thereto.  After Agent’s receipt of the proceeds of such Advances from the
applicable Lenders, Agent shall make the proceeds thereof available to Borrowers
on the applicable Funding Date by transferring immediately available funds equal
to such proceeds received by Agent to the Designated Account; provided, that,
subject to the provisions of Section 2.3(d)(ii), Agent shall not request any
Lender to make any Advance if it has knowledge that, and no Lender shall have
the obligation to make, any Advance if (1) one or more of the applicable
conditions precedent set forth in Section 3.1 or 3.2 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.
 
(ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (New York
time) on the date of a Borrowing, that such Lender will not make available as
and when required hereunder to Agent for the account of Borrowers the amount of
that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender
has made or will make such amount available to Agent in immediately available
funds on the Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrowers on such date a
corresponding amount.  If any Lender shall not have made its full amount
available to Agent in immediately available funds and if Agent in such
circumstances has made available to Borrowers such amount, such Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period.  A notice submitted by Agent to any Lender with respect to amounts
owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest
error.  If such amount is so made available, such payment to Agent shall
constitute such Lender’s Advance on the date of Borrowing for all purposes of
this Agreement.  If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify Borrowers of such failure to
fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for
Agent’s account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing.
 
(d) Protective Advances and Optional Overadvances.
 
(i) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), Agent hereby is authorized
by Borrowers and the Lenders, from time to time in Agent’s sole discretion, to
make Advances to, or for the benefit of, Borrowers on behalf of the Lenders that
Agent, in its Permitted Discretion deems necessary or desirable (A) to preserve
or protect the Collateral, or any portion thereof, or (B) to enhance the
likelihood of repayment of the Obligations (other than the Bank Product
Obligations) (any of the Advances described in this Section 2.3(d)(i) shall be
referred to as “Protective Advances”), at any time (1) after the occurrence and
during the continuance of a Default or an Event of Default, or (2) that any of
the other applicable conditions precedent set forth in Section 3.1 or 3.2 are
not satisfied.
 
(ii) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), the Lenders hereby authorize
Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as
applicable, may, but is not obligated to, knowingly and intentionally, continue
to make Advances (including Swing Loans) to Borrowers notwithstanding that an
Overadvance exists or would be created thereby, so long as (A) after giving
effect to such Advances, the outstanding US Revolver Usage does not exceed the
US Borrowing Base by more than ten (10%)
 

 
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percent of the US Borrowing Base, (B) after giving effect to such Advances, the
outstanding US Revolver Usage (except for and excluding amounts charged to the
Loan Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum US Revolver Amount, (C) after giving effect to such Advances, the
outstanding Canadian Revolver Usage does not exceed the Canadian Borrowing Base
by more than ten (10%) percent of the Canadian Borrowing Base, and (D) after
giving effect to such Advances, the outstanding Canadian Revolver Usage (except
for and excluding amounts charged to the Loan Account for interest, fees, or
Lender Group Expenses) does not exceed the Maximum Canadian Revolver Amount.  In
any event: (x) if any unintentional Overadvance remains outstanding for more
than 30 days, unless otherwise agreed to by the Required Lenders, Borrowers
shall immediately repay Advances in an amount sufficient to eliminate all such
unintentional Overadvances, and (y) after the date all such Overadvances have
been eliminated, there must be at least five consecutive days before intentional
Overadvances are made.  The foregoing provisions are meant for the benefit of
the Lenders and Agent and are not meant for the benefit of Borrowers, which
shall continue to be bound by the provisions of Section 2.4.  Each Lender with a
US Revolver Commitment shall be obligated to settle with Agent as provided in
Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such
Lender’s Pro Rata Share of any unintentional Overadvances by Agent to US
Borrowers reported to such Lender, any intentional Overadvances to US Borrowers
made as permitted under this Section 2.3(d)(ii), and any Overadvances to US
Borrowers resulting from the charging to the US Loan Account of interest, fees,
or Lender Group Expenses.  Each Lender with a Canadian Revolver Commitment shall
be obligated to settle with Agent as provided in Section 2.3(e) (or Section
2.3(g), as applicable) for the amount of such Lender’s Pro Rata Share of any
unintentional Overadvances by Agent to Canadian Borrowers reported to such
Lender, any intentional Overadvances to Canadian Borrowers made as permitted
under this Section 2.3(d)(ii), and any Overadvances to Canadian Borrowers
resulting from the charging to the Canadian Loan Account of interest, fees, or
Lender Group Expenses.
 
(iii) Any Protective Advance or Overadvance to Canadian Borrowers may be made by
Agent or by the Canadian Lender which is an Affiliate of Agent.  Each Protective
Advance and each Overadvance shall be deemed to be an Advance hereunder, except
that no Protective Advance or Overadvance shall be a LIBOR Rate Loan or BA Rate
Loan and, prior to Settlement therefor, all payments on the Protective Advances
shall be payable to Agent (or the Canadian Lender which made such Protective
Advance) solely for its own account.  The Protective Advances and Overadvances
shall be repayable on demand, be secured by Agent’s Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to
time to Advances that are Base Rate Loans.  The ability of Agent to make
Protective Advances is separate and distinct from its ability to make
Overadvances and its ability to make Overadvances is separate and distinct from
its ability to make Protective Advances.  For the avoidance of doubt, the
limitations on Agent’s ability to make Protective Advances do not apply to
Overadvances and the limitations on Agent’s ability to make Overadvances do not
apply to Protective Advances.  The provisions of this Section 2.3(d) are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended
to benefit Borrowers in any way.
 
(iv) Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary, no Overadvance or Protective Advance may be made by
Agent if such Advance would cause (A) the aggregate principal amount of
Overadvances and Protective Advances outstanding to exceed an amount equal to
ten percent (10%) of the Maximum Revolver Amount; (B) the US Revolver Usage to
exceed the Maximum US Revolver Amount or (C)  the Canadian Revolver Usage to
exceed the Maximum Canadian Revolver Amount.
 
(e) Settlement.  It is agreed that each US Lender’s funded portion of the US
Advances is intended by the US Lenders to equal, at all times, such US Lender’s
Pro Rata Share of the outstanding US Advances.  It is agreed that each Canadian
Lender’s funded portion of the Canadian Advances is intended by the Canadian
Lenders to equal, at all times, such Canadian Lender’s Pro Rata Share of the
outstanding
 

 
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Canadian Advances.    Such agreement notwithstanding, Agent, Swing Lender, and
the other Lenders agree (which agreement shall not be for the benefit of
Borrowers) that in order to facilitate the administration of this Agreement and
the other Loan Documents, settlement among the Lenders as to the Advances
(including Swing Loans, Overadvances and Protective Advances) shall take place
on a periodic basis in accordance with the following provisions:
 
(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent (1) on behalf of
Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with
respect to the outstanding Protective Advances or Overadvances, and (3) with
respect to the Loan Parties’ Collections or payments received, as to each by
notifying the Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00 p.m. (New York
time) on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the “Settlement
Date”).  Such notice of a Settlement Date shall include a summary statement of
the amount of outstanding Advances, (including Swing Loans, Overadvances and
Protective Advances) for the period since the prior Settlement Date.  Subject to
the terms and conditions contained herein (including Section 2.3(g)):  (y) if
the amount of the Advances (including Swing Loans, Overadvances and Protective
Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s
Pro Rata Share of the Advances (including Swing Loans, Overadvances and
Protective Advances) as of a Settlement Date, then Agent shall, by no later than
12:00 p.m. (New York time) on the Settlement Date, transfer in immediately
available funds to a Deposit Account of such Lender (as such Lender may
designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans, Overadvances and Protective Advances), and (z) if the
amount of the Advances (including Swing Loans, Overadvances and Protective
Advances) made by a Lender is less than such Lender’s Pro Rata Share of the
Advances (including Swing Loans and Protective Advances) as of a Settlement
Date, such Lender shall no later than 12:00 p.m. (New York time) on the
Settlement Date transfer in immediately available funds to Agent’s Account or
Agent’s Canadian Account, as applicable, an amount such that each such Lender
shall, upon transfer of such amount, have as of the Settlement Date, its Pro
Rata Share of the Advances (including Swing Loans, Overadvances and Protective
Advances).  Such amounts made available to Agent under clause (z) of the
immediately preceding sentence shall be applied against the amounts of the
applicable Swing Loans, Overadvances or Protective Advances and, together with
the portion of such Swing Loans, Overadvances or Protective Advances
representing Swing Lender’s Pro Rata Share thereof, shall constitute Advances of
such Lenders.  If any such amount is not made available to Agent by any Lender
on the Settlement Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account such amount on demand
from such Lender together with interest thereon at the Defaulting Lender Rate.
 
(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and
Protective Advances is less than, equal to, or greater than such Lender’s Pro
Rata Share of the Advances, Swing Loans, and Protective Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received in good funds by Agent with
respect to principal, interest, fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral.
 
(iii) Between Settlement Dates, Agent, to the extent Protective Advances or
Swing Loans are outstanding, may pay over to Agent or Swing Lender or the
Canadian Lender that is an Affiliate of Agent, as applicable, any Collections or
payments received by Agent, that in accordance with the terms of this Agreement
would be applied to the reduction of the Advances, for application to the
Protective Advances, Overadvances or Swing Loans.  Between Settlement Dates,
Agent, to the extent no Protective Advances, Overadvances or Swing Loans are
outstanding, may pay over to Swing Lender any Collections or payments received
by Agent, that in accordance with the terms of this Agreement would be applied
to
 

 
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the reduction of the Advances, for application to Swing Lender’s Pro Rata Share
of the Advances.  If, as of any Settlement Date, Collections or payments of Loan
Parties received since the then immediately preceding Settlement Date have been
applied to Swing Lender’s Pro Rata Share of the Advances other than to Swing
Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent
for the accounts of the Lenders, and Agent shall pay to the Lenders (other than
a Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)),
to be applied to the outstanding Advances of such Lenders, an amount such that
each such Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Advances.  During the period between Settlement
Dates, Swing Lender with respect to Swing Loans, Agent with respect to
Protective Advances and Overadvances, and each Lender with respect to the
Advances other than Swing Loans, Overadvances and Protective Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
 
(iv) Anything in this Section 2.3(e) to the contrary notwithstanding, in the
event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain
from remitting settlement amounts to the Defaulting Lender and, instead, shall
be entitled to elect to act in accordance with Section 2.3(g).
 
(f) Notation.  Agent, as a non-fiduciary agent for Borrowers, shall maintain a
register showing the principal amount of the Advances owing to each Lender,
including the Swing Loans owing to Swing Lender, and Protective Advances owing
to Agent, and the interests therein of each Lender, from time to time and such
register shall, absent manifest error, conclusively be presumed to be correct
and accurate.
 
(g) Defaulting Lenders.
 
(i) Agent shall not be obligated to transfer to a Defaulting Lender that is a US
Lender any payments made by any Borrower to Agent for such Defaulting Lender’s
benefit or any Collections or proceeds of Collateral that would otherwise be
remitted hereunder to such Defaulting Lender, and, in the absence of such
transfer to such Defaulting Lender, Agent shall transfer any such payments (A)
first, to Swing Lender to the extent of any Swing Loans that were made by Swing
Lender and that were required to be, but were not, paid by such Defaulting
Lender, (B) second, to the Issuing Lender, to the extent of the portion of a US
Letter of Credit Disbursement that was required to be, but was not, paid by such
Defaulting Lender, (C) third, to each non-Defaulting Lender that is a US Lender
ratably in accordance with their US Revolver Commitments (but, in each case,
only to the extent that such Defaulting Lender’s portion of a US Advance (or
other funding obligation) was funded by such other non-Defaulting Lender), (D)
fourth, to a suspense account maintained by Agent, the proceeds of which shall
be retained by Agent and may be made available to be re-advanced to or for the
benefit of US Borrowers upon the request of Administrative Borrower (subject to
the satisfaction of the conditions set forth in Section 3.2 as if such
Defaulting Lender had made its portion of US Advances (or other funding
obligations) hereunder, and (E) fifth, from and after the date on which all
other Obligations have been paid in full, to such Defaulting Lender in
accordance with clause (M) of Section 2.4(b)(ii).  Subject to the foregoing,
Agent may hold and, in its discretion, re-lend to US Borrowers for the account
of such Defaulting Lender the amount of all such payments received and retained
by Agent for the account of such Defaulting Lender.  Agent shall not be
obligated to transfer to a Defaulting Lender that is a Canadian Lender any
payments made by any Borrower to Agent for such Defaulting Lender’s benefit or
any Collections or proceeds of Collateral that would otherwise be remitted
hereunder to such Defaulting Lender, and, in the absence of such transfer to
such Defaulting Lender, Agent shall transfer any such payments (A) first, to the
Issuing Lender, to the extent of the portion of a Canadian Letter of Credit
Disbursement that was required to be, but was not, paid by such Defaulting
Lender, (B) second, to each non-Defaulting Lender that is a Canadian Lender
ratably in accordance with their Canadian Revolver Commitments (but, in each
case, only to the extent that such Defaulting Lender’s portion of a Canadian
Advance (or other funding obligation) was funded by
 

 
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such other non-Defaulting Lender), (C) third, to a suspense account maintained
by Agent, the proceeds of which shall be retained by Agent and may be made
available to be re-advanced to or for the benefit of Canadian Borrowers upon the
request of Administrative Borrower (subject to the satisfaction of the
conditions set forth in Section 3.2 as if such Defaulting Lender had made its
portion of Canadian Advances (or other funding obligations) hereunder, and (D)
fourth, from and after the date on which all other Canadian Obligations have
been paid in full, to such Defaulting Lender in accordance with clause (J) of
Section 2.4(b)(iii).  Subject to the foregoing, Agent may hold and, in its
discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender.  Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents (including the calculation of Pro
Rata Share in connection therewith) and for the purpose of calculating the fee
payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be
a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided,
that, the foregoing shall not apply to any of the matters governed by Section
14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall remain
effective with respect to such Defaulting Lender until the earlier of (y) the
date on which the non-Defaulting Lenders, Agent, Issuing Lender and Borrowers
shall have waived, in writing, the application of this Section 2.3(g) to such
Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment
of all amounts that it was obligated to fund hereunder, pays to Agent all
amounts owing by Defaulting Lender in respect of the amounts that it was
obligated to fund hereunder, and, if requested by Agent, provides adequate
assurance of its ability to perform its future obligations hereunder.  The
operation of this Section 2.3(g) shall not be construed to increase or otherwise
affect the Commitment of any Lender, to relieve or excuse the performance by
such Defaulting Lender or any other Lender of its duties and obligations
hereunder, or to relieve or excuse the performance by Borrowers of their duties
and obligations hereunder to Agent, Issuing Lender or to the Lenders other than
such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that
it was obligated to fund hereunder shall constitute a material breach by such
Defaulting Lender of this Agreement and shall entitle Borrowers, at their
option, upon written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute Lender to be
reasonably acceptable to Agent.  In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees, and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit); provided,
that, any such assumption of the Commitment of such Defaulting Lender shall not
be deemed to constitute a waiver of any of the Lender Groups’ or any Borrower’s
rights or remedies against any such Defaulting Lender arising out of or in
relation to such failure to fund.  In the event of a direct conflict between the
priority provisions of this Section 2.3(g) and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3(g) shall control and govern.
 
(h) Independent Obligations.  All Advances (other than Swing Loans, Overadvances
and Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares.  It is understood that (i) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligations hereunder, and (ii) no
failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.
 

 
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2.4 Payments; Reductions of Commitments; Prepayments.
 
(a) Payments by Borrowers.
 
(i) Except as otherwise expressly provided herein, all payments by any Borrower
shall be made to Agent’s Account or Agent’s Canadian Account, as applicable, for
the account of the Lender Group and shall be made in immediately available
funds, no later than 11:00 a.m. (New York time) on the date specified
herein.  Any payment received by Agent later than 11:00 a.m. (New York time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue until such following
Business Day.
 
(ii) Unless Agent receives notice from Administrative Borrower prior to the date
on which any payment is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that Borrowers have made
(or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender.  If and to the extent Borrowers do not make
such payment in full to Agent on the date when due, each Lender severally shall
repay to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
 
(iii) All payments in respect of the Canadian Obligations of Canadian Loan
Parties shall be applied first to Canadian Obligations denominated in the same
currency as the payments received and second to the Canadian Obligations
denominated in the other currency; provided, that, Agent may, at its option (but
is not obligated to), convert such currency received to the currency in which
the Canadian Obligations are denominated at the exchange rate calculated by
Agent in good faith on such date and  Borrowers shall pay the costs of such
conversion (or Agent may, at its option, charge such costs to the loan account
of any Borrower maintained by such Agent).
 
(b) Apportionment and Application.
 
(i) So long as no Application Event has occurred and is continuing and except as
otherwise provided herein, all principal and interest payments received by Agent
shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Obligations to which such payments relate held by each
Lender) entitled to such payments and all payments of fees and expenses received
by Agent (other than fees or expenses that are for Agent’s separate account or
for the separate account of the Issuing Lender) shall be apportioned ratably
among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee or expense relates.  All payments to be
made hereunder by Borrowers shall be remitted to Agent and all such payments,
and all proceeds of Collateral received by Agent, shall be applied, so long as
no Application Event has occurred and is continuing, to reduce the balance of
the Advances outstanding and, thereafter, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law
(subject to Section 2.4(b)(v), Section 2.4(d)(ii), and Section 2.4(e)).
 
(ii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to Agent in respect of the Obligations (other than Canadian
Obligations) and all proceeds of Collateral (other than Canadian Collateral)
received by Agent shall be applied as follows:
 
(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,
 

 
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(B) second, to pay any fees then due to Agent under the Loan Documents until
paid in full,
 
(C) third, to pay interest due in respect of all Protective Advances until paid
in full,
 
(D) fourth, to pay the principal of all Protective Advances made for the account
of Canadian Borrowers until paid in full,
 
(E) fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan
Documents, until paid in full,
 
(F) sixth, ratably, to pay any fees then due to any of the Lenders under the
Loan Documents until paid in full,
 
(G) seventh, to pay interest accrued in respect of the Swing Loans until paid in
full,
 
(H) eighth, to pay the principal of all Swing Loans until paid in full,
 
(I) ninth, ratably, to pay interest accrued in respect of the Advances (other
than Protective Advances and Canadian Advances) until paid in full,
 
(J) tenth, ratably (i) to Agent, for the account of Agent and Lenders, to pay
the principal of all Advances (other than Canadian Advances) until paid in full,
(ii) to Agent, to be held by Agent, for the benefit of Issuing Lender (and for
the ratable benefit of each of the US Lenders that have an obligation to pay to
Agent, for the account of the Issuing Lender, a share of each US Letter of
Credit Disbursement), as cash collateral in an amount up to 105% of the US
Letter of Credit Usage (to the extent permitted by applicable law, such cash
collateral shall be applied to the reimbursement of any US Letter of Credit
Disbursement as and when such disbursement occurs and, if a US Letter of Credit
expires undrawn, the cash collateral held by Agent in respect of such US Letter
of Credit shall, to the extent permitted by applicable law, be reapplied
pursuant to this Section 2.4(b)(ii), beginning with clause (A) hereof), and
(iii) ratably, to the Bank Product Providers based upon amounts then certified
by the applicable Bank Product Provider to Agent (in form and substance
satisfactory to Agent) to be due and payable to such Bank Product Providers on
account of Bank Product Obligations of US Loan Parties, but (unless Agent
otherwise determines in its sole discretion) only to the extent of the Bank
Product Reserve Amount then in effect with respect to such Bank Product
Obligations,
 
(K) eleventh, to pay any other Obligations other than Obligations owed to
Defaulting Lenders or Bank Product Obligations,
 
(L) twelfth, to pay any other Obligations other than Obligations owed to
Defaulting Lenders (including being paid, ratably, to the Bank Product Providers
on account of all amounts then due and payable in respect of Bank Product
Obligations, with any balance to be paid to Agent, to be held by Agent, for the
ratable benefit of the Bank Product Providers, as cash collateral (which cash
collateral may be released by Agent to the applicable Bank Product Provider and
applied by such Bank Product Provider to the payment or reimbursement of any
amounts due and payable with respect to Bank Product Obligations owed to the
applicable Bank Product Provider as and when such amounts first become due and
payable and, if and at such time as all such Bank Product Obligations are paid
or otherwise satisfied in full, the cash collateral held by Agent in respect of
such Bank Product Obligations shall be reapplied pursuant to this Section
2.4(b)(ii), beginning with clause (A) hereof),
 

 
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(M) thirteenth, ratably to pay any Obligations owed to Defaulting Lenders; and
 
(N) fourteenth, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.
 
(iii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to Agent in respect of the Canadian Obligations and all
proceeds of Canadian Collateral received by Agent shall be applied as follows:
 
(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,
 
(B) second, to pay any fees then due to Agent under the Loan Documents until
paid in full,
 
(C) third, to pay interest due in respect of all Protective Advances made for
the account of Canadian Borrowers until paid in full,
 
(D) fourth, to pay the principal of all Protective Advances made for the account
of Canadian Borrowers until paid in full,
 
(E) fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Canadian Lenders under the
Loan Documents, until paid in full,
 
(F) sixth, ratably, to pay any fees then due to any of the Canadian Lenders
under the Loan Documents until paid in full,
 
(G) seventh, ratably, to pay interest accrued in respect of the Canadian
Advances (other than Protective Advances) until paid in full,
 
(H) eighth, ratably (i) to Agent, for the account of Agent and Canadian Lenders,
to pay the principal of all Canadian Advances until paid in full, (ii) to Agent,
to be held by Agent, for the benefit of Issuing Lender (and for the ratable
benefit of each of the Canadian Lenders that have an obligation to pay to Agent,
for the account of the Issuing Lender, a share of each Canadian Letter of Credit
Disbursement), as cash collateral in an amount up to 105% of the Canadian Letter
of Credit Usage (to the extent permitted by applicable law, such cash collateral
shall be applied to the reimbursement of any Canadian Letter of Credit
Disbursement as and when such disbursement occurs and, if a Canadian Letter of
Credit expires undrawn, the cash collateral held by Agent in respect of such
Canadian Letter of Credit shall, to the extent permitted by applicable law, be
reapplied pursuant to this Section 2.4(b)(iii), beginning with clause (A)
hereof), and (iii) ratably, to the Bank Product Providers based upon amounts
then certified by the applicable Bank Product Provider to Agent (in form and
substance satisfactory to Agent) to be due and payable to such Bank Product
Providers on account of Bank Product Obligations of Canadian Loan Parties, but
(unless Agent otherwise determines in its sole discretion) only to the extent of
the Bank Product Reserve Amount then in effect with respect to such Bank Product
Obligations,
 
(I) ninth, to pay any other Canadian Obligations other than Obligations owed to
Defaulting Lenders (including being paid, ratably, to the Bank Product Providers
on account of all amounts then due and payable in respect of Bank Product
Obligations, with any balance to be paid to Agent, to be held by Agent, for the
ratable benefit of the Bank Product Providers, as cash collateral
 

 
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 (which cash collateral may be released by Agent to the applicable Bank Product
Provider and applied by such Bank Product Provider to the payment or
reimbursement of any amounts due and payable with respect to Bank Product
Obligations owed to the applicable Bank Product Provider as and when such
amounts first become due and payable and, if and at such time as all such Bank
Product Obligations are paid or otherwise satisfied in full, the cash collateral
held by Agent in respect of such Bank Product Obligations shall be reapplied
pursuant to this Section 2.4(b)(iii), beginning with clause (A) hereof),
 
(J) tenth, ratably to pay any Canadian Obligations owed to Defaulting Lenders,
and
 
(K) eleventh, to Borrowers (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.
 
(iv) Agent promptly shall distribute to each Lender, pursuant to the applicable
wire instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in Section
2.3(e).
 
(v) In each instance, so long as no Application Event has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by any
Borrower to Agent and specified by such Borrower to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement or any other Loan Document.
 
(vi) For purposes of Section 2.4(b)(ii) or (iii), “paid in full” of a type of
Obligation means payment in cash or immediately available funds of all amounts
owing on account of such type of Obligation, including interest accrued after
the commencement of any Insolvency Proceeding, default interest, interest on
interest, and expense reimbursements, whether or not any of the foregoing would
be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
 
(vii) In the event of a direct conflict between the priority provisions of this
Section 2.4 and any other provision contained in this Agreement or any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other.  In the event of any actual, irreconcilable conflict that
cannot be resolved as aforesaid, if the conflict relates to the provisions of
Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall
control and govern, and if otherwise, then the terms and provisions of this
Section 2.4 shall control and govern.
 
