exv10w1



 





EXHIBIT 10.1




 





SECOND AMENDED AND RESTATED CREDIT AGREEMENT




dated as of October 26, 2007




among




T-3 ENERGY SERVICES, INC.,




as US Borrower,




T3 ENERGY SERVICES

(FORMERLY KNOWN AS T-3 OILCO ENERGY SERVICES PARTNERSHIP),




as Canadian Borrower,




WELLS FARGO BANK, NATIONAL ASSOCIATION,




as US Administrative Agent, US Issuing Lender and US Swingline Lender,




and as Lead Arranger,




COMERICA BANK, a Michigan banking corporation

and an authorized foreign bank under the Bank Act (Canada) acting

through its Canadian branch,




as Canadian Administrative Agent, Canadian Issuing Lender and Canadian Swingline Lender,




and




the Lenders




Revolving Credit Facility

(with Swing Lines and Letters of Credit)




 





 









 





Table of Contents




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE I Definitions	 	 	1	 
	 
	 	Section 1.1	 	Definitions	 	 	1	 
	 
	 	Section 1.2	 	Other Definitional Provisions	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II Advances and Letters of Credit	 	 	21	 
	 
	 	Section 2.1	 	Aggregate Commitments	 	 	21	 
	 
	 	Section 2.2	 	The Notes	 	 	22	 
	 
	 	Section 2.3	 	Repayment of Advances	 	 	23	 
	 
	 	Section 2.4	 	Interest	 	 	23	 
	 
	 	Section 2.5	 	Use of Proceeds	 	 	23	 
	 
	 	Section 2.6	 	Commitment Fee	 	 	24	 
	 
	 	Section 2.7	 	Reduction or Termination of Aggregate Commitments	 	 	24	 
	 
	 	Section 2.8	 	Letters of Credit	 	 	24	 
	 
	 	Section 2.9	 	Payments and Reimbursement Under Letters of Credit	 	 	25	 
	 
	 	Section 2.10	 	Optional Commitment Increase	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III Swing Line Advances	 	 	30	 
	 
	 	Section 3.1	 	Swing Line Advances	 	 	30	 
	 
	 	Section 3.2	 	Lenders' Funding of Swing Line Advances as Advances	 	 	31	 
	 
	 	Section 3.3	 	The Swing Line Notes	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV Borrowing Procedure: Payments; Facilities Fees;
Matters Related to Letters
of Credit; Matters Related to Advances; Designation of
Canadian Resident Lenders	 	 	32	 
	 
	 	Section 4.1	 	Borrowing Procedure	 	 	32	 
	 
	 	Section 4.2	 	Method of Payment	 	 	34	 
	 
	 	Section 4.3	 	Voluntary Prepayment	 	 	35	 
	 
	 	Section 4.4	 	Mandatory Prepayment	 	 	35	 
	 
	 	Section 4.5	 	Pro Rata Treatment	 	 	37	 
	 
	 	Section 4.6	 	Non-Receipt of Funds by the Administrative Agents	 	 	37	 
	 
	 	Section 4.7	 	Withholding Tax Exemption	 	 	37	 
	 
	 	Section 4.8	 	Computation of Interest	 	 	38	 
	 
	 	Section 4.9	 	Conversions and Continuation	 	 	38	 
	 
	 	Section 4.10	 	Letter of Credit Procedure	 	 	38	 
	 
	 	Section 4.11	 	Amendments to Letters of Credit	 	 	39	 
	 
	 	Section 4.12	 	Letter of Credit Fees	 	 	39	 
	 
	 	Section 4.13	 	Participation by Lenders	 	 	39	 
	 
	 	Section 4.14	 	Obligations Absolute	 	 	40	 
	 
	 	Section 4.15	 	Limitation of Liability	 	 	40	 
	 
	 	Section 4.16	 	Letter of Credit Agreements	 	 	41	 
	 
	 	Section 4.17	 	Replacement of either of the Issuing Lenders	 	 	41	 
	 
	 	Section 4.18	 	No Advances	 	 	41	 
	 
	 	Section 4.19	 	Special Provisions for Canadian Lenders	 	 	41	 






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Table of Contents

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE V Yield Protection and Illegality	 	 	42	 
	 
	 	Section 5.1	 	Capital Adequacy	 	 	42	 
	 
	 	Section 5.2	 	Additional Costs	 	 	42	 
	 
	 	Section 5.3	 	Limitation on LIBOR Advances	 	 	43	 
	 
	 	Section 5.4	 	Illegality	 	 	44	 
	 
	 	Section 5.5	 	Treatment of Certain LIBOR Advances	 	 	44	 
	 
	 	Section 5.6	 	Compensation	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI Security	 	 	45	 
	 
	 	Section 6.1	 	Collateral	 	 	45	 
	 
	 	Section 6.2	 	Setoff	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII Conditions Precedent	 	 	47	 
	 
	 	Section 7.1	 	Conditions to Initial Advance	 	 	47	 
	 
	 	Section 7.2	 	All Advances	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII Representations and Warranties	 	 	50	 
	 
	 	Section 8.1	 	Corporate Existence	 	 	50	 
	 
	 	Section 8.2	 	Projections; Financial Statements	 	 	50	 
	 
	 	Section 8.3	 	Corporate Action: No Breach	 	 	51	 
	 
	 	Section 8.4	 	Operation of Business	 	 	51	 
	 
	 	Section 8.5	 	Litigation and Judgments	 	 	51	 
	 
	 	Section 8.6	 	Rights in Properties: Liens	 	 	51	 
	 
	 	Section 8.7	 	Enforceability	 	 	51	 
	 
	 	Section 8.8	 	Approvals	 	 	52	 
	 
	 	Section 8.9	 	Debt	 	 	52	 
	 
	 	Section 8.10	 	Taxes	 	 	52	 
	 
	 	Section 8.11	 	Use of Proceeds: Margin Securities	 	 	52	 
	 
	 	Section 8.12	 	ERISA	 	 	52	 
	 
	 	Section 8.13	 	Disclosure	 	 	53	 
	 
	 	Section 8.14	 	Subsidiaries	 	 	53	 
	 
	 	Section 8.15	 	Agreements	 	 	53	 
	 
	 	Section 8.16	 	Compliance with Laws	 	 	53	 
	 
	 	Section 8.17	 	Investment Company Act	 	 	53	 
	 
	 	Section 8.18	 	Environmental Matters	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX Affirmative Covenants	 	 	55	 
	 
	 	Section 9.1	 	Reporting Requirements	 	 	55	 
	 
	 	Section 9.2	 	Maintenance of Existence: Conduct of Business	 	 	57	 
	 
	 	Section 9.3	 	Maintenance of Properties	 	 	57	 
	 
	 	Section 9.4	 	Taxes and Claims	 	 	58	 
	 
	 	Section 9.5	 	Insurance	 	 	58	 
	 
	 	Section 9.6	 	Inspection Rights	 	 	58	 
	 
	 	Section 9.7	 	Keeping Books and Records	 	 	59	 






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Table of Contents

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	Section 9.8	 	Compliance with Laws	 	 	59	 
	 
	 	Section 9.9	 	Compliance with Agreements	 	 	59	 
	 
	 	Section 9.10	 	Further Assurances	 	 	59	 
	 
	 	Section 9.11	 	ERISA	 	 	59	 
	 
	 	Section 9.12	 	Additional Subsidiaries as Guarantors: Execution of Additional Security Agreements-Guarantors	 	 	59	 
	 
	 	Section 9.13	 	Continuity of Operations	 	 	60	 
	 
	 	Section 9.14	 	Intercompany Notes	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X Negative Covenants	 	 	60	 
	 
	 	Section 10.1	 	Debt	 	 	60	 
	 
	 	Section 10.2	 	Limitation on Liens	 	 	62	 
	 
	 	Section 10.3	 	Mergers, Dissolutions, Etc	 	 	63	 
	 
	 	Section 10.4	 	Loans and Investments	 	 	64	 
	 
	 	Section 10.5	 	Transactions With Affiliates	 	 	64	 
	 
	 	Section 10.6	 	Disposition of Assets	 	 	65	 
	 
	 	Section 10.7	 	Sale and Leaseback	 	 	65	 
	 
	 	Section 10.8	 	Nature of Business	 	 	65	 
	 
	 	Section 10.9	 	Environmental Protection	 	 	65	 
	 
	 	Section 10.10	 	Accounting	 	 	66	 
	 
	 	Section 10.11	 	Changes to Subordinated Debt	 	 	66	 
	 
	 	Section 10.12	 	Restrictions on Certain Subsidiaries	 	 	66	 
	 
	 	Section 10.13	 	Restricted Payments	 	 	66	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI Financial Covenants	 	 	67	 
	 
	 	Section 11.1	 	Interest Coverage Ratio	 	 	67	 
	 
	 	Section 11.2	 	Leverage Ratio	 	 	67	 
	 
	 	Section 11.3	 	Capital Expenditures	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XII Default	 	 	67	 
	 
	 	Section 12.1	 	Events of Default	 	 	67	 
	 
	 	Section 12.2	 	Remedies Upon Default	 	 	69	 
	 
	 	Section 12.3	 	Letter of Credit	 	 	70	 
	 
	 	Section 12.4	 	Performance by the Administrative Agents	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIII The Administrative Agents	 	 	70	 
	 
	 	Section 13.1	 	Appointment, Powers and Immunities	 	 	70	 
	 
	 	Section 13.2	 	Certain Rights of Administrative Agents	 	 	72	 
	 
	 	Section 13.3	 	Sharing of Payments, Etc	 	 	73	 
	 
	 	Section 13.4	 	Indemnification	 	 	73	 
	 
	 	Section 13.5	 	Independent Credit Decisions	 	 	74	 
	 
	 	Section 13.6	 	Several Commitments	 	 	74	 
	 
	 	Section 13.7	 	Successor Administrative Agents	 	 	75	 






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Table of Contents

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE XIV Miscellaneous	 	 	75	 
	 
	 	Section 14.1	 	Expenses	 	 	75	 
	 
	 	Section 14.2	 	Indemnification	 	 	76	 
	 
	 	Section 14.3	 	Limitation of Liability	 	 	76	 
	 
	 	Section 14.4	 	No Duty	 	 	76	 
	 
	 	Section 14.5	 	Lender Not Fiduciary	 	 	77	 
	 
	 	Section 14.6	 	No Waiver; Cumulative Remedies	 	 	77	 
	 
	 	Section 14.7	 	Successors and Assigns	 	 	77	 
	 
	 	Section 14.8	 	Survival	 	 	80	 
	 
	 	Section 14.9	 	ENTIRE AGREEMENT; AMENDMENTS	 	 	80	 
	 
	 	Section 14.10	 	Maximum Interest Rate	 	 	81	 
	 
	 	Section 14.11	 	Notices; Electronic Communications	 	 	81	 
	 
	 	Section 14.12	 	GOVERNING LAW; VENUE; SERVICE OF PROCESS	 	 	82	 
	 
	 	Section 14.13	 	Counterparts; Facsimiles	 	 	83	 
	 
	 	Section 14.14	 	Severability	 	 	83	 
	 
	 	Section 14.15	 	Headings	 	 	83	 
	 
	 	Section 14.16	 	Non-Application of Chapter 346 of Texas Finance Code	 	 	83	 
	 
	 	Section 14.17	 	Construction	 	 	83	 
	 
	 	Section 14.18	 	Independence of Covenants	 	 	84	 
	 
	 	Section 14.19	 	Waiver of Trial By Jury	 	 	84	 
	 
	 	Section 14.20	 	Amendment and Restatement; Release	 	 	84	 
	 
	 	Section 14.21	 	Provisions Related to Canadian Loans	 	 	85	 
	 
	 	Section 14.22	 	Appointment	 	 	85	 






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	Schedules	 	 
	 
	1.1
	 	Aggregate Commitments
	1.2
	 	Existing Letters of Credit
	8.5
	 	Litigation
	8.10
	 	Tax Matters
	8.14
	 	Subsidiaries
	8.18
	 	Environmental Matters
	9.14
	 	Intercompany Notes
	10.1
	 	Existing Permitted Debt
	10.5
	 	Transactions with Affiliates
	14.11
	 	Addresses for Notice






	 	 	 
	Exhibits	 	 
	 
	A-1
	 	Revolving Credit Note
	A-2
	 	Canadian Note
	A-3
	 	US Swing Line Note
	A-4
	 	Canadian Swing Line Note
	B
	 	Advance Request Form (US)
	B-1
	 	Advance Request Form (Canadian)
	C
	 	Compliance Certificate
	D
	 	Assignment and Acceptance






v 









 






SECOND AMENDED AND RESTATED CREDIT AGREEMENT




     THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 26, 2007 (this
“Agreement”), is among T-3 ENERGY SERVICES, INC., a Delaware corporation (the
“US Borrower”), T3 ENERGY SERVICES (formerly known as T-3 Oilco Energy Services
Partnership), an Alberta general partnership (the “Canadian Borrower”), each of the banks
or other lending institutions which is or which may from time to time become a signatory hereto or
any successor or assignee thereof, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for itself and the other US Lenders (in such capacity,
together with its successors in such capacity, the “US Administrative Agent”) and COMERICA
BANK, a Michigan banking corporation and an authorized foreign bank under the Bank Act (Canada)
acting through its Canadian branch, as agent for itself and the other Canadian Lenders in
connection with the Canadian Advances (as defined herein) (in such capacity, together with its
successors in such capacity, the “Canadian Administrative Agent”).



RECITALS:




     A. The Borrowers, US Administrative Agent, and certain lenders have previously entered into
that certain First Amended and Restated Credit Agreement dated as of September 30, 2004 (as the
same has been amended, modified, or supplemented, the “Existing Credit Agreement”).



     B. The Borrowers have requested and the Administrative Agents and the Lenders have agreed to
restructure and increase the credit facilities provided under the Existing Credit Agreement to
provide for $180,000,000 of revolving credit facilities (with an option to increase such amount up
to an aggregate amount no greater than $250,000,000) and to amend and restate (but not extinguish)
the Existing Credit Agreement in its entirety upon the terms and conditions hereinafter set forth.



     C. It is the intention of the parties hereto that this Agreement is an amendment and
restatement of the Existing Agreement, not a new or substitute credit agreement or novation of the
Existing Credit Agreement.



     In consideration of the premises, covenants and agreements herein contained, and of the loans,
extensions of credit and commitments hereinafter referred to, the parties hereto agree that the
Existing Credit Agreement is amended and restated (but not substituted or extinguished) and further
as follows:



ARTICLE I




Definitions




     Section 1.1 Definitions. As used in this Agreement, the following terms have the
following meanings:



     “Additional Costs” is defined Section 5.2.



 









 





     “Additional Lender” is defined in Section 2.10(c).



     “Adjusted LIBOR Rate” means, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) determined by the US
Administrative Agent to be equal to (a) LIBOR for the applicable Interest Period divided by (b) the
difference of 1 minus the Reserve Requirement for such LIBOR Advance for such Interest Period.



     “Administrative Agent” means the US Administrative Agent or the Canadian
Administrative Agent, as the context may require.



     “Advance” means, as the context may require, (a) a US Revolving Credit Advance, (b) a
Swing Line Advance, (c) a Canadian Advance, (d) a payment under a US Letter of Credit, or (e) a
payment under a Canadian Letter of Credit.



     “Advance Request Form” means (a) in the case of US Revolving Credit Advances, US Swing
Line Advances, and payment under a US Letter of Credit, a certificate, in substantially the form
attached hereto as Exhibit B, properly completed and signed by an Authorized Representative
of the US Borrower and (b) in the case of Canadian Advances, Canadian Swing Line Advances, and a
payment under a Canadian Letter of Credit, a certificate, in substantially the form attached hereto
as Exhibit B-1, properly completed and executed by an Authorized Representative of the
Canadian Borrower.



     “Affiliate” means, as to any Person, any other Person (a) that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under common control with,
such Person; (b) that directly or indirectly beneficially owns or holds 10% or more of any class of
voting stock of such Person; or (c) 10% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Person in question. The term “control” means the
possession, directly or indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall any of the Administrative Agents, the Issuing
Lenders and the Lenders be deemed an Affiliate of the Borrowers or any of their Subsidiaries.



     “Aggregate Commitments” means, collectively, the US Revolving Credit Commitments and
the Canadian Commitments.



     “Applicable Lending Office” means for each Lender and each Type of Advance, the
Lending Office of such Lender (or of an Affiliate of such Lender) designated for such Type of
Advance below its name on the signature pages hereof or such other office of the Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to the applicable one of the
Borrowers as the office by which its Advances of such Type are to be made and maintained.



     “Applicable Margin” means, on any date of determination of the interest rate for any
Base Rate Advance or LIBOR Advance or of the commitment fee described in Section 2.6, the
applicable percentage set forth in the table below for such Advance or fee, as appropriate, which
corresponds to the Leverage Ratio:



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	 	 	Applicable	 	 	 	 
	 	 	Margin for	 	 	 	 
	 	 	Base Rate	 	Applicable	 	 
	 	 	Advances and	 	Margin for	 	Applicable Margin
	Leverage	 	Swing Line	 	LIBOR	 	for Commitment
	Ratio	 	Advances	 	Advances	 	Fee
	Greater than or
equal to 3.00 to
1.00
	 	 	1.25	%	 	 	2.25	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 2.50 to
1.00, but less than
3.00 to 1.00
	 	 	1.00	%	 	 	2.00	%	 	 	0.375	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 2.00 to
1.00, but less than
2.50 to 1.00
	 	 	0.75	%	 	 	1.75	%	 	 	0.350	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 1.50 to
1.00, but less than
2.00 to 1.00
	 	 	0.50	%	 	 	1.50	%	 	 	0.300	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Greater than or
equal to 1.00 to
1.00, but less than
1.50 to 1.00
	 	 	0.25	%	 	 	1.25	%	 	 	0.250	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Less than 1.00 to
1.00
	 	 	0.00	%	 	 	1.00	%	 	 	0.200	%






     From the date hereof until the US Administrative Agent receives the US Borrower’s financial
statements for the Fiscal Quarter ending September 30, 2007, the Applicable Margin shall be deemed
to be (a) 1.25% for LIBOR Advances, (b) 0.25% for Base Rate Advances, and (c) 0.25% for the
commitment fee described in Section 2.6. Any change in the Leverage Ratio shall be
effective to adjust the Applicable Margin as of the date of the most recently delivered Compliance
Certificate. If the US Borrower fails to deliver the Compliance Certificate and financial
statements within the times specified in this Agreement, such ratio shall be deemed to be greater
than 3.00 to 1.00 until the US Borrower delivers such Compliance Certificate and financial
statements, but upon such delivery, the Applicable Margin shall be determined based on such
Compliance Certificate and the US Borrower’s financial statements.



     In the event that any financial statement delivered pursuant to Section 9.1(a) or
9.1(b) or any Compliance Certificate delivered pursuant to Section 9.1(c) is shown
to be inaccurate (regardless of whether this Agreement or the Aggregate Commitments are in effect
when such inaccuracy is discovered), and such inaccuracy, if corrected, would have lead to a higher
Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin
applied for such Applicable Period, then (i) the US Borrower shall immediately deliver to the



3









 







US Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the
Applicable Margin shall be determined using the Leverage Ratio applicable for such Applicable
Period based upon the corrected Compliance Certificate, and (iii) the Borrowers shall immediately
pay to the Administrative Agents the accrued additional interest and fees owing as a result of such
increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by
the Administrative Agents in accordance with the terms hereof. This paragraph shall not limit the
rights of the Administrative Agents and the Lenders under Section 2.4 and
Article XII and other provisions of this Agreement. The obligations of each Borrower under
this paragraph shall survive termination of the Aggregate Commitments and the repayment of all
other Obligations hereunder.



     “Applicable Rate” means the sum of (a) the Base Rate or Adjusted LIBOR Rate, as the
case may be, plus (b) the Applicable Margin for the Base Rate or Adjusted LIBOR Rate, as the case
may be, from time to time in effect.



     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) any entity or an Affiliate of an entity that administers or manages a
Lender.



     “Asset Sale” means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or sale and leaseback
transaction) (collectively, a “transfer”) by the US Borrower or any of its Subsidiaries,
directly or indirectly, in one or a series of related transactions, to any Person other than the
US Borrower or any of its Subsidiaries of (a) any Capital Stock of any of US Borrower’s
Subsidiaries, (b) all or substantially all of the properties and assets of the US Borrower and its
Subsidiaries representing a division or line of business or (c) any other properties or assets of
the US Borrower or any of its Subsidiaries, other than in the ordinary course of business. For
purposes of this definition, the term “Asset Sale” does not include (i) any transfer of
properties or assets between or among the US Borrower and the Guarantors pursuant to transactions
that do not violate any provision of this Agreement, or (ii) the sale or issuance of the
US Borrower’s Capital Stock.



     “Assignee” is defined Section 14.7(b).



     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.



     “Assignment and Acceptance” means an Assignment and Acceptance, in substantially the
form attached hereto as Exhibit D with appropriate completions.



     “Authorized Representative” means any officer or employee who has been designated in
writing by a Borrower to the Administrative Agents to be an Authorized Representative of such
Borrower.



     “Base Rate” means (a) with respect to the Canadian Advances, the Canadian Prime Rate,
and (b) with respect to the US Revolving Credit Advances, for any day, a per annum interest rate
equal to the higher of (i) the sum of 0.50% plus the Federal Funds Rate on such day or (ii) the
Prime Rate on such day. The Base Rate shall be adjusted automatically as of the opening of



4









 







business on the effective date of each change in the Canadian Prime Rate, the Prime Rate or Federal
Funds Rate, as applicable, to account for such change.



     “Base Rate Advances” means Advances that bear interest at rates based upon the Base
Rate.



     “Borrowers” means, collectively, the US Borrower and the Canadian Borrower.



     “Business Day” means (a) any day on which commercial banks are not authorized or
required to close in Houston, Texas, (b) with respect to all borrowings, payments, Conversions,
Continuations, Interest Periods, and notices in connection with LIBOR Advances, any day which is a
Business Day described in clause (a) above and which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market, and (c) if such day also relates to
the fundings, disbursements, settlements and payments under the Canadian Notes, means any such day
on which banks are not required or authorized by law to close in Toronto, Canada.



     “Calculation Date” means the last Business Day of each month.



     “Calculation Period” means the period of four Fiscal Quarters ended as of the last day
of any Fiscal Quarter, or, if a calculation is performed on a date other than the last day of any
Fiscal Quarter, the period of 12 months ending on such date.



     “Canadian Administrative Agent” means Comerica Bank, a Michigan banking corporation
and an authorized foreign bank under the Bank Act (Canada) acting through its Canadian branch.



     “Canadian Advance” means an advance of funds by the Canadian Lenders to the Canadian
Borrower pursuant to Section 2.1(b), and includes, as applicable, a Canadian Prime Rate
Advance or a LIBOR Advance.



     “Canadian Borrower” means T3 Energy Services (formerly known as T-3 Oilco Energy
Services Partnership), an Alberta general partnership.



     “Canadian Collateral” is referred-to in Section 6.1(b).



     “Canadian Commitment” means, as to each Canadian Lender, the obligation to make
Canadian Advances and incur or participate in Canadian Letter of Credit Liabilities in an aggregate
principal amount at any one time outstanding up to (but not exceeding) the amount, if any, set
forth opposite each Canadian Lender’s name on Schedule 1.1 as its Canadian Commitment, as
such amount may be reallocated pursuant to Section 2.1(c), reduced pursuant to
Section 2.7 or terminated pursuant to Section 2.7 or 12.2.



     “Canadian Dollars” or “C$" means lawful money of Canada.



     “Canadian Issuing Lender” means the Canadian Administrative Agent in respect of the
Canadian Letters of Credit.



     “Canadian Lender Party” is defined in Section 4.19.



5









 





     “Canadian Lenders” means Lenders having a Canadian Commitment or if such Canadian
Commitments have been terminated, Lenders that are owed Canadian Advances. Each Canadian Lender at
all times shall be a Canadian Resident Lender.



     “Canadian Letter of Credit Liabilities” means, at any time, the aggregate undrawn face
amounts of all outstanding Canadian Letters of Credit.



     “Canadian Letters of Credit” means letters of credit issued under the Canadian
Commitments under Article II.



     “Canadian Note” means those certain promissory notes dated as of the date hereof,
executed by the Canadian Borrower and payable to the order of the Canadian Lenders, and all
extensions, renewals, replacements, modifications, supplements or rearrangements thereof from time
to time, in substantially the form attached hereto as Exhibit A-2.



     “Canadian Obligations” means, as at any date of determination thereof and without
duplication, a portion of the Obligations that is the sum of the following (determined without
duplication): (a) the aggregate principal amount of Canadian Advances outstanding hereunder on
such date, plus (b) the aggregate amount of Canadian Letter of Credit Liabilities outstanding on
such date. For purposes of calculating the aggregate amount of Canadian Obligations, all amounts
or values expressed in Canadian Dollars shall be converted into Dollars at the Exchange Rate in
effect as of the date of determination.



     “Canadian Prime Loans” means Canadian Advances bearing interest based on the Canadian
Prime Rate and Canadian Swing Line Advances.



     “Canadian Prime Rate” means, on any day, the greater of (a) the annual rate of
interest announced from time to time by the Canadian Administrative Agent as its prime rate then in
effect at its Principal Office, being the reference rate used by the Canadian Administrative Agent
for determining interest rates on commercial loans denominated in Canadian Dollars to borrowers in
Canada, and (b) an annual rate of interest equal to the sum of (i) the CDOR Rate and (ii) 1.00% per
annum. The Canadian Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate or a favored rate, and the Canadian Administrative Agent and each Canadian Lender
disclaims any statement, representation or warranty to the contrary. The Canadian Administrative
Agent or any Canadian Lender may make commercial loans or other loans at rates of interest at,
above or below the Canadian Prime Rate.



     “Canadian Resident Lender” is defined in Section 4.19.



     “Canadian Security Agreement” means that certain First Amended and Restated Canadian
General Pledge and Security Agreement dated of even date, executed by and among the Canadian
Borrower, the Foreign Subsidiaries and the Canadian Administrative Agent for the benefit of the
Canadian Lenders, as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.



     “Canadian Swing Line Advance” means any Advance made by the Canadian Administrative
Agent under Section 3.1(b).



6









 





     “Canadian Swing Line Note” means the promissory note of the Canadian Borrower payable
to the order of the Canadian Administrative Agent, in substantially the form attached hereto as
Exhibit A-4 with appropriate completions, and all extensions, renewals, replacements,
modifications, supplements or rearrangements thereof from time to time.



     “Canadian Withholding Tax” is defined in Section 4.19.



     “Capital Expenditures” means, for any Person, all expenditures for assets which, in
accordance with GAAP, are properly classified as equipment, real property, improvements, fixed
assets or a similar type of capitalized asset and which would be required to be capitalized and
shown on the balance sheet of such Person.



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



     “Capital Stock” of any Person means any and all shares, interests, partnership
interests, participations, rights in or other equivalents (however designated) of such Person’s
equity interest (however designated).



     “Cash Equivalent Investment” means, at any time, (a) any evidence of Debt, maturing
not more than one year after such time, issued or guaranteed by the United States government or any
agency thereof, (b) commercial paper, maturing not more than one year from the date of issue,
corporate demand notes or other debt securities having a maturity or tender right less than one
year from the date of issuance thereof, in each case (unless issued by a Lender or its holding
company) rated in one of the two highest rating categories by Standard & Poor’s Ratings Group or
Moody’s Investors Service, Inc., (c) any certificate of deposit (or time deposits represented by
such certificates of deposit) or bankers acceptance, maturing not more than one year after such
time, or overnight Federal Funds transactions that are issued or sold by a commercial banking
institution that is a member of the Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $500,000,000, (d) any repurchase agreement entered into with
any Lender (or other commercial banking institution of the stature referred to in
clause (c)) which (i) is secured by a fully perfected security interest in any obligation
of the type described in any of clauses (a) through (c) and (ii) has a market value
at the time such repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such Lender (or other commercial banking institution) thereunder and (e) investments
in short-term asset management accounts offered by any Lender for the purpose of investing in
investment grade loans to any corporation (other than the Borrowers or an Affiliate of the
Borrowers), state or municipality, in each case organized under the laws of any state of the United
States or of the District of Columbia.



     “CDOR Rate” means, on any day, an annual rate of interest equal to the average 30 day
rate applicable to Canadian Dollar bankers’ acceptances appearing on the “Reuters Screen CDOR Page”
on such day, plus 0.10% or if such day is not a Business Day, then on the immediately



7









 







preceding Business Day; provided, however, if such rate does not appear on the Reuters Screen
CDOR Page as contemplated, then the CDOR Rate on any day shall be calculated as the 30 day rate
applicable to Canadian Dollar bankers’ acceptances quoted by the Canadian Administrative Agent as
of 10:00 a.m. (Toronto, Ontario time) on such day, or if such day is not a Business Day, then on
the immediately preceding Business Day.



     “Change of Control” means the occurrence of any transaction or event by which any
Person, or two or more Persons acting in concert, acquire beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Act of 1934, as amended) of more than 50% of the
outstanding shares of the US Borrower’s voting stock.



     “Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated and rulings issued thereunder.



     “Collateral” is defined in Section 6.1.



     “Commitment Increase” is defined in Section 2.10.



     “Communications” is defined in Section 14.11(b).



     “Compliance Certificate” means a certificate, in substantially the form of
Exhibit C attached hereto, properly completed and signed.



     “Contingent Liabilities” means, as applied to any Person, those direct or indirect
liabilities of that Person which, in conformity with GAAP, would be included as liabilities of that
Person on a consolidated balance sheet of such Person, with respect to any Debt, lease, dividend,
letter of credit or other obligation (the “primary obligations”) of another Person (the
“primary obligor”) including, without limitation, any obligation of such Person upon the
occurrence of certain circumstances, (a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of the primary obligor,
or (c) to purchase property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof. The amount of any Contingent Liabilities shall be
deemed to be an amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Liabilities are made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the Borrowers in good
faith.



     “Continue,” “Continuation,” and “Continued” shall refer to the
continuation pursuant to Section 4.9 of a LIBOR Advance as a LIBOR Advance from one
Interest Period to the next Interest Period.



     “Convert,” “Conversion,” and “Converted” shall refer to a conversion
pursuant to Section 4.9 or Article V of one Type of Advance into another Type of
Advance.



8









 





     “Credit Request” is defined in Section 4.10.



     “Debt” means as to any Person at any time (without duplication as to such Person on a
consolidated basis): (a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or services, except trade
accounts payable of such Person arising in the ordinary course of business that are not past due by
more than 90 days or which are being contested in good faith and for which adequate reserves have
been established, (d) all Capital Lease Obligations of such Person, (e) all obligations secured by
a Lien existing on property owned by such Person, whether or not the obligations secured thereby
have been assumed by such Person or are non-recourse to the credit of such Person, (f) all
reimbursement obligations of such Person (whether contingent or otherwise and whether or not a
request for funding has been made) in respect of letters of credit, bankers’ acceptances, surety or
other bonds and similar instruments, (g) all liabilities of such Person in respect of unfunded
vested benefits under any Plan, (h) all Contingent Liabilities and (i) all obligations under
Hedging Agreements.



     “Default” means the occurrence of an event or condition which with notice or lapse of
time or both would become an Event of Default.



     “Default Rate” means the lesser of (a) the sum of (i) the Base Rate, plus the
Applicable Margin for the Base Rate, plus 2.00% per annum and (b) the Maximum Rate.



     “de minimus Subsidiary” means, from time to time, a Subsidiary, including its
Subsidiaries, the assets of which, when aggregated with each other de minimus
Subsidiary, do not exceed three percent (3%) of the total assets of the US Borrower and its
Subsidiaries and the revenue from continuing operations of which, when aggregated with each other
de minimus Subsidiary, do not exceed three percent (3%) of the revenue of the US
Borrower and its Subsidiaries for the preceding four Fiscal Quarters most recently ended.



     “Dollars”, “US$” and “$" means lawful money of the United
States of America.



     “Domestic Subsidiary” means any Subsidiary of the US Borrower which is organized and
existing under the laws of the United States of America or any state thereof.



     “EBITDA” means as to any Person, for any period, the sum of (a) consolidated Net
Income for such period, plus (b) without duplication and to the extent deducted in determining
consolidated Net Income for such period (i) Interest Expense for such period, (ii) Tax Expense for
such period, (iii) Non-Cash Charges for such period, (iv) the amount of any amortization of, or
write-downs or write-offs of intangibles (including but not limited to, goodwill) for such period,
(v) any charges taken in connection with the prepayment, redemption or repurchase of Debt, minus
(c) without duplication and to the extent included in determining consolidated Net Income for such
period, any extraordinary gains and extraordinary non-cash credits for such period, plus
(d) historical EBITDA of acquired entities for periods included in the applicable Calculation
Period in which such acquired entities were not Subsidiaries of the US Borrower, so long as the
financial statements of such acquired entities are in form and detail satisfactory to the US
Administrative Agent, minus (e) historical EBITDA of sold entities for periods included in



9









 







the applicable Calculation Period in which such sold entities were Subsidiaries of the
US Borrower.



     “Effective Date” means the date on which all the conditions precedent set forth in
Sections 7.1 and 7.2 have been satisfied or waived in writing by the Administrative
Agent.



     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by (i) the US Administrative
Agent and the US Issuing Lender in the case of any assignment of a US Revolving Credit Commitment,
(ii) the Canadian Administrative Agent in the case of any assignment of a Canadian Commitment,
(iii) unless an Event of Default has occurred and is continuing at the time any assignment is
effected, the US Borrower with respect to any assignment of a US Revolving Commitment, and
(iv) unless an Event of Default has occurred and is continuing at the time any assignment, the
Canadian Borrower with respect to any assignment of a Canadian Commitment (each such approval not
to be unreasonably withheld or delayed); provided, however, that neither the Company nor an
Affiliate of the Company shall qualify as an Eligible Assignee; and provided further, however, that
in the case of any assignment of a Canadian Commitment, such Lender must also satisfy Section
4.19.



     “Environmental Law” means any and all foreign, federal, state, and local laws,
regulations, requirements, ordinances, rules, orders, decrees, or governmental restrictions
pertaining to health, safety, the environment, pollution and the protection of the environment, or
the release of any materials into the environment, including those related to hazardous substances
or wastes, air emissions and discharges to waste or public systems including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601
et. seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901
et seq., the Occupational Safety and Health Act, 29 U.S.C. § 651 et
seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean Water Act, 33
U.S.C. § 1251 et seq., and the Toxic Substances Control Act, 15 U.S.C. § 2601
et seq., as such laws, regulations, and requirements may be amended or supplemented
from time to time.



     “Environmental Liabilities” means, as to any Person, all liabilities (contingent or
otherwise), obligations, responsibilities, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs, and expenses (including, without limitation, all
reasonable fees, disbursements and expenses of counsel, expert and consulting fees and costs of
investigation and feasibility studies), fines, penalties, indemnities, sanctions, and interest
incurred directly or indirectly as a result of any claim or demand, by any Person, whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil statute, including
any Environmental Law, permit, order or agreement with any Governmental Authority or other Person,
arising from (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.



     “Equity Interests” means, with respect to any Person, all of the shares of Capital
Stock of (or other ownership or equity interests in) such Person, all of the warrants, options or
other rights



10









 







for the purchase or acquisition from such Person of shares of Capital Stock of (or other
ownership or equity interests in) such Person, all of the securities convertible into or
exchangeable for shares of Capital Stock of (or other ownership or equity interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.



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



     “ERISA Affiliate” means any corporation or trade or business which is or has been a
member of the same controlled group of corporations (within the meaning of Section 414 (b) of the
Code) as the US Borrower or is or has been under common control with the US Borrower within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).



     “Event of Default” is defined in Section 12.1.



     “Exchange Rate” means, on any day, with respect to any foreign currency in relation to
Dollars or Dollars in relation to any foreign currency, the noon buying rate quoted by the Bank of
Canada; provided, however, that in the event that any applicable exchange rate cannot be determined
on any day by the foregoing procedure, then such exchange rate shall be determined for such day in
accordance with such commercially reasonable procedures as the Canadian Administrative Agent may
elect.



     “Existing Credit Agreement” is defined in Recital A to this Agreement.



     “Existing LCs” means those letters of credit described on Schedule 1.2 issued
pursuant to the Existing Credit Agreement.



     “Federal Funds Rate” means, for any day, the rate per annum, (rounded upwards, if
necessary, to the nearest 1/16 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if such
rate is not so published on such next succeeding Business Day, the Federal Funds Rate for any day
shall be the average rate charged to the US Administrative Agent on such day on such transactions
as determined by the US Administrative Agent.



     “Fee Letter” means that certain letter agreement dated as of August 10, 2007, executed
by and between the US Borrower and the US Administrative Agent, setting forth certain fees to be
paid by the US Borrower to the US Administrative Agent in connection with this Agreement.



     “Fiscal Quarter” means a fiscal quarter of a Fiscal Year.



11









 





     “Fiscal Year” means the fiscal year of the US Borrower and its Subsidiaries, which
period is the 12-month period ending on December 31 of each year.



     “Foreign Subsidiary” means any Subsidiary of the Canadian Borrower.



     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.



     “GAAP” means generally accepted accounting principles, applied on a consistent basis,
as set forth in Opinions of the Accounting Principles Board of the American Institute of Certified
Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a “consistent basis” when the accounting principles applied in
a current period are comparable in all material respects to those accounting principles applied in
a preceding period.



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



     “Guarantors” means, collectively, the Domestic Subsidiaries, the Foreign Subsidiaries
and the Non-domestic Guarantors, in each case other than de minimus Subsidiaries.



     “Guaranty Agreement” means a Guaranty Agreement–Domestic, a Guaranty Agreement–Foreign
or a Guaranty Agreement-Non-domestic, and “Guaranty Agreements” means, collectively, the
Guaranty Agreements-Domestic, the Guaranty Agreements-Foreign and the Guaranty
Agreements-Non-domestic.



     “Guaranty Agreement–Domestic” means the Second Amended and Restated Guaranty
Agreement-Domestic Guarantors dated of even date herewith executed by each Domestic Subsidiary in
favor of the US Administrative Agent for the benefit of the Lenders, as the same may be amended,
restated, supplemented, or modified from time to time.



     “Guaranty Agreement–Foreign” means the First Amended and Restated Guaranty
Agreement-Foreign Guarantors dated of even date herewith executed by the US Borrower and each
Foreign Subsidiary in favor of the Canadian Administrative Agent for the benefit of the Canadian
Lenders, as the same may be amended, supplemented, or modified from time to time.



     “Guaranty Agreement-Non-domestic” means a Guaranty Agreement in form and substance
satisfactory to the US Administrative Agent executed by a Non-domestic Guarantor in favor of the US
Administrative Agent, as the same may be amended, supplemented or modified from time to time, as
the same may be amended, supplemented or modified from time to time.



     “Hazardous Material” means any substance, product, waste, pollutant, material,
chemical, contaminant, constituent, or other material which is or becomes listed, regulated, or
addressed under any Environmental Law, including, without limitation, asbestos, petroleum, and
polychlorinated biphenyls.



12









 





     “Hedging Agreements” shall mean any commodity, interest rate or currency swap, cap,
floor, collar, forward agreement or other exchange or protection agreement or any option with
respect to any such transaction.



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



     “Increase Amount” is defined in Section 2.10(a).



     “Increase Effective Date” is defined in Section 2.10(d).



     “Increase Request” is defined in Section 2.10(a).



     “Increasing Lender” is defined in Section 2.10(c).



     “Intercompany Notes” means those certain promissory notes described on
Schedule 9.14 and any other intercompany note executed at any time after the Effective
Date, as each such promissory note may be renewed, extended, amended, restated, replaced, or
otherwise modified from time to time. The term “Intercompany Note” means any one of the
Intercompany Notes.



     “Intercreditor Agreement (Canadian Facility)” means that certain Intercreditor
Agreement (Canadian Facility) dated as of even date herewith executed by and among the Borrowers
and Administrative Agents, in form and substance satisfactory to the Administrative Agents, as the
same may hereafter be amended, restated, supplemented, or otherwise modified from time to time.



     “Interest Coverage Ratio” means as to any Person, at any date, the ratio of (a) EBITDA
for the Calculation Period, divided by (b) cash Interest Expense for the Calculation Period.



     “Interest Expense” means the sum of all interest expense (whether cash or non-cash)
paid or required by its terms to be paid during the period in question, as determined in accordance
with GAAP, with respect to the Debt of a Person or any portion thereof.



     “Interest Period” means, with respect to LIBOR Advances, each period commencing on the
date such Advances are made or Converted from Advances of another Type or, in the case of each
subsequent, successive Interest Period applicable to a LIBOR Advance, the last day of the next
preceding Interest Period with respect to such Advance, and ending on that day which is one, two,
three, or six months thereafter, as the applicable Borrower may select as provided in
Section 4.1 or 4.9 hereof. Notwithstanding the foregoing: (a) each Interest Period
which would otherwise end on a day which is not a Business Day shall end on the next succeeding
Business Day unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the preceding Business Day;
(b) any Interest Period which would otherwise extend beyond the applicable Termination Date shall
end on such Termination Date; (c) no more than eight Interest Periods for each LIBOR Advance shall
be in effect at the same time; and (d) no Interest Period for any LIBOR Advances shall have a
duration of less than one month and, if the Interest Period for any LIBOR Advance would otherwise
be a shorter period, such Advance shall be a Base Rate Advance.



13









 





     “Issuing Lenders” means, collectively, the US Issuing Lender and the Canadian Issuing
Lender.



     “Lenders” means, collectively, the Canadian Lenders and the US Lenders.



     “Letters of Credit” means, collectively, the US Letters of Credit and the Canadian
Letters of Credit.



     “Letter of Credit Agreements” means the application and letter of credit agreements
and other documents, if any, then required by an Issuing Lender now or hereafter executed by a
Borrower, such agreements to be on such Issuing Lender’s standard form (with such changes thereto
as such Borrower and such Issuing Lender may agree from time to time) and completed in form and
substance satisfactory to such Issuing Lender.



     “Letter of Credit Liabilities” means, at any time, the aggregate undrawn face amounts
of all outstanding Letters of Credit.



     “Leverage Ratio” means, as to any Person, at any date, the ratio of (a) Total Debt as
of the last day of the Calculation Period divided by (b) EBITDA for the Calculation Period.



     “LIBOR” means, with respect to each Interest Period:




     (a) the rate per annum equal to the rate determined by the US Administrative Agent
equal the British Bankers Association LIBO Rate (or any successor thereto), as set forth on
Reuters Reference LIBOR01 as the London Interbank Offered Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, or




     (b) if the rate referenced in the preceding subsection (a) does not appear on
such page or service or such page or service shall cease to be available, the rate per annum
equal to the rate determined by the US Administrative Agent to be the offered rate on such
other page or other service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period,
or




     (c) if the rates referenced in the preceding subsections (a) and (b)
are not available, the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) offered to the US Administrative Agent at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) two Business Days prior to the first day of the Interest
Period for such Advance by leading banks in the London interbank market for Dollar deposits
having a term comparable to such Interest Period and in an amount comparable to the
principal amount of the LIBOR Advance to be made by the Lenders for such Interest Period.



14









 





     “LIBOR Advances” means Advances the interest rates on which are determined on the
basis of the rates referred to in the definition of “Adjusted LIBOR Rate”.



     “Lien” means any lien, mortgage, security interest, tax lien, financing statement,
pledge, charge, hypothecation, assignment, preference, priority, or other encumbrance of any kind
or nature whatsoever (including, without limitation, any conditional sale or title retention
agreement), whether arising by contract, operation of law, or otherwise.



     “Loan Documents” means (a) this Agreement, the Intercreditor Agreement (Canadian
Facility), the Guaranty Agreements, Notes, the Pledge and Security Agreement and all promissory
notes, security agreements, deeds of trust, assignments, guaranties, and other instruments,
documents, and agreements executed and delivered pursuant to or in connection with this Agreement,
as such instruments, documents, and agreements may be amended, restated, modified, renewed,
extended, or supplemented from time to time, and (b) any interest rate Hedging Agreements between
the US Borrower and any Lender or its Affiliate.



     “Material Adverse Effect” means (a) a material adverse effect on (i) the business,
condition (financial or otherwise), operations, prospects, or properties of the Borrowers and their
Subsidiaries, taken as a whole, (ii) the ability of the Borrowers and their Subsidiaries, taken as
a whole, to perform their respective obligations under this Agreement or any of the other Loan
Documents, or (iii) the validity or enforceability of this Agreement or any of the other Loan
Documents, or the rights or remedies of the Administrative Agents, the Lenders or the Issuing
Lenders hereunder or thereunder or (b) civil or criminal liability for the Administrative Agents or
the Lenders under Environmental Laws.



     “Maximum Canadian Available Amount” means, at any date, US$5,000,000 or the subject
adjusted amount pursuant to Section 2.1(c). In connection with the application of any
provision hereof using the term “Maximum Canadian Available Amount”, any amounts denominated in
Canadian Dollars shall be converted to Dollars using the then current Exchange Rate.



     “Maximum Rate” means, with respect to any Lender and the holder of any Swing Line
Note, any Canadian Note, or any US Revolving Credit Note, the maximum nonusurious interest rate, if
any, that at any time, or from time to time, may be contracted for, taken, reserved, charged or
received on the indebtedness created under this Agreement, the Canadian Notes, the US Revolving
Credit Notes, any Swing Line Note or any other Loan Document under the laws which are presently in
effect in the United States and the State of Texas applicable to the Lenders, such holders and such
indebtedness or, to the extent permitted by law, under such applicable laws of the United States
and the State of Texas which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws now allow, or, in the case of Canadian Advances made
in Canada by the Canadian Lenders to the Canadian Borrower, under applicable Canada federal law or
under applicable laws of the Province of Ontario (or the laws of any other jurisdiction whose usury
laws are deemed to apply to the Canadian Notes or any other Loan Documents despite the intention
and desire of the express choice of law provisions set forth herein). To the extent that Chapter
303 of the Texas Finance Code (the “Finance Code”), is relevant to any Lender or any holder
of any Swing Line Note, any Canadian Note, or any US Revolving Credit Note for the purposes of
determining the Maximum



15









 







Rate, each such Person shall determine such applicable legal rate under the Finance Code
pursuant to the “weekly ceiling,” from time to time in effect, as referred to and defined in
Chapter 303 of the Finance Code; subject, however, to the limitations on such applicable ceiling
referred to and defined in Chapter 303 of the Finance Code, and further subject to any right such
Person may have subsequently, under applicable law, to change the method of determining the Maximum
Rate. If no Maximum Rate is established by applicable law, then the Maximum Rate shall be equal to
18%, per annum.



     “Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the US Borrower or any predecessor thereto or any
ERISA Affiliate and which is covered by Title IV of ERISA.



     “Net Cash Proceeds” means, with respect to (a) any Asset Sale or (b) any other
transfer or disposition of any asset to a third-party, the aggregate amount of cash and Cash
Equivalent Investments received by such Person in connection with such transaction minus reasonable
fees, costs and expenses and related taxes paid or payable as a result of such transaction.



     “Net Income” means, for any period, the net income (or loss) determined in conformity
with GAAP of the US Borrower.



     “Net Worth” means, with respect to any Person and as of the date of its determination,
the excess of the assets of such Person over the sum of the liabilities of such Person and the
minority interests of such Person, as determined in accordance with GAAP.



     “Non-Cash Charges” means as to any Person, for any period, depreciation, amortization
and other non-cash charges, determined in accordance with GAAP.



     “Non-domestic Guarantors” means all of the Subsidiaries which are Non-domestic
Subsidiaries and which have executed a Guaranty Agreement, provided that, (a) no
Non-domestic Subsidiary shall become a Non-domestic Guarantor if delivery of a Guaranty
Agreement-Non-domestic by such Non-domestic Subsidiary would result in material increased tax or
similar liabilities for the US Borrower and its Subsidiaries on a consolidated basis, (b) no
Non-domestic Subsidiary shall become a Non-domestic Guarantor if such Non-domestic Subsidiary is a
de minimus Subsidiary and (c) the Canadian Borrower shall not be required to be a Non-domestic
Guarantor so long as delivery of a Guaranty Agreement-Non-domestic would result in material
increased tax or similar liabilities for the US Borrower and its Subsidiaries on a consolidated
basis.



     “Non-domestic Subsidiary” means any Subsidiary of the US Borrower which is organized
and existing under the laws of a jurisdiction other than the United States of America or any state
thereof.



     “Notes” means, collectively, the US Revolving Credit Notes, the Canadian Notes and the
Swing Line Notes, and “Note” means one of the Notes.



     “Notice” is defined in Section 14.11(b)(ii).



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     “Obligated Party” means each Guarantor or any other Person who is or becomes party to
any agreement pursuant to which such Person guarantees or secures payment and performance of the
Obligations or any part thereof.



     “Obligations” means, without duplication, all obligations, indebtedness and
liabilities of each of the Borrowers and their respective Subsidiaries to the Administrative
Agents, the Issuing Lenders, the Lenders, the Secured Parties, any of their respective Affiliates,
or any or some of them, arising pursuant to this Agreement, any of the Loan Documents, or any
Hedging Agreements with Lenders or Affiliates of Lenders now existing or hereafter arising, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several. For purposes of calculating the aggregate amount of Obligations, all amounts
or values expressed in Canadian Dollars shall be converted into Dollars at the applicable Exchange
Rate in effect as of the date of determination.



     “Payment Date” means, (a) in the case of Base Rate Advances, the last Business Day of
each September, December, March and June, commencing December 28, 2007, (b) in the case of LIBOR
Advances the last day of each Interest Period therefor (and, in the case of six-month Interest
Periods, on the last day of the third month following the date of such Advance), and (c) in the
case of all Advances, the Termination Date.



     “Payor” is defined in Section 4.6.



     “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to all
or any of its functions under ERISA.



     “Percentage” means at any time with respect to any Lender, such Lender’s portion,
expressed as a percentage, of the aggregate US Revolving Credit Commitments or Canadian
Commitments, as applicable.



     “Permitted Liens” is defined in Section 10.2.



     “Person” means any individual, corporation, business trust, association, company,
partnership, joint venture, Governmental Authority, or other entity.



     “Plan” means any employee benefit or other plan established or maintained by the
US Borrower or any ERISA Affiliate.



     “Platform” is defined in Section 14.11(b).



     “Pledge and Security Agreement” means, (a) with respect to the US Borrower and the
Domestic Subsidiaries, the Second Amended and Restated Pledge and Security Agreement dated of even
date herewith executed by the US Borrower and each Domestic Subsidiary (other than a de
minimus Subsidiary) in favor of the US Administrative Agent for the benefit of the Lenders,
and (b) with respect to each Non-domestic Guarantor, a pledge and security agreement executed by
such Non-domestic Guarantor in favor of the US Administrative Agent in form and substance
satisfactory to the US Administrative Agent, in each case as the same may be amended, restated,
supplemented, or modified from time to time.



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     “Prime Rate” means, at any time, the rate of interest per annum most recently
announced by the US Administrative Agent at its principal office in San Francisco as its prime
rate, with the understanding that such prime rate is one of its base rates and serves as the basis
upon which effective rates of interest are calculated for those loans making reference thereto, and
is evidenced by the recording thereof after its announcement in such internal publication or
publications as US Administrative Agent may designate.



     “Principal Office” means the principal office of the Administrative Agents, the
Issuing Lenders, and the Lenders presently located for such Persons at the addresses shown under
the signature line of such Persons in this Agreement.



     “Prohibited Transaction” means any transaction set forth in Section 406 of ERISA or
Section 4975 of the Code.



     “Property” means any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.



     “Quarterly Fee Payment Date” means the last Business Day of each September, December,
March and June of each year, the first of which shall be December 31, 2007.



     “Refunded Swing Line Advance” is defined in Section 3.2.



     “Register” is defined in Section 14.7(d).



     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve
System as the same may be amended or supplemented from time to time.



     “Regulatory Change” means, with respect to a Lender, any change after the date of this
Agreement in United States federal, state, or foreign laws or regulations (including Regulation D)
or the adoption or making after such date of any interpretations, directives, or requests applying
to a class of banks, including such Lender, of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any court or governmental
or monetary authority charged with the interpretation or administration thereof.



     “Release” means, as to any Person, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, disbursement, leaching, or migration of Hazardous Materials into the
indoor or outdoor environment or into or out of property owned by such Person, including, without
limitation, the movement of Hazardous Materials through or in the air, soil, surface water, ground
water, or property.



     “Remedial Action” means all actions required to (a) clean up, remove, treat, or
otherwise address Hazardous Materials in the indoor or outdoor environment, (b) prevent the Release
or threat of Release or minimize the further Release of Hazardous Materials so that they do not
migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor
environment, or (c) perform pre-remedial studies and investigations in post-remedial monitoring and
care.



     “Replacement Lender” is defined in Section 5.5.



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     “Reportable Event” means any of the events set forth in Section 4043 of ERISA.



     “Required Lenders” means (a) at any time while no Advances are outstanding, two or
more Lenders holding at least 50% of the Aggregate Commitments, and (b) at any time while Advances
are outstanding, two or more Lenders holding at least 50% of the outstanding aggregate principal
amount of the Advances (without regard to any sale by a Lender of a participation in any Advance
under Section 14.7(a)). For purposes of this definition, Swing Line Advances shall not
constitute “Advances.”



     “Reserve Requirement” means, for any LIBOR Advance for any Interest Period therefor,
the average maximum rate at which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest Period under Regulation D by member
banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars
against “Eurocurrency Liabilities” as such term is used in Regulation D. Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Adjusted LIBOR Rate is to be
determined, or (b) any category of extensions of credit or other assets which include LIBOR
Advances.



     “Reset Date” is defined in Section 4.2(c).



     “Response Date” is defined in Section 2.10(b).



     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock or other Equity Interest of the
US Borrower or any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Capital Stock or other Equity Interest, or on
account of any return of capital to the US Borrower’s stockholders.



     “SEC” means the Securities and Exchange Commission of the United States of America,
and includes any successor agency.



     “Secured Parties” means the Administrative Agents, the Lenders and any Affiliates of a
Lender that has entered into a Hedging Agreement with the US Borrower.



     “Stockholders Equity” has the meaning given to such term under GAAP.



     “Subordinated Debt” means Debt of a Person which has been subordinated to the
Obligations in form and substance and upon terms satisfactory to the Administrative Agents and the
Required Lenders.



     “Subsidiary” means any Person of which or in which either of the Borrowers and their
other Subsidiaries own or control, directly or indirectly, more than 50% of (a) the combined voting
power of all classes having general voting power under ordinary circumstances to elect a majority
of the directors or equivalent body of such Person, if it is a corporation, (b) the capital
interest or profits interest of such Person, if it is a partnership, limited liability company,
joint



19









 







venture or similar entity, or (c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated association or organization.



     “Swing Line Advance” means any Advance made by the US Administrative Agent or Canadian
Administrative Agent under Article III.



     “Swing Line Note” means the US Swing Line Note or the Canadian Swing Line Note, as
applicable.



     “Taxable Payment” is defined in Section 4.19.



     “Tax Expense” means, for any period, all expenses incurred during such period by the
US Borrower and its Subsidiaries, on a consolidated basis, in connection with income tax
obligations, all as determined in accordance with GAAP.



     “Termination Date” means October 26, 2012, or such earlier date on which the Aggregate
Commitments terminate as provided in this Agreement.



     “Total Debt” means, as of the date of determination, all Debt of the US Borrower and
its consolidated Subsidiaries, excluding, however, for calculation of the Leverage Ratio
obligations under Hedging Agreements other than unwind and termination payments.



     “Type” means any type of Advance (i.e., Base Rate Advance or LIBOR Advance).



     “UCC” means the Uniform Commercial Code as in effect in the State of Texas from time
to time.



     “US Administrative Agent” means Wells Fargo Bank, National Association.



     “US Borrower” means T-3 Energy Services, Inc., a Delaware corporation.



     “US Collateral” is referred-to in Section 6.1(a).



     “US Issuing Lender” means the US Administrative Agent (or any of its Affiliates) and
any other Lender (or any of its Affiliates) appointed by the US Borrower and approved by the
US Administrative Agent that agrees to issue US Letters of Credit under the US Revolving Credit
Commitment.



     “US Lenders” means Lenders having a US Revolving Credit Commitment or if such US
Revolving Credit Commitments have been terminated, Lenders that are owed US Revolving Credit
Advances.



     “US Letters of Credit” means, at any time, the aggregate undrawn face amount of all
outstanding Existing LCs and letters of credit issued under the US Revolving Credit Commitment
pursuant to Article II.



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     “US Revolving Credit Advance” means an advance of funds by the US Administrative Agent
on behalf of the US Lenders to a US Borrower pursuant to Section 2.1(a) and includes, as
applicable, a Base Rate Advance or a LIBOR Advance.



     “US Revolving Credit Commitment” means, as to each US Lender, the obligation to
(a) make Advances (other than Canadian Advances) and (b) subject to applicable sublimits, purchase
participations in US Letters of Credit pursuant to Section 4.13, in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set forth opposite the name
of such US Lender on Schedule 1.1 as its US Revolving Credit Commitment, or on the signature pages
of an Assignment and Acceptance, as the case may be, as such amount may be reduced pursuant to
Section 2.7, increased pursuant to Section 2.10, or terminated pursuant to
Section 2.7 or Section 12.2.



     “US Revolving Credit Notes” means the promissory notes of the US Borrower payable to
the order of the Lenders, in substantially the form attached hereto as Exhibit A-1 with
appropriate completions, and all extensions, renewals, replacements, modifications, supplements or
rearrangements thereof from time to time.



     “US Swing Line Advance” means any Advance made by the US Administrative Agent under
Section 3.1(a).



     “US Swing Line Note” means the promissory note of the US Borrower payable to the order
of the US Administrative Agent, in substantially the form attached hereto as Exhibit A-3
with appropriate completions, and all extensions, renewals, replacements, modifications,
supplements or rearrangements thereof from time to time.



     Section 1.2 Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms defined. The words
“hereof”, “herein”, and “hereunder” and words of similar import referring to this Agreement refer
to this Agreement as a whole and not to any particular provision of this Agreement. Unless
otherwise specified, all Article and Section references pertain to this Agreement. All accounting
terms not specifically defined herein shall be construed in accordance with GAAP. Terms used
herein that are defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.



ARTICLE II




Advances and Letters of Credit




     Section 2.1 Aggregate Commitments.




     (a) Subject to the terms and conditions of this Agreement, each US Lender severally
agrees to make one or more US Revolving Credit Advances to the US Borrower from time to time
from the Effective Date to and including the Termination Date in an aggregate principal
amount at any time outstanding up to but not exceeding the amount of such US Lender’s
Revolving Credit Commitment, provided that the aggregate amount of all US Revolving Credit
Advances and US Swing Line Advances at any time outstanding shall not exceed (i) the
aggregate of the US Revolving Credit Commitments, minus



21









 







(ii) the outstanding Letter of Credit Liabilities under US Letters of Credit. Subject
to the foregoing limitations, and the other terms and provisions of this Agreement, the
US Borrower may borrow, repay, and reborrow hereunder the aggregate amount of the US
Revolving Credit Commitments by means of US Revolving Credit Advances. Each US Revolving
Credit Advance made by each US Lender shall be made and maintained at such US Lender’s
Principal Office.




     (b) Subject to the terms and conditions of this Agreement, each Canadian Lender agrees
to make one or more Canadian Advances to the Canadian Borrower from time to time from the
Effective Date to and including the Termination Date in an aggregate principal amount at any
time outstanding up to but not exceeding the amount of such Canadian Lender’s Canadian
Commitment, provided that the aggregate amount of all Canadian Advances and Canadian Swing
Line Advances at any time outstanding shall not exceed (i) the aggregate of the Canadian
Commitments, minus (ii) the outstanding Letter of Credit Liabilities under Canadian Letters
of Credit. Subject to the foregoing limitations, and the other terms and provisions of this
Agreement, the Canadian Borrower may borrow, repay, and reborrow hereunder the aggregate
amount of the Canadian Commitments by means of Canadian Advances. Each Canadian Advance
made by each Canadian Lender shall be made and maintained at such Canadian Lender’s
Principal Office. Each Canadian Advance made under this Section 2.1(b) shall be
made and denominated in Canadian Dollars.




     (c) Reallocation of Commitments. Any Lender may agree with the Borrowers to
reallocate its existing US Revolving Credit Commitment or Canadian Commitment so long as the
sum of such US Revolving Credit Commitment and Canadian Commitment remains unchanged;
provided that, the aggregate amount of all Canadian Commitments, after giving effect to any
reallocation, shall not exceed $15,000,000. In addition, any Lender may agree with the
Borrowers to convert a portion of its US Revolving Credit Commitment into a Canadian
Commitment, and any Lender may agree with the Borrowers to convert a portion of its Canadian
Commitment into a US Revolving Credit Commitment, in each case so long as (i) the sum of
such Lender’s US Revolving Credit Commitment and Canadian Commitment remains equal to the
aggregate amount of such Lender’s US Revolving Credit Commitment and Canadian Commitment, as
the case may be, prior to such reallocation and (ii) the aggregate amount of all Canadian
Commitments, after giving effect to any reallocation, shall not exceed $15,000,000. The
Borrowers shall give written notice to the Administrative Agents of any reallocation
pursuant to this provision at least 10 Business Days prior to the effective date of any such
reallocation. No applicable Lender affected by such reallocation shall be required to agree
to any such reallocation, but may do so at its option, in its sole absolute discretion.




     Section 2.2 The Notes.




     (a) The obligation of the US Borrower to repay the US Revolving Credit Advances (other
than US Swing Line Advances) and interest thereon shall be evidenced by a US Revolving
Credit Note executed by the US Borrower, payable to the order of each US Lender, in the
principal amount of such US Lender’s US Revolving Credit



22









 







Commitment as originally in effect and dated the date hereof or such later date as may
be required with respect to transactions contemplated by Section 14.7.




     (b) The obligation of the Canadian Borrower to repay the Canadian Advances (other than
Canadian Swing Line Advances) and interest thereon shall be evidenced by a Canadian Note
executed by the Canadian Borrower, payable to the order of each Canadian Lender, in the
principal amount of such Canadian Lender’s Canadian Commitment as originally in effect and
dated the date hereof or such later date as may be required with respect to transactions
contemplated by Section 14.7.




     Section 2.3 Repayment of Advances.




     (a) The US Borrower shall repay the unpaid principal amount of all US Revolving Credit
Advances on the Termination Date.




     (b) The Canadian Borrower shall repay the unpaid principal amount of all Canadian
Advances on the Termination Date.



     Section 2.4 Interest. The unpaid principal amount of the Advances shall bear interest
prior to maturity at a varying rate per annum equal from day to day to the lesser of (a) the
Maximum Rate, and (b) the Applicable Rate. If at any time the Applicable Rate for any Advance
shall exceed the Maximum Rate, thereby causing the interest accruing on such Advance to be limited
to the Maximum Rate, then any subsequent reduction in the Applicable Rate for such Advance shall
not reduce the rate of interest on such Advance below the Maximum Rate until the aggregate amount
of interest accrued on such Advance equals the aggregate amount of interest which would have
accrued on such Advance if the Applicable Rate had at all times been in effect. Accrued and unpaid
interest on the Advances shall be due and payable as follows:




     (a) on each Payment Date; and




     (b) on the Termination Date.


Notwithstanding the foregoing, after an Event of Default and during any continuance thereof, at the
US Administrative Agent’s election or at the request of the Required Lenders, the Obligations shall
bear interest at a rate per annum equal to the Default Rate. Such interest shall be payable on the
earlier of demand or the Termination Date, and shall accrue until the earlier of (i) waiver or cure
of the applicable Event of Default, (ii) agreement by the Required Lenders to rescind the charging
of interest at the Default Rate, or (iii) payment in full of the Obligations. The Lenders shall
not be required to accelerate the maturity of the Advances or to exercise any other rights or
remedies under the Loan Documents.




     Section 2.5 Use of Proceeds. The proceeds of the US Revolving Credit Advances shall
be used by the US Borrower (a) to refinance certain existing Debt of the Borrowers, (b) for
acquisition of assets or Equity Interests in other Persons permitted under this Agreement (or as
otherwise agreed in writing by the Required Lenders), (c) for general corporate and working capital
purposes in the ordinary course of business and (d) to finance fees and expenses incurred in
connection with the closing of the credit transaction described in this Agreement. The proceeds of
the Canadian Advances shall be used by the Canadian Borrower for (i) general



23









 







corporate and working capital purposes in the ordinary course of business, and (ii) one or
more acquisitions of Canadian Persons or assets located in Canada.



     Section 2.6 Commitment Fee. The Borrowers agree to pay to the US Administrative Agent
for the account of each Lender a commitment fee on the daily average unused amount of such Lender’s
Aggregate Commitments for the period from and including the Effective Date to and including the
Termination Date at the rate per annum equal to the Applicable Margin in effect on the date such
payment is due, based on a 360 day year and the actual number of days elapsed; provided that (a)
the amount of any Swing Line Advances that may be outstanding from time to time shall not be
considered usage of the Aggregate Commitments and (b) the face amount of outstanding Letters of
Credit shall be considered usage of the Aggregate Commitments. The accrued commitment fee shall be
payable in arrears on each Quarterly Fee Payment Date and on the Termination Date.



     Section 2.7 Reduction or Termination of Aggregate Commitments. Each of the Borrowers
shall have the right to terminate in whole or reduce in part the unused portion of the US Revolving
Credit Commitments (or the Canadian Commitments, as the case may be) upon at least three Business
Days’ prior notice (which notice shall be irrevocable) to the Administrative Agents specifying the
effective date thereof, whether a termination or reduction is being made, and the amount of any
partial reduction; provided, however, that (a) the Aggregate Commitments shall never be reduced
below an amount equal to the aggregate outstanding Letter of Credit Liabilities unless cash
collateralized, (b) the US Revolving Credit Commitments shall never be reduced below an amount
equal to the aggregate outstanding Letter of Credit Liabilities under the US Letters of Credit and
(c) the Canadian Commitments shall never be reduced below an amount equal to the aggregate
outstanding Letter of Credit Liabilities under the Canadian Letters of Credit. Each partial
reduction in the US Revolving Credit Commitments shall be in the amount of $1,000,000 or a greater
integral multiple of $500,000. Each partial reduction in the Canadian Commitments shall be in an
amount of $150,000 or a greater integral multiple of $100,000. The US Borrower shall
simultaneously prepay the US Revolving Credit Advances by the amount by which the unpaid principal
amount of the US Revolving Credit Advances, plus the Letter of Credit Liabilities under the US
Letters of Credit exceeds the US Revolving Credit Commitments after giving effect to such notice,
plus accrued and unpaid interest on the principal amount so prepaid. The Canadian Borrower shall
simultaneously prepay the Canadian Advances by the amount by which the unpaid principal amount of
the Canadian Advances, plus the Letter of Credit Liabilities under the Canadian Letters of Credit
exceeds the Canadian Commitments after giving effect to such notice, plus accrued and unpaid
interest on the principal amount so prepaid. Subject to Section 2.10 with respect to the
Aggregate Commitments only, neither the US Revolving Credit Commitments nor the Canadian
Commitments may be reinstated after either such commitment has been terminated or reduced to zero.



     Section 2.8 Letters of Credit.




     (a) Subject to, and upon the terms, conditions, covenants and agreements contained
herein and in the Letter of Credit Agreements, prior to the Termination Date, the US Issuing
Lender agrees to issue irrevocable, standby and commercial US Letters of Credit, for the
account of the US Borrower or any Domestic Subsidiary other than a de minimus Subsidiary (as
the context may require). The US Issuing Lender agrees with



24









 







respect to US Letters of Credit issued under the US Revolving Credit Commitment, that
(i) the Letter of Credit Liabilities under the US Letters of Credit shall not at any time
exceed $50,000,000 in respect of US Letters of Credit issued under the US Revolving Credit
Commitments, and (ii) with respect to the US Revolving Credit Commitments, the aggregate
principal amount outstanding of all US Revolving Credit Advances, the Letter of Credit
Liabilities under the US Letters of Credit, and the aggregate principal amount outstanding
of all US Swing Line Advances may at no time exceed the aggregate US Revolving Credit
Commitments. In the event of an actual conflict between the terms and conditions of this
Agreement and the terms and conditions of any Letter of Credit Agreement, then the terms and
conditions of this Agreement shall prevail. US Letters of Credit shall expire no later than
three years after the date of issuance (but may include provision for automatic one year
renewals unless notice of non-renewal is timely sent by US Issuing Lender), must be
satisfactory in form to the US Issuing Lender, and must be issued pursuant to a Letter of
Credit Agreement.




     (b) Subject to, and upon the terms, conditions, covenants and agreements contained
herein and in the Letter of Credit Agreements, prior to the Termination Date, the Canadian
Issuing Lender agrees to issue irrevocable, standby and commercial Canadian Letters of
Credit, for the account of the Canadian Borrower or any Foreign Subsidiary (as the context
may require). The Canadian Issuing Lender agrees with respect to Canadian Letters of Credit
issued under the Canadian Commitments, that (i) the Letter of Credit Liabilities under the
Canadian Letters of Credit shall not at any time exceed $5,000,000 in respect of Canadian
Letters of Credit issued under the Canadian Commitments, and (ii) with respect to the
Canadian Commitments, the aggregate principal amount outstanding of all Canadian Advances,
the Letter of Credit Liabilities under the Canadian Letters of Credit, and the aggregate
principal amount outstanding of all Canadian Swing Line Advances may at no time exceed the
aggregate Canadian Commitments. In the event of an actual conflict between the terms and
conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement,
then the terms and conditions of this Agreement shall prevail. Canadian Letters of Credit
shall expire no later than three years after the date of issuance (but may include provision
for automatic one year renewals unless notice of non-renewal is timely sent by the Canadian
Issuing Lender), must be satisfactory in form to the Canadian Issuing Lender, and must be
issued pursuant to a Letter of Credit Agreement.




     (c) On or before five days prior to the Termination Date, each Borrower agrees to
deposit with and pledge to the applicable Administrative Agent for the ratable benefit of
the applicable Lenders cash or Cash Equivalent Investments in an amount equal to 110% of all
outstanding Letter of Credit Liabilities.




Section 2.9 Payments and Reimbursement Under Letters of Credit.




     (a) Payments. Each Issuing Lender shall promptly notify the Administrative
Agents and the applicable Borrower of the date and amount of any draft presented for honor
under any Letter of Credit (but failure to give notice will not affect the applicable
Borrower’s obligations under this Agreement). Each Issuing Lender shall pay the requested
amount upon presentment of a draft unless presentment on its face does not



25









 







comply with the terms of the applicable Letter of Credit. When making payment, each
Issuing Lender may disregard (i) any default or potential default that exists under any
other agreement and (ii) obligations under any other agreement that have or have not been
performed by the beneficiary or any other Person (and such Issuing Lender is not liable for
any of those obligations absent gross negligence or willful misconduct). Each Issuing
Lender shall promptly pay to the applicable Administrative Agent for such Administrative
Agent to promptly distribute reimbursement payments received from the applicable Borrower to
all applicable Lenders according to their Percentages.




     (b) Reimbursement Obligation of the Borrowers. To induce each Issuing Lender
to issue and maintain Letters of Credit, and to induce the Lenders to participate in issued
Letters of Credit, each Borrower agrees to pay or reimburse such Issuing Lender (or cause
another Obligated Party to pay or reimburse such Issuing Lender) (i) the amount paid by such
Issuing Lender pursuant to a draw on a Letter of Credit issued by such Issuing Lender on the
same day such payment is made, and (ii) on demand, the amount of any additional reasonable
fees such Issuing Lender customarily charges for amending Letter of Credit Agreements, for
honoring drafts under the Letters of Credit, and for taking similar action in connection
with Letters of Credit. If a Borrower or another Obligated Party has not reimbursed an
Issuing Lender for any drafts when reimbursement is required under this section, then the
applicable Administrative Agent is irrevocably authorized to fund such Borrower’s
reimbursement obligations as a Base Rate Advance if proceeds are available under the
US Revolving Credit Commitments or the Canadian Commitments (as the context may require) and
if the conditions in this Agreement for such an Advance (other than any notice requirements
or minimum funding amounts) have, to such Administrative Agent’s knowledge, been satisfied.
The proceeds of that Advance shall be advanced directly to such Issuing Lender to pay such
Borrower’s unpaid reimbursement obligations. If funds cannot be advanced under the
US Revolving Credit Commitments or the Canadian Commitments (as the context may require),
then such Borrower’s reimbursement obligation shall constitute a demand obligation. Each
Borrower’s obligations under this section are absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim, or defense to payment that such
Borrower may have at any time against any Issuing Lender or any other Person. From the date
that an Issuing Lender pays a draft under a Letter of Credit until the applicable Borrower
or another Obligated Party either reimburses or is obligated to reimburse such Issuing
Lender for that draft under this section, the amount of that draft bears interest payable to
such Issuing Lender at the rate then applicable to Base Rate Advances. From the due date of
the respective amounts due under this section, to the date paid (including any payment from
proceeds of a Base Rate Advance), unpaid reimbursement amounts accrue interest that is
payable on demand at the Default Rate.




     (c) Obligation of Lenders. If a Borrower or an Obligated Party fails to
reimburse any Issuing Lender as provided herein by the date on which reimbursement is due
hereunder, and funds cannot be advanced under the US Revolving Credit Commitments or the
Canadian Commitments (as the context may require) to satisfy the reimbursement obligations,
then the applicable Administrative Agent shall promptly notify each Lender of such failure,
of the date and amount paid, and of each Lender’s Percentage of the unreimbursed amount as a
participation in such unreimbursed amounts.



26









 






Each Lender shall promptly and unconditionally make available to the applicable
Administrative Agent in immediately available funds its Percentage of the unpaid
reimbursement obligation, subject to the limitations of Section 2.1. Funds are due
and payable to the applicable Administrative Agent before the close of business on the
Business Day when such Administrative Agent gives notice to each Lender of such
reimbursement failure (if notice is given before 11:00 a.m. (Houston time)) or on the next
succeeding Business Day (if notice is given after 11:00 a.m. (Houston time)). All amounts
payable by any Lender accrue interest after the due date at the Federal Funds Rate from the
day the applicable draft or draw is paid by the applicable Administrative Agent to (but not
including) the date the amount is paid by such Lender to such Administrative Agent. Upon
receipt of those funds, such Administrative Agent shall make them available to the
applicable Issuing Lender.




     (d) Duties of Issuing Lenders. Each Issuing Lender agrees with each Lender
that it will exercise and give the same care and attention to each Letter of Credit as it
gives to its other letters of credit. Each Lender and each Borrower agree that, in paying
any draft under any Letter of Credit, no Issuing Lender has any responsibility to obtain any
document (other than any documents expressly required by the respective Letter of Credit) or
to ascertain or inquire as to any document’s validity, enforceability, sufficiency,
accuracy, or genuineness or the authority of any Person delivering it. No Issuing Lender
nor any of its representatives will be liable to any Lender, any Borrower, or any Obligated
Party for any Letter of Credit’s use or for any beneficiary’s acts or omissions. Any
action, inaction, error, delay, or omission taken or suffered by any Issuing Lender or any
of its representatives in connection with any Letter of Credit, applicable drafts or
documents, or the transmission, dispatch, or delivery of any related message or advice, if
in good faith and in conformity with applicable laws and in accordance with the standards of
care specified in the Uniform Customs and Practices for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (as amended or modified), is binding
upon any Borrower, the Obligated Parties and Lenders and, except as expressly provided
herein, does not place any Issuing Lender or any of its representatives under any resulting
liability to any Borrower, any Obligated Party or any Lender. With respect to any Letter of
Credit issued under the US Revolving Credit Commitments or any Canadian Letter of Credit
issued under the Canadian Commitments, the applicable Administrative Agent is not liable to
any Borrower, any Obligated Party or any Lender for any action taken or omitted, in the
absence of gross negligence or willful misconduct, by any Issuing Lender or its
representative in connection with any Letter of Credit.




     Section 2.10 Optional Commitment Increase.




     (a) Optional Increase Request. The US Borrower may, at any time and from time
to time prior to the Termination Date, so long as no Default or Event of Default exists,
request that the US Revolving Credit Commitments be increased (the “Increase
Amount”) in an aggregate amount not to exceed $70,000,000 (each, a “Commitment
Increase”), provided that any such request shall be made in writing (an “Increase
Request”) by the US Borrower and delivered to the US Administrative Agent. Promptly



27









 







upon receipt of an Increase Request, the US Administrative Agent shall notify the
US Lenders of such request.




     (b) US Lenders’ Response to Increase Request. Each US Lender shall have the
right, but not the obligation, to elect to increase its respective US Revolving Credit
Commitment by an amount not to exceed the Increase Amount, which election shall be made by
notice from each US Lender to the US Administrative Agent given not later than 15 days after
the date notified of the Increase Request by US Administrative Agent (the “Response
Date”), and shall specify the amount of the proposed increase in such US Lender’s
US Revolving Credit Commitment. If any US Lender shall fail to give such notice to
US Administrative Agent by the Response Date, such US Lender shall be deemed to have elected
not to increase its US Revolving Credit Commitment in connection with such Increase Request.




     (c) Joinder of Additional US Lenders. If the aggregate amount of the proposed
increases in the US Revolving Credit Commitments of all US Lenders making an election to
increase their respective US Revolving Credit Commitment (each, an “Increasing
Lender”) does not equal or exceed the Increase Amount, then the US Borrower may seek one
or more lenders (which must be Eligible Assignees reasonably satisfactory to the US Borrower
and the US Administrative Agent) as US Lenders (each an “Additional Lender”), which
Additional Lenders shall have aggregate US Revolving Credit Commitments not greater than an
amount equal to (i) the Increase Amount, less (ii) any increases in the US Revolving Credit
Commitments of the Increasing Lenders.




     (d) Increase Effective Date and Allocations. If the US Revolving Credit
Commitments are increased in accordance with this Section, the US Administrative Agent and
the US Borrower shall determine the effective date (the “Increase Effective Date”)
and final allocation of such increase. The US Administrative Agent shall promptly notify
the US Borrower and the US Lenders of the final allocation of such increase amount, the
Increase Effective Date and the resulting Percentages.




     (e) Notes. Upon any increase in the US Revolving Credit Commitments pursuant
to this Section, the US Borrower will execute and deliver (i) a replacement US Revolving
Credit Note to each Increasing Lender, each in the principal amount of the US Revolving
Credit Commitment of such Increasing Lender, as increased in accordance with
subsection (d) of this Section 2.10, and (ii) a new US Revolving Credit Note
to each Additional Lender made party to this Agreement in connection therewith, each in the
principal amount of such Additional Lender’s US Revolving Credit Commitment.




     (f) Documentation. The US Borrower and the US Administrative Agent shall
execute appropriate documentation to add each Additional Lender as a party to this
Agreement, whereupon such Additional Lender shall have all of the rights and obligations of
a US Lender hereunder and under the other Loan Documents. The US Borrower and the Obligated
Parties shall execute and deliver appropriate documentation in connection with a Commitment
Increase to preserve and protect the Liens of the Administrative Agents in the Collateral
and the perfection and priority of such Liens.



28









 






     (g) Payment; Amortization. (i) Each Additional Lender shall pay to the
US Administrative Agent for the account of the other US Lenders an amount equal to its
Percentage of outstanding US Revolving Credit Advances, (ii) each Increasing Lender shall
pay to the US Administrative Agent for the account of the other US Lenders the amount
necessary so that such Increasing Lender has advanced an amount equal to its Percentage (as
adjusted in accordance with subsection (d) of this Section 2.10) of
outstanding US Revolving Credit Advances, and (iii) such amount so paid by each Additional
Lender and each Increasing Lender shall constitute a US Revolving Credit Advance by such
Additional Lender or Increasing Lender under its US Revolving Credit Note and a payment of
principal to the other US Lenders under their respective US Revolving Credit Notes and the
outstanding principal balances of the respective US Revolving Credit Notes shall be
increased or reduced accordingly.




     (h) Effects of Increase. Upon and as of the date of the addition of any
Additional Lender to this Agreement or the increase of the US Revolving Credit Commitment of
any Increasing Lender, (i) the US Revolving Credit Commitments of the other US Lenders
(other than other Increasing Lenders) shall remain unchanged, and (ii) solely with respect
to US Revolving Credit Commitments, each of the other US Lenders shall be deemed to have
sold and transferred to such Additional Lender or such Increasing Lender, as the case may
be, and such Additional Lender or Increasing Lender shall be deemed irrevocably and
unconditionally to have purchased and received from each such other US Lenders (on a pro
rata basis, based on such other US Lenders’ respective Percentages, as adjusted in
accordance with this Section) a portion of such other US Lenders’ participation shares under
Section 4.13 in all US Letters of Credit outstanding on such date and related
rights, in an aggregate amount equal to such Additional Lender’s or such Increasing Lender’s
Percentage of such outstanding US Letters of Credit. The addition of any Additional Lender
or the increase of the US Revolving Credit Commitment of an Increasing Lender and the
effects thereof as described in this Section shall occur automatically upon satisfaction of
the requirements specified in this Section, without the necessity for further documentation
to be executed by the other Lenders.




     (i) Acknowledgments Regarding Obligation to Increase. The US Borrower
acknowledges that (i) no Administrative Agent nor any US Lender has made any representations
to the US Borrower regarding its intent to agree to any increases to the US Revolving Credit
Commitments described in this Section, (ii) no US Lender shall have any obligation to
increase its US Revolving Credit Commitment, (iii) any US Lender’s agreement to one or more
increases shall not commit such US Lender to any additional increases, and (iv) no
Administrative Agent, nor any US Lender, nor any of their respective Affiliates shall have
any obligation to find or arrange for any Additional Lender.




     (j) Compensation. The US Borrower acknowledges that nothing herein shall
constitute a waiver of the US Borrower’s obligation set forth in Section 5.6 hereof
to provide compensation to the US Lenders if any circumstance arising in connection with any
increase in the US Revolving Credit Commitments results in a LIBOR Advance




29











 






being paid on a day other than the last day of an Interest Period for such LIBOR
Advance.



ARTICLE III




Swing Line Advances




     Section 3.1 Swing Line Advances. (a) For the convenience of the parties, the
US Administrative Agent, solely for its own account, may make any requested Advance under the
US Revolving Credit Commitments (which request must be made before 1:00 p.m. (Houston time) on the
Business Day the Advance is to be made and may be telephonic if confirmed in writing within two
Business Days) in the minimum amount of $500,000 (or a greater integral multiple of $100,000)
directly to the US Borrower as a US Swing Line Advance without requiring each other US Lender to
fund its Percentage thereof on such Business Day. US Swing Line Advances are subject to the
following conditions:




     (i) Each US Swing Line Advance must occur on a Business Day before the
Termination Date;




     (ii) The aggregate principal outstanding of all US Swing Line Advances
may not exceed $25,000,000; the aggregate principal amount outstanding of
all US Swing Line Advances, the aggregate principal amount of all
US Revolving Credit Advances, and the Letter of Credit Liabilities under the
US Letters of Credit may at no time exceed the aggregate US Revolving Credit
Commitments; and no US Swing Line Advance shall be made which would cause
the aggregate principal outstanding of US Administrative Agent’s percentage
of all US Revolving Credit Advances (including US Swing Line Advances) to
exceed the US Administrative Agent’s US Revolving Credit Commitment;




     (iii) Each US Swing Line Advance shall be paid in full or Converted by
the US Borrower no later than the 15th day and the last day of
each calendar month, and if such US Swing Line Advance is not paid within
such time, then such US Swing Line Advance shall be paid in full by the
funding of a Base Rate Advance; and




     (iv) Each US Swing Line Advance shall accrue interest at the Base Rate
plus the Applicable Margin for Base Rate Advances and Swing Line Advances.




     (b) For the convenience of the parties, the Canadian Administrative Agent, solely for
its own account, may make any requested Advance under the Canadian Commitments (which
request must be made before 1:00 p.m. (Toronto, Ontario time) on the Business Day the
Advance is to be made and may be telephonic if confirmed in writing within two Business
Days) in the minimum amount of $500,000 (or a greater integral multiple of $100,000)
directly to the Canadian Borrower as a Canadian Swing Line Advance without requiring each
other Canadian Lender to fund its Percentage



30









 






thereof on such Business Day. Canadian Swing Line Advances are subject to the
following conditions:




     (i) Each Canadian Swing Line Advance must occur on a Business Day
before the Termination Date;




     (ii) The aggregate principal outstanding of all Canadian Swing Line
Advances may not exceed $5,000,000; the aggregate principal amount
outstanding of all Canadian Swing Line Advances, the aggregate principal
amount of all Canadian Advances, and the Letter of Credit Liabilities under
the Canadian Letters of Credit may at no time exceed the aggregate Canadian
Commitments; and no Canadian Swing Line Advance shall be made which would
cause the aggregate principal outstanding of Canadian Administrative Agent’s
percentage of all Canadian Advances (including Canadian Swing Line Advances)
to exceed the Canadian Administrative Agent’s Canadian Commitment;




     (iii) Each Canadian Swing Line Advance shall be paid in full or
Converted by the Canadian Borrower no later than the 15th and
last day of each calendar month, and if such Canadian Swing Line Advance is
not paid within such time, then such Canadian Swing Line Advance shall be
paid in full by the funding of a Base Rate Advance; and




     (iv) Each Canadian Swing Line Advance shall accrue interest at the Base
Rate plus the Applicable Margin for Base Rate Advances and Swing Line
Advances.



     Section 3.2 Lenders’ Funding of Swing Line Advances as Advances. If a Borrower fails
to repay any Swing Line Advance within 10 Business Days after the making thereof, the applicable
Administrative Agent shall promptly notify the applicable Lenders of such failure and the unpaid
amount, which notice shall, on behalf of such Borrower (and for such purpose such Borrower hereby
irrevocably directs such Administrative Agent to act on its behalf), request each such Lender to
make, and each such Lender hereby agrees to make, an Advance in an amount equal to such Lender’s
Percentage of the aggregate amount of such unpaid Swing Line Advance (each a “Refunded Swing
Line Advance”), to repay such Administrative Agent. Each Lender shall make the amount of such
Advance available to the applicable Administrative Agent in immediately available funds, not later
than 10:00 a.m. Houston time or Toronto, Ontario time one Business Day after the date of such
notice. The proceeds of such Advance shall be immediately made available to the applicable
Administrative Agent for application by such Administrative Agent to the repayment of the Refunded
Swing Line Advance. Each Borrower irrevocably authorizes the applicable Administrative Agent to
charge such Borrower’s accounts with such Administrative Agent in order to immediately pay the
amount of such Refunded Swing Line Advance to the extent amounts received from the Lenders are not
sufficient to repay in full such Refunded Swing Line Advance (with notice of such charge being
provided to such Borrower, provided that the failure to give such notice shall not affect the
validity of such charge). All such Refunded Swing Line Advances shall be subject to all provisions
of this Agreement concerning Advances, except that such Advances shall be made without regard to



31









 




satisfaction of the conditions precedent to Advances (including the existence of a Default or
Event of Default). If prior to the time an Advance would otherwise have been made pursuant to this
paragraph, Advances may not be made as contemplated by this paragraph, each such Lender shall
irrevocably and unconditionally purchase and receive from the applicable Administrative Agent a
ratable participation in such Swing Line Advance and shall make available to such Administrative
Agent in immediately available funds its Percentage of such unpaid amount, together with interest
from the date when its payment was due to, but not including, the date of payment. If a Lender
does not promptly pay its amount upon such Administrative Agent’s demand, and until such Lender
makes the required payment, such Administrative Agent is deemed to continue to have outstanding a
Swing Line Advance in the amount of such Lender’s unpaid obligation. Each Borrower shall make each
payment of all or any part of any Swing Line Advance to the applicable Administrative Agent for the
ratable benefit of such Administrative Agent and those Lenders who have funded their participations
in Swing Line Advances under this section (but all interest accruing on Swing Line Advances before
the funding date of any Advance to repay such Swing Line Advance or any participation is payable
solely to such Administrative Agent for its own account).




     Section 3.3 The Swing Line Notes. The obligation of the US Borrower to repay the
US Swing Line Advances and interest thereon shall be evidenced by the US Swing Line Note in the
principal amount of $25,000,000. The obligation of the Canadian Borrower to repay the Canadian
Swing Line Advances and interest thereon shall be evidenced by the Canadian Swing Line Note in the
principal amount of $5,000,000.



ARTICLE IV




Borrowing Procedure: Payments; Facilities Fees;

Matters Related to Letters of Credit; Matters Related to Advances;

Designation of Canadian Resident Lenders




     Section 4.1 Borrowing Procedure.




     (a) The US Borrower shall give the US Administrative Agent notice by means of an
Advance Request Form of each requested US Revolving Credit Advance (other than US Swing Line
Advances) at least one Business Day before the requested date of a Base Rate Advance, and at
least three Business Days before the requested date of a LIBOR Advance, specifying: (a) the
requested date of such US Revolving Credit Advance (which shall be a Business Day), (b) the
amount of such US Revolving Credit Advance, (c) the Type of the US Revolving Credit Advance,
and (d) in the case of a LIBOR Advance, the duration of the Interest Period for such
US Revolving Credit Advance. The US Administrative Agent at its option may accept
telephonic requests for US Revolving Credit Advances, provided that such acceptance shall
not constitute a waiver of the US Administrative Agent’s right to delivery of the
appropriate Advance Request Form in connection with subsequent advances. Any telephonic
request for a US Revolving Credit Advance by the US Borrower shall be promptly continued by
submission of a properly completed Advance Request Form to the US Administrative Agent.
Each Base Rate Advance shall be in a minimum principal amount of $500,000 or a greater
integral multiple of $100,000. Each LIBOR Advance shall be in a minimum



32









 






principal amount of $3,000,000 or a greater integral multiple of $1,000,000. The
US Administrative Agent shall notify each US Lender of the contents of each such notice on
the date such notice is given by the US Borrower. Not later than 11:00 a.m. Houston, Texas
time on the date specified for each US Revolving Credit Advance hereunder, each US Lender
will make available to the US Administrative Agent at its Principal Office in immediately
available funds, for the account of the US Borrower, its Percentage of each US Revolving
Credit Advance. After the US Administrative Agent’s receipt of such funds and subject to
the other terms and conditions of this Agreement, the US Administrative Agent will make each
US Revolving Credit Advance available to the US Borrower by depositing the same, in
immediately available funds, in an account of the US Borrower (designated by the
US Borrower) maintained with the US Administrative Agent at the US Administrative Agent’s
Principal Office. All notices under this Section shall be irrevocable and shall be given
not later than 11:00 a.m. Houston, Texas, time on the day which is not less than the number
of Business Days specified above for such notice.




     (b) The following borrowing procedures shall apply with respect to the Canadian
Advances. The Canadian Borrower shall give the Canadian Administrative Agent notice by
means of an Advance Request Form of each requested Canadian Advance (other than Canadian
Swing Line Advances) at least one Business Day before the requested date of a Base Rate
Advance, and at least three Business Days before the requested date of a LIBOR Advance,
specifying: (a) the requested date of such Canadian Advance (which shall be a Business Day),
(b) the amount of such Canadian Advance, (c) the Type of the Canadian Advance, and (d) in
the case of a LIBOR Advance, the duration of the Interest Period for such Canadian Advance.
The Canadian Administrative Agent at its option may accept telephonic requests for Canadian
Advances, provided that such acceptance shall not constitute a waiver of the Canadian
Administrative Agent’s right to delivery of the appropriate Advance Request Form in
connection with subsequent advances. Any telephonic request for a Canadian Advance by the
Canadian Borrower shall be promptly continued by submission of a properly completed Advance
Request Form to the Canadian Administrative Agent. Each Base Rate Advance shall be in a
minimum principal amount of $250,000 or a greater integral multiple of $100,000. Each LIBOR
Advance shall be in a minimum principal amount of $250,000 or a greater integral multiple of
$100,000. The Canadian Administrative Agent shall notify each Canadian Lender of the
contents of each such notice on the date such notice is given by the Canadian Borrower. Not
later than 1:00 p.m., Toronto, Ontario time on the date specified for each Canadian Advance
hereunder, and subject to the other terms and conditions of this Agreement, each Canadian
Lender will make available to the Canadian Administrative Agent at its Principal Office in
immediately available funds, for the account of the Canadian Borrower, its Percentage of
each Canadian Advance. After the Canadian Administrative Agent’s receipt of such funds and
subject to the other terms and conditions of this Agreement, the Canadian Administrative
Agent will make each Canadian Advance available to the Canadian Borrower by depositing the
same, in immediately available funds, in an account of the Canadian Borrower (designated by
the Canadian Borrower) maintained with the Canadian Administrative Agent at the Canadian
Administrative Agent’s Principal Office. All notices under this Section shall be



33









 






irrevocable and shall be given not later than 1:00 p.m., Toronto, Ontario time on the
day which is not less than the number of Business Days specified above for such notice.



     Section 4.2 Method of Payment.




     (a) All payments of principal, interest, and other amounts to be made by the
US Borrower under this Agreement and the other Loan Documents shall be made to the
US Administrative Agent at its Principal Office for the account of each US Lender’s
Principal Office in Dollars and in immediately available funds, without setoff, deduction,
or counterclaim, not later than 11:00 a.m., Houston, Texas time on the date on which such
payment shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day). The US Borrower shall, at
the time of making each such payment, specify to the US Administrative Agent the sums
payable by the US Borrower under this Agreement and the other Loan Documents to which such
payment is to be applied (and in the event that the US Borrower fails to so specify, or if
an Event of Default has occurred and is continuing, the US Administrative Agent may apply
such payment to the Obligations in such order and manner as it may elect in its sole
discretion, subject to Section 4.5 hereof). Each payment received by the
US Administrative Agent under this Agreement or any other Loan Document for the account of a
US Lender shall be paid promptly to such US Lender, in immediately available funds, for the
account of such US Lender’s Principal Office. Whenever any payment under this Agreement or
any other Loan Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest and commitment fee, as
the case may be.




     (b) The following shall apply with respect to methods of payment for the Canadian
Advances. All payments of principal, interest, and other amounts to be made by the Canadian
Borrower under this Agreement and the other Loan Documents shall be made to the Canadian
Administrative Agent at its Principal Office for the account of each Canadian Lender’s
Principal Office in Canadian Dollars and in immediately available funds, without setoff,
deduction, or counterclaim, not later than 1:00 p.m., Toronto, Ontario time on the date on
which such payment shall become due (each such payment made after such time on such due date
to be deemed to have been made on the next succeeding Business Day). The Canadian Borrower
shall, at the time of making each such payment, specify to the Canadian Administrative Agent
the sums payable by the Canadian Borrower under this Agreement and the other Loan Documents
to which such payment is to be applied (and in the event that the Canadian Borrower fails to
so specify, or if an Event of Default has occurred and is continuing, the Canadian
Administrative Agent may apply such payment to the Canadian Obligations in such order and
manner as it may elect in its sole discretion, subject to Section 4.5 hereof). Each
payment received by the Canadian Administrative Agent under this Agreement or any other Loan
Document for the account of a Canadian Lender shall be paid promptly to such Canadian
Lender, in immediately available funds, for the account of such Canadian Lender’s Principal
Office. Whenever any payment under this Agreement or any other Loan Document shall be
stated to be due on a day that is not a Business Day, such payment



34









 






may be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of the payment of interest and commitment fee, as
the case may be.




     (c) Not later than 1:00 p.m., Toronto, Ontario time on each Calculation Date, the
Canadian Administrative Agent shall determine the Exchange Rate applicable to Canadian
Dollars as of such Calculation Date. For purposes of this Agreement, the Exchange Rate so
determined shall become effective on the first Business Day immediately following the
relevant Calculation Date (a “Reset Date”).



     Section 4.3 Voluntary Prepayment. The Borrowers may prepay the Base Rate Advances in
whole at any time or from time to time in part without premium or penalty upon not less than one
Business Day’s prior notice to the applicable Administrative Agent (which shall promptly notify the
applicable Lenders), which notice shall specify the prepayment date (which shall be a Business Day)
and the amount of the prepayment (which shall be at least $3,000,000 or any whole multiple of
$1,000,000 in the case of the US Revolving Credit Advances and at least $150,000 or any whole
multiple of $100,000 in the case of Canadian Advances, or, if less, the remaining aggregate
principal balance outstanding on the applicable Note) and shall be irrevocable and effective only
upon receipt by the applicable Administrative Agent, provided that interest on the principal
prepaid, accrued to the prepayment date, shall be paid on the prepayment date. Each Borrower may
prepay LIBOR Advances on the same conditions as for Base Rate Advances (except that prior notice to
the applicable Administrative Agent shall be not less than three Business Days for LIBOR Advances)
and in addition such prepayments of LIBOR Advances shall not relieve the US Borrower or the
Canadian Borrower of its respective obligations under Section 5.2 or 5.6 hereof.



     Section 4.4 Mandatory Prepayment.




     (a) If at any time the amount equal to the sum of (i) the aggregate principal amount of
all US Revolving Credit Advances, plus (ii) the Letter of Credit Liabilities under the US
Letters of Credit, plus (iii) the aggregate principal amount outstanding of all US Swing
Line Advances exceeds the aggregate US Revolving Credit Commitments, the US Borrower shall
promptly prepay the outstanding US Revolving Credit Advances by the amount of the excess or,
if no US Revolving Credit Advances are outstanding, the US Borrower shall immediately pledge
to the US Administrative Agent cash or Cash Equivalent Investments in an amount equal to the
excess as cash collateral for the outstanding Letter of Credit Liabilities under the US
Letters of Credit. Additionally, if at any time the amount equal to the sum of (A) the
aggregate principal amount of all Canadian Advances, plus (B) the Letter of Credit
Liabilities under the Canadian Letters of Credit exceeds the aggregate Canadian Commitments,
the Canadian Borrower shall promptly prepay the outstanding Canadian Advances by the amount
of the excess or, if no Canadian Advances are outstanding, the Canadian Borrower shall
immediately pledge to the Canadian Administrative Agent for the ratable benefit of the
Canadian Lenders with respect to the Canadian Commitments cash or Cash Equivalent
Investments in an amount equal to the excess as cash collateral for the outstanding Letter
of Credit Liabilities under the Canadian Letters of Credit.



35









 






     (b) Promptly upon receipt of the Net Cash Proceeds from any Asset Sale or
sale/leaseback transaction with respect to either Borrower’s or any of their Subsidiaries’
Property, or receipt of any insurance proceeds with respect to properties or assets of any
Borrower or any of their Subsidiaries, such Borrower, shall prepay Advances and permanently
reduce the US Revolving Credit Commitments or the Canadian Commitments, as applicable, in
accordance with Section 4.4(c) in a principal amount equal to 100% of the amount by
which aggregate Net Cash Proceeds received from such Asset Sales or insurance proceeds
during any twelve month period exceeds 10 percent of US Borrower’s consolidated Net Worth,
and 100% of the amount of Net Cash Proceeds received from any such sale/leaseback
transaction.




     (c) (i)  Subject to the Intercreditor Agreement (Canadian Facility), any prepayment
made by the US Borrower under Sections 4.4(a) or (b) shall (i) include
accrued interest to the date of such prepayment on the principal amount prepaid, (ii) not be
subject to (A) any minimum payment provisions contained in this Agreement or (B) the
requirement set forth in Section 5.6 hereof to provide compensation to the
US Lenders if such prepayment results in a LIBOR Advance being paid on a day other than the
last day of an Interest Period for such LIBOR Advance, and (iii) be applied first, to repay
outstanding US Revolving Credit Advances, with a corresponding permanent reduction in the
US Revolving Credit Commitments (other than in respect of prepayments under
Section 4.4(a) above), and second, at any time there are no Advances outstanding
under the US Revolving Credit Commitments, to provide cash collateral for the outstanding
Letter of Credit Liabilities under the US Letters of Credit, provided that, in any event
there shall be a permanent reduction in the US Revolving Credit Commitments in an amount
equal to the applicable amount of Net Cash Proceeds from the applicable transaction which,
but for the principal amount of Advances outstanding on the date of receipt thereof, would
be required to prepay Advances under this Section.




     (ii) Subject to the Intercreditor Agreement (Canadian Facility), any prepayment
made by Canadian Borrower under Sections 4.4(a), (b), and
(c) shall (i) include accrued interest to the date of such prepayment on the
principal amount prepaid, (ii) not be subject to (A) any minimum payment provisions
contained in this Agreement or (B) the requirement set forth in Section 5.6
hereof to provide compensation to the Canadian Lenders if such prepayment results in
a LIBOR Advance being paid on a day other than the last day of an Interest Period
for such LIBOR Advance, and (iii) be applied first, to repay outstanding Canadian
Advances, with a corresponding permanent reduction in the Canadian Commitments
(other than in respect of prepayments under Section 4.4(a) above), and
second, at any time there are no Advances outstanding under the Canadian
Commitments, to provide cash collateral for the outstanding Letter of Credit
Liabilities under the Canadian Letters of Credit, provided that, in any event there
shall be a permanent reduction in the Canadian Commitments in an amount equal to the
applicable amount of Net Cash Proceeds from the applicable transaction which, but
for the principal amount of Advances outstanding on the date of receipt thereof,
would be required to prepay Advances under this Section.



36









 





     Section 4.5 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each Advance shall be made by the Lenders pro rata in accordance with their respective
Percentages; (b) each payment of fees under Section 2.6 and letter of credit fees under
Section 4.12 shall be made for the account of the Lenders pro rata in accordance with their
respective Percentages; (c) each termination or reduction of the Aggregate Commitments under
Section 2.7 shall be applied to the Aggregate Commitments pro rata according to the
respective unused US Revolving Credit Commitments or Canadian Commitments, as applicable; (d) each
Letter of Credit shall be deemed participated in by the Lenders, pro rata in accordance with their
respective Percentages; and (e) each payment and prepayment of principal of or interest on the
Advances by the applicable Borrower shall be made to the Administrative Agents for the account of
the Lenders pro rata in accordance with the respective unpaid principal amounts of the Advances
held by such Lenders.



     Section 4.6 Non-Receipt of Funds by the Administrative Agents. Unless the applicable
Administrative Agent shall have been notified by a Lender or the US Borrower or the Canadian
Borrower, as applicable (the “Payor”) prior to the date on which such Lender is to make
payment to such Administrative Agent of the proceeds of an Advance to be made or participated in as
applicable, by it hereunder or the US Borrower or the Canadian Borrower, as applicable is to make a
payment to the applicable Administrative Agent for the account of one or more of the Lenders, as
the case may be (such payment being herein called the “Required Payment”), which notice
shall be effective upon receipt, that the Payor does not intend to make the Required Payment to
such Administrative Agent, such Administrative Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to such Administrative Agent, the recipient of such payment shall, on demand, pay
to such Administrative Agent the amount made available to it together with interest thereon in
respect of the period commencing on the date such amount was so made available by such
Administrative Agent until the date such Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.



     Section 4.7 Withholding Tax Exemption. Each Lender that is not incorporated under the
laws of the United States of America or a state thereof agrees that it will deliver to the
Borrowers and the Administrative Agents two duly completed copies of Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive payments from the US Borrower or
the Canadian Borrower, as applicable under any Loan Document without deduction or withholding of
any United States federal income taxes. Each US Lender which so delivers a Form W-8BEN or W-8ECI
further undertakes to deliver to the US Borrower or the Canadian Borrower, as applicable and the
Administrative Agents two additional copies of such form (or a successor form) on or before the
date such form expires or becomes obsolete or after the occurrence of any event requiring a change
in the most recent form so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the US Borrower or the Canadian Borrower, or the
Administrative Agents, in each case certifying that such Lender is entitled to receive payments
from the US Borrower or the Canadian Borrower, as applicable under any Loan Document without
deduction or withholding of any United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would



37









 




otherwise be required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and such Lender advises
the US Borrower or the Canadian Borrower, as applicable and the Administrative Agents that it is
not capable of receiving such payments without any deduction or withholding of United States
federal income tax. Notwithstanding any provisions of this agreement to the contrary, the
US Borrower or the Canadian Borrower, as applicable shall make payments net of, and after
deductions for, taxes and shall not be required to increase any such amount payable to any
non-US Lender that fails to comply with this Section.




     Section 4.8 Computation of Interest. Interest on the LIBOR Advances and all other
amounts payable by the Borrowers hereunder shall be computed on the basis of a year of 360 days and
the actual number of days elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall be calculated on the
basis of a year of 365 or 366 days, as the case may be. Interest on the Base Rate Advances shall
be computed on the basis of a year of 365 or 366 days, as the case may be.



     Section 4.9 Conversions and Continuation. The US Borrower or the Canadian Borrower,
as applicable shall have the right from time to time to Convert all or part of an Advance of one
Type into an Advance of another Type or to Continue LIBOR Advances of one Type as Advances of the
same Type by giving the applicable Administrative Agent, written notice at least one Business Day
before Conversion into a Base Rate Advance, and at least three Business Days before Conversion into
or Continuation of a LIBOR Advance, specifying: (a) the Conversion or Continuation date, (b) the
amount of the Advance to be Converted or Continued, (c) in the case of Conversions, the Type of
Advance to be Converted into, and (d) in the case of a Continuation of or Conversion into a LIBOR
Advance, the duration of the Interest Period applicable thereto; provided that (i) LIBOR Advances
may only be Converted on the last day of the applicable Interest Period, and (ii) except for
Conversions into Base Rate Advances, no Conversions shall be made while a Default or an Event of
Default has occurred and is continuing. All notices under this Section shall be irrevocable and
shall be given not later than 11:00 a.m. Houston, Texas time on the day which is not less than the
number of Business Days specified above for such notice. The Administrative Agents shall promptly
notify the Lenders of each such notice received. If the US Borrower or the Canadian Borrower, as
applicable, shall fail to give the applicable Administrative Agent, the notice as specified above
for Continuation or Conversion of a LIBOR Advance prior to the end of the Interest Period with
respect thereto, such LIBOR Advance shall be Converted automatically into a Base Rate Advance on
the last day of the then current Interest Period for such LIBOR Advance.



     Section 4.10 Letter of Credit Procedure. Each Letter of Credit shall be issued upon
receipt by the applicable Issuing Lender of a written request of the US Borrower or the Canadian
Borrower, as applicable (a “Credit Request”), together with a duly executed Letter of
Credit Agreement, not later than 11:00 a.m. (Houston, Texas time), three Business Days prior to the
date set for the issuance of such Letter of Credit. Each Credit Request shall contain or specify,
among other things:




     (a) the proposed date of the issuance of the Letter of Credit, which shall be a
Business Day;



38









 






     (b) the stated amount of the Letter of Credit;




     (c) the date of expiration of the Letter of Credit;




     (d) the name and address of the beneficiary of the Letter of Credit;




     (e) the documents to be presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder;




     (f) the full text of any certificate to be presented by the beneficiary in case of any
drawing thereunder;




     (g) the purpose of the Letter of Credit; and




     (h) the aggregate amount of Letter of Credit Liabilities (including the requested
Letter of Credit) to be existing on the date of issuance of such requested Letter of Credit.



     Section 4.11 Amendments to Letters of Credit. Any request for amendment to or
extension of the expiry date of any previously issued Letter of Credit shall be submitted pursuant
to a Credit Request to the applicable Issuing Lender not later than three Business Days prior to
the date of the proposed amendment or extension. No Issuing Lender shall amend or extend the
expiry date of any Letter of Credit if the issuance of a new Letter of Credit having the same terms
and conditions as such Letter of Credit as so amended or extended would be prohibited by any
provision of this Agreement.



     Section 4.12 Letter of Credit Fees. The applicable Borrower agrees in all instances,
to pay (a) to the applicable Administrative Agent a non-refundable letter of credit fee, due and
payable quarterly in arrears on each Quarterly Fee Payment Date and on the applicable Termination
Date, for the account of the Lenders, which fee shall be equal to the Applicable Margin for LIBOR
Advances on the date of payment multiplied by the Dollar equivalent (at the applicable Exchange
Rate) of the undrawn amount of each Letter of Credit (with a $600 minimum letter of credit fee per
Letter of Credit issued), and based on a year of 360 days, and (b) to the applicable Issuing Lender
a fronting fee, due and payable on the date of issuance of any Letter of Credit, for the sole
account of such Issuing Lender, which fee shall be equal to 0.125% of the face amount of each such
Letter of Credit (with a $600 minimum fronting fee per Letter of Credit issued). Additionally, the
applicable Borrower agrees to pay the applicable Issuing Lender, on a demand basis, all other fees
(including without limitation amendment, transfer, or negotiation fees) due and payable in
accordance with such Issuing Lender’s then current fee policy, which fee policy has previously been
provided to the Borrowers.



     Section 4.13 Participation by Lenders. By the issuance of any Letter of Credit and
without any further action on the part of the applicable Issuing Lender or any of the Lenders in
respect thereof, (a) the US Issuing Lender hereby grants to each US Lender and each US Lender
hereby agrees to acquire from the US Issuing Lender a participation in each US Letter of Credit and
the related Letter of Credit Liabilities, effective upon the issuance thereof without recourse or
warranty, equal to such US Lender’s Percentage of such US Letter of Credit and Letter of Credit
Liabilities under the US Letters of Credit and (b) the Canadian Issuing Lender hereby



39









 




grants to each Canadian Lender and each Canadian Lender hereby agrees to acquire from the
Canadian Issuing Lender a participation in each such Canadian Letter of Credit and the related
Letter of Credit Liabilities, effective upon the issuance thereof without recourse or warranty,
equal to such Canadian Lender’s Percentage of such Canadian Letter of Credit and Letter of Credit
Liabilities under Canadian Letters of Credit. The Issuing Lenders shall provide a copy of each
Letter of Credit to each other Lender promptly after issuance. This agreement to grant and acquire
participations is an agreement between the Issuing Lenders and the Lenders, and neither the
Borrowers nor any beneficiary of a Letter of Credit or Lender Guaranty shall be entitled to rely
thereon. The Borrowers agree that each Lender purchasing a participation from an Issuing Lender
pursuant to this Section 4.13 may exercise all its rights to payment against the applicable
Borrower including the right of setoff, with respect to such participation as fully as if such
Lender were the direct creditor of such Borrower in the amount of such participation.




     Section 4.14 Obligations Absolute. The obligations of the applicable Borrowers and
the Guarantors under this Agreement and the other Loan Documents (including without limitation the
obligation of the applicable Borrower to reimburse the applicable Issuing Lender for draws under
any Letter of Credit) shall be joint and several, absolute, unconditional, and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement and the other Loan
Documents under all circumstances whatsoever, including without limitation the following
circumstances (provided that nothing in this Agreement constitutes a waiver of the Borrowers’
rights to assert any claim or defense based upon the gross negligence or willful misconduct of any
Lender):




     (a) Any lack of validity or enforceability of any Letter of Credit or any other Loan
Document;




     (b) Any amendment or waiver of or any consent to departure from any Loan Document;




     (c) The existence of any claim, set-off, counterclaim, defense or other rights which
the Borrowers, any Obligated Party, or any other Person may have at any time against any
beneficiary of any Letter of Credit, any Issuing Lender, or any other Person, whether in
connection with this Agreement or any other Loan Document or any unrelated transaction
except for any Administrative Agent’s, Issuing Lender’s, or any Lender’s gross negligence or
willful misconduct;




     (d) The occurrence of any Default or Event of Default; or




     (e) Any statement, draft, or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever except for any Administrative
Agent’s, any Issuing Lender’s, or any Lender’s gross negligence or willful misconduct.



     Section 4.15 Limitation of Liability. The applicable Borrower assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit with respect to its use of such
Letter of Credit. None of the Issuing Lenders, the Administrative Agents, the Lenders nor any of
their



40









 




officers or directors shall have any responsibility or liability to any Borrower or any other
Person for: (a) errors, omissions, interruptions, or delays in transmission or delivery of any
messages, or (b) the validity, sufficiency, or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should in fact prove to be
in any and all respects invalid, insufficient, fraudulent, or forged or any statement therein is
untrue or inaccurate in any respect, provided that in each case such actions taken or omitted by
any Issuing Lender, any Administrative Agent or any Lender are done or omitted in the absence of
gross negligence or willful misconduct. The Issuing Lenders may accept documents that appear on
their face to be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.




     Section 4.16 Letter of Credit Agreements. Certain additional provisions regarding the
obligations, liabilities, rights, remedies and agreements of the applicable Borrower and the
applicable Issuing Lender relative to the Letters of Credit are set out in the Letter of Credit
Agreements.



     Section 4.17 Replacement of either of the Issuing Lenders. Either of the Borrowers
may, with the approval of the Required Lenders, appoint an applicable successor Issuing Lender
hereunder upon the condition precedent that such successor Issuing Lender shall become a party to
this Agreement and expressly agree to be bound by the terms and conditions contained in this
Agreement pertaining to such Issuing Lender. Upon the appointment of a successor Issuing Lender,
such Issuing Lender replaced by such successor Issuing Lender shall cease to issue Letters of
Credit but shall continue to carry out its obligations hereunder and shall continue to have the
benefit of this Agreement and the other Loan Documents with respect to the outstanding Letters of
Credit issued by it until all such Letters of Credit have expired and any drawings thereunder have
been reimbursed in full.



     Section 4.18 No Advances. None of the Administrative Agents, Issuing Lenders or the
Lenders shall have any obligation to make any Advance, if a Default or an Event of Default has
occurred and is continuing.



     Section 4.19 Special Provisions for Canadian Lenders. Notwithstanding anything herein
to the contrary, so long as no Default exists, each Canadian Lender, the Canadian Administrative
Agent, the Canadian Issuing Lender and Canadian Swingline Lender (each a “Canadian Lender
Party”) shall be a resident of Canada for the purposes of the ITA in that it shall either be
incorporated under the laws of Canada or a province thereof or be an “authorized foreign bank” as
defined under the ITA that will receive all amounts paid or credited to it with respect to the
Canadian Facilities in respect of its “Canadian banking business” for the purposes of the ITA (a
“Canadian Resident Lender”). In the event that a Canadian Lender Party does not qualify as
a Canadian Resident Lender, the Canadian Lender Party shall deliver to the Canadian Borrower and
the Canadian Administrative Agent on the date on which such Canadian Lender Party becomes a
Canadian Lender Party hereunder or otherwise does not qualify as a Canadian Resident Lender, notice
that it is not a Canadian Resident Lender. It is acknowledged that there may be Canadian tax
imposed under Part XIII of the ITA (“Canadian Withholding Tax”) on any payments as, on
account or in lieu of payment of, or in satisfaction of, interest and other fees paid by the
Canadian Borrower with respect to the Canadian Facilities to persons who are not Canadian Resident
Lenders (such payments a “Taxable Payment”). So long as no Default exists,



41









 




the Canadian Borrower and the Canadian Administrative Agent shall have no obligation to make
any additional or increased payment under this Agreement in respect of any Canadian Withholding Tax
on a Taxable Payment, and the Canadian Borrower shall be entitled to deduct and remit to the proper
Canadian taxing authorities any Canadian Withholding Tax on any Taxable Payment.




ARTICLE V




Yield Protection and Illegality




     Section 5.1 Capital Adequacy. If after the date hereof, any adoption or
implementation of any applicable law, rule, or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration thereof, or compliance by
any Lender (or its parent) with any guideline, request, or directive regarding capital adequacy
(whether or not having the force of law) of any such central bank or other Governmental Authority,
has or would have the effect of reducing the rate of return on such Lender’s (or its parent’s)
capital as a consequence of its obligations hereunder or the transactions contemplated hereby
(whether in respect of Advances, Letters of Credit or otherwise) to a level below that which such
Lender (or its parent) could have achieved but for such adoption, implementation, change, or
compliance (taking into consideration such Lender’s policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then from time to time, within 10 Business Days
after demand by such Lender (with a copy to the applicable Administrative Agent), the applicable
Borrower agrees to pay to such Lender (or its parent) such additional amount or amounts as will
compensate such Lender for such reduction. Any such demand shall be accompanied by a certificate
of such Lender claiming compensation under this Section and setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder shall be conclusive
(absent manifest error), provided that the determination thereof is made on a reasonable basis. In
determining such amount or amounts, such Lender may use any reasonable averaging and attribution
methods.



     Section 5.2 Additional Costs. The applicable Borrower shall pay (without duplication
of amounts owing under other Sections of this Article V) directly to each Lender from time
to time such amounts as such Lender may determine to be necessary to compensate it for any costs
incurred by such Lender which such Lender determines are attributable to its making or maintaining
of any LIBOR Advances hereunder, to its issuing Letters of Credit or to its obligation to issue
Letters of Credit or make any of such Advances hereunder, or any reduction in any amount receivable
by such Lender hereunder in respect of any such Advances or Letters of Credit or such obligation
(such increases in costs and reductions in amounts receivable being herein called “Additional
Costs”), resulting from any Regulatory Change which:




     (a) changes the basis of taxation, of any amounts payable to such Lender under this
Agreement, any of its Notes in respect of any of such Advances or in respect of any Letters
of Credit (other than taxes imposed on the overall net income of such Lender or its
Applicable Lending Office for any of such Advances by the jurisdiction in which such Lender
has its principal office or such Applicable Lending Office);



42









 






     (b) imposes or modifies any reserve, special deposit, minimum capital, capital ratio,
or similar requirement relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (including any of such
Advances, Letters of Credit or any deposits referred to in the definition of “LIBOR” in
Section 1.1); or




     (c) imposes any other condition affecting this Agreement, the Notes, the Letters of
Credit or any of such extensions of credit or liabilities or commitments.


Each Lender will notify the applicable Borrower of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this Section 5.2 as
promptly as practicable after it obtains knowledge thereof and determines to request such
compensation, and will designate a different Applicable Lending Office for the Advances affected by
such event if such designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, violate any law, rule, or regulation or be in any
way disadvantageous to such Lender, provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United States of America or Canada. Each
Lender will furnish the applicable Borrower with a certificate setting forth in reasonable detail
the basis and the amount of each request of such Lender for compensation under this
Section 5.2, and such Borrower shall not be obligated to pay under this Section 5.2
prior to receipt of such certificate. If a Lender requests compensation from a Borrower under this
Section 5.2, such Borrower may, by notice to such Lender and the applicable Administrative
Agent suspend the obligation of such Lender to make or Continue making, or Convert Advances into,
Advances of the Type with respect to which such compensation is requested until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the provisions of
Section 5.5 hereof shall be applicable). Determinations and allocations by a Lender for
purposes of this Section 5.2 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Advances or of making or maintaining Advances or on amounts
receivable by it in respect of Advances, and of the additional amounts required to compensate such
Lender in respect of any Additional Costs, shall be conclusive absent manifest error, provided that
such determinations and allocations are made on a reasonable basis and in good faith.




     Section 5.3 Limitation on LIBOR Advances. Anything herein to the contrary
notwithstanding, if with respect to any LIBOR Advances for any Interest Period therefor:




     (a) The US Administrative Agent determines (which determination shall be conclusive
absent manifest error) that quotations of interest rates for the relevant deposits referred
to in the definition of “LIBOR” in Section 1.1 hereto are not being provided in the
relative amounts or for the relative maturities for purposes of determining the rate of
interest for such Advances as provided in this Agreement; or




     (b) A Lender determines (which determination shall be conclusive absent manifest error)
that the relevant rates of interest referred to in the definition of “LIBOR” in Section
1.1 hereto on the basis of which the rate of interest for such Advances for such
Interest Period is to be determined do not accurately reflect the cost to such Lender of
making or maintaining such Advances for such Interest Period; then such Lender shall



43









 






give the applicable Borrower prompt notice thereof and the relevant amounts or periods,
and so long as such condition remains in effect, such Lender shall be under no obligation to
make additional LIBOR Advances or to Convert Base Rate Advances into LIBOR Advances and such
Borrower shall, on the last day(s) of the then current Interest Period(s) for, the
outstanding LIBOR Advances, either prepay such Advances or Convert such Advances into Base
Rate Advances in accordance with the terms of this Agreement.



     Section 5.4 Illegality. Notwithstanding any other provision of this Agreement, in the
event that it becomes unlawful for a Lender or its Applicable Lending Office to (a) honor its
obligation to make LIBOR Advances hereunder or (b) maintain LIBOR Advances hereunder, then such
Lender shall promptly notify the applicable Borrower thereof and such Lender’s obligation to make
or maintain LIBOR Advances and to Convert Base Rate Advances into LIBOR Advances hereunder shall be
suspended until such time as such Lender may again make and maintain LIBOR Advances (in which case
the provisions of Section 5.5 hereof shall be applicable).



     Section 5.5 Treatment of Certain LIBOR Advances. If the LIBOR Advances of a Lender
are to be Converted pursuant to Section 5.2, 5.3 or 5.4 hereof, such
Lender’s LIBOR Advances shall be automatically Converted into Base Rate Advances on the last
day(s)of the then current Interest Period(s) for the LIBOR Advances (or, in the case of a
Conversion required by Section 5.4 hereof, on such earlier date as such Lender may specify
to the applicable Borrower, such earlier date to be not earlier than the date such Lender gives
notice thereof to such Borrower) and, unless and until such Lender gives notice as provided below
that the circumstances specified in Section 5.2, 5.3 or 5.4 hereof which
gave rise to such Conversion no longer exist:




     (a) To the extent that such Lender’s LIBOR Advances have been so Converted, all
payments and prepayments of principal which would otherwise be applied to such Lender’s
LIBOR Advances shall be applied instead to its Base Rate Advances; and




     (b) All Advances which would otherwise be made or Continued by a Lender as LIBOR
Advances shall be made as or Converted into Base Rate Advances and all Advances of such
Lender which would otherwise be Converted into LIBOR Advances shall be Converted instead
into (or shall remain as) Base Rate Advances.


If a Lender gives notice to a Borrower that the circumstances specified in Section 5.2,
5.3 or 5.4 hereof which gave rise to the Conversion of such Lender’s LIBOR Advances
pursuant to this Section 5.5 no longer exist (which such Lender agrees to do promptly upon
such circumstances ceasing to exist) at a time when any LIBOR Advances are outstanding, such
Lender’s Base Rate Advances shall be automatically Converted to LIBOR Advances, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding LIBOR Advances to the extent
necessary so that, after giving effect thereto, all Advances held by such Lender holding LIBOR
Advances and by such Lenders are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Percentages. In the event any Lender invokes
Section 5.2, 5.3 or 5.4 or either Borrower becomes obligated to pay any
additional amounts to any Lender pursuant such Sections, then, unless such Lender has removed or
cured the conditions actuating





44









 







such Sections, such Borrower may designate a substitute lender which is an Eligible Assignee (such
Lender referred to in this Agreement as a “Replacement Lender”) to purchase such Lender’s
rights and obligations with respect to its Percentage of the Aggregate Commitments. Any such
purchase shall have a purchase price equal to the outstanding principal amounts payable to such
Lender with respect to all Advances outstanding under this Agreement on the date of purchase, plus
any accrued and unpaid interest, fees and charges (including breakage charges, if any, up to such
date) in respect of such Lender’s Percentage of the Aggregate Commitments, and on other terms
reasonably satisfactory to the US Administrative Agent. Upon such purchase by the Replacement
Lender and payment of all other amounts owing to such Lender being replaced, such exiting Lender
shall no longer be a party to this Agreement or any rights or obligations under this Agreement and
the Replacement Lender shall succeed to the rights and obligations of the exiting Lender with
respect to the exiting Lender’s Percentage of the Aggregate Commitments.




     Section 5.6 Compensation. The applicable Borrower shall pay (without duplication of
amounts owing under other Sections of this Article V) to the Lenders, upon the request of
any Lender, such amount or amounts as shall be sufficient (in the reasonable opinion of the
US Administrative Agent) to compensate the Lenders for any actual loss, cost, or expense incurred
by them as a result of:




     (a) Any payment, prepayment or Conversion of a LIBOR Advance for any reason (including,
without limitation, the acceleration of the outstanding Advances pursuant to Section
12.2 or any payment pursuant to Section 5.5) on a date other than the last day
of an Interest Period for such Advance; or




     (b) Any failure by a Borrower for any reason (including, without limitation, the
failure of any conditions precedent specified in Article VII to be satisfied) to
borrow, Convert, or prepay a LIBOR Advance on the date for such borrowing, Conversion, or
prepayment, specified in the relevant notice of borrowing, prepayment, or Conversion under
this Agreement.


The US Administrative Agent shall furnish the applicable Borrower with a certificate setting forth
in reasonable detail the basis and amount of each request for compensation under this Section
5.6, and such Borrower shall not be obligated to pay under this Section 5.6 prior to
receipt of such certificate.




ARTICLE VI




Security




     Section 6.1 Collateral. To secure full and complete payment and performance of the
Obligations, the Borrowers and the Guarantors (as the case may be) have executed and delivered the
documents described below covering the property and collateral described in this Section
6.1 (which, together with any other property and collateral which may now or hereafter secure
the Secured Obligations or any part thereof, is sometimes herein called the “Collateral”):



45









 






     (a) The US Borrower and the Domestic Subsidiaries (other than de minimus Subsidiaries)
have respectively executed the Pledge and Security Agreement pursuant to which such Persons
have granted to the US Administrative Agent for its benefit and for the benefit of the
Lenders a first priority security interest in (i) all of such Persons’ accounts accessions,
chattel paper, commercial tort claims, commodity accounts, commodity contracts, deposit
accounts, documents, equipment, financial assets, fixtures, general intangibles, goods,
instruments, intellectual property, inventory, investment property, letters of credit,
letter of credit rights, payment intangibles, licenses, permits, securities, securities
accounts, security entitlements, software, supporting obligations, cash and cash accounts,
(ii) 100% of the Capital Stock issued to such Persons by any Domestic Subsidiary or
Non-domestic Guarantor, (iii) 65% of the Capital Stock issued to such Persons by any
Non-domestic Subsidiary that is not a Non-domestic Guarantor; (iv) promissory notes made by
any Subsidiary payable to the order of the US Borrower or such Domestic Subsidiary, and
(v) all products and proceeds related to any of the above.




     (b) Collateral Securing Canadian Loans. The Canadian Borrower and the Foreign
Subsidiaries have respectively executed the Canadian Security Agreement, pursuant to which
such Persons have granted to the Canadian Administrative Agent for the benefit of the
Canadian Lenders a first priority security interest in (i) all of such Persons’ accounts
accessions, chattel paper, commercial tort claims, commodity accounts, commodity contracts,
deposit accounts, documents, equipment, financial assets, fixtures, general intangibles,
goods, instruments, intellectual property, inventory, investment property, letters of
credit, letter of credit rights, payment intangibles, licenses, permits, securities,
securities accounts, security entitlements, software, supporting obligations, cash and cash
accounts, (ii) 100% of the Capital Stock issued to such Persons by any Foreign Subsidiary,
(iii) promissory notes made by any Subsidiary payable to the order of the Canadian Borrower
or such Foreign Subsidiary, and (iv) all products and proceeds related to any of the above.




     (c) The Borrowers and the Guarantors shall execute or authenticate and cause to be
executed or authenticated, such further agreements, documents and instruments, including
without limitation, as applicable, financing statements under the UCC, as the
US Administrative Agent, in its sole discretion, deems necessary or desirable to create,
preserve, evidence, and perfect its liens and security interests in the Collateral.



     Section 6.2 Setoff. If an Event of Default shall have occurred and is continuing, the
Administrative Agents, the Issuing Lenders and the Lenders are each hereby authorized at any time
and from time to time, without notice to the Borrowers, (any such notice being hereby expressly
waived by the Borrowers), to set off and apply any and all deposits (general, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by such Issuing
Lender, such Administrative Agent or such Lender to or for the credit or the account of the
US Borrower or the Canadian Borrower, as applicable against any and all of the obligations of the
US Borrower or the Canadian Borrower, as applicable now or hereafter existing under this Agreement,
the US Revolving Credit Notes, Canadian Notes, the Swing Line Notes or any other Loan Document,
irrespective of whether or not such Administrative Agent, such Issuing Lender or such Lender shall
have made any demand under this Agreement, the US Revolving Credit Notes, Canadian Notes, the Swing
Line Notes or any other Loan Document and although such



46









 




Obligations may be unmatured. Each of the Issuing Lenders, the Administrative Agents and the
Lenders agree promptly to notify the US Borrower or the Canadian Borrower, as applicable (with a
copy to the Administrative Agents) after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and application. The rights and
remedies of the Issuing Lenders, the Administrative Agents and the Lenders hereunder are in
addition to other rights and remedies (including, without limitation, other rights of setoff) which
any Issuing Lender, any Administrative Agent and any Lender may have.




ARTICLE VII




Conditions Precedent




     Section 7.1 Conditions to Initial Advance. This Agreement is not effective, and the
obligation of any Lender to make the initial Advance or of any Issuing Lender to issue the initial
Letter of Credit is subject to the condition precedent that the US Administrative Agent shall have
received (or waived or postponed in writing the requirement that it receive) on or before the day
of such Advance or Letter of Credit issuance all of the items set forth below, in each case, in
form and substance satisfactory to the US Administrative Agent.




     (a) Certificate – US Borrower. A certificate of the Secretary or an Assistant
Secretary or other appropriate officer of the US Borrower certifying (i) resolutions of the
Board of Directors of the US Borrower which authorize the execution, delivery and
performance by the US Borrower of this Agreement and the other Loan Documents to which the
US Borrower is or is to be a party hereunder, (ii) the names and signatures of the officers
of the US Borrower authorized to sign this Agreement and each of the other Loan Documents to
which the US Borrower is or is to be a party hereunder, and (iii) that the attached
certificate of incorporation and the bylaws of the US Borrower are correct and complete
copies. The US Administrative Agent and the Lenders may conclusively rely on such
certificate until the US Administrative Agent receives notice in writing from the
US Borrower to the contrary.




     (b) Certificate – Canadian Borrower. A certificate of the Secretary or an
Assistant Secretary or other appropriate officer of the Canadian Borrower certifying (i)
resolutions of the general partner of the Canadian Borrower which authorize the execution,
delivery and performance by the Canadian Borrower of this Agreement and the other Loan
Documents to which the Canadian Borrower is or is to be a party hereunder, (ii) the names
and signatures of the officers of the Canadian Borrower authorized to sign this Agreement
and each of the other Loan Documents to which the Canadian Borrower is or is to be a party
hereunder, and (iii) that the attached certificate of incorporation and the bylaws of the
Canadian Borrower are correct and complete copies. The Canadian Administrative Agent and
the Canadian Lenders may conclusively rely on such certificate until the Canadian
Administrative Agent receives notice in writing from the Canadian Borrower to the contrary.




     (c) Certificate — Guarantors. A certificate of the Secretary or an Assistant
Secretary or other appropriate officer of each Guarantor certifying (i) resolutions of the
Board of Directors of such Guarantor or actions of any other body which authorize the



47









 






execution, delivery and performance by such Guarantor of the Loan Documents to which
such Guarantor is or is to be a party hereunder, (ii) the names and signatures of the
officers of such Guarantor authorized to sign the Loan Documents to which such Guarantor is
or is to be a party hereunder, and (iii) that the articles or certificate of incorporation,
bylaws, partnership agreements, or other organizational documents of such Guarantor have not
been modified in any respect from the copies previously provided to the US Administrative
Agent and the Lenders in connection with the Existing Credit Agreement. The Administrative
Agents and the Lenders may conclusively rely on such certificate until they receive notice
in writing from such Guarantor to the contrary.




     (d) Governmental Certificates — Borrowers. Certificates of the appropriate
government officials of the state, province or territory of organization of each Borrower as
to the existence and good standing of such Borrower.




     (e) Governmental Certificates — Guarantors. Certificates of the appropriate
government officials of the jurisdiction of organization of each Guarantor as to the
existence and good standing of such Guarantor.




     (f) US Revolving Credit Notes. The US Revolving Credit Notes executed by the
US Borrower.




     (g) Canadian Notes. The Canadian Notes executed by the Canadian Borrower.




     (h) Swing Line Notes. The Swing Line Notes executed by the applicable
Borrower.




     (i) Pledge and Security Agreement. The Second Amended and Restated Pledge and
Security Agreement executed by the US Borrower and each Domestic Subsidiary other than
de minimus Subsidiaries and a Pledge and Security Agreement executed by each
Non-domestic Guarantor, if any.




     (j) Second Amended and Restated Guaranty Agreement — Domestic Guarantors. The
Second Amended and Restated Guaranty Agreement — Domestic Guarantors executed by each
Domestic Subsidiary other than de minimus Subsidiaries.




     (k) First Amended and Restated Guaranty Agreement — Foreign Guarantors. The
First Amended and Restated Guaranty Agreement — Foreign Guarantors executed by the US
Borrower and each Foreign Subsidiary.




     (l) Canadian Security Agreement. The Canadian Security Agreement executed by
the Canadian Borrower and the Foreign Subsidiaries.




     (m) Compliance Certificate. A Compliance Certificate, duly and properly
executed by an authorized officer of the US Borrower and dated as of the date of the initial
Advance.



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     (n) Opinion of US Borrower’s Counsel. A favorable opinion of legal counsel to
the US Borrower and the Guarantors organized in the United States in such form as the
US Administrative Agent may request, including without limitation opinions relating to the
Loan Documents.




     (o) Opinion of Canadian Borrower’s Counsel. A legal opinion of solicitors of
the Canadian Borrower and each Obligated Party domiciled in Canada or any province thereof
in such form as the US Administrative Agent may request.




     (p) Financial Statements. Projected consolidated financial statements of the
US Borrower and its Subsidiaries, including income statements, statements of cash flow, and
balance sheets, for the following five 12-month periods after the end of the immediately
preceding Fiscal Year (including the current Fiscal Year).




     (q) Fees. Payment of all fees required by the Fee Letter to be paid on or
prior to the Effective Date.




     (r) Insurance Certificates. Certificates showing the existence of all
insurance policies required by Section 9.5, naming the applicable Administrative
Agent as lender loss payee and additional insured.




     (s) UCC Searches. Uniform Commercial Code searches (as US Administrative Agent
shall deem necessary or appropriate) showing all financing statements on file against those
Domestic Subsidiaries that have changed their names or jurisdictions of organization since
December 17, 2001.




     (t) Landlord Waivers. Landlord lien waivers or subordinations, as the case may
be, with respect to each location of equipment and inventory of each of the Borrowers and
the Guarantors which is leased by either Borrower or any such Guarantor and for which a
landlord lien waiver or subordination is required by the US Administrative Agent in its sole
discretion, to the extent not previously delivered to the US Administrative Agent in
connection with the Existing Credit Agreement.




     (u) Stock Certificates. Stock certificates and blank stock powers with respect
to the Domestic Subsidiaries, to the extent not previously delivered to the US
Administrative Agent in connection with the Existing Credit Agreement.




     (v) Repay Debt. All outstanding Debt (other than that created under the
Existing Credit Agreement) shall have been repaid.



     Section 7.2 All Advances. The obligation of each Lender to make any Advance
(including the initial Advance) and of the Issuing Lenders to issue any Letter of Credit is subject
to the additional conditions precedent set forth below.




     (a) Items Required by Agreement. The US Administrative Agent shall have
received the items required by Section 4.1 and 4.10, as applicable.



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     (b) No Default. No Default or Event of Default shall have occurred and be
continuing, or would result from such Advance and/or Letter of Credit issuance, as
applicable.




     (c) Representations and Warranties. All of the representations and warranties
contained in Article VIII hereof and in the other Loan Documents shall be true and
correct on and as of the date of such Advance and/or Letter of Credit issuance, as
applicable with the same force and effect as if such representations and warranties had been
made on and as of such date, except for those that relate solely to a specific date or have
changed as a result of transactions permitted by this Agreement.




     (d) Material Adverse Effect. No Material Adverse Effect has occurred since the
effective date of the most current financial statements delivered to the US Administrative
Agent in accordance with Section 9.1 below.




     (e) Additional Documentation. The US Administrative Agent shall have received
such additional approvals, opinions, documents, agreements, instruments, or information as
the US Administrative Agent or its legal counsel may reasonably request.


Each request for a borrowing or issuance, renewal, extension or reissuance of a Letter of Credit by
either Borrower hereunder shall constitute a certification by such Borrower to the effect set forth
in Section 7.2(c) (as of the date of such notice).




ARTICLE VIII




Representations and Warranties




     To induce the Administrative Agents, the Issuing Lenders and the Lenders to enter into this
Agreement, the US Borrower represents and warrants to each such Person that:



     Section 8.1 Corporate Existence. Each Borrower and each Obligated Party (a) is a
corporation, partnership or limited liability company duly organized, validly existing, and in good
standing to the extent applicable under the laws of the jurisdiction of its incorporation or
organization; (b) has all requisite organizational power and authority to own its assets and carry
on its business as now being or as proposed to be conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of its business makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect. Each Borrower and each Guarantor has
the corporation, partnership or limited liability company, as applicable, power and authority to
execute, deliver and perform its obligations under this Agreement and the other Loan Documents to
which it is or may become a party.



     Section 8.2 Projections; Financial Statements. All financial information delivered by
the US Borrower to the US Administrative Agent before the date of this Agreement has been prepared
by the US Borrower in good faith based upon reasonable assumptions consistent with each other and
all facts then known to the US Borrower. The US Borrower has delivered to the US Administrative
Agent audited consolidated financial statements of the US Borrower and its Subsidiaries as at and
for the Fiscal Year ended December 31, 2006 and its unaudited consolidated and consolidating
financial statements for the six month period ended June 30,



50









 




2007. Such financial statements have been prepared in accordance with GAAP except as
expressly noted therein, and fairly present, on a consolidated basis, the financial condition of
the US Borrower and its Subsidiaries as of the respective dates indicated therein and the results
of operations for the respective periods indicated therein. Neither the US Borrower nor any of its
Subsidiaries has any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable commitments except
as referred to or reflected on such financial statements. Since June 30, 2007, there has been no
event, occurrence or circumstance that has had a Material Adverse Effect.




     Section 8.3 Corporate Action: No Breach. The execution, delivery, and performance by
each Borrower and its Subsidiaries of the Loan Documents to which such Persons are or may become a
party and compliance with the terms and provisions hereof and thereof have been duly authorized by
all requisite organizational action on the part of such Persons and do not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) the articles of incorporation or
bylaws or other organizational documents of such Persons, (ii) any applicable law, rule, or
regulation or any order, writ, injunction, or decree of any Governmental Authority or arbitrator,
or (iii) any material agreement or instrument to which the Borrowers or any of their Subsidiaries
is a party or by which any of them or any of their property is bound or subject, or (b) constitute
a default under any such agreement or instrument, or result in the creation or imposition of any
Lien (except as provided in Article VI) upon any of the revenues or assets of any Borrower
or any Subsidiary.



     Section 8.4 Operation of Business. Each Borrower and each of its Subsidiaries possess
all material licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or
rights thereto, material necessary to conduct their respective businesses substantially as now
conducted and as presently proposed to be conducted, and each Borrower and each of its Subsidiaries
are not in violation of any valid rights of others with respect to any of the foregoing in any
respect that could reasonably be expected to have a Material Adverse Effect.



     Section 8.5 Litigation and Judgments. Except as disclosed on Schedule 8.5
hereto, there is no action, suit, investigation, or proceeding before or by any Governmental
Authority or arbitrator pending (in respect of which process has been served on either of the
Borrowers or any of their Subsidiaries), or to the knowledge of the President, Chief Executive
Officer or any Vice President of the US Borrower, threatened against or affecting the Borrowers or
any Subsidiary, that would, if adversely determined, have a Material Adverse Effect. There are no
outstanding judgments against either of the Borrowers or any Subsidiary, except as disclosed on
Schedule 8.5 hereto.



     Section 8.6 Rights in Properties: Liens. Each Borrower and each Subsidiary has good
and indefeasible title to or valid leasehold interests in all material respects in their respective
properties and assets, real and personal, including the properties, assets and leasehold interests
reflected in the financial statements described in Section 8.2, and none of the properties,
assets or leasehold interests of either of the Borrowers or any Subsidiary is subject to any Lien,
except as permitted by Section 10.2.



     Section 8.7 Enforceability. This Agreement constitutes, and the other Loan Documents
to which the Borrowers and their Subsidiaries are party, when delivered, shall




51












 




constitute legal, valid, and binding obligations of each of the Borrowers and their
Subsidiaries as applicable, enforceable against such Borrowers and its Subsidiaries as applicable,
in accordance with their respective terms, except as limited by bankruptcy, insolvency, or other
laws of general application relating to the enforcement of creditors’ rights and by general
equitable principles.




     Section 8.8 Approvals. No authorization, approval, or consent of, and no filing or
registration with, any Governmental Authority or third party is or will be necessary for the
execution, delivery, or performance by the Borrowers and their Subsidiaries of the Loan Documents
to which such Borrower and its Subsidiaries are or may become a party or the validity or
enforceability thereof, except for filings and recordings in respect of the Liens created pursuant
to Loan Documents and appropriate filings with the SEC.



     Section 8.9 Debt. The Borrowers and their Subsidiaries have no Debt, except Debt
permitted by Section 10.1.



     Section 8.10 Taxes. Each Borrower and each Subsidiary have filed all tax returns
(federal, state, local and foreign) required to be filed, including all income, franchise,
employment, property, and sales tax returns, and have paid all of their respective liabilities for
taxes, assessments, governmental charges and other levies that are due and payable, in each case
except for those contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP are being maintained. Except as set forth on Schedule
8.10, neither of the Borrowers know of any pending investigation of either of the Borrowers or
any Subsidiary by any taxing authority or of any pending but unassessed tax liability of either of
the Borrowers or any Subsidiary.



     Section 8.11 Use of Proceeds: Margin Securities. Neither of the Borrowers nor any
Subsidiary is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within the meaning of
Regulations U, or X of the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying margin stock.



     Section 8.12 ERISA. The US Borrower and each Subsidiary are in compliance with all
applicable provisions of ERISA and the applicable provisions of the Code relating thereto. No
Reportable Event which is required to be reported to the PBGC pursuant to Section 4043(b) of ERISA
or Prohibited Transaction which could reasonably be expected to have a Material Adverse Effect has
occurred and is continuing with respect to any Plan. No notice of intent to terminate a Plan has
been filed, nor has any Plan been terminated. No circumstances exist which constitute grounds
entitling the PBGC to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither the US Borrower nor any ERISA
Affiliate (nor any predecessor to the US Borrower or any ERISA Affiliate) has completely or
partially withdrawn from a Multiemployer Plan. The US Borrower and each ERISA Affiliate have met
their minimum funding requirements under ERISA with respect to all of their Plans, and the present
value of all vested benefits under each Plan do not exceed the fair market value of all Plan assets
allocable to such benefits, as determined on the most recent valuation date of the Plan and in
accordance with ERISA. Neither the US Borrower nor any ERISA Affiliate has incurred any liability
to the PBGC under ERISA.



52









 





     Section 8.13 Disclosure. No statement, information, report, representation, or
warranty made by either of the Borrowers or any of their Subsidiaries in this Agreement or in any
other Loan Document or furnished to any Administrative Agent or any Lender in connection with this
Agreement or any of the transactions contemplated hereby (but excluding all projections and pro
forma financial statements which shall have been prepared in good faith and based upon reasonable
assumptions) contains any untrue statement of a material fact and all such statements, information,
reports, representations and warranties, taken as a whole, do not omit to state any material fact
necessary to make the statements herein or therein not materially misleading. There is no fact
known to either of the Borrowers or any of their Subsidiaries which has a Material Adverse Effect,
or which could reasonably be expected to have, in the reasonable judgment of the US Borrower, in
the future a Material Adverse Effect, that has not been disclosed in writing to the
US Administrative Agent.



     Section 8.14 Subsidiaries. Neither Borrower has any Subsidiary other than those
listed on Schedule 8.14 hereto, and Schedule 8.14 lists the jurisdiction of
organization or incorporation of each Subsidiary and the percentage of such Borrower’s and its
Subsidiaries’ ownership of the outstanding voting stock or other similar interests of each such
Subsidiary. All of the outstanding Capital Stock of each Subsidiary has been validly issued, is
fully paid, and is nonassessable.



     Section 8.15 Agreements. Except as disclosed in SEC filings, neither the US Borrower
nor any Guarantor is a party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction which could reasonably
be expected to have a Material Adverse Effect. Neither the US Borrower nor any Guarantor is in
default in any respect in the performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument material to its business to which
it is a party where such default or the effect thereof could reasonably be expected to result in a
Material Adverse Effect.



     Section 8.16 Compliance with Laws. Neither of the Borrowers nor any Subsidiary is in
violation of any law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator except where such Person’s failure to do so could not reasonably be expected to result
in a Material Adverse Effect.



     Section 8.17 Investment Company Act. Neither the US Borrower nor any Subsidiary is an
“investment company” within the meaning of, or “controlled by” an “investment company” within the
meaning of, the Investment Company Act of 1940, as amended.



     Section 8.18 Environmental Matters. Except as disclosed on Schedule 8.18
hereto:




               (a) The US Borrower, each Subsidiary, and all of their respective properties, assets,
and operations are in full compliance with all Environmental Laws, except for occurrences of
noncompliance which could not in the aggregate, reasonably be expected to have a Material
Adverse Effect. The US Borrower is not aware of, nor has the US Borrower received notice
of, any past, present, or future conditions, events, activities, practices, or incidents
which may interfere with or prevent the compliance or continued compliance of the
US Borrower and its Subsidiaries with all Environmental Laws, except



53









 







for occurrences of noncompliance which could not in the aggregate, reasonably be
expected to have a Material Adverse Effect;




               (b) The US Borrower and each Subsidiary have obtained all permits, licenses, and
authorizations that are required under applicable Environmental Laws, and all such permits
are in effect and the US Borrower and its Subsidiaries are in compliance with all of the
terms and conditions of such permits, except where failure to obtain or comply with such
permits, licenses or authorizations could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;




               (c) No Hazardous Materials exist on, about, or within or have been used, generated,
stored, transported, disposed of on, or Released from any of the properties or assets of the
US Borrower or any Subsidiary except (i) in amounts that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect and (ii) for dynamite and
other explosives for which such Person possesses all licenses and permits necessary to
comply with all Environmental Laws and other federal, state, local and foreign laws,
regulations and requirements pertaining to the use, possession, disposal, storage or sale
thereof, and such use, possession, disposal, storage or sale thereof is in compliance with
Environmental Laws and such other laws, regulations and requirements except where failure to
obtain or comply with such licenses or permits or to comply with such laws, regulations or
requirements could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect;




               (d) Neither the US Borrower nor any of its Subsidiaries nor any of their respective
currently or previously owned or leased properties or operations is subject to any
outstanding or, to the best of its knowledge, threatened order from or agreement with any
Governmental Authority or other Person or subject to any judicial or docketed administrative
proceeding with respect to (i) failure to comply with Environmental Laws, (ii) Remedial
Action, or (iii) any Environmental Liabilities arising from a Release or threatened Release,
which, in the aggregate, could reasonably be expected to have a Material Adverse Effect;




               (e) There are no conditions or circumstances associated with the currently or
previously owned or leased properties or operations of the US Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse Effect;




               (f) Neither the US Borrower nor any of its Subsidiaries is a treatment, storage, or
disposal facility requiring a permit under the Resource Conservation and Recovery Act, 42
U.S.C. § 6901 et. seq. regulations thereunder or any comparable provision of state
law. The US Borrower and its Subsidiaries are in compliance with all applicable financial
responsibility requirements of all Environmental Laws except where failure to be in such
compliance could not reasonably be expected to have a Material Adverse Effect;




               (g) Neither the US Borrower nor any of its Subsidiaries has filed or failed to file any
notice required under applicable Environmental Law reporting a Release, which



54









 







Release or any aggregation thereof, or failure to file, could reasonably be expected to
have a Material Adverse Effect; and




               (h) To the best of the US Borrower’s knowledge, no Lien arising under any Environmental
Law has attached to any property or revenues of the US Borrower or its Subsidiaries.



ARTICLE IX




Affirmative Covenants




     The US Borrower covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any commitment to lend hereunder or any Issuing Lender has any
obligation to issue any Letter of Credit hereunder or any Letter of Credit Liabilities exist, the
US Borrower will perform and observe, or cause to be performed and observed, the following
covenants:



     Section 9.1 Reporting Requirements. The US Borrower will furnish the items set forth
below to the US Administrative Agent for distribution to the Lenders:




               (a) Annual Financial Statements. As soon as available, but in any event no
later than the earlier of (i) five days after filing the US Borrower’s Form 10—K Annual
Report with the SEC, or (ii) 90 days after the end of the US Borrower’s Fiscal Year, the
US Borrower’s Form 10-K Annual Report, including (i) the consolidated balance sheets of the
US Borrower and its Subsidiaries, as of the end of such Fiscal Year and (ii) the
consolidated statements of earnings of the US Borrower and its Subsidiaries and consolidated
statements of changes in shareholders’ equity of the US Borrower and its Subsidiaries, and
statements of changes in cash flows of the US Borrower and its Subsidiaries as of and
through the end of such Fiscal Year, all of which are prepared in accordance with GAAP, and
certified by independent certified public accountants acceptable to the US Administrative
Agent, whose opinion shall be in scope and substance in accordance with generally accepted
auditing standards and shall be unqualified. Additionally, concurrent with delivery of the
information described above, the US Borrower shall deliver (A) the unaudited consolidating
balance sheets of the US Borrower and its Subsidiaries, as of the end of such Fiscal Year
and (B) the unaudited consolidating statements of earnings of the US Borrower and its
Subsidiaries and consolidating statements of changes in shareholders’ equity of the
US Borrower and its Subsidiaries and statements of changes in cash flows of the US Borrower
and its Subsidiaries as of and through the end of such Fiscal Year, all of which are
prepared in accordance with GAAP, and certified by the chief financial officer, chief
accounting officer, or another officer of the US Borrower acceptable to the
US Administrative Agent.




               (b) Quarterly 10-Q of the US Borrower. As soon as available, but in any event
no later than the earlier of (i) five days after filing the US Borrower’s Form 10-Q
Quarterly Report with the SEC, or (ii) 45 days after the end of each Fiscal Quarter of the
US Borrower, the US Borrower’s Form 10-Q Quarterly Report, including (i) the



55









 







consolidated and consolidating balance sheets of the US Borrower and its Subsidiaries,
as of the end of such Fiscal Quarter and (ii) the consolidated and consolidating statements
of earnings of the US Borrower and its Subsidiaries and consolidated and consolidating
statements of changes in shareholders’ equity of the US Borrower and its Subsidiaries, and
statements of changes in cash flows of the US Borrower and its Subsidiaries as of and
through the end of such Fiscal Quarter, all of which are prepared in accordance with GAAP,
and certified by the chief financial officer, chief accounting officer, or another officer
of the US Borrower acceptable to the US Administrative Agent.




               (c) Compliance Certificate. Concurrently with the delivery of the Form 10-K’s
or Form 10-Q’s, as applicable, referred to in subsections 9.1(a) and 9.1(b),
a Compliance Certificate of the chief financial officer, the chief accounting officer, the
treasurer or the assistant treasurer of the US Borrower or another officer of the
US Borrower acceptable to the US Administrative Agent (i) stating, among other things, that
no Default or Event of Default has occurred and is continuing, or if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and the action
which is proposed to be taken with respect thereto, and (ii) showing in reasonable detail
the calculations demonstrating compliance with Article XI.




               (d) Annual Projected Financial Statements and Capital Expenditure Projections.
As soon as available, but in any event no later than 90 days after the end of each Fiscal
Year of the US Borrower, projected financial statements for the upcoming Fiscal Year of the
US Borrower and its Subsidiaries and for each Fiscal Year thereafter through and including
the Fiscal Year in which the Termination Date occurs, including projected Capital
Expenditures, in form and detail satisfactory to the US Administrative Agent and prepared
under the supervision of the chief financial officer or the chief accounting officer of the
US Borrower or another officer of the US Borrower acceptable to the US Administrative Agent.




               (e) Notice of Litigation. Promptly after the service of process or notice
thereof, notice of all actions, suits, and proceedings before any Governmental Authority or
arbitrator affecting either Borrower or any Subsidiary which could reasonably be expected to
have a Material Adverse Effect.




               (f) Notice of Default. As soon as possible and in any event within two days
after any of the chief executive officer, the chief financial officer, the chief accounting
officer, the treasurer or any other employee serving in a comparable capacity (regardless of
title) of either of the Borrowers or any Guarantor obtains any knowledge, becomes aware or
should have known through the exercise of prudent business judgment of the occurrence of any
Default, a written notice setting forth the details of such Default and the action that the
US Borrower has taken and proposes to take with respect thereto.




               (g) ERISA Reports. Upon the request of the US Administrative Agent from time
to time copies of all reports, including annual reports, and notices which the US Borrower
or any Subsidiary files with or receives from the PBGC, the US Department of Labor under
ERISA or the Internal Revenue Service under the Code; and as soon as possible and in any
event within five days after the US Borrower or any



56









 







Subsidiary knows or has reason to know that any Reportable Event which is required to
be reported to the PBGC pursuant to Section 4043 (b) of ERISA or Prohibited Transaction
which could be reasonably expected to have a Material Adverse Effect has occurred with
respect to any Plan or that the PBGC or the US Borrower or any Subsidiary has instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, a certificate of
the chief financial officer of the US Borrower setting forth the details as to such
Reportable Event or Prohibited Transaction or Plan termination and the action that the
US Borrower proposes to take with respect thereto.




               (h) Notice of Material Adverse Effect. As soon as possible and in any event
within two days after any of the chief executive officer, the chief financial officer, the
chief accounting officer, the treasurer or any other employee serving in a comparable
capacity (regardless of title) of either of the Borrowers or any Guarantor obtains any
knowledge, becomes aware or should have known through the exercise of prudent business
judgment of the occurrence thereof, written notice of any matter that could reasonably be
expected to have a Material Adverse Effect.




               (i) Notice of Actual or Contingent Liabilities. As soon as possible, and in
any event within two Business Days after any of the chief executive officer, the chief
financial officer, the chief accounting officer, the treasurer or any other employee serving
in a comparable capacity (regardless of title) of either of the Borrowers or any Guarantor
obtains any knowledge, becomes aware or should have known through the exercise of prudent
business judgment of the occurrence thereof, written notice of any actual or contingent
liabilities which, if resolved adversely to such Person could reasonably be expected to have
a Material Adverse Effect.




               (j) General Information. Within such a time period as US Administrative Agent
may reasonably request, such additional information and statements, lists of assets and
liabilities, tax returns, financial statements, reporting statements and any other reports
with respect to the US Borrower’s or any Subsidiary’s financial condition, business
operations and properties as the US Administrative Agent may reasonably request from time to
time.



     Section 9.2 Maintenance of Existence: Conduct of Business. Except as provided in
Section 10.3, each Borrower will preserve and maintain, and will cause each Guarantor to
preserve and maintain, its corporate existence and all of its leases, privileges, licenses,
permits, franchises, qualifications, and rights that are necessary or desirable in the ordinary
conduct of its business. Each Borrower will conduct, and will cause each Subsidiary to conduct,
its businesses in an orderly and efficient manner in accordance with good business practices.



     Section 9.3 Maintenance of Properties. Subject to Sections 10.3 and
10.6, each Borrower will maintain, keep, and preserve, and cause each Subsidiary to
maintain, keep, and preserve, in all material respects, all of its properties (tangible and
intangible) necessary in the proper conduct of its business in good working order and condition
(ordinary wear and tear excepted).



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     Section 9.4 Taxes and Claims. Each Borrower will pay or discharge, and will cause
each Subsidiary to pay or discharge, at or before maturity or before becoming delinquent all
material taxes, levies, assessments, and governmental charges imposed on it or its income or
profits or any of its property; provided, however, that neither of the Borrowers nor any Subsidiary
shall be required to pay or discharge any tax, levy, assessment, or governmental charge which is
being contested in good faith by appropriate proceedings diligently pursued, and for which adequate
reserves have been established to the extent required by GAAP.



     Section 9.5 Insurance.




               (a) Each Borrower will maintain, and will cause each Subsidiary to maintain, insurance
with financially sound and reputable insurance companies in such amounts and covering such
risks as is usually carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Borrowers and their Subsidiaries operate,
provided that in any event each Borrower will maintain and will cause each Subsidiary to
maintain workmen’s compensation insurance, property insurance, comprehensive general
liability insurance, and business interruption insurance with respect to processing centers
in accordance with such Borrower’s and such Subsidiaries’ current practices reasonably
satisfactory to the US Administrative Agent.




               (b) Certificates of insurance, and endorsements and renewals thereof shall be delivered
by each Borrower to and retained by the US Administrative Agent. All policies of
(i) property insurance with respect to the US Collateral either shall have attached thereto
a lender’s loss payable endorsement in favor of the US Administrative Agent for its benefit
and the ratable benefit of the US Lenders or name the US Administrative Agent as loss payee
for its benefit and the ratable benefit of the Secured Parties, in either case, in form
reasonably satisfactory to the US Administrative Agent, (ii) property insurance with respect
to the Canadian Collateral either shall have attached thereto a lender’s loss payable
endorsement in favor of the Canadian Administrative Agent for its benefit and the ratable
benefit of the Canadian Lenders or name the Canadian Administrative Agent as loss payee for
its benefit and the ratable benefit of the Secured Parties, in either case, in form
reasonably satisfactory to the Canadian Administrative Agent, and (iii) liability insurance
shall name the US Administrative Agent for its benefit and the ratable benefit of the
US Lenders as an additional insured. All certificates of insurance shall set forth the
coverage, the limits of liability, the name of the carrier, the policy number, and the
period of coverage. All such policies shall contain a provision that notwithstanding any
contrary agreements between a Borrower, its Subsidiaries, and the applicable insurance
company, such policies will not be canceled or allowed to lapse without renewal without at
least 30 days’ prior written notice to the applicable Administrative Agent. In the event
that, notwithstanding the “lender’s loss payable endorsement” requirement of this section,
the proceeds of any insurance policy described above are paid to a Borrower or a Guarantor,
such Borrower shall deliver, or cause to be delivered, such proceeds to the applicable
Administrative Agent immediately upon receipt.



     Section 9.6 Inspection Rights. At any reasonable time during business hours and from
time to time, each Borrower will permit, and will cause each Subsidiary to permit,



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representatives of the Administrative Agents, the Lenders and the Issuing Lenders to examine,
copy, and make extracts from its books and records, to visit and inspect its properties, and to
discuss its business, operations, and financial condition with its officers, employees, and
independent certified public accountants. So long as no Default or Event of Default is then
existing, the applicable Administrative Agent shall provide prior notice of such inspection to
Borrowers.



     Section 9.7 Keeping Books and Records. Each Borrower will maintain, and will cause
each Subsidiary to maintain, proper books of record and account in which full, true, and correct
entries in conformity with GAAP shall be made of all dealings and transactions in relation to its
business and activities.



     Section 9.8 Compliance with Laws. Each Borrower will comply, and will cause each
Subsidiary to comply with all applicable laws, rules, regulations, orders, and decrees of any
Governmental Authority or arbitrator if its failure to comply could reasonably be expected to
result in a Material Adverse Effect.



     Section 9.9 Compliance with Agreements. Each Borrower will comply, and will cause
each Subsidiary to comply with all agreements, contracts, and instruments binding on it or
affecting its properties or business if its failure to comply could reasonably be expected to
result in a Material Adverse Effect.



     Section 9.10 Further Assurances. Each Borrower will, and will cause each Subsidiary
to, execute and deliver such further agreements and instruments and take such further action as may
be requested by the either Administrative Agent or any Lender to carry out the provisions and
purposes of this Agreement and the other Loan Documents to create, preserve, and perfect the Liens
of the Administrative Agents in the Collateral.



     Section 9.11 ERISA. The US Borrower will comply, and will cause each Subsidiary to
comply, with all minimum funding requirements, and all other material requirements of ERISA and the
applicable provisions of the Code relating thereto, if applicable, so as not to give rise to any
liability thereunder if its failure to comply could reasonably be expected to result in a Material
Adverse Effect.



     Section 9.12 Additional Subsidiaries as Guarantors: Execution of Additional Security
Agreements–Guarantors.




               (a) Each Borrower will cause each Subsidiary created or acquired after the Effective
Date, or which after the Effective Date is no longer a de minimus
Subsidiary, to execute a Guaranty Supplement in substantially the form of Exhibit A
to the Guaranty Agreement–Domestic if such Subsidiary is a Domestic Subsidiary, a Guaranty
Agreement–Foreign if such Subsidiary is a Foreign Subsidiary or a Guaranty
Agreement-Non-domestic if such Subsidiary is a Non-domestic Subsidiary. Each Borrower will
cause each such Subsidiary to deliver such Guaranty Agreement to the applicable
Administrative Agent.




               (b) Contemporaneously with the delivery by any Subsidiary of a Guaranty Agreement
pursuant to paragraph (a) of this Section 9.12, such Subsidiary will execute



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and deliver to the US Administrative Agent (i) a Security Agreement Supplement in
substantially the form of Exhibit G to the Pledge and Security Agreement if such
Subsidiary is a Domestic Subsidiary or a Non-domestic Guarantor and on a form satisfactory
to the Canadian Administrative Agent if the Subsidiary is a Foreign Subsidiary, and
(ii) uniform commercial code or other applicable financing statements or documents with
respect to security interest granted by the document executed in connection with clause (i)
or (ii) of this Section 9.12(c), as applicable. Any such Subsidiary shall be deemed
a Guarantor five Business Days following the date on which such Subsidiary delivers the
documents described above to the applicable Administrative Agent.



     Section 9.13 Continuity of Operations. Subject to Sections 10.3 and
10.6, each Borrower will continue to conduct, and will cause each of the Guarantors to
continue to conduct, its primary businesses as conducted as of the Effective Date and to continue
its operations in such businesses.



     Section 9.14 Intercompany Notes.




               (a) All loans and other advances made by either of the Borrowers or any of their
Subsidiaries to either of the Borrowers or any of such Borrower’s other Subsidiaries shall
be evidenced by an Intercompany Note.




               (b) Each Intercompany Note shall be (i)  subordinated to the Notes on terms and
conditions reasonably satisfactory to the Required Lenders; and (ii) collaterally assigned
to the US Administrative Agent (as agent for the other Lenders).




               (c) No Intercompany Note shall be renewed, extended, amended, restated, replaced, or
otherwise modified without the Required Lenders’ prior written consent.



ARTICLE X




Negative Covenants




     The US Borrower covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any commitment to lend hereunder or any Issuing Lender has any
obligation to issue any Letter of Credit hereunder or any Letter of Credit Liabilities exist, the
US Borrower will perform and observe, or cause to be performed and observed, the following
covenants:



     Section 10.1 Debt. The US Borrower will not incur, create, assume, or permit to
exist, and will not permit any Subsidiary to incur, create, assume, or permit to exist, any Debt,
except:




               (a) Debt and Contingent Liabilities pursuant to the Loan Documents;




               (b) Extensions, renewals, refundings, amendments or replacements of Debt permitted by
clause (a) above or clause (c) below provided that no such extension, renewal, refunding or
replacement shall (i) if such Debt is Subordinated Debt, amend or modify any subordination
provisions, if any, contained in the original Debt so that the



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Debt, as extended, renewed or replaced, is no longer Subordinated Debt, (ii) shorten
the fixed maturity the Debt being refinanced, (iii) increase the principal amount of the
Debt being refinanced by an amount greater than the lesser of (A) reasonable fees and
expenses incurred in connection with such refinancing and (B) an amount equal to five
percent (5.00%) of the principal amount of the Debt being refinanced, or (iv) increase the
rate of interest to a rate greater than the current market rate at the time of the
extension, renewal, refunding, or replacement of the original Debt;




               (c) Senior unsecured Debt and Subordinated Debt so long as (i) the US Borrower has
delivered a Compliance Certificate concurrently with the issuance thereof demonstrating pro
forma compliance with Sections 11.1, 11.2 and 11.3 of this
Agreement, (ii) the covenants and financial ratios under instruments or agreements governing
such Debt are not more restrictive than such covenants under this Agreement as reasonably
determined by the US Administrative Agent, (iii) the scheduled maturity of such Debt is at
least 30 days past the scheduled Termination Date and no amortization payments, mandatory
prepayments, or repurchases of such Debt are required thereunder other than at the scheduled
maturity thereof, and (iv) the US Borrower and its Subsidiaries are in compliance with the
covenants set forth in this Agreement, both before and after giving effect to each
incurrence of such Debt;




               (d) The following secured Debt: provided that, the aggregate principal amount of all
such Debt shall not exceed 10% of the US Borrower’s consolidated Net Worth at any time and
neither the US Borrower nor any Subsidiary may enter into additional Debt of the type
described in this clause (d) if a Default or Event of Default is continuing or entering into
the additional Debt could reasonably be expected to cause or result in a Default or Event of
Default:




                    (i) purchase money Debt or Capital Leases; and




                    (ii) Existing Debt and Contingent Liabilities described on Schedule
10.1 hereto;




               (e) Debt of the US Borrower to a Guarantor that is a Domestic Subsidiary other than a
de minimus Subsidiary or of a Guarantor to the US Borrower, so long as such
Debt is evidenced by an Intercompany Note;




               (f) Debt of the US Borrower to a Subsidiary which is not a Domestic Subsidiary and a
Guarantor or of a Subsidiary to another Subsidiary which is not a Domestic Subsidiary and a
Guarantor so long as such Debt is evidenced by an Intercompany Note and does not exceed
$2,000,000, in the aggregate outstanding at any time;




               (g) Obligations of the US Borrower or any Subsidiary under real estate leases entered
into in the ordinary course of business;




               (h) Contingent Obligations under any guaranty by the US Borrower or any Subsidiary of
obligations as lessee under any lease which is otherwise permitted under this Agreement;



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               (i) Debt constituting deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and appeal bonds and
performance bonds and other obligations of a like nature that are incurred in the ordinary
course of business, not to exceed $2,000,000 in the aggregate at any time outstanding;




               (j) Indemnities arising under agreements entered into by the US Borrower or any
Obligated Party in the ordinary course of business; and




               (k) Debt arising on account of deferred Taxes, deferred workers compensation
liabilities or deferred employee medical liabilities.



     Section 10.2 Limitation on Liens. The US Borrower will not incur, create, assume, or
permit to exist, and will not permit any Obligated Party to incur, create, assume, or permit to
exist, any Lien upon any of their respective properties, assets, or revenues, whether now owned or
hereafter acquired, except the following (herein referred to as “Permitted Liens”):




               (a) Liens in favor of the Administrative Agents for the Secured Parties;




               (b) Encumbrances consisting of minor easements, zoning restrictions, or other
restrictions on the use of property that do not (individually or in the aggregate)
materially affect the value of the assets encumbered thereby or materially impair the
ability of the US Borrower or any Obligated Party to use such assets in their respective
businesses;




               (c) Liens for taxes, assessments, or other governmental charges which are not
delinquent for longer than 90 days or which are being contested in good faith and for which
adequate reserves have been established;




               (d) Liens of landlords, tenants, vendors, mechanics, materialmen, warehousemen,
carriers, or other similar statutory Liens securing obligations that are not delinquent for
longer than 90 days and are incurred in the ordinary course of business or which are being
contested in good faith and for which adequate reserves have been established;




               (e) Liens resulting from good faith deposits to secure payments of workmen’s
compensation or other social security programs or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, or contracts (other than for payment
of Debt), or leases made in the ordinary course of business;




               (f) Liens incurred in connection with Debt permitted under Section 10.1(d), so
long as such Liens only extend to the assets being acquired with the proceeds of such Debt
and do not extend to any inventory;




               (g) Inchoate Liens arising under ERISA;




               (h) Rights of set-off or banker’s liens created by law in favor of commercial banks;



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               (i) Liens to be discharged and released on the Effective Date; and




               (j) precautionary UCC filings regarding operating leases entered into in the ordinary
course of business.



     Section 10.3 Mergers, Dissolutions, Etc. The US Borrower will not, and will not
permit any Subsidiary to, be a party to any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or any stock of any class of, or any partnership or
joint venture interest in, any other Person, or sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any receivables, except
for the following:




               (a) any other such merger or consolidation, sale, transfer, conveyance, lease or
assignment of or by any Subsidiary of the US Borrower into the US Borrower or into, with or
to any other Subsidiary of the US Borrower; provided that (i) if such event involves the
US Borrower, the US Borrower shall be the surviving entity, (ii) if such event involves a
Guarantor, a Guarantor shall be the surviving entity and shall guarantee the Obligations
that were guaranteed by the prior entity, and (iii) no Default or Event of Default shall
exist at such time;




               (b) any such purchase or other acquisition by the US Borrower of the assets or stock of
any Guarantor or any Subsidiary of the US Borrower, or by any Guarantor of the assets or
stock of any Subsidiary of the US Borrower;




               (c) any such merger or consolidation of the US Borrower or a Subsidiary of the
US Borrower into, with or to any other Person or any such purchase or other acquisition by
the US Borrower or any Subsidiary of the US Borrower of the assets or stock of any other
Person in similar or related businesses where (i) the transaction is not hostile;
(ii) immediately before and immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; (iii) the US Borrower and its
Subsidiaries, taken as a whole, are in pro forma compliance with all the terms and
conditions of this Agreement, including without limitation the financial covenants set forth
in Article XI taking into account such purchase or acquisition; (iv) such Person (or
its board of directors or similar body) has approved such acquisition or other purchase; and
(v) if, after giving effect to such purchase or other acquisition, the Leverage Ratio is
greater than 2.50 to 1.00 (based on the most recent financial statements in Administrative
Agents’ possession), then for such transactions under this clause (v) taking into account
and including all such transactions in any Fiscal Year, the aggregate consideration to be
paid or Debt incurred (or assumed) by the US Borrower and its Subsidiaries in connection
with all such purchases or acquisitions is not greater than $50,000,000; and (vi) prior to
the consummation of any such purchase or acquisition, the US Borrower delivers to the
US Administrative Agent evidence satisfactory to the US Administrative Agent that, after
giving effect to such purchase or acquisition, the amount available to be borrowed pursuant
to Section 2.1 of this Agreement shall be greater than or equal to $15,000,000;



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               (d) investments in joint ventures, partnerships and other entities not exceeding in the
aggregate $20,000,000; and




               (e) transactions permitted under Section 10.6.



     Section 10.4 Loans and Investments. The US Borrower will not make, and will not
permit any Subsidiary to make, any advance, loan, extension of credit, or capital contribution to
or investment in, or purchase, or permit any Subsidiary to purchase, any stock, bonds, notes,
debentures or other securities of, any Person, except:




               (a) advances or loans to, or investments in, Subsidiaries (other than the US Borrower
and the Guarantors), so long as such advances, loans, or investments made after the
Effective Date do not exceed, in the aggregate, $500,000;




               (b) any bonds or other obligations of the United States of America which, as to
principal and interest, constitute direct obligations or are guaranteed by the United States
of America;




               (c) any bonds, debentures, participation certificates, notes or other obligations of
any agency or corporation or instrumentality of the United States of America, the
obligations of which are unconditionally guaranteed by the United States of America;




               (d) interest bearing accounts, interest bearing deposits, Eurodollar investments, or
certificates of deposit issued by or bankers acceptances drawn or accepted by, banks or
trust companies, including the Administrative Agents, organized under the laws of the United
States or any state thereof, but only with institutions whose capital and surplus is in
excess of $500,000,000;




               (e) investments described in Section 10.3(d); and




               (f) advances or loans to any employee of the US Borrower or any Subsidiary (i) in the
ordinary course of business consistent with past practices for travel and entertainment
expenses, relocation costs and similar purposes of up to $150,000 for any employee and up to
$500,000 in the aggregate at any one time outstanding, and (ii) to finance the exercise of
stock options up to $200,000 for any employee and up to $500,000 in the aggregate at any one
time outstanding.



     Section 10.5 Transactions With Affiliates. Except as disclosed on Schedule
10.5, the US Borrower will not enter into, and will not permit any Subsidiary to enter into,
any transaction, including, without limitation, the purchase, sale, or exchange of property or the
rendering of any service, with any Affiliate of the US Borrower or any Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of the US Borrower’s or such
Subsidiary ‘s business and upon fair and reasonable terms no less favorable to the US Borrower or
such Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person not
an Affiliate of the US Borrower or such Subsidiary; provided that the foregoing shall not prohibit
the US Borrower or the Subsidiaries from entering into management contracts with Affiliates upon
fair and reasonable terms in the ordinary course of business or from entering into transactions
permitted by this Agreement.



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     Section 10.6 Disposition of Assets. Subject to Sections 9.2, 9.3 and
10.3, the US Borrower will not sell, lease, assign, transfer, or otherwise dispose of any
of its assets, nor permit any Subsidiary to do so with any of its assets, except (a) dispositions
of inventory in the ordinary course of business, (b) transfers of condemned Property to the
Governmental Authority that has condemned such Property, (c) transfers of Property that have been
subject to casualty, (d) licenses or sublicenses of software in the ordinary course of business,
and (e) without duplication of clauses (a) through (d) above, dispositions of Property of the
US Borrower and the Subsidiaries made in the best business judgment of the US Borrower, if (i) no
Event of Default has occurred and is continuing, (ii) no Event of Default would arise as a result
of any such disposition, (iii) the aggregate book value of all such assets disposed of in reliance
on this Section 10.6(e) shall not exceed in any Fiscal Year 10% of the US Borrower’s
consolidated Net Worth, and (iv) the US Borrower shall have delivered to the US Administrative
Agent (a) a summary of (x) the terms of the proposed disposition, including without limitation, a
description of the Property to be sold, the current book value of such Property by class, and the
consideration received for such Property, and (y) the effect of such disposition on the
US Borrower’s trailing twelve-month financial performance; and (b) to the extent such disposition
consists of a sale of a Subsidiary (or a division of any Subsidiary), consolidating,
company-prepared financial statements of US Borrower and its Subsidiaries (both including and
excluding the Subsidiary or division that is to be sold) for the latest Fiscal Year end and for the
year-to-date, which financial statements shall include, without limitation, balance sheets,
statements of income and retained earnings and of cash flows, all of which shall be prepared in
accordance with GAAP.



     Section 10.7 Sale and Leaseback. Other than a sale/leaseback arrangement with respect
to all of the US Borrower’s and its Subsidiaries’ motor vehicles, the US Borrower will not enter
into, and will not permit any Subsidiary to enter into, any arrangement or series or arrangements
with any Person or group of Persons pursuant to which any of them leases from such Person real or
personal property that has been or is to be sold or transferred, directly or indirectly, by any of
them to such Person, except that the US Borrower and the Subsidiaries may enter into such
arrangements as long as the aggregate book value of the property sold and which at any time remains
subject to a lease does not exceed $10,000,000.



     Section 10.8 Nature of Business. The US Borrower will not, and will not permit any
Guarantor to, engage in any business other than the businesses in which they are engaged as of the
date hereof and other businesses reasonably related thereto.



     Section 10.9 Environmental Protection. If, as a result thereof, a Material Adverse
Effect could be reasonably be expected to result therefrom, the US Borrower will not, and will not
permit any Subsidiary to, (a) use (or permit any tenant to use) any of their respective properties
or assets for the handling, processing, storage, transportation, or disposal of any Hazardous
Material except in compliance with Environmental Law, (b) generate any Hazardous Material except in
compliance with Environmental Law, (c) conduct any activity that is likely to cause a Release or
threatened Release of any Hazardous Material, or (d) otherwise conduct any activity or use any of
their respective properties or assets in any manner that is likely to violate in any material
respect any Environmental Law or create any Environmental Liabilities for which the US Borrower or
any of its Subsidiaries would be responsible.



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     Section 10.10 Accounting. The US Borrower will not, and will not permit any of its
Subsidiaries to, make any material change (a) in accounting treatment or reporting practices,
except as required or permitted by GAAP, or (b) in tax reporting treatment, except as required or
permitted by law.



     Section 10.11 Changes to Subordinated Debt. The US Borrower will not agree, and will
not permit any of its Subsidiaries to agree, to any change or amendment to the terms of any
agreement, document or instrument evidencing or executed in connection with any Subordinated Debt
if the effect of such change or amendment is to: (a) increase the interest rate on such
Subordinated Debt, (b) change the dates upon which payments of principal or interest are due on
such Subordinated Debt other than to extend such dates, (c) change any default or event of default
or covenant other than to delete or make less restrictive any default or covenant provision
therein, or add any covenant with respect to such Subordinated Debt, (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates therefor or to
reduce the premiums (if any) payable in connection therewith, (e) grant any security, collateral or
guaranty (or additional security, collateral or guaranty, as the case may be) to secure payment of
such Subordinated Debt, (f) change any of the terms of subordination thereof, or (g) change or
amend any other term if such change or amendment would materially increase the obligations of the
obligor or confer additional material rights to the holder of such Subordinated Debt in a manner
adverse to the US Borrower or US Lenders. Neither the US Borrower nor any of its Subsidiaries will
make any voluntary prepayment on any Subordinated Debt.



     Section 10.12 Restrictions on Certain Subsidiaries. Notwithstanding any other
provision of the Agreement, the US Borrower will not permit (a) any of T-3 Management LP, Inc.,
Cor-Val LP, Inc., Preferred Industries LP, Inc., or O&M Equipment LP, Inc. to: (i) incur, create
or assume any Debt, (ii) grant any Liens on its assets, (iii) incur, create or assume any
liabilities other than liabilities arising by operation of law and the costs of maintaining its
corporate existence, or (iv) engage in any trade or business other than acting as a limited partner
in the limited partnership in which it currently acts as a limited partner, (b) T-3 Investment
Corporation IV, The Rex Group, Inc., Landreth Metal Forming, Inc., T-3 Investment Corporation V,
T-3 Investment Corporation VI, and T-3 Machine Tools, Inc. to: (i) incur, create or assume any
Debt, (ii) grant any Liens on its assets, (iii) incur, create or assume any liabilities other than
liabilities arising by operation of law or the costs of maintaining its corporate existence, and
(c) T-3 Investment Corporation IV to engage in any trade or business other than acting as a
stockholder in T-3 Investment Corporation III.



     Section 10.13 Restricted Payments. The US Borrower will not, nor will it permit any
Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests, except that
(i) each Subsidiary may make Restricted Payments to the US Borrower or any Guarantor, ratably
according to their respective holdings of the type of Equity Interest in respect of which such
Restricted Payment is being made, and (ii) so long as no Default or Event of Default shall have
occurred and be continuing at the time of any action described below or would result therefrom:




               (a) the US Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity Interests of such
Person;



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               (b) the US Borrower may purchase, redeem or otherwise acquire Equity Interests issued
by it with the proceeds received from the substantially concurrent issue of new shares of
its common stock or other common Equity Interests; and




               (c) the US Borrower may issue and sell shares of its common stock.



ARTICLE XI




Financial Covenants




     The US Borrower covenants and agrees that, as long as the Obligations or any part thereof are
outstanding or any Lender has any commitment to lend hereunder or any Issuing Lender has any
obligation to issue Letters of Credit hereunder or any Letter of Credit Liabilities exist, the
US Borrower will observe and perform the following financial covenants:



     Section 11.1 Interest Coverage Ratio. The US Borrower and its Subsidiaries will at
all times maintain, on a consolidated basis, an Interest Coverage Ratio of not less than 3.00 to
1.00. The Interest Coverage Ratio shall be calculated and tested quarterly as of the last day of
each Fiscal Quarter for the Calculation Period ending on the last day of such Fiscal Quarter.



     Section 11.2 Leverage Ratio. The US Borrower and its Subsidiaries will maintain at
all times, on a consolidated basis, a Leverage Ratio of not greater than (a) for Fiscal Quarters
ending during the period commencing on the date hereof and ending on June 30, 2008, 3.25 to 1.00,
and (b) for the Fiscal Quarter ending September 30, 2008 and for each Fiscal Quarter thereafter,
3.00 to 1.00. The Leverage Ratio shall be calculated and tested quarterly as of the last day of
each Fiscal Quarter for the Calculation Period ending on the last day of such Fiscal Quarter.



     Section 11.3 Capital Expenditures. The US Borrower will not make Capital Expenditures
during any single Fiscal Year that exceed, in the aggregate, 75% of EBITDA for such Fiscal Year.



ARTICLE XII




Default




     Section 12.1 Events of Default. Each of the following shall be deemed an “Event of
Default”:




               (a) Either Borrower shall fail to pay (i) any interest or principal portion of the
Obligations when due or (ii) any other portion of the Obligations.




               (b) Any representation or warranty made or deemed made by the US Borrower or any
Obligated Party (or any of their respective officers) in any Loan Document or in any
certificate, report, notice, or financial statement furnished at any time in connection with
this Agreement shall be false, misleading, or erroneous in any material respect when made or
deemed to have been made.



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               (c) Any Borrower or any Obligated Party shall fail to perform, observe, or comply with
(i) any covenant, agreement, or term contained in Sections 9.2, 9.3,
9.4, 9.7, 9.8, 9.9, 9.11, 9.13 and
9.14 of this Agreement and such failure shall continue for twenty 20 days after the
occurrence thereof, or (ii) any other covenant, agreement, or term contained in this
Agreement or in any other Loan Document.




               (d) Either Borrower or any Subsidiary shall commence a voluntary proceeding seeking
liquidation, reorganization, or other relief with respect to itself or its debts under any
bankruptcy, insolvency, or other similar law nor or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar official of it
or a substantial part of its property or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become due or shall take any
corporate action to authorize any of the foregoing.




               (e) An involuntary proceeding shall be commenced against the either Borrower or any
Subsidiary seeking liquidation, reorganization, or other relief with respect to it or its
debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar
official for its or a substantial part of its property, and such involuntary proceeding
shall remain undismissed and unstayed for a period of 60 days.




               (f) Either Borrower or any Subsidiary shall fail to discharge within a period of 30
days after the commencement thereof any attachment, sequestration, or similar proceeding or
proceedings involving an aggregate amount in excess of $2,250,000 against any of its assets
or properties.




               (g) A final judgment or judgments for the payment of money in excess of $2,250,000, in
the aggregate, shall be rendered by a court or courts against either Borrower, any of their
Subsidiaries, or any Obligated Party and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the relevant Borrower or the relevant
Subsidiary or Obligated Party shall not, within said period of 30 days, or such longer
period during which execution of the same shall have been stayed, appealed therefrom and
cause the execution thereof to be stayed during such appeal.




               (h) Either Borrower, any Subsidiary, or any Obligated Party shall be in default under
any agreement, instrument or other document evidencing or in any way related to any Debt
(other than the Obligations) in excess of $2,250,000, which default permits any holder of
such Debt to accelerate the maturity of such Debt or require all or any portion of such Debt
to be prepaid prior to the stated maturity thereof, whether or not the maturity of such Debt
shall actually have been accelerated or such prepayment shall actually have been demanded.



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               (i) This Agreement or any other Loan Document shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability thereof shall be
contested or challenged by either Borrower, any Subsidiary, any Obligated Party or any of
their respective shareholders, or either Borrower or any Obligated Party shall deny that it
has any further liability or obligation under any of the Loan Documents, or any lien or
security interest created by the Loan Documents shall for any reason cease to be a valid,
first priority perfected security interest in and lien upon any of the Collateral purported
to be covered thereby.




               (j) The US Borrower, any of its Subsidiaries, or any Obligated Party, or any of their
properties, revenues, or assets, shall become subject to an order of forfeiture, seizure, or
divestiture and the same shall not have been discharged within 30 days from the date of
entry thereof.




               (k) A Change of Control shall have occurred.




               (l) Any of the following events shall occur or exist with respect to the US Borrower or
any ERISA Affiliate: (i) any Prohibited Transaction involving any Plan; (ii) any Reportable
Event with respect to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan; (iv) any event or circumstance
that might constitute grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and in each case
above, such event or condition, together with all other events or conditions, if any, have
subjected or could in the reasonable opinion of Required Lenders subject the US Borrower to
any tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise
(or any combination thereof) which in the aggregate exceed or could reasonably be expected
to exceed $2,250,000.




               (m) Any event or circumstance shall occur or exist that causes a Material Adverse
Effect.



     Section 12.2 Remedies Upon Default. If any Event of Default shall occur and be
continuing, the US Administrative Agent and the Canadian Administrative Agent, as applicable may
(and if directed by Required Lenders, shall) without notice terminate the US Revolving Credit
Commitments and the Canadian Commitments and declare the Obligations or any part thereof to be
immediately due and payable, and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent
to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which
are hereby expressly waived by the Borrowers; provided, however, that upon the occurrence of an
Event of Default under Section 12.1(d) or Section 12.1(e), the US Revolving Credit
Commitments and Canadian Commitment shall automatically terminate, and the Obligations shall become
immediately due and payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other
formalities of any kind, all of which are hereby expressly waived by



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the Borrowers. Except as otherwise expressly set forth herein, if any Event of Default shall
occur and be continuing, the Administrative Agents may exercise all rights and remedies available
to it in law or in equity, under the Loan Documents, or otherwise.



     Section 12.3 Letter of Credit. If any Event of Default shall occur and be continuing,
the Borrowers shall, if requested by the Administrative Agents, immediately deposit with and pledge
to the Administrative Agents cash or Cash Equivalent Investments in an amount equal to 110 percent
of the outstanding Letter of Credit Liabilities.



     Section 12.4 Performance by the Administrative Agents. If either of the Borrowers
shall fail to perform any covenant or agreement contained in any of the Loan Documents, the
Administrative Agents may, at the direction of the Required Lenders, perform or attempt to perform
such covenant or agreement on behalf of such Borrower. In such event, the Borrowers shall, at the
request of the Administrative Agents, promptly pay any amount expended by the Administrative Agents
or the Lenders in connection with such performance or attempted performance to the Administrative
Agents, together with interest thereon at the Default Rate from and including the date of such
expenditure to but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that none of the Administrative Agents, the Issuing Lenders and
the Lenders shall have any liability or responsibility for the performance of any obligation of
either of the Borrowers under this Agreement or any other Loan Document except for either of the
Administrative Agent’s gross negligence or willful misconduct.



ARTICLE XIII




The Administrative Agents




     Section 13.1 Appointment, Powers and Immunities. In order to expedite the various
transactions contemplated by this Agreement, the Lenders and the Issuing Lenders hereby irrevocably
appoint and authorize the US Administrative Agent and Canadian Administrative Agent, as applicable,
to act as their Administrative Agent hereunder and under each of the other Loan Documents and the
US Administrative Agent and Canadian Administrative Agent consents to such appointment and agrees
to perform the duties of the US Administrative Agent and Canadian Administrative Agent as specified
herein. The Lenders and the Issuing Lenders authorize and direct the applicable Administrative
Agent to take such action in their name and on their behalf under the terms and provisions of the
Loan Documents and to exercise such rights and powers thereunder as are specifically delegated to
or required of the applicable Administrative Agent for the Lenders and the Issuing Lenders,
together with such rights and powers as are reasonably incidental thereto.




               (a) To receive on behalf of each of the Lenders, the Issuing Lenders and the
Administrative Agents any payment of principal, interest, fees or other amounts paid
pursuant to this Agreement, the US Revolving Credit Notes, the Canadian Notes and the Swing
Line Notes and to distribute to each Lender, the Issuing Lenders and the Administrative
Agents, or any or some of them its share of all payments so received as provided in this
Agreement;



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               (b) To receive all documents and items to be furnished under the Loan Documents;




               (c) To act as nominee for and on behalf of the Lenders, the Issuing Lenders and the
Administrative Agents in and under the Loan Documents.




               (d) To arrange for the means whereby the funds of the Lenders are to be made available
to the applicable Borrower;




               (e) To distribute to the Lenders and the Issuing Lenders information, requests,
notices, payments, prepayments, documents and other items received from either Borrower, the
other Obligated Parties, and other Persons;




               (f) To execute and deliver to the US Borrower, the other Obligated Parties, and other
Persons, all requests, demands, approvals, notices, and consents received from the Lenders
and the Issuing Lenders;




               (g) To the extent permitted by the Loan Documents, to exercise on behalf of itself,
each Lender and the Issuing Lenders all rights and remedies of the Lenders upon the
occurrence of any Event of Default;




               (h) To enter into the Intercreditor Agreement (Canadian Facility);




               (i) To accept, execute, and deliver any security documents as the secured party,
including, without limitation all financing statements;




               (j) To take such other actions as may be requested by Required Lenders.




               (k) To appoint from time to time, with the US Borrower’s consent, such additional
Administrative Agents and co-agents as the US Administrative Agent deems appropriate,
including without limitation, a syndication agent, a documentation agent and a collateral
agent.



     Notwithstanding the express permission granted to the Administrative Agents in Section
13.1(g) hereof or anything else to the contrary, the Administrative Agents shall not, without
the prior written consent of each Lender, (i) appoint one or more members of the Board of Directors
(or similar governing body) of the Borrowers or any of its Affiliates, or (ii) exercise any rights
or remedies with respect to any Capital Stock pledged to secure any or all of the Obligations;
provided, however, if any Lender does not, within 30 days after such Lender’s
receipt of a written request from the US Administrative Agent for a consent to one or more of the
actions described in clause (i) or (ii) of this sentence, respond to any such written request, such
Lender shall, for the purposes of this sentence, be deemed to have consented to such request.



     Neither the US Administrative Agent, nor the Canadian Administrative Agent, nor any of its
Affiliates, officers, directors, employees, attorneys, of the Administrative Agents shall be liable
for any action taken or omitted to be taken by any of them hereunder or otherwise in connection
with this Agreement or any of the other Loan Documents except for its or their own gross negligence
or willful misconduct. Without limiting the generality of the preceding



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sentence, the Administrative Agents (i) may treat the payee of any US Revolving Credit Note or
Canadian Note as the holder thereof until the US Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory to the
US Administrative Agent; (ii) shall have no duties or responsibilities except those expressly set
forth in this Agreement and the other Loan Documents, and shall not by reason of this Agreement or
any other Loan Document be a trustee or fiduciary for any Lender or the Issuing Lenders;
(iii) shall not be required to initiate any litigation or collection proceedings hereunder or under
any other Loan Document except to the extent hereunder or under any other Loan Document except to
the extent requested by the Required Lenders; (iv) shall not be responsible to the Lenders or the
Issuing Lenders for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or any certificate or other document referred to or provided
for in, or received by any of them under, this Agreement or any other Loan Document or for the
value, validity, effectiveness, enforceability, or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or for any failure by
any Person to perform any of its obligations hereunder or thereunder; (v) may consult with legal
counsel (including counsel for the Borrowers), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants, or experts; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice, consent, certificate,
or other instrument or writing believed by it to be genuine and signed or sent by the proper party
or parties. As to any matters not expressly provided for by this Agreement, the Administrative
Agents shall in all cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such instructions of the Required
Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the
Lenders; provided, however, that the Administrative Agents shall not be required to take any action
which exposes the Administrative Agents to personal liability or which is contrary to this
Agreement or any other Loan Document or applicable law.



     Section 13.2 Certain Rights of Administrative Agents. (a) With respect to its
commitment to lend hereunder, the Advances made by it and the US Revolving Credit Note and US Swing
Line Note issued to it, the US Administrative Agent in its capacity as a US Lender hereunder shall
have the same rights and powers hereunder as any other US Lender and may exercise the same as
though it were not acting as the US Administrative Agent or the US Issuing Lender and the term
“Lender” or “Lenders” shall, unless the context otherwise indicates, include the US Administrative
Agent in its individual capacity. The US Administrative Agent and its Affiliates may (without
having to account therefor to any Lender or any Issuing Lender) accept deposits from, lend money
to, act as trustee under indentures of, provide merchant banking services to, and generally engage
in any kind of business with the Borrowers, any of their Subsidiaries, any other Obligated Party,
and any other Person who may do business with or own securities of either of the Borrowers, any
Subsidiary, or any other Obligated Party, all as if it were not acting as the US Administrative
Agent and without any duty to account therefor to the Lenders or the Issuing Lenders.




               (a) Rights of Canadian Administrative Agent as a Canadian Lender. With respect
to its commitment to lend hereunder, the Advances made by it and the Canadian Note and
Canadian Swing Line Note issued to it, the Canadian Administrative



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Agent in its capacity as a Canadian Lender hereunder shall have the same rights and
powers hereunder as any other Canadian Lender and may exercise the same as though it were
not acting as the Canadian Administrative Agent or the Canadian Issuing Lender and the term
“Lender” or “Lenders” shall, unless the context otherwise indicates, include the
Canadian Administrative Agent in its individual capacity. The Canadian Administrative Agent
and its Affiliates may (without having to account therefor to any Lender or any Issuing
Lender) accept deposits from, lend money to, act as trustee under indentures of, provide
merchant banking services to, and generally engage in any kind of business with the
Borrowers, any of their Subsidiaries, any other Obligated Party, and any other Person who
may do business with or own securities of either of the Borrowers, any Subsidiary, or any
other Obligated Party, all as if it were not acting as the Canadian Administrative Agent and
without any duty to account therefor to the Lenders or the Issuing Lenders.



     Section 13.3 Sharing of Payments, Etc. If any Lender shall obtain any payment of any
principal of or interest on any Advance made by it under this Agreement or payment of any other
obligation under the Loan Documents then owed by the Borrowers or any other Obligated Party to such
Lender, whether voluntary, involuntary, through the exercise of any right of setoff, banker’s lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share, such Lender shall
promptly purchase from the other Lenders participations in the Advances held by them hereunder in
such amounts, and make such other adjustments from time to time as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of the other Lenders in accordance
with its pro rata portion thereof. To such end, all of the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be restored. The
Borrowers agree, to the fullest extent it may effectively do so under applicable law, that any
Lender so purchasing a participation in the Advances made by the other Lenders may exercise all
rights of setoff, banker’s lien, counterclaim, or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Advances to the Borrowers in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the Borrowers.



     Section 13.4 Indemnification. THE LENDERS HEREBY AGREE TO INDEMNIFY THE
US ADMINISTRATIVE AGENT AND CANADIAN ADMINISTRATIVE AGENT FROM AND HOLD THE ADMINISTRATIVE AGENTS
AND THE ISSUING LENDERS HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED UNDER SECTIONS 14.1
AND 14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWERS UNDER SECTIONS 14.1
AND 14.2), RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS,
COSTS, EXPENSES (INCLUDING ATTORNEYS’ FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE ADMINISTRATIVE AGENTS OR THE ISSUING
LENDERS IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED TO BE TAKEN BY THE ADMINISTRATIVE AGENTS OR THE ISSUING LENDERS UNDER OR IN RESPECT OF ANY
OF THE LOAN




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DOCUMENTS; PROVIDED, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING
TO THE EXTENT CAUSED BY EITHER ADMINISTRATIVE AGENT’S OR EITHER OF THE ISSUING LENDER’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION
OF THE LENDERS THAT THE ADMINISTRATIVE AGENTS AND THE ISSUING LENDERS SHALL BE INDEMNIFIED
HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS’ FEES),
AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR RESULTING FROM THE
SOLE OR CONTRIBUTORY NEGLIGENCE OF EITHER OF THE ADMINISTRATIVE AGENTS OR EITHER OF THE ISSUING
LENDERS. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH LENDER AGREES TO REIMBURSE
EACH ADMINISTRATIVE AGENT AND EACH ISSUING LENDER PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE
(CALCULATED ON THE BASIS OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING
ATTORNEYS’ FEES) INCURRED BY EITHER ADMINISTRATIVE AGENT OR EITHER ISSUING LENDER 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, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE ADMINISTRATIVE AGENTS
OR THE ISSUING LENDERS ARE NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWERS.




     Section 13.5 Independent Credit Decisions. Each Lender agrees that it has
independently and without reliance on any of Administrative Agents, the Issuing Lenders, or any
other Lender, and based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrowers and the Obligated Parties and decision to enter into this
Agreement and that it will, independently and without reliance upon the Administrative Agents, the
Issuing Lenders, or any other Lender, and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. Neither Administrative
Agent shall be required to keep itself informed as to the performance or observance by either
Borrower or any Obligated Party of this Agreement or any other Loan Document or to inspect the
properties or books of either Borrower or any Obligated Party. Except for notices, reports and
other documents and information expressly required to be furnished to the Lenders by the
Administrative Agents hereunder or under the other Loan Documents, the Administrative Agents shall
not have any duty or responsibility to provide the Issuing Lenders or any Lender with any credit or
other financial information concerning the affairs, financial condition or business of either
Borrower or any Obligated Party (or any of their Affiliates) which may come into the possession of
either Administrative Agent or any of its Affiliates.



     Section 13.6 Several Commitments. The commitments to lend and other obligations of
the Lenders under this Agreement are several. The default by the Lender in making an Advance in
accordance with its commitment hereunder shall not relieve the other Lenders of their



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obligations under this Agreement. In the event of any default by any Lender in making any
Advance, each nondefaulting Lender shall be obligated to make its Advance but shall not be
obligated to advance the amount which the defaulting Lender was required to advance hereunder. In
no event shall any Lender be required to advance an amount or amounts which shall in the aggregate
exceed such Lender’s US Revolving Credit Commitment or Canadian Commitment. No Lender shall be
responsible for any act or omission of any other Lender.



     Section 13.7 Successor Administrative Agents. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, either of the Administrative
Agents may resign at any time by giving notice thereof to the Lenders and the Borrowers and either
Administrative Agent may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders (with the consent of the US Borrower,
which consent will not be unreasonably withheld) will have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after the retiring
Administrative Agent giving notice of resignation or the Required Lenders’ removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint
a successor Administrative Agent, which shall be a commercial bank organized under the laws of the
United States of America or any State thereof and having combined capital and surplus of at least
$500,000,000.00. Upon the acceptance of its appointment as successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with all rights,
powers, privileges, immunities, and duties of the resigning or removed Administrative Agent, and
the resigning or removed Administrative Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. After any Administrative Agent’s resignation or
removal as Administrative Agent, the provisions of this Article XIII shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by it while it was
the Administrative Agent.



ARTICLE XIV




Miscellaneous




     Section 14.1 Expenses. Each Borrower hereby agrees to pay on demand (a) all
reasonable costs and expenses of the Administrative Agents in connection with the preparation,
negotiation, execution, and delivery of this Agreement and the other Loan Documents and any and all
amendments, modifications, renewals, extensions, and supplements thereof and thereto, including,
without limitation, the reasonable fees and expenses of outside legal counsel for the
Administrative Agents, the Issuing Lenders and the Lenders, (b) all reasonable costs and expenses
of the Administrative Agents, the Issuing Lenders and the Lenders in connection with any Default or
Event of Default and the enforcement of this Agreement or any other Loan Document, including,
without limitation, the reasonable fees and expenses of outside legal counsel for the
Administrative Agents, the Issuing Lenders and the Lenders, (c) all transfer, stamp, documentary,
or other similar taxes, assessments, or charges levied by any Governmental Authority in respect of
this Agreement or any of the other Loan Documents, (d) all costs, expenses, assessments, and other
charges incurred in connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by this Agreement or any other Loan Document, and (e) all
other reasonable costs and expenses incurred by the



75









 




Administrative Agents, the Issuing Lenders and the Lenders in connection with this Agreement
or any other Loan Document, including, without limitation, all costs, expenses, and other charges
incurred in connection with obtaining audit, or appraisal in respect of the Collateral.




     Section 14.2 Indemnification. EACH BORROWER SHALL INDEMNIFY EACH OF THE
ADMINISTRATIVE AGENTS, THE ISSUING LENDERS, AND THE LENDERS AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND ADMINISTRATIVE AGENTS FROM, AND HOLD EACH
OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENT,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION,
DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY EITHER OF THE BORROWERS OF ANY
REPRESENTATION, WARRANTY, COVENANT, CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE,
RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWERS OR ANY SUBSIDIARY, OR
(E) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING.



     Section 14.3 Limitation of Liability. Neither the Administrative Agents, the Issuing
Lenders or the Lenders nor any Affiliate, officer, director, employee, attorney, of Administrative
Agents of the Administrative Agents, the Issuing Lenders or the Lenders shall have any liability
with respect to, and the Borrowers hereby waive, release, and agree not to sue any of them upon,
any claim for any special, indirect, incidental, or consequential damages suffered or incurred by
either Borrower in connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents. The Borrowers hereby waive, release, and agree not to sue the
Administrative Agents, the Issuing Lenders or the Lenders or any of such Person’s Affiliates,
officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim
in connection with, arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan
Documents. Nothing contained in this Section shall affect the rights of either Borrower to collect
actual damages awarded to them against any of the Administrative Agents, the Issuing Lenders, the
Lenders or any Affiliate of any of the foregoing Persons.



     Section 14.4 No Duty. All attorneys, accountants, appraisers, and other professional
Persons and consultants retained by any of the Administrative Agents, the Issuing Lenders or the
Lenders shall have the right to act exclusively in the interest of such Persons and shall have no
duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or
nature whatsoever to either Borrower or any Borrower’s shareholders or any other Person.



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     Section 14.5 Lender Not Fiduciary. The relationship between the Borrowers, on one
hand, and the Administrative Agents, the Issuing Lenders and the Lenders, on the other hand, is
solely that of debtor and creditor, and no such Person has any fiduciary or other special
relationship with the Borrowers, and no term or condition of any of the Loan Documents shall be
construed so as to deem the relationship between the Borrowers and such Persons to be other than
that of debtor and creditor.



     Section 14.6 No Waiver; Cumulative Remedies. No failure on the part of any of the
Administrative Agents, the Issuing Lenders or the Lenders to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or
privilege under this Agreement preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies provided for in this Agreement and
the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by
law.



     Section 14.7 Successors and Assigns.




     (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Neither Borrower may assign or transfer any of
its rights or obligations hereunder without the prior written consent of the
US Administrative Agent and all of the Lenders. Any Lender may sell participations to one
or more banks or other institutions in or to all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Commitment and the Advances owing to it); provided, however, that (i) such
Lender’s obligations under this Agreement and the other Loan Documents (including, without
limitation, its Commitment) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the Borrowers for the performance of such obligations, (iii) such Lender
shall remain the holder of its Notes for all purposes of this Agreement, and (iv) the
Borrowers shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement and the other Loan Documents.
Participants have no rights under the Loan Documents except as provided below. Subject to
the following, each Lender may obtain, on behalf of its participants, the benefits of
Article V with respect to all participations in its part of the Obligations
outstanding from time to time, so long as neither Borrower is not obligated to pay any
amount in excess of the amount that would be due to that Lender under Article V
calculated as though no participations have been made. No Lender may sell any participating
interest under which the participant has any rights to approve any amendment, modification,
or waiver of any Loan Document except as to matters in Section 14.9(a), (b)
and (c).




     (b) The Borrowers and each of the Lenders agree that any Lender (the “Assigning
Lender”) may, with the US Administrative Agent’s consent (which consent shall not be
unreasonably withheld or delayed) and unless an Event of Default has occurred, the
US Borrower’s consent, which consent of the US Borrower shall not be unreasonably withheld
or delayed, at any time assign to one or more Eligible Assignees all, or a proportionate
part of all, of its rights and obligations under this Agreement and



77









 






the other Loan Documents (including, without limitation, its Aggregate Commitments and
Advances) (each an “Assignee”); provided, however, that (i) each such assignment
shall be of a consistent, and not a varying, percentage of all of the Assigning Lender’s
Commitments, rights and obligations under this Agreement and the other Loan Documents,
(ii) except in the case of an assignment of all of a Lender’s rights and obligations under
this Agreement and the other Loan Documents, the amount of the Aggregate Commitments of the
Assigning Lender being assigned pursuant to each assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no event be less
than $5,000,000 in the aggregate, and (iii) the parties to each such assignment shall
execute and deliver to the US Administrative Agent for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with the Notes (and the
Swing Line Notes, if applicable) subject to such assignment, and a processing and
recordation fee of $5,000 to be paid by the Assignee or Assignee Group. Upon such
execution, delivery, acceptance, and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five Business Days
after the execution thereof, or, if so specified in such Assignment and Acceptance, the date
of acceptance thereof by the US Administrative Agent, (x) the assignee thereunder shall be a
party hereto as a “Lender” and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the Loan Documents and (y) the Lender that is an
assignor thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and the other Loan Documents (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of a Lender’s
rights and obligations under the Loan Documents, such Lender shall cease to be a party
thereto); provided that the obligations of the Borrowers under Article V and
Section 14.1 and 14.2 shall continue to apply to such Lender.




     (c) By executing and delivering an Assignment and Acceptance, the Lender that is an
assignor 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 the Loan Documents or the execution, legality, validity, and enforceability,
genuineness, sufficiency, or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such Assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of either of the
Borrowers or any Obligated Party or the performance or observance by either of the Borrowers
or any Obligated Party of its obligations under the Loan Documents; (iii) such assignee
confirms that it has received a copy of the other Loan Documents, together with copies of
the current financial statements dated a date acceptable to such assignee and such other
documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agents or such assignor and based
on such documents and information as it shall deem appropriate at the time, continue to make
its



78









 






own credit decisions in taking or not taking action under this Agreement and the other
Loan Documents; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the applicable Administrative Agent to take such action as
such Administrative Agent on its behalf and exercise such powers under the Loan Documents as
are delegated to such Administrative Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender.




     (d) The US Administrative Agent shall maintain at its Principal Office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the recordation
of the names and addresses of the Lenders and the Commitments of, and principal amount of
the US Revolving Credit Advances or Canadian Advance owing to, each Lender from time to time
(the “Register”). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers, the Administrative Agents, the
Issuing Lenders and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes under the Loan Documents. The Register shall be
available for inspection by any Borrower, any Issuing Lender or any Lender at any reasonable
time and from time to time upon reasonable prior notice.




     (e) Upon its receipt of an Assignment and Acceptance executed by an Assigning Lender
and assignee representing that it is an Eligible Assignee, together with any Note (and the
Swing Line Notes, if applicable) subject to such assignment, the US Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in the form satisfactory
to the US Administrative Agent in its sole discretion, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and (iii) give
prompt written notice thereof to the Borrowers. Within five Business Days after its receipt
of such notice, the applicable Borrower, at its expense, shall execute and deliver to the
US Administrative Agent in exchange for the surrendered Note (and Swing Line Note, if
applicable), new Notes (and Swing Line Note, if applicable) to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the Assigning Lender has retained a portion of its Commitment, new Notes
to the order of the Assigning Lender in an amount equal to the Commitments retained by it
hereunder (each such promissory note shall constitute a “US Revolving Credit Note” or
“Canadian Note” for purposes of the Loan Documents). Such new Notes (and Swing Line Notes,
if applicable) shall be in an aggregate principal amount of the surrendered Notes (and Swing
Line Notes, if applicable), shall be dated the last interest payment date prior to the
effective date of such Assignment and Acceptance, and shall otherwise be in substantially
the form of the appropriate Notes (and Swing Line Notes, if applicable) initially issued
pursuant hereto with appropriate changes.




     (f) Any Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section, disclose to the assignee or
participant or proposed assignee or participant, any information relating to either of the



79









 






Borrowers or their Subsidiaries furnished to such Lender by or on behalf of either of
the Borrowers or their Subsidiaries.




     (g) Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.



     Section 14.8 Survival. All representations and warranties made in this Agreement or
any other Loan Documents or in any document, statement, or certificate furnished in connection with
this Agreement shall survive the execution and delivery of this Agreement and the other Loan
Documents, and no investigation by any of the Administrative Agents, the Issuing Lenders or the
Lenders or any closing shall affect the representations and warranties or the right of any such
Person to rely upon them. Without prejudice to the survival of any other obligation of the
Borrowers hereunder, the obligations of the Borrowers under Article V and
Sections 14.1 and 14.2 shall survive repayment of the Notes and the Swing Line
Notes and termination of the Lenders’ commitments to lend hereunder.



     Section 14.9 ENTIRE AGREEMENT; AMENDMENTS. THIS AGREEMENT, THE NOTES, THE SWING LINE
NOTES AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. No
amendment, modification or waiver of, or consent with respect to, any provision of this Agreement,
the Notes, or the Swing Line Notes shall in any event be effective unless the same shall be in
writing and signed and delivered by the Borrowers and the Required Lenders, and then any such
amendment, modification, waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. Subject to Section 2.10 with respect to the Increase
Amount, no amendment, modification, waiver or consent shall change the Percentage of any Lender
without the consent of such Lender. No amendment, modification, waiver or consent shall (a) extend
or, subject to Section 2.10, increase the amount of Aggregate Commitments, (b) extend the
date for payment of any principal of or interest on the Advances or any fees or other amounts
payable hereunder, (c) reduce the principal amount of any Advances, the rate of interest thereof or
any fees or other amounts payable hereunder, (d) release a Guaranty Agreement or all or
substantially all of the Collateral, or (e) reduce the aggregate Percentage required to effect an
amendment, modification, waiver or consent without, in each case, the consent of all Lenders. No
provisions of Article XIII or other provision of this Agreement affecting the
Administrative Agents in their capacity as such shall be amended, modified or waived without the
consent of the Administrative Agents. No provision of this Agreement relating to the rights or
duties of an Issuing Lender in its capacity as



80









 







such shall be amended, modified or waived without the consent of such Issuing Lender. If, in
connection with any proposed amendment, waiver or consent (a “Proposed Change”):



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



     (ii) requiring the consent of Required Lenders, the consent of Required Lenders is obtained,


then, so long as the applicable Administrative Agent is not a Non-Consenting Lender, at the
US Borrower’s request, the applicable Administrative Agent or an Eligible Assignee shall have the
right (but not the obligation) with the US Administrative Agent’s approval, to purchase from the
Non-Consenting Lenders’ Commitments for an amount equal to the principal balances thereof and all
accrued interest and fees with respect thereto through the date of sale pursuant to Assignment and
Acceptance(s), without premium or discount.




     Section 14.10 Maximum Interest Rate. No provision of this Agreement or any other Loan
Document shall require the payment or the collection of interest in excess of the maximum amount
permitted by applicable law. If any excess of interest in such respect is hereby provided for, or
shall be adjudicated to be so provided, in any Loan Document or otherwise in connection with this
loan transaction, the provisions of this Section shall govern and prevail and neither the Borrowers
nor the sureties, guarantors, successors, or assigns of the Borrowers shall be obligated to pay the
excess amount of such interest or any other excess sum paid for the use, forbearance, or detention
of sums loaned pursuant hereto. In the event any of the Administrative Agents, the Issuing Lenders
or the Lenders ever receives, collects, or applies as interest any such sum, such amount which
would be in excess of the maximum amount permitted by applicable law shall be applied as a payment
and reduction of the principal of the indebtedness evidenced by the Notes or the Swing Line Notes,
as applicable; and, if the principal of the Notes and the Swing Line Notes has been paid in full,
any remaining excess shall forthwith be paid to the applicable Borrowers. In determining whether
or not the interest paid or payable exceeds the Maximum Rate, the Borrowers and the Administrative
Agents, the Issuing Lenders and the Lenders shall, to the extent permitted by applicable law,
(a) characterize any non-principal payment as an expense, fee, or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by the Revolving Credit Notes and the Swing Line Notes so that
interest for the entire term does not exceed the Maximum Rate.



     Section 14.11 Notices; Electronic Communications. (a) All notices and other
communications provided for in this Agreement and the other Loan Documents to which either Borrower
is a party shall be in writing and may be telecopied (faxed), mailed by certified mail return
receipt requested, or delivered to the intended recipient at the address specified in
Schedule 14.11; or, as to any party at such other address as shall be designated by such
party in a notice to the other party given in accordance with this Section. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been duly given when



81









 







transmitted by telecopy, subject to telephone confirmation of receipt, or when personally
delivered to, in the case of a mailed notice, when duly deposited in the mails, in each case given
or addressed as aforesaid; provided, however, notices to either of the Administrative Agents
pursuant to Articles II, III and IV shall not be effective until received
by the applicable Administrative Agents.




     (b) (i) The Borrowers and the Lenders agree that the Administrative Agents may make any
material delivered by any Borrower to any Administrative Agent, as well as any amendments,
waivers, consents, and other written information, documents, instruments and other materials
relating to the Company, any of its Subsidiaries, or any other materials or matters relating
to this Agreement, the Notes or any of the transactions contemplated hereby (collectively,
the “Communications”) available to the Lenders by posting such notices on an electronic
delivery system (which may be provided by any Administrative Agent, an Affiliate of an
Administrative Agent, or any Person that is not an Affiliate of an Administrative Agent),
such as IntraLinks, or a substantially similar electronic system (the “Platform”). The
Borrowers acknowledge that (1) the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks associated with
such distribution, (2) the Platform is provided “as is” and “as available” and (3) none of
the Administrative Agents nor any of their respective Affiliates warrants the accuracy,
completeness, timeliness, sufficiency, or sequencing of the Communications posted on the
Platform. The Administrative Agents and their respective Affiliates expressly disclaim with
respect to the Platform any liability for errors in transmission, incorrect or incomplete
downloading, delays in posting or delivery, or problems accessing the Communications posted
on the Platform and any liability for any losses, costs, expenses or liabilities that may be
suffered or incurred in connection with the Platform. No warranty of any kind, express,
implied or statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by either Administrative Agent or any of their
respective Affiliates in connection with the Platform.




     (ii) Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communication has been posted to the Platform shall
for purposes of this Agreement constitute effective delivery to such Lender of such
information, documents or other materials comprising such Communication. Each Lender
agrees (1) to notify, on or before the date such Lender becomes a party to this
Agreement, the Applicable Agent in writing of such Lender’s e-mail address to which
a Notice may be sent (and from time to time thereafter to ensure that the
Administrative Agents have on record an effective e-mail address for such Lender)
and (2) that any Notice may be sent to such e-mail address.



     Section 14.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA. THIS AGREEMENT HAS BEEN ENTERED INTO IN HARRIS COUNTY, TEXAS, AND
IT SHALL BE PERFORMABLE FOR ALL PURPOSES IN



82









 







HARRIS COUNTY, TEXAS. SUBJECT TO SECTION 14.19, ANY ACTION OR PROCEEDING AGAINST
EITHER BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT IN HARRIS COUNTY, TEXAS. EACH BORROWER HEREBY IRREVOCABLY (A) SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT
IS AN INCONVENIENT FORUM. EACH BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR DETERMINED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 14.11. NOTHING HEREIN OR IN ANY OF THE OTHER
LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENTS, THE ISSUING LENDERS OR THE
LENDERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR, SUBJECT TO SECTION 14.19,
SHALL LIMIT THE RIGHT OF SUCH PERSONS TO BRING ANY ACTION OR PROCEEDING AGAINST EITHER BORROWER OR
WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. SUBJECT TO
SECTION 14.19, ANY ACTION OR PROCEEDING BY EITHER BORROWER AGAINST ANY OF THE
ADMINISTRATIVE AGENTS, THE ISSUING LENDERS OR THE LENDERS SHALL BE BROUGHT ONLY IN A COURT LOCATED
IN HARRIS COUNTY, TEXAS; PROVIDED, HOWEVER, THAT EXCEPT AS MAY BE REQUIRED UNDER APPLICABLE LAWS,
THE USURY LAWS OF THE STATE OF TEXAS OR THE UNITED STATES OF AMERICA SHALL NOT APPLY TO THE
CANADIAN LOANS BUT RATHER THE USURY LAWS IN EFFECT IN CANADA SHALL GOVERN IN SUCH CONTEXT.



     Section 14.13 Counterparts; Facsimiles. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimiles of signatures shall be binding and effective as originals.



     Section 14.14 Severability. Any provision of this Agreement by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision held to be invalid or illegal.



     Section 14.15 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of this Agreement.



     Section 14.16 Non-Application of Chapter 346 of Texas Finance Code. The provisions of
Chapter 346 of the Texas Finance Code are specifically declared by the parties hereto not to be
applicable to this Agreement or any of the other Loan Documents or to the transactions contemplated
hereby.



     Section 14.17 Construction. The Borrowers, the Administrative Agents, the Issuing
Lenders and the Lenders acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan Documents



83









 







shall be construed as if jointly drafted by the Borrowers, the Administrative Agents, the
Issuing Lenders and the Lenders.



     Section 14.18 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a Default if such action is
taken or such condition exists.



     Section 14.19 WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED, BY APPLICABLE
LAW, EACH OF THE BORROWERS, THE ADMINISTRATIVE AGENTS AND THE LENDERS HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG EITHER BORROWER AND
ANY OTHER PARTY TO THIS AGREEMENT ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENTS, OR ANY RELATIONSHIP BETWEEN ANY OTHER PARTY TO THIS AGREEMENT AND THE BORROWERS.
THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDERS TO PROVIDE THE FINANCING DESCRIBED IN THIS
AGREEMENT.



     Section 14.20 Amendment and Restatement; Release. This Agreement amends and restates
in its entirety the Existing Credit Agreement. The execution of this Agreement and the other Loan
Documents executed in connection herewith does not extinguish the indebtedness outstanding in
connection with the Existing Credit Agreement nor does it constitute a novation with respect to
such indebtedness. EACH BORROWER REPRESENT AND WARRANT THAT AS OF THE DATE HEREOF THERE ARE NO
CLAIMS OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OR ANY OBLIGATED PARTIES’ OBLIGATIONS
UNDER THE EXISTING CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE DOCUMENTATION RELATING TO THE
DEPOSIT AND CASH MANAGEMENT SERVICES. TO INDUCE THE ADMINISTRATIVE AGENTS, THE ISSUING LENDERS AND
THE LENDERS TO ENTER INTO THIS AGREEMENT, EACH BORROWER AND, BY THE EXECUTION OF THE LOAN DOCUMENTS
TO WHICH IT IS A PARTY, EACH GUARANTOR WAIVES ANY AND ALL CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE HEREOF AND HEREBY RELEASES THE
ADMINISTRATIVE AGENTS, THE LENDERS, THE ISSUING LENDERS AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND ATTORNEYS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ANY AND ALL
OBLIGATIONS, INDEBTEDNESS, LIABILITY, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER,
WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED WHICH SUCH BORROWER OR ANY GUARANTOR EVER HAD,
NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF OR
FROM OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY DOCUMENTATION RELATING TO
THE DEPOSIT AND



84









 





CASH MANAGEMENT SERVICES OR THE TRANSACTIONS CONTEMPLATED THEREBY.




     Section 14.21 Provisions Related to Canadian Loans.




     (a) Income Tax Act (Canada). Neither the Canadian Administrative Agent nor any
Canadian Lender is a non-resident of Canada for purposes of the ITA.




     (b) Interest Act (Canada). Whenever interest is calculated on the basis of a
year of 360 or 365 days, for the purposes of the Interest Act (Canada), the yearly rate of
interest which is equivalent to the rate payable hereunder is the rate payable multiplied by
the actual number of days in the year and divided by 360 or 365, as the case may be. All
interest will be calculated using the nominal rate method and not the effective rate method
and the deemed reinvestment principle shall not apply to such calculations.




     (c) Judgment Currency. The obligation of the Canadian Borrower to make
payments on any Obligation to the Canadian Administrative Agent or to the US Administrative
Agent hereunder in any currency (the “first currency”) shall not be discharged or satisfied
by any tender or recovery pursuant to any judgment expressed in or converted into any other
currency (the “second currency”) except to the extent to which such tender or recovery shall
result in the effective receipt by the Canadian Administrative Agent or the
US Administrative Agent of the full amount of the first currency payable, and accordingly
the primary obligation of the Canadian Borrower shall be enforceable as an alternative or
additional cause of action for the purpose of recovery in the second currency of the amount
(if any) by which such effective receipt shall fall short of the full amount of the first
currency payable and shall not be affected by a judgment being obtained for any other sum
due hereunder.



     Section 14.22 Appointment. Each of the Lenders hereby irrevocably appoints the
applicable Administrative Agent as its agent for purposes of the Intercreditor Agreement (Canadian
Facility) and irrevocably authorizes and instructs the applicable Administrative Agent to enter
into and perform the Intercreditor Agreement (Canadian Facility). Each of the Lenders agrees to be
bound by the terms and provisions of the Intercreditor Agreement (Canadian Facility) applicable to
it.



85









 





     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.



	 	 	 	 	 	 	 
	 	 	US BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	T-3 ENERGY SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael T. Mino
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Michael T. Mino

     Title: Vice President	 	 






(Signature Page to Second Amended and Restated Credit Agreement)




 









 





	 	 	 	 	 	 	 	 	 
	 	 	CANADIAN BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	T3 ENERGY SERVICES (formerly known as T-3

Oilco Energy Services Partnership)	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	T-3 Energy Services Canada, Inc.,

its partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael T. Mino
	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael T. Mino

Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	T-3 Oilco Partners ULC,

its partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Michael T. Mino	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael T. Mino

Title: Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	US ADMINISTRATIVE AGENT and

US LENDER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as the US Administrative Agent,

the US Issuing Lender and a US Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Michael Janak	 	 
	 	 	 	 	 	 	 
	 	 	 	 	     Name: Michael Janak

     Title: Vice President	 	 






(Signature Page to Second Amended and Restated Credit Agreement)









 









 











	 	 	 	 	 	 	 
	 	 	CANADIAN ADMINISTRATIVE AGENT, 

US LENDER and CANADIAN LENDER	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK, a Michigan banking

corporation and an authorized foreign bank under

the Bank Act (Canada) acting through its

Canadian branch	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Omer Ahmed
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Omer Ahmed

     Title: Portfolio Manager	 	 






(Signature Page to Second Amended and Restated Credit Agreement)




 









 





	 	 	 	 	 	 	 
	 	 	COMERICA BANK,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gary Culbertson
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Gary Culbertson

     Title: Vice President, Texas Division	 	 
	 
	 	 	 	 	 	 
	 	 	DNB NOR BANK ASA,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sanjiv Nayar	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Sanjiv Nayar

     Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jack Sun	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Jack Sun

     Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Okamoto	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Thomas Okamoto

     Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Linda M. Stephens	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Name: Linda M. Stephens

     Title: Authorized Signatory	 	 






(Signature Page to Second Amended and Restated Credit Agreement)




 









 





Schedule 1.1




Aggregate Commitments




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	US Revolving	 	Canadian	 	Aggregate
	Bank	 	Credit Commitments	 	Commitments	 	Commitments
	 
	Wells Fargo Bank, National Association
	 	$	50,000,000	 	 	$	0	 	 	$	50,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Comerica Bank
	 	$	30,000,000	 	 	$	5,000,000	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	DnB NOR Bank ASA
	 	$	35,000,000	 	 	$	0	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank, N.A.
	 	$	35,000,000	 	 	$	0	 	 	$	35,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Royal Bank of Canada
	 	$	25,000,000	 	 	$	0	 	 	$	25,000,000	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	175,000,000	 	 	$	5,000,000	 	 	$	180,000,000	 
	 






Schedule 1.1 to Second Amended and Restated Credit Agreement