exv10w5



 





Exhibit 10.5









CREDIT AGREEMENT



between




JPMORGAN CHASE BANK, N.A.




as Agent




and




JPMORGAN CHASE BANK, N.A.,

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

those other financial institutions whose names appear on the signature pages hereto and the other

persons from time to time party hereto as Lenders




as Lenders




and




J.P. MORGAN SECURITIES INC.




as Lead Arranger and Sole Bookrunner




and




BANK OF AMERICA, N.A. and BANK OF MONTREAL




as Co-Syndication Agents




and




NATIONAL BANK OF CANADA and FIFTH THIRD BANK




as Co-Documentation Agents




and




VITRAN CORPORATION INC.,




VITRAN EXPRESS CANADA INC.




and VITRAN CORPORATION




as Borrowers




Dated as of July 31, 2007




FRASER MILNER CASGRAIN LLP










 



 




TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE 1

INTERPRETATION
	1.1   Defined Terms
	 	 	6	 
	1.2   Other Usages
	 	 	25	 
	1.3   Plural and Singular
	 	 	26	 
	1.4   Headings
	 	 	26	 
	1.5   Currency
	 	 	26	 
	1.6   Applicable Law
	 	 	26	 
	1.7   Time of the Essence
	 	 	26	 
	1.8   Non Banking Days
	 	 	26	 
	1.9   Consents and Approvals
	 	 	26	 
	1.10 Amount of Credit
	 	 	26	 
	1.11 Schedules
	 	 	27	 
	1.12 Extension of Credit
	 	 	27	 
	1.13 Joint and Several Obligations
	 	 	27	 
	1.14 Paramountcy
	 	 	27	 
	1.15 Statute References
	 	 	27	 
	1.16 Meaning of Include
	 	 	27	 
	1.17 Accounting Terms; GAAP
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 2

CREDIT FACILITIES
	2.1   Establishment of Credit Facilities
	 	 	28	 
	2.2   Credit Restrictions
	 	 	28	 
	2.3   Lenders’ Commitments
	 	 	28	 
	2.4   Reduction of Credit Facilities
	 	 	29	 
	2.5   Termination of Credit Facilities
	 	 	29	 
	2.6   Increase in Commitments
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 3

GENERAL PROVISIONS RELATING TO CREDITS
	3.1   Types of Credit Availments
	 	 	31	 
	3.2   Funding of Loans
	 	 	31	 
	3.3   Failure of Lender to Fund Loan
	 	 	32	 
	3.4   Funding of Bankers’ Acceptances
	 	 	32	 
	3.5   BA Rate Loans
	 	 	34	 
	3.6   Inability to Fund U.S.Dollar Advances in Canada
	 	 	35	 
	3.7   Inability to Fund LIBOR Loans in the United States
	 	 	36	 
	3.8   Timing of Credit Availments
	 	 	37	 
	3.9   Time and Place of Payments
	 	 	37	 
	3.10 Remittance of Payments
	 	 	37	 
	3.11 Evidence of Indebtedness
	 	 	37	 
	3.12 Notice Periods
	 	 	38	 
	3.13 Swingline Loans
	 	 	38	 
	3.14 General Provisions Relating to All Letters of Credit
	 	 	40	 
	3.15 Agent’s Discretion to Allocate
	 	 	42	 












 



- ii -


	 	 	 	 	 
	ARTICLE 4

DRAWDOWN
	4.1 Drawdown Notice
	 	 	42	 
	 
	 	 	 	 
	ARTICLE 5

ROLLOVERS
	5.1 Bankers’ Acceptances
	 	 	43	 
	5.2 LIBOR Loans
	 	 	43	 
	5.3 Rollover Notice.
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 6

CONVERSIONS
	6.1 Converting a Loan into Another Type of Loan
	 	 	44	 
	6.2 Converting a Loan into Bankers’ Acceptances
	 	 	44	 
	6.3 Converting Bankers’ Acceptances into a Loan
	 	 	44	 
	6.4 Conversion Notice
	 	 	44	 
	6.5 Absence of Notice
	 	 	45	 
	6.6 Conversion After Default
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 7

INTEREST AND FEES
	7.1 Interest Rates
	 	 	45	 
	7.2 Calculation and Payment of Interest
	 	 	46	 
	7.3 General Interest Rules
	 	 	46	 
	7.4 Selection of Interest Periods
	 	 	47	 
	7.5 Acceptance Fees
	 	 	47	 
	7.6 Standby Fees
	 	 	47	 
	7.7 Waiver
	 	 	48	 
	7.8 Maximum Rate Permitted by Law
	 	 	48	 
	7.9 Letter of Credit Fees
	 	 	48	 
	 
	 	 	 	 
	ARTICLE 8

RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS
	8.1 Conditions of Credit
	 	 	49	 
	8.2 Change of Circumstances
	 	 	49	 
	8.3 Assignment as a Result of Change of Circumstances
	 	 	50	 
	8.4 Indemnity Relating to Credits
	 	 	50	 
	8.5 Indemnity for Transactional and Environmental Liability
	 	 	51	 
	8.6 Gross-Up for Taxes
	 	 	52	 
	8.7 Foreign Subsidiary Costs
	 	 	56	 
	 
	 	 	 	 
	ARTICLE 9

REPAYMENTS AND PREPAYMENTS
	9.1 Repayment under the Term Facility
	 	 	57	 
	9.2 Repayment under the Revolving Facility
	 	 	58	 
	9.3 Voluntary Prepayments
	 	 	58	 
	9.4 [Intentionally deleted]
	 	 	58	 
	9.5 Repayments of Credit Excess
	 	 	58	 
	9.6 Reimbursement or Conversion on Presentation of Letters of Credit
	 	 	58	 
	9.7 Letters of Credit Subject to an Order
	 	 	59	 












 




- iii -


	 	 	 	 	 
	9.8      Reimbursement Obligation for Maturing Bankers’ Acceptances
	 	 	59	 
	9.9      Currency of Repayment
	 	 	60	 
	9.10    Break Funding Payments
	 	 	60	 
	 
	 	 	 	 
	ARTICLE 10

REPRESENTATIONS AND WARRANTIES
	10.1   Representations and Warranties
	 	 	61	 
	10.2   Survival of Representations and Warranties
	 	 	67	 
	 
	 	 	 	 
	ARTICLE 11

COVENANTS
	11.1   Affirmative Covenants
	 	 	67	 
	11.2   Restrictive Covenants
	 	 	75	 
	 
	 	 	 	 
	ARTICLE 12

CONDITIONS PRECEDENT
	12.1   Conditions Precedent to All Credit
	 	 	78	 
	12.2   Conditions Precedent to Effectiveness of Agreement
	 	 	79	 
	12.3   Waiver
	 	 	80	 
	 
	 	 	 	 
	ARTICLE 13

DEFAULT AND REMEDIES
	13.1   Events of Default
	 	 	80	 
	13.2   Refund of Overpayments
	 	 	83	 
	13.3   Remedies Cumulative
	 	 	83	 
	13.4   Set Off
	 	 	83	 
	 
	 	 	 	 
	ARTICLE 14

THE AGENT
	14.1   Appointment and Authorization of Agent
	 	 	83	 
	14.2   Interest Holders
	 	 	84	 
	14.3   Consultation with Counsel
	 	 	84	 
	14.4   Documents
	 	 	84	 
	14.5   Agent as Lender
	 	 	84	 
	14.6   Responsibility of Agent
	 	 	85	 
	14.7   Action by Agent
	 	 	85	 
	14.8   Notice of Events of Default
	 	 	85	 
	14.9   Responsibility Disclaimed
	 	 	85	 
	14.10 Indemnification
	 	 	86	 
	14.11 Credit Decision
	 	 	86	 
	14.12 Successor Agent
	 	 	86	 
	14.13 Delegation by Agent
	 	 	87	 
	14.14 Waivers and Amendments
	 	 	87	 
	14.15 Determination by Agent Conclusive and Binding
	 	 	88	 
	14.16 Redistribution of Payment
	 	 	88	 
	14.17 Adjustments among Lenders after Acceleration
	 	 	88	 
	14.18 Distribution of Notices
	 	 	89	 
	14.19 Decision to Enforce Security
	 	 	89	 
	14.20 Enforcement
	 	 	89	 
	14.21 Application of Cash Proceeds of Realization
	 	 	89	 
	14.22 Security Documents
	 	 	90	 












 




- iv -


	 	 	 	 	 
	14.23 Discharge of Security
	 	 	90	 
	 
	 	 	 	 
	ARTICLE 15

GUARANTEE OF BORROWERS
	15.1   Guarantee
	 	 	91	 
	15.2   Nature of Guarantee
	 	 	91	 
	15.3   Liability Not Lessened or Limited
	 	 	91	 
	15.4   Agent not Bound to Exhaust Recourse
	 	 	92	 
	15.5   Enforcement
	 	 	93	 
	15.6   Guarantee in Addition to Other Security
	 	 	93	 
	15.7   Reinstatement
	 	 	93	 
	15.8
  Waiver of Notice, etc.
	 	 	93	 
	15.9   Subrogation Rights
	 	 	93	 
	15.10 Postponement and Subordination of Claims
	 	 	94	 
	15.11 Advances After Certain Events
	 	 	94	 
	 
	 	 	 	 
	ARTICLE 16

MISCELLANEOUS
	16.1   Waivers
	 	 	94	 
	16.2   Notices
	 	 	94	 
	16.3   Severability
	 	 	95	 
	16.4   Counterparts
	 	 	95	 
	16.5   Successors and Assigns
	 	 	95	 
	16.6   Participations and Assignments
	 	 	95	 
	16.7   Entire Agreement
	 	 	97	 
	16.8   Further Assurances
	 	 	97	 
	16.9   Judgment Currency
	 	 	97	 
	16.10 Waivers of Jury Trial
	 	 	98	 
	16.11 Expenses
	 	 	98	 
	16.12 USA PATRIOT Act
	 	 	98	 
	16.13 Confidentiality
	 	 	99	 






SCHEDULE A — Pricing Grid

SCHEDULE B — Individual Commitments

SCHEDULE C — Compliance Certificate

SCHEDULE D — Form of Assignment

SCHEDULE E — Form of Drawdown/Rollover/Conversion Notice

SCHEDULE F — Litigation

SCHEDULE G — Permitted Liens

SCHEDULE H — Freehold Parcels

SCHEDULE I — Leasehold Parcels

SCHEDULE J — Pledged Capital

SCHEDULE K — Disclosure Schedule

SCHEDULE L — Organizational Chart

SCHEDULE M — Security Documents

SCHEDULE N — Pension plans

SCHEDULE O — Instrument of adherence

SCHEDULE P — Permitted                      Debt











 



 




CREDIT AGREEMENT




THIS AGREEMENT made as of the 31st day of July, 2007.




B E T W E E N:





JPMORGAN CHASE BANK, N.A.




(herein, in its capacity as agent of the Lenders,
called the “Agent”)




- and -




JPMORGAN CHASE BANK, N.A., JPMORGAN CHASE BANK, N.A.,
TORONTO BRANCH, BANK OF AMERICA, N.A., BANK OF
AMERICA, N.A, CANADA BRANCH, BANK OF MONTREAL –
CHICAGO BRANCH, BANK OF MONTREAL, NATIONAL BANK OF
CANADA – NEW YORK BRANCH, NATIONAL BANK OF CANADA,
FIFTH THIRD BANK, FIFTH THIRD BANK, CANADA BRANCH,
WELLS FARGO BANK, N.A., WELLS FARGO FINANCIAL
CORPORATION CANADA, NATIONAL CITY BANK, NATIONAL CITY
BANK, CANADA BRANCH and LAURENTIAN BANK OF CANADA and
one or more financial institutions to whom any of the
foregoing or their assigns may from time to time
assign an undivided interest in the Loan Documents
(as defined herein) and who agree to be bound by the
terms hereof as a Lender (as defined herein)




- and -




VITRAN CORPORATION INC., a corporation incorporated
under the laws of the Province of Ontario




(herein called “Vitran”)




- and -




VITRAN EXPRESS CANADA INC., a corporation continued
and amalgamated under the laws of the Province of
Ontario




(herein called “Vitran Express” and, together with
Vitran, the “Canadian Borrowers”)









 



Schedule O 


 6.





- and -




VITRAN CORPORATION, a corporation incorporated under
the laws of the State of Nevada




(herein called the “U.S. Borrower”)



          WHEREAS the Borrowers and each of the Guarantors have requested the Lenders to provide the
Borrowers with certain credit facilities;




          AND WHEREAS Vitran Express, the U.S. Borrower and each of the Guarantors is a wholly-owned
Subsidiary, direct or indirect, of Vitran;




          AND WHEREAS the Lenders are willing to provide (a) a revolving credit facility in an amount
not to exceed $100,000,000 in the aggregate to the Borrowers, and (b) a term credit facility in an
amount not to exceed $60,000,000 to the Canadian Borrowers, each upon the terms and conditions
contained herein;




          NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:




ARTICLE 1

INTERPRETATION



1.1 Defined Terms. The following defined terms shall for all purposes of this agreement, or any amendment,
substitute, supplement, replacement or addition hereto, have the following respective meanings
unless the context otherwise specifies or requires or unless otherwise defined herein:





“ABR Canada” means, for any particular day, the variable rate of interest per annum,
calculated on the basis of a 360-day year, which is equal to the greater of (a) the Base
Rate Canada for such day and (b) the aggregate of (i) the Federal Funds Effective Rate for
such day and (ii) 1/2 of 1% per annum.




“ABR New York” means, at any particular time, the variable rate of interest per annum,
calculated on the basis of a 360-day year, which is equal to the greater of (a) the Base
Rate New York at such time and (b) the aggregate of (i) the Federal Funds Effective Rate at
such time and (ii) 1/2 of 1% per annum.




“Acquisition” means, as to any Person, (i) any purchase or other acquisition of all of the
securities of any other Person, and (ii) any purchase or other acquisition of all or
substantially all of the assets of any other Person or of assets consisting of a line of
business of any other Person.






“Affected Lender” shall have the meaning ascribed thereto in Section 8.3.




“affiliate” when used with respect to a Person, means any other Person which directly or
indirectly through one or more intermediaries Controls, or is Controlled by, or is under
common Control with, such Person.








 



Schedule O
7.


“Aggregate Consideration” means, in relation to an Acquisition, the total value of the
consideration paid or liability assumed by the purchaser making such Acquisition and, for
the purposes of Section 11.2(g), less (x) cash on hand of any Person that is the subject of
an Acquisition; (y) the value of equity issued by a purchaser which is issued as part of the
purchase price for such Acquisition; and (z) such purchaser’s cash on hand immediately prior
to the Acquisition which will be used to pay all or part of the purchase price for such
Acquisition.




“Applicable Law” means all public laws, statutes, ordinances, decrees, judgments, codes,
standards, acts, orders, by-laws, rules, regulations, Official Body consents, permits,
binding policies and guidelines, and requirements of all Official Bodies, which now or
hereafter may be lawfully applicable to and enforceable against any Company or its property
or any part thereof.




“Applicable Margin” means the rates and fees per annum set out on Schedule A hereto, based
on the Debt to EBITDA Ratio as set forth in the most recent compliance certificate received
by the Agent pursuant to Section 11.1(a)(v). Any increase or decrease in the Applicable
Margin resulting from a change in the Debt to EBITDA Ratio shall become effective as of the
fifth Banking Day immediately following the date a compliance certificate is delivered
pursuant to Section 11.1(a)(v); provided that if such certificate is not delivered when due
in accordance with such Section, then Pricing Level IV shall apply as of the first Banking
Day after the date on which such certificate was required to have been delivered until such
certificate is delivered, after which the Applicable Margin shall be determined from such
certificate. The Applicable Margin in effect from the Effective Date through the date on
which the first such certificate is delivered to the Agent and the Lenders in accordance
with Section 11.1(a)(v) shall be determined based upon Pricing Level III.




“Approved Fund” means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a Lender, (b) an
affiliate of a Lender or (c) an entity or an affiliate of an entity that administers or
manages a Lender.




“Asset Coverage Ratio” means, for a particular Fiscal Quarter, the ratio of (i) Receivables
Value of Vitran (on a consolidated basis) as at the last day of such Fiscal Quarter plus the
net book value, in accordance with generally accepted accounting principles, of Eligible
Real Property and Eligible Equipment of Vitran (on a consolidated basis) to (ii) Funded Debt
of Vitran (on a consolidated basis) for such Fiscal Quarter.




“Available Credit” means, at any particular time and with respect to the Revolving Facility,
the aggregate amount, if any, by which the Revolving Facility Available Amount at such time
exceeds the aggregate Outstanding Principal Amount of credit outstanding under the Revolving
Facility at such time. For purposes of calculating the standby fee in Section 7.6 only, any
outstanding Swingline Loans shall not be included in the calculation of the Outstanding
Principal Amount of the credit outstanding under the Revolving Facility.




“BA Discounted Proceeds” means, in respect of any Bankers’ Acceptances to be accepted by a
Lender on any day, an amount (rounded to the nearest whole cent and with one-half of one
cent being rounded up) calculated on such day by multiplying:




	 	(a)	 	the aggregate face amount of such Bankers’ Acceptances; by
	 
	 	(b)	 	the price, where the price is determined by dividing one by the sum of
one plus the product of:










 



Schedule O
8.








	 	(i)	 	the BA Rate which is applicable to such Bankers’ Acceptance
(expressed as a decimal); and
	 
	 	(ii)	 	a fraction, the numerator of which is the number of days
remaining in the term of such Bankers’ Acceptances and the denominator
of which is 365;






with the price as so determined being rounded up or down to the fifth decimal place and
        .000005 being rounded up.




“BA Lender” means (i) any Lender which is a Schedule I chartered bank or (ii) any other
Lender which has been selected by the Agent and the Borrowers as a “BA Lender”.




“BA Proceeds” means, with respect to a particular Bankers’ Acceptance, the BA Discounted
Proceeds with respect thereto less the amount of the acceptance fees in respect of such
Bankers’ Acceptance calculated in accordance with Section 7.5.




“BA Rate” means, with respect to an issue of Bankers’ Acceptances with the same maturity
date to be accepted by a BA Lender hereunder, the discount rate per annum, calculated on the
basis of a year of 365 days, equal to, as determined by the Agent, (i) for a BA Lender which
is a Schedule I chartered bank, the arithmetic average (rounded upwards to the nearest
multiple of 0.01%) of the discount rates of such Lender that appear on the Reuters Screen
CDOR Page for such Lender at or about 10:00 a.m. (Toronto time) on the date of issue and
acceptance of such Bankers’ Acceptances, for bankers’ acceptances having a comparable face
value and an identical maturity date to the face value and maturity date of such issue of
Bankers’ Acceptances or (ii) for any other BA Lender, the arithmetic average (rounded
upwards to the nearest multiple of 0.01%) of the actual discount rates applicable to the
Bankers’ Acceptances accepted by such Lender but not to exceed the actual rate of discount
applicable to Bankers’ Acceptances accepted by the Agent from the same Bankers’ Acceptance
issue plus 10 basis points per annum;




“BA Rate Loans” shall have the meaning ascribed thereto in Section 3.5.




“Bankers’ Acceptance” means a depository bill or bill of exchange (a) drawn by a Canadian
Borrower and accepted by a Canadian Lender, (b) denominated in Canadian dollars, (c) having
a term of 30 to 180 days, (d) issued and payable only in Canada and (e) having a face amount
of at least CDN$100,000 and otherwise in an integral multiple of CDN$1,000.




“Banking Day” means, when used in respect of Prime Rate Loans, Bankers’ Acceptances and
Letters of Credit, any day other than a Saturday or a Sunday on which banks generally are
open for normal banking business in Toronto, Ontario and, when used in respect of LIBOR
Loans, means any day other than a Saturday or a Sunday on which banks generally are open for
normal banking business in Toronto, Ontario, New York, New York, and London, England and, on
which transactions may be undertaken in the London interbank market and, when used in
respect of all other Loans, means any day other than a Saturday or Sunday on which banks
generally are open for normal banking business in Toronto, Ontario and New York, New York.




“Base Rate Canada” means the variable rate of interest per annum, calculated on the basis of
a 360-day year for the actual number of days elapsed, equal to the rate of interest
determined by JPMorgan Canada from time to time as the base rate of JPMorgan Canada for
United States dollar loans made by JPMorgan Canada in Canada from time to time, being a
variable per annum reference rate of interest adjusted automatically upon change by JPMorgan
Canada.









 



Schedule O
9.



“Base Rate Canada Loan” means monies lent by the Canadian Lenders to a Canadian Borrower
hereunder in United States dollars and upon which interest accrues at a rate referrable to
the ABR Canada.




“Base Rate New York” means the variable rate of interest per annum determined by the Agent
from time to time as its prime rate for United States dollar loans made by the Agent in the
United States at its principal office in New York, New York from time to time, being a
variable per annum reference rate of interest adjusted automatically upon change by the
Agent, calculated on the basis of a year of 360 days.




“Base Rate New York Loan” means monies lent by the U.S. Lenders to the U.S. Borrower and
upon which interest accrues at a rate referable to the ABR New York.




“Borrowers” means the Canadian Borrowers and the U.S. Borrower and “Borrower” means any of
the Borrowers.




“Branch of Account” means the Canadian Branch of Account in the case of the Canadian
Borrowers and the U.S. Branch of Account in the case of the U.S. Borrower.




“Business” means the business of the Borrowers and the Subsidiaries, being the provision of
freight and distribution services and ancillary services thereto carried on by the Borrowers
and the Subsidiaries in Canada and the United States.




“Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral or written,
formal or informal, funded or unfunded, insured or uninsured, providing employee benefits,
including medical, hospital care, dental, sickness, accident, disability, life insurance,
pension, retirement or savings benefits, under which any Company or any Subsidiary of any
Company has any liability with respect to any employee or former employee, but excluding any
Canadian Pension Plans.




“Canadian Branch of Account” means the branch of JPMorgan Canada at Royal Bank Plaza, South
Tower, 200 Bay Street, Suite 1800, Toronto, Ontario or such other branch or office of
JPMorgan Canada located in Canada as the Canadian Borrowers and the Agent may agree upon.




“Canadian Dollar Equivalent” means the Exchange Equivalent in Canadian dollars of any amount
of United States dollars.




“Canadian
Lenders” means the financial institutions set out and
described as such in Schedule  B as amended from time to time and their
successors and permitted assigns.




“Canadian Obligor” means an Obligor duly incorporated, amalgamated, continued or organized
pursuant to the laws of Canada or a Province thereof.




“Canadian Pension Plans” means each pension plan required to be registered under Canadian
federal or provincial law that is maintained or contributed to by a Company or any
Subsidiary of any Company for its employees or former employees, but does not include the
Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or
the Province of Quebec, respectively.









 



Schedule O
10.



“Canadian Qualified Lender” means a Person which (i) is not a “non-resident” within the
meaning of the Tax Act, or (ii) is an “authorized foreign bank” within the meaning of the
Tax Act, but only in respect of an amount payable with respect to any outstanding credit or
portion thereof that is paid or credited in respect of its “Canadian banking business”
within the meaning of the Tax Act.




“Canadian Union-Administered Plans” shall mean all present and future Canadian Pension Plans
and Canadian Benefit Plans of any type whatsoever, administered by trustees of which at
least half are union representatives, other than a plan in respect of which any director,
officer, employee, agent or representative of any Borrower or any Subsidiary has acted or is
acting as a trustee or has been or is involved in the administration, to which any Borrower
or any Subsidiary makes or is required to make contributions for the benefit of its
employees.




“Capital Expenditures” means, for any particular period, the amount which would, in
accordance with generally accepted accounting principles and on a consolidated basis, be
considered to be capital expenses of Vitran for such period (specifically including those
financed through capital leases.




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




“Cash Collateral Account” means a special purpose deposit account established by the
Borrowers with the Agent to deal with prepayments of outstanding Bankers’ Acceptances and
Letters of Credit hereunder in the manner set forth herein.




“Cash Pooling Obligations” means, as applied to any Obligor, any direct or indirect
liability, contingent or otherwise, of such Obligor to a Lender or any affiliate thereof in
respect of cash management services (including treasury, depository, overdraft, credit or
debit card, electronic funds transfer and other cash management arrangements), including
obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and
disbursements in connection therewith.




“Cash Proceeds of Realization” means the aggregate of (i) all Proceeds of Realization in the
form of cash and (ii) all cash proceeds of the sale or disposition of non-cash Proceeds of
Realization, in each case expressed in U.S. dollars.




“CDN$” means the lawful currency of Canada.




“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of
1980 of the United States, as amended by the Superfund Amendments and Reauthorization Act
and as further amended from time to time, and any successor statute and including all
regulations issued under all such statutes.




“Code” means the Internal Revenue Code of 1986 of the United States, as amended from time to
time, and any successor statute and including all regulations issued under all such
statutes.









 



Schedule O
11.



“Commitment” means, in respect of any Lender, such Lender’s commitment to make extensions of
credit to a Borrower under either or both of the Credit Facilities, as the context requires
(for greater certainty, both before and after any such extension of credit has been made);




“Companies” means the Borrowers and the Subsidiaries.




“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of
voting stock, by contract or otherwise and “Controlled” has a meaning correlating thereto.




“Conversion Notice” shall have the meaning ascribed thereto in Section 6.4.




“Credit Excess” means, as at a particular date and with respect to a particular Credit
Facility, the amount, if any, by which the aggregate amount of credit outstanding under such
Credit Facility as at the close of business on such date exceeds the amount of such Credit
Facility (as such amount may be reduced from time to time pursuant to the terms hereof) as
at the close of business on such date.




“Credit Facilities” means the Revolving Facility and the Term Facility and “Credit Facility”
means either of the Credit Facilities.




“Debt” means, at any particular time, with respect to any Company, without duplication, (a)
the Funded Debt of such Company and (b) all guarantees by such Company of Debt of others.
For purposes of calculating the U.S. Borrower Debt to EBITDA Ratio only, the amount of
outstanding Permitted ___Debt as at the last day of the applicable Fiscal Quarter
shall be excluded from the calculation of Debt of the U.S. Borrower. For purposes of
calculating the Applicable Margin only, outstanding Swingline Loans (up to a maximum of U.S.
$10,000,000) shall not be included in the definition of Debt.




“Debt to EBITDA Ratio” means, for a particular Fiscal Quarter, the ratio of (i) Debt of
Vitran (on a consolidated basis) as at the last day of such Fiscal Quarter to (ii) Rolling
EBITDA of Vitran (on a consolidated basis) for such Fiscal Quarter.




“Default” means any event which is or which, with the passage of time, the giving of notice
or both, would be an Event of Default.




“Defaulting Lender” shall have the meaning ascribed thereto in Section 3.3.




“Designated Account” means, with respect to transactions in a particular currency under the
Credit Facilities, the account of a particular Borrower maintained by the Agent or JPMorgan
Canada at the relevant Branch of Account for the purposes of transactions in such currency
under the Credit Facilities.




“Draft” means any draft, bill of exchange, receipt, acceptance, demand or other request for
payment drawn or issued under or in respect of a Letter of Credit.