(viii) Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Documents, (i) no Canadian Loan Party shall be liable for any US
Obligations, (ii) no security interest granted by any Canadian Loan Party under
any of the Loan Documents shall secure any US Obligations, (iii) no amounts
payable on account of the Canadian Obligations shall be payable to Agent’s
Account, and (iv) no US Obligations shall be charged to the Canadian Loan
Account.
 
(c) Reduction of Commitments.
 
(i) Revolver Commitments.  The US Revolver Commitments and the Canadian Revolver
Commitments shall terminate on the Maturity Date.  Borrowers may reduce the US
Revolver Commitments to an amount not less than the sum of (A) the US Revolver
Usage as of such date, plus (B) the principal amount of all US Advances not yet
made as to which a request has been given by Borrowers under Section 2.3(a),
plus (C) the amount of all US Letters of Credit not yet issued as to which a
request has been given by Borrowers pursuant to Section 2.11(a).  Borrowers may
reduce the Canadian Revolver Commitments to an amount not less than the sum of
(A) the Canadian Revolver Usage as of such date, plus (B) the principal amount
of all Canadian Advances not yet made as to which a request has been
 

 
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given by Borrowers under Section 2.3(a), plus (C) the amount of all Canadian
Letters of Credit not yet issued as to which a request has been given by
Borrowers pursuant to Section 2.11(a).  Notwithstanding anything to the contrary
contained in this Section 2.4(c)(i), Borrower may not reduce the US Revolver
Commitments to an aggregate amount less than $30,000,000.  Each such reduction
shall be in an amount which is not less than $5,000,000 unless the Revolver
Commitments are being reduced to zero and the amount of the Revolver Commitments
in effect immediately prior to such reduction are less than $5,000,000), shall
be made by providing not less than 10 Business Days prior written notice to
Agent, which notice shall specify whether such reduction is in respect of the US
Revolver Commitments or the Canadian Revolver Commitments and shall be
irrevocable.  Once reduced, the Revolver Commitments may not be increased.  Each
such reduction of the Revolver Commitments shall reduce the Revolver Commitments
of each Lender proportionately in accordance with its ratable share thereof.
 
(ii) [Reserved].
 
(d) Optional Prepayments.
 
(i) Advances.  Borrowers may prepay the principal of any Advance at any time in
whole or in part.
 
(ii) [Reserved]
 
(e) Mandatory Prepayments.
 
(i) Borrowing Base.  If, at any time, the US Revolver Usage on such date exceeds
the lesser of the US Borrowing Base or the Maximum US Revolver Amount, or the
Canadian Revolver Usage on such date exceeds the lesser of the Canadian
Borrowing Base or the Maximum Canadian Revolver Amount (any such excess being
referred to as the “Overadvance”), then Borrowers shall immediately prepay the
Obligations in accordance with Section 2.4(f) in an aggregate amount equal to
any such excess, as applicable, except as otherwise provided in Section
2.3(d).  Notwithstanding anything to the contrary set forth in this Agreement or
any of the other Loan Documents, Administrative Borrower and the other Borrowers
shall not request, and Agent and Lenders shall not be required to make or
provide, Advances or Letters of Credit, at any time that there exists an
Overadvance (but without limiting the obligations of Lenders to have
participations or to settle in respect of Overadvances or Protective Advances
permitted hereunder).
 
(ii) [Reserved]
 
(f) Application of Payments.
 
(i) Each prepayment pursuant to Section 2.4(e)(i) shall, (A) so long as no
Application Event shall have occurred and be continuing, be applied, first, to
the outstanding principal amount of the US Advances or Canadian Advances, as
applicable, until paid in full, and second, to cash collateralize the US Letters
of Credit or Canadian Letters of Credit, as applicable, in an amount equal to
105% of the then outstanding US Letter of Credit Usage or Canadian Letter of
Credit Usage, as applicable, and (B) if an Application Event shall have occurred
and be continuing, be applied in the manner set forth in Section 2.4(b)(ii) or
(iii).
 
(ii) [Reserved]
 
2.5 [Reserved.]
 

 
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2.6 Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.
 
(a) Interest Rates.  Except as provided in Section 2.6(c), all Obligations
(except for undrawn Letters of Credit) that have been charged to the Loan
Account pursuant to the terms hereof shall bear interest on the Daily Balance
thereof as follows:
 
(i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal
to the LIBOR Rate plus the Applicable Margin for LIBOR Rate Loans,
 
(ii) if the relevant Obligation is a BA Rate Loan, at a rate per annum equal to
the BA Rate plus the Applicable Margin for BA Rate Loans,
 
(iii) if the relevant Obligation is a Base Rate Loan, at a rate per annum equal
to the Base Rate plus the Applicable Margin for the Base Rate Loans, and
 
(iv) otherwise, at a per annum rate equal to the Base Rate plus the Applicable
Margin for Base Rate Loans.
 
(b) Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment) a Letter of Credit fee (in addition to
the charges, commissions, fees, and costs set forth in Section 2.11(e)) which
shall accrue at a per annum rate equal to (i) in the case of Canadian Letters of
Credit, the Applicable Margin for BA Rate Loans times the Daily Balance of the
undrawn amount of all Canadian Letters of Credit, and (ii) in the case of US
Letters of credit, the Applicable Margin for LIBOR Rate Loans times the Daily
Balance of the undrawn amount of all outstanding US Letters of Credit.
 
(c) Default Rate.  Upon the occurrence and during the continuation of an Event
of Default and at the election of the Required Lenders (or Agent at the
direction of, with the consent of, the Required Lenders),
 
(i) all Obligations (except for undrawn Letters of Credit) that have been
charged to the Loan Account pursuant to the terms hereof shall, upon 2 Business
Days’ prior written notice by Agent to Administrative Borrower, bear interest on
the Daily Balance thereof at a per annum rate equal to 2 percentage points above
the per annum rate otherwise applicable thereunder, and
 
(ii) the Letter of Credit fee provided for in Section 2.6(b) shall, upon two (2)
Business Days’ prior written notice by Agent to Administrative Borrower, be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.
 
(d) Payment.  All other interest, and all Letter of Credit fees, all other fees
payable hereunder or under any of the other Loan Documents, all costs and
expenses payable hereunder or under any of the other Loan Documents shall be due
and payable, in arrears, on the first day of each month at any time that
Obligations or Commitments are outstanding, except as otherwise provided
herein.  Each Borrower hereby authorizes Agent, from time to time without prior
notice to such Borrower, to charge all interest, fees, costs, expenses and other
amounts payable hereunder or under any of the other Loan Documents when due and
payable to the Loan Account. Any interest, fees, costs, expenses, or other
amounts payable hereunder or under any other Loan Document that are charged to
(i) the US Loan Account shall thereupon constitute US Advances hereunder and
shall initially accrue interest at the rate then applicable to US Advances that
are Base Rate Loans (unless and until converted into LIBOR Rate Loans in
accordance with the terms of this Agreement) or (ii) the Canadian Loan Account
shall thereupon constitute Canadian Advances hereunder and shall initially
accrue interest at the rate applicable to
 

 
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Canadian Advances that are Base Rate Loans (unless and until converted into BA
Rate Loans with respect to Canadian Advances denominated in Canadian Dollars, or
LIBOR Rate Loans with respect to Canadian Advances denominated in US Dollars, in
each case, in accordance with the terms of this Agreement).
 
(e) Computation.  Interest shall be calculated on the basis of a three hundred
sixty (360) day year and actual days elapsed, other than for BA Rate Loans and
Base Rate Loans denominated in Canadian Dollars which shall be calculated on the
basis of three hundred sixty-five (365) or three hundred sixty-six (366) day
year, as applicable, and actual days elapsed.  In the event the Base Rate is
changed from time to time hereafter, the rates of interest hereunder based upon
the Base Rate automatically and immediately shall be increased or decreased by
an amount equal to such change in the Base Rate.  For the purposes of the
Interest Act (Canada), the yearly rate of interest to which any rate calculated
on the basis of a period of time different from the actual number of days in the
year (360 days, for example) is equivalent is the stated rate multiplied by the
actual number of days in the year (365 days) and divided by the number of days
in the shorter period (360 days, in the example).
 
(f) Intent to Limit Charges to Maximum Lawful Rate.  In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable.  Each Borrower and the Lender Group, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, that, anything contained herein to
the contrary notwithstanding, if such rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum amount as is allowed by law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such excess.
 
2.7 Crediting Payments; Clearance Charge.  The receipt of any payment item by
Agent shall not be considered a payment on account unless such payment item is a
wire transfer of immediately available federal funds made to Agent’s Account or
Agent’s Canadian Account, as applicable, or unless and until such payment item
is honored when presented for payment.  Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly.  Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into Agent’s Account on a Business Day on or before
1:00 p.m. (New York time).  If any payment item is received into Agent’s Account
or Agent’s Canadian Account, as applicable, on a non-Business Day or after 1:00
p.m. (New York time) on a Business Day, it shall be deemed to have been received
by Agent as of the opening of business on the immediately following Business
Day.
 
2.8 Designated Account.  Agent is authorized to make the Advances, and Issuing
Lender is authorized to issue the Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person or, without instructions, if pursuant to Section
2.6(d).  Borrowers agree to establish and maintain the Designated Account with
the Designated Account Bank for the purpose of receiving the proceeds of the
Advances requested by Borrowers and made by Agent or the Lenders
hereunder.  Unless otherwise agreed by Agent and Borrowers, any Advance or Swing
Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be
made to the Designated Account.
 
2.9 Maintenance of Loan Account; Statements of Obligations.  Agent shall
maintain an account on its books in the name of US Borrowers (the “US Loan
Account”) on which US Borrowers will be charged with all US Advances (including
Protective Advances, Overadvances and Swing Loans) made by Agent, Swing Lender,
or the Lenders to US Borrowers or for US Borrowers’ account, the US Letters
 

 
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of Credit issued or arranged by Issuing Lender for US Borrowers’ account, and
with all other payment Obligations hereunder or under the other Loan Documents
owing by US Loan Parties, including, accrued interest, fees and expenses, and
Lender Group Expenses.  Agent shall maintain an account on its books in the name
of Canadian Borrowers (the “Canadian Loan Account”) on which Canadian Borrowers
will be charged with all Canadian Advances (including Protective Advances and
Overadvances) made by Agent or the Lenders to Canadian Borrowers or for Canadian
Borrowers’ account, the Canadian Letters of Credit issued or arranged by Issuing
Lender for Canadian Borrowers’ account, and with all other payment Obligations
hereunder or under the other Loan Documents owing by Canadian Loan Parties,
including, accrued interest, fees and expenses, and Lender Group Expenses.  In
accordance with Section 2.7, the US Loan Account will be credited with all
payments received by Agent from US Borrowers or for any US Borrower’s account,
and the Canadian Loan Account shall be credited with all payments received by
Agent from Canadian Borrowers or for any Canadian Borrower’s account.  Agent
shall render monthly statements regarding the Loan Account to Borrowers,
including principal, interest, fees, and including an itemization of all charges
and expenses constituting Lender Group Expenses owing, and such statements,
absent manifest error, shall be conclusively presumed to be correct and accurate
and constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after receipt thereof by Borrowers, Borrowers shall deliver to
Agent written objection thereto describing the error or errors contained in any
such statements.
 
2.10 Fees.
 
(a) Agent Fees.  Borrowers shall pay to Agent for the account of Agent, as and
when due and payable under the terms of the Fee Letter, the fees set forth in
the Fee Letter.
 
(b) Unused Line Fee.  US Borrowers shall pay to Agent, for the account of
Lenders with US Revolver Commitments, a quarterly unused line fee payable in
arrears on the first day of each calendar quarter from and after the Closing
Date up to the first day of the month prior to the Payoff Date and on the Payoff
Date, in an amount equal to, commencing on the Closing Date and ending on March
31, 2012, one-half of one (0.50%) percent per annum times the result of  the
aggregate amount of the US Revolver Commitments, less  the average Daily Balance
of the US Revolver Usage (other than Swing Loans) during the immediately
preceding calendar quarter (or portion thereof), which rate shall be adjusted
thereafter as of the first day of every calendar quarter to an amount equal to
(A) one half of one (0.50%) percent per annum if the average Daily Balance of
the US Revolver Usage during the immediately preceding calendar quarter was less
than fifty (50%) percent of the Maximum US Revolver Amount and (ii) three
hundred and seventy-five one-thousandths of one (0.375%) percent per annum if
the average Daily Balance of the US Revolver Usage during the immediately
preceding calendar quarter was equal to or greater than fifty (50%) percent of
the Maximum US Revolver Amount.  Canadian Borrowers shall pay to Agent, for the
account of Lenders with Canadian Revolver Commitments, a quarterly unused line
fee payable in arrears on the first day of each calendar quarter from and after
the Closing Date up to the first day of the month prior to the Payoff Date and
on the Payoff Date, in an amount equal to, commencing on the Closing Date and
ending on March 31, 2012, one-half of one (0.50%) percent per annum times the
result of  the aggregate amount of the Canadian Revolver Commitments, less  the
average Daily Balance of the Canadian Revolver Usage during the immediately
preceding calendar quarter (or portion thereof), which rate shall be adjusted
thereafter as of the first day of every calendar quarter to an amount equal to
(A) one half of one (0.50%) percent per annum if the average Daily Balance of
the Canadian Revolver Usage during the immediately preceding calendar quarter
was less than fifty (50%) percent of the Maximum Canadian Revolver Amount and
(ii) three hundred and seventy-five one-thousandths of one (0.375%) percent per
annum if the average Daily Balance of the Canadian Revolver Usage during the
immediately preceding calendar quarter was equal to or greater than fifty (50%)
percent of the Maximum Canadian Revolver Amount.
 

 
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(c) Early Termination Fee.  If for any reason this Agreement is terminated on or
prior to the first anniversary of the Closing Date, in view of the
impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Lenders’ lost
profits as a result thereof, Borrowers shall pay to Agent, for the ratable
account of Lenders, upon the effective date of such termination, an early
termination fee in the amount equal to one (1%) percent of the Maximum Revolver
Amount.  Such early termination fee shall be presumed to be the amount of
damages sustained by Lenders as a result of such early termination and each
Borrower agrees that it is reasonable under the circumstances currently existing
(including, but not limited to, the borrowings that are reasonably expected by
Borrowers hereunder and the interest, fees and other charges that are reasonably
expected to be received by Lenders hereunder).  In addition, Lenders shall be
entitled to such early termination fee upon the occurrence of any Event of
Default described in Section 8.4 or 8.5, even if Agent or Lenders do not
exercise their right to terminate this Agreement, but elects to provide
financing to Borrowers or permit the use of cash collateral under the Bankruptcy
Code or other bankruptcy laws.
 
2.11 Letters of Credit.
 
(a) Subject to the terms and conditions of this Agreement, upon the request of
Administrative Borrower made in accordance herewith, the Issuing Lender agrees
to issue, or to cause an Underlying Issuer (including, as Issuing Lender’s
agent) to issue, a requested Letter of Credit.  If Issuing Lender, at its
option, elects to cause an Underlying Issuer to issue a requested Letter of
Credit, then Issuing Lender agrees that it will enter into arrangements relative
to the reimbursement of such Underlying Issuer (which may include, among, other
means, by becoming an applicant with respect to such Letter of Credit or
entering into undertakings which provide for reimbursements of such Underlying
Issuer with respect to such Letter of Credit; each such obligation or
undertaking, irrespective of whether in writing, a “Reimbursement Undertaking”)
with respect to Letters of Credit issued by such Underlying Issuer.  By
submitting a request to Issuing Lender for the issuance of a Letter of Credit,
Borrowers shall be deemed to have requested that Issuing Lender issue or that an
Underlying Issuer issue the requested Letter of Credit and to have requested
Issuing Lender to issue a Reimbursement Undertaking with respect to such
requested Letter of Credit if it is to be issued by an Underlying Issuer (it
being expressly acknowledged and agreed by each Borrower that Borrowers are and
shall be deemed to be applicants (within the meaning of Section 5-102(a)(2) of
the Code) with respect to each Underlying Letter of Credit).  Each request for
the issuance of a Letter of Credit, or the amendment, renewal, or extension of
any outstanding Letter of Credit, shall be made in writing by an Authorized
Person and delivered to the Issuing Lender via hand delivery, telefacsimile, or
other electronic method of transmission reasonably in advance of the requested
date of issuance, amendment, renewal, or extension.  Each such request shall be
in form and substance reasonably satisfactory to the Issuing Lender and shall
specify (i) the amount of such Letter of Credit and whether such Letter of
Credit shall be a US Letter of Credit or a Canadian Letter of Credit, (ii) in
the case of a Canadian Letter of Credit, whether such Canadian Letter of Credit
shall be denominated in US Dollars or Canadian Dollars, (iii) the date of
issuance, amendment, renewal, or extension of such Letter of Credit, (iv) the
proposed expiration date of such Letter of Credit, (v) the name and address of
the beneficiary of the Letter of Credit, and (vi) such other information
(including, the conditions of drawing, and in the case of an amendment, renewal,
or extension, identification of the Letter of Credit to be so amended, renewed,
or extended) as shall be necessary to prepare, amend, renew, or extend such
Letter of Credit.  Each US Letter of Credit shall be denominated in US
Dollars.  Anything contained herein to the contrary notwithstanding, the Issuing
Lender may, but shall not be obligated to, issue or cause the issuance of a
Letter of Credit or to issue a Reimbursement Undertaking in respect of an
Underlying Letter of Credit, in either case, that supports the obligations of a
Loan Party (a) in respect of a lease of Real Property or an employment contract,
(i) in the case of a Letter of Credit in connection with such a lease, with a
face amount in excess of the amount equal to (x) the amount of rent under such
lease, without acceleration, for the greater of one year or fifteen (15%)
percent, not to exceed three (3) years, of the
 

 
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remaining term of such lease minus (y) the amount of any cash or other
collateral to secure the obligations of a Loan Party in respect of such lease
and (ii) in the case of a Letter of Credit in connection with an employment
contract, with a face amount in excess of the compensation provided by such
contract, without acceleration, for a one year period, or (b) at any time that
one or more of the Lenders is a Defaulting Lender.

(b) The Issuing Lender shall have no obligation to issue a Letter of Credit or a
Reimbursement Undertaking in respect of an Underlying Letter of Credit, in
either case, if any of the following would result after giving effect to the
requested issuance:
 
(i) the US Letter of Credit Usage would exceed the US Borrowing Base less the
outstanding amount of US Advances (including Swing Loans), or
 
(ii) the sum of the US Letter of Credit Usage plus the Canadian Letter of Credit
Usage would exceed $20,000,000,
 
(iii) the US Letter of Credit Usage would exceed the Maximum US Revolver Amount
less the outstanding amount of US Advances (including Swing Loans),
 
(iv) the Canadian Letter of Credit Usage would exceed the Canadian Borrowing
Base less the outstanding amount of Canadian Advances, or
 
(v) the Canadian Letter of Credit Usage would exceed the Canadian Maximum
Revolver Amount less the outstanding amount of Canadian Advances.
 
(c) Borrowers and the Lender Group hereby acknowledge and agree that all
Existing Letters (if any) of Credit shall constitute US Letters of Credit under
this Agreement on and after the Closing Date with the same effect as if such
Existing Letters of Credit were issued by Issuing Lender or an Underlying Issuer
at the request of US Borrowers on the Closing Date.  Each Letter of Credit shall
be in form and substance reasonably acceptable to the Issuing Lender.  If
Issuing Lender makes a payment under a US Letter of Credit or an Underlying
Issuer makes a payment under a US Underlying Letter of Credit, US Borrowers
shall pay to Agent an amount equal to the applicable US Letter of Credit
Disbursement on the date such US Letter of Credit Disbursement is made and, in
the absence of such payment, the amount of the US Letter of Credit Disbursement
immediately and automatically shall be deemed to be a US Advance hereunder and,
initially, shall bear interest at the rate then applicable to US Advances that
are Base Rate Loans.  If Issuing Lender makes a payment under a Canadian Letter
of Credit or an Underlying Issuer makes a payment under a Canadian Underlying
Letter of Credit, Canadian Borrowers shall pay to Agent an amount equal to the
applicable Canadian Letter of Credit Disbursement on the date such Canadian
Letter of Credit Disbursement is made and, in the absence of such payment, the
amount of the Canadian Letter of Credit Disbursement immediately and
automatically shall be deemed to be a Canadian Advance hereunder and, initially,
shall bear interest at the rate then applicable to Canadian Advances that are
Base Rate Loans with respect to Canadian Letter of Credit Disbursements made in
US Dollars, or BA Rate Loans with respect to Canadian Letter of Credit
Disbursements made in Canadian Dollars.  If a Letter of Credit Disbursement is
deemed to be an Advance hereunder (notwithstanding any failure to satisfy any
condition precedent set forth in Section 3), Borrowers’ obligation to pay the
amount of such Letter of Credit Disbursement to Issuing Lender shall be
automatically converted into an obligation to pay the resulting
Advance.  Promptly following receipt by Agent of any payment from Borrowers
pursuant to this paragraph, Agent shall distribute such payment to the Issuing
Lender or, to the extent that Lenders have made payments pursuant to Section
2.11(b) to reimburse the Issuing Lender, then to such Lenders and the Issuing
Lender as their interests may appear.
 

 
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(d) Promptly following receipt of a notice of a US Letter of Credit Disbursement
pursuant to Section 2.11(a), each Lender with a US Revolver Commitment agrees to
fund its Pro Rata Share of any US Advance deemed made pursuant to Section
2.11(a) on the same terms and conditions as if Borrowers had requested the
amount thereof as an Advance and Agent shall promptly pay to Issuing Lender the
amounts so received by it from the Lenders.  By the issuance of a US Letter of
Credit or a Reimbursement Undertaking related thereto (or an amendment, renewal
or extension of a US Letter of Credit or a Reimbursement Undertaking related
thereto) and without any further action on the part of the Issuing Lender or the
Lenders with Revolver Commitments, the Issuing Lender shall be deemed to have
granted to each Lender with a US Revolver Commitment, and each Lender with a US
Revolver Commitment shall be deemed to have purchased, a participation in each
US Letter of Credit issued by Issuing Lender and each Reimbursement Undertaking
related thereto, in an amount equal to its Pro Rata Share of such US Letter of
Credit or Reimbursement Undertaking, and each such Lender agrees to pay to
Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of
any US Letter of Credit Disbursement made by Issuing Lender or an Underlying
Issuer under the applicable US Letter of Credit.  In consideration and in
furtherance of the foregoing, each Lender with a US Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender’s Pro Rata Share of each US Letter of Credit
Disbursement made by Issuing Lender or an Underlying Issuer and not reimbursed
by Borrowers on the date due as provided in Section 2.11(a), or of any
reimbursement payment required to be refunded (or that Agent or Issuing Lender
elects, based upon the advice or counsel to refund) to US Borrowers for any
reason.  Promptly following receipt of a notice of a Canadian Letter of Credit
Disbursement pursuant to Section 2.11(a), each Lender with a Canadian Revolver
Commitment agrees to fund its Pro Rata Share of any Canadian Advance deemed made
pursuant to Section 2.11(a) on the same terms and conditions as if Borrowers had
requested the amount thereof as an Advance and Agent shall promptly pay to
Issuing Lender the amounts so received by it from the Lenders.  By the issuance
of a Canadian Letter of Credit or a Reimbursement Undertaking related thereto
(or an amendment, renewal or extension of a Letter of Credit or a Reimbursement
Undertaking related thereto) and without any further action on the part of the
Issuing Lender or the Lenders with Canadian Revolver Commitments, the Issuing
Lender shall be deemed to have granted to each Lender with a Canadian Revolver
Commitment, and each Lender with a Canadian Revolver Commitment shall be deemed
to have purchased, a participation in each Canadian Letter of Credit issued by
Issuing Lender and each Reimbursement Undertaking related thereto, in an amount
equal to its Pro Rata Share of such Canadian Letter of Credit or Reimbursement
Undertaking related thereto, and each such Canadian Lender agrees to pay to
Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of
any Canadian Letter of Credit Disbursement made by Issuing Lender or an
Underlying Issuer under the applicable Canadian Letter of Credit.  In
consideration and in furtherance of the foregoing, each Lender with a Canadian
Revolver Commitment hereby absolutely and unconditionally agrees to pay to
Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of
each Canadian Letter of Credit Disbursement made by Issuing Lender or an
Underlying Issuer and not reimbursed by Borrowers on the date due as provided in
Section 2.11(a), or of any reimbursement payment required to be refunded (or
that Agent or Issuing Lender elects, based upon the advice or counsel to refund)
to Canadian Borrowers for any reason.  Each Lender with a Revolver Commitment
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share of each
Letter of Credit Disbursement pursuant to this Section 2.11(b) shall be absolute
and unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the failure to
satisfy any condition set forth in Section 3.  If any such Lender fails to make
available to Agent the amount of such Lender’s Pro Rata Share of a Letter of
Credit Disbursement as provided in this Section, such Lender shall be deemed to
be a Defaulting Lender and Agent (for the account of the Issuing Lender) shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate until paid in full.
 

 
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(e) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group and each Underlying Issuer harmless from any damage, loss, cost, expense,
or liability (other than Taxes, which shall be governed by Section 16), and
reasonable and documented attorneys fees and expenses of one US counsel to
Agent, one Canadian counsel to Agent, one regulatory counsel to Agent and one
local counsel in each appropriate jurisdiction selected by Agent and, if an
Event of Default has occurred and is continuing, one additional counsel to the
Lenders (taken as a whole), in each case for Issuing Lender and the Lender Group
or any Underlying Issuer arising out of or in connection with any Reimbursement
Undertaking or any Letter of Credit; provided, that, (i) no Borrower shall be
obligated hereunder to indemnify the Lender Group or any Underlying Issuer for
any loss, cost, expense, or liability that results from the bad faith, gross
negligence or willful misconduct of the Issuing Lender, any other member of the
Lender Group, or any Underlying Issuer as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction (and (ii) Canadian
Borrowers shall not be obligated to indemnify for any such loss, cost, expense
or liability arising under or in connection with a US Letter of Credit.  Each
Borrower agrees to be bound by the Underlying Issuer’s regulations and
interpretations of any Letter of Credit or by Issuing Lender’s interpretations
of any Reimbursement Undertaking, and each Borrower agrees that none of the
Issuing Lender, any other member of the Lender Group, or any Underlying Issuer
shall be liable for any error, negligence, or mistake, whether of omission or
commission, in following any Borrower’s instructions or those in the Letter of
Credit or any modifications, amendments, or supplements thereto.  Each Borrower
understands that the Reimbursement Undertakings may require Issuing Lender to
indemnify the Underlying Issuer for certain costs or liabilities arising out of
claims by a Borrower against such Underlying Issuer.  Each Borrower hereby
agrees to indemnify, save, defend, and hold Issuing Lender and the other members
of the Lender Group harmless with respect to any loss, cost, expense (including
reasonable and documented attorneys fees and expenses of one US Counsel to
Agent, one Canadian counsel to Agent, one regulatory counsel to Agent and one
local counsel in each appropriate jurisdiction selected by Agent and, if an
Event of Default has occurred and is continuing, one additional counsel to the
Lenders (taken as a whole)), or liability (other than Taxes, which shall be
governed by Section 16) incurred by them as a result of the Issuing Lender’s
indemnification of an Underlying Issuer; provided, that, (i) no Borrower shall
be obligated hereunder to indemnify for any such loss, cost, expense, or
liability to the extent that it is caused by the bad faith, gross negligence or
willful misconduct of the Issuing Lender or any other member of the Lender Group
as determined pursuant to a final, non-appealable order of a court of competent
jurisdiction (and (ii) Canadian Borrowers shall not be obligated to indemnify
for any such loss, cost, expense or liability arising under or in connection
with a US Letter of Credit.  Each Borrower hereby acknowledges and agrees that
none of the Issuing Lender, any other member of the Lender Group, or any
Underlying Issuer shall be responsible for delays, errors, or omissions
resulting from the malfunction of equipment in connection with any Letter of
Credit.
 
(f) The obligation of Borrowers to reimburse the Issuing Lender for each drawing
under each Letter of Credit shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following:
 
(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or another Loan Document,
 
(ii) the existence of any claim, counterclaim, setoff, defense or other right
that Parent or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee maybe acting), the Issuing Lender or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction,
 

 
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(iii) any draft, demand, certificate or other document presented under such
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,
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit,
 
(iv) any payment by the Issuing Lender under such Letter of Credit against
presentation of a draft or certificate that does not substantially or strictly
comply with the terms of such Letter of Credit (including, without limitation,
any requirement that presentation be made at a particular place or by a
particular time of day), or any payment made by the Issuing Lender under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit,
 
(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or discharge of, Borrowers or any of their
Subsidiaries, or
 
(vi) any Event of Default shall have occurred and be continuing.
 
(g) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver
to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender’s instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
 
(h) Borrowers shall pay to the Issuing Lender, for its own account, a fronting
fee equal to 0.125% per annum, which fee shall be paid monthly in arrears on the
first day of each month.  Each Borrower acknowledges and agrees that any and all
issuance charges, usage charges, amendment, extension, renewal and drawing
changes, commissions, fees, and costs incurred by the Issuing Lender relating to
Underlying Letters of Credit shall be Lender Group Expenses for purposes of this
Agreement and shall promptly upon demand, but in any event, within 3 Business
Days, be reimbursed by Borrowers to Agent for the account of the Issuing Lender.
 
(i) If by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Issuing Lender,
any other member of the Lender Group, or Underlying Issuer with any direction,
request, or requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
 
(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued or caused to be issued
hereunder or hereby, or
 
(ii) there shall be imposed on the Issuing Lender, any other member of the
Lender Group, or Underlying Issuer any other condition regarding any Letter of
Credit or Reimbursement Undertaking,
 
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Issuing Lender, any other member of the Lender Group, or an Underlying
Issuer of issuing, making, participating in, or maintaining any Reimbursement
Undertaking or Letter of Credit or to reduce the amount receivable in respect
thereof, then, and in any such case, Agent may, at any time within a reasonable
period after the
 

 
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additional cost is incurred or the amount received is reduced, notify
Administrative Borrower, and Borrowers shall pay within 30 days after demand
therefor, such amounts as Agent may specify to be necessary to compensate the
Issuing Lender, any other member of the Lender Group, or an Underlying Issuer
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans hereunder; provided, that, (A) no Borrower
shall be required to provide any compensation pursuant to this Section 2.11(g)
for any such amounts incurred more than 180 days prior to the date on which the
demand for payment of such amounts is first made to Borrowers, (B) if an event
or circumstance giving rise to such amounts is retroactive, then the 180-day
period referred to above shall be extended to include the period of retroactive
effect thereof and (C) the Canadian Borrower shall not be obligated to reimburse
the Issuing Lender, any other member of the Lender Group, or an Underlying
Issuer for any cost or amount pursuant to this Section 2.11(i) arising from the
Obligations of the US Borrowers.  The determination by Agent of any amount due
pursuant to this Section 2.11(g), as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
 
2.12 LIBOR Option.
 
(a) Interest and Interest Payment Dates.  In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option, subject to
Section 2.12(b) below (the “LIBOR Option”) to have interest on all or a portion
of the Advances be charged (whether at the time when made (unless otherwise
provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or
upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of
interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall be
payable on the earliest of (i) the last day of the Interest Period applicable
thereto; (ii) the date on which all or any portion of the Obligations are
accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof.  On the last day of each
applicable Interest Period, unless Borrowers properly have exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder.  At any time that an Event of Default has
occurred and is continuing, at the written election of the Required Lenders,
Borrowers no longer shall have the option to request that Advances bear interest
at a rate based upon the LIBOR Rate.
 
(b) LIBOR Election.
 
(i) Borrowers may, at any time and from time to time, so long as Administrative
Borrower has not received a notice from Agent, after the occurrence and during
the continuance of an Event of Default, of the election of the Required Lenders
to terminate the right of Borrowers to exercise the LIBOR Option during the
continuance of such Event of Default, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. (New York time) at least 3 Business Days
prior to the commencement of the proposed Interest Period (the “LIBOR
Deadline”).  Notice of Borrowers’ election of the LIBOR Option for a permitted
portion of the Advances and an Interest Period pursuant to this Section shall be
made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR
Deadline, or by telephonic notice received by Agent before the LIBOR Deadline
(to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior
to 5:00 p.m. (New York time) on the same day).  Promptly upon its receipt of
each such LIBOR Notice, Agent shall provide a copy thereof to each of the
affected Lenders.
 
(ii) Each LIBOR Notice shall be irrevocable and binding on each Borrower.  In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense actually
incurred by Agent or any Lender as a result
 

 
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of (A) the payment of any principal of any LIBOR Rate Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default), (B) the conversion of any LIBOR Rate Loan other than on the
last day of the Interest Period applicable thereto, or (C) the failure to
borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in
any LIBOR Notice delivered pursuant hereto, except to the extent the failure to
so prepay resulted from the failure of a Defaulting Lender to make an Advance in
accordance with the terms of the Agreement (such losses, costs, or expenses,
“Funding Losses”).  A certificate of Agent or a Lender delivered to Borrowers
setting forth in reasonable detail any amount or amounts that Agent or such
Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive
absent manifest error.  Borrowers shall pay such amount to Agent or the Lender,
as applicable, within 30 days of the date of its receipt of such
certificate.  If a payment of a LIBOR Rate Loan on a day other than the last day
of the applicable Interest Period would result in a Funding Loss, Agent may, in
its sole discretion at the request of Borrowers, hold the amount of such payment
as cash collateral in support of the Obligations until the last day of such
Interest Period and apply such amounts to the payment of the applicable LIBOR
Rate Loan on such last day, it being agreed that Agent has no obligation to so
defer the application of payments to any LIBOR Rate Loan and that, in the event
that Agent does not defer such application, Borrowers shall be obligated to pay
any resulting Funding Losses; provided, that, the Canadian Borrower shall not be
obligated to reimburse any such Funding Losses arising from any LIBOR Rate Loan
made to a US Borrower.
 
(iii) Borrowers shall have not more than six (6) LIBOR Rate Loans and/or BA Rate
Loans in effect at any given time.  Borrowers only may exercise the LIBOR Option
for proposed LIBOR Rate Loans of at least $500,000.
 
(c) Conversion.  Borrowers may convert LIBOR Rate Loans to Base Rate Loans at
any time; provided, that, in the event that LIBOR Rate Loans are converted or
prepaid on any date that is not the last day of the Interest Period applicable
thereto, including as a result of any prepayment through the required
application by Agent of proceeds of Loan Parties’ Collections in accordance with
Section 2.4(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with Section 2.12 (b)(ii).
 
(d) Special Provisions Applicable to LIBOR Rate.
 
(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining funding for any LIBOR Rate Loans or increased
costs, in each case, due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period, including changes in
the reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), which additional or increased costs would
increase the cost of funding or maintaining loans bearing interest at the LIBOR
Rate.  In any such event, the affected Lender shall give Borrowers and Agent
notice of such a determination and adjustment and Agent promptly shall transmit
the notice to each other Lender and, upon its receipt of the notice from the
affected Lender,  Borrowers may, by notice to such affected Lender (A) require
such Lender to furnish to Borrowers a statement setting forth in reasonable
detail the basis for adjusting such LIBOR Rate and the method for determining
the amount of such adjustment, or (B) repay the LIBOR Rate Loans of such Lender
with respect to which such adjustment is made (together with any amounts due
under Section 2.12(b)(ii)).
 
(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation or
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to
 

 
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fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or
to determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Borrowers and Agent promptly
shall transmit the notice to each other Lender and (A) in the case of any LIBOR
Rate Loans of such Lender that are outstanding, the date specified in such
Lender’s notice shall be deemed to be the last day of the Interest Period of
such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender
thereafter shall accrue interest at the rate then applicable to Base Rate Loans,
and (B) Borrowers shall not be entitled to elect the LIBOR Option until such
Lender determines that it would no longer be unlawful or impractical to do so.
 
(iii) For purposes of this Section 2.12(d) and Section 2.15(d), the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all rules, regulations,
orders, requests, guidelines or directives in connection therewith are deemed to
have been enacted and become effective after the date of this Agreement.
 
(e) No Requirement of Matched Funding.  Anything to the contrary contained
herein notwithstanding, neither Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.
 
2.13 Capital Requirements.
 
(a) If, after the date hereof, any Lender determines that (i) the adoption of or
change in any law, rule, regulation or guideline regarding capital or reserve
requirements for banks or bank holding companies, or any change in the
interpretation, implementation, or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender’s or
such holding company’s capital as a consequence of such Lender’s Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender’s or such holding company’s then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity’s capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof.  Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 30 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender’s calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error).  In determining such amount,
such Lender may use any reasonable averaging and attribution methods.  Failure
or delay on the part of any Lender to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s right to demand such
compensation; provided, that, (A) no Borrower shall be required to compensate a
Lender pursuant to this Section for any reductions in return incurred more than
180 days prior to the date that such Lender notifies Borrowers of such law,
rule, regulation or guideline giving rise to such reductions and of such
Lender’s intention to claim compensation therefore and (B) if such claim arises
by reason of the adoption of or change in any law, rule, regulation or guideline
that is retroactive, then the 180-day period referred to above shall be extended
to include the period of retroactive effect thereof.  For purposes of this
Section 2.13(a), the Dodd-Frank Wall Street Reform and Consumer Protection Act,
the Basel Committee on Banking Supervision (of any successor or similar
authority), the Bank for International Settlements and (in each case) all rules,
regulations, orders, requests, guidelines or directives in connection therewith
are deemed to have been enacted and become effective after the date of this
Agreement.
 

 
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(b) If any Lender requests additional or increased costs referred to in Section
2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under Section
2.12(d)(ii) relative to changed circumstances (any such Lender, an “Affected
Lender”), then such Affected Lender shall use reasonable efforts to promptly
designate a different one of its lending offices or to assign its rights and
obligations hereunder to another of its offices or branches, if (i) in the
reasonable judgment of such Affected Lender, such designation or assignment
would eliminate or reduce amounts payable pursuant to Section 2.12(d)(i) or
Section 2.13(a), as applicable, or would eliminate the illegality or
impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the
reasonable judgment of such Affected Lender, such designation or assignment
would not subject it to any material unreimbursed cost or expense and would not
otherwise be materially disadvantageous to it.  Borrowers agree to pay all
reasonable out-of-pocket costs and expenses incurred by such Affected Lender in
connection with any such designation or assignment.  If, after such reasonable
efforts, such Affected Lender does not so designate a different one of its
lending offices or assign its rights to another of its offices or branches so as
to eliminate Borrowers’ obligation to pay any future amounts to such Affected
Lender pursuant to Section 2.12(d)(i) or Section 2.13(a), as applicable, or to
enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without prejudice
to any amounts then due to such Affected Lender under Section 2.12(d)(i) or
Section 2.13(a), as applicable) may, unless prior to the effective date of any
such assignment the Affected Lender withdraws its request for such additional
amounts under Section 2.12(d)(i) or Section 2.13(a), as applicable, or indicates
that it is no longer unlawful or impractical to fund or maintain LIBOR Rate
Loans, may seek a substitute Lender reasonably acceptable to Agent to purchase
the Obligations owed to such Affected Lender and such Affected Lender’s
Commitments hereunder (a “Replacement Lender”), and if such Replacement Lender
agrees to such purchase, such Affected Lender shall assign to the Replacement
Lender its Obligations and Commitments, pursuant to an Assignment and Acceptance
Agreement, and upon such purchase by the Replacement Lender, such Replacement
Lender shall be deemed to be a “Lender” for purposes of this Agreement and such
Affected Lender shall cease to be a “Lender” for purposes of this Agreement.
 
(c) The Canadian Borrower shall not be obligated to reimburse any amounts under
this Section 2.13 arising from Obligations of the US Borrowers.
 
2.14 Joint and Several Liability of Borrowers.
 
(a) Each US Borrower is accepting joint and several liability for the
Obligations hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Lender Group under this
Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.  Each Canadian Borrower is accepting
joint and several liability for the Canadian Obligations hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Lender Group under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Canadian Obligations.
 
(b) Each US Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other US Borrowers, with respect to the payment
and performance of all of the Obligations (including any Obligations arising
under this Section 2.14), it being the intention of the parties hereto that all
the Obligations shall be the joint and several obligations of each US Borrower
without preferences or distinction among them.  Each Canadian Borrower, jointly
and severally, hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the Canadian
Borrowers, with respect to the payment and performance of all of the Canadian
Obligations (including any Canadian Obligations arising under this Section
2.14), it being the intention of the parties hereto that all the Canadian
Obligations shall
 

 
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be the joint and several obligations of each Canadian Borrower without
preferences or distinction among them.
 
(c) If and to the extent that any US Borrower shall fail to make any payment
with respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other US Borrowers will make such payment with respect to, or perform, such
Obligation until such time as all of the Obligations are paid in full.  If and
to the extent that any Canadian Borrower shall fail to make any payment with
respect to any of the Canadian Obligations as and when due or to perform any of
the Canadian Obligations in accordance with the terms thereof, then in each such
event the other Canadian Borrowers will make such payment with respect to, or
perform, such Canadian Obligation until such time as all of the Canadian
Obligations are paid in full.
 
(d) The obligations of each Borrower under the provisions of this Section 2.14
constitute the absolute and unconditional, full recourse obligations of each
Borrower enforceable against each Borrower to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of the
provisions of this Agreement (other than this Section 2.14(d)) or any other
circumstances whatsoever.
 
(e) Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement (except as otherwise provided in this
Agreement).  Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agent or Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any Borrower.  Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure to act on the
part of any Agent or Lender with respect to the failure by any Borrower to
comply with any of its respective Obligations, including, without limitation,
any failure strictly or diligently to assert any right or to pursue any remedy
or to comply fully with applicable laws or regulations thereunder, which might,
but for the provisions of this Section 2.14 afford grounds for terminating,
discharging or relieving any Borrower, in whole or in part, from any of its
Obligations under this Section 2.14, it being the intention of each Borrower
that, so long as any of the Obligations hereunder remain unsatisfied, the
Obligations of each Borrower under this Section 2.14 shall not be discharged
except by performance and then only to the extent of such performance.  The
Obligations of each Borrower under this Section 2.14 shall not be diminished or
rendered unenforceable by any bankruptcy, insolvency, winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any other Borrower or any Agent or Lender.
 
(f) Each Borrower represents and warrants to Agent and Lenders that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations.  Each Borrower further
represents and warrants to Agent and Lenders that such Borrower has read and
understands the terms and conditions of the Loan Documents.
 

 
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(g) The provisions of this Section 2.14 are made for the benefit of Agent, each
member of the Lender Group and their respective successors and assigns, and may
be enforced by it or them from time to time against any or all Borrowers as
often as occasion therefor may arise and without requirement on the part of
Agent, any member of the Lender Group, or any of their successors or assigns
first to marshal any of its or their claims or to exercise any of its or their
rights against any Borrower or to exhaust any remedies available to it or them
against any Borrower or to resort to any other source or means of obtaining
payment of any of the Obligations hereunder or to elect any other remedy.  The
provisions of this Section 2.14 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied.  If at
any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by Agent or
any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or
otherwise, the provisions of this Section 2.14 will forthwith be reinstated in
effect, as though such payment had not been made.
 
(h) Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or Lenders with respect to any of the Obligations
or any collateral security therefor until such time as all of the Obligations
have been paid in full.  Any claim which any Borrower may have against any other
Borrower with respect to any payments to any Agent or any member of the Lender
Group hereunder are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Obligations arising
hereunder or thereunder, to the prior payment in full of the Obligations and, in
the event of any insolvency, bankruptcy, receivership, liquidation,
reorganization, winding up, arrangement or other similar proceeding under the
laws of any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower therefor.
 
(i) Each Borrower hereby agrees that after the occurrence and during the
continuance of any Default or Event of Default, such Borrower will not demand,
sue for or otherwise attempt to collect any indebtedness of any other Borrower
owing to such Borrower until the Obligations shall have been paid in full.  If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).
 
2.15 BA Rate Option.
 
(a) Interest and Interest Payment Dates.  In lieu of having interest charged at
the rate based upon the Base Rate, Canadian Borrowers shall have the option,
subject to Section 2.15(b) below (the “BA Rate Option”) to have interest on all
or a portion of the Canadian Advances to be made in Canadian Dollars be charged
(whether at the time when made (unless otherwise provided herein), upon
conversion from a Base Rate Loan to a BA Rate Loan, or upon continuation of a BA
Rate Loan as a BA Rate Loan) at a rate of interest based upon the BA
Rate.  Interest on BA Rate Loans shall be payable on the earliest of (i) the
last day of the Interest Period applicable thereto; (ii) the date on which all
or any portion of the Obligations become due and payable pursuant to the terms
hereof, or (iii) the date on which this Agreement is terminated pursuant to the
terms hereof.  On the last day of each applicable Interest Period, unless
Canadian Borrowers properly have exercised the BA Rate Option with respect
thereto, the interest rate applicable to such BA Rate Loan automatically shall
convert to the rate of interest then applicable to Base Rate Loans in Canadian
Dollars.  At any time that an Event of Default has occurred and is continuing,
at the written election of the Required Lenders, Borrowers no longer shall have
the option to request that Canadian Advances made in Canadian Dollars bear
interest at a rate based upon the BA Rate.
 

 
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(b) BA Rate Election.
 
(i) Canadian Borrowers may, at any time and from time to time, so long as
Borrowers have not received a notice from Agent, after the occurrence and during
the continuance of an Event of Default, of the election of the Required Lenders
to terminate the right of Canadian Borrowers to exercise the BA Rate Option
during the continuance of such Event of Default, elect to exercise the BA Rate
Option by notifying Agent prior to 11:00 a.m., at least three (3) Business Days
prior to the commencement of the proposed Interest Period (the “BA Rate
Deadline”).  Notice of Canadian Borrowers’ election of the BA Rate Option for a
portion of the Advances to be made in Canadian Dollars and an Interest Period
pursuant to this Section 2.15(b) shall be made by delivery to Agent of a BA Rate
Notice received by Agent before the BA Rate Deadline, or by telephonic notice
received by Agent before the BA Rate Deadline (to be confirmed by delivery to
Agent of a BA Rate Notice received by Agent prior to 5:00 p.m., on the same
day).  Promptly upon its receipt of each such BA Rate Notice, Agent shall
provide a copy thereof to each of the affected Lenders.
 
(ii) Each BA Rate Notice shall be irrevocable and binding on Borrowers.  In
connection with each BA Rate Loan, Borrowers shall, jointly and severally
indemnify, defend, and hold Agent and the Lenders harmless against any loss,
cost, or expense actually incurred by Agent or any Lender as a result of (A) the
payment of any principal of any BA Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (B) the conversion of any BA Rate Loan other than on the last day of
the Interest Period applicable thereto, or (C) the failure to borrow, convert,
continue or prepay any BA Rate Loan on the date specified in any BA Rate Notice
delivered pursuant hereto except to the extent the failure to so prepay resulted
from the failure of a Defaulting Lender to make an Advance in accordance with
the terms of the Agreement (such losses, costs, or expenses, “BA Funding
Losses”).  A certificate of Agent or a Lender delivered to Administrative
Borrower setting forth in reasonable detail any amount or amounts that Agent or
such Lender is entitled to receive pursuant to this Section 2.15 shall be
conclusive absent manifest error.  Borrowers shall pay such amount to Agent or
the Lender, as applicable, within thirty (30) days of the date of its receipt of
such certificate.  If a payment of a BA Rate Loan on a day other than the last
day of the applicable Interest Period would result in a BA Funding Loss, Agent
may, in its sole discretion at the request of Administrative Borrower, hold the
amount of such payment as cash collateral in support of the Obligations until
the last day of such Interest Period and apply such amounts to the payment of
the applicable BA Rate Loan on such last day, it being agreed that Agent has no
obligation to so defer the application of payments to any BA Rate Loan and that,
in the event that Agent does not defer such application, Borrowers shall be
obligated to pay any resulting BA Funding Losses.
 
(iii) Borrowers shall have not more than six (6) BA Rate Loans and/or LIBOR Rate
Loans in effect at any given time.  Borrowers may only exercise the BA Rate
Option for proposed BA Rate Loans of at least C$500,000.
 
(c) Conversion.  Borrowers may convert Base Rate Loans in Canadian Dollars to BA
Rate Loans at any time by exercising the BA Rate Option.  Borrowers may convert
BA Rate Loans to Base Rate Loans at any time; provided, however, that in the
event that BA Rate Loans are converted or prepaid on any date that is not the
last day of the Interest Period applicable thereto, including as a result of any
automatic prepayment through the required application by Agent of proceeds of
Borrowers’ and their Subsidiaries’ Collections in accordance with Section 2.4(b)
or for any other reason, including early termination of the term of this
Agreement or acceleration of all or any portion of the Obligations pursuant to
the terms hereof, Borrowers shall, jointly and severally indemnify, defend, and
hold Agent and the Lenders harmless against any and all BA Funding Losses in
accordance with Section 2.15(b)(ii).
 

 
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(d) Special Provisions Applicable to BA Rate.
 
(i) The BA Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any funding for BA Rate Loans or increased
costs, in each case, due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period, which additional or
increased costs would increase the cost of funding or maintaining loans bearing
interest at the BA Rate.  In any such event, the affected Lender shall give
Administrative Borrower and Agent notice of such a determination and adjustment
and Agent promptly shall transmit the notice to each other Lender and, upon its
receipt of the notice from the affected Lender, Administrative Borrower may, by
notice to such affected Lender (A) require such Lender to furnish to
Administrative Borrower a statement setting forth the basis for adjusting such
BA Rate and the method for determining the amount of such adjustment, or (B)
repay the BA Rate Loans with respect to which such adjustment is made (together
with any amounts due under Section 2.15(b)(ii)).
 
(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation or
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain BA Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the BA Rate, such Lender shall give notice
of such changed circumstances to Agent and Administrative Borrower and Agent
promptly shall transmit the notice to each other Lender and (A) in the case of
any BA Rate Loans of such Lender that are outstanding, the date specified in
such Lender’s notice shall be deemed to be the last day of the Interest Period
of such BA Rate Loans, and interest upon the BA Rate Loans of such Lender
thereafter shall accrue interest at the rate then applicable to Base Rate Loans,
and (B) Borrowers shall not be entitled to elect the BA Rate Option until such
Lender determines that it would no longer be unlawful or impractical to do so.
 
(e) No Requirement of Matched Funding.  Anything to the contrary contained
herein notwithstanding, neither Agent, nor any Lender, nor any of their
Participants, is required actually to issue bills of exchange or depository
notes for acceptances to fund or otherwise match fund any Obligation as to which
interest accrues at the BA Rate.
 
3.  
CONDITIONS; TERM OF AGREEMENT.

 
3.1 Conditions Precedent to the Initial Extension of Credit.  The obligation of
each Lender to make its initial extension of credit provided for hereunder is
subject to the fulfillment, to the satisfaction of each of the conditions
precedent set forth on Schedule 3.1.
 
3.2 Conditions Precedent to all Extensions of Credit.  The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:
 
(a) the representations and warranties of Parent or its Subsidiaries contained
in this Agreement or in the other Loan Documents shall be true and correct in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of the date of such
extension of credit, as though made on and as of such date (except to the extent
that such representations and warranties relate solely to an earlier date);
 
(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof;
 

 
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(c) the outstanding principal amount of Advances and Swing Loans plus the Letter
of Credit Usage shall not exceed the Availability, both before and immediately
after giving effect to such extension of credit.
 
3.3 Maturity.  This Agreement shall continue in full force and effect for a term
ending on September 28, 2016 (the “Maturity Date”).  The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and upon notice by Agent to Administrative Borrower or any other
Loan Party upon the occurrence and during the continuation of an Event of
Default.
 
3.4 Effect of Maturity.  On the Maturity Date, all commitments of the Lender
Group to provide additional credit hereunder shall automatically be terminated
and all of the Obligations immediately shall become due and payable without
notice or demand and Borrowers shall be required to repay all of the Obligations
in full.  No termination of the obligations of the Lender Group (other than
payment in full of the Obligations and termination of the Commitments) shall
relieve or discharge any Loan Party of its duties, obligations, or covenants
hereunder or under any other Loan Document and Agent’s Liens in the Collateral
shall continue to secure the Obligations and shall remain in effect until all
Obligations have been paid in full and the Commitments have been
terminated.  When all of the Obligations have been paid in full and the Lender
Group’s obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and
deliver any termination statements, lien releases, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are reasonably necessary to release, as of record,
Agent’s Liens and all notices of security interests and liens previously filed
by Agent and Loan Parties shall execute and deliver to Agent a release of Agent
and Lenders in form and substance reasonably satisfactory to Agent.
 
3.5 Early Termination by Borrowers.  Borrowers have the option, at any time upon
5 Business Days prior written notice to Agent, to terminate this Agreement and
terminate the Commitments hereunder by repaying to Agent all of the Obligations
in full.
 
4.  
REPRESENTATIONS AND WARRANTIES.

 
In order to induce the Lender Group to enter into this Agreement, each Loan
Party makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete, in all material respects (except
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
each Advance (or other extension of credit) made thereafter, as though made on
and as of the date of such Advance (or other extension of credit) (except to the
extent that such representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
 
4.1 Due Organization and Qualification; Subsidiaries.
 
(a) Each Loan Party (i) is duly organized and existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is qualified to do
business in any jurisdiction where the failure to be so qualified could
reasonably be expected to result in a Material Adverse Change, (iii) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, except where the
failure to have such power and authority has not had or could not reasonably be
expected to have a Material Adverse Change, and (iv) has all requisite power and
 

 
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authority to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.
 
(b) Set forth on Schedule 4.1(b) are the authorized Equity Interests of each
Loan Party (other than Parent) and each direct Subsidiary of such Loan Party, by
class, and a description of the number of shares of each such class that are
issued and outstanding, in each case, as of the Closing Date. Other than as
described on Schedule 4.1(b), as of the Closing Date there are no subscriptions,
options, warrants, or calls relating to any shares of any Borrower’s or
Subsidiary’s Equity Interests, including any right of conversion or exchange
under any outstanding security or other instrument.  None of the Borrowers or
any Subsidiary is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital Equity
Interests or any security convertible into or exchangeable for any of its Equity
Interests
 
(c) All of the outstanding Equity Interests of each Subsidiary of a Loan Party
has been validly issued and is fully paid and, except with respect to the shares
of Colt Canada, non-assessable.
 
(d) Neither Borrowers nor any of their Subsidiaries are subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of any Loan Party’s Equity Interests or any security
convertible into or exchangeable for any such Equity Interests.
 
4.2 Due Authorization; No Conflict.
 
(a) As to each Loan Party, the execution, delivery, and performance by such Loan
Party of the Loan Documents to which it is a party have been duly authorized by
all necessary action on the part of such Loan Party.
 
(b) As to each Loan Party, the execution, delivery, and performance by such Loan
Party of the Loan Documents to which it is a party do not and will not (i)
violate any provision of federal, provincial, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, or any order, judgment, or
decree of any court or other Governmental Authority binding on any Loan Party or
its Subsidiaries, where such violation has or could reasonably be expected to
have a Material Adverse Change, (ii) violate any provisions of the Governing
Documents of any Loan Party or its Subsidiaries, (iii) conflict with, result in
a breach of, or constitute (with due notice or lapse of time or both) a default
under any Material Contract of any Loan Party or its Subsidiaries where any such
conflict, breach or default has or could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect, (iv) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
assets of any Loan Party, other than Permitted Liens, or (v) require any
approval of any holders of Equity Interests of a Loan Party or any approval or
consent of any Person under any Material Contract of any Loan Party, other than
consents or approvals that have been obtained and that are still in force and
effect and except, in the case of Material Contracts, for consents or approvals,
the failure to obtain could not individually or in the aggregate reasonably be
expected to have a Material Adverse Change.
 
4.3 Governmental Consents.  The execution, delivery, and performance by each
Loan Party of the Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority, other than
registrations, consents, approvals, notices, or other actions that have been
obtained and that are still in force and effect and except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Agent for filing or recordation, as of the Closing Date where the failure to
obtain the foregoing has or could reasonably be expected to have a Material
Adverse Change.
 

 
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4.4 Binding Obligations; Perfected Liens.
 
(a) Each Loan Document has been duly executed and delivered by each Loan Party
that is a party thereto and is the legally valid and binding obligation of such
Loan Party, enforceable against such Loan Party in accordance with its
respective terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.
 
(b) Agent’s Liens are validly created Liens.  Agent’s Liens will be perfected,
first priority Liens, subject as to priority only to the Permitted Liens that
have priority by operation of law, upon (i) in the case of all Collateral in
which a security interests may be perfected by filing a financing statements
under the Code, the filing of the UCC financing statement naming such Borrower
or Guarantor as “debtor” and Agent as “secured party” in the filing offices set
forth opposite such Borrower’s or Guarantor’s name on Schedule 4.4(b), (ii) with
respect to any deposit account, securities account, commodity account,
securities entitlement or commodity contract, the execution of a Control
Agreement, (iii) in the case of U.S. copyrights, trademarks and patents to the
extent that UCC financing statements may be insufficient to establish the rights
of a secured party as to certain parties, the recording of the appropriate
filings in the United States Patent and Trademark Office and the United States
Copyright Office, as applicable, (iv) in the case of letter-of-credit rights
that are not supporting obligations (as defined in the Code), the execution by
the issuer or any nominated person of an agreement granting control to Agent
over such letter-of-credit rights, and (v) in the case of electronic chattel
paper, the completion of steps necessary to grant control to Agent over such
electronic chattel paper.
 
4.5 Title to Assets; No Encumbrances.  Each of the Loan Parties and its
Subsidiaries has (a) good and marketable title to (in the case of fee interests
in Real Property), (b) valid leasehold interests in (in the case of leasehold
interests in real or personal property), and (c) good and marketable title to
(in the case of all other personal property), all of their respective assets or
property necessary to conduct its business or used in the ordinary course of
business.  All of such assets are free and clear of Liens except for Permitted
Liens.
 
4.6 Jurisdiction of Organization; Location of Chief Executive Office and
Tangible Assets; Organizational Identification Number; Commercial Tort Claims.
 
(a) The name (within the meaning of the Code or PPSA, as applicable) and
jurisdiction of organization of each Loan Party and each of its Subsidiaries is
set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time
to reflect changes resulting from transactions permitted under this Agreement).
 
(b) The chief executive offices of each Loan Party and each of its Subsidiaries
are located at the addresses indicated on Schedule 4.6(b) (as such Schedule may
be updated from time to time to reflect changes resulting from transactions
permitted under this Agreement).
 
(c) Each Loan Party’s and each of its Subsidiaries’ tax identification numbers
and organizational identification numbers, if any, are identified on Schedule
4.6(c) (as such Schedule may be updated from time to time to reflect changes
resulting from transactions permitted under this Agreement).
 
(d) As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party
holds any commercial tort claims that exceed $250,000 or more in any one case or
$500,000 or more in the aggregate, except as set forth on Schedule 4.6(d).
 

 
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4.7 Litigation.  There are no actions, suits, or proceedings pending or, to the
knowledge of Borrowers, after due inquiry, threatened in writing against a Loan
Party or any of its Subsidiaries that either individually or in the aggregate
could reasonably be expected to result in a Material Adverse Change.
 
4.8 Compliance with Laws.  No Loan Party nor any of its Subsidiaries (a) is in
violation of any applicable laws, rules, regulations, executive orders, or codes
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Change, or (b) is subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules or regulations of any court or any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Change.
 
4.9 No Material Adverse Change.  All historical financial statements relating to
the Loan Parties and their Subsidiaries that have been delivered by any of the
Borrowers to Agent have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the Loan Parties’ and their Subsidiaries’ consolidated financial
condition as of the date thereof and results of operations for the period then
ended.  Since April 3, 2011, no event, circumstance, or change has occurred that
has or could reasonably be expected to result in a Material Adverse Change with
respect to the Loan Parties and their Subsidiaries.
 
4.10 Solvency.  Each Loan Party is Solvent.
 
4.11 Employee Benefits.  As of the Closing Date, no Loan Party, none of their
Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any
Benefit Plan, except as set forth on Schedule 4.11.  As of the Closing Date, no
Loan Party nor any of its Subsidiaries maintains, sponsors, administers,
contributes to, participates in or has any liability in respect of any Specified
Canadian Pension Plan, nor has any such Person ever maintained, sponsored,
administered, contributed or participated in any Specified Canadian Pension
Plan.  Except as, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change, (a) Canadian Pension Plans are
duly registered under the Income Tax Act (Canada) and any other applicable laws
which require registration, have been administered in accordance with the Income
Tax Act (Canada) and such other applicable law and no event has occurred which
could cause the loss of such registered status, (b) all obligations of the Loan
Parties and their Subsidiaries (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the
Canadian Pension Plans and the funding agreements therefore have been performed
on a timely basis, and (c) all contributions or premiums required to be made or
paid by the Loan Parties and their Subsidiaries to the Canadian Pension Plans
have been made on a timely basis in accordance with the terms of such plans and
all applicable laws.
 
4.12 Environmental Condition.  Except as set forth on Schedule 4.12, (a) to
Borrowers’ knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or
assets has ever been used by a Loan Party, its Subsidiaries, or by previous
owners or operators in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials, where such disposal, production,
storage, handling, treatment, release or transport was in violation, in any
material respect, of any applicable Environmental Law, (b) to Borrowers’
knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets has
ever been designated pursuant to any Environmental Law as a Hazardous Materials
disposal site, (c) no Loan Party nor any of its Subsidiaries has received
written notice, or has knowledge, that any Environmental Lien has attached to
any revenues or to any Real Property owned or operated by a Loan Party or its
Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their
respective facilities or operations is subject to any outstanding written order,
consent decree, or settlement agreement
 

 
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with any Person relating to any Environmental Law or has incurred any
Environmental Liability that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Change.
 
4.13 Intellectual Property.  Each Loan Party and its Subsidiaries own, or hold
licenses in, all trademarks, trade names, copyrights, patents, and licenses that
are necessary to the conduct of its business as currently conducted, and
attached hereto as Schedule 4.13 (as updated from time to time) is a true,
correct, and complete listing of all material trademarks, copyrights and patents
as to which any Loan Party is the owner; provided, that, any Borrower may amend
Schedule 4.13 to add additional intellectual property so long as such amendment
occurs by written notice to Agent not less than forty-five (45) days after the
end of the fiscal quarter in which the applicable Loan Party or its Subsidiary
acquires any such property after the Closing Date.
 
4.14 Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and, subject to Permitted
Protests, all of such material leases are valid and subsisting and no default
beyond any applicable cure period by the applicable Loan Party or its
Subsidiaries exists under any of them where such default has or could reasonably
be expected to have a Material Adverse Change.
 
4.15 Deposit Accounts and Securities Accounts.  Set forth on Schedule 4.15 (as
updated pursuant to the provisions of the Security Agreement or the Canadian
Security Agreement, as the case may be from time to time) is a listing of all of
the Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities
Accounts, including, with respect to each bank or securities intermediary (a)
the name and address of such Person, and (b) the account numbers of the Deposit
Accounts or Securities Accounts maintained with such Person.
 
4.16 Complete Disclosure.  All factual information taken as a whole (other than
forward-looking information and projections and information of a general
economic nature and general information about Borrowers’ industry) furnished by
or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement or
the other Loan Documents, and all other such factual information taken as a
whole (other than forward-looking information and projections and information of
a general economic nature and general information about Borrowers’ industry)
hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in
writing to Agent or any Lender will be, true and accurate, in all material
respects, on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.  The Projections
delivered to Agent on June 30, 2011 represent, and as of the date on which any
other Projections are delivered to Agent, such additional Projections represent,
Borrowers’ good faith estimate, on the date such Projections are delivered, of
the Loan Parties’ and their Subsidiaries’ future performance for the periods
covered thereby based upon assumptions believed by Borrowers to be reasonable at
the time of the delivery thereof to Agent (it being understood that such
Projections are subject to uncertainties and contingencies, many of which are
beyond the control of the Loan Parties and their Subsidiaries, that no
assurances can be given that such Projections will be realized, and that actual
results may differ in a material manner from such Projections).
 
4.17 Material Contracts.  Except for matters which, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change, each Material Contract is not in default due to the action or inaction
of the applicable Loan Party or its Subsidiary.
 

 
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4.18 Patriot Act; etc.  To the extent applicable, each Loan Party is in
compliance, in all material respects, with the (a) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, (b) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”), and  (c) the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and
the regulations promulgated thereunder.  No part of the proceeds of the loans
made hereunder will be used by any Loan Party or any of their Affiliates,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
 
4.19 [Reserved].
 
4.20 Payment of Taxes.  All tax returns and reports of each Loan Party and its
Subsidiaries required to be filed by any of them have been timely filed, and all
Taxes shown on such tax returns to be due and payable and all governmental
assessments, fees and other charges upon a Loan Party and its Subsidiaries and
upon their respective assets, income, businesses and franchises that are due and
payable have been paid when due and payable, except (a) to the extent the
validity of such Taxes shall be the subject of a Permitted Protest or (b) for
failures which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change.  No Borrower knows of any
proposed tax assessment against a Loan Party or any of its Subsidiaries that is
not being actively contested by such Loan Party or such Subsidiary diligently,
in good faith, and by appropriate proceedings; provided such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
 
4.21 Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.  No part of
the proceeds of the loans made to Borrowers will be used to purchase or carry
any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such Margin Stock or for any purpose that violates
the provisions of Regulation T, U or X of the Board of Governors of the United
States Federal Reserve.
 
4.22 Governmental Regulation.  No Loan Party nor any of its Subsidiaries is
subject to regulation under the Federal Power Act or the Investment Company Act
of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.  No Loan Party nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.
 
4.23 OFAC.  No Loan Party nor any of its Subsidiaries is in violation of any of
the country or list based economic and trade sanctions administered and enforced
by OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person
or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or
(c) derives revenues from investments in, or transactions with Sanctioned
Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be
used to fund any operations in, finance any investments or activities in, or
make any payments to, a Sanctioned Person or a Sanctioned Entity.
 

 
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4.24 Employee and Labor Matters.  Except as, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Change, there
is (a) no unfair labor practice complaint pending or, to the knowledge of
Borrowers, threatened against Parent or its Subsidiaries before any Governmental
Authority and no grievance or arbitration proceeding pending or threatened
against Parent or its Subsidiaries which arises out of or under any collective
bargaining agreement, (b) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened in writing against Parent or
its Subsidiaries, (c) to the knowledge of Borrowers, after due inquiry, no union
representation question existing with respect to the employees of Parent or its
Subsidiaries and no union organizing activity taking place with respect to any
of the employees of Parent or its Subsidiaries, or (d) any liability or
obligation incurred by Parent or any of its Subsidiaries under the Worker
Adjustment and Retraining Notification Act or similar state law, which remains
unpaid or unsatisfied.  The hours worked and payments made to employees of
Parent or its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to the extent
such violations could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change.  All material payments due from
Parent or its Subsidiaries on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of Parent, except where the failure to do so could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Change.
 
4.25 Eligible Accounts.  As to each Account that is identified by any Borrower
as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such
Account is (a) a bona fide existing payment obligation of the applicable Account
Debtor created by the sale and delivery of Inventory or the rendition of
services to such Account Debtor in the ordinary course of Borrowers’ business,
(b) owed to one or more of the Borrowers, and (c) not excluded as ineligible by
virtue of one or more of the excluding criteria (other than Agent-discretionary
criteria) set forth in the definition of Eligible Accounts.
 
4.26 Eligible Inventory.  As to each item of Inventory that is identified by any
Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to
Agent, such Inventory is (a) of good and merchantable quality, free from known
defects, and (b) not excluded as ineligible by virtue of one or more of the
excluding criteria (other than Agent-discretionary criteria) set forth in the
definition of Eligible Inventory.
 
4.27 Locations of Inventory and Equipment.  The Inventory and Equipment (other
than vehicles or Equipment out for repair or Inventory or Equipment owned by
Persons other than Loan Parties or having an aggregate book value of less than
$250,000) of the Loan Parties and their Subsidiaries are not stored with a
bailee, warehouseman, or similar party and are located only at, or in-transit
between or to, the locations identified on Schedule 4.6(e).
 
4.28 Inventory Records.  Each Loan Party keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries’ Inventory and the book value thereof.
 
4.29 Common Enterprise.  Borrowers and Guarantors make up a related organization
of various entities constituting a single economic and business enterprise so
that Borrowers and Guarantors share an identity of interests such that any
benefit received by any one of them benefits the others.  Certain Borrowers and
Guarantors render services to or for the benefit of certain of the other
Borrowers and/or Guarantors, as the case may be, and purchase or sell and supply
goods to or from or for the benefit of certain of the others.  Certain of
Borrowers and Guarantors have the same chief executive office, certain common
officers and directors and generally do not provide consolidating financial
statements to creditors.
 

 
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4.30 Eligible Equipment.  As to each item of Equipment that is identified by any
Borrower as Eligible Equipment in a Borrowing Base Certificate submitted to
Agent, such Equipment is not excluded as ineligible by virtue of one or more of
the excluding criteria (other than Agent-discretionary criteria) set forth in
the definition of Eligible Equipment.
 
4.31 Eligible Real Property.  As to each parcel of Real Property that is
identified by any Borrower as Eligible Inventory in a Borrowing Base Certificate
submitted to Agent, such Real Property is not excluded as ineligible by virtue
of one or more of the excluding criteria (other than Agent-discretionary
criteria) set forth in the definition of Eligible Real Property.
 
4.32 Specified Equipment Lease Documents.  As of the date hereof, (a)
Administrative Borrower has delivered to Agent true, correct and complete copies
of all material Specified Equipment Lease Documents and (b) the aggregate unpaid
amount of all obligations owing by Parent under the Specified Equipment Lease
Documents equals $1,672,028.
 
5.  
AFFIRMATIVE COVENANTS.

 
Each Loan Party covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties shall and
shall cause each of their Subsidiaries to comply with each of the following:
 
5.1 Financial Statements, Reports, Certificates.  Loan Parties shall deliver to
Agent, with copies to each Lender, each of the financial statements, reports,
and other items set forth on Schedule 5.1 no later than the times specified
therein.  In addition, Parent agrees that it shall not change its fiscal
year.  In addition, Parent agrees to maintain a system of accounting that
enables Parent to produce financial statements in accordance with GAAP.  Each
Loan Party shall also maintain its billing systems/practices (including with
respect to reporting of sales, claims, returns and allowances with respect to
its sales) substantially as in effect as of the Closing Date and shall only make
material modifications thereto with notice to, and with the consent of, Agent.
 
5.2 Collateral Reporting.  Provide Agent (and if so requested by Agent, with
copies for each Lender) with each of the reports set forth on Schedule 5.2 at
the times specified therein. In addition, each Borrower agrees to use
commercially reasonable efforts in cooperation with Agent to facilitate and
establish a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth on such Schedule.
 
5.3 Existence.  Except as otherwise permitted under Section 6.3 or Section 6.4,
at all times maintain and preserve in full force and effect (a) its existence
and (b) all rights and franchises, licenses and permits material to its business
where (in the case of this clause (b) the failure to do so has or could
reasonably be expected to have a Material Adverse Change; provided, however,
that no Loan Party or any of its Subsidiaries shall be required to preserve any
such right or franchise, licenses or permits if such Person’s board of directors
(or similar governing body) shall determine that the preservation thereof is no
longer desirable in the conduct of the business of such Person.
 
5.4 Maintenance of Properties.  Maintain and preserve all of its assets that are
necessary or useful in the proper conduct of its business in good working order
and condition, except for ordinary wear, tear, and casualty and Permitted
Dispositions (and where the failure to do so has or could reasonably be expected
to have a Material Adverse Change).
 
5.5 Taxes.  Cause all Taxes imposed, levied, or assessed against any Loan Party
or its Subsidiaries, or any of their respective assets or in respect of any of
its income, businesses, or franchises
 

 
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to be paid in full when due (taking into account any valid and effective
extension), except (a) to the extent that the validity of such Tax shall be the
subject of a Permitted Protest or (b) for failures which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Change.
 
5.6 Insurance.  At Borrowers’ expense, maintain insurance respecting each of the
Loan Parties’ and their Subsidiaries’ assets wherever located, covering
liabilities, losses or damage as customarily are insured against by other
Persons engaged in the same or similar businesses.  All such policies of
insurance shall be with financially sound and reputable insurance companies and
in such amounts as is carried generally in accordance with sound business
practice by companies in similar businesses similarly situated and located.  All
property insurance policies covering the Collateral are to be made payable to
Agent for the benefit of Agent and the Lenders, as their interests may appear,
in case of loss, pursuant to a standard loss payable endorsement with a standard
non contributory “lender” or “secured party” clause and are to contain such
other provisions as Agent may reasonably require to fully protect the Lenders’
interest in the Collateral and to any payments to be made under such
policies.  All certificates of property and general liability insurance shall,
promptly upon the request of Agent, be delivered to Agent, with the loss payable
(but only in respect of Collateral) and additional insured endorsements in favor
of Agent and shall provide for not less than 30 days (or 10 days in the case of
non-payment) prior written notice to Agent of the exercise of any right of
cancellation.  If any Borrower fails to maintain such insurance while an Event
of Default exists, Agent may arrange for such insurance, but at such Borrower’s
expense and without any responsibility on Agent’s part for obtaining the
insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims.  Borrowers shall give Agent prompt notice
of any loss exceeding $250,000 covered by its casualty or business interruption
insurance.
 
5.7 Inspection.  Permit Agent and each of its duly authorized representatives or
agents to visit any of its properties and inspect any of its assets or books and
records, to conduct appraisals and valuations, to examine and make copies of its
books and records, and to discuss its affairs, finances, and accounts with, and
to be advised as to the same by, its officers and employees at such reasonable
times (during normal business hours) and intervals as Agent may designate and,
so long as no Default or Event of Default exists and is continuing, with
reasonable prior notice to Administrative Borrower all at such times and
intervals as  Agent may request, all at Borrower’s expense; provided, that, (a)
as to field examinations, (i) no more than four (4) field examination in any 12
month period shall be at the expense of Borrowers unless an Event of Default
exists or has occurred and is continuing, and (ii) such other field examinations
as Agent may request at any time a Default or an Event of Default exists or has
occurred and is continuing shall be at the expense of Borrowers or otherwise at
any other times at the expense of Agent and Lenders and (b) as to appraisals,
(i) unless an Event of Default exists or has occurred and is continuing, no more
than one (1) appraisal of each type of Collateral in any twelve (12) month
period shall be at the expense of Borrowers, and (iii) such other appraisals as
Agent may request at any time a Default or an Event of Default exists or has
occurred and is continuing shall be at the expense of Borrowers or otherwise at
any other times at the expense of Agent and Lenders.
 
5.8 Compliance with Laws.  Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.
 
5.9 Environmental.
 
(a) Keep any property either owned or operated by Parent or its Subsidiaries
free of any Environmental Liens or post bonds or other financial assurances
sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,
 

 
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(b) Comply, in all material respects, with Environmental Laws,
 
(c) Promptly notify Agent of any release of which any Borrower has knowledge of
a Hazardous Material in any reportable quantity from or onto property owned or
operated by Parent or its Subsidiaries and take any Remedial Actions required to
abate said release or otherwise to come into compliance, with applicable
Environmental Law, except where the failure to do so has not had an could not
reasonably be expected to have a Material Adverse Effect, and
 
(d) Promptly, but in any event within 5 Business Days of its receipt thereof,
provide Agent with written notice of any of the following:  (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of Parent or its Subsidiaries, (ii) commencement of any Environmental Action or
written notice that an Environmental Action will be filed against Parent or its
Subsidiaries, and (iii) written notice of a violation, citation, or other
administrative order from a Governmental Authority pursuant to any Environmental
Law.
 
5.10 Reserved.
 
5.11 Formation of Subsidiaries.  At any time that any Loan Party forms any
direct or indirect Subsidiary or acquires any direct Subsidiary (other than a
subsidiary organized or incorporated under the laws of a jurisdiction other than
the United States of America, a state thereof, the District of Columbia, a
Province of Canada or Canada) after the Closing Date, such Loan Party shall (a)
within 30 days of such formation or acquisition (or such later date as permitted
by Agent in its sole discretion) cause any such new Subsidiary to provide to
Agent a joinder to the Guaranty and the Security Agreement or the Canadian
Security Agreement, as the case may be, together with such other security
documents (including mortgages with respect to any Real Property owned in fee of
such new Subsidiary with a fair market value of at least $1,000,000), as well as
appropriate financing statements (and with respect to all property subject to a
mortgage, fixture filings), all in form and substance reasonably satisfactory to
Agent (including being sufficient to grant Agent a first priority Lien (subject
to Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary); provided, that, the Guaranty, the Security Agreement, the Canadian
Security Agreement, and such other security documents shall not be required to
be provided to Agent with respect to any Subsidiary of Parent that is a CFC
(other than a CFC organized or incorporated under the laws of Canada or a
province thereof) or if the costs to the Loan Parties of providing such
Guaranty, executing any security documents or perfecting the security interests
created thereby are unreasonably excessive (as determined by Agent in
consultation with Borrowers) in relation to the benefits of Agent and the
Lenders of the security or guarantee afforded thereby, (b) within 30 days of
such formation or acquisition (or such later date as permitted by Agent in its
sole discretion) provide to Agent a pledge agreement (or an addendum to the
Security Agreement or the Canadian Security Agreement, as the case may be) and
appropriate certificates and powers or financing statements, pledging all of the
direct or beneficial ownership interest in such new Subsidiary reasonably
satisfactory to Agent; provided, that, (i) only 65% of the total outstanding
voting Equity Interests of any first tier Subsidiary of any Loan Party that is a
CFC (and none of the Equity Interests of any Subsidiary of such CFC organized or
incorporated under the laws of a jurisdiction outside the United States or
Canada) shall be required to be pledged (which pledge, if reasonably requested
by Agent, shall be governed by the laws of the jurisdiction of such Subsidiary)
and (ii) no other pledge shall be required if the costs to the Loan Parties of
providing such other pledge are unreasonably excessive (as determined by Agent
in consultation with Borrowers) in relation to the benefits of Agent and Lenders
of the security afforded thereby, and (c) within 30 days of such formation or
acquisition (or such later date as permitted by Agent in its sole discretion)
provide to Agent all other documentation reasonably requested by Agent
(including policies of title insurance or other documentation with respect to
all Real Property owned in fee and subject to a mortgage); provided, further,
that, notwithstanding anything to the contrary in this Section 5.11, (i) no
Canadian Loan Party shall be liable for any US Obligations, (ii) no security
interest granted by any
 

 
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Canadian Loan Party under any of the Loan Documents shall secure any US
Obligations, (iii) no amounts payable on account of the Canadian Obligations
shall be payable to Agent’s Account, and (iv) no US Obligations shall be charged
to the Canadian Loan Account.
 
5.12 Further Assurances.  At any time upon the reasonable request of Agent,
execute or deliver to Agent any and all financing statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, mortgages, deeds of trust, and all other documents (the “Additional
Documents”) that Agent may reasonably request in form and substance reasonably
satisfactory to Agent, to create, perfect, and maintain Agent’s Liens in all of
the assets of Parent and its Subsidiaries (other than Excluded Property)
(whether now owned or hereafter arising or acquired, tangible or intangible,
real or personal), to create and perfect Liens in favor of Agent in any Real
Property acquired by Parent or its Subsidiaries after the Closing Date with a
fair market value in excess of $1,000,000, and in order to fully consummate all
of the transactions contemplated hereby and under the other Loan Documents;
provided, that, (i) the foregoing shall not apply to any Subsidiary of Parent
that is a CFC organized or incorporated under the laws of a jurisdiction outside
Canada,(ii) no other pledge shall be required if the costs to the Loan Parties
of providing such documents are unreasonably excessive (as determined by Agent
in consultation with Borrowers) in relation to the benefits of Agent and the
Lenders of the benefits afforded thereby and (iii) only 65% of the total
outstanding voting Equity Interests of any first tier Subsidiary of any Loan
Party that is a CFC (and none of the Equity Interests of any Subsidiary of such
CFC organized or incorporated under the laws of a jurisdiction outside the
United States or Canada); provided, further, that, (i) no Canadian Loan Party
shall be liable for any US Obligations, (ii) no security interest granted by any
Canadian Loan Party under any of the Loan Documents shall secure any US
Obligations, (iii) no amounts payable on account of the Canadian Obligations
shall be payable to Agent’s Account, and (iv) no US Obligations shall be charged
to the Canadian Loan Account.  To the maximum extent permitted by applicable
law, if any Loan Party refuses or fails to execute or deliver any reasonably
requested Additional Documents within a reasonable period of time following the
request to do so, such Loan Party hereby authorizes Agent to execute any such
Additional Documents in the applicable Loan Party’s name, as applicable, and
authorizes Agent to file such executed Additional Documents in any appropriate
filing office.  In furtherance and not in limitation of the foregoing, each Loan
Party shall take such actions as Agent may reasonably request from time to time
(a) in connection with any merger, amalgamation, consolidation,  or
reorganization permitted under Section 6.3, delivery to Agent of the agreements
and documentation set forth in Section 5.11 above, or (b) to ensure that the
Obligations are guarantied by the Guarantors and are secured by substantially
all of the assets of the Loan Parties (subject to exceptions and limitations
contained in the Loan Documents).
 
5.13 Lender Meetings.  Within 90 days after the close of each fiscal year of
Administrative Borrower, at the request of Agent or of the Required Lenders and
upon reasonable prior notice, hold a meeting (at a mutually agreeable location
and time or, at the option of Agent, by conference call) with all Lenders who
choose to attend such meeting at which meeting shall be reviewed the financial
results of the previous fiscal year of Parent and the financial condition of
Parent and its Subsidiaries and the projections presented for the current fiscal
year of Parent.
 
5.14 Material Contracts.  Contemporaneously with the delivery of each Compliance
Certificate pursuant to Section 5.1, provide Agent with copies of (a) each
Material Contract entered into since the delivery of the previous Compliance
Certificate, and (b) each material amendment or modification of any Material
Contract entered into since the delivery of the previous Compliance Certificate.
 
5.15 Location of Inventory and Equipment.  Keep each Loan Parties’ Inventory and
Equipment (other than vehicles, Inventory and Equipment out for repair or
in-transit and Inventory and Equipment owned by Persons other than Loan Parties
or having an aggregate book value of less than $250,000) only at the locations
identified on Schedule 4.6(b) or  Schedule 4.6(e); provided, that, any
 

 
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Borrower may amend Schedule 4.6(e) or Schedule 4.6(b) so long as such amendment
occurs by written notice to Agent not less than 10 days after the date on which
such Inventory or Equipment is moved to such new location.
 
6.  
NEGATIVE COVENANTS.

 
Each Loan Party covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties will not
and will not permit any of their Subsidiaries to do any of the following:
 
6.1 Indebtedness.  Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except for Permitted Indebtedness.
 
6.2 Liens.  Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens.
 
6.3 Restrictions on Fundamental Changes.
 
(a) Enter into any merger, amalgamation, consolidation, reorganization, or
recapitalization, or reclassify its Equity Interests except for mergers,
consolidations, amalgamations and reorganizations (i) between US Loan Parties,
(ii) between Canadian Loan Parties, and (iii) between any Borrower and any of
its Subsidiaries, provided that, in the case of this clause (iii), (A) such
Borrower is the surviving entity of such merger, amalgamation, consolidation or
reorganization (or, in the case of a Canadian Borrower, is the amalgamated
corporation under applicable Canadian law), and (B) the Accounts and Inventory
of such Subsidiary shall not be Eligible Accounts or Eligible Inventory until
such time as Agent shall have completed a field examination with respect thereto
and such other due diligence reasonably requested by the Agent, in a manner and
with results reasonably satisfactory to Agent, (iii) between Subsidiaries of
Parent which are not Loan Parties and (iv) required for a Permitted Acquisition;
provided, that, nothing in Sections 6.3 or 6.5 shall restrict or prohibit Colt
Canada from registering as a limited liability company under the laws of the
Province of Nova Scotia, Canada (Colt Canada currently being an unlimited
liability company) or from continuing its certificate of amalgamation under the
laws of another Canadian provincial or federal jurisdiction, so long as Colt
Canada otherwise complies with the provisions of Section 6.5 concerning change
of corporate name, if applicable, and Section 5.12.
 
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), except for (i) the liquidation or dissolution of non-operating
Subsidiaries of Parent with nominal assets and nominal liabilities, (ii) the
liquidation or dissolution of a Loan Party (other than Borrowers) or any of
Borrowers’ wholly-owned Subsidiaries so long as all of the assets (including any
interest in any Equity Interests) of such liquidating or dissolving Loan Party
or Subsidiary are transferred to a Loan Party that is not liquidating or
dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Parent
that is not a Loan Party (other than any such Subsidiary the Equity Interests of
which (or any portion thereof) are subject to a Lien in favor of Agent) so long
as all of the assets of such liquidating or dissolving Subsidiary are
transferred to a Subsidiary of Parent that is not liquidating or dissolving, or
 
(c) Suspend or terminate all or a substantial portion of its or their business,
except as permitted pursuant to clauses (a) or (b) above or in connection with
the transactions permitted pursuant to Section 6.4.
 
6.4 Disposal of Assets.  Convey, sell, lease, license, assign, transfer, or
otherwise dispose of (or enter into an agreement to convey, sell, lease,
license, assign, transfer, or otherwise dispose of) any assets
 

 
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or Equity Interests of Parent or its Subsidiaries, except for Permitted
Dispositions or transactions expressly permitted by Sections 6.3 or 6.11.
 
6.5 Change Name.  Change the name, organizational identification number,
jurisdiction of organization or organizational identity of any Loan Party;
provided, that, any Loan Party may change its name so long as such Loan Party
gives written notice to Agent of such change within ten (10) days following such
change.
 
6.6 Nature of Business.  Make any change in the nature of its or their business
as presently conducted or acquire any properties or assets that are not
reasonably related to the conduct of such business activities; provided, that,
the foregoing shall not be construed to prohibit Parent and its Subsidiaries
from engaging in any business that is reasonably related or ancillary to its or
their business.
 
6.7 Certain Payments of Debt and Amendments.
 
(a) Make any payment, prepayment, redemption, retirement, defeasance, purchase
or sinking fund payment or other acquisition for value of any of its
Indebtedness other than the Indebtedness hereunder or under the other Loan
Documents (including, without limitation, by way of depositing money or
securities with the trustee therefor before the date required for the purpose of
paying any portion of such Indebtedness when due), or otherwise set aside or
deposit or invest any sums for such purpose, except that:
 
(i) Loan Parties may make regularly scheduled payments of principal and interest
in respect of Indebtedness permitted under clause (p) of the definition of
Permitted Indebtedness and other mandatory payments as and when due in respect
of such Indebtedness in accordance with the terms thereof;
 
(ii) Borrowers and Guarantors may make payments in respect of Indebtedness
permitted under clauses (b), (c), (g) or (p) of the definition of Permitted
Indebtedness, in each case with proceeds of Refinancing Indebtedness as
permitted in the definition of the term Permitted Indebtedness;
 
(iii) Borrowers and Guarantors may make optional prepayments and redemptions of
Indebtedness solely with the proceeds of the issuance and sale of Equity
Interests of Parent, provided, that, as of the date of any such prepayment or
redemption, and after giving effect thereto, no Event of Default shall exist or
have occurred and be continuing;
 
(iv) Borrowers and Guarantors may make optional prepayments and redemptions of
Indebtedness so long as the Specified Transaction Conditions have been
satisfied;
 
(v) Parent and its Subsidiaries may make optional prepayments of Permitted
Intercompany Indebtedness owing to a US Loan Party;
 
(vi) as to payments in respect of any other Permitted Indebtedness not subject
to the provisions above in this Section 6.7, Borrowers and Guarantors may make
payments of regularly scheduled principal and interest or other mandatory
payments as and when due in respect of such Indebtedness in accordance with the
terms thereof (and in the case of Indebtedness that has been contractually
subordinated in right of payment to the Obligations if such payment is permitted
at such time under the subordination terms and conditions set forth therein or
applicable thereto);
 

 
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(b) Borrowers shall not, and shall not permit any of their Subsidiaries,
directly or indirectly, to amend, modify, or change (or permit the amendment,
modification or other change in any manner of) any of the terms or provisions
of:
 
(i) any agreements, documents or instruments in respect of any Subordinated Debt
or any agreements related to the Indebtedness permitted under clause (p) of the
definition of Permitted Indebtedness, except (A) to the extent permitted under
any intercreditor or subordination agreement applicable thereto or (B) after
prior written notice to Agent, any amendment, modification or other change to
the terms thereof to make the terms thereof less restrictive or burdensome to
Parent or its Subsidiaries;
 
(ii) the certificate of incorporation, memorandum and articles of association,
certificate of formation, limited liability agreement, limited partnership
agreement or other organizational documents of any Loan Party, except for
amendments, modifications or other changes that do not adversely affect the
rights and privileges of any Borrower, or its Subsidiaries in any material
respect and do not adversely affect in any material respect the ability of a
Loan Party to borrow hereunder or to amend, modify, renew or supplement the
terms of this Agreement or any of the other Loan Documents, or otherwise
adversely affect the interests of Agent or Lenders in any material respect; and
 
(iii) any of the Specified Equipment Lease Documents in a manner which
increases, or could reasonably be expected to increase, the aggregate unpaid
amount of obligations owing by Parent under the Specified Equipment Lease
Documents (whether by entering into additional lease schedules or otherwise);
provided, that, Parent shall promptly deliver to Agent copies of any amendment,
modification or other change to any of the Specified Equipment Lease Documents.
 
6.8 Change of Control.  Cause, permit, or suffer, directly or indirectly, any
Change of Control.
 
6.9 Restricted Payments.  Declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:
 
(a) Parent and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the Equity Interests of such Person (other than
Disqualified Equity Interests);
 
(b) any Subsidiary of Parent may pay dividends or other distributions to a Loan
Party (including, without limitation, distributions to a Loan Party upon the
reduction of capital (by whatsoever name called, including paid in capital, paid
up capital or stated capital) of such Subsidiary), provided, that, no US Loan
Party may pay dividends or other distributions to a Canadian Loan Party;
 
(c) any Subsidiary of Parent may pay or make distributions to Parent that are
used to make substantially contemporaneous payments of any of the following: (i)
accounting, legal, administrative and other general corporate and overhead
expenses, franchise or similar taxes and other fees required to maintain the
corporate existence of Parent and to pay other operating costs, including
customary salary, bonus and other benefits payable to, and indemnities provided
on behalf of, officers and employees of Parent and (ii) reasonable directors
fees and to reimburse reasonable out-of-pocket expenses of the board of
directors of Parent and any direct or indirect parent entity of Parent, in each
case in an amount not more than the portion of such fees and expenses as are
reasonably and in good faith allocable to the operation of Parent and its
Subsidiaries;
 
(d) any Subsidiary of Parent may pay or make distributions to Parent that are
used to make substantially contemporaneous payments to, and Parent may make
payments to, repurchase or redeem Equity Interests and options to purchase
Equity Interests of Parent held by officers, directors or
 

 
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employees or former officers, directors or employees (or their transferees,
estates or beneficiaries under their estates) of Parent pursuant to any
management equity subscription agreement, employee agreement or stock option
agreement or other agreement with such officer, director or employee or former
officer, director or employee; provided, that, (i) no Default or Event of
Default shall have occurred and be continuing or would result therefrom and (ii)
the aggregate cash consideration paid for all such payments, repurchases or
redemptions shall not in any fiscal year of Parent exceed $1,000,000;
 
(e) Loan Parties may make other Restricted Payments not otherwise expressly
provided for in this Section 6.9 provided, that the Specified Transaction
Conditions have been is satisfied;
 
(f) Parent may repurchase its Equity Interests to the extent such repurchase is
deemed to occur upon (i) the non-cash exercise of stock options to the extent
such Equity Interests represents a portion of the exercise price of such options
and (ii) the withholding of a portion of such Equity Interests to pay taxes
associated therewith, and the purchase of fractional shares of Equity Interests
of Parent or any Subsidiary arising out of stock dividends, splits or
combinations or business combinations;
 
(g) for each taxable year beginning after the Closing Date with respect to which
the Parent is treated as a partnership or a disregarded entity for U.S. federal
income tax purposes, Parent may make distributions, advances or other payments
to each owner of its Equity Interests, in an amount equal to the product of (i)
the portion of the Parent’s “taxable income” (as modified below) allocable to
such member for such year and (ii) the highest combined marginal federal, state
and/or local income tax rate applicable to any such owner for such year;
provided that, for purposes of this clause (g), the Parent’s “taxable income”
for any year shall be computed (A) without any deduction for any interest
expense for such year attributable to any indebtedness of the Parent used to
finance distributions (as determined in accordance with Treasury Regulation
Section 1.163-8T) or any indebtedness treated as having refinanced any such
indebtedness, or any other interest expense incurred by the Parent, that, in
each case, is not treated as deductible for federal income tax purposes by each
holder of Equity Interests issued by the Parent, and (B) by including any
increases to taxable income for such year as a result of any tax examination,
audit or other adjustment, whether for taxable years ended prior to or after the
Closing Date; and
 
(h) other Restricted Payments not otherwise expressly provided for in this
Section 6.9 in an aggregate amount not to exceed $500,000; provided, that, as of
the date of any such Restricted Payment and immediately after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing.
 
6.10 Accounting Methods.  Modify or change its fiscal year of Parent or its
method of accounting (other than as may be required to conform to GAAP or as
permitted under Section 1.2).
 
6.11 Investments; Controlled Investments.
 
(a) Directly or indirectly, make or acquire any Investment or incur any
liabilities (including contingent obligations) for or in connection with any
Investment, except for Permitted Investments.
 
6.12 Transactions with Affiliates.  Directly or indirectly, purchase, acquire or
lease any property from, or sell, transfer or lease any property to, any
officer, director or other Affiliates of Parent or any of its Subsidiaries,
except pursuant to the reasonable requirements of Parent’s or such Subsidiary’s
business (as the case may be) and upon fair and reasonable terms no less
favorable to Parent or such Subsidiary than Parent or such Subsidiary would
obtain in a comparable arm’s length transaction with a person that is not an
Affiliate, except for:
 

 
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(a) any employment or compensation arrangement or agreement, employee benefit
plan or arrangement, officer or director indemnification agreement or any
similar arrangement or other compensation arrangement entered into by Parent or
any of its Subsidiaries in the ordinary course of business and payments,
issuance of securities or awards pursuant thereto, and including the grant of
stock options, restricted stock, stock appreciation rights, phantom stock awards
or similar rights to employees and directors in each case approved by the Board
of Directors of such Parent or such Subsidiary;
 
(b) transactions exclusively between Parent and its Subsidiaries, provided,
that, such transactions are not otherwise prohibited by this Agreement;
 
(c) transactions permitted under Section 6.3, 6.4, 6.9 or 6.11 hereof;
 
(d) the payment of reasonable and customary fees paid to and indemnities
provided on behalf of the directors of Parent or any Subsidiary;
 
(e) any agreement as in effect as of the Closing Date and listed on Schedule
6.12(e), as each such agreement may be amended, modified, supplemented, extended
or renewed from time to time, so long as any such amendment, modification,
supplement, extension or renewal is not more disadvantageous to the Loan
Parties, the Agent or the Lenders in any material respect in the good faith
judgment of the Parent when taken as a whole than the terms of such agreement in
effect on the Closing Date;
 
(f) management fees, payable to Sponsor or an Affiliate thereof in an amount not
to exceed $500,000 in the aggregate in any fiscal year of Parent; provided,
that, as of the date of the payment of any such fees and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing, and the reimbursement by Parent and its Subsidiaries of Sponsor of
reasonable and customary out-of-pocket expenses of Sponsor incurred in the
ordinary course of business in connection with the businesses of Parent and its
Subsidiaries; and
 
(g) transactions with customers, clients, suppliers, joint venture partners or
purchasers or sellers of goods or services, in each case in the ordinary course
of business of Parent and its Subsidiaries and otherwise in compliance with the
terms of this Agreement, provided, that in the good faith determination of
Parent, such transactions are on terms that are no less favorable to Parent or
the relevant Subsidiary than those that could have been obtained at the time of
such transactions in a comparable transaction by Parent or such Subsidiary with
an unrelated person.
 
6.13 Use of Proceeds.  Use the proceeds of any loan made hereunder for any
purpose other than (a) on the Closing Date, (i) to repay, in full, the
outstanding principal, accrued interest, and accrued fees and expenses owing
under or in connection with the Existing Credit Facility and (ii) to pay
transactional fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, and the transactions contemplated hereby
and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, for their lawful and permitted purposes (including that no part of the
proceeds of the loans made to Borrowers will be used to purchase or carry any
such Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or for any purpose that violates the provisions
of Regulation T, U or X of the Board of Governors of the United States Federal
Reserve).
 
6.14 [Reserved]
 
6.15 Senior Note Indenture Secured Debt Cap.  Permit (a) the amount of the
Senior Note Indenture Secured Debt Cap with respect to US Loan Parties at any
time to be less than the aggregate outstanding principal amount of all US
Advances (including Swing Loans, Protective Advances and
 

 
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Overadvances) plus the US Letter of Credit Usage at such time or (b) the amount
of the Senior Secured Note Indenture Secured Debt Cap with respect to Canadian
Loan Parties at any time to be less than the aggregate outstanding principal
amount of all Canadian Advances (including Protective Advances and Overadvances)
plus the Canadian Letter of Credit Usage at such time.
 
6.16 Specified Canadian Pension Plans.  Maintain, sponsor, administer,
contribute to, participate in or assume or incur any liability in respect of any
Specified Canadian Pension Plan, or acquire an interest in any Person if such
Person sponsors, administers, contributes to, participates in or has any
liability in respect of, any Specified Canadian Pension Plan.
 
7.  
FINANCIAL COVENANTS.

 
Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations:
 
(a) Fixed Charge Coverage Ratio.  During any Compliance Period, the Fixed Charge
Coverage Ratio of Parent and its Subsidiaries (on a consolidated basis), for the
most recently ended period of four consecutive fiscal quarters for which Agent
has received financial statements, shall not be less than 1.00:1.00.
 
8.  
EVENTS OF DEFAULT.

 
Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:
 
8.1  If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations (excluding Bank Product
Obligations) consisting of interest, fees, or charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts (other than any portion
thereof constituting principal) constituting Obligations (excluding Bank Product
Obligations but including any portion thereof (other than Bank Product
Obligations) that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), and such failure continues for a period of 3
Business Days, or (b) all or any portion of the principal of the Obligations
(excluding Bank Product Obligations);
 
8.2  If any Loan Party or any of its Subsidiaries:
 
(a) fails to perform or observe any covenant or other agreement contained in any
of (i) Sections 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in
its jurisdiction of organization), or  5.7 (solely if any Borrower refuses to
allow Agent or its representatives or agents to visit such Borrower’s
properties, inspect its assets or books or records, examine and make copies of
its books and records, or discuss such Borrower’s affairs, finances, and
accounts with officers and employees of such Borrower), of this Agreement, (ii)
Sections 6.1 through 6.16 of this Agreement, (iii) Section 7 of this Agreement,
(iv) Section 6 of the Security Agreement, or (v) Section 6 of the Canadian
Security Agreement; or
 
(b) fails to perform or observe any covenant or other agreement contained in
Section 5.6 or 5.15 of this Agreement, and such failure continues for a period
of 3 Business Days (in each case of Section 5.6) or 10 Business Days (in the
case of Section 5.15) after the earlier of (i) the date on which such failure
shall first become known to a Responsible Officer of any Borrower or (ii) the
date on which written notice thereof is given to Administrative Borrower by
Agent; and
 

 
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(c) fails to perform or observe any covenant or other agreement contained in
this Agreement, or in any of the other Loan Documents, in each case, other than
any such covenant or agreement that is the subject of another provision of this
Section 8 (in which event such other provision of this Section 8 shall govern),
and such failure continues for a period of 30 days after the earlier of (i) the
date on which such failure shall first become known to a Responsible Officer of
any Borrower or (ii) the date on which written notice thereof is given to
Administrative Borrower by Agent;
 
8.3  If one or more judgments, orders, or awards for the payment of money
involving an aggregate amount of $2,000,000, or more (except to the extent fully
covered (other than to the extent of customary deductibles) by insurance
pursuant to which the insurer has not denied coverage) is entered or filed
against a Loan Party or any of its Subsidiaries, or with respect to any of their
respective assets, and either (a) there is a period of 30 consecutive days at
any time after the entry of any such judgment, order, or award during which (1)
the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2)
a stay of enforcement thereof is not in effect, or (b) enforcement proceedings
are commenced upon such judgment, order, or award;
 
8.4  If an Insolvency Proceeding is commenced by a Loan Party or any of its
Subsidiaries;
 
8.5  If an Insolvency Proceeding is commenced against a Loan Party or any of its
Subsidiaries and any of the following events occur: (a) such Loan Party or such
Subsidiary consents to the institution of such Insolvency Proceeding against it,
(b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, such Loan Party or its Subsidiary, or (e) an order
for relief shall have been issued or entered therein;
 
8.6  If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in
any way prevented by court order from continuing to conduct all or any material
part of the business affairs of Parent Borrowers and its Subsidiaries, taken as
a whole;
 
8.7  If there is (a) a default in respect of one or more agreements to which a
Loan Party or any of its Subsidiaries is a party with one or more third Persons
relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an
aggregate amount of $2,000,000 or more, and such default (i) occurs at the final
maturity of the obligations thereunder, or (ii) results in a right by such third
Person, irrespective of whether exercised, to accelerate the maturity of such
Loan Party’s or its Subsidiary’s obligations thereunder, or (b) a default in
respect of one or more Material Contracts, or  (c) a default in respect of or an
involuntary early termination of one or more Hedge Agreements to which a Loan
Party or any of its Subsidiaries is a party involving an aggregate amount of
$2,000,000 or more;
 
8.8  If any warranty, representation, certificate, statement, or Record made
herein or in any other Loan Document or delivered in writing to Agent or any
Lender in connection with this Agreement or any other Loan Document proves to be
untrue in any material respect (except that such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof) as of the date of issuance or
making or deemed making thereof;
 
8.9  If the obligation of any Guarantor under the Guaranty ceases to be in full
force and effect;
 
8.10  If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent of Permitted Liens which are permitted
purchase money Liens or the interests of lessors under Capital Leases, first
priority
 

 
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Lien on Collateral having an aggregate book value in excess of $2,000,000,
except (a) as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement, or (b) as the result of an action or
failure to act on the part of Agent;
 
8.11  The validity or enforceability of any Loan Document shall at any time for
any reason  (other than solely as the result of an action or failure to act on
the part of Agent) be declared to be null and void, or a proceeding shall be
commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority
having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish
the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries
shall deny that such Loan Party or its Subsidiaries has any liability or
obligation purported to be created under any Loan Document; or
 
8.12  If any Loan Party ceases to have the right to use, or the Loan Parties are
not in possession and control of, a material amount of the Specified Government
Property.
 
9.  
RIGHTS AND REMEDIES.

 
9.1 Rights and Remedies.  Upon the occurrence and during the continuation of an
Event of Default, Agent may, and, at the instruction of the Required Lenders,
shall (in each case under clauses (a) or (b) by written notice to Administrative
Borrower), in addition to any other rights or remedies provided for hereunder or
under any other Loan Document or by applicable law, do any one or more of the
following:
 
(a) declare the Obligations (other than the Bank Product Obligations), whether
evidenced by this Agreement or by any of the other Loan Documents immediately
due and payable, whereupon the same shall become and be immediately due and
payable and Borrowers shall be obligated to repay all of such Obligations in
full, without presentment, demand, protest, or further notice or other
requirements of any kind, all of which are hereby expressly waived by each
Borrower;
 
(b) declare the Commitments terminated, whereupon the Commitments shall
immediately be terminated together with (i) any obligation of any Lender
hereunder to make Advances, (ii) the obligation of the Swing Lender to make
Swing Loans, and (iii) the obligation of the Issuing Lender to issue Letters of
Credit; and
 
(c) exercise all other rights and remedies available to Agent or the Lenders
under the Loan Documents or applicable law.
 
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to any Borrower or any other Person or any
act by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of all accrued
and unpaid interest thereon and all fees and all other amounts owing under this
Agreement or under any of the other Loan Documents, shall automatically and
immediately become due and payable and Borrowers shall be obligated to repay all
of such Obligations in full, without presentment, demand, protest, or notice of
any kind, all of which are expressly waived by each Loan Party.
 
9.2 Remedies Cumulative.  The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative.  The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, the PPSA, by law, or in
equity.  No exercise by the Lender Group of one right or remedy shall be deemed
an election, and no waiver by the Lender Group of any Event of Default shall be
deemed a continuing waiver.  No delay by the Lender Group shall constitute a
waiver, election, or acquiescence by it.
 

 
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9.3 Appointment of a Receiver.  Upon the occurrence and during the continuance
of an Event of Default, Agent may seek the appointment of a receiver, manager or
receiver and manager (a “Receiver”) under the laws of Canada or any province
thereof to take possession of all or any portion of the Collateral of any Loan
Party or to operate same and, to the maximum extent permitted by law, may seek
the appointment of such a Receiver without the requirement of prior notice or a
hearing.  Any such Receiver shall, to the extent permitted by law, so far as
concerns responsibility for his/her acts, be deemed to be an agent of such Loan
Party and not Agent and the Lenders, and Agent and the Lenders shall not be in
any way responsible for any misconduct, negligence or non-feasance on the part
of any such Receiver, or his/her servants or employees, absent the gross
negligence, bad faith or willful misconduct of the Agent or the Lenders as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction.  Subject to the provisions of the instrument appointing him/her,
any such Receiver shall have power to take possession of Collateral of any Loan
Party, to preserve Collateral of such Loan Party or its value, to carry on or
concur in carrying on all or any part of the business of such Loan Party and to
sell, lease, license or otherwise dispose of or concur in selling, leasing,
licensing or otherwise disposing of Collateral of such Loan Party.  To
facilitate the foregoing powers, any such Receiver may, to the exclusion of all
others, including a Loan Party, enter upon, use and occupy all premises owned or
occupied by a Loan Party wherein Collateral of such Loan Party may be situated,
maintain Collateral of a Loan Party upon such premises, borrow money on a
secured or unsecured basis and use Collateral of a Loan Party directly in
carrying on such Loan Party’s business or as security for loans or advances to
enable the Receiver to carry on such Loan Party’s business or otherwise, as such
Receiver shall, in its discretion, determine.  Except as may be otherwise
directed by Agent, all money received from time to time by such Receiver in
carrying out his/her appointment shall be received in trust for and paid over to
Agent.  Every such Receiver may, in the discretion of Agent, be vested with all
or any of the rights and powers of Agent and the Lenders.  Agent may, either
directly or through its nominees, exercise any or all powers and rights given to
a Receiver by virtue of the foregoing provisions of this paragraph.
 
10.  
WAIVERS; INDEMNIFICATION.

 
10.1 Demand; Protest; etc.  Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which such Borrower may in any way be liable.
 
10.2 The Lender Group’s Liability for Collateral.  Each Borrower hereby agrees
that:  (a) so long as Agent complies with its obligations, if any, under the
Code and the PPSA, the Lender Group shall not in any way or manner be liable or
responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers,
other than any such loss or damage resulting from the gross negligence, willful
misconduct or bad faith of the Agent or any member of the Lender Group, as
finally determined by a court of competent jurisdiction.
 
10.3 Indemnification.  Borrowers shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons (each, an “Indemnified
Person”) harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings,
liabilities, fines, costs, penalties, and damages, and all reasonable fees and
disbursements of attorneys (limited to one US counsel to Agent-Related Persons
and Lender-Related Persons, one Canadian counsel to Agent-Related Persons and
Lender-Related Persons, any local or regulatory counsel to Agent-Related Persons
and Lender-Related Persons reasonably selected by Agent, one additional counsel
for the Lenders (taken as a whole) if an Event of Default has occurred and is
continuing and, if the interests of any Agent-Related Person or Lender-Related
Person are distinctly and disproportionately
 

 
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affected, one additional counsel for such affected Person), experts, or
consultants and all other costs and expenses actually incurred in connection
therewith or in connection with the enforcement of this indemnification
(promptly upon demand of Agent but in any event not later than 5 days of demand
therefor by Agent irrespective of (1) the provisions of Section 17.10 hereof and
(2) whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or related to
the execution and delivery (provided that Borrowers shall not be liable for
costs and expenses (including attorneys fees) of any Lender (other than WFCF)
incurred in advising, structuring, drafting, reviewing, administering or
syndicating the Loan Documents), enforcement, performance, or administration
(including any restructuring or workout with respect hereto) of this Agreement,
any of the other Loan Documents, or the transactions contemplated hereby or
thereby or the monitoring of Parent’s and its Subsidiaries’ compliance with the
terms of the Loan Documents (provided, however, that the indemnification in this
clause (a) shall not extend to (i) disputes solely between or among the Lenders
or (ii) disputes solely between or among the Lenders and their respective
Affiliates; it being understood and agreed that the indemnification in this
clause (a) shall extend to Agent (but not the Lenders) relative to disputes
between or among Agent (in its capacity as such) on the one hand, and one or
more Lenders, or one or more of their Affiliates, on the other hand, (b) with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto, and (c) in connection with or arising out of any Environmental
Liabilities, Environmental Action or Remedial Action, including any presence or
release of Hazardous Materials at, on, under, to or from any assets or
properties owned, leased or operated by Parent or any of its Subsidiaries (each
and all of the foregoing, the “Indemnified Liabilities”);provided, that, the
Indemnified Liabilities shall not include any Taxes or any costs attributable to
Taxes, which shall be governed by Section 16.  The foregoing to the contrary
notwithstanding, no Borrower shall have any obligation to any Indemnified Person
under this Section 10.3 with respect to any Indemnified Liability that a court
of competent jurisdiction finally determines to have resulted from the bad
faith, gross negligence or willful misconduct of such Indemnified Person or its
officers, directors, employees, attorneys, or agents.  This provision shall
survive the termination of this Agreement and the repayment of the
Obligations.  If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which any
Borrower was required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto.
 
11.  
NOTICES.

 
Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile.  In the case of notices or
demands to Loan Parties or Agent, as the case may be, they shall be sent to the
respective address set forth below:
 
 
If to Loan Parties:
Colt Defense LLC
547 New Park Avenue
West Hartford, CT  06110
Attn: Jeffrey Grody
Fax No. (860) 244-1442

 

 
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with copies to:
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York  10005
Attn:  William J. Miller, Esq.
Fax No.:  (212) 269-5420

 
 
If to Agent:
Wells Fargo Capital Finance, LLC
One Boston Place, 18th Floor
Boston, Massachusetts 02108-4407
Attn:  Portfolio Manager-Colt
Fax No.:  (617) 523-4032

 
 
with copies to:
Otterbourg, Steindler, Houston & Rosen, P.C.
230 Park Avenue
New York, NY  10169
Attn:  Michael Barocas, Esq.
Fax No.:  (212) 682-6104

 
Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party.  All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or 3 Business Days
after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received, (b)
notices by facsimile shall be deemed to have been given when sent (except that,
if not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next Business Day for the
recipient) and (c) notices by electronic mail shall be deemed received upon the
sender's receipt of an acknowledgment from the intended recipient (such as by
the "return receipt requested" function, as available, return email or other
written acknowledgment).
 
12.  
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
 
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE OF NEW YORK AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND.  EACH LOAN PARTY AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).
 

 
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(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH LOAN PARTY AND EACH
MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  EACH LOAN PARTY AND EACH MEMBER OF THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
 
(d) SUBJECT TO THE LAST SENTENCE OF THIS SECTION (D) EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS  LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW
YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT.  EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
 
13.  
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 
13.1 Assignments and Participations.
 
(a) Any Lender may at any time assign to one or more Eligible
Transferees  (each, an “Assignee”) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Obligations at the time owing to it and its participation interests in
Letters of Credit, Swing Loans and Overadvances), provided, that, any such
assignment shall be subject to the following conditions:
 
(i) The aggregate amount of the Commitment or, if the applicable Commitment is
not then in effect, the principal outstanding balance of the Obligations of the
assigning Lender subject to such assignment shall be not less than $5,000,000,
unless the Agent otherwise consents, except that such minimum amount shall not
apply to (A) an assignment or delegation by any Lender to any other Lender, an
Affiliate of any Lender or an Related Fund or (B) a group of new Lenders, each
of which is an Affiliate of each other or a Related Fund of such new Lender to
the extent that the aggregate amount to be assigned to all such new Lenders is
at least $5,000,000 or (C) in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and/or Obligations at the time owing
to it;
 
(ii) Each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
 
(iii) No consent shall be required for any assignment except:
 

 
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(A) The consent of the Administrative Borrower shall be required, which consent
shall not be unreasonably withheld, conditioned or delayed; provided, that no
consent of Administrative Borrower shall be required for an assignment to
another Lender, an Affiliate of a Lender, a Related Fund or, if Default or an
Event of Default has occurred and is continuing; and
 
(B) The consent of the Agent shall be required.
 
(iv) The parties to each assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a processing fee of $3,500, provided,
that Agent may, in its discretion, elect to reduce or waive such processing fee
in the case of any assignment, and the assignee, if its not a Lender, shall
deliver to the Agent an administrative questionnaire in a form reasonably
satisfactory to Agent.
 
(v) No such assignment shall be made to (A) a Loan Party or an Affiliate of a
Loan Party, (B) any Defaulting Lender or any of its Subsidiaries or any Person
who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or
one of its Subsidiaries, and (C) a natural Person.
 
(vi) Borrowers and Agent may continue to deal solely and directly with a Lender
in connection with the interest so assigned to an Assignee until (A) written
notice of such assignment, together with payment instructions, addresses, and
related information with respect to the Assignee, have been given to
Administrative Borrower and Agent by such Lender and the Assignee, (B) such
Lender and its Assignee have delivered to Administrative Borrower and Agent an
Assignment and Acceptance and Agent has notified the assigning Lender of its
receipt thereof in accordance with this Section 13.1(b) and the satisfaction of
the other conditions herein.
 
(b) From and after the date that Agent has recorded the assignment in the
Register and Agent notifies the assigning Lender (with a copy to Borrowers) that
it has received an executed Assignment and Acceptance and, if applicable,
payment of the required processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall be a “Lender”
and shall have the rights and obligations of a Lender under the Loan Documents,
and (ii) the assigning Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (except with respect to
Section 10.3) and be released from any future obligations under this Agreement
(and in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender’s rights and obligations under this Agreement and
the other Loan Documents, such Lender shall cease to be a party hereto and
thereto); provided, however, that nothing contained herein shall release any
assigning Lender from obligations that survive the termination of this
Agreement, including such assigning Lender’s obligations under Section 15 and
Section 17.9(a).
 
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows:  (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such
Assignee confirms that it has received a copy of the CAM Letter Agreement and
this Agreement, together with such other documents and information as it has
deemed appropriate to
 

 
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make its own credit analysis and decision to enter into such Assignment and
Acceptance, (iv) such Assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement, (v)
such Assignee appoints and authorizes Agent to take such actions and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, (vi) such Assignee agrees that it will perform
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender, and (vii) such Assignee shall, without further
action, become a party to the CAM Letter Agreement, as a Lender and shall be
bound by the terms thereof.
 
(d) Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to Section
13.1(b), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom.  The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
 
(e) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in all
or any portion of its Obligations, its Commitment, and the other rights and
interests of that Lender (the “Originating Lender”) hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Lender shall
remain a “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, and (v) all amounts payable by Borrowers
hereunder shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement.  The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Loan Parties, the Collections of Loan Parties, the Collateral,
or otherwise in respect of the Obligations.  No Participant shall have the right
to participate directly in the making of decisions by the Lenders among
themselves.
 

 
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(f) In connection with any such assignment or participation or proposed
assignment or participation or any grant of a security interest in, or pledge
of, its rights under and interest in this Agreement, a Lender may, subject to
the provisions of Section 17.9, disclose all documents and information which it
now or hereafter may have relating to Parent and its Subsidiaries and their
respective businesses.
 
(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law.
 
(h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or
cause to be maintained, a register (the “Register”) on which it enters the name
and address of each Lender as the registered owner of the Advances (and the
principal amount thereof and stated interest thereon) held by such Lender (each,
a “Registered Loan”).  A Registered Loan (and the registered note, if any,
evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide) and any assignment or sale of all or part of
such Registered Loan (and the registered note, if any, evidencing the same) may
be effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s).  Prior to the registration of assignment or sale
of any Registered Loan (and the registered note, if any evidencing the same),
Borrowers shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
 
(i) In the event that a Lender sells participations in the Registered Loan, such
Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or
cause to be maintained) a register on which it enters the name of all
participants in the Registered Loans held by it (and the principal amount (and
stated interest thereon) of the portion of such Registered Loans that is subject
to such participations) (the “Participant Register”).  A Registered Loan (and
the Registered Note, if any, evidencing the same) may be participated in whole
or in part only by registration of such participation on the Participant
Register (and each registered note shall expressly so provide).  Any
participation of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
 
(j) Agent shall make a copy of the Register (and each Lender shall make a copy
of its Participant Register in the extent it has one) available for review by
Borrowers from time to time as Borrowers may reasonably request.
 
13.2 Successors.  This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that no Borrower may assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio.  No consent to assignment by the Lenders shall
release any Borrower from its Obligations.  A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 and, except as expressly required pursuant to Section
13.1, no consent or approval by any Borrower is required in connection with any
such assignment.
 

 
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14.  
AMENDMENTS; WAIVERS.

 
14.1 Amendments and Waivers.
 
(a) No amendment, waiver or other modification of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements, the
Fee Letter or the CAM Letter Agreement), and no consent with respect to any
departure by any Loan Party therefrom, shall be effective unless the same shall
be in writing and signed by the Required Lenders (or by Agent at the written
request of the Required Lenders) and the Loan Parties that are party thereto and
then any such waiver or consent shall be effective, but only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
of the Lenders directly affected thereby and all of the Loan Parties that are
party thereto, do any of the following:
 
(i) increase the amount of or extend the expiration date of any Commitment of
any Lender or amend, modify, or eliminate the last sentence of Section
2.4(c)(i),
 
(ii) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
 
(iii) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except (y) in connection with the
waiver of applicability of Section 2.6(c) (which waiver shall be effective with
the written consent of the Required Lenders), and (z) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees
for purposes of this clause (iii)),
 
(iv) amend, modify, or eliminate this Section or any provision of this Agreement
providing for consent or other action by all Lenders,
 
(v) amend, modify, or eliminate Section 15.11,
 
(vi) release Agent’s Lien in and to any of the Collateral, except as permitted
by Section 15.11,
 
(vii) amend, modify, or eliminate the definition of “Required Lenders” or “Pro
Rata Share”,
 
(viii) contractually subordinate any of Agent’s Liens, except as permitted by
Section 15.11,
 
(ix) release any Borrower or any Material Guarantor from any obligation for the
payment of money or consent to the assignment or transfer by any Borrower or any
Material Guarantor of any of its rights or duties under this Agreement or the
other Loan Documents, except in connection with a merger, liquidation,
dissolution or sale of such Person expressly permitted by the terms hereof or
the other Loan Documents,
 
(x) amend, modify, or eliminate any of the provisions of Section 2.4(b)(i), (ii)
or (iii) or Section 2.4(e)(i) or (f),
 

 
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(xi) amend, modify, or eliminate any of the provisions of Section 13.1(a) to
permit a Loan Party or an Affiliate of a Loan Party to be permitted to become an
Assignee, or
 
(xii) amend, modify, or eliminate the definition of Borrowing Base or Canadian
Borrowing Base or any of the defined terms (including the definitions of
Eligible Accounts, Eligible Inventory, Eligible Equipment and Eligible Real
Property that are used in such definition to the extent that any such change
results in more credit being made available to Borrowers based upon the
Borrowing Base or Canadian Borrowing Base, but not otherwise, or the definitions
of Maximum Revolver Amount, or change Section 2.1(d).
 
(b) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive (i) the definition of, or any of the terms or provisions of,
the Fee Letter, without the written consent of Agent and Borrowers (and shall
not require the written consent of any of the Lenders), and (ii) any provision
of Section 15 pertaining to Agent, or any other rights or duties of Agent under
this Agreement or the other Loan Documents, without the written consent of
Agent, Borrowers, and the Required Lenders, Notwithstanding anything to the
contrary contained in this Agreement or the other Loan Documents, the consent of
Loan Parties and Lenders shall not be required for the exercise by Agent of any
of its rights under this Agreement in accordance with the terms of this
Agreement with respect to reserves, or the Borrowing Base or Canadian Borrowing
Base or any of the defined terms (including the definitions of Eligible
Accounts, Eligible Equipment, Eligible Real Property and Eligible Inventory)
that are used therein.
 
(c) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Issuing Lender, or any other rights or duties of Issuing Lender
under this Agreement or the other Loan Documents, without the written consent of
Issuing Lender, Agent, Borrowers, and the Required Lenders,
 
(d) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Swing Lender, or any other rights or duties of Swing Lender under
this Agreement or the other Loan Documents, without the written consent of Swing
Lender, Agent, Borrowers, and the Required Lenders,
 
(e) Anything in this Section 14.1 to the contrary notwithstanding, (i) any
amendment, modification, elimination, waiver, consent, termination, or release
of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of any Loan
Party, shall not require consent by or the agreement of any Loan Party, and (ii)
any amendment, waiver, modification, elimination, or consent of or with respect
to any provision of this Agreement or any other Loan Document may be entered
into without the consent of, or over the objection of, any Defaulting Lender
other than any of the matters governed by Section 14.1(a)(i) through (iii).
 
14.2 Replacement of Certain Lenders.
 
(a) If (i) any action to be taken by the Lender Group or Agent hereunder
requires the consent, authorization, or agreement of all Lenders or all Lenders
affected thereby and if such action has received the consent, authorization, or
agreement of the Required Lenders but not of all Lenders or all Lenders affected
thereby, or (ii) any Lender makes a claim for compensation under Section 16,
then Borrowers or Agent, upon at least 5 Business Days prior irrevocable notice,
may permanently replace any Lender that failed to give its consent,
authorization, or agreement (a “Holdout Lender”) or any Lender that made a claim
for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the
Holdout Lender or Tax Lender, as applicable, shall have no right to refuse to be
replaced hereunder.  Such notice
 

 
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to replace the Holdout Lender or Tax Lender, as applicable, shall specify an
effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given.
 
(b) Prior to the effective date of such replacement, the Holdout Lender or Tax
Lender, as applicable, and each Replacement Lender shall execute and deliver an
Assignment and Acceptance, subject only to the Holdout Lender or Tax Lender, as
applicable, being repaid in full its share of the outstanding Obligations
(without any premium or penalty of any kind whatsoever, but including (i) all
interest, fees and other amounts that may be due in payable in respect thereof,
and (ii) an assumption of its Pro Rata Share of participations in the Letters of
Credit).  If the Holdout Lender or Tax Lender, as applicable, shall refuse or
fail to execute and deliver any such Assignment and Acceptance prior to the
effective date of such replacement, Agent may, but shall not be required to,
execute and deliver such Assignment and Acceptance in the name or and on behalf
of the Holdout Lender or Tax Lender, as applicable, and irrespective of whether
Agent executes and delivers such Assignment and Acceptance, the Holdout Lender
or Tax Lender, as applicable, shall be deemed to have executed and delivered
such Assignment and Acceptance.  The replacement of any Holdout Lender or Tax
Lender, as applicable, shall be made in accordance with the terms of Section
13.1.  Until such time as one or more Replacement Lenders shall have acquired
all of the Obligations, the Commitments, and the other rights and obligations of
the Holdout Lender or Tax Lender, as applicable, hereunder and under the other
Loan Documents, the Holdout Lender or Tax Lender, as applicable, shall remain
obligated to make the Holdout Lender’s or Tax Lender’s, as applicable, Pro Rata
Share of Advances and to purchase a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of such Letters of Credit.
 
14.3 No Waivers; Cumulative Remedies.  No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof.  No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated.  No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by each Loan Party of
any provision of this Agreement.  Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
 
15.  
AGENT; THE LENDER GROUP.

 
15.1 Appointment and Authorization of Agent.  Each Lender hereby designates and
appoints WFCF as its agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to designate, appoint, and
authorize) Agent to execute and deliver each of the other Loan Documents on its
behalf and to take such other action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to Agent by the terms of this Agreement
or any other Loan Document, together with such powers as are reasonably
incidental thereto.  Agent agrees to act as agent for and on behalf of the
Lenders (and the Bank Product Providers) on the conditions contained in this
Section 15.  Any provision to the contrary contained elsewhere in this Agreement
or in any other Loan Document notwithstanding, Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Loan Documents, nor shall Agent have or be deemed to have any fiduciary
relationship with any Lender (or Bank Product Provider), and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent.  Without limiting the generality of the foregoing, the use of the
term “agent” in this Agreement or the other Loan Documents with reference to
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.  Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only a representative relationship
 

 
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between independent contracting parties.  Each Lender hereby further authorizes
(and by entering into a Bank Product Agreement, each Bank Product Provider shall
be deemed to authorize) Agent to act as the secured party under each of the Loan
Documents that create a Lien on any item of Collateral.  Except as expressly
otherwise provided in this Agreement, Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents.  Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect:  (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections of Parent and its
Subsidiaries, and related matters, (b) execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders, as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections of Parent and its Subsidiaries as provided in the Loan
Documents, (e) open and maintain such bank accounts and cash management
arrangements as Agent deems necessary and appropriate in accordance with the
Loan Documents for the foregoing purposes with respect to the Collateral and the
Collections of Parent and its Subsidiaries, (f) perform, exercise, and enforce
any and all other rights and remedies of the Lender Group with respect to Parent
or its Subsidiaries, the Obligations, the Collateral, the Collections of Parent
and its Subsidiaries, or otherwise related to any of same as provided in the
Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may
deem necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to the Loan Documents.
 
15.2 Delegation of Duties; Appointment of Subagents.  (a) Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys in fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  Agent shall not be
responsible for the negligence or misconduct of any agent or attorney in fact
that it selects as long as such selection was made without gross negligence or
willful misconduct.
 
(b)      Agent hereby designates and appoints WFCF Canada as Agent’s subagent
(the “Subagent”) with respect to all or any part of the Canadian Collateral, and
WFCF Canada hereby accepts such appointment; provided that the Subagent shall
not be authorized to take any action with respect to any Canadian Collateral
unless and except to the extent expressly authorized in writing by
Agent.  Should any instrument in writing from any Loan Party be required by the
Subagent to more fully or certainly vest in and confirm to the Subagent such
rights, powers, privileges and duties, such Loan Party shall execute,
acknowledge and deliver any and all such instruments promptly upon request by
Agent.  If the Subagent, or successor thereto, shall resign or be removed, all
rights, powers, privileges and duties of the Subagent, to the extent permitted
by law, shall automatically vest in and be exercised by Agent until the
appointment of a new Subagent.  Agent shall not be responsible for the
negligence or misconduct of any Subagent that it selects in the absence of the
Agent’s gross negligence or willful misconduct.
 
15.3 Liability of Agent.  None of the Agent-Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own bad faith, gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank
Product Providers) for any recital, statement, representation or warranty made
by Parent or any of its Subsidiaries or Affiliates, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan
 

 
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Document, or for any failure of Parent or its Subsidiaries or any other party to
any Loan Document to perform its obligations hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lenders (or Bank
Product Providers) to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of Parent or its Subsidiaries.
 
15.4 Reliance by Agent.  Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent.  Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable.  If Agent so requests, it shall first be indemnified to its
reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product
Providers) against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.  Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders (and Bank Product
Providers).
 
15.5 Notice of Default or Event of Default.  Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or any Borrower referring
to this Agreement, describing such Default or Event of Default, and stating that
such notice is a “notice of default.”  Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
actual knowledge.  If any Lender obtains actual knowledge of any Event of
Default, such Lender promptly shall notify the other Lenders and Agent of such
Event of Default.  Each Lender shall be solely responsible for giving any
notices to its Participants, if any.  Subject to Section 15.4, Agent shall take
such action with respect to such Default or Event of Default as may be requested
by the Required Lenders in accordance with Section 9; provided, however, that
unless and until Agent has received any such request, 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.
 
15.6 Credit Decision.  Each Lender (and Bank Product Provider) acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it,
and that no act by Agent hereinafter taken, including any review of the affairs
of Parent and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender (or Bank
Product Provider).  Each Lender represents (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to represent) to Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such due diligence, documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of any Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers.  Each Lender also represents (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
 

 
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analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of any Borrower or
any other Person party to a Loan Document.  Except for notices, reports, and
other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender (or
Bank Product Provider) with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of any Borrower or any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons.  Each
Lender acknowledges (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that Agent does not have any
duty or responsibility, either initially or on a continuing basis (except to the
extent, if any, that is expressly specified herein) to provide such Lender (or
Bank Product Provider) with any credit or other information with respect to any
Borrower, its Affiliates or any of their respective business, legal, financial
or other affairs, and irrespective of whether such information came into Agent's
or its Affiliates’ or representatives’ possession before or after the date on
which such Lender became a party to this Agreement (or such Bank Product
Provider entered into a Bank Product Agreement).
 
15.7 Costs and Expenses; Indemnification.  Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, attorneys fees and expenses, fees
and expenses of financial accountants, advisors, consultants, and appraisers,
costs of collection by outside collection agencies, auctioneer fees and
expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrowers are obligated to reimburse Agent or
Lenders for such expenses pursuant to this Agreement or otherwise.  Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections of Parent and its Subsidiaries received by Agent to reimburse Agent
for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders (or Bank Product Providers).  In the event Agent is not
reimbursed for such costs and expenses by Parent or its Subsidiaries, each
Lender hereby agrees that it is and shall be obligated to pay to Agent such
Lender’s ratable thereof.  Whether or not the transactions contemplated hereby
are consummated, each of the Lenders, on a ratable basis, shall indemnify and
defend the Agent-Related Persons (to the extent not reimbursed by or on behalf
of Borrowers and without limiting the obligation of Borrowers to do so) from and
against any and all Indemnified Liabilities; provided, that, no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s bad faith, gross
negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder.  Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender’s ratable share of any costs
or out of pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrowers.  The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.
 
15.8 Agent in Individual Capacity.  WFCF and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, provide Bank
Products to, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with Parent
and its Subsidiaries and Affiliates and any other Person party to any Loan
Document as though WFCF were not Agent hereunder, and, in each case, without
notice to or consent of the other members of the Lender Group.  The other
members of the Lender Group acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that,
pursuant to such
 

 
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activities, WFCF or its Affiliates may receive information regarding Borrowers
or their Affiliates or any other Person party to any Loan Documents that is
subject to confidentiality obligations in favor of Borrowers or such other
Person and that prohibit the disclosure of such information to the Lenders (or
Bank Product Providers), and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them.  The terms “Lender” and “Lenders” include WFCF in its
individual capacity.
 
15.9 Successor Agent.  Agent may resign as Agent upon 30 days prior written
notice to the Lenders (unless such notice is waived by the Required Lenders) and
Administrative Borrower (unless such notice is waived by Borrowers) and without
any notice to the Bank Product Providers.  If Agent resigns under this
Agreement, the Required Lenders shall be entitled, with (so long as no Event of
Default has occurred and is continuing) the consent of Administrative Borrower
(such consent not to be unreasonably withheld, delayed, or conditioned), appoint
a successor Agent for the Lenders (and the Bank Product Providers).  If, at the
time that Agent’s resignation is effective, it is acting as the Issuing Lender
or the Swing Lender, such resignation shall also operate to effectuate its
resignation as the Issuing Lender or the Swing Lender, as applicable, and it
shall automatically be relieved of any further obligation to issue Letters of
Credit, to cause the Underlying Issuer to issue Letters of Credit, or to make
Swing Loans.  If no successor Agent is appointed prior to the effective date of
the resignation of Agent, Agent may appoint, after consulting with the Lenders
and Administrative Borrower, a successor Agent.  If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders with (so long as no Event of
Default has occurred and is continuing) the consent of Borrowers (such consent
not to be unreasonably withheld, delayed, or conditioned).  In any such event,
upon the acceptance of its appointment as successor Agent hereunder, such
successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term “Agent” shall mean such successor Agent and the
retiring Agent’s appointment, powers, and duties as Agent shall be
terminated.  After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 15 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.  If no
successor Agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above.
 
15.10 Lender in Individual Capacity.  Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, provide Bank Products to, acquire equity interests in and generally engage
in any kind of banking, trust, financial advisory, underwriting, or other
business with Parent and its Subsidiaries and Affiliates and any other Person
party to any Loan Documents as though such Lender were not a Lender hereunder
without notice to or consent of the other members of the Lender Group (or the
Bank Product Providers).  The other members of the Lender Group acknowledge (and
by entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to acknowledge) that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Parent or their
Affiliates or any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Parent or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver such
Lender will use its reasonable best efforts to obtain), such Lender shall not be
under any obligation to provide such information to them.
 

 
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15.11 Collateral Matters.
 
(a) The Lenders hereby irrevocably authorize (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent, at its option and in its discretion, to release, or subordinate, any Lien
on any of the Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations, or (ii) constituting property being sold
or disposed of if Administrative Borrower or any Loan Party certifies to Agent
that the sale or disposition is made in compliance with Section 6.4 (and Agent
may rely conclusively on any such certificate, without further inquiry), or
(iii) constituting property in which any Loan Party did not own an interest at
the time the security interest, mortgage or lien was granted or at any time
thereafter, or (iv) having a value in the aggregate in any twelve (12) month
period of less than $2,500,000, and to the extent Agent may release its Lien on
any such Collateral pursuant to the sale or other disposition thereof, such sale
or other disposition shall be deemed consented to by Lenders, or (v) if required
or permitted under the terms of any of the other Loan Documents, including any
intercreditor agreement, or (vi) constituting property leased to a Loan Party
under a lease that has expired or is terminated, or (vii) subject to Section
14.1, the Canadian Security Agreement and the Security Agreement, if the release
is approved, authorized or ratified in writing by the Required Lenders.  In no
event shall the consent or approval of an Issuing Lender to any release or
subordination of Collateral be required.  Nothing contained herein shall be
construed to require the consent of any Bank Product Provider to any release or
subordination of any Collateral or termination of security interests in any
Collateral.  Upon request by Agent or any Borrower at any time, the Lenders will
(and if so requested, the Bank Product Providers will) confirm in writing
Agent’s authority to release or subordinate any such Liens on particular types
or items of Collateral pursuant to this Section 15.11; provided, that, (1) Agent
shall not be required to execute any document necessary to evidence such release
or subordination on terms that, in Agent’s opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Lien without recourse, representation, or warranty, and (2) such
release or subordination shall not in any manner discharge, affect, or impair
the Obligations or any Liens (other than those expressly being released or
subordinated) upon (or obligations of any Borrower in respect of) all interests
retained by any Loan Party, including, the proceeds of any sale, all of which
shall continue to constitute part of the Collateral.  The Lenders further hereby
irrevocably authorize (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to authorize) Agent, at its option and in its
sole discretion, to subordinate any Lien granted to or held by Agent under any
Loan Document to the holder of any Permitted Lien on such property if such
Permitted Lien secures Permitted Purchase Money Indebtedness.
 
(b) The Loan Parties and the Lenders hereby irrevocably authorize (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) Agent, based upon the instruction of the Required Lenders,
to (A) consent to, credit bid or purchase (either directly or through one or
more acquisition vehicles) all or any portion of the Collateral at any sale
thereof conducted under the provisions of the Bankruptcy Code or other
bankruptcy laws, including under Section 363 of the Bankruptcy Code, (B) credit
bid or purchase (either directly or through one or more acquisition vehicles)
all or any portion of the Collateral at any sale or other disposition thereof
conducted under the provisions of the Code or the PPSA, including pursuant to
Sections 9-610 or 9-620 of the Code, or (C) credit bid or purchase (either
directly or through one or more acquisition vehicles) all or any portion of the
Collateral at any other sale or foreclosure conducted by Agent (whether by
judicial action or otherwise) in accordance with applicable law.  In connection
with any such credit bid or purchase, the Obligations owed to the Lenders and
the Bank Product Providers shall be entitled to be, and shall be, credit bid on
a ratable basis (with Obligations with respect to contingent or unliquidated
claims being estimated for such purpose if the fixing or liquidation thereof
would not unduly delay the ability of Agent to credit bid or purchase at such
sale or other disposition of the Collateral and, if such claims cannot be
estimated without unduly delaying the ability of Agent to credit bid, then such
claims shall be disregarded,
 

 
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not credit bid, and not entitled to any interest in the asset or assets
purchased by means of such credit bid) and the Lenders and the Bank Product
Providers whose Obligations are credit bid shall be entitled to receive
interests (ratably based upon the proportion of their Obligations credit bid in
relation to the aggregate amount of Obligations so credit bid) in the asset or
assets so purchased (or in the Equity Interests of the acquisition vehicle or
vehicles that are used to consummate such purchase).
 
(c) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank
Product Providers) to assure that the Collateral exists or is owned by a Loan
Party or is cared for, protected, or insured or has been encumbered, or that
Agent’s Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or that any
particular items of Collateral meet the eligibility criteria applicable in
respect thereof or whether to impose, maintain, reduce, or eliminate any
particular reserve hereunder or whether the amount of any such reserve is
appropriate or not, 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 Agent pursuant to any of
the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender (or Bank Product Provider) as to any of the
foregoing, except as otherwise provided herein.
 
15.12 Restrictions on Actions by Lenders; Sharing of Payments.
 
(a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent, set off against the Obligations, any
amounts owing by such Lender to Parent or its Subsidiaries or any deposit
accounts of Parent or its Subsidiaries now or hereafter maintained with such
Lender.  Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings to
enforce any Loan Document against any Borrower or any Guarantor or to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
 
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
 
15.13 Agency for Perfection.  Agent hereby appoints each other Lender (and each
Bank Product Provider) as its agent (and each Lender hereby accepts (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to accept) such appointment) for the purpose of perfecting
 

 
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Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as
applicable, of the Code or in accordance with the PPSA or the Securities
Transfer Act of any applicable jurisdictions in Canada can be perfected by
possession or control.  Should any Lender obtain possession or control of any
such Collateral, such Lender shall notify Agent thereof, and, promptly upon
Agent’s request therefor shall deliver possession or control of such Collateral
to Agent or in accordance with Agent’s instructions.
 
15.14 Payments by Agent to the Lenders.  All payments to be made by Agent to the
Lenders (or Bank Product Providers) shall be made by bank wire transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent.  Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, fees, or interest of the Obligations.
 
15.15 Concerning the Collateral and Related Loan Documents.  Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the
other Loan Documents.  Each member of the Lender Group agrees (and by entering
into a Bank Product Agreement, each Bank Product Provider shall be deemed to
agree) that any action taken by Agent in accordance with the terms of this
Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders (and such Bank Product Provider).
 
15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information.
 
(a) By becoming a party to this Agreement, each Lender:
 
(i) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field examination report respecting Parent
or its Subsidiaries (each, a “Report”) prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,
 
(ii) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
 
(iii) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Parent and its
Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’
books and records, as well as on representations of each Borrower’s personnel,
 
(iv) agrees to keep all Reports and other material, non-public information
regarding Parent and its Subsidiaries and their operations, assets, and existing
and contemplated business plans in a confidential manner in accordance with
Section 17.9, and
 
(v) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees:  (i) to hold Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including,
 

 
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attorneys fees and costs) incurred by Agent and any such other Lender preparing
a Report as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.
 
(b) In addition to the foregoing: (i) any Lender may from time to time request
of Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Parent or any Subsidiary of Parent to Agent that has not
been contemporaneously provided by Parent or its Subsidiaries to such Lender,
and, upon receipt of such request, Agent promptly shall provide a copy of same
to such Lender, (y) to the extent that Agent is entitled, under any provision of
the Loan Documents, to request additional reports or information from Parent or
its Subsidiaries, any Lender may, from time to time, reasonably request Agent to
exercise such right as specified in such Lender’s notice to Agent, whereupon
Agent promptly shall request of such Borrower the additional reports or
information reasonably specified by such Lender, and, upon receipt thereof from
Parent or its Subsidiaries, Agent promptly shall provide a copy of same to such
Lender, and (z) any time that Agent renders to any Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.
 
15.17 Agent May File Proofs of Claim.
 
(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, Agent (irrespective of whether
the principal of any Obligations or amounts owing in respect of Letters of
Credit shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Agent shall have made any demand on the
Borrowers) shall be entitled and empowered, by intervention in such proceeding
or otherwise:
 
(i) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Obligations and all other Obligations (other
than obligations under Bank Products to which Agent is not a party) that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of Lenders, Issuing Lenders and Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of Lenders, Issuing Lenders and Agent and their respective agents
and counsel and all other amounts due Lenders, Issuing Lenders and Agent allowed
in such judicial proceeding; and
 
(ii) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender and Issuing Lender
to make such payments to Agent and, in the event that Agent shall consent to the
making of such payments directly to Lenders and Issuing Lenders, to pay to Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of Agent and its agents and counsel, and any other amounts due Agent.
 
(b) Nothing contained herein shall be deemed to authorize Agent to authorize or
consent to or accept or adopt on behalf of any Lender or Issuing Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize Agent to vote in respect
of the claim of any Lender in any such proceeding.
 
15.18 Several Obligations; No Liability.  Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to
 

 
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exceed, in principal amount, at any one time outstanding, the amount of their
respective Commitments.  Nothing contained herein shall confer upon any Lender
any interest in, or subject any Lender to any liability for, or in respect of,
the business, assets, profits, losses, or liabilities of any other Lender.  Each
Lender shall be solely responsible for notifying its Participants of any matters
relating to the Loan Documents to the extent any such notice may be required,
and no Lender shall have any obligation, duty, or liability to any Participant
of any other Lender.  Except as provided in Section 15.7, no member of the
Lender Group shall have any liability for the acts of any other member of the
Lender Group.  No Lender shall be responsible to any Borrower or any other
Person for any failure by any other Lender (or Bank Product Provider) to fulfill
its obligations to make credit available hereunder, nor to advance for such
Lender (or Bank Product Provider) or on its behalf, nor to take any other action
on behalf of such Lender (or Bank Product Provider) hereunder or in connection
with the financing contemplated herein.
 
15.19 Appointment for the Province of Québec.  Without prejudice to Section 15.1
above, each member of the Lender Group hereby appoints Agent as the person
holding the power of attorney (fondé pouvoir) of the Lender Group as
contemplated under Article 2692 of the Civil Code of Québec, to enter into, to
take and to hold on their behalf, and for their benefit, any deed of hypothec
(“Deed of Hypothec”) to be executed by any of the Borrowers or Guarantors
granting a hypothec pursuant to the laws of the Province of Québec (Canada) and
to exercise such powers and duties which are conferred thereupon under such
deed.  All of the Lender Group hereby additionally appoints Agent as agent,
mandatary, custodian and depositary for and on behalf of the Lender Group (a) to
hold and to be the sole registered holder of any bond (“Bond”) issued under the
Deed of Hypothec, the whole notwithstanding any other applicable law, and (b) to
enter into, to take and to hold on their behalf, and for their benefit, a bond
pledge agreement (“Pledge”) to be executed by such Borrower or Guarantor
pursuant to the laws of the Province of Québec and creating a pledge of the Bond
as security for the payment and performance of, inter alia, the Obligations.  In
this respect, (i) Agent as agent, mandatary, custodian and depositary for and on
behalf of the Lender Group, shall keep a record indicating the names and
addresses of, and the pro rata portion of the obligations and indebtedness
secured by the Pledge, owing to each of the members of the Lender Group for and
on behalf of whom the Bond is so held from time to time, and (ii) each of the
members of the Lender Group will be entitled to the benefits of any property or
assets charged under the Deed of Hypothec and the Pledge and will participate in
the proceeds of realization of any such property or assets. Agent, in such
aforesaid capacities shall (A) have the sole and exclusive right and authority
to exercise, except as may be otherwise specifically restricted by the terms
hereof, all rights and remedies given to Agent with respect to the property or
assets charged under the Deed of Hypothec and Pledge, any other applicable law
or otherwise, and (B) benefit from and be subject to all provisions hereof with
respect to the Agent mutatis mutandis, including, without limitation, all such
provisions with respect to the liability or responsibility to and
indemnification by the Lender Group, the Borrowers or the Guarantors.  The
execution prior to the date hereof by Agent of any Deed of Hypothec, Pledge or
other security documents made pursuant to the laws of the Province of Québec
(Canada) is hereby ratified and confirmed.  The constitution of Agent as the
Person holding the power of attorney (fondé de pouvoir), and of Agent, as agent,
mandatary, custodian and depositary with respect to any bond that may be issued
and pledged from time to time to Agent for the benefit of the Lender Group,
shall be deemed to have been ratified and confirmed by each Person accepting an
assignment of, a participation in or an arrangement in respect of, all or any
portion of any of the Lender Group’s rights and obligations under this Agreement
by the execution of an assignment, including an Assignment and Acceptance
Agreement or other agreement pursuant to which it becomes such assignee or
participant, and by each successor Agent by the execution of an assignment
agreement or other agreement, or by the compliance with other formalities, as
the case may be, pursuant to which it becomes a successor Agent hereunder.
 

 
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16.  
WITHHOLDING TAXES.

 
16.1 No Setoff; Payments.  All payments made by any Loan Party under any Loan
Document will be made without setoff, counterclaim or other defense.  In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes unless deduction or
withholding of any Taxes is required under applicable law.  If any deduction or
withholding of any Indemnified Tax is required by law, the applicable Loan Party
shall pay such additional amounts as may be necessary so that, after such
required deduction or withholding of Indemnified Tax (including any Indemnified
Tax on the additional amounts payable under this Section 16.1), the amount
payable to the affected Agent or Lender (as applicable) is equal to same amount
that would have been so payable had no such deduction or withholding of
Indemnified Tax been required; provided, however, that Loan Parties shall not be
required to pay any additional amounts under this Section 16.1 to the extent
that the obligation to pay such additional amounts results from Agent’s or such
Lender’s own bad faith, willful misconduct or gross negligence (as finally
determined by a court of competent jurisdiction).  Loan Parties will furnish to
Agent as promptly as possible after the date the payment by Loan Parties of any
Tax in respect of any payment made by any Loan Party under any Loan Document is
due pursuant to applicable law, certified copies of tax receipts evidencing such
payment by Loan Parties or other evidence reasonably satisfactory to
Agent.  Loan Parties agree to pay any present or future stamp, value added or
documentary taxes or any other similar excise or property taxes, charges, or
levies that arise from any payment made hereunder or from the execution,
delivery, performance, recordation, or filing of, or otherwise with respect to
this Agreement or any other Loan Document.
 
16.2 Exemptions.
 
(a) If a Lender or Participant is entitled to claim an exemption or reduction
from United States withholding tax, such Lender or Participant agrees with and
in favor of Agent, to deliver to Administrative Borrower and Agent (or, in the
case of a Participant, to the Lender granting the participation only) one of the
following before receiving its first payment under the Loan Documents:
 
(i) if such Lender or Participant is entitled to claim an exemption from United
States withholding tax pursuant to the portfolio interest exception, (A) a
statement of the Lender or Participant, signed under penalty of perjury, that it
is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a
10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of
the IRC), or (III) a controlled foreign corporation related to any Borrower
within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed
and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);
 
(ii) if such Lender or Participant is entitled to claim an exemption from, or a
reduction of, withholding tax under a United States tax treaty, a properly
completed and executed copy of IRS Form W-8BEN;
 
(iii) if such Lender or Participant is entitled  to claim that interest paid
under this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, a
properly completed and executed copy of IRS Form W-8ECI;
 
(iv) if such Lender or Participant is entitled to claim that interest paid under
this Agreement is exempt from United States withholding tax because such Lender
or Participant serves as an intermediary, a properly completed and executed copy
of IRS Form W-8IMY (with proper attachments); or
 

 
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(v) a properly completed and executed copy of any other form or forms, including
IRS Form W-9, as may be required under the IRC or other laws of the United
States as a condition to exemption from, or reduction of, United States
withholding or backup withholding tax.
 
(b) Each Lender or Participant shall provide new forms (or successor forms) upon
the expiration, invalidity or obsolescence of any previously delivered forms and
shall promptly notify Administrative Borrower and Agent (or, in the case of a
Participant, to the Lender granting the participation only) in writing of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
 
(c) If a Lender or Participant claims an exemption from, or reduction of,
withholding or backup withholding tax in a jurisdiction other than the United
States, such Lender or such Participant agrees with and in favor of Agent and
the Administrative Borrower to deliver to Administrative Borrower and Agent  in
writing (or, in the case of a Participant, to the Lender granting the
participation only), before receiving its first payment under the Loan Documents
(and/or thereafter from time to time if reasonably requested by the Agent or
Administrative Borrower), any such form or other information as may be required
under the laws of such jurisdiction (including any administrative policy or
practice of such jurisdiction) as a condition to exemption from, or reduction
of, withholding or backup withholding tax, but only if such Lender or such
Participant is legally able to deliver such forms.  Each Lender and each
Participant shall provide new forms (or successor forms) or information upon the
expiration, invalidity or obsolescence of any previously delivered forms or
information and to promptly notify Administrative Borrower and Agent (or, in the
case of a Participant, to the Lender granting the participation only) in writing
of any change in circumstances which would modify or render invalid any claimed
exemption or reduction.
 
(d) If a Lender or Participant claims exemption from, or reduction of,
withholding tax and such Lender or Participant sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
Borrowers to such Lender or Participant, such Lender or Participant agrees to
notify Administrative Borrower and Agent (or, in the case of a sale of a
participation interest, to the Lender granting the participation only) of  the
percentage amount in which it is no longer the beneficial owner of Obligations
of Borrowers to such Lender or Participant.  To the extent of such percentage
amount, Agent will treat such Lender’s or such Participant’s documentation or
information provided pursuant to Section 16.2(a), 16.2(b) or 16.2(c) as no
longer valid.  With respect to such percentage amount, such Participant or
Assignee shall provide new documentation or information, pursuant to Section
16.2(a), 16.2(b) or 16.2(c), if applicable.  Each Borrower agrees that each
Participant shall be entitled to the benefits of this Section 16 (subject to the
limitations set forth in Section 13.1(e) and Section 14.2 as if the Participant
were a Lender) with respect to its participation in any portion of the
Commitments and the Obligations so long as such Participant complies with the
obligations set forth in this Section 16 with respect thereto.
 
16.3 Reductions.
 
(a) If a Lender or a Participant is entitled to a reduction in the applicable
withholding tax, Agent (or, in the case of a Participant, to the Lender granting
the participation) may deduct or withhold from any interest payment to such
Lender or such Participant an amount equivalent to the applicable withholding
tax after taking into account such reduction.  If the forms or other
documentation or information required by Section 16.2(a), 16.2(b) or 16.2(c) are
not delivered by a Lender or Participant to the applicable Loan Party or Agent
(or, in the case of a Participant, to the Lender granting the participation),
then the applicable Loan Party or Agent (or, in the case of a Participant, the
Lender granting the participation), as applicable, shall deduct or withhold
amounts required to be withheld by applicable laws from any payment to such
Lender or such Participant not providing such forms or other documentation or
information at the applicable statutory rate.
 

 
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(b) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that Agent (or, in the case of a Participant, to
the Lender granting the participation) did not properly deduct or withhold tax
from amounts paid to or for the account of any Lender or any Participant due to
a failure on the part of the Lender or any Participant (because the appropriate
form or information was not delivered, was not properly executed, or because
such Lender failed to notify Agent (or such Participant failed to notify the
Lender granting the participation) of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify and hold Agent harmless (or, in the
case of a Participant, such Participant shall indemnify and hold the Lender
granting the participation harmless) for all amounts paid, directly or
indirectly, by Agent (or, in the case of a Participant, to the Lender granting
the participation), as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
(or, in the case of a Participant, to the Lender granting the participation
only) under this Section 16, together with all costs and expenses (including
attorneys fees and expenses).  The obligation of the Lenders and the
Participants under this subsection shall survive the payment of all Obligations
and the resignation or replacement of Agent.
 
16.4 Refunds.  If Agent or a Lender determines, in its sole discretion, that it
has received a refund of any Taxes as to which it has been indemnified by
Borrowers or with respect to which Borrowers have paid additional amounts
pursuant to this Section 16, so long as no Default or Event of Default has
occurred and is continuing, it shall pay over such refund to Borrowers (but only
to the extent of payments made, or additional amounts paid, by Borrowers under
this Section 16 with respect to Taxes giving rise to such a refund), net of all
out-of-pocket expenses of Agent or such Lender and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such a
refund); provided, that Borrowers, upon the request of Agent or such Lender,
agree to repay the amount paid over to Borrowers (plus any penalties, interest
or other charges, imposed by the relevant Governmental Authority, other than
such penalties, interest or other charges imposed as a result of the bad faith,
willful misconduct or gross negligence of Agent hereunder) to Agent or such
Lender in the event Agent or such Lender is required to repay such refund to
such Governmental Authority.  Notwithstanding anything in this Agreement to the
contrary, this Section 16.4 shall not be construed to require Agent or any
Lender to make available its tax returns (or any other confidential  information
which it in good faith deems confidential) to any Borrower or any other Person.
 
17.  
GENERAL PROVISIONS.

 
17.1 Effectiveness.  This Agreement shall be binding and deemed effective when
executed by each Loan Party, Agent, and each Lender whose signature is provided
for on the signature pages hereof.
 
17.2 Section Headings.  Headings and numbers have been set forth herein for
convenience only.  Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
 
17.3 Interpretation.  Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or any Loan Party, whether
under any rule of construction or otherwise.  On the contrary, this Agreement
has been reviewed by all parties and shall be construed and interpreted
according to the ordinary meaning of the words used so as to accomplish fairly
the purposes and intentions of all parties hereto.
 
17.4 Severability of Provisions.  Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
 

 
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17.5 Bank Product Providers.  Each Bank Product Provider shall be deemed a third
party beneficiary hereof and of the provisions of the other Loan Documents for
purposes of any reference in a Loan Document to the parties for whom Agent is
acting.  Agent hereby agrees to act as agent for such Bank Product Providers
and, as a result of entering into a Bank Product Agreement, the applicable Bank
Product Provider shall be automatically deemed to have appointed Agent as its
agent and to have accepted the benefits of the Loan Documents; provided, that,
the rights and benefits of each Bank Product Provider under the Loan Documents
consist exclusively of such Bank Product Provider’s being a beneficiary of the
Liens and security interests (and, if applicable, guarantees) granted to Agent
and the right to share in proceeds of the Collateral as more fully set forth
herein. In addition, each Bank Product Provider, as a result of entering into a
Bank Product Agreement, shall be automatically deemed to have agreed that Agent
shall have the right, but shall have no obligation, to establish, maintain,
reduce, or release reserves in respect of the Bank Product Obligations and that
if reserves are established there is no obligation on the part of Agent to
determine or insure whether the amount of any such reserve is appropriate or
not.  In connection with any such distribution of payments or proceeds of
Collateral, Agent shall be entitled to assume no amounts are due or owing to any
Bank Product Provider unless such Bank Product Provider has provided a written
certification (setting forth a reasonably detailed calculation) to Agent as to
the amounts that are due and owing to it and such written certification is
received by Agent a reasonable period of time prior to the making of such
distribution.  Agent shall have no obligation to calculate the amount due and
payable with respect to any Bank Products, but may rely upon the written
certification of the amount due and payable from the relevant Bank Product
Provider.  In the absence of an updated certification, Agent shall be entitled
to assume that the amount due and payable to the applicable Bank Product
Provider is the amount last certified to Agent by such Bank Product Provider as
being due and payable (less any distributions made to such Bank Product Provider
on account thereof).  Any Borrower may obtain Bank Products from any Bank
Product Provider, although no Borrower is required to do so.  Each Borrower
acknowledges and agrees that no Bank Product Provider has committed to provide
any Bank Products and that the providing of Bank Products by any Bank Product
Provider is in the sole and absolute discretion of such Bank Product
Provider.  Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, no provider or holder of any Bank Product shall have any
voting or approval rights hereunder (or be deemed a Lender) solely by virtue of
its status as the provider or holder of such agreements or products or the
Obligations owing thereunder, nor shall the consent of any such provider or
holder be required (other than in their capacities as Lenders, to the extent
applicable) for any matter hereunder or under any of the other Loan Documents,
including as to any matter relating to the Collateral or the release of
Collateral or Guarantors.
 
17.6 Debtor-Creditor Relationship.  The relationship between the Lenders and
Agent, on the one hand, and the Loan Parties, on the other hand, is solely that
of creditor and debtor.  No member of the Lender Group has (or shall be deemed
to have) any fiduciary relationship or duty to any Loan Party arising out of or
in connection with the Loan Documents or the transactions contemplated thereby,
and there is no agency or joint venture relationship between the members of the
Lender Group, on the one hand, and the Loan Parties, on the other hand, by
virtue of any Loan Document or any transaction contemplated therein.
 
17.7 Counterparts; Electronic Execution.  This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.  Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this
Agreement.  Any party delivering an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity,
 

 
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enforceability, and binding effect of this Agreement.  The foregoing shall apply
to each other Loan Document mutatis mutandis.
 
17.8 Revival and Reinstatement of Obligations.  If the incurrence or payment of
the Obligations by any Borrower or Guarantor or the transfer to the Lender Group
of any property should for any reason subsequently be asserted, or declared, to
be void or voidable under any state or federal law relating to creditors’
rights, including provisions of the Bankruptcy Code (or under any bankruptcy or
insolvency laws of Canada, including the BIA, the CCAA and the Winding-Up and
Restructuring Act (Canada)) relating to fraudulent conveyances, preferences, or
other voidable or recoverable payments of money or transfers of property (each,
a “Voidable Transfer”), and if the Lender Group is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects to do so upon the
advice of counsel, then, as to any such Voidable Transfer, or the amount thereof
that the Lender Group is required or elects to repay or restore, and as to all
reasonable costs, expenses, and attorneys fees of the Lender Group related
thereto, the liability of Borrowers or Guarantor automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.
 
17.9 Confidentiality.
 
(a) Agent and Lenders each individually (and not jointly or jointly and
severally) agree that non-public information regarding Parent and its
Subsidiaries, their operations, assets, and existing and contemplated business
plans (“Confidential Information”) shall be treated by Agent and the Lenders in
a confidential manner, and shall not be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except:  (i) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group and to employees, directors and officers of any member of the
Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on
a “need to know” basis in connection with this Agreement and the transactions
contemplated hereby and on a confidential basis, (ii) to Subsidiaries and
Affiliates of any member of the Lender Group (including the Bank Product
Providers), provided that any such Subsidiary or Affiliate shall have agreed to
receive such information hereunder subject to the terms of this Section 17.9,
(iii) as may be required by regulatory authorities so long as such authorities
are informed of the confidential nature of such information, (iv) as may be
required by statute, decision, or judicial or administrative order, rule, or
regulation; provided that (x) prior to any disclosure under clause (iii) or
(iv), the disclosing party agrees to provide Administrative Borrower with prior
notice thereof, to the extent that it is practicable to do so and to the extent
that the disclosing party is permitted to provide such prior notice to Borrowers
pursuant to the terms of the applicable statute, decision, or judicial or
administrative order, rule, or regulation and (y) any disclosure under clause
(iii) or (iv) shall be limited to the portion of the Confidential Information as
may be required by such regulatory authority, statute, decision, or judicial or
administrative order, rule, or regulation, (v) as may be agreed to in advance in
writing by Borrowers, (vi) as requested or required by any Governmental
Authority pursuant to any subpoena or other legal process, provided, that, (x)
prior to any disclosure under this clause (vi) the disclosing party agrees to
provide Borrowers with prior written notice thereof, to the extent that it is
practicable to do so and to the extent that the disclosing party is permitted to
provide such prior written notice to Borrowers pursuant to the terms of the
subpoena or other legal process and (y) any disclosure under this clause (vi)
shall be limited to the portion of the Confidential Information as may be
required by such Governmental Authority pursuant to such subpoena or other legal
process, (vii) as to any such information that is or becomes generally available
to the public (other than as a result of prohibited disclosure by Agent or the
Lenders or the Lender Group Representatives), (viii) in connection with any
assignment, participation  or pledge of any Lender’s interest under this
Agreement, provided that prior to receipt of Confidential Information any such
assignee, participant, or pledgee shall have agreed in writing to receive such
Confidential Information hereunder subject to the terms of this Section, (ix) in
connection with any litigation or other adversary proceeding involving parties
hereto which such litigation or adversary proceeding involves claims related to
the rights or duties of such parties under this Agreement
 

 
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or the other Loan Documents; provided, that, prior to any disclosure to any
Person (other than any Loan Party, Agent, any Lender, any of their respective
Affiliates, or their respective counsel) under this clause (ix) with respect to
litigation involving any Person (other than any Borrower, Agent, any Lender, any
of their respective Affiliates, or their respective counsel), the disclosing
party agrees to provide Borrowers with prior written notice thereof, and (x) in
connection with, and to the extent reasonably necessary for, the exercise of any
secured creditor remedy under this Agreement or under any other Loan Document.
 
(b) Anything in this Agreement to the contrary notwithstanding, Agent may
disclose information concerning the terms and conditions of this Agreement and
the other Loan Documents to loan syndication and pricing reporting services or
for its marketing materials, with such information to consist of deal terms and
other information customarily found in such publications or marketing materials
and may otherwise use the name, logos, and other insignia of Borrowers and Loan
Parties and the Commitments provided hereunder in any “tombstone” or other
advertisements, on its website or in other marketing materials of the Agent.
 
17.10 Lender Group Expenses.  Borrowers agree to pay any and all Lender Group
Expenses promptly upon demand therefor by Agent.  Borrowers agree that their
respective obligations contained in this Section 17.10 shall survive payment or
satisfaction in full of all other Obligations.
 
17.11 Survival.  All representations and warranties made by the Loan Parties in
the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that Agent,
the Issuing Lender, or any Lender may have had notice or knowledge of any
Default or Event of Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated.
 
17.12 Patriot Act.  Each Lender that is subject to the requirements of the
Patriot Act hereby notifies Borrowers that pursuant to the requirements of the
Act, it is required to obtain, verify and record information that identifies
each Borrower, which information includes the name and address of each Borrower
and other information that will allow such Lender to identify each Borrower in
accordance with the Patriot Act.  In addition, if Agent is required by law or
regulation or internal policies to do so, it shall have the right to
periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary
individual background checks for the Loan Parties and (b) OFAC/PEP searches and
customary individual  background checks for the Loan Parties’ senior management
and key principals, and each Borrower agrees to cooperate in respect of the
conduct of such searches and further agrees that the reasonable costs and
charges for such searches shall constitute Lender Expenses hereunder and be for
the account of such Borrower.
 
17.13 Integration.  This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.  The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.
 

 
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17.14 Administrative Borrower as Agent for Borrowers.
 
(a) Each Borrower hereby irrevocably appoints and constitutes Parent
(“Administrative Borrower”) as its agent and attorney-in-fact to request and
receive Loans and Letters of Credit pursuant to this Agreement and the other
Loan Documents from Agent or any Lender or Issuing Lender in the name or on
behalf of such Borrower.  Agent, Lenders and Issuing Lenders may disburse the
Loans to such bank account of Administrative Borrower or a Borrower or otherwise
make such Loans to a Borrower and provide such Letters of Credit to a Borrower
as Administrative Borrower may designate or direct, without notice to any other
Borrower or Guarantor.  Notwithstanding anything to the contrary contained
herein, Agent may at any time and from time to time require that Loans to or for
the account of any Borrower be disbursed directly to an operating account of
such Borrower.
 
(b) Administrative Borrower hereby accepts the appointment by Borrowers to act
as the agent and attorney-in-fact of Borrowers pursuant to this Section
17.14.  Administrative Borrower shall ensure that the disbursement of any Loans
to each Borrower requested by or paid to or for the account of Parent, or the
issuance of any Letter of Credit for a Borrower hereunder, shall be paid to or
for the account of such Borrower.
 
(c) Each Borrower and Guarantor hereby irrevocably appoints and constitutes
Administrative Borrower as its agent to receive statements on account and all
other notices from Agent, Lenders and Issuing Lenders with respect to the
Obligations or otherwise under or in connection with this Agreement and the
other Loan Documents.
 
(d) Any notice, election, representation, warranty, agreement or undertaking by
or on behalf of any other Borrower or any Guarantor by Administrative Borrower
shall be deemed for all purposes to have been made by such Borrower or
Guarantor, as the case may be, and shall be binding upon and enforceable against
such Borrower or Guarantor to the same extent as if made directly by such
Borrower or Guarantor.
 
(e) No resignation or termination of the appointment of Administrative Borrower
as agent as aforesaid shall be effective, except after ten (10) Business Days’
prior written notice to Agent. If the Administrative Borrower resigns under this
Agreement, Borrowers shall be entitled to appoint a successor Administrative
Borrower (which shall be a Borrower).  Upon the acceptance of its appointment as
successor Administrative Borrower hereunder, such successor Administrative
Borrower shall succeed to all the rights, powers and duties of the retiring
Administrative Borrower and the term “Administrative Borrower” shall mean such
successor Administrative Borrower and the retiring or terminated Administrative
Borrower’s appointment, powers and duties as Administrative Borrower shall be
terminated.
 
17.15 Currency Indemnity.  If, for the purposes of obtaining judgment in any
court in any jurisdiction with respect to this Agreement or any of the other
Loan Documents, it becomes necessary to convert into the currency of such
jurisdiction (the “Judgment Currency”) any amount due under this Agreement or
under any of the other Loan Documents in any currency other than the Judgment
Currency (the “Currency Due”), then conversion shall be made at the exchange
rate at which Agent is able, on the relevant date, to purchase the Currency Due
with the Judgment Currency prevailing on the Business Day before the day on
which judgment is given.  In the event that there is a change in the rate of
exchange rate prevailing between the Business Day before the day on which the
judgment is given and the date of receipt by Agent of the amount due, Borrowers
will, on the date of receipt by Agent, pay such additional amounts, if any, as
may be necessary to ensure that the amount received by Agent on such date is the
amount in the Judgment Currency which when converted at the rate of exchange
prevailing on the date of receipt by Agent is the amount then due under this
Agreement or such other of the Loan Documents in the
 

 
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Currency Due.  If the amount of the Currency Due which Agent is able to purchase
is less than the amount of the Currency Due originally due to it, Borrowers and
Guarantors shall indemnify and save Agent harmless from and against loss or
damage arising as a result of such deficiency.  If the amount of the Judgment
Currency which Agent is able to purchase is greater than the amount of the
Judgment Currency original due it, Agent agrees, so long as no Event of Default
has occurred and is continuing, to return the amount of any excess to Borrowers
(or to any other Person who may be entitled thereto under applicable law).  The
indemnity contained herein shall constitute an obligation separate and
independent from the other obligations contained in this Agreement and the other
Loan Documents, shall give rise to a separate and independent cause of action,
shall apply irrespective of any indulgence granted by any Agent from time to
time and shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum in respect of an amount due under this Agreement or
any of the other Loan Documents or under any judgment or order.
 
17.16 Anti-Money Laundering Legislation.
 
(a) Each Loan Party acknowledges that, pursuant to the Proceeds of Crime Money
Laundering) and Terrorist Financing Act (Canada) and other applicable anti-money
laundering, anti-terrorist financing, government sanction and “know your client”
laws, under the laws of Canada (collectively, including any guidelines or orders
thereunder, “AML Legislation”), Agent and Lenders may be required to obtain,
verify and record information regarding each Loan Party, its respective
directors, authorized signing officers, direct or indirect shareholders or other
Persons in control of such Loan Party, and the transactions contemplated
hereby.  Administrative Borrower shall promptly provide all such information,
including supporting documentation and other evidence, as may be reasonably
requested by any Lender or Agent, or any prospective assign or participant of a
Lender or Agent, necessary in order to comply with any applicable AML
Legislation, whether now or hereafter in existence.
 
(b) If Agent has ascertained the identity of any Loan Party or any authorized
signatories of any Loan Party for the purposes of applicable AML Legislation,
then the Agent:
 
(i) shall be deemed to have done so as an agent for each Lender, and this
Agreement shall constitute a “written agreement” in such regard between each
Lender and the Agent within the meaning of applicable AML Legislation; and
 
(ii) shall provide to each Lender copies of all information obtained in such
regard without any representation or warranty as to its accuracy or
completeness.
 
(c) Notwithstanding the provisions of this Section and except as may otherwise
be agreed in writing, each Lender agrees that Agent has no obligation to
ascertain the identity of the Loan Parties or any authorized signatories of the
Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy
of any information it obtains from the Loan Parties or any such authorized
signatory in doing so.
 
17.17 Quebec Interpretation.  For all purposes pursuant to which the
interpretation or construction of this Agreement may be subject to the laws of
the Province of Quebec or a court or tribunal exercising jurisdiction in the
Province of Quebec, (a) “personal property” shall include “movable property”,
(b) “real property” shall include “immovable property”, (c) “tangible property”
shall include “corporeal property”, (d) “intangible property” shall include
“incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall
include a “hypothec”, “prior claim” and a “resolutory clause”, (f) all
references to filing, registering or recording under the Code or PPSA shall
include publication under the Civil Code of Quebec, (g) all references to
“perfection” of or “perfected” liens or security interest shall include a
reference to an “opposable” or “set up” lien or security interest as against
third parties, (h) any “right of offset”, “right of setoff” or similar
expression shall include a “right of compensation”,
 

 
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 (i) “goods” shall include corporeal movable property” other than chattel paper,
documents of title, instruments, money and securities, (j) an “agent” shall
include a “mandatary”, (k) “construction liens” shall include “legal hypothecs”,
(l) “joint and several” shall include solidary, (m) “gross negligence or willful
misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial
ownership” shall include “ownership on behalf of another as mandatary”, (o)
“easement” shall include “servitude”, (p) “priority” shall include “prior
claim”, (q) “survey” shall include “certificate of location and plan”, and (r)
“fee simple title” shall include “absolute ownership”.
 
[Signature pages to follow.]
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 
COLT DEFENSE LLC
 
 
By:  /s/ Scott B. Flaherty
Title:  Chief Financial Officer
 
 
COLT CANADA CORPORATION
 
 
By:  /s/ Scott B. Flaherty
Title:  Chief Financial Officer
 
 
COLT FINANCE CORP.
 
 
By:  /s/ Scott B. Flaherty
Title:  Chief Financial Officer
 
 
WELLS FARGO CAPITAL FINANCE, LLC,
as Agent and as a Lender
 
 
By:  /s/ Casmir Mazurkiewicz
Title:  Director
 
 
WELLS FARGO CAPITAL FINANCE CORPORATION CANADA
 
 
By:  /s/ Domenic Cosentino
Title:  Vice President