“Drawdown Notice” shall have the meaning ascribed thereto in Section 4.1.




“EBITDA” means, for any particular period, with respect to any Company, Net Income of such
Company (excluding, in the calculation of Net Income of such Company, any dividends other
than cash dividends received in the ordinary course from entities in which such Person has
an









 



Schedule O
12.



equity interest which are not directly or indirectly subsidiaries of such Person provided
that such cash dividend amount shall be limited to a maximum of 10% of the EBITDA calculated
only in respect of any Person) for such period plus, to the extent deducted in determining
Net Income of such Company, the aggregate of (a) Interest Expenses of such Company for such
period, (b) consolidated income tax expenses of such Company for such period, (c)
consolidated depletion, depreciation and amortization expenses and other non cash expenses
of such Company for such period, and, provided that for purposes of calculating EBITDA for
any period, the EBITDA during such period attributable to any Acquisition by such Company or
any Subsidiary of such Company during such period shall be included on a pro forma basis for
such period (assuming the consummation of such Acquisition and the incurrence or assumption
of any Debt in connection therewith occurred on the first day of such period) provided that
such Company shall have provided to the Agent and the Lenders, prior to the completion of
the Acquisition, (i) the most recently available consolidated balance sheet of the Person
that is the subject of such Acquisition (and its consolidated Subsidiaries) and (ii) the
most recently available consolidated statements of income and of cash flows and all such
financial statements have been reviewed and reported on by independent accountants or are
otherwise in form and substance acceptable to the Agent.




“EBITDA to Interest Expenses Ratio” means, for a particular Fiscal Quarter, the ratio of (i)
Rolling EBITDA of Vitran (on a consolidated basis) for such Fiscal Quarter to (ii) Rolling
Interest Expenses of Vitran (on a consolidated basis) for such Fiscal Quarter.




“Effective Date” means the date on which the conditions specified in Section 12.2 are
satisfied (or waived in accordance with Section 14.4).




“Eligible Equipment” shall mean, in respect of any Obligor, equipment, fixtures, plant,
machinery, tools and furniture of such Obligor which is acceptable to the Agent in its sole
discretion exercised in good faith. Without limiting the Agent’s discretion, the Agent
shall, in general, consider equipment, fixtures, plant, machinery, tools and furniture to be
Eligible Equipment if it meets, and so long as it continues to meet, all of the following
requirements: (i) it is owned by such Obligor and such Obligor has the right to subject it
to a security interest in favour of the Agent; (ii) except for rolling stock, it is located
on a premises listed on Schedule H or I hereto and is not in transit except between such
locations; (iii) it is not subject to any prior assignment, claim, lien, security interest
or encumbrance whatsoever, other than Permitted Liens, and is subject to a valid first
ranking security interest in favour of the Agent which is properly perfected in the
appropriate jurisdiction (notwithstanding the foregoing, the Lien in favour of the Agent in
respect of motor vehicles (including tractors and trailers) must only be properly perfected
as required pursuant to Section 11.1(ff)); and (iv) the Agent has determined in accordance
with the Agent’s customary business practices that it is not unacceptable due to
immateriality, obsolescence, age, type, category, condition or quality; for greater
certainty, damaged or defective equipment, fixtures, plant, machinery, tools or furniture
shall not be acceptable as Eligible Equipment.




“Eligible Real Property” shall mean, in respect of any Obligor, real property owned by such
Obligor which is acceptable to the Agent in its sole discretion exercised in good faith.
Without limiting the Agent’s discretion, the Agent shall, in general, consider real property
to be Eligible Real Property if it meets, and so long as it continues to meet, all of the
following requirements: (i) it is owned by such Obligor and such Obligor has the right to
subject it to a security interest in favour of the Agent; (ii) it is listed on Schedule H
hereto; and (iii) it is not subject to any prior
assignment, claim, lien, security interest or encumbrance whatsoever, other than Permitted
Liens, and is subject to a valid first ranking charge in favour of the Agent which is
properly registered against the applicable land, provided that so long as the Borrowers
remain in compliance with









 



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13.



Section 11.1(bb), the real property listed in Part 1 of Schedule H
shall be deemed to be Eligible Real Property.




“Environmental Laws” means all Applicable Law relating in full or in part to the protection
of the environment or human health or relating to the manufacture, processing, management,
distribution, use, collection, treatment, storage, generation, release, spill, leak,
pumping, pouring, emitting, adding, emptying, injection, escape, leaching, throwing,
placing, exhausting, dumping, spraying, burial, abandonment, incineration, seepage,
placement, emission, deposit, issuance, discharge or disposal, transport, transfer or
handling of any contaminant, pollutant, waste of any nature, hazardous or toxic substance or
material or dangerous good as defined, judicially interpreted or identified in any
Environmental Law or any substance that causes or may cause harm or degradation to the
environment or injury to human health and includes any condition, circumstance, pollutant,
contaminant, waste, hazardous waste, deleterious, toxic or hazardous substance or dangerous
good present in such quantity or state that it contravenes any Environmental Laws or gives
rise to any losses, claims, liability or obligation under any Environmental Law.




“Environmental Order” means any order, judgment, ruling, variance, decree, publication or
declaration of or by any Official Body pursuant to any Environmental Law.




“Environmental Permit” means any authorization, consent, approval, license, permit,
concession, certification, exemption or filing by or with any Official Body pursuant to any
Environmental Law.




“ERISA” means the Employee Retirement Income Security Act of 1974 of the United States, as
amended from time to time, and any successor statute and including all regulations issued
under all such statutes.




“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that is a
member of a group of which any Borrower or any Guarantor is a member and which group is
treated as a single employer under Section 414(b) or (c) of the Code or Section 4001 of
ERISA.




“ERISA Companies” means the Borrowers and the ERISA Affiliates and “ERISA Company” means any
of the ERISA Companies.




“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived); (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by a Borrower or any ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by a Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by a Borrower or any ERISA Affiliate of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by a Borrower or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from a Borrower or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA.









 



Schedule O
14.



“Equity” means, at any particular time, the amount which would, in accordance with generally
accepted accounting principles, be classified upon the consolidated balance sheet of Vitran
at such time as shareholders’ equity of Vitran.




“Event of Default” means any one of the events set forth in Section 13.1.




“Exchange Equivalent” means, as of any particular date, with reference to any amount (the
“original amount”) expressed in either Canadian or United States dollars (the “original
currency”), the amount expressed in the other currency which would be required to buy the
original amount of the original currency using the noon spot rate of exchange for Canadian
interbank transactions applied in converting the other currency into the original currency
published by the Agent for such date.




“Federal Funds Effective Rate” means, for any particular day, the variable rate of interest
per annum, calculated on the basis of a 360-day year and for the actual number of days
elapsed, equal to the weighted average of the rates on overnight federal funds transactions
in United States dollars with members of the Federal Reserve System arranged by United
States federal funds brokers as published for such day (or, if such day is not a Banking
Day, for the next preceding Banking Day) by the Federal Reserve Bank of New York or, for any
Banking Day on which such rate is not so published by the Federal Reserve Bank of New York,
the average of the quotations for such day for such transactions received by the Agent from
three United States federal funds brokers of recognized standing selected by the Agent.




“Fee Letter” means the fee letter dated June 28, 2007 between the Agent and the Borrowers
and pursuant to which the Borrowers agree to pay certain fees to the Agent and the Lenders.




“Finance Parties” means the Agent and the Lenders.




“Financial Statements” means the audited consolidated financial statements of Vitran for the
Fiscal Year ending on or about December 31, 2006 and the unaudited consolidated financial
statements of Vitran for the six-month period ending on or about June 30, 2007.




“Financing Lease” means any lease of property, real or personal, the obligations of the
lessee in respect of which are required in accordance with generally accepted accounting
principles to be capitalized on the balance sheet of the lessee (including, without
limitation, any such lease forming part of a sale-leaseback transaction).




“Fiscal Quarter” means any of the three-month periods ending on the last day of March, June,
September or December in each year.




“Fiscal Year” means any of the twelve-month periods ending on the last day of December in
each year.




“F.R.S. Board” means the Board of Governors of the Federal Reserve System of the United
States or any successor thereto.




“Funded Debt” means, at any particular time, with respect to any Company, the aggregate of
the amounts which would, in accordance with generally accepted accounting principles, be
classified on the consolidated balance sheet of such Company at such time as indebtedness
for borrowed money of such Company (including all obligations of such Company in respect of
bankers’ acceptances issued or created for the account of such Company and then outstanding
and in









 



Schedule O
15.



respect of letters of credit and letters of guarantee issued for the account of such
Company and then outstanding) and as capital leases of such Company. For purposes of
calculating the U.S. Asset Coverage Ratio only, the amount of outstanding Permitted
___Debt as at the last day of the applicable Fiscal Quarter shall be excluded from
the calculation of Funded Debt of the U.S. Borrower.




“generally accepted accounting principles” means generally accepted accounting principles in
effect in the United States of America from time to time.




“Guarantees” means the guarantee agreements entered into as of the date hereof by the
Guarantors in favour of the Agent and the Lenders, as each may be amended, modified,
supplemented or replaced from time to time, and pursuant to which the Guarantors jointly and
severally guaranteed the payment and performance of the Secured Obligations of the Borrowers
expressly stated therein as being guaranteed thereby.




“Guarantors” means, collectively, Vitran Logistics Limited, Expéditeur T.W. Ltée., 1124708
Ontario Inc., 1124709 Ontario Inc., Can-Am Logistics Inc., 1098304 Ontario Inc., Doney
Holdings Inc., Rout-Way Express Lines Ltd./Les Services Routiers Express Rout Ltée, Southern
Express Lines of Ontario Limited, Vitran Environmental Systems Inc., Vitran Express, Inc.,
Frontier Transport Corporation, Vitran Logistics, Inc., Vitran Logistics Corp., R.A.
Christopher, Inc., Kansas Motor Freight Corp., Vitran Express West, Inc., PJAX, Inc.,
1277050 Alberta Inc. and 0772703 BC Ltd. and otherwise any Subsidiaries who become
Guarantors pursuant to Section 11.1(r), and “Guarantor” means any one of the foregoing.




“Hazardous Materials” means:




	 	(a)	 	any “hazardous substance”, as defined by CERCLA;
	 
	 	(b)	 	any “hazardous waste”, as defined by the Resource Conservation
and Recovery Act of the United States, as amended from time to time, or any
successor statute;
	 
	 	(c)	 	any petroleum product, asbestos, polychlorinated biphenyl
(PCB), natural gas, radon gas, natural gas liquids, liquefied natural gas or
synthetic gas usable for fuel;
	 
	 	(d)	 	any material defined as “hazardous waste” pursuant to 40 Code
of Federal Regulations Part 261 or any “hazardous chemical” as defined pursuant
to 29 Code of Federal Regulations Part 1910; or
	 
	 	(e)	 	any pollutant or contaminant or explosive or radioactive
substance or waste or hazardous or toxic chemical, material, waste or substance
within the meaning of any applicable federal, state, provincial or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) including asbestos or asbestos containing materials,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.






“Individual Commitment” means, with respect to a particular Lender and a particular Credit
Facility, the amount set forth in Schedule B attached
hereto, as reduced, increased or amended from time to time pursuant to Sections 2.3, 2.6,
8.3 and 16.6, as the individual commitment of such Lender under such Credit Facility.









 



Schedule O
16.



“Interest Expenses” means, for any period, with respect to any Company, the amount which
would, in accordance with generally accepted accounting principles, be classified on the
consolidated statement of earnings of such Company for such period as the cash interest
expense of such Company (including, without limitation, interest on amounts under capital
leases).




“Interest Period” means, in the case of any LIBOR Loan, the applicable period for which
interest on such Loan shall be calculated pursuant to Article 7.




“Issuing Lender” means JPMorgan Canada in respect of Letters of Credit issued at the
request, and on the credit, of a Canadian Borrower, JPMorgan U.S. in respect of Letters of
Credit issued at the request, and on the credit of, the U.S. Borrower or any other Lender
selected by the Agent and acceptable to the Borrowers who assumes in writing with Borrowers,
the Lenders and the Agent the obligation of issuing Letters of Credit under the Revolving
Facility on behalf of the Lenders.




“JPMorgan Canada” means JPMorgan Chase Bank, N.A., Toronto Branch.




“JPMorgan U.S.” means JPMorgan Chase Bank, N.A.




“Lenders” means the Canadian Lenders and the U.S. Lenders and “Lender” means any of the
Lenders.




“Letters of Credit” means standby and documentary letters of credit issued by the Issuing
Lender (i) at the request, and on the credit, of a Borrower and (ii) on behalf of a Borrower
and, if applicable, a Subsidiary of a Borrower, each being denominated in Canadian or United
States dollars having a maximum term as set out in Section 3.14(b), being issued to a named
beneficiary and being otherwise in a form satisfactory to the Issuing Lender.




“LIBOR” means the interest rate per annum, calculated on the basis of a 360-day year,
determined by the Agent for a particular Interest Period to be the rate of interest per
annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point), which appears on the Reuters Page LIBOR01 at approximately 11:00 a.m.
(London time) two Banking Days before the first day of such Interest Period for borrowings
in United States dollars for a period comparable to such Interest Period and in an amount
approximately equal to the amount of the LIBOR Loan to be outstanding during such Interest
Period.




“LIBOR Loan” means monies lent by the Lenders to the Borrowers hereunder in United States
dollars and upon which interest accrues at a rate referrable to LIBOR.




“Lien” means any deed of trust, mortgage, charge, hypothec, assignment, pledge, lien,
vendor’s privilege, supplier’s right of reclamation or other security interest or
encumbrance of whatever kind or nature, regardless of form and whether consensual or arising
by law (statutory or otherwise), that secures the payment of any indebtedness or liability
or the observance or performance of any obligation.




“Loan Documents” means this agreement, the Fee Letter, the Guarantees and the Security
Documents.




“Loans” means LIBOR Loans, Base Rate Canada Loans, Base Rate New York Loans, Prime Rate
Loans and BA Rate Loans.









 



Schedule O
17.



“Majority Lenders” means, at any particular time, such group of at least two Lenders which,
in the aggregate, have extended at least fifty-one percent (51%) of the total amount of
credit outstanding under the Credit Facilities at such time or, if no credit is then
outstanding, such group of at least two Lenders which, in the aggregate, have Individual
Commitments which are equal to at least fifty-one percent (51%) of the total amount of the
Individual Commitments of all of the Lenders at such time.




“Material Adverse Change” means any change of circumstances or any event which would have a
Material Adverse Effect.




“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
property or financial condition, of the Borrowers and the Subsidiaries taken as a whole, or
(b) the validity, legality, binding effect or enforceability of this agreement or any of the
other Loan Documents or the rights or remedies of the Agent and the Lenders hereunder.




“Material Subsidiaries” means any Subsidiary whose total assets (as recorded on its
consolidated balance sheet in accordance with generally accepted accounting principles)
exceed 5% of the total assets of Vitran and its Subsidiaries on a consolidated basis (as
recorded on Vitran’s consolidated balance sheet in accordance with generally accepted
accounting principles).




“Maturity Date” means July 31, 2012, subject to earlier termination pursuant to the terms of
this agreement.




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




“National City Bank Indebtedness” means the Indebtedness of PJAX, Inc. to National City Bank
of Pennsylvania with respect to a secured term loan of which the current principal balance
is $3,420,502 maturing September 1, 2010 provided by National City Bank of Pennsylvania to
PJAX, Inc. and otherwise on terms satisfactory to the Lenders.




“National City Bank Loan Documents” means the credit, guarantee and security documentation
which evidences the National City Bank Indebtedness and the guarantees thereof and the
security therefore, in form and substance satisfactory to the Lenders.




“Net Income” means, for any period, with respect to any Company, the amount which would, in
accordance with generally accepted accounting principles, be classified on the consolidated
statement of earnings of such Company for such period as the net income of such Company,
before extraordinary or unusual items.




“Obligors” means, collectively but without duplication, the Borrowers and the Guarantors.




“Official Body” means any national government or government of any political subdivision
thereof, or any agency, authority, board, central bank, monetary authority, commission,
department or instrumentality thereof, or any court, tribunal, grand jury, mediator or
arbitrator, whether foreign or domestic, or any non-governmental regulating authority to the extent that
the rules, regulations and orders of such body have the force of law.









 



Schedule O
18.



“Order” means an order, judgment, injunction or other determination by an Official Body
restricting payment by the Issuing Lender under and in accordance with a Letter of Credit or
extending the Issuing Lender’s liability under a Letter of Credit beyond the expiration date
stated therein.




“Outstanding Principal Amount” means at any time and with respect to any Credit Facility,
without duplication, the aggregate amount of all extensions of credit made by the Lenders
thereunder which continue outstanding at such time including, for such purpose, the face
amount of any outstanding Bankers’ Acceptances, the amount of all outstanding Letters of
Credit, the principal amount of any outstanding Prime Rate Loan, BA Rate Loan, Base Rate
Canada Loan, Base Rate New York Loan and LIBOR Loan.




“PBGC” means Pension Benefit Guaranty Corporation.




“Permitted Debt” means, with respect to the Companies:




	 	(a)	 	indebtedness of the Borrowers under this agreement;
	 
	 	(b)	 	accounts payable and accrued liabilities incurred by the Companies in
the ordinary course of business;
	 
	 	(c)	 	indebtedness of the Companies which is secured by a Permitted Lien;
	 
	 	(d)	 	Subordinated Debt;
	 
	 	(e)	 	Permitted ___Debt;
	 
	 	(f)	 	until September 1, 2010, the National City Bank Indebtedness in a
principal amount not exceeding U.S.$3,420,502;
	 
	 	(g)	 	subject to Section 11.1(gg), indebtedness of one Obligor to another
Obligor; and
	 
	 	(h)	 	other indebtedness of any of the Companies approved by the Majority
Lenders.






“Permitted Disposition” means (i) the sale, lease or other disposition by the applicable
Obligor of the properties listed on Part III of Schedule H hereto, and (ii) any other
disposition of assets of any of the Companies out of the ordinary course of business which
is expressly consented to in writing by all of the Lenders.




“Permitted ___Debt” means indebtedness from time to time of the U.S. Borrower to
___, the details of which indebtedness as of the date hereof are listed on
Schedule P hereto.




“Permitted Liens” means any one or more of the following with respect to the assets of the
Companies:




	 	(a)	 	inchoate or statutory Liens for Taxes, assessments and other
governmental charges or levies which are not delinquent (taking into account
any relevant grace
periods) or the validity of which are currently being contested in good
faith by appropriate proceedings and in respect of which there shall have
been set aside a 










 



Schedule O
19.


	 	 	 	reserve (segregated to the extent required by generally
accepted accounting principles) in an amount which is adequate therefor;
	 
	 	(b)	 	inchoate or statutory Liens of contractors, subcontractors, mechanics,
workers, suppliers, materialmen, carriers and others in respect of
construction, maintenance, repair or operation of assets of the Companies,
provided that such Liens are related to obligations not due or delinquent
(taking into account any applicable grace or cure periods), are not registered
as encumbrances against title to any assets of the Companies and adequate
holdbacks are being maintained as required by applicable legislation or such
Liens are being contested in good faith by appropriate proceedings and in
respect of which there shall have been set aside a reserve (segregated to the
extent required by generally accepted accounting principles) in an amount which
is adequate with respect thereto and provided further that such Liens do not in
the aggregate materially detract from the value of the assets of the Companies
encumbered thereby or materially interfere with the use thereof in the
operation of the business of the Companies;
	 
	 	(c)	 	easements, rights-of-way, servitudes, restrictions and similar rights
in real property comprised in the assets of the Companies or interests therein
granted or reserved to other persons, provided that such rights do not in the
aggregate materially detract from the value of the assets of the Companies
subject thereto or materially interfere with the use thereof in the operation
of the business of the Companies;
	 
	 	(d)	 	title defects or irregularities which are of a minor nature and which
do not in the aggregate materially detract from the value of the assets of the
Companies encumbered thereby or materially interfere with the use thereof in
the operation of the business of the Companies;
	 
	 	(e)	 	Liens incidental to the conduct of the business or the ownership of
the assets of the Companies (other than those described in clauses (f) and (g)
of this definition) which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit (including, without limitation,
unpaid purchase price), and which do not in the aggregate materially detract
from the value of the assets of the Companies encumbered thereby or materially
interfere with the use thereof in the operation of the business of the
Companies;
	 
	 	(f)	 	Liens securing appeal bonds and other similar Liens arising in
connection with court proceedings (including, without limitation, surety bonds,
security for costs of litigation where required by law and letters of credit)
or any other instruments serving a similar purpose;
	 
	 	(g)	 	attachments, judgments and other similar Liens arising in connection
with court proceedings; provided, however, that such Liens are in existence for
less than 30 days after the entry therefor or the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings;
	 
	 	(h)	 	the reservations, limitations, provisos and conditions, if any, (i)
expressed in any original grant from the Crown of any real property or (ii) any
interest therein or in any comparable grant in jurisdictions other than Canada;










 



Schedule O
20.


	 	(i)	 	Liens, charges or other security interests given to a public utility
or any municipality or governmental or other public authority when required by
such utility or other authority in connection with the operation of the
business or the ownership of the assets of the Companies, provided that such
Liens do not in the aggregate reduce the value of the assets of the Companies
or materially interfere with the use thereof in the operation of the business
of the Companies;
	 
	 	(j)	 	servicing agreements, development agreements, site plan agreements,
and other agreements with governmental or public authorities pertaining to the
use or development of any of the assets of the Companies, provided same are
complied with including, without limitation, any obligations to deliver letters
of credit and other security as required;
	 
	 	(k)	 	applicable municipal and other governmental restrictions, including
municipal by-laws and regulations, affecting the use of land or the nature of
any structures which may be erected thereon, provided such restrictions have
been complied with;
	 
	 	(l)	 	Purchase Money Obligations arising in the ordinary course of business,
where “Purchase Money Obligations” means any Lien created, issued or assumed by
the Companies to secure Financing Leases or indebtedness assumed as part of, or
issued or incurred to pay or provide funds to pay, all or a part of the
purchase price of any property, provided that such Lien is limited to the
property so acquired and is created, issued or assumed substantially
concurrently with the acquisition of such property and provided that such
property is not a replacement of a similar asset owned or held by a Company
prior to the date of such acquisition;
	 
	 	(m)	 	Liens identified in Schedule G
hereto;
	 
	 	(n)	 	the right reserved to or vested in any Official Body by any statutory
provision, or by the terms of any lease, licence, franchise, grant or permit of
any of the Companies, to terminate any such lease, licence, franchise, grant or
permit, or to require annual or other payments as a condition to the
continuance thereof;
	 
	 	(o)	 	Liens existing on any asset at the time of its acquisition provided
that such asset is not a replacement of a similar asset owned or held by a
Company prior to the date of such acquisition;
	 
	 	(p)	 	the Security; and
	 
	 	(q)	 	the extension, renewal or refinancing of any of the foregoing
Permitted Liens, unless specifically provided otherwise and provided that the
amount so secured does not exceed the original amount secured immediately prior
to such extension, renewal or refinancing.






“Person” means any natural person, corporation, firm, partnership, joint venture, joint
stock company, incorporated or unincorporated association, government, governmental agency
or any other entity, whether acting in an individual, fiduciary or other capacity.









 



Schedule O
21.



“Plan” means any employee pension benefit plan covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code that either (a) is maintained by
an ERISA Affiliate for employees of an ERISA Affiliate or (b) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which an ERISA Affiliate is then making or accruing an obligation
to make contributions or has within the preceding five plan years made contributions.




“Prime Rate” means the greater of (a) the variable rate of interest per annum equal to the
rate of interest determined by the Agent from time to time as the prime rate of the Agent
for Canadian dollar loans made by the Agent in Canada from time to time, being a variable
per annum reference rate of interest adjusted automatically upon change by the Agent,
calculated on the basis of a year of 365 days or 366 days in the case of a leap year and (b)
the sum of (i) the average rate per annum for Canadian dollar bankers’ acceptances for BA
Lenders having a term of 30 days that appears on the Reuters Screen CDOR Page as of 10:00
a.m. (Toronto time) on the date of determination, as reported by the Agent and (ii) 1% per
annum.




“Prime Rate Loan” means monies lent by the Canadian Lenders to a Canadian Borrower hereunder
in Canadian dollars and upon which interest accrues at a rate referable to the Prime Rate.




“Pro Rata Share” means (i) at any particular time with respect to a particular Lender and
referable to a particular Credit Facility, the ratio of the Individual Commitment of such
Lender with respect to such Credit Facility at such time to the aggregate of the Individual
Commitments of all of the Lenders with respect to such Credit Facility at such time or (ii)
at any particular time with respect to a particular Lender but not referable to a particular
Credit Facility, the ratio of the aggregate of the Individual Commitments of such Lender
with respect to all Credit Facilities at such time to the aggregate of the Individual
Commitments of all of the Lenders with respect to all Credit Facilities at such time.




“Proceeds of Realization” means all cash and non-cash proceeds derived from any sale,
disposition or other realization of the Secured Assets (i) after any notice by the Agent to
the Borrowers pursuant to Section 13.1 declaring all indebtedness of the Borrowers hereunder
to be immediately due and payable, (ii) upon any dissolution, liquidation, winding-up,
reorganization, bankruptcy, insolvency or receivership of any of the Obligors (or any other
arrangement or marshalling of the Secured Assets that is similar thereto) or (iii) upon the
enforcement of, or any action taken with respect to, any of the Security Documents or the
Guarantees. For greater certainty, prior to the Security becoming enforceable (x) insurance
proceeds derived as a result of the loss or destruction of any of the Secured Assets or (y)
cash or non-cash proceeds derived from any expropriation or other condemnation of any of the
Secured Assets shall not constitute Proceeds of Realization.




“Property” means all of the property owned, operated or used by the Companies.




“Qualified Environmental Consultant” means an environmental consultant which is qualified
and recognized as such in the geographic area in which the related property is located.




“Receivables Value” means, the amount expressed in U.S. dollars (or the Exchange Equivalent
thereof) of the invoice amounts owing on each account of an Obligor valued on the basis of a
compliance certificate of Vitran in the form of Schedule C hereto for such Fiscal Quarter,
prepared in accordance with generally accepted accounting principles, and for which each of
the following statements is accurate:









 



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22.



	 	(a)	 	such amount is a binding and valid obligation of the obligor
thereunder and is in full force and effect;
	 
	 	(b)	 	such account is genuine on its face or is represented in the books and
records of the relevant Obligor;
	 
	 	(c)	 	such account is free from valid and asserted claims regarding set-off,
holdback, rescission, cancellation or avoidance, whether by operation of law or
otherwise provided that if such account is not free from such claims it shall
only be excluded to the extent of any such claims;
	 
	 	(d)	 	(x) payment of such account is due and is less than 90 days past the
issuance date of the invoice therefor or (y) such account is an account
described in clause (h)(y) of this definition;
	 
	 	(e)	 	such account is an asset of the relevant Obligor and the Agent, on
behalf of itself and the other Lenders, has a first-priority perfected lien on
such account;
	 
	 	(f)	 	such amount arose in the ordinary course of business of the relevant
Obligor;
	 
	 	(g)	 	the obligor on such account is not the subject of, or made a party to,
any bankruptcy or insolvency proceeding, has not had a trustee or receiver
appointed for it or any part of its property, has not made an assignment for
the benefit of creditors, has not admitted its inability to pay its debts as
they mature, has not suspended its business and has not become insolvent;
	 
	 	(h)	 	(x) the obligor of such account is subject to the jurisdiction of
federal, state or provincial courts in Canada or the United States or (y) such
account is supported by a letter of credit issued by a Person with a minimum
credit rating of A- from Standard & Poor’s or the equivalent rating from
Moody’s Investors Service, Inc. or by insurance provided by Export Development
Canada, Export-Import Bank of the United States or any similar agencies
approved from time to time by the Lenders, in each case in a form that is
acceptable to the Agent acting reasonably;
	 
	 	(i)	 	in the case of the sale of goods, the subject goods have been sold to
an obligor on a true sale basis on open account, or subject to contract, and
not on consignment, or approval or on a “sale or return” basis or subject to
any other repurchase or return agreement, no material part of the subject goods
has been returned, rejected, loss or damaged, and such account is not evidenced
by an instrument of any kind unless such instrument has been pledged by way of
delivery to the Agent; and
	 
	 	(j)	 	each of the representations and warranties set forth in the Security
Documents with respect to such account is true and correct in all material
respects on such date.






“Receiver” means a receiver, receiver and manager or other Person having similar powers or
authority appointed by the Agent or by a court at the instance of the Agent in respect of
the Secured Assets or any part thereof.




“Reference Lender” means JPMorgan Canada.









 



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23.



“Release” means a “release”, as such term is defined in CERCLA.




“Revolving Facility” means the revolving term credit facility in the amount of the Revolving
Facility Available Amount established by the Lenders in favour of the Borrowers pursuant to
Section 2.1(b).




“Revolving Facility Available Amount” means US$100,000,000 or the Canadian Dollar Equivalent
thereof, as such amount may be reduced or cancelled from time to time pursuant to Section
2.4 of this agreement or increased from time to time to the pursuant to Section 2.6 of this
agreement.




“Rolling EBITDA” means, for any Fiscal Quarter, the aggregate of EBITDA for such Fiscal
Quarter and for each of the three immediately preceding Fiscal Quarters.




“Rolling Interest Expenses” means, for any Fiscal Quarter, the aggregate of Interest
Expenses for such Fiscal Quarter and for each of the three immediately preceding Fiscal
Quarters.




“Rollover Notice” shall have the meaning ascribed thereto in Section 5.3.




“Secured Assets” means the present and future property, assets and undertakings of the
Obligors including the capital stock of each of the Obligors (other than Vitran).




“Secured Obligations” shall mean all indebtedness, obligations and liabilities, present or
future, absolute or contingent, matured or not, at any time owing by any of the Obligors to
the Agent and the Lenders, or remaining unpaid to the Agent and the Lenders or any affiliate
thereof, under or in connection with any of the Loan Documents or any SWAP Agreement entered
into between a Borrower and any Lender or any affiliate thereof and shall include all Cash
Pooling Obligations of the Obligors, and Secured Obligations of a particular Obligor shall
mean all indebtedness, obligations and liabilities, present or future, absolute or
contingent, matured or not, at any time owing by such Obligor to the Agent and the Lenders
or any affiliate thereof, or remaining unpaid to the Agent and the Lenders or any affiliate
thereof, under or in connection with any of the Loan Documents or SWAP Agreements to which
such Obligor is a party and shall include Cash Pooling Obligations of such Obligor.




“Security” means the collateral security constituted by the Security Documents.




“Security Documents” shall mean the security documents (as the same may be amended,
modified, supplemented, restated or replaced from time to time) which, in the reasonable
opinion of the Agent, are required to be entered into from time to time by the Obligors in
favour of the Agent for the benefit of the Lenders or any affiliate thereof in order to
grant directly or indirectly to the Agent a Lien on the Secured Assets as continuing
collateral security for the payment and
performance of the Secured Obligations, such security documents to be in form and substance
satisfactory to the Agent and to include, without limitation, the security documents
described in Schedule M.




“Subordinated Debt” means Funded Debt which is subordinated in right of payment to the prior
payment of the Secured Obligations pursuant to subordination provisions approved in writing
by the Agent and is otherwise pursuant to documentation that is, which is in an amount that
is, and which contains interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies and other material terms that are in form and substance, in
each case satisfactory to the Agent, acting reasonably.









 



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24.



“Subsidiaries” means any corporation, partnership, joint venture, or other entity of which
more than 50% of the outstanding voting capital stock or other ownership interest
(irrespective of whether or not at the time capital stock or other equity interest of any
other class or classes of such corporation, partnership, joint venture, or other entity
shall or might have voting power upon the happening of any contingency) is at the time owned
directly or indirectly by a Person; provided that no corporation shall be deemed a
Subsidiary until the applicable Person directly or indirectly acquires more than 50% of the
outstanding voting stock thereof and has elected a majority of its board of directors; and
unless otherwise specifically related to another Person in any section of this agreement
shall mean each such Subsidiary of Vitran.




“SWAP Agreement” means any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference to, one or
more interest rates or currencies or any similar transaction or any combination of these
transactions.




“Swingline Lender” means JPMorgan Canada in respect of overdrafts drawn on the account of a
Canadian Borrower, JPMorgan U.S. in respect of overdrafts drawn on the account of the U.S.
Borrower or any other Lender selected by the Agent and acceptable to the Borrowers who
assumes in writing with the Borrowers, the Lenders and the Agent the obligation of making
Swingline Loans under the Revolving Facility.




“Swingline Loan” shall have the meaning ascribed thereto in Section 3.13(a).




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




“Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all
income, sales, use, goods and services, value added, capital, capital gains, alternative,
net worth, transfer, profits, withholding, payroll, employer health, excise, real property
and personal property taxes, and any other taxes, customs duties, fees, assessments, or
similar charges in the nature of a tax including Canada Pension Plan and provincial pension
plan contributions, unemployment insurance payments and workers’ compensation premiums,
together with any instalments with respect thereto, and any interest, fines and penalties
with respect thereto, imposed, levied, collected, withheld or assessed by any Official Body
(including federal, state, provincial, municipal and foreign Official Bodies), and whether
disputed or not.




“Term Facility” means the non-revolving term credit facility in the amount of the Term
Facility Available Amount established by the Canadian Lenders in favour of the Canadian
Borrowers pursuant to Section 2.1(a).




“Term Facility Available Amount” means US$60,000,000 or the Canadian Dollar Equivalent
thereof, as such amount may be reduced or cancelled from time to time pursuant to Section
2.4 of this agreement.




“Transferee” shall have the meaning ascribed thereto in Section 16.6(d).




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




“U.S. Asset Coverage Ratio” means, for a particular Fiscal Quarter, the ratio of (i)
Receivables Value of the U.S. Borrower (on a consolidated basis) as at the last day of such
Fiscal Quarter plus









 



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25.



the net book value of Eligible Real Property and Eligible Equipment of
the U.S. Borrower (on a consolidated basis) to (ii) Funded Debt of the U.S. Borrower (on a
consolidated basis) for such Fiscal Quarter.




“U.S. Borrower Debt to EBITDA Ratio” means, for a particular Fiscal Quarter, the ratio of
(i) Debt of the U.S. Borrower (on a consolidated basis) as at the last day of such Fiscal
Quarter to (ii) Rolling EBITDA of the U.S. Borrower (on a consolidated basis) for such
Fiscal Quarter.




“U.S. Branch of Account” means the branch of the Agent located at 10 South Dearborn,
Chicago, Illinois 60603 or such other office of the Agent located in the United States as
the U.S. Borrower and the Agent may agree upon.




“U.S. Dollar Equivalent” means the Exchange Equivalent in United States dollars of any
amount of Canadian dollars.




“U.S. Financial Statements” means the audited consolidated financial statements of the U.S.
Borrower for the Fiscal Year ending on or about December 31, 2006 and the unaudited
consolidated financial statements of the U.S. Borrower for the three-month period ending on
or about March 31, 2007.




“U.S.
Lenders” means the financial institutions set out and
described as such in Schedule B, as amended from time to time, and their successors and
permitted assigns.




“U.S. Obligor” means an Obligor that is not a Canadian Obligor.




“U.S. Qualified Lender” means a Person (a) which is (i) a corporation, partnership or other
entity created, organized or incorporated under the laws of the United States or a State
thereof (including the District of Columbia) (any such Person being hereinafter referred to
as a “United States Person”) provided, however, that in the case of any Person other than a
corporation, such Person is not subject to “backup withholding” under Code Section 3406;
(ii) not a United States Person but is acting through a lending office located in the United
States in a manner that results in a zero rate of withholding on any U.S. source payments
made to such Person by a resident of the United States; or (iii) not a United States Person
but is a “qualified resident” under an income tax convention between the United States and
the country of residence of such Person and such convention provides for a zero rate of
withholding on any U.S.-source Payments made to such Lender by a resident of the United
States; (b) in respect of which there has been no determination that such Person is a
“conduit entity” within the meaning of section 1.881-3(a)(4) of the United States Treasury
Regulations with respect to Loans, advances and extensions of credit to the U.S. Borrower
and that it is participating as a Lender pursuant to a “tax avoidance plan”; and (c) which
has properly completed and timely filed with the U.S. Borrower all documentation
required under the Code in order to entitle such Person to a complete exemption from
withholding of any and all United States federal income taxes on all Payments made to such
Person in connection with such Loans, advances and extensions of credit.




“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.


1.2 Other Usages. References to “this agreement”, “the agreement”, “hereof”, “herein”, “hereto” and like
references refer to this Credit Agreement and not to any particular Article, Section or








 



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26.


other
subdivision of this agreement. Any references herein to any agreements (including, without
limitation, this agreement) or documents shall mean such agreements or documents as amended,
supplemented, restated or otherwise modified from time to time in accordance with the terms hereof
and thereof.



1.3 Plural and Singular. Where the context so requires, words importing the singular number shall include the plural
and vice versa.



1.4 Headings. The division of this agreement into Articles and Sections and the insertion of headings in
this agreement are for convenience of reference only and shall not affect the construction or
interpretation of this agreement.



1.5 Currency. Unless otherwise specified herein, all statements of or references to dollar amounts in this
agreement shall mean lawful money of the United States of America.



1.6 Applicable Law. This agreement shall be governed by and construed in accordance with the laws of the Province
of Ontario and the federal laws of Canada applicable therein. Any legal action or proceeding with
respect to this agreement may be brought in the courts of the Province of Ontario and, by execution
and delivery of this agreement, the parties hereby accept for themselves and in respect of their
property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
Each party irrevocably consents to the service of process out of any of the aforementioned courts
in any such action or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party to the address prescribed by Section 16.2, such service to become
effective when received. Nothing herein shall limit the right of any party to serve process in any
manner permitted by law or to commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction.



1.7 Time of the Essence. Time shall in all respects be of the essence of this agreement.



1.8 Non Banking Days. Subject to Section 7.4(c), whenever any payment to be made hereunder shall be stated to be due
or any action to be taken hereunder shall be stated to be required to be taken on a day other than
a Banking Day, such payment shall be made or such action shall be taken on the next succeeding
Banking Day and, in the case of the payment of any amount, the extension of time shall be included
for the purposes of computation of interest, if any, thereon.



1.9 Consents and Approvals. Whenever the consent or approval of a party hereto is required in a particular circumstance,
unless otherwise expressly provided for herein, such consent or approval shall not be unreasonably
withheld or delayed by such party.



1.10 Amount of Credit. Any reference herein to the “amount of credit outstanding” or “outstanding amount of credit”
or any similar phrase shall mean, at any particular time:





	 	(a)	 	in the case of a Prime Rate Loan or a BA Rate Loan, the U.S. Dollar
Equivalent of the principal amount thereof;
	 
	 	(b)	 	in the case of a Bankers’ Acceptance, the U.S. Dollar Equivalent of
the face amount of the Bankers’ Acceptance;
	 
	 	(c)	 	in the case of a Base Rate Canada Loan, a Base Rate New York Loan or a
LIBOR Loan, the principal amount thereof;










 



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27.


	 	(d)	 	in the case of a Letter of Credit denominated in Canadian dollars, the
U.S. Dollar Equivalent of the contingent liability of the Issuing Lender
thereunder at such time; and
	 
	 	(e)	 	in the case of a Letter of Credit denominated in United States
dollars, the contingent liability of the Issuing Lender thereunder at such
time.




1.11 Schedules. Each and every one of the schedules which is referred to in this agreement and attached to
this agreement shall form a part of this agreement.



1.12 Extension of Credit. For the purposes hereof, each drawdown, rollover and conversion shall be deemed to be an
extension of credit to the Borrowers hereunder.



1.13 Joint and Several Obligations. All obligations hereunder which are stated to be obligations of the Canadian Borrowers or
either one of them shall, to the extent permitted by Applicable Law, be joint and several
obligations of each of the Borrowers. For greater certainty, all obligations hereunder which are
stated to be obligations of the U.S. Borrower shall be several obligations of the U.S. Borrower
(and not joint or joint and several obligations of the Canadian Borrowers).



1.14 Paramountcy. In the event of any conflict or inconsistency between the provisions of this agreement and the
provisions of any other Loan Document, the provisions of this agreement shall prevail and be
paramount. If any covenant, representation, warranty or event of default contained in any other
Loan Document is in conflict with or is inconsistent with a provision of this agreement relating to
the same specific matter, such covenant, representation, warranty or event of default shall be
deemed to be amended to the extent necessary to ensure that it is not in conflict with or
inconsistent with the provision of this agreement relating to the same specific matter.



1.15 Statute References. Any reference in this agreement to any statute or any section thereof shall, unless otherwise
expressly stated, be deemed to be a reference to such statute or section as amended, restated or
re-enacted from time to time.



1.16 Meaning of Include. The words “include”, “includes” and “including”, when used in this agreement, shall be deemed
to be followed by the phrase “without limitation”.



1.17 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with generally accepted accounting principles, as in effect from
time to time. If at any time any change in generally accepted accounting principles would affect
the computation of any financial ratio or requirement set forth in any Loan Document, and either a
Borrower or the Majority Lenders shall so request, the Agent, the Lenders and the Borrowers shall
negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in generally accepted accounting principles (subject to the approval of the
Majority Lenders, not to be unreasonably withheld); provided, that until so amended, (i) such ratio
or requirement shall continue to be computed in accordance with generally accepted accounting
principles prior to such change therein and (ii) the Borrowers shall provide to the Agent and the
Lenders financial statements and other documents required under this agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in generally accepted accounting
principles.










 



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28.




ARTICLE 2

CREDIT FACILITIES




2.1 Establishment of Credit Facilities.





	 	(a)	 	Subject to the terms and conditions hereof, the Canadian Lenders
hereby establish in favour the Canadian Borrowers a non-revolving term credit
facility in the amount of the Term Facility Available Amount. Subject to the
provisions hereof, the Canadian Borrowers may request one single extension of
credit under the Term Facility by delivering a Drawdown Notice to the Agent
pursuant to Section 4.1. The Canadian Borrowers may not repay and then
reborrow extensions of credit under the Term Facility. Any of the Term
Facility Available Amount which is not drawn down by the Canadian Borrowers on the date on
which the Canadian Borrowers first have credit extended to them under this
agreement shall be cancelled.
	 
	 	(b)	 	Subject to the terms and conditions hereof, the Lenders hereby
establish in favour of the Borrowers a revolving credit facility in the amount,
from time to time, equal to the Revolving Facility Available Amount. Subject
to the provisions hereof, the Borrowers may at any time and from time to time
request an extension of credit under the Revolving Facility by delivering a
Drawdown Notice to the Agent pursuant to Section 4.1. The Borrowers may
borrow, repay and reborrow extensions of credit under the Revolving Facility on
a revolving basis on the terms and conditions set out herein provided that the
Outstanding Principal Amount under the Revolving Facility does not exceed the
Revolving Facility Available Amount.




2.2 Credit Restrictions. Notwithstanding any other provision hereof, the Borrowers shall be entitled to obtain credit
by way of LIBOR Loans or Bankers’ Acceptances only in such amounts so as to ensure that the Lenders
are not required to make a LIBOR Loan for a principal amount other than US$100,000 or an integral
multiple of US$100,000 in excess thereof or to accept a Bankers’ Acceptance having a face amount
other than CDN$100,000 or an integral multiple of CDN$1,000 in excess thereof.



2.3 Lenders’ Commitments. Subject to the terms and conditions hereof, the Lenders severally agree to extend credit to
the Borrowers hereunder from time to time provided that the aggregate amount of credit extended by
each Lender under the Credit Facilities shall not at any time exceed the Individual Commitment of
such Lender and further provided that the aggregate amount of credit outstanding under the Credit
Facilities shall not at any time exceed the amount of the Credit Facilities referred to in Section
2.1 as the same may be reduced pursuant to Section 2.4. All credit requested under the Credit
Facilities by a particular Borrower shall be made available to such Borrower contemporaneously by
all of the Lenders who have made an Individual Commitment with respect to such Credit Facility.
Each such Lender shall provide to the applicable Borrower its Pro Rata Share of each credit under
such Credit Facility, whether such credit is extended by way of drawdown, rollover or conversion.
No Lender shall be responsible for any default by any other Lender in its obligation to provide its
Pro Rata Share of any credit nor shall the Individual Commitment of any Lender with respect to any
of the Credit Facilities be increased as a result of any such default of another Lender. The
failure of any Lender to make available to a Borrower its Pro Rata Share of any credit shall not
relieve any other Lender of its obligation hereunder to make available to such Borrower its Pro
Rata Share of such credit. Notwithstanding any other provision hereof, the Agent is authorized by
the Borrowers and the Lenders to allocate amongst the Lenders the Bankers’ Acceptances to be issued
and the LIBOR Loans to be advanced under the Credit Facilities in such manner and amounts as the
Agent may, in its sole and unfettered








 



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29.


discretion acting reasonably, consider necessary, rounding up
or down, so as to ensure that no Lender is required to accept a Bankers’ Acceptance for a fraction
of CDN$5,000 or advance a LIBOR Loan for a fraction of US$5,000 and, in such event, the Lenders’
Pro Rata Shares with respect to such Bankers’ Acceptances and LIBOR Loans shall be adjusted
accordingly. It is acknowledged that such rounding may result in a Lender’s Pro Rata Share with
respect to such Bankers’ Acceptances and LIBOR Loans exceeding its Individual Commitment.



2.4 Reduction of Credit Facilities. The Borrowers may, from time to time and at any time, by 5 Banking Days notice in writing to
the Agent, permanently reduce any Credit Facility to the extent it is not utilized, provided,
however, that any such permanent reduction of the amount of such Credit Facility shall be by an
amount of no less than US$2,000,000 and otherwise in multiples of US$500,000. The amount of the
Term Facility will be permanently reduced at the time of and by the amount of each scheduled
repayment pursuant to Section 9.1 and any prepayment pursuant to Sections 9.3 and 9.4. Any
prepayment of the Revolving Facility shall not cause a reduction in the amount of the Revolving
Facility. Any repayment of outstanding credit which forms part of any conversion from one type of
credit to another type of credit under Article 3 or Article 6 shall not cause any reduction in the
amount of the applicable Credit Facility. Upon any reduction in the amount of any Credit Facility,
the Individual Commitment of each Lender with respect to such Credit Facility shall thereupon be
reduced by an amount equal to such Lender’s Pro Rata Share of the amount of such reduction in the
amount of such Credit Facility.




2.5 Termination of Credit Facilities.





	 	(a)	 	A Credit Facility shall terminate upon the earliest to occur of:






	 	(i)	 	the Maturity Date;
	 
	 	(ii)	 	the termination of such Credit Facility in accordance with
Section 13.1; and
	 
	 	(iii)	 	the date on which the relevant Credit Facility has been
permanently reduced to zero pursuant to Section 2.4.






	 	(b)	 	Upon the termination of any Credit Facility, the right of the
Borrowers to obtain or maintain credit under such Credit Facility and all of
the obligations of the Lenders to make credit available under such Credit
Facility shall automatically terminate.





2.6 Increase in Commitments.





	 	(a)	 	The Borrowers shall have the right upon one or more occasions by
written notice to the Agent (a “Commitment Increase Notice”) to request an
increase in the Revolving Facility Available Amount and the Individual
Commitments of the Lenders (the amount of increase requested on any occasion
being referred to herein as the “Increase Amount”), to a maximum aggregate
amount of US$150,000,000; provided that at the time of the Commitment
Increase Notice and at the time such request would become effective (i) no
Default has occurred and is continuing or would exist after giving effect to
such increase in the Revolving Facility Available Amount and the Individual
Commitments of the Lenders, (ii) the representations and warranties in Article
10 are true and correct in all material respects immediately prior to such time
and will remain true and 










 



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30.


	 	 	 	correct in all material respects immediately after
such time; and (ii) the Borrowers will be in pro forma compliance with all
financial covenants set out in section 11.1 after giving effect to any funding
in connection with such increase.
	 
	 	(b)	 	The Commitment Increase Notice shall be delivered by the Agent to the
Lenders within five (5) Banking Days of receipt thereof by the Agent and shall
specify a time period selected by the Borrowers within which each Lender is
requested to respond to such Commitment Increase Notice (which shall in no
event be less than ten Banking Days from the date of delivery of such
Commitment Increase Notice to the Lenders). Each Lender shall notify the Agent
within such time period whether or not it agrees to increase its Individual
Commitment and, if so, the amount of such increase. Any such Lender not
responding within such time period shall be deemed to have declined to increase
its Individual Commitment. The Agent shall notify the Borrowers and each
Lender of such other Lenders’ responses to each request made hereunder. After
the expiration of the time period set forth in the Commitment Increase Notice
or receipt by the Agent of responses to the Commitment Increase Notice from
each of the Lenders, the Borrowers may, to achieve the full amount of the
requested increase in the Commitments, invite one or more other Persons (other
than individuals) (an “Additional Lender”) that have agreed to provide all or
any portion of the Increase Amount and that are acceptable to each of the
Agent, the Swingline Lender and the Issuing Lender (such acceptance not to be
unreasonably withheld) (it being agreed that any Lender as of the date of the
Commitment Increase Notice would be acceptable) may be admitted as a Lender
party to this Agreement in accordance with the provisions of Section 16.6(f).
No Finance Party shall have any obligation or other commitment to provide all
or any portion of the Increase Amount.
	 
	 	(c)	 	Any such increase in the Commitment shall become effective upon
written notice by the Agent (which shall be promptly delivered by the Agent) to
the Borrowers and the Lenders specifying the effective date of such increase in
Commitment, together with a revised Schedule B stating the new Individual
Commitment of each of the Lenders
	 
	 	(d)	 	Upon the effective date of the increased Commitment, each Additional
Lender shall make all (if any) such payments to the Agent for distribution to
the other Lenders as may be necessary to result in the respective extensions of
credit under the Revolving Facility held by such Additional Lender and the
other Lenders being equal to such applicable Lender’s Pro Rata Share of the
aggregate principal amount of all extensions of credit under the Revolving
Facility outstanding as of such date. Each of the Borrowers hereby agrees that
any Additional Lender so paying any such amount to the other Lenders pursuant
to the preceding sentence shall be entitled to all the rights of a Lender
having Commitments hereunder in respect of such amounts, that such payments to
such other Lenders shall thereafter constitute extensions of credit under the
Revolving Facility made by such Additional Lender hereunder and that such
Additional Lender may exercise all of its right of payment with respect to such
amounts as fully as if such Additional Lender had initially advanced to the
Borrowers directly the amount of such payments. If any such adjustment
payments pursuant to the preceding sentences of this Section are made by an
Additional Lender to other Lenders in respect of LIBOR Loans, Bankers’
Acceptances and/or Letters of Credit at a time 










 



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31.


	 	 	 	other than on the expiry of the
applicable Interest Period in respect of a LIBOR Loan, the maturity of a
Bankers’ Acceptance or the expiry date of a Letter of Credit, as the case may
be, and if any such adjustment payments result in the Lenders (or any one or
more of them) incurring an actual loss, cost or expense,
the Borrowers shall pay to each of the Lenders receiving any such payment,
at the time that such payment is made pursuant to this Section, the amount
that would be required to be paid by the Borrowers pursuant to Section 9.10
had such payments been made directly by a Borrower.





ARTICLE 3

GENERAL PROVISIONS RELATING TO CREDITS




3.1 Types of Credit Availments. Subject to the terms and conditions hereof:





	 	(a)	 	each Canadian Borrower may obtain credit under the Term Facility from
the Canadian Lenders through the Canadian Branch of Account by way of one or
more Prime Rate Loans, BA Rate Loans, Base Rate Canada Loans, LIBOR Loans and
Bankers’ Acceptances;
	 
	 	(b)	 	each Canadian Borrower may obtain credit under the Revolving Facility
from the Canadian Lenders through the Canadian Branch of Account by way of one
or more Prime Rate Loans, BA Rate Loans, Base Rate Canada Loans, LIBOR Loans,
Bankers’ Acceptances and Letters of Credit; and
	 
	 	(c)	 	the U.S. Borrower may obtain credit under the Revolving Facility from
the U.S. Lenders through the U.S. Branch of Account by way of one or more Base
Rate New York Loans, LIBOR Loans and U.S. dollar denominated Letters of Credit.




Any extension of credit hereunder by way of one or more Letters of Credit shall not exceed in the
aggregate US$35,000,000 or the Exchange Equivalent thereof. The Borrowers may obtain credit under
the Revolving Facility in currencies other than Canadian dollars and United States dollars with the
prior written consent of each of the Lenders in respect of currencies to be agreed upon by the
Borrowers and each of the Lenders.



3.2 Funding of Loans. Each Lender which has made an Individual Commitment under a particular Credit Facility shall
make available to the Agent its Pro Rata Share of the principal amount of each Loan under such
Credit Facility, in the appropriate currency, prior to 11:00 a.m. (Toronto time) on the date of the
extension of credit. The Agent shall, upon fulfilment by the Borrowers of the terms and conditions
set forth in Article 12, make such funds available to the applicable Borrower on the date of the
extension of credit by crediting the relevant Designated Account (or causing such account to be
credited) unless otherwise irrevocably authorized and directed in the Drawdown Notice. Unless the
Agent has been notified by a Lender at least two Banking Days prior to the date of the extension of
credit that such Lender will not make available to the Agent its Pro Rata Share of such Loan, the
Agent may assume that such Lender has made such portion of the Loan available to the Agent on the
date of the extension of credit in accordance with the provisions hereof and the Agent may, in
reliance upon such assumption, make available to the applicable Borrower on such date a
corresponding amount. If the Agent has made such assumption, to the extent such Lender shall not
have so made its Pro Rata Share of the Loan available to the Agent, such Lender agrees to pay to
the Agent, forthwith on demand, such Lender’s Pro Rata Share of the Loan and all reasonable costs
and expenses incurred by the Agent in connection therewith together with interest thereon at the
rate payable hereunder by such Borrower in respect of such Loan for each day from the date such
amount is made available to such Borrower until the date such








 



Schedule O
32.


 amount is paid or repaid to the Agent; provided, however, that notwithstanding such
obligation, if such Lender fails so to pay, such Borrower shall, without prejudice to any rights
that such Borrower might have against such Lender, repay such amount to the Agent forthwith after
demand therefor by the Agent. The amount payable to the Agent pursuant hereto shall be set forth
in a certificate delivered by the Agent to such Lender and the Borrowers (which certificate shall
contain reasonable details of how the amount payable is calculated) and shall constitute prima
facie evidence of such amount payable. If such Lender makes the payment to the Agent required
herein, the amount so paid shall constitute such Lender’s Pro Rata Share of the Loan for purposes
of this agreement and shall entitle the Lender to all rights and remedies against the Borrowers in
respect of such Loan. The failure of any Lender to make available to the Agent its Pro Rata Share
of a Loan shall not relieve any other Lender of its obligation hereunder to make available to the
Agent its Pro Rata Share of the Loan on the date of the credit.



3.3 Failure of Lender to Fund Loan. If any Lender fails to make available to the Agent its Pro Rata Share of any Loan as required
(such Lender being herein called the “Defaulting Lender”) and the Agent has not funded pursuant to
Section 3.2, the Agent shall forthwith give notice of such failure by the Defaulting Lender to the
Borrowers and the other Lenders. The Agent shall then forthwith give notice to the other Lenders
that any Lender may make available to the Agent all or any portion of the Defaulting Lender’s Pro
Rata Share of such Loan (but in no way shall any other Lender or the Agent be obliged to do so) in
the place and stead of the Defaulting Lender. If more than one Lender gives notice that it is
prepared to make funds available in the place and stead of a Defaulting Lender in such
circumstances and the aggregate of the funds which such Lenders (herein collectively called the
“Contributing Lenders” and individually called the “Contributing Lender”) are prepared to make
available exceeds the amount of the advance which the Defaulting Lender failed to make, then each
Contributing Lender shall be deemed to have given notice that it is prepared to make available its
pro rata share of such advance based on the Contributing Lenders’ relative commitments to advance
in such circumstances. If any Contributing Lender makes funds available in the place and stead of
a Defaulting Lender in such circumstances, then the Defaulting Lender shall pay to any Contributing
Lender making the funds available in its place and stead, forthwith on demand, any amount advanced
on its behalf together with interest thereon at the rate applicable to such Loan from the date of
advance to the date of payment, against payment by the Contributing Lender making the funds
available of all interest received in respect of the Loan from the Borrowers. In addition to
interest as aforesaid, the Borrowers shall pay all amounts owing by the Borrowers to the Defaulting
Lender hereunder to the Contributing Lenders until such time as the Defaulting Lender pays to the
Contributing Lenders all amounts advanced by the Contributing Lenders on behalf of the Defaulting
Lender.




3.4 Funding of Bankers’ Acceptances.





	 	(a)	 	If the Agent receives from a Canadian Borrower a Drawdown Notice,
Rollover Notice or Conversion Notice requesting a drawdown of, a rollover of or
a conversion into Bankers’ Acceptances under a particular Credit Facility, the
Agent shall notify each of the Canadian Lenders which has made an Individual
Commitment under such Credit Facility prior to 11:00 a.m. (Toronto time) on the
second Banking Day prior to the date of such extension of credit of such
request and of each Canadian Lender’s Pro Rata Share of such extension of
credit. The Agent shall also at such time notify the Canadian Borrowers of
each Canadian Lender’s Pro Rata Share of such extension of credit. Each
Canadian Lender shall, not later than 11:00 a.m. (Toronto time) on the date of
each extension of credit by way of Bankers’ Acceptance, accept drafts of the
applicable Canadian Borrower which are presented to it for acceptance and which
have an aggregate
face amount equal to such Canadian Lender’s Pro Rata Share of the total
extension of credit being made available by way of Bankers’ Acceptances on










 



Schedule O
33.


	 	 	 	such date, as advised by the Agent. Each Canadian Lender shall purchase the
Bankers’ Acceptances which it has accepted for a purchase price equal to the
BA Discounted Proceeds therefor. Each Canadian Lender may at any time and
from time to time hold, sell, rediscount or otherwise dispose of any and all
Bankers’ Acceptances accepted and purchased by it.
	 
	 	(b)	 	The Canadian Borrowers shall provide for payment to the accepting
Lenders of the face amount of each Bankers’ Acceptance at its maturity, either
by payment of such amount or through an extension of credit hereunder or
through a combination of both. The Canadian Borrowers hereby waive presentment
for payment of Bankers’ Acceptances by the Canadian Lenders and any defence to
payment of amounts due to a Lender in respect of a Bankers’ Acceptance which
might exist by reason of such Bankers’ Acceptance being held at maturity by the
Canadian Lender which accepted it and agrees not to claim from such Canadian
Lenders any days of grace for the payment at maturity of Bankers’ Acceptances.
	 
	 	(c)	 	In the case of a drawdown by way of Bankers’ Acceptance, each Canadian
Lender shall, forthwith after the acceptance of drafts of the applicable
Canadian Borrower as aforesaid, make available to the Agent the BA Proceeds
with respect to the Bankers’ Acceptances accepted by it. The Agent shall, upon
fulfilment by the Canadian Borrowers of the terms and conditions set forth in
Article 12, make such BA Proceeds available to the applicable Canadian Borrower
on the date of such extension of credit by crediting the Designated Account.
In the case of a rollover of or conversion into Bankers’ Acceptances, each
Canadian Lender shall retain the Bankers’ Acceptance accepted by it and shall
not be required to make any funds available to the Agent for deposit to the
Designated Account; however, forthwith after the acceptance of drafts of the
applicable Canadian Borrower as aforesaid, the Canadian Borrowers shall pay to
the Agent on behalf of such Canadian Lenders an amount equal to the aggregate
amount of the acceptance fees in respect of such Bankers’ Acceptances
calculated in accordance with Section 7.5 plus the amount by which the
aggregate face amount of such Bankers’ Acceptances exceeds the aggregate BA
Discounted Proceeds with respect thereto.
	 
	 	(d)	 	Any Bankers’ Acceptance may, at the option of a particular Canadian
Borrower, be executed in advance by or on behalf of such Canadian Borrower (as
otherwise provided herein), by mechanically reproduced or facsimile signatures
of any two officers of such Canadian Borrower who are properly so designated
and authorized by such Canadian Borrower from time to time. Any Bankers’
Acceptance so executed and delivered by such Canadian Borrower to the Canadian
Lenders shall be valid and shall bind such Canadian Borrower and may be dealt
with by the Canadian Lenders to all intents and purposes as if the Bankers’
Acceptance had been signed in the executing officers’ own handwriting.
	 
	 	(e)	 	Each Canadian Borrower shall notify the Canadian Lenders as to those
officers whose signatures may be reproduced and used to execute Bankers’
Acceptances in the manner provided in Section 3.4(d). Bankers’ Acceptances
with the mechanically reproduced or facsimile signatures of designated officers
may be used by the Canadian Lenders and shall continue to be valid,
notwithstanding the
death, termination of employment or termination of authorization of either
or 










 



Schedule O
34.


	 	 	 	both of such officers or any other circumstance until such time as such
Canadian Borrower shall otherwise notify the Canadian Lenders.
	 
	 	(f)	 	Each of the Canadian Borrowers hereby indemnifies and agrees to hold
harmless the Canadian Lenders against and from all losses, damages, expenses
and other liabilities caused by or attributable to the use of the mechanically
reproduced or facsimile signature instead of the original signature of an
authorized officer of the applicable Canadian Borrower on a Banker’s Acceptance
prepared, executed, issued and accepted pursuant to this agreement, except to
the extent determined by a court of competent jurisdiction to be due to the
gross negligence or wilful misconduct of the Canadian Lenders.
	 
	 	(g)	 	Each of the Canadian Lenders agrees that, in respect of the
safekeeping of executed depository bills of the Canadian Borrowers which are
delivered to it for acceptance hereunder, it shall exercise the same degree of
care which it gives to its own property, provided that it shall not be deemed
to be an insurer thereof.
	 
	 	(h)	 	All Bankers’ Acceptances shall be issued in the form of depository
bills made payable originally to and deposited with CDS Clearing and Depository
Services Inc. pursuant to the Depository Bills and Notes Act (Canada).
	 
	 	(i)	 	In order to facilitate the issuance of Bankers’ Acceptances pursuant
to this agreement, each Canadian Borrower hereby authorizes each Canadian
Lender, and appoints each Canadian Lender as such Canadian Borrower’s attorney,
to complete, sign and endorse drafts or depository bills (each such executed
draft or bill being herein referred to as a “BA Draft”) on its behalf in
handwritten form or by facsimile or mechanical signature or otherwise in
accordance with the applicable Drawdown Notice, Rollover Notice or Conversion
Notice and, once so completed, signed and endorsed to accept them as Bankers’
Acceptances under this agreement and then if applicable, purchase, discount or
negotiate such Bankers’ Acceptances in accordance with the provisions of this
agreement. BA Drafts so completed, signed, endorsed and negotiated on behalf
of a Canadian Borrower by such Canadian Lender shall bind such Canadian
Borrower as fully and effectively as if so performed by an authorized officer
of such Canadian Borrower. Each draft of a Bankers’ Acceptance completed,
signed or endorsed by a Canadian Lender shall mature on the last day of the
term thereof.




3.5 BA Rate Loans. If, in the sole judgement of a Canadian Lender, such Canadian Lender is unable to extend
credit by way of Bankers’ Acceptances in accordance with this agreement, such Canadian Lender shall
give an irrevocable notice to such effect to the Agent prior to 10:00 a.m. (Toronto time) on the
date of the requested credit extension and shall make available to the applicable Canadian Borrower
prior to 11:00 a.m. (Toronto time) on the date of such requested credit extension a Canadian dollar
loan (a “BA Rate Loan”) in the principal amount equal to such Canadian Lender’s Pro Rata Share of
the total credit to be extended by way of Bankers’ Acceptances, such BA Rate Loan to be funded in
the same manner as a Loan is funded pursuant to Sections 3.2 and 3.3. Such BA Rate Loan shall have
the same term as the Bankers’ Acceptances for which it is a substitute and shall bear such rate of
interest per annum throughout the term thereof as shall permit such Canadian Lender to obtain the
same effective rate as if such Canadian Lender had accepted and purchased a Bankers’ Acceptance at
the same acceptance fee and
pricing at which the Reference Lender would have accepted and purchased such Bankers’
Acceptance at approximately 11:00 a.m. (Toronto time) on the date such BA Rate Loan is made, on the
basis that, and the Canadian Borrowers hereby agree that, for such a BA Rate Loan, interest shall
be payable in advance





 









 





Schedule O

35.



on the date of the extension of credit by the Canadian Lender deducting the interest payable in respect
thereof from the principal amount of such BA Rate Loan. All BA Rate Loans shall be evidenced by a
promissory note in the form of a depository note made payable originally to and deposited with CDS
Clearing and Depository Services Inc. pursuant to the Depository Bills and Notes Act (Canada).



3.6 Inability to Fund U.S. Dollar Advances in Canada. If a Canadian Lender
determines in good faith, which determination shall be final, conclusive and binding on the
Canadian Borrowers, and the Agent notifies the Canadian Borrowers that (i) by reason of
circumstances affecting financial markets inside or outside Canada, deposits of United States
dollars are unavailable to such Canadian Lender in Canada, (ii) adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided in the definition of
LIBOR or ABR Canada, as the case may be, (iii) the making or continuation of United States dollar
advances in Canada has been made impracticable by the occurrence of a contingency (other than a
mere increase in rates payable by such Canadian Lender to fund the advance) which materially and
adversely affects the funding of the advances at any interest rate computed on the basis of LIBOR
or the ABR Canada, as the case may be, or by reason of a change in any Applicable Law or government
regulation, guideline or order (whether or not having the force of law but, if not having the force
of law, one with which a responsible bank would comply) or in the interpretation thereof by any
Official Body affecting such Lender or any relevant financial market, which results in LIBOR or the
ABR Canada, as the case may be, no longer representing the effective cost to such Lender of
deposits in such market for a relevant Interest Period, or (iv) any change to present law or any
future law, regulation, order, treaty or official directive (whether or not having the force of law
but, if not having the force of law, one with which a responsible bank would comply) or any change
therein or any interpretation or application thereof by any Official Body has made it unlawful for
such Canadian Lender to make or maintain or give effect to its obligations in respect of United
States dollar advances in Canada as contemplated herein, then:





	 	(a)	 	the right of the Canadian Borrowers to obtain any affected type of
credit from such Canadian Lender shall be suspended until such Canadian Lender
determines that the circumstances causing such suspension no longer exist and
the Agent so notifies the Canadian Borrowers and the other Canadian Lenders;
	 
	 	(b)	 	if any affected type of credit is not yet outstanding, any applicable
Drawdown Notice, Rollover Notice or Conversion Notice shall be cancelled and
the advance requested therein shall not be made;
	 
	 	(c)	 	if any LIBOR Loan is already outstanding at any time when the right of
the Canadian Borrowers to obtain extensions of credit by way of a LIBOR Loan is
suspended, it shall, subject to the Canadian Borrowers having the right to
obtain credit by way of a Base Rate Canada Loan at such time, be converted on
the last day of the Interest Period applicable thereto (or on such earlier date
as may be required to comply with any Applicable Law) to a Base Rate Canada
Loan in the principal amount equal to the principal amount of the LIBOR Loan
or, if the Canadian Borrowers do not have the right to obtain credit by way of
a Base Rate Canada Loan at such time, such LIBOR Loan shall be converted on the
last day of the Interest Period applicable thereto (or on such earlier date as
may be required to comply with any Applicable Law) to a Prime Rate Loan in the
principal amount equal to the Canadian Dollar Equivalent of the principal
amount of such LIBOR Loan; and
	 
	 	(d)	 	if any Base Rate Canada Loan is already outstanding at any time when
the right of the Canadian Borrowers to obtain credit by way of a Base Rate
Canada Loan




 









 











Schedule O

36.





	 	 	 	is suspended, it shall, subject to the Canadian Borrowers having
the right to obtain extension of credit by way of a LIBOR Loan at such time, be
immediately converted to a LIBOR Loan in the principal amount equal to the
principal amount of the Base Rate Canada Loan and having an Interest Period of
one month or, if the Canadian Borrowers do not have the right to obtain credit
by way of a LIBOR Loan at such time, it shall be immediately converted to a
Prime Rate Loan in the principal amount equal to the Canadian Dollar Equivalent
of the principal amount of the Base Rate Canada Loan.




If the Canadian Borrowers are notified by the Agent as aforesaid, then the Canadian Borrowers may
indicate to the Agent in writing that they desire to replace the aforesaid Canadian Lender and, in
such event, the provisions of Section 8.3 shall apply mutatis mutandis to such Canadian Lender as
if such Canadian Lender were the Affected Lender.



3.7 Inability to Fund LIBOR Loans in the United States. If a U.S. Lender
determines in good faith, which determination shall be final, conclusive and binding on the U.S.
Borrower, and the Agent notifies the U.S. Borrower that (i) adequate and fair means do not exist
for ascertaining the interest rate on the basis provided in the definition of LIBOR, (ii) the
making or continuation of LIBOR Loans in the United States has been made impracticable by the
occurrence of a contingency (other than a mere increase in rates payable by such U.S. Lender to
fund the advance) which materially and adversely affects the funding of the advances at any
interest rate computed on the basis of LIBOR, or by reason of a change since the date hereof in any
Applicable Law or government regulation, guideline or order (whether or not having the force of law
but, if not having the force of law, one with which a responsible U.S. commercial bank would
comply) or in the interpretation thereof by any Official Body affecting such Lender or any relevant
financial market, which results in LIBOR no longer representing the effective cost to such Lender
of deposits in such market for a relevant Interest Period, or (iii) any change to present law or
any future law, regulation, order, treaty or official directive (whether or not having the force of
law but, if not having the force of law, one with which a responsible U.S. commercial bank would
comply) or any change therein or any interpretation or application thereof by any Official Body has
made it unlawful for such U.S. Lender to make or maintain or give effect to its obligations in
respect of LIBOR Loans in the United States as contemplated herein, then:





	 	(a)	 	the right of the U.S. Borrower to obtain any credit in United States
dollars by way of LIBOR Loans, shall be suspended until such U.S. Lender
determines, acting reasonably, that the circumstances causing such suspension
no longer exist and such U.S. Lender so notifies the U.S. Borrower;
	 
	 	(b)	 	if any credit in United States dollars by way of LIBOR Loans is not
yet outstanding, any applicable Drawdown Notice shall be cancelled and the
advance requested therein shall not be made; and
	 
	 	(c)	 	if any LIBOR Loan is already outstanding at any time when the right of
the U.S. Borrower to obtain credit by way of a LIBOR Loan is suspended, it
shall, subject to the U.S. Borrower having the right to obtain credit by way of
a Base Rate New York Loan at such time, be converted to a Base Rate New York
Loan on the last day of the Interest Period applicable thereto (or on such
earlier date as may be required to comply with any Applicable Law).




If the U.S. Borrower is notified by the Agent as aforesaid, then the U.S. Borrower may indicate to
the Agent in writing that it desires to replace the aforesaid U.S. Lender and, in such event, the
provisions of






 









 








Schedule O

37.



Section 8.3 shall apply mutatis mutandis to such U.S. Lender as if such U.S. Lender
were the Affected Lender.



3.8 Timing of Credit Availments. No Bankers’ Acceptance, LIBOR Loan or BA Rate
Loan under any Credit Facility may have a maturity date later than the Maturity Date or that would,
with respect to the Term Facility, prevent the Canadian Borrowers from paying the scheduled
instalments under the Term Facility pursuant to Section 9.1.



3.9 Time and Place of Payments. Except as otherwise provided herein, the Borrowers
shall make all payments pursuant to this agreement or pursuant to any document, instrument or
agreement delivered pursuant hereto by deposit to the applicable Designated Account before 1:00
p.m. (Toronto time) on the day specified for payment and the Agent shall be entitled to withdraw
the amount of any payment due to the Agent or the Lenders from such account on the day specified
for payment. Any such payment received on the day specified for such payment but after 1:00 p.m.
(Toronto time) shall be deemed to have been received prior to 1:00 p.m. (Toronto time) on the
Banking Day immediately following such day specified for payment.



3.10 Remittance of Payments. Forthwith after the withdrawal from the applicable
Designated Account by the Agent of any payment of principal, interest, fees or other amounts for
the benefit of the relevant Lenders pursuant to Section 3.9, the Agent shall, subject to Sections
3.3 and 8.3, remit to each relevant Lender, in immediately available funds, such Lender’s Pro Rata
Share of such payment (except to the extent such payment results from a Loan with respect to which
a Lender had failed, pursuant to Section 3.3, to make available to the Agent its Pro Rata Share
and, where any other Lender has made funds available in the place and stead of a Defaulting
Lender); provided that if the Agent, on the assumption that it will receive, on any particular
date, a payment of principal (including, without limitation, a prepayment), interest, fees or other
amount under a particular Credit Facility, remits to each relevant Lender its Pro Rata Share of
such payment and the relevant Borrower fails to make such payment, each relevant Lender agrees to
repay to the Agent, forthwith on demand, to the extent that such amount is not recovered from the
relevant Borrower on demand and after reasonable efforts by the Agent to collect such amount
(without in any way obligating the Agent to take any legal action with respect to such collection),
such Lender’s Pro Rata Share of the payment made to it pursuant hereto together with interest
thereon at the then prevailing interbank rate for each day from the date such amount is remitted to
the relevant Lenders until the date such amount is paid or repaid to the Agent, the exact amount of
the repayment required to be made by the relevant Lenders pursuant hereto to be as set forth in a
certificate delivered by the Agent to each relevant Lender, which certificate shall constitute
prima facie evidence of such amount of repayment.



3.11 Evidence of Indebtedness.





	 	(a)	 	The Agent shall open and maintain accounts wherein the Agent shall
record the amount and type of credit outstanding, each advance and each payment
of principal and interest on account of each Loan, each Bankers’ Acceptance
accepted and cancelled and all other amounts becoming due to and being paid to
the Lenders or the Agent under a particular Credit Facility. The Agent’s
accounts constitute, in the absence of manifest error, prima facie evidence of
the indebtedness of the Borrowers to the Lenders and the Agent under the
applicable Credit Facility.
	 
	 	(b)	 	The Swingline Lender shall open and maintain accounts wherein it shall
record the amount and currency of each Swingline Loan, each payment of
principal and interest on account of each Swingline Loan and all other amounts
becoming due




 









 











Schedule O

38.





	 	 	 	to and being paid to the Swingline Lender. The Swingline Lender’s
accounts constitute, in the absence of manifest error, prima facie evidence of
the indebtedness of the Borrowers to the Swingline Lender.
	 
	 	(c)	 	The Issuing Lender shall open and maintain accounts wherein it shall
record the amount and currency of each Letter of Credit issued and drawn upon
and all other amounts becoming due to and being paid to the Issuing Lender.
The Issuing Lender’s accounts constitute, in the absence of manifest error,
prima facie evidence of the indebtedness of the Borrowers to the Issuing
Lender.




3.12 Notice Periods. Each Drawdown Notice, Rollover Notice and Conversion Notice
shall be given to the Agent:





	 	(a)	 	prior to 11:00 a.m. (Toronto time) on the third Banking Day prior to
the date of drawdown of, rollover of or conversion into a LIBOR Loan;
	 
	 	(b)	 	prior to 11:00 a.m. (Toronto time) on the second Banking Day prior to
the date of a drawdown of or conversion into a Base Rate Canada Loan, Base Rate
New York Loan or a Prime Rate Loan or a drawdown of, rollover of or conversion
into a Bankers’ Acceptance; and
	 
	 	(c)	 	prior to 11:00 a.m. (Toronto time) on the first Banking Day prior to
the date of any other drawdown, rollover or conversion.




3.13 Swingline Loans.





	 	(a)	 	Subject to the following provisions of this Section, overdrafts
arising from clearance of cheques or drafts drawn on the accounts of the
Borrowers maintained with the Swingline Lender, and designated by the Swingline
Lender for such purpose, shall be deemed to be outstanding as extensions of
credit to the respective Borrowers from the Swingline Lender under the
Revolving Facility (each, a “Swingline Loan”) as follows:






	 	(i)	 	in the case of overdrafts in Canadian dollars, as Prime Rate
Loans; and
	 
	 	(ii)	 	in the case of overdrafts in United States dollars, as Base
Rate New York Loans.






For certainty, notwithstanding Section 4.1, no Drawdown Notice need be delivered by
the Borrowers in respect of Swingline Loans.




	 	(b)	 	Except as otherwise specifically provided herein, all references to
Prime Rate Loans and Base Rate New York Loans shall include Swingline Loans
made in Canadian and United States dollars, respectively.
	 
	 	(c)	 	Swingline Loans shall be made by the Swingline Lender alone, without
assignment to or participation by the other Lenders other than pursuant to
Section 3.13(h).
	 
	 	(d)	 	The aggregate principal amount of the outstanding Swingline Loans
shall not exceed the lesser of:




 









 











Schedule O

39.





	 	(i)	 	US$10,000,000 or the Canadian Dollar Equivalent thereof; and
	 
	 	(ii)	 	the amount, if any, by which the amount of the Revolving
Facility exceeds the aggregate amount of credit outstanding under the
Revolving Facility other than by way of Swingline Loans.






	 	(e)	 	The Borrowers may make repayments of Swingline Loans (together with
accrued interest thereon) from time to time without penalty.
	 
	 	(f)	 	All interest payments and principal repayments of or in respect of
Swingline Loans shall be solely for the account of the Swingline Lender.
Subject to Section 3.13(g), all costs and expenses relating to the Swingline
Loans shall be solely for the account of the Swingline Lender.
	 
	 	(g)	 	Notwithstanding anything to the contrary herein contained, or the
contrary provisions of Applicable Law, (i) if an Event of Default occurs or
(ii) if the Swingline Lender so requires (and the Swingline Lender agrees to so
require if there have been outstanding Swingline Loans for 29 consecutive days
or such shorter period of time as required by the Agent or the Majority Lenders
(which period shall not be less than seven consecutive days)), and there are
then outstanding any Swingline Loans, then, effective on the day of notice to
that effect from the Swingline Lender to the Lenders who have made Individual
Commitments under the Revolving Facility, the Borrowers shall be deemed to have
requested, and hereby request, extensions of credit by way of drawdown of an
amount of Loans under the Revolving Facility, in the currency or currencies of
the Swingline Loans, sufficient to repay the Swingline Loans and accrued and
unpaid interest in respect thereof, and on the day of receipt of such notice,
each of such Lenders shall disburse to the Swingline Lender its respective Pro
Rata Share of such amounts and such amounts shall thereupon be deemed to have
been advanced by such Lenders to the Borrowers and to constitute Loans under
the Revolving Facility (by way of Base Rate New York Loans if the Swingline
Loans were so denominated or Prime Rate Loans if the Swingline Loans were so
denominated, or both). Such Loans under the Revolving Facility shall be deemed
to be comprised of principal and accrued and unpaid interest in the same
proportions as the corresponding Swingline Loans.
	 
	 	(h)	 	If for any reason Base Rate New York Loans or Prime Rate Loans are not
made pursuant to Section 3.13(g) in an amount sufficient to repay any amounts
owed to the Swingline Lender in respect of any outstanding Swingline Loans on
or before the third Banking Day after demand for payment thereof by the
Swingline Lender, each Lender having an Individual Commitment with respect to
the Revolving Facility shall be deemed to, and hereby agrees to, have purchased
a participation in such outstanding Swingline Loans in an amount equal to its
Pro Rata Share of the applicable unpaid amount together with accrued interest
thereon. Upon one Banking Day’s notice from the Swingline Lender, each Lender
holding an Individual Commitment with respect to the Revolving Facility shall
deliver to the Swingline Lender an amount equal to its respective participation
in the applicable unpaid amount in same day funds in the relevant currency as
directed by the Swingline Lender. In the event that any Lender holding an
Individual Commitment with respect to the Revolving Facility fails to make
available to the Swingline Lender the amount of such Lender’s participation as




 









 











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40.





	 	 	 	provided in this Section 3.13(h), the Swingline Lender shall be entitled to
recover such amount from such Lender on demand together with interest thereon
at the then prevailing interbank rate.
	 
	 	(i)	 	Notwithstanding anything contained herein to the contrary, each
Lender’s obligation to make Base Rate New York Loans or Prime Rate Loans
pursuant to Section 3.13(g) or each Lender’s obligation to purchase a
participation in any unpaid Swingline Loans pursuant to Section 3.13(h), as the
case may be, shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any set-off, counterclaim, recoupment, defence
or other right that such Lender may have against the Swingline Lender or any
other Person for any reason whatsoever, (ii) the occurrence or continuation of
a Default or an Event of Default, (iii) any Material Adverse Change, or (iv)
any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.




3.14 General Provisions Relating to All Letters of Credit.





	 	(a)	 	To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), a Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Lender) to the Issuing Lender
and the Agent three (3) Banking Days in advance of the requested date of
issuance, amendment, renewal or extension a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Banking Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (b) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Lender, such Borrower also shall
submit a letter of credit application and indemnity on the Issuing Lender’s
standard form in connection with any request for a Letter of Credit.
	 
	 	(b)	 	Each Letter of Credit to be issued under the Revolving Facility shall
have, as its stated expiry date, a date that is no later than the earlier of
(i) the date which is one year after the date of its issuance and (ii) the date
that is five (5) Banking Days prior to the Maturity Date; provided that Letters
of Credit with one year maturities may provide for automatic renewals thereof
for additional one year periods (which in no event shall extend beyond a date
that is five (5) Banking Days prior to the Maturity Date).
	 
	 	(c)	 	The Borrowers shall indemnify and save harmless the Lenders, the
Issuing Lender and the Agent against all claims, losses, costs, expenses or
damages to the Lenders, the Issuing Lender and the Agent arising out of or in
connection with any Letter of Credit, the issuance thereof, any payment
thereunder or any action taken by the Lenders, the Issuing Lender or the Agent
or any other person in connection therewith, including, without limitation, all
costs relating to any legal process or proceeding instituted by any party
restraining or seeking to restrain the Issuing Lender from accepting or paying
any Draft or any amount under any such Letter of Credit.




 









 











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41.





	 	(d)	 	Each of the Borrowers hereby acknowledges and confirms to the Issuing
Lender that the Issuing Lender shall not be obliged to make any inquiry or
investigation as to the right of any beneficiary to make any claim or Draft or
request any payment under a Letter of Credit and payment by the Issuing Lender
pursuant to a Letter of Credit shall not be withheld by the Issuing Lender by
reason of any matters in dispute between the beneficiary thereof and the
relevant Borrower. The sole obligation of the Issuing Lender with respect to
Letters of Credit is to cause to be paid a Draft drawn or purporting to be
drawn in accordance with the terms of the applicable Letter of Credit and for
such purpose the Issuing Lender is only obliged to determine that the Draft
purports to comply with the terms and conditions of the relevant Letter of
Credit.
	 
	 	(e)	 	The Issuing Lender shall not have any responsibility or liability for
or any duty to inquire into the form, sufficiency (other than to the extent
provided in the preceding paragraph), authorization, execution, signature,
endorsement, correctness (other than to the extent provided in the preceding
paragraph), genuineness or legal effect of any Draft, certificate or other
document presented to it pursuant to a Letter of Credit and each of the
Borrowers unconditionally assumes all risks with respect to the same. Each of
the Borrowers agrees that it assumes all risks of the acts or omissions of the
beneficiary of any Letter of Credit with respect to the use by such beneficiary
of the relevant Letter of Credit.
	 
	 	(f)	 	The obligations of the Borrowers hereunder with respect to Letters of
Credit shall be absolute, unconditional and irrevocable and shall not be
reduced by any event or occurrence including, without limitation, any lack of
validity or enforceability of any such Letter of Credit, or any Draft with
respect thereto paid or acted upon by the Issuing Lender or any of its
correspondents being fraudulent, forged, invalid or insufficient in any
respect, or any claims which the Borrowers may have against any beneficiary or
transferee of any such Letter of Credit; provided, however, that nothing herein
shall adversely affect the rights of the Borrowers to commence any proceeding
against the Issuing Lender for any wrongful payments made by the Issuing Lender
under a Letter of Credit as a result of acts or omissions constituting gross
negligence or wilful misconduct on the part of the Issuing Lender. The
obligations of the Borrowers hereunder with respect to Letters of Credit shall
remain in full force and effect and shall apply to any amendment to or
extension of the expiration date of any such Letter of Credit.
	 
	 	(g)	 	Any action, inaction or omission taken or suffered by the Issuing
Lender or any of the Issuing Lender’s correspondents under or in connection
with a Letter of Credit or any Draft made thereunder, if in good faith and in
conformity with foreign or domestic laws, regulations or customs applicable
thereto, shall be binding upon each of the Borrowers and shall not place the
Issuing Lender or any of its correspondents under any resulting liability to
the Borrowers. Without limiting the generality of the foregoing, the Issuing
Lender and its correspondents may receive, accept or pay as complying with the
terms of a Letter of Credit, any Draft thereunder, otherwise in order which may
be signed by, or issued to, the administrator or any executor of, or the
trustee in bankruptcy of, or the receiver for any property of, or other person
or entity acting as the representative or in the place of, such beneficiary or
its successors and assigns. Each of the Borrowers covenants that it will not
take any steps, issue any instructions to the Issuing Lender or any of its
correspondents or institute any proceedings intended to




 









 











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42.





	 	 	 	derogate from the right
or ability of the Issuing Lender or its correspondents to honour and pay any
Draft or Drafts.
	 
	 	(h)	 	Each of the Borrowers agrees that the Lenders, the Issuing Lender and
the Agent shall have no liability to it for any reason in respect of or in
connection with any Letter of Credit, the issuance thereof, any payment
thereunder, or any other action taken by the Lenders, the Issuing Lender or the
Agent or any other person in connection therewith, other than on account of the
Issuing Lender’s gross negligence or wilful misconduct and other than to the
extent not in compliance with (b) above.
	 
	 	(i)	 	Save to the extent expressly provided otherwise in this Section 3.14,
the rights and obligations between the Issuing Bank and each Borrower with
respect to each Letter of Credit shall be determined in accordance with the
applicable provisions of the (i) Uniform Customs and Practice for Documentary
Credits (1993 Revision), ICC Publications 500 or (ii) the International Standby
Practices — ISP98, ICC Publication No. 590, as applicable.




3.15 Agent’s Discretion to Allocate. Notwithstanding the provisions of Sections
3.2, 3.4(a) and 9.6(b) with respect to the funding of Loans and Bankers’ Acceptances and
reimbursing with respect to Letters of Credit in accordance with each relevant Lender’s Pro Rata
Share, the Agent shall be entitled to reallocate the funding or reimbursement obligations among the
relevant Lenders in order to ensure, to the greatest extent practicable, that after such funding
the aggregate amount of credit extended hereunder by each Lender coincides with such Lender’s Pro
Rata Share of the aggregate amount of credit extended under a particular Credit Facility by all of
the relevant Lenders, provided that no such allocation shall result in the aggregate amount of
credit extended hereunder by any Lender exceeding such Lender’s Individual Commitment under such
Credit Facility.




ARTICLE 4

DRAWDOWN



4.1 Drawdown Notice. Subject to Sections 3.1, 3.6 and 3.7 and provided that all of
the applicable conditions precedent set forth in Article 12 have been fulfilled by the Borrowers or
waived in accordance with Section 14.4, the Borrowers may have credit extended to them hereunder by
giving to the Agent an irrevocable notice (“Drawdown
Notice”) in substantially the form of Schedule E hereto and specifying:





	 	(a)	 	the applicable Borrower;
	 
	 	(b)	 	the Credit Facility under which the Credit is to be extended;
	 
	 	(c)	 	the date the credit is to be extended;
	 
	 	(d)	 	whether the credit is to be extended by way of a Prime Rate Loan, a
Base Rate Canada Loan, a Base Rate New York Loan, a LIBOR Loan or a Bankers’
Acceptance;
	 
	 	(e)	 	if the credit is to be extended by way of a Loan, the principal amount
of the Loan;




 









 











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43.





	 	(f)	 	if the credit is to be extended by way of a LIBOR Loan, the applicable
Interest Period;
	 
	 	(g)	 	if the credit is to be extended by way of Bankers’ Acceptances, the
aggregate face amount of the Bankers’ Acceptances to be issued and the term of
the Bankers’ Acceptances;
	 
	 	(h)	 	if the credit is to be obtained by way of Letter of Credit, the date
of issuance of the Letter of Credit, whether the Letter of Credit is to be a
letter of credit or a letter of guarantee, the named beneficiary of the Letter
of Credit, the maturity date and amount of the Letter of Credit, the currency
in which the Letter of Credit is to be denominated and all other terms of the
Letter of Credit; and
	 
	 	(i)	 	the details of any irrevocable authorization and direction pursuant to
Section 3.2.





ARTICLE 5

ROLLOVERS



5.1 Bankers’ Acceptances. Subject to Section 3.4 and provided that the applicable
Canadian Borrower has, by giving notice to the Agent in accordance with Section 5.3, requested the
Canadian Lenders to accept its drafts to replace all or a portion of outstanding Bankers’
Acceptances as they mature, each Canadian Lender shall, on the maturity of such Bankers’
Acceptances and concurrent with the payment by the Canadian Borrowers to such Canadian Lender of
the face amount of such Bankers’ Acceptances or the portion thereof to be replaced, accept such
Canadian Borrower’s draft or drafts having an aggregate face amount equal to its Pro Rata Share of
the aggregate face amount of the matured Bankers’ Acceptances or the portion thereof to be
replaced.



5.2 LIBOR Loans. Subject to Sections 3.6 and 3.7 and provided that the applicable
Borrower has, by giving notice to the Agent in accordance with Section 5.3, requested the Lenders
to continue to make credit available by way of LIBOR Loans to replace all or a portion of an
outstanding LIBOR Loan at the end of its Interest Period, each Lender shall, at the end of the
Interest Period of such LIBOR Loan, continue to make credit available to such Borrower by way of a
LIBOR Loan (without a further advance of funds to such Borrower) in the principal amount equal to
its Pro Rata Share of the principal amount of the LIBOR Loan to be replaced or the portion thereof
to be replaced.



5.3 Rollover Notice. The notice to be given to the Agent pursuant to Section 5.1
or 5.2 (a “Rollover Notice”) shall be irrevocable, shall be given in accordance with Section 3.12,
shall be substantially in the form of Schedule E hereto and shall
specify:





	 	(a)	 	the applicable Borrower;
	 
	 	(b)	 	the relevant Credit Facility;
	 
	 	(c)	 	the maturity date of the maturing Bankers’ Acceptances or the expiry
date of the Interest Period of the LIBOR Loan to be replaced, as the case may
be;
	 
	 	(d)	 	the face amount of the maturing Bankers’ Acceptances or the principal
amount of the LIBOR Loan to be replaced, as the case may be, and the portion
thereof to be replaced; and




 









 











Schedule O

44.





	 	(e)	 	the aggregate face amount of the new Bankers’ Acceptances and the term
or terms of the new Bankers’ Acceptances or the principal amount of the new
LIBOR Loans, as the case may be, and the Interest Period or Interest Periods of
the new LIBOR Loans.





ARTICLE 6

CONVERSIONS



6.1 Converting a Loan into Another Type of Loan. Subject to Sections 3.1, 3.6 and
3.7 and provided that the applicable Borrower has, by giving notice to the Agent in accordance with
Section 6.4, requested that all or a portion of an outstanding Loan of a particular type be
converted into another type of Loan, each Lender shall, on the date of conversion (which, in the
case of the conversion of all or a portion of an outstanding LIBOR Loan, shall be the last day of
the Interest Period of such Loan), continue to make credit available to such Borrower by way of the
type of Loan into which the outstanding Loan or a portion thereof is converted (with a repayment
and a subsequent advance of funds to such Borrower) in the aggregate principal amount equal to its
Pro Rata Share of the principal amount as provided in the Conversion Notice.



6.2 Converting a Loan into Bankers’ Acceptances. Subject to Sections 3.1 and 3.4
and provided that the applicable Canadian Borrower has, by giving notice to the Agent in accordance
with Section 6.4, requested the Canadian Lenders to accept its drafts to replace all or a portion
of an outstanding Loan and, if a LIBOR Loan or a BA Rate Loan is to be replaced, the date of
conversion is the date on which such Loan matures, each Canadian Lender shall, on the date of
conversion and concurrent with the payment by the Canadian Borrowers to each Canadian Lender of the
principal amount of such outstanding Loan or the portion thereof which is being converted, accept
such Canadian Borrower’s draft or drafts having an aggregate face amount as provided in the
Conversion Notice.



6.3 Converting Bankers’ Acceptances into a Loan. Each Canadian Lender shall, on
the maturity date of a Bankers’ Acceptance which such Canadian Lender has accepted, pay to the
holder thereof the face amount of such Bankers’ Acceptance. Subject to Sections 3.1, 3.6 and 3.7
and provided that the applicable Canadian Borrower has, by giving notice to the Agent in accordance
with Section 6.4, requested the Canadian Lenders to convert all or a portion of outstanding
maturing Bankers’ Acceptances into a particular type of Loan, each Canadian Lender shall, upon the
maturity date of such Bankers’ Acceptances and the payment by such Canadian Lender to the holders
of such Bankers’ Acceptances of the aggregate face amount thereof, make credit available to such
Canadian Borrower by way of the Loan into which the matured Bankers’ Acceptances or a portion
thereof are converted in the aggregate principal amount as provided in the Conversion Notice.
Where a particular Canadian Lender has funded the Canadian Borrowers by way of a BA Rate Loan
rather than by way of Bankers’ Acceptances, the provisions of this Section 6.3 as they relate to
Bankers’ Acceptances shall apply mutatis mutandis to such BA Rate Loan.



6.4 Conversion Notice. The notice to be given to the Agent pursuant to Section
6.1, 6.2, or 6.3 (a “Conversion Notice”), shall be irrevocable, shall be given in accordance with
Section 3.12, shall be substantially in the form of Schedule E hereto and shall specify:





	 	(a)	 	the applicable Borrower;
	 
	 	(b)	 	the relevant Credit Facility;




 









 











Schedule O

45.





	 	(c)	 	whether an outstanding Loan or Bankers’ Acceptances are to be
converted and, if an outstanding Loan is to be converted, the type of Loan to
be converted;
	 
	 	(d)	 	the date on which the conversion is to take place;
	 
	 	(e)	 	the face amount of the Bankers’ Acceptances or the portion thereof
which is to be converted or the principal amount of the Loan or the portion
thereof which is to be converted;
	 
	 	(f)	 	the type and amount of the Loan or Bankers’ Acceptances into which the
outstanding Loan or Bankers’ Acceptances are to be converted;
	 
	 	(g)	 	if outstanding extension of credit is to be converted into a LIBOR
Loan, the applicable Interest Period; and
	 
	 	(h)	 	if an outstanding Loan is to be converted into Bankers’ Acceptances,
the aggregate face amount of the Bankers’ Acceptances to be issued and the term
of the Bankers’ Acceptances.




6.5 Absence of Notice. Subject to Sections 3.6 and 3.7, in the absence of a
Rollover Notice or Conversion Notice within the appropriate time periods referred to herein, a
maturing Bankers’ Acceptance or BA Rate Loan shall be automatically converted to a Prime Rate Loan
and a maturing LIBOR Loan shall be automatically converted to a Base Rate New York Loan as though a
notice to such effect had been given in accordance with Section 6.4.



6.6 Conversion After Default. Subject to Sections 3.6 and 3.7, if an Event of
Default has occurred and is continuing at 10:00 a.m. (Toronto time) on the third Banking Day prior
to the maturity date of a Bankers’ Acceptance, BA Rate Loan or a LIBOR Loan, such Bankers’
Acceptances or BA Rate Loan shall be automatically converted to a Prime Rate Loan and such LIBOR
Loan shall be automatically converted to a Base Rate New York Loan as though a notice to such
effect had been given in accordance with Section 6.4.




ARTICLE 7

INTEREST AND FEES



7.1 Interest Rates. The Borrowers shall pay to the Agent for the account of the
relevant Lenders, in accordance with Section 3.9, interest on the outstanding principal amount from
time to time of each Loan (other than a BA Rate Loan) and on overdue interest thereon, at the rate
per annum equal to:





	 	(a)	 	in the case of each Prime Rate Loan, the Prime Rate plus the
Applicable Margin;
	 
	 	(b)	 	in the case of each Base Rate Canada Loan, the ABR Canada plus the
Applicable Margin;
	 
	 	(c)	 	in the case of each Base Rate New York Loan, the ABR New York plus the
Applicable Margin; and
	 
	 	(d)	 	in the case of each LIBOR Loan in favour of a Borrower, LIBOR plus the
Applicable Margin.




 









 











Schedule O

46.



7.2 Calculation and Payment of Interest.





	 	(a)	 	Interest on the outstanding principal amount from time to time of each
Prime Rate Loan and on overdue interest thereon shall accrue from day to day
from and including the date on which credit is made available by way of such
Loan or on which such overdue interest is due, as the case may be, to but
excluding the date on which such Loan or overdue interest, as the case may be,
is repaid in full (both before and after maturity and before and after
judgment) and shall be calculated on the basis of the actual number of days
elapsed divided by 365 or 366 in the case of a leap year.
	 
	 	(b)	 	Interest on the outstanding principal amount from time to time of each
LIBOR Loan, Base Rate New York Loan and Base Rate Canada Loan and on overdue
interest thereon shall accrue from day to day from and including the date on
which credit is made available by way of such Loan or on which such overdue
interest is due, as the case may be, to but excluding the date on which such
Loan or overdue interest, as the case may be, is repaid in full (both before
and after maturity and before and after judgment) and shall be calculated on
the basis of the actual number of days elapsed divided by 360.
	 
	 	(c)	 	Accrued interest shall be paid:






	 	(i)	 	in the case of interest on Prime Rate Loans, Base Rate New
York Loans and Base Rate Canada Loans, quarterly in arrears on the last
Banking Day of each Fiscal Quarter, on the date of each scheduled
instalment under Section 9.1 and on the termination of the applicable
Credit Facility; and
	 
	 	(ii)	 	in the case of interest on LIBOR Loans, on the last day of
the applicable Interest Period and, where the Interest Period is longer
than three months, three months after the beginning of such Interest
Period and on the termination of the applicable Credit Facility.




7.3 General Interest Rules.





	 	(a)	 	For the purposes hereof, whenever interest is calculated on the basis
of a year of 360 or 365 days, each rate of interest determined pursuant to such
calculation expressed as an annual rate for the purposes of the Interest Act
(Canada) is equivalent to such rate as so determined multiplied by the actual
number of days in the calendar year in which the same is to be ascertained and
divided by 360 or 365, as the case may be.
	 
	 	(b)	 	Interest on each Loan and on overdue interest shall be payable in the
currency in which such Loan is denominated during the relevant period.
	 
	 	(c)	 	If any Borrower fails to pay any interest, fee or other amount of any
nature payable by it to the Agent or the Lenders hereunder on the due date
therefor or under any document, instrument or agreement delivered pursuant
hereto on the due date therefor, such Borrower shall pay to the Agent interest
on such overdue amount in the same currency as such overdue amount is payable
from and




 









 











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47.





	 	 	 	including such due date to but excluding the date of actual payment
(as well after as before judgment) at the rate per annum, calculated and
compounded monthly, which is equal to:






	 	(i)	 	the then applicable ABR New York plus the Applicable Margin
plus 2% per annum in the case of overdue amounts denominated in United
States dollars; and
	 
	 	(ii)	 	the then applicable Prime Rate plus the Applicable Margin
plus 2% per annum in the case of all other overdue amounts.




7.4 Selection of Interest Periods. With respect to each LIBOR Loan, the Borrowers
shall specify in the Drawdown Notice, Rollover Notice or Conversion Notice, the duration of the
Interest Period provided that:





	 	(a)	 	no LIBOR Loan may have an Interest Period that would end after the
Maturity Date;
	 
	 	(b)	 	Interest Periods for LIBOR Loans shall have a duration of one, two,
three or six months, or such other period agreed to between the Borrowers and
the Agent;
	 
	 	(c)	 	the first Interest Period for a LIBOR Loan shall commence on and
include the day on which credit is made available by way of such Loan and each
subsequent Interest Period applicable thereto shall commence on and include the
date of the expiry of the immediately preceding Interest Period applicable
thereto; and
	 
	 	(d)	 	if any Interest Period would end on a day which is not a Banking Day,
such Interest Period shall be extended to the next succeeding Banking Day
unless such next succeeding Banking Day falls in the next calendar month, in
which case such Interest Period shall be shortened to end on the immediately
preceding Banking Day.




7.5 Acceptance Fees. With respect to each draft or depository bill of the Canadian
Borrowers accepted pursuant hereto, such Canadian Borrower shall pay to the Canadian Lenders, in
advance, an acceptance fee calculated at the applicable rate per annum, on the basis of a year of
365 days, set forth in Schedule A hereto, on the face amount of
such Bankers’ Acceptance for its term, being the actual number of days in the period commencing on
the date of acceptance of the applicable Canadian Borrower’s draft and ending on but excluding the
maturity date of the Bankers’ Acceptance. Such acceptance fees shall be non-refundable and shall
be fully earned when due.



7.6 Standby Fees. Upon the first Banking Day immediately following the completion
of each Fiscal Quarter and on the termination of the Revolving Facility, the Borrowers shall pay,
in accordance with Section 3.9, to the Agent for the benefit of the Lenders, in arrears, a standby
fee in United States dollars on the Available Credit with respect to the Revolving Facility,
calculated and accruing daily from the date of the execution and delivery of this agreement at the
rate per annum equal to the Applicable Margin pertaining to the Revolving Facility set forth in
Schedule A hereto, calculated on the basis of a year of 365 days during such Fiscal Quarter or
other period as the case may be. Such standby fees shall be payable by the Canadian Borrowers to
the Agent for the benefit of the Canadian Lenders. Notwithstanding the foregoing sentence, if any
U.S. Lender does not have a related Canadian







 









 








Schedule O

48.



Lender, such U.S. Lender’s Pro Rata Share of such
standby fees shall be payable by the U.S. Borrower to the Agent for the benefit of such U.S.
Lender.



7.7 Waiver. To the extent permitted by Applicable Law, the covenant of the
Borrowers to pay interest at the rates provided herein shall not merge in any judgment relating to
any obligation of the Borrowers to the Lenders and any provision of the Interest Act (Canada) which
restricts any rate of interest set forth herein shall be inapplicable to this agreement and is
hereby waived by the Borrowers.



7.8 Maximum Rate Permitted by Law. Notwithstanding any other provisions of this
agreement, if the amount of any interest, premium, fees or other monies or any rate of interest
stipulated for, taken, reserved or extracted under this agreement or the Security would otherwise
contravene the provisions of section 347 of the Criminal Code (Canada), section 8 of the Interest
Act (Canada) or any successor or similar legislation, or would exceed the amounts which the Agent
or any Lender is legally entitled to charge and receive under any law to which such compensation is
subject, then such amount or rate of interest shall be reduced to such maximum amount as would not
contravene such provision; and to the extent that any excess has been charged or received, the
Agent or such Lender shall apply such excess against the outstanding extensions of credit hereunder
and refund any further excess amount.



7.9 Letter of Credit Fees.





	 	(a)	 	The Canadian Borrowers shall pay to the Agent for the account of the
relevant Lenders an issuance fee (in the currency which the Letter of Credit is
denominated) in respect of all Letters of Credit, calculated at a rate per
annum equal to the Applicable Margin and on the amount of each such Letter of
Credit for the number of days in the term of such Letter of Credit in the year
of 365 or 366 days, as the case may be, in which the Letter of Credit is issued
or renewed, and which shall be calculated and payable quarterly in arrears, on
the first day of each Fiscal Quarter, commencing on the first day of the Fiscal
Quarter following the date of issuance of such Letter of Credit and thereafter
on the first day of each Fiscal Quarter for such fee which has accrued due for
the previous quarter, provided that all such fees shall be payable on the date
on which the Revolving Facility terminates and any such fees accruing after the
date on which the Revolving Facility terminates shall be payable on demand. In
addition, with respect to all Letters of Credit, the Borrowers shall from time
to time pay to the Agent for the account of the Issuing Lender its usual and
customary fees (at the then prevailing rates) for the amendment, delivery and
administration of letters of credit and letters of guarantee such as the
Letters of Credit. Each such payment is non-refundable and fully earned when
due.
	 
	 	(b)	 	The Borrowers shall pay to the Agent for the account of the Issuing
Lender a fronting fee (in the currency in which the Letter of Credit is
denominated) calculated at a rate of 0.125% per annum on the amount of each
such Letter of Credit for the number of days in the term of such Letter of
Credit in the year of 365 or 366 days, as the case may be, in which the Letter
of Credit is issued or renewed, and which shall be payable quarterly in
arrears, on the first day of each Fiscal Quarter, commencing on the first day
of the Fiscal Quarter following the date of issuance of such Letter of Credit
and thereafter on the first day of each Fiscal Quarter for such fee which has
accrued due for the previous quarter, provided that all such fees shall be
payable on the date on which the Revolving Facility terminates and any such
fees accruing after the date on which the Revolving Facility terminates shall
be payable on demand. Each such payment is non-refundable and fully earned
when due.






 










 





Schedule O
 49.




ARTICLE 8



RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS



8.1 Conditions of Credit. The obtaining or maintaining of credit hereunder shall
be subject to the terms and conditions contained in this Article 8.




8.2 Change of Circumstances.





	 	(a)	 	If, after the date hereof, the introduction of or any change in or in
the interpretation of, or any change in its application to any Lender of, any
law or any regulation or guideline issued by any Official Body, including,
without limitation, any reserve or special deposit requirement or any tax
(other than tax on a Lender’s general income) or any capital requirement, has,
due to a Lender’s compliance, the effect, directly or indirectly, of (i)
increasing the cost to such Lender of performing its obligations hereunder;
(ii) reducing any amount received or receivable by such Lender hereunder or its
effective return hereunder or on its capital; or (iii) causing such Lender to
make any payment or to forego any return based on any amount received or
receivable by such Lender hereunder, then such Lender shall deliver to the
Borrowers a certificate stating that such costs have been incurred because of
the existence of this Agreement or the Loans and setting out the reason for and
the calculation of the relevant amount and shall document that such costs are
generally being charged by such Lender to other similarly situated Borrowers
under similar credit facilities and, upon demand from time to time, the
Borrowers shall pay such amount as shall compensate such Lender for any such
cost, reduction, payment or foregone return (but no earlier than the amount to
which it pertains would have been required to be paid hereunder) provided that
the Borrowers shall be obligated under this Section 8.2(a) to compensate such
Lender for capital adequacy requirements measured against its outstanding
obligations hereunder only to the extent such capital adequacy requirements are
in excess of the capital adequacy requirements as of the date hereof. Any
certificate of a Lender in respect of the foregoing will be conclusive and
binding upon the Borrowers, except for manifest error, provided that such
Lender shall determine the amounts owing to it in good faith using any
reasonable averaging and attribution methods.
	 
	 	(b)	 	Each Lender agrees that, as promptly as practicable after it becomes
aware of the occurrence of an event or the existence of a condition that would
cause it to seek additional amounts from the Borrowers pursuant to Section
8.2(a), it will use reasonable efforts to make, fund or maintain the affected
credit through another lending office or take such other actions as it deems
appropriate if as a result thereof the additional moneys which would otherwise
be required to be paid in respect of such credit pursuant to Section 8.2(a)
would be reduced and if, as determined by such Lender in its sole discretion,
the making, funding or maintaining of such credit through such other lending
office or the taking of such other actions would not otherwise adversely affect
such credit or such Lender and would not, in such Lender’s sole discretion, be
commercially unreasonable.
	 
	 	(c)	 	Notwithstanding Section 8.2(a), the Borrowers shall not be liable to
compensate a Lender for any such cost, reduction, payment or foregone return:










 



Schedule O
50.








	 	(i)	 	resulting from any law, regulation or guideline now in effect;
	 
	 	(ii)	 	occurring more than 60 days before receipt by the Borrowers
of the certificate described in Section 8.2(a); or
	 
	 	(iii)	 	if such compensation is not being claimed as a general
practice from customers of such Lender who by agreement are liable to
pay such or similar compensation.




	In determining the amount of compensation payable by the Borrowers under Section 8.2(a), such
Lender shall use all reasonable efforts to minimize the compensation payable by the Borrowers
including, without limitation, using all reasonable efforts to obtain refunds or credits, and any
compensation paid by the Borrowers which is later determined not to have been properly payable or
in respect of which a refund, credit or compensation has been received shall forthwith be
reimbursed by such Lender to the Borrowers.




8.3 Assignment as a Result of Change of Circumstances. If any Lender but not all
of the Lenders seeks additional compensation pursuant to Section 8.2(a), if a Borrower is required
to deduct or withhold Taxes from or in respect of any payment made by it hereunder pursuant to
Section 8.6 to any Lender but not all of the Lenders or if any Lender but not all of the Lenders
fails to approve any waiver, consent or amendment requested by the Borrowers (in each case such
Lender is hereinafter referred to as the “Affected Lender”), then the Borrowers may indicate to the
Agent in writing that they desire the Affected Lender to be replaced with one or more of the other
Lenders, and the Agent shall then forthwith give notice to the other Lenders that any Lender or
Lenders may, in the aggregate, assume all (but not part) of the Affected Lender’s Individual
Commitment and obligations hereunder and acquire all (but not part) of the rights of the Affected
Lender and assume all (but not part) of the obligations of the Affected Lender under each of the
other agreements and instruments delivered pursuant hereto (but in no event shall any other Lender
or the Agent be obliged to do so). If one or more Lenders shall so agree in writing (herein
collectively called the “Assenting Lenders” and individually called an “Assenting Lender”) with
respect to such acquisition and assumption, the Individual Commitment and the obligations of such
Assenting Lender under this agreement and the rights and obligations of such Assenting Lender under
each of the other agreements and instruments delivered pursuant hereto shall be increased by its
respective pro rata share (based on the relative Individual Commitments of the Assenting Lenders)
of the Affected Lender’s Pro Rata Share of outstanding credit and Individual Commitment and
obligations under this agreement and rights and obligations under each of the other agreements and
instruments delivered pursuant hereto on a date mutually acceptable to the Assenting Lenders and
the Borrowers. On such date, the Assenting Lenders shall pay to the Affected Lender the amount of
the outstanding credit which it has made available to the Borrowers and the Affected Lender shall
cease to be a “Lender” for purposes of this agreement and shall no longer have any obligations
hereunder. Upon the assumption of the Affected Lender’s Individual Commitment as aforesaid by an
Assenting Lender, Schedule B hereto shall be deemed to be amended to increase the Individual
Commitment of such Assenting Lender by the respective amounts of such assumption. If there are no
Assenting Lenders, the Borrowers may designate to the Agent by written notice a Canadian chartered
bank (which bank must be acceptable to the Agent acting reasonably) which is not a Lender and, for
all purposes of this Section 8.3, such bank shall be the sole Assenting Lender.



8.4 Indemnity Relating to Credits.
Upon notice from the Agent to the Borrowers (which notice shall be accompanied by a detailed
calculation of the amount to be paid by the Borrowers), the Borrowers shall pay to the Agent or the
Lenders such amount or amounts as will compensate the Agent or the Lenders for any loss, cost or
expense incurred by them:











 



Schedule O
51.





	 	(a)	 	in the liquidation or redeposit of any funds acquired by the Lenders
to fund or maintain any portion of a LIBOR Loan or a BA Rate Loan as a result
of:






	 	(i)	 	the failure of any Borrower to borrow or make repayments on
the dates specified under this agreement or in any notice from any
Borrower to the Agent; or
	 
	 	(ii)	 	the repayment or prepayment of any amounts on a day other
than the payment dates prescribed herein or in any notice from any
Borrower to the Agent; or






	 	(b)	 	with respect to any Bankers’ Acceptance, arising from claims or legal
proceedings, and including reasonable legal fees and disbursements, respecting
the collection of amounts owed by a Canadian Borrower hereunder in respect of
such Bankers’ Acceptance or the enforcement of the Agent’s or Lenders’ rights
hereunder in respect of such Bankers’ Acceptance including, without limitation,
legal proceedings attempting to restrain the Agent or the Lenders from paying
any amount under such Bankers’ Acceptance; or
	 
	 	(c)	 	in converting United States dollars into Canadian dollars or Canadian
dollars into United States dollars as a result of the failure of the Borrowers
to make repayments of outstanding credit hereunder in the currency in which
such outstanding credit was denominated.





8.5 Indemnity for Transactional and Environmental Liability.





	 	(a)	 	The Borrowers hereby agree to indemnify, exonerate and hold the Agent
and each Lender and each of their respective officers, directors and agents
(collectively, the “Indemnified Parties”) free and harmless from and against
any and all claims, demands, actions, causes of action, suits, losses, costs
(including, without limitation, all documentary, recording, filing, mortgage or
other stamp taxes or duties), liabilities (other than contingent liabilities
and/or related accounts) and damages, and expenses in connection therewith
(irrespective of whether such Indemnified Party is a party to the action for
which indemnification hereunder is sought), and including, without limitation,
reasonable legal fees and out of pocket disbursements (collectively, in this
Section 8.5(a), the “Indemnified Liabilities”), paid, incurred or suffered by
the Indemnified Parties or any of them as a result of, or arising out of, or
relating to (i) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any extension of credit obtained
hereunder, or (ii) the execution, delivery, performance or enforcement of this
agreement and any instrument, document or agreement executed pursuant hereto,
except for any such Indemnified Liabilities that a court of competent
jurisdiction determined arose on account of the relevant Indemnified Party’s
gross negligence or wilful misconduct.
	 
	 	(b)	 	Without limiting the generality of the indemnity set out in Section
8.5(a), the Borrowers hereby further agree to indemnify, exonerate and hold the
Indemnified Parties free and harmless from and against any and all claims,
demand, actions, causes of action, suits, losses, costs, liabilities (other
than contingent liabilities










 



Schedule O
52.








	 	 	 	and/or related accounts) and damages, and expenses
in connection therewith, including, without limitation, reasonable legal fees
and out of pocket disbursements, of any and every kind whatsoever
(collectively, in this Section 8.5(b), the “Indemnified Liabilities”), paid,
incurred or suffered by the Indemnified Parties or any of them for, with
respect to, or as a direct or indirect result of, (i) the presence on or under,
or the escape, seepage, leakage, spillage, discharge, emission or release from,
any Property of any Hazardous Material or (ii) the breach or violation of any
Environmental Law by any of the Companies, except for any such Indemnified
Liabilities that a court of competent jurisdiction determined arose on account
of the relevant Indemnified Party’s gross negligence or willful misconduct.
	 
	 	(c)	 	All obligations provided for in this Section 8.5 shall survive any
termination of the Credit Facilities or this agreement and shall not be reduced
or impaired by any investigation made by or on behalf of the Agent or any of
the Lenders.
	 
	 	(d)	 	Each of the Borrowers hereby agrees that, for the purposes of
effectively allocating the risk of loss placed on the Borrowers by this Section
8.5, the Agent and each of the Lenders shall be deemed to be acting as the
agent or trustee on behalf of and for the benefit of its officers, directors
and agents.
	 
	 	(e)	 	If, for any reason, the obligations of the Borrowers pursuant to this
Section 8.5 shall be unenforceable, each of the Borrowers agrees to make the
maximum contribution to the payment and satisfaction of each obligation that is
permissible under Applicable Law, except to the extent that a court of
competent jurisdiction determines such obligations arose on account of the
gross negligence or willful misconduct of any Indemnified Party.





8.6 Gross-Up for Taxes.





	 	(a)	 	Any and all payments made by any Borrower hereunder or under any other
Loan Document (any such payment being hereinafter referred to as a “Payment”)
to or for the benefit of the Agent or any Lender shall be made without set-off
or counterclaim, and free and clear of, and without deduction or withholding
for, or on account of, any and all present or future Taxes, except to the
extent such deduction or withholding is required by law or the administrative
practice of any Official Body. If any Borrower shall be so required to deduct
or withhold any Taxes from or in respect of any Payment made to or for the
benefit of the Agent or any Lender, such Borrower shall:






	 	(i)	 	promptly notify the Agent of such requirement;
	 
	 	(ii)	 	pay to the Agent or such Lender, as the case may be, in
addition to the Payment to which the Agent or such Lender is otherwise
entitled, such additional amount as is necessary to ensure that the net
amount actually received by the Agent or such Lender (free and clear
of, and net of, any
such Taxes, including the full amount of any Taxes required to be
deducted or withheld from any additional amount paid by such Borrower
under this Section 8.6, whether assessable against such Borrower, the
Agent or such Lender) equals the full amount the Agent or such
Lender,










 



Schedule O
53.








	 	 	 	as the case may be, would have received had no such deduction
or withholding been required;
	 
	 	(iii)	 	make such deduction or withholding;
	 
	 	(iv)	 	pay to the relevant Official Body in accordance with
Applicable Law the full amount of Taxes required to be deducted or
withheld (including the full amount of Taxes required to be deducted or
withheld from any additional amount paid by such Borrower to the Agent
or such Lender under this Section 8.6(a)), within the time period
required by Applicable Law; and
	 
	 	(v)	 	as promptly as possible thereafter, forward to the Agent or
such Lender, as the case may be, an original official receipt (or a
certified copy), or other documentation reasonably acceptable to the
Agent and such Lender, evidencing such payment to such Official Body.






	 	(b)	 	If the Agent or any Lender is subject to Taxes under Part XIII of the
Tax Act (or any successor part) in respect of any Payment made by any Borrower
but such Taxes are not levied by way of deduction or withholding (all such
Taxes being “Non-Withheld Part XIII Taxes”), such Borrower shall pay to the
Agent or such Lender, as the case may be, at the time such Borrower makes such
Payment and in addition to such Payment, such additional amount as is necessary
to ensure that the total amount received by the Agent or such Lender, as the
case may be, is equal to the Payment plus the amount of the Non-Withheld Part
XIII Taxes exigible in respect of the aggregate of the Payment and the
additional amount payable under this Section 8.6(b).
	 
	 	(c)	 	In addition, the Borrowers agree to pay any and all present or future
stamp or documentary taxes or excise or property taxes, charges or levies of a
similar nature, which arise from any Payment or from the execution, delivery or
registration of, or otherwise with respect to, the Loan Documents and the
transactions contemplated thereby (any such amounts being hereinafter referred
to as “Other Taxes”).
	 
	 	(d)	 	Each Borrower hereby indemnifies and holds harmless the Agent and each
Lender, on an after-Taxes basis, for the full amount of Taxes and Other Taxes,
including Non-Withheld Part XIII Taxes, interest, penalties and other
liabilities, levied, imposed or assessed against (and whether or not paid
directly by) the Agent or such Lender, as applicable, and for all expenses,
resulting from or relating to any Borrower’s failure to:






	 	(i)	 	remit to the Agent or such Lender the documentation referred
to in Section 8.6(a)(v);
	 
	 	(ii)	 	pay any Taxes in accordance with Section 8.6(a)(iv) or Other
Taxes in accordance with Section 8.6(c) when due to the relevant
Official Body
(including, without limitation, any Taxes imposed by any Official
Body on amounts payable under this Section 8.6 above)); or










 



Schedule O
54.


	 	(iii)	 	pay to the Agent or applicable Lender any Non-Withheld Part
XIII Taxes in accordance with Section 8.6(b) above,






	 	 	 	whether or not such Taxes or Other Taxes were correctly or legally assessed.
The Agent or any Lender who pays any Taxes or Other Taxes (other than
Non-Withheld Part XIII Taxes), and the Agent or any Lender who pays any
Non-Withheld Part XIII Taxes in excess of the amount (if any) paid by a
Borrower on account thereof under Section 8.6(b), shall promptly notify
such Borrower of such payment, provided, however, that failure to provide
such notice shall not detract from, or compromise, the obligations of the
Borrowers under this Section 8.6. Payment pursuant to this indemnification
shall be made within 30 days from the date the Agent or the relevant Lender,
as the case may be, makes written demand therefor accompanied by a
certificate as to the amount of such Taxes or Other Taxes and the
calculation thereof, which calculation shall be prima facie evidence of such
amount.
	 
	 	(e)	 	If any Borrower determines in good faith that a reasonable basis
exists for contesting any Taxes for which a payment has been made under this
Section 8.6, the relevant Lender or the Agent, as applicable, shall, if so
requested by such Borrower, cooperate with such Borrower in challenging such
Taxes at such Borrower’s expense.
	 
	 	(f)	 	If any Lender or the Agent, as applicable, receives a refund of, or
credit for, Taxes for which a payment has been made by any Borrower under this
Section 8.6, which refund or credit in the good faith judgment of such Lender
or the Agent, as the case may be, is attributable to the Taxes giving rise to
such payment made by such Borrower, then such Lender or the Agent, as the case
may be, shall reimburse such Borrower for such amount (if any, but not
exceeding the amount of any payment made under this Section 8.6 that gives rise
to such refund or credit), net of out-of-pocket expenses of such Lender or the
Agent, as the case may be, which the Agent or such Lender, as the case may be,
determines in its absolute discretion, exercised in good faith, will leave it,
after such reimbursement, in no better or worse position than it would have
been in if such Taxes had not been exigible. Any such Borrower, upon the
request of the Agent or any Lender, agrees to repay the Agent or such Lender,
as the case may be, any portion of any such refund or credit paid over to such
Borrower that the Agent or such Lender, as the case may be, is required to pay
to the relevant Official Body and agrees to pay any interest, penalties or
other charges paid by such Lender or the Agent, as the case may be, as a result
of or related to such payment to such Official Body. Neither the Agent nor any
Lender shall be under any obligation to arrange its tax affairs in any
particular manner so as to claim any refund or credit.
	 
	 	(g)	 	Each Borrower also hereby indemnifies and holds harmless the Agent and
each Lender, on an after-Taxes basis, for any additional taxes on net income
that the Agent or such Lender may be obliged to pay as a result of the receipt
of amounts under this Section 8.6.
	 
	 	(h)	 	Any Lender that is entitled to an exemption from or reduction of
withholding tax or Non-Withheld Part XIII Taxes under the law of the
jurisdiction in which any Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to Payments shall, at the
request of such Borrower, deliver to










 



Schedule O
55.








	 	 	 	such Borrower (with a copy to the Agent),
at the time or times prescribed by Applicable Law or reasonably requested by
such Borrower or the Agent, such properly completed and executed documentation
prescribed by Applicable Law (if any) as will permit such payments to be made
without withholding or at a reduced rate of withholding or a reduced rate of
Non-Withheld Part XIII Taxes. In addition, (i) any Lender, if requested by any
Borrower or the Agent, shall deliver such other documentation prescribed by
Applicable Law (if any) or reasonably requested by any Borrower or the Agent as
will enable such Borrower or the Agent to determine whether or not such Lender
is subject to withholding or information reporting requirements, and (ii) any
Lender that ceases to be, or to be deemed to be, resident in Canada for
purposes of Part XIII of the Tax Act or any successor provision thereto in
respect of Payments shall within five Banking Days thereof notify such Borrower
and the Agent in writing. Notwithstanding the foregoing, no Lender shall be
required to deliver any documentation pursuant to this Section 8.6(h) that such
Lender is not legally able to deliver or that reflects any facts or statements
that are inaccurate.
	 
	 	(i)	 	Neither any Lender nor the Agent shall be under any obligation to
arrange its tax affairs in any particular manner or be obliged to disclose any
information regarding its tax affairs or computations to the Borrowers or any
other Person in connection with this Section 8.6.
	 
	 	(j)	 	Additional amounts payable under Section 8.6(a) and Non-Withheld Part
XIII Taxes payable under Section 8.6(b) have the same character as the Payments
to which they relate. For greater certainty, for example, additional amounts
payable under Section 8.6(a) or Non-Withheld Part XIII Taxes payable under
Section 8.6(b), in respect of interest payable under a Loan Document, shall be
payments of interest under such Loan Document. All payments made under this
Section 8.6 shall be subject to the provisions of this Section 8.6.
	 
	 	(k)	 	All Loans, advances and extensions of credit made to any Canadian
Borrower under the Credit Facilities shall be made only by a Lender that is a
Canadian Qualified Lender, unless such Lender became a Lender:






	 	(i)	 	at the written request of or with the written consent of
Vitran; or
	 
	 	(ii)	 	in accordance with Section 16.6 following the occurrence of
and during the continuance of an Event of Default.






For greater certainty, neither Canadian Borrower shall be required to pay
any amount under this Section 8.6 above in respect of any Payment to any
Person that is not a Canadian Qualified Lender unless that Person ceased to
be a Canadian Qualified Lender because of a change in law or unless that
Person is receiving such Payment because:




	 	(iii)	 	that Person became a Lender at the written request of or
with the written consent of Vitran;
	 
	 	(iv)	 	that Person acquired any interest under the Loan Documents or
became a Participant pursuant to Section 16.6 following the occurrence
of and during the continuance of an Event of Default; or










 



Schedule O
56.








	 	(v)	 	the relevant Canadian Borrower is making the Payment in its
capacity as a joint and several obligor or guarantor under Section 1.13
following the occurrence of and during the continuance of an Event of
Default.






	 	(l)	 	All Loans, advances and extensions of credit made to the U.S. Borrower
under the Credit Facilities shall be made only by a Lender that is a U.S.
Qualified Lender unless such Lender became a Lender:






	 	(i)	 	at the written request of or with the written consent of
Vitran; or
	 
	 	(ii)	 	in accordance with Section 16.6 following the occurrence of
and during the continuance of an Event of Default.






For greater certainty, the U.S. Borrower shall not be required to pay any
amount under this Section 8.6 in respect of any Payment to any Person that
is not a U.S. Qualified Lender unless that Person ceased to be a U.S.
Qualified Lender because of a change in law or unless that Person is
receiving such Payment because:




	 	(iii)	 	that Person became a Lender at the written request of or
with the written consent of Vitran or the U.S. Borrower;
	 
	 	(iv)	 	that Person acquired any interest under the Loan Documents or
became a Participant pursuant to Section 16.6 following the occurrence
of and during the continuance of an Event of Default; or
	 
	 	(v)	 	the U.S. Borrower is making the Payment in its capacity as a
joint and several obligor under Section 1.13 following the occurrence
of and during the continuance of an Event of Default.






	 	(m)	 	To the extent of any conflict or inconsistency between this Section
8.6 and any provision of any other Loan Document, this Section 8.6 shall to the
extent of such conflict or inconsistency override such other provision and
prevail.
	 
	 	(n)	 	Each Borrower’s obligations under this Section 8.6 shall survive
without limitation the termination of the Credit Facilities and this agreement
and all other Loan Documents and the permanent repayment of the outstanding
credit and all other amounts payable hereunder.





8.7 Foreign Subsidiary Costs.





	 	(a)	 	If the cost to any Lender of making or maintaining any extension of
credit to any Borrower is increased (or the amount of any sum received or
receivable by any Lender (or its applicable lending office) is reduced) by an
amount deemed in good faith by such Lender to be material, due to a change in
Applicable Law and by reason of the fact that such Borrower is incorporated in,
or conducts business in, a jurisdiction other than the United States of America
or Canada, such
within 30 days after demand by such Lender (with a copy to the Agent). A
certificate of such Lender claiming compensation under this paragraph and
setting forth the additional amount or amounts to be paid to it hereunder
(and the










 



Schedule O
57.








	 	 	 	basis for the calculation of such amount or amounts) shall be
conclusive in the absence of manifest error.
	 
	 	(b)	 	Each Lender will promptly notify the Borrowers and the Agent of any
event of which it has knowledge that will entitle such Lender to additional
interest or payments pursuant to paragraph (a) above, but in any event within
45 days after such Lender obtains actual knowledge thereof; provided that (i)
if any Lender fails to give such notice within 45 days after it obtains actual
knowledge of such an event, such Lender shall, with respect to compensation
payable pursuant to this Section in respect of any costs resulting from such
event, only be entitled to payment under this Section for costs incurred from
and after the date 45 days prior to the date that such Lender does give such
notice and (ii) each Lender will designate a different applicable lending
office, if, in the judgment of such Lender, such designation will avoid the
need for, or reduce the amount of, such compensation and will not be otherwise
disadvantageous to such Lender.





ARTICLE 9

REPAYMENTS AND PREPAYMENTS




     9.1 Repayment under the Term Facility. The credit outstanding under the Term
Facility as of the date hereof shall be repaid by the Canadian Borrowers to the Canadian Lenders in
the amounts on the dates set forth below and the balance of credit outstanding under the Term
Facility owing after June 30, 2012 shall be repaid in full on the Maturity Date:



	 	 	 
	     Amount	 	Date
	US$2,000,000

	 	September 30, 2007
	US$2,000,000

	 	December 31, 2007
	US$2,000,000

	 	March 31, 2008
	US$2,000,000

	 	June 30, 2008
	US$2,000,000

	 	September 30, 2008
	US$2,000,000

	 	December 31, 2008
	US$2,000,000

	 	March 31, 2009
	US$2,000,000

	 	June 30, 2009
	US$3,000,000

	 	September 30, 2009
	US$3,000,000

	 	December 31, 2009
	US$3,000,000

	 	March 31, 2010
	US$3,000,000

	 	June 30, 2010
	US$3,000,000

	 	September 30, 2010
	US$3,000,000

	 	December 31, 2010
	US$3,000,000

	 	March 31, 2011
	US$3,000,000

	 	June 30, 2011
	US$5,000,000

	 	September 30, 2011
	US$5,000,000

	 	December 31, 2011
	US$5,000,000

	 	March 31, 2012
	US$5,000,000

	 	June 30, 2012












 



Schedule O
58.

Amounts which are repaid as aforesaid may not be reborrowed.



9.2 Repayment under the Revolving Facility. The aggregate credit outstanding under
the Revolving Facility, together with all accrued and unpaid interest thereon and all accrued and
unpaid fees with respect thereto, shall be repaid by the Borrowers to the Lenders on the Maturity
Date. Amounts which are repaid as aforesaid may not be re-borrowed. As concerns any Letter of
Credit which, on the Maturity Date, has an expiry date later than the Maturity Date, the Borrowers
shall pay to the Agent for deposit to the Cash Collateral Account, on the Maturity Date, the then
contingent liability of the Issuing Lender thereunder; following such deposit by the Borrowers to
the Cash Collateral Account, the Agent shall apply funds in the Cash Collateral Account to (a)
satisfy any reimbursement obligations of the Borrowers to the Issuing Lender under Section 9.6, or
(b) refund to the Borrowers any amounts payable by the Issuing Lender to the Borrowers under
Section 13.2.



9.3 Voluntary Prepayments. The Borrowers shall be entitled, at their option and on
five Banking Days notice to the Agent, to prepay all or any portion of the outstanding credit under
any Credit Facility without penalty; provided that (i) Bankers’ Acceptances may only be prepaid as
they mature, (ii) Section 8.4(b) shall be complied with in connection with any such prepayment and
(iii) any such prepayment of all or any portion of any outstanding Loan shall be in an amount of no
less than US$100,000 and otherwise in multiples of US$100,000. Amounts under the Revolving
Facility which have been prepaid as aforesaid may be re-borrowed. Amounts under the Term Facility
which have been prepaid as aforesaid may not be re-borrowed. Any such prepayments under Term
Facility shall be applied in inverse order of maturity.



9.4 [Intentionally deleted]



9.5 Repayments of Credit Excess. In the event that the Credit Excess with respect
to a particular Credit Facility at any time exceeds 3% of the aggregate amount of credit
outstanding under such Credit Facility at such time, the Borrowers shall repay to the relevant
Lenders, upon the demand of the Agent, the amount of the Credit Excess with respect to such Credit
Facility at such time. Each such repayment that is referable to a particular Credit Facility shall
be applied against credit outstanding under such Credit Facility. Each such repayment that is not
referable to a particular Credit Facility shall be applied, firstly, against credit outstanding
under the Term Facility in inverse order of maturity and, secondly, if no credit remains
outstanding under the Term Facility against credit outstanding under the Revolving Facility. Each
such repayment shall first be applied to repay outstanding Prime Rate Loans, Base Rate New York
Loans and Base Rate Canada Loans under the relevant Credit Facility as selected by the relevant
Borrower and, to the extent that the amount of such repayment exceeds the aggregate amount of
credit outstanding by way
of such Loans which have been repaid, shall then be deposited by the Agent in a segregated
account and held in trust for the Lenders to be applied to repay outstanding LIBOR Loans under the
relevant Credit Facility or to satisfy reimbursement obligations with respect to outstanding
Bankers’ Acceptances or Letters of Credit under the relevant Credit Facility as such Loans or
Bankers’ Acceptances mature or as such Letters of Credit are drawn upon, as the case may be.



9.6 Reimbursement or Conversion on Presentation of Letters of Credit.





	 	(a)	 	On presentation of a Letter of Credit and payment thereunder by the
Issuing Lender on any Banking Day, the Borrowers shall forthwith on such
Banking Day pay to the Agent for the account of the Issuing Lender, and thereby
reimburse the Issuing Lender for, all amounts paid by the Issuing Lender
pursuant to such










 



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59.








	 	 	 	Letter of Credit; failing such payment, the Borrowers shall be
deemed to have effected a conversion of such Letter of Credit into: (i) a Prime
Rate Loan in the case of a Letter of Credit denominated in Canadian dollars or
(ii) a Base Rate New York Loan, in the case of a Letter of Credit denominated
in United States dollars, in each case to the extent of the payment of the
Issuing Lender thereunder.
	 
	 	(b)	 	(i) If the Issuing Lender makes payment under any Letter of Credit and
the Borrowers do not fully reimburse the Issuing Lender on or before the date
of payment, then Section 9.6(a) shall apply to deem a Loan to be outstanding to
the relevant Borrower under this agreement in the manner therein set out. Each
Lender shall, on request by the Issuing Lender, immediately pay to the Issuing
Lender an amount equal to such Lender’s Pro Rata Share of the amount paid by
the Issuing Lender such that each Lender is participating in the deemed Loan in
accordance with its Pro Rata Share.






	 	(i)	 	Each Lender shall immediately on demand indemnify the Issuing
Lender to the extent of such Lender’s Pro Rata Share of any amount paid
or liability incurred by the Issuing Lender under each Letter of Credit
issued by it to the extent that the Borrower does not fully reimburse
the Issuing Lender therefor.
	 
	 	(ii)	 	For certainty, the obligations in this Section 9.6(b) shall
continue as obligations of the Persons who were Lenders at the time
each such Letter of Credit was issued notwithstanding that such Lender
may assign its rights and obligations hereunder, unless the Issuing
Lender specifically releases such Lender from such obligations in
writing.




9.7 Letters of Credit Subject to an Order. The Borrowers shall pay to the Agent
for deposit to the Cash Collateral Account an amount equal to the maximum amount available to be
drawn under any unexpired Letter of Credit which becomes the subject of any Order; payment in
respect of each such Letter of Credit shall be due forthwith upon demand in the currency in which
such Letter of Credit is denominated. The Agent shall apply funds in the Cash Collateral Account to
(a) satisfy any reimbursements obligations of the Borrowers to the Issuing Lender under Section
9.6, or (b) refund to the Borrowers any amounts payable by the Issuing Lender to the Borrowers
under Section 13.2.



9.8 Reimbursement Obligation for Maturing Bankers’ Acceptances. Each Canadian
Borrower hereby unconditionally agrees to pay to the Canadian Lenders on the maturity date (whether
at stated maturity, by acceleration or otherwise) of each Bankers’ Acceptance drawn by such
Canadian Borrower the undiscounted face amount of such then-maturing Bankers’ Acceptance. The
obligation of the relevant Canadian Borrower to reimburse the Canadian Lenders for then-maturing
Bankers’ Acceptances may be satisfied by such Canadian Borrower by:





	 	(a)	 	paying to the Canadian Lenders, in accordance with Section 3.9, on the
maturity date of such Bankers’ Acceptances an amount equal to the aggregate
undiscounted face amount thereof, provided that such Canadian Borrower shall
notify the Agent of its intention to reimburse the Canadian Lenders in such
manner prior to 10:00 a.m. (Toronto time) on such maturity date;










 



Schedule O
60.








	 	(b)	 	replacing the maturing Bankers’ Acceptances with new Bankers’
Acceptances in accordance with Section 5.1; or
	 
	 	(c)	 	converting the maturing Bankers’ Acceptances into a Loan in accordance
with Section 6.3, 6.5 or 6.6.




In no event shall either Canadian Borrower claim from the Canadian Lenders any grace period with
respect to the aforesaid obligation of such Canadian Borrower to reimburse the Canadian Lenders.



9.9 Currency of Repayment. All payments and repayments of outstanding credit
hereunder shall be made in the currency of such outstanding credit.



9.10 Break Funding Payments. The Borrowers shall have no right to prepay the amount of
any extension of credit hereunder in the form of a Bankers’ Acceptance, a LIBOR Loan or any Letter
of Credit. Subject to the foregoing, in the event that a Borrower seeks to pay the amount of any
extension of credit in the form of one or more LIBOR Loans, Bankers’ Acceptances or Letters of
Credit prior to the expiry of the applicable Interest Period, the maturity of the Bankers’
Acceptance or the expiry date of the Letter of Credit, as the case may be, such Borrower shall be
obliged to comply with the provisions of this Section. In the event of (a) the payment of any
principal of any LIBOR Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any LIBOR Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any LIBOR Loan on the date specified in any notice delivered pursuant hereto, or
(d) the assignment of any LIBOR Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the applicable Borrower pursuant to Section 8.3, then, in any
such event, the applicable Borrower shall compensate each Lender for the actual loss, cost and
expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest
which would have accrued on the principal amount of such Loan had such event not occurred for the
period from the date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which such Lender would bid were it to bid,
at the commencement of such period, for deposits in the applicable currency of a comparable amount
and period from other banks in the London or European interbank market. A certificate of any
Lender as to
any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.
In the event of (a) the payment of any extension of credit in the form of a Bankers’ Acceptance or
Letter of Credit other than on the maturity date of such Bankers’ Acceptance or the date of payment
under such Letter of Credit by the Issuing Lender (including as a result of an Event of Default),
(b) the conversion of any Bankers’ Acceptance other than on the maturity date applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Bankers’ Acceptance on the date
specified in any notice delivered pursuant hereto, or (d) the assignment of any extension of credit
in the form of a Bankers’ Acceptance or Letter of Credit other than on the maturity date of such
Bankers’ Acceptance or the date of payment under such Letter of Credit by the Issuing Lender as a
result of a request by the applicable Borrower pursuant to Section 8.3, then, in any such event,
such Borrower shall pay to the Agent that amount equal to the Outstanding Principal Amount of such
extension of credit (such payments to include, without limitation, (A) the amount or amounts
required to pay (1) on maturity, the undiscounted face amount of all outstanding Bankers’
Acceptances which the Financed Parties are required to honour and (2) all unpaid acceptance fees,
if any, owed to the Financed Parties which amount shall be deposited into the Cash Collateral
Account to be held by the Agent as additional security for payment of the undiscounted face amount
of such outstanding Bankers’ Acceptances upon maturity and (B) an amount









 



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61.



equal to the aggregate
undrawn amount of all outstanding Letters of Credit at such time by, in each case, depositing into
the Cash Collateral Account and pledging to the Agent cash collateral covering all such amounts,
such cash collateral to be held by the Agent in an interest bearing account or instrument and
otherwise on terms and conditions satisfactory to the Agent), such amount (including interest
earned thereon) to be held by the Agent and to be applied by the Agent to the Borrowers’
indebtedness in respect of such extensions of credit at the maturity or expiry date thereof. Each
Borrower hereby undertakes and agrees to enter into, execute and deliver to the Agent any and all
such agreements including, without limitation, one or more set-off and consolidation of accounts
agreements or pledge and security agreements as the Agent may reasonably require in connection with
such cash collateral. In the event that the Borrowers are required to reimburse the Agent or pay
any amount to the Agent on account of the indemnity contained in this Section as a result of a
request by any Borrower to prepay or repay the amount of any extensions of credit or otherwise (as
contemplated by this Section), the Borrowers shall be required to pay any and all amounts owing to
the Agent in accordance with this Section on such terms and conditions as the Agent may reasonably
require.




ARTICLE 10

REPRESENTATIONS AND WARRANTIES



10.1 Representations and Warranties. To induce the Lenders and the Agent to enter
into this agreement and to make credit available to the Borrowers hereunder from time to time, each
of the Borrowers hereby represents and warrants to the Lenders and the Agent, as at the date hereof
and, as at the date of each extension of credit as set forth in Article 12 as follows and
acknowledges and confirms that the Lenders and the Agent are relying upon such representations and
warranties in executing this agreement and in extending credit hereunder:





	 	(a)	 	Status and Power. Each Company is a corporation duly incorporated or
amalgamated and organized and validly existing under the laws of its
jurisdiction of incorporation or amalgamation. Each Company is duly qualified,
registered or licensed in all jurisdictions where such qualification,
registration or licensing is
required for such Company to carry on its business, except where failure to
do so could not reasonably be expected to have a Material Adverse Effect.
Each Company has all requisite capacity, power and authority to own, hold
under licence or lease its properties, to carry on its business and to
otherwise enter into, and carry out the transactions contemplated by, the
Loan Documents to which it is a party. None of the Obligors is an
“investment company” within the meaning of the Investment Company Act of
1940, as amended.
	 
	 	(b)	 	Authorization and Enforcement of Loan Documents. All necessary
action, corporate or otherwise, has been taken to authorize the execution,
delivery and performance by each Company of the Loan Documents to which it is a
party. Each Company has duly executed and delivered the Loan Documents to
which it is a party. The Loan Documents to which each Company is a party are
legal, valid and binding obligations of such Company, enforceable against such
Company by the Agent and the Lenders in accordance with their respective terms,
except to the extent that the enforceability thereof may be limited by (i)
applicable bankruptcy, insolvency, moratorium, reorganization and other laws of
general application limiting the enforcement of creditors’ rights generally and
(ii) the fact that the courts may deny the granting or enforcement of equitable
rights.










 



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62.








	 	(c)	 	Compliance with Other Instruments. The execution, delivery and
performance by each Company of the Loan Documents to which it is a party, and
the consummation of the transactions contemplated herein and therein, do not
and will not conflict with, result in any breach or violation of, or constitute
a default under the terms, conditions or provisions of the articles of
incorporation (or amalgamation, as applicable) or by-laws of the Companies, any
Applicable Law or any agreement, lease, licence, permit or other instrument to
which any Company is a party or is otherwise bound or by which any Company
benefits or to which its property is subject and do not require the consent or
approval of any Official Body or any other Person except as has been obtained.
Each Company has complied with all Applicable Law in respect of the Loan
Documents and the transactions contemplated herein.
	 
	 	(d)	 	Compliance with Laws. None of the Companies are in violation of any
agreement, employee benefit plan, pension plan, mortgage, franchise, licence,
judgment, decree, order, statute, rule or regulation relating in any way to
itself, to the operation of its business or to its property or assets and which
could reasonably be expected to have a Material Adverse Effect.
	 
	 	(e)	 	Litigation. Except as disclosed in Schedule F hereto, there are no actions, suits, investigations, claims or
proceedings which have been commenced or have been threatened in writing
against or affecting any of the Companies before any Official Body in respect
of which there is a reasonable possibility of a determination adverse to the
relevant Company and which, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
	 
	 	(f)	 	Environmental Compliance.






	 	(i)	 	All facilities and property (including underlying groundwater)
owned, leased, used or operated by the Companies have been, and
continue to
be, owned, leased, used or operated by the Companies in compliance
with all Environmental Laws in effect at the time and from time to
time of such ownership, leasing or usage, except where failure to do
so could not reasonably be expected to have a Material Adverse
Effect.
	 
	 	(ii)	 	There are no pending or threatened (in writing):






	 	A.	 	claims, complaints, notices or
requests for information received by the Companies (or any one
or more of them) with respect to any alleged violation of any
Environmental Law, except such as could not reasonably be
expected to have a Material Adverse Effect, or
	 
	 	B.	 	complaints, notices or inquiries
to the Companies (or any one or more of them) regarding
potential liability under any Environmental Law which liability
could reasonably be expected to have a Material Adverse Effect;






	 	(iii)	 	There has been no escape, seepage, leakage, spillage,
discharge, emission or release of Hazardous Materials at, on, under or
from any property now










 



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63.








	 		 	or previously owned, leased, used or operated by
the Companies (or any one or more of them) that, singly or in the
aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect.
	 
	 	(iv)	 	Each of the Companies has been issued and is in compliance
with all Environmental Permits, except where failure to do so could not
reasonably be expected to have a Material Adverse Effect.
	 
	 	(v)	 	No conditions exist at, on or under any property now or
previously owned, leased, used or operated by the Companies (or any one
or more of them) which, with the passage of time, or the giving of
notice or both, would give rise to liability under any Environmental
Law in effect at the time, which liability could reasonably be expected
to have a Material Adverse Effect.
	 
	 	(vi)	 	No Company has within the immediately preceding 10 years been
convicted of an offence for non-compliance with any Environmental Laws,
Environmental Permits or Environmental Orders or been fined or
otherwise sentenced or settled such prosecution short of conviction.
	 
	 	(vii)	 	Each of the Companies has in effect a management structure
and policies and procedures that will permit it to effectively
management environmental risk and respond in a timely manner in
compliance with the Environmental Laws, Environmental Orders and
Environmental Permits in the event of Release of Hazardous Materials
in, on or under their property.






	 	(g)	 	Financial Statements. Each of the Financial Statements and the U.S.
Financial Statements were prepared in accordance with generally accepted
accounting principles consistently applied in accordance with past practice.
The balance sheets contained in the Financial Statements and the U.S. Financial
Statements
fairly present the consolidated financial condition of Vitran and the U.S.
Borrower, respectively, as at the respective dates thereof and the
statements of income contained in the Financial Statements and the U.S.
Financial Statements fairly present the consolidated results of operations
of Vitran and the U.S. Borrower, respectively, during the respective fiscal
periods covered thereby.
	 
	 	(h)	 	Subsidiaries and Partnerships. There are no Subsidiaries other than
the Guarantors, T.W. Express, Inc., 2022219 Ontario Inc.,                     ,
                     and those which have become Subsidiaries pursuant to Section
11.1(r) and no Company is a member of, or a partner or participant in, any
partnership, joint venture or syndicate. All of the Subsidiaries are
wholly-owned Subsidiaries.
	 
	 	(i)	 	Outstanding Defaults. No event has occurred which constitutes or
which, with the giving of notice, lapse of time or both, would constitute a
default under or in respect of any agreement, undertaking or instrument under
which any of the Companies have outstanding indebtedness.
	 
	 	(j)	 	Solvency Proceedings. None of the Companies has:










 



Schedule O
64.








	 	(i)	 	admitted its inability to pay its debts generally as they
become due or failed to pay its debts generally as they become due;
	 
	 	(ii)	 	in respect of itself, filed an assignment or petition in
bankruptcy or a petition to take advantage of any insolvency statute;
	 
	 	(iii)	 	made an assignment for the benefit of its creditors;
	 
	 	(iv)	 	consented to the appointment of a Receiver of the whole or
any substantial part of its assets;
	 
	 	(v)	 	filed a petition or answer seeking a reorganization,
arrangement, adjustment or composition in respect of itself under
applicable bankruptcy laws or any other Applicable Law or statute of
Canada or any subdivision thereof; or
	 
	 	(vi)	 	been adjudged by a court having jurisdiction a bankrupt or
insolvent, nor has a decree or order of a court having jurisdiction
been entered for the appointment of a Receiver, liquidator, trustee or
assignee in bankruptcy of such Company with such decree or order having
remained in force and undischarged or unstayed for a period of thirty
days.






	 	(k)	 	Freehold Interests. None of the Borrowers or Guarantors own any
freehold interest in any real estate other than the parcels which are described
by their municipal addresses in Schedule H
hereto.
	 
	 	(l)	 	Leasehold Interests. None of the Borrowers or Guarantors own any
leasehold interest in any real estate other than the parcels which are
described by their municipal addresses in Schedule I hereto.
	 
	 	(m)	 	Pledged Capital. The classes and numbers of and the registered owners
of the issued and outstanding shares of each of the Companies which have been
pledged to the Agent pursuant to the Security Documents as of the date hereof
is as set forth in Schedule J hereto.
	 
	 	(n)	 	No Omissions. None of the representations and statements of fact set
forth in this Section 10.1 omits to state any material fact necessary to make
such representation or statement of fact not misleading in any material
respect.
	 
	 	(o)	 	Insurance. Each Obligor has contracted for the insurance coverage
described in Section 11.1(k).
	 
	 	(p)	 	French Form of Corporate Name. The French form of the corporate name
of each Obligor, if applicable, is as set forth in Schedule K.
	 
	 	(q)	 	Location for Purposes of PPSA. For the purposes of Section 7(3) of
the PPSA, each Obligor is located as set out in Schedule K hereto.
	 
	 	(r)	 	Deposit Accounts and Other Deposits. Each bank or other financial
institution in which any Obligor maintains a deposit account or other deposit
(other than










 



Schedule O
65.








	 	 	 	with the Agent or the Lenders and whether general or special, time
or demand, provisional or final) and the details of each such deposit account
or other deposit are as set forth in Schedule K hereto.
	 
	 	(s)	 	Organizational Chart. Schedule L contains a complete and accurate
corporate organizational chart of the Companies and such Schedule shall be
deemed to be updated with each revised organizational chart delivered by Vitran
pursuant to Section 11.1(a)(v).
	 
	 	(t)	 	Solvency after Drawdown. On an unconsolidated basis,






	 	(i)	 	the assets of the U.S. Borrower exceed its liabilities,
including contingent liabilities at a fair valuation;
	 
	 	(ii)	 	the capital of the U.S. Borrower is not unreasonably small to
conduct its business; and
	 
	 	(iii)	 	the U.S. Borrower does not intend to incur debts, nor does
it believe that it would incur debts, beyond its ability to pay such
debts as they mature.






	 	(u)	 	Employee Benefit Plans. Each of the ERISA Companies has fulfilled in
all material respects its obligations under the minimum funding standards of
Section 302 of ERISA and Section 412 of the Code with respect to each Plan and
is in material compliance with all other applicable provisions of ERISA. The
U.S. Borrower has not nor has any ERISA Affiliate incurred any Withdrawal
Liability that could reasonably expected to have a Material Adverse Effect.
None of the ERISA Companies has received any notification that any
Multiemployer Plan is in reorganization or has been terminated within the
meaning of Title IV of ERISA.
	 
	 	(v)	 	Regulation U or X. None of the Borrowers is engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any credit obtained hereunder shall be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation U or X. Terms
for which meanings are provided in F.R.S. Board Regulation U or X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
	 
	 	(w)	 	Foreign Assets Control Regulations. Neither the execution and
delivery of this agreement nor the relevant Borrowers’ use of the proceeds of a
Credit Facility will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. Without limiting the
foregoing, no Obligor nor any of its Subsidiaries (a) is or will become a
Person whose property or interests in property are blocked pursuant to Section
1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001) or (b) engages or will engage in
any dealings or transactions, or be otherwise associated, with any such Person.
Each Obligor and its Subsidiaries are in compliance, in all material respects,
with the Title III of Uniting and










 



Schedule O
66.








	 	 	 	Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA Patriot
Act of 2001). No part of the proceeds from a Credit Facility will be used,
directly or indirectly, for any payment to any governmental official or
employee, political party, official of a political party, candidate for
political office or anyone else acting in an official party capacity, in order
to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.
	 
	 	(x)	 	Quebec Assets. Rout-Way Express Line Ltd./Les Services Routiers
Express Rout Ltée and Southern Express Lines of Ontario Limited do not own any
assets which are located in the Province of Quebec.
	 
	 	(y)	 	Canadian Pension Plans. As of the date hereof, Schedule N lists all
Canadian Benefit Plans and Canadian Pension Plans currently maintained by or
contributed to the Companies and their Subsidiaries. The Canadian Pension
Plans are duly registered under the Tax Act and all other Applicable Laws which
require registration. Each Company and each of their Subsidiaries are in
material compliance with and have performed all of their respective obligations
under and in respect of the Canadian Pension Plans and Canadian Benefit Plans
under the terms thereof, any funding agreements and all Applicable Laws
(including any fiduciary, funding, investment and administration obligations).
All employer and employee payments, contributions or premiums to be remitted,
paid to or in respect of each Canadian Pension Plan or Canadian Benefit Plan
have been paid in a timely fashion in accordance with the terms thereof, any
funding agreement and all Applicable Laws. There have been no improper
withdrawals or applications of the assets of the Canadian Pension Plans or the
Canadian Benefit Plans. Except as set forth on Schedule N, there are no
outstanding disputes concerning the assets of the Canadian Pension Plans or the
Canadian Benefit Plans. There has been no partial termination of any Canadian
Pension Plan and,
to any Borrower’s knowledge, no facts or circumstances have occurred or
existed which could result in a partial termination of any Canadian Pension
Plans.
	 
	 	(z)	 	Disclosure. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrowers or any other
Company to the Agent or any Lender in connection with the negotiation of this
agreement or delivered hereunder (as modified or supplemented by other
information so furnished) including the information set out in Schedule K
hereto (collectively, the “Disclosed Matters”) contain any material
misstatement of material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not materially misleading; provided that with respect to
projected financial information, each Company represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time. Since March 31, 2007, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in a Material Adverse Effect.
	 
	 	(aa)	 	Specially Designated Nationals or Blocked Persons List. No Company
is named on the United States Department of the Treasury’s Specially Designated
Nationals or Blocked Persons list.










 



Schedule O
67.








	 	(bb)	 	Properties. Each of the Borrowers and its Subsidiaries:






	 	(i)	 	is the owner of, and has good and marketable title to, or
valid leasehold interests in, all its real and personal property
material to its business, except to the extent that failure to have
such good and marketable title has not had, and could not reasonably be
expected to have, a Material Adverse Effect, and all of their
respective properties and assets are free and clear of all Liens except
for Permitted Liens; and
	 
	 	(ii)	 	owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrowers and their Subsidiaries
does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.






	 	(cc)	 	Default. There is no Default or Event of Default under this agreement
and no breach of any other Loan Document nor has any Borrower or any other
Obligor done or omitted to do anything which, with the giving of notice or the
passage of time, or both, would constitute such an Event of Default or breach.
	 
	 	(dd)	 	Restrictions. No Obligor has granted or agreed to grant, or to permit
to exist at any time, any express prohibition or restriction which prevents or
limits its ability to enter into, and perform its obligations under, this
agreement and the other Loan Documents.
	 
	 	(ee)	 	Taxes. Each Obligor has timely filed or caused to be filed all Tax
returns and reports required to have been filed (within any applicable
extension) and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which
such Obligor, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be expected
to result in a Material Adverse Effect





10.2 Survival of Representations and Warranties.




          All of the representations and warranties of the Borrowers contained in Section 10.1 shall
survive the execution and delivery of this agreement and shall continue (with reference to the
actual dates at which such representations and warranties are made) until all outstanding credit
hereunder has been repaid and the Credit Facilities have been terminated notwithstanding any
investigation made at any time by or on behalf of the Agent or any of the Lenders.




ARTICLE 11

COVENANTS




11.1 Affirmative Covenants.




          The Borrowers hereby covenant and agree with the Agent and the Lenders that, until all
outstanding credit hereunder has been repaid in full and the Credit Facilities have been
terminated, and unless the Lenders otherwise expressly consent in writing in accordance with
Section 14.14:











 



Schedule O
68.





	 	(a)	 	Financial Reporting. The Borrowers shall furnish the Agent with the
following documents, statements and reports:






	 	(i)	 	within 90 days after the end of each Fiscal Year, a copy of
the audited consolidated financial statements of Vitran and the
auditors’ certification thereof;
	 
	 	(ii)	 	within 120 days after the end of each Fiscal Year, a copy of
the audited consolidated financial statements of the U.S. Borrower and
the auditors’ certification thereof prepared in accordance with
generally accepted accounting principles;
	 
	 	(iii)	 	within 45 days after the end of each Fiscal Quarter, a copy
of the unaudited consolidated financial statements of Vitran;
	 
	 	(iv)	 	within 60 days after the end of each Fiscal Quarter, a copy
of the unaudited consolidated financial statements of the U.S. Borrower
prepared in accordance with generally accepted accounting principles;
	 
	 	(v)	 	concurrently with the delivery of the financial statements of
Vitran and the Material Subsidiaries pursuant to (i) and (iii) above, a
compliance certificate of Vitran in the form of Schedule C hereto and, where the information in
Schedule L has changed as of such
date, an updated Schedule L; and
	 
	 	(vi)	 	such additional financial or operating reports or statements
as the Agent on the instructions of any Lender may, from time to time,
reasonably require.






	 	(b)	 	Debt to EBITDA Ratio. Vitran shall at all times maintain the Debt to
EBITDA Ratio for each Fiscal Quarter at less than or equal to ___to _.
	 
	 	(c)	 	U.S. Borrower Debt to EBITDA Ratio. The U.S. Borrower shall at all
times maintain the U.S. Borrower Debt to EBITDA Ratio for each Fiscal Quarter
at less than or equal to ___to _.
	 
	 	(d)	 	EBITDA to Interest Expenses Ratio. Vitran shall, for each Fiscal
Quarter, maintain the EBITDA to Interest Expenses Ratio at greater than or
equal to ___to _.
	 
	 	(e)	 	Asset Coverage. The Borrowers shall, for each Fiscal Quarter,
maintain the Asset Coverage Ratio at greater than or equal to ___to _.
	 
	 	(f)	 	U.S. Asset Coverage. The U.S. Borrower shall, for each Fiscal
Quarter, maintain the U.S. Asset Coverage Ratio at greater than or equal to
___to _.
	 
	 	(g)	 	Equity. Equity shall at all times exceed US$                    .










 



Schedule O
69.








	 	(h)	 	Corporate Existence. Except as expressly permitted in this agreement,
including pursuant to Section 11.2(b), the Borrowers shall, and shall cause
each of the Subsidiaries to, maintain their corporate existence in good
standing and shall, and shall cause each of the Subsidiaries to, qualify and
remain duly qualified to carry on business and own property in each
jurisdiction in which such qualification is necessary to the extent that a
failure to so qualify could reasonably be expected to have a Material Adverse
Effect; provided that nothing herein shall prohibit the merger, consolidation,
wind up or amalgamation of any Subsidiary into any other Subsidiary or into the
Borrowers or the discontinuance of the operations of any Subsidiary if such
merger, consolidation or discontinuance could not reasonably be expected to
have a Material Adverse Effect.
	 
	 	(i)	 	Conduct of Business. The Borrowers shall, and shall cause each of the
Subsidiaries to, conduct their business in such a manner so as to comply in all
respects with all Applicable Laws, so as to observe and perform all its
obligations under leases, licences and agreements necessary for the proper
conduct of its business and so as to preserve and protect its property and
assets and the earnings, income and profits therefrom (including, without
limitation, Environmental Laws and laws relating to the discharge, spill,
disposal or emission of Hazardous Materials) to the extent that such
non-compliance, non-observance or non-performance could reasonably be expected
to have a Material Adverse Effect. The Borrowers shall, and shall cause each
of the Subsidiaries to, obtain and maintain all material licenses, certificates
of approval, consents, registrations, permits, government approvals,
franchises, authorizations and other rights necessary for the operation of
their business to the extent that a failure to do so could reasonably be
expected to have a Material Adverse Effect.
	 
	 	(j)	 	Use of Proceeds. The Borrowers shall apply all of the proceeds of the
credit obtained under (i) the Term Facility to refinance certain indebtedness
incurred by the Canadian Borrowers to capitalize certain non-North American
Subsidiaries of
the Canadian Borrowers in respect of the acquisition of PJAX, Inc., and (ii)
the Revolving Facility to finance the working capital needs, and for the
general corporate purposes, of the Borrowers and their Subsidiaries in the
ordinary course of business including Capital Expenditures and Acquisitions
permitted hereby and refinancing existing indebtedness.
	 
	 	(k)	 	Insurance. The Borrowers shall, and shall cause each of the
Subsidiaries to, maintain insurance with reputable insurers with respect to
their properties and business against loss or damage of the kind customarily
insured against by companies engaged in the same or similar business, of such
types and in such amounts as are customarily carried under such circumstances
by such other companies.
	 
	 	(l)	 	Taxes. The Borrowers shall, and shall cause each of the Subsidiaries
to, file all returns and reports in respect of Taxes required by law to be
filed by them and pay all material Taxes, rates, government fees and dues
levied, assessed or imposed upon them and upon their property or assets or any
part thereof, as and when the same become due and payable (except any such
Taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting










 



Schedule O
70.








	 	 	 	principles shall have been set aside on its
books), where the failure to file such returns and reports in respect of Taxes
or to pay such Taxes, rates, government fees or duties could reasonably have a
Material Adverse Effect.
	 
	 	(m)	 	Reimbursement of Expenses. The Borrowers shall reimburse the Agent,
on demand, for all reasonable out-of-pocket costs, charges and expenses
incurred by or on behalf of the Agent (including, without limitation, travel
costs and the reasonable fees and out-of-pocket disbursements of its counsel)
in connection with:






	 	(i)	 	the development, negotiation, preparation, execution,
syndication, delivery, interpretation and enforcement of this agreement
and all other documentation ancillary to the completion of the
transactions contemplated hereby and any amendments hereto or thereto
and any waivers of any provisions hereof or thereof (whether or not
consummated or entered into); and
	 
	 	(ii)	 	any lien search fees relating to the transactions
contemplated hereby;






	 	 	 	and, prior to the occurrence of a Default which is continuing, the Borrowers
may contest the reasonableness of such costs, charges and expenses in good
faith. The Borrowers shall also reimburse each Lender for reasonable fees
and out-of-pocket disbursements of its counsel in connection with the
enforcement of this agreement.
	 
	 	(n)	 	Books and Records. The Borrowers shall, and shall cause each of the
Subsidiaries to, keep proper books of account and records covering all their
business and affairs on a current basis, make full, true and correct entries in
all material respects of their transactions in such books, set aside on their
books from their earnings all such proper reserves as required by generally
accepted accounting principles and permit representatives of the Agent to
inspect such
books of account, records and documents and to make copies therefrom during
reasonable business hours and upon reasonable notice and to discuss the
affairs, finances and accounts of the Companies with the officers of the
Companies and their auditors during reasonable business hours and upon
reasonable notice.
	 
	 	(o)	 	Notice of Litigation. The Borrowers shall promptly notify the Agent
of any actions, suits, inquiries, claims or proceedings (whether or not
purportedly on behalf of any of the Companies) commenced or threatened in
writing against or affecting any of the Companies before any government,
parliament, legislature, regulatory authority, agency, commission, board or
court or before any private arbitrator, mediator or referee which in any case
or in the aggregate could reasonably be expected to have a Material Adverse
Effect.
	 
	 	(p)	 	Environmental Matters. The Borrowers shall, as soon as practicable
and in any event within 30 days, notify the Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries from an
Official Body relating to the condition of the facilities and properties of the
Companies or compliance with Environmental Laws, which claims, complaints,
notices or inquiries relate to matters which would have, or may reasonably be
expected to have, a Material Adverse Effect, and shall, and shall cause each of
the Subsidiaries to, proceed











 



Schedule O
71.







	 	 	 	diligently to resolve any such claims, complaints,
notices or inquiries relating to compliance with Environmental Laws and provide
such information and certifications which the Agent may reasonably request from
time to time to evidence compliance with this provision.
	 
	 	(q)	 	Notice of Default or Event of Default. Upon the occurrence of a
Default or an Event of Default, the Borrowers shall promptly deliver to the
Agent a notice specifying the nature and date of occurrence of such Default or
Event of Default and the action which the Borrowers propose to take with
respect thereto.
	 
	 	(r)	 	Future Subsidiaries to Become Guarantors. The Borrowers will cause
any Person becoming a Subsidiary after the date hereof to (i) execute and
deliver an assumption and supplement agreement to the applicable Guarantee
thereby becoming a Guarantor thereunder and to (ii) grant to the Agent a
security interest in all of its present and future undertaking and assets. In
addition, in connection therewith, each such new Subsidiary will be required to
execute and deliver, or cause to be executed and delivered, all other relevant
documentation (including opinions of counsel and corporate organizational and
authorizing documents) as the Agent shall reasonably request.
	 
	 	(s)	 	Prompt Payment. The Borrowers shall, and shall cause each Guarantor
to, duly and punctually pay or cause to be duly and punctually paid to the
Agent and the Lenders all amounts payable by the Obligors under the Loan
Documents to which each is a signatory at the times and places and in the
currency and manner mentioned therein.
	 
	 	(t)	 	Change in Scheduled Information. If any of the information contained
in Schedule K shall change, the Borrowers shall promptly notify the Agent in
writing of the details of such change and Schedule K shall thereupon be deemed
to be amended accordingly.
	 
	 	(u)	 	Security. The Secured Obligations of the Obligors under the Loan
Documents shall at all times be collaterally secured by the Security and the
Security shall at all times create in favour of the Agent, for the benefit of
the Lenders, a legal, valid and enforceable first priority (subject to
Permitted Liens) security interest in the collateral described therein and
proceeds thereof.
	 
	 	(v)	 	ERISA. The Borrowers shall, and shall cause each ERISA Affiliate to,
furnish to the Agent:






	 	(i)	 	promptly after receipt thereof (but in no event later than 30
days after such receipt), a copy of any notice any ERISA Company
receives after the date of this agreement from the PBGC relating to the
intention of the PBGC to terminate any Plan or Plans or to appoint a
trustee to administer any Plan or Plans, if such termination or
appointment would result in a Material Adverse Effect;
	 
	 	(ii)	 	within 10 days after the due date for filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of failure to make a
required instalment or other payment with respect to a Plan, a
statement of a financial officer setting forth details as to such
failure and the action










 



Schedule O
72.








	 	 	 	proposed to be taken with respect thereto,
together with a copy of such notice given to the PBGC, but only if such
failure to make a required instalment would result in a Material
Adverse Effect; and
	 
	 	(iii)	 	promptly and in any event within 30 days after receipt
thereof by any ERISA Company from the sponsor of a Multiemployer Plan,
a copy of each notice received by any ERISA Company concerning (A) the
imposition of any Withdrawal Liability or (B) a determination that a
Multiemployer Plan is, or is expected to be, terminated or in
reorganization, in each case within the meaning of Title IV of ERISA,
but only if the imposition of such withdrawal liability, in the case of
clause (A), or such termination or reorganization, in the case of
clause (B), would result in a Material Adverse Effect.






	 	(w)	 	ERISA; Canadian Pension Plans and Canadian Benefit Plan.






	 	(i)	 	Each of the Borrowers shall, and shall cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising
under ERISA of a character which if unpaid or unperformed would
reasonably be expected to result in the imposition of a Lien against
any of its property, assets or undertaking. Each of the Borrowers
shall, and shall cause each Subsidiary to, promptly notify the Agent
of: (i) the occurrence of any unwaived reportable event (as defined in
ERISA) with respect to a Plan, (ii) receipt of any notice from the PBGC
of its intention to seek termination of any Plan or appointment of a
trustee therefor, (iii) its intention to terminate or withdraw from any
Plan in a manner reasonably likely to incur withdrawal liability, and
(iv) the occurrence of any material event with respect to any Plan
which would result in the incurrence by any Borrower or any Subsidiary
of any material liability, fine or penalty, or any material increase in
the contingent liability of any
Borrower or any Subsidiary with respect to any post-retirement
welfare plan (as defined in Section 3(1) of ERISA) benefit.
	 
	 	(ii)	 	Each of the Canadian Borrowers shall, and shall cause each
Subsidiary to, promptly pay and discharge or remit when due all
obligations and liabilities (including without limitation all employer
and employee payments, contributions and premiums) arising under or in
respect of each Canadian Pension Plan and Canadian Benefit Plan (in
this Section, collectively the “Canadian Plans” or individually, a
“Canadian Plan”) of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against
any of its property, assets and undertaking and (ii) operate and
administer each Canadian Pension Plan and each Canadian Benefit Plan in
compliance with all Applicable Laws and maintain all necessary
governmental approvals which are material in respect of the operation
thereof and (iii) comply with and perform in all material respects its
respective obligations under all Canadian Pension Plans and all
Canadian Benefit Plans including without limitation all funding
agreements with respect thereto or in connection therewith (including
any fiduciary, funding, investment and administration obligations).
Each Canadian Borrower shall, and shall cause each Subsidiary to,
promptly notify the Agent of: (i) the










 



Schedule O
73.








	 		 	occurrence of any reportable
event with respect to a Canadian Plan, (ii) receipt of any notice from
any plan administrator with a governmental regulator of a Canadian
Pension Plan or a Canadian Benefits Plan (in each case, a “Canadian
Pension Regulator”) of its intention to seek termination or wind-up, in
whole or in part, of any Canadian Plan or appointment of a trustee
therefor, or (iii) the occurrence of any event with respect to any
Canadian Plan which would result in the incurrence by any Borrower or
any Subsidiary of any material liability, fine or penalty, or any
material increase in the contingent liability of any Borrower or any
Subsidiary with respect to any Canadian Plan. Each Canadian Borrower
shall cause to be delivered to the Agent (i) promptly after receipt
thereof a copy of any material direction, order, notice, ruling or
opinion from any governmental authority (including without limitation
the Canadian Pension Regulator) with respect to any Canadian Plan
(including any notice or proposal to terminate or wind up, in whole or
in part, any Canadian Pension Plan or Canadian Benefit Plan), (ii) any
default or violation notice under any Canadian Plan or any suit,
action, claim or proceeding commenced or threatened with respect to any
Canadian Plan or its assets that could result in any material
liability, payment of taxes, fine or penalty or (iii) any material
change in the funding or contribution requirements for any Canadian
Plan. Each of the Borrowers covenant and agree that it will and will
cause any Subsidiary to continue to fulfill its obligations when due in
respect of any Canadian Union-Administered Plan as required pursuant to
any collective agreement and Applicable Law, including but not limited
to withholding and remitting employee (if any) and employer
contributions.






	 	(x)	 	Notices of Material Event. The Borrowers will furnish to the Agent
prompt written notice of any development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
	 
	 	(y)	 	Payment of Obligations. The Borrowers shall, and shall cause each of
the Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could reasonably be likely to result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) such Borrower or Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with generally accepted
accounting principles and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.
	 
	 	(z)	 	Maintenance of Properties. The Borrowers shall, and shall cause each
of the Subsidiaries to, keep and maintain all property material to the conduct
of the business of the Borrowers and the Subsidiaries, taken as a whole, in
good working order and condition, ordinary wear and tear excepted, except to
the extent that failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
	 
	 	(aa)	 	Inspection Rights. The Borrowers shall, and shall cause each of the
Subsidiaries to, permit any representatives designated by the Agent, upon
reasonable prior notice, to visit and inspect its properties, and to discuss
its affairs, finances and
















 




Schedule O
74.



	 	 	 	condition with its officers and independent
accountants, all at such reasonable times during normal business hours and as
often as reasonably requested, provided that such visits shall not
occur more than once per calendar year unless an Event of Default has occurred
and is continuing.
	 
	 	(bb)	 	Undertaking re: Mortgages. The Borrowers shall, and shall cause each
of the Obligors to (a) register, or cause its counsel to register, against
title to each of the properties listed on Part I of Schedule H hereto, a
mortgage in form and scope satisfactory to the Agent within 60 days from the
date hereof (or by such later date agreed to by the Agent in writing in its
sole discretion, acting reasonably), and (b) deliver to the Agent title
insurance policies in respect of each of the properties listed on Part I of
Schedule H hereto in form, scope and amount satisfactory to the Agent within 60
days from the date hereof (or by such later date agreed to by the Agent in
writing in its sole discretion, acting reasonably).
	 
	 	(cc)	 	Additional Mortgages. If any one or more of the properties listed on
Part III of Schedule H hereto is not sold by the applicable Obligor on or
before December 31, 2008 or if an Obligor no longer intends to sell any one or
more of such properties on or before December 31, 2008, the Borrowers shall,
and shall cause the applicable Obligors to (a) register, or cause its counsel
to register, against title to each of such properties, a mortgage in form and
scope satisfactory to the Agent on or before February 15, 2008 (or by such
later date agreed to by the Agent in writing in its sole discretion, acting
reasonably), and (b) deliver to the Agent title insurance policies in respect
of each of such properties in form, scope and amount satisfactory to the Agent
on or before February 15, 2008 (or by such later date agreed to by the Agent in
writing in its sole discretion, acting reasonably).
	 
	 	(dd)	 	Winding-up. If either 2022219 Ontario Inc. or T.W. Express, Inc. is
not wound-up on or before December 31, 2007, the Borrowers shall cause such
Subsidiaries to, on or before January 15, 2008 (or by such later date agreed to
by the Agent in
writing in its sole discretion, acting reasonably), (i) execute and deliver
an assumption and supplement agreement to the applicable Guarantee thereby
becoming a Guarantor thereunder, (ii) grant to the Agent a security interest
in all of its present and future undertaking and assets, and (iii) execute
and deliver, or cause to be executed and delivered, all other relevant
documentation (including opinions of counsel and corporate organizational
and authorizing documents) as the Agent shall reasonably request.
	 
	 	(ee)	 	Additional Security. The Borrowers shall, and shall cause each of
the Obligors to, forthwith, and from time to time on demand, make, do, execute,
and deliver or cause to be made, done, executed and delivered all such further
acts, deeds, assurances and things as may be necessary in the opinion of the
Agent, acting reasonably, to give the Agent for its benefit and for the benefit
of the Lenders the Liens intended to be created by the Security Documents
including a first priority Lien (subject to Permitted Liens) on any property,
assets or undertaking (including real property) hereafter acquired by a
Borrower or other Obligor.
	 
	 	(ff)	 	Rolling Stock. Upon the occurrence of a Default, the Borrowers
shall, and shall cause each of the Obligors to make, do, execute, and deliver
or cause to be made, done, executed and delivered, within 30 days from the date
requested by the Agent (or by such later date agreed to by the










 



Schedule O
75.


	 	 	 	Agent in writing
in its sole discretion, acting reasonably), all such further acts, deeds,
assurances and things as may be necessary in the opinion of the Agent to
perfect its Lien on the motor vehicles (including tractors and trailers) of the
Obligors including delivering any and all certificates of title of such motor
vehicles to the Agent.
	 
	 	(gg)	 	Pledge of Intercompany Loans. The Borrowers shall, and shall cause
each of the other Obligors to, (i) pledge to the Agent for the benefit of the
Lenders all Debt of any U.S. Obligor in favour of any Canadian Obligor on terms
and documentation (including legal opinions) satisfactory to the Agent and (ii)
deliver to the Agent a promissory note or notes evidencing such Debt, in each
case concurrently with the creation of such Debt.




11.2 Restrictive Covenants. Each of the Borrowers hereby covenants and agrees with
the Agent and the Lenders that, until all outstanding credit hereunder has been repaid in full and
the Credit Facilities have been terminated, and unless the Lenders otherwise expressly consent in
writing in accordance with Section 14.14:





	 	(a)	 	Encumbrances. The Borrowers shall not, and shall not suffer or permit
any of the Subsidiaries to, enter into or grant, create, assume or suffer to
exist any Lien affecting any of their property, assets or undertaking, save and
except only for the Permitted Liens.
	 
	 	(b)	 	Corporate Existence. The Borrowers shall not, and shall not suffer or
permit any of the Subsidiaries to, take part in any amalgamation, merger,
winding-up, liquidation, dissolution, capital or corporate reorganization or
similar proceeding or arrangement, except that:






	 	(i)	 	any Guarantor may amalgamate or merge with any other
Guarantor, wind-up into any other Guarantor or a Borrower or transfer
any or all of its assets to a Borrower or any other Guarantor, and
	 
	 	(ii)	 	each of 2022219 Ontario Inc. and T.W. Express, Inc. may be
wound-up on or before December 31, 2007.






	 	(c)	 	Debt. The Borrowers shall not, and shall not suffer or permit any of
the Subsidiaries to, incur or permit or suffer to exist any Debt other than
Permitted Debt.
	 
	 	(d)	 	Investments. The Borrowers shall not, and shall not suffer or permit
any of the Subsidiaries to, (i) invest in any other entity or entities, singly
or in the aggregate, by way of equity investment or otherwise or (ii) provide
any financial assistance (by way of loan, guarantee or otherwise) to any other
entity, in an aggregate amount greater than US$2,000,000 or the Canadian Dollar
Equivalent thereof, other than by way of investments in or financial assistance
to any of the Subsidiaries. Nothing in this Section 11.2(d) shall prevent any
Borrower nor any Subsidiary from making any Acquisition as permitted by Section
11.2(g).
	 
	 	(e)	 	Finance Subsidiaries. The Borrowers shall not suffer or permit
                     or                      to own any assets other than










 



Schedule O
76.


	 	 	 	the
Permitted                      Debt and assets of nominal value, to incur any liabilities
other than nominal liabilities or to carry on any business.
	 
	 	(f)	 	Dispositions of Assets. The Borrowers shall not, and shall not suffer
or permit any of the Subsidiaries to, sell, assign, transfer, convey, lease (as
lessor) or otherwise dispose of any of their respective assets including any
disposition as part of a sale and leaseback transaction out of the ordinary
course of business other than Permitted Dispositions.
	 
	 	(g)	 	Restrictions on Acquisitions. No Borrower nor any Subsidiary shall
make any Acquisition unless:






	 	(i)	 	no Default or Event of Default has occurred which is
continuing and no such event shall occur as a result of making such
Acquisition;
	 
	 	(ii)	 	the assets or entity being purchased will be used to carry on
the Business in Canada or the United States;
	 
	 	(iii)	 	the purchase would not result in a breach of any of the
representations, warranties or covenants contained herein, including
financial covenants on a pro forma basis, after giving effect to such
Acquisition, as evidenced by a certificate which contains financial
covenant calculations in reasonable detail and which has been delivered
to the Agent and the Lenders, and is in a form satisfactory to each of
them acting reasonably;
	 
	 	(iv)	 	for any real property (whether owned or, if the property
previously has been used other than as office space, leased, occupied,
managed, used or controlled) that is the subject of any purchase, lease
or other agreement,
by any Borrower or other Obligor or the entity being acquired by such
Borrower or other Obligor, the Borrowers shall have delivered to the
Agent a recent phase I environmental assessment conducted by a
Qualified Environmental Consultant and a phase II environmental
assessment conducted by a Qualified Environmental Consultant, if so
requested by the Agent upon (i) consultation with the relevant
Borrower or other Obligor and (ii) if recommended in the phase I
environmental assessment, together with a plan of remediation,
satisfactory to the Agent acting reasonably, if any remediation
required by Environmental Law is recommended in such assessments;
	 
	 	(v)	 	in the case of an Acquisition of shares, the purchase must be
“friendly” (i.e., not hostile) and, for certainty, shall not include an
offer to acquire securities which has not been recommended by the board
of directors of the targeted corporation; and
	 
	 	(vi)	 	the target corporation shall comply with Section 11.1(r) if
such target corporation would be a Subsidiary and its shares shall be
pledged to the Agent pursuant to the Security Documents,






	 	 	 	provided that nothing in this subsection shall restrict any Borrower’s or
any Subsidiary’s ability to make any investment permitted by Section
11.2(d).










 



Schedule O
77.








	 	(h)	 	Capital of Companies. Vitran shall not suffer or permit any of the
other Companies to issue further equity securities, unless such equity
securities are:






	 	(i)	 	issued to (A) the existing equity holder or (B) a Company
which has executed and delivered to the Agent a Security Document; and
	 
	 	(ii)	 	pledged to the Agent pursuant to the Security Documents.






	 	(i)	 	Further Equity Securities to be Pledged with Agent upon Request.
Notwithstanding any inconsistent term and conditions contained in the Security
Documents, within 5 Banking Days of a written request of the Agent, the
certificates representing further equity securities issued pursuant to the
conditions contained in Subsection (i) of this section shall be delivered to
the Agent, together with a stock transfer power (executed in blank) with
respect to same.
	 
	 	(j)	 	Regulation U or X. The Borrowers shall not, and shall not suffer or
permit any Subsidiary to, engage in the business of extending credit for the
purpose of purchasing or carrying margin stock. The Borrowers shall not use
any of the proceeds of any credit extended hereunder to “purchase” or “carry”
any “margin stock” as defined in Regulation U of the F.R.S. Board.
	 
	 	(k)	 	National City Bank Loan Documents. The Borrowers shall not suffer or
permit PJAX, Inc. to amend, modify, supplement or restate the National City
Bank Loan Documents without the prior written consent of the Lenders.
	 
	 	(l)	 	Loans and Advances. Except for Permitted Debt, the Borrowers shall
not, and shall not permit any of the Subsidiaries to, make or permit to exist
any loans or advances to any other Person.
	 
	 	(m)	 	Transactions with Affiliates. The Borrowers shall not, and shall not
permit any of the Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
affiliates, except (a) in the ordinary course of business at prices and on
terms and conditions not less favourable to such Borrower or Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties, (b)
transactions between or among Obligors, or (c) in respect of the Permitted
                     Debt.
	 
	 	(n)	 	Restrictive Agreements. The Borrowers shall not, and shall not permit
any of the Guarantors to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of any Obligor to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability
of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances to any
Borrower or any other Subsidiary or to guarantee the Secured Obligations of the
Borrowers or any other Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions
imposed by law or by this
agreement, (ii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions










 



Schedule O
78.


	 	 	 	apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iii)
clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Debt permitted by this agreement
if such restrictions or conditions apply only to the property or assets
securing such Debt; and (iv) clause (a) of the foregoing shall not apply to
customary provisions in leases, licenses and other contracts restricting the
assignment thereof or the subject matter thereof.
	 
	 	(o)	 	Fiscal Year. The Borrowers shall not, and shall not permit any of the
Guarantors to, change its Fiscal Year except with at least thirty (30) Banking
Days prior written notice to the Agent and provided that, notwithstanding such
change of Fiscal Year (i) all covenants of the Borrowers and Guarantors
pursuant to this agreement and the other Loan Documents shall be performed,
construed and applied as if such change of fiscal year had not occurred, (ii)
none of the rights or remedies of the Agent or the Lenders under this agreement
and the other Loan Documents shall be reduced, diminished or otherwise
adversely affected by such change of Fiscal Year, and (iii) Vitran shall
furnish to the Agent in a timely manner all necessary reconciliations required
as a result of such change to enable the Agent to determine compliance by the
Borrowers (and Guarantors, if relevant) with their respective covenants
hereunder.
	 
	 	(p)	 	Dividends and Certain Other Restricted Payments. Vitran shall not pay
dividends in an amount greater than ten percent (10%) of Net Income for the
period of four consecutive Fiscal Quarters immediately preceding the date of
such payment. No U.S. Obligor shall pay a dividend to a Canadian Obligor
without the prior written consent of the Agent.
	 
	 	(q)	 	                     The U.S. Borrower shall not pay any amount or amounts
owing to                      if a Default has occurred and is continuing or if such
payment would trigger the occurrence of a Default.
	 
	 	(r)	 	Subordinated Debt. Each of the Borrowers shall not, nor shall it
permit any Subsidiary to, (a) amend or modify any of the terms or conditions
relating to Subordinated Debt, (b) make any voluntary prepayment of
Subordinated Debt or effect any voluntary redemption thereof, or (c) make any
payment on account of Subordinated Debt which is prohibited under the terms of
any instrument or agreement subordinating the same to the Secured Obligations;
for greater certainty, indebtedness contemplated by paragraphs (e) and (g) of
the definition of Permitted Debt shall not be considered Subordinated Debt.
Notwithstanding the foregoing, a Borrower may agree to a decrease in the
interest rate applicable thereto or to a deferral of repayment of any of the
principal of or interest on the Subordinated Debt beyond the current due dates
therefor.





ARTICLE 12

CONDITIONS PRECEDENT



12.1 Conditions Precedent to All Credit. The obligation of the Lenders to extend
credit hereunder is subject to fulfilment of the following conditions precedent at the time such
credit is made available:










 



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79.





	 	(a)	 	no Default or Event of Default has occurred and is continuing or would
arise immediately after giving effect to or as a result of such extension of
credit;
	 
	 	(b)	 	the Borrowers shall have complied with the requirements of Article 4,
Article 5 or Article 6, as the case may be, in respect of the relevant
extension of credit; and
	 
	 	(c)	 	the representations and warranties of the Borrowers contained in
Section 10.1 and of the Obligors under the Guarantees and the Security
Documents shall be true and correct in all material respects on the date such
credit is made available as if such representations and warranties were made on
such date.




12.2 Conditions Precedent to Effectiveness of Agreement. The effectiveness of this
agreement is subject to fulfilment of the following conditions precedent:





	 	(a)	 	the conditions precedent set forth in Section 12.1 have been
fulfilled;
	 
	 	(b)	 	the Fee Letter shall have been executed and delivered by the parties
thereto and the Borrowers shall have paid the fees due thereunder together with
all fees and other amounts due and payable pursuant to this agreement,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder;
	 
	 	(c)	 	each Guarantor shall have executed and delivered to the Agent a
Guarantee;
	 
	 	(d)	 	each of the Loan Documents including the Security Documents listed in
Schedule M and any documents in connection therewith as the Agent may require
shall have been executed and delivered to the Agent in form and substance
satisfactory to the Agent;
	 
	 	(e)	 	the Agent has received, in form and substance satisfactory to the
Agent:






	 	(i)	 	a duly certified resolution of the board of directors of each
Obligor authorizing it to execute, deliver and perform its obligations
under the Loan Documents to which it is a signatory;
	 
	 	(ii)	 	a certificate of a senior officer of each Obligor setting
forth specimen signatures of the individuals authorized to sign on
their respective behalf;
	 
	 	(iii)	 	a certificate of status or good standing for each Obligor
issued by the appropriate governmental body or agency of the
jurisdiction in which such Obligor is incorporated or formed;
	 
	 	(iv)	 	a certificate of a senior officer of each Borrower certifying
that, inter alia, no Default or Event of Default has occurred and is
continuing or would occur or continue immediately after this agreement
becoming effective;
	 
	 	(v)	 	opinions of the Obligors’ legal counsel with respect to, inter
alia, each Obligor, the enforceability of this agreement, and the
documents referenced in Sections 12.2(b), (c) and (d) and as to such
other matters as










 



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80.


	 	 	 	the Agent may reasonably request, and otherwise in
form and substance satisfactory to the Agent; and
	 
	 	(vi)	 	insurance binders, certificates of insurance and statements
of coverage with respect to all insurance required to be maintained by
the Obligors hereunder, with the Agent named as loss payee or
additional insured, as applicable;






	 	(f)	 	the Agent and its counsel shall be satisfied that all Applicable Laws
have been complied with, all material agreements have been entered into and all
necessary governmental, corporate and other third party consents and approvals
have been obtained with respect to this agreement and the transactions
contemplated herein;
	 
	 	(g)	 	all documents and instruments shall have been properly registered,
recorded and filed in all places which, searches shall have been conducted in
all jurisdictions which, and deliveries of all consents, approvals,
acknowledgments, undertakings, directions, negotiable documents of title and
other documents and instruments to the Agent shall have been made which, in the
opinion of the Agent’s counsel, are necessary to make effective the Security
created or intended to be created by the Companies pursuant to the Security
Documents and to ensure the perfection and the intended first ranking priority
(subject to Permitted Liens) of such security;
	 
	 	(h)	 	no Material Adverse Change has occurred;
	 
	 	(i)	 	the Agent shall have completed, to its satisfaction in its sole
discretion, a due diligence review with respect to the assets, liabilities
(including, for certainty, any environmental liability) and capitalization of
each of Vitran and the other Obligors, its financial condition and prospects,
and the transactions contemplated herein; and
	 
	 	(j)	 	the Lenders shall have completed, to their satisfaction in their sole
and absolute discretion, a due diligence review of all financial, business,
legal, tax, accounting and environmental matters with respect to the Obligors
and the transactions contemplated hereby including the Financial Statements and
the U.S. Financial Statements.




12.3 Waiver. The terms and conditions of Sections 12.1 and 12.2 are inserted for
the sole benefit of the Agent and the Lenders, and the Agent with the approval of the Lenders in
accordance with Section 14.4 may waive such terms and conditions in whole or in part, with or
without terms or conditions, in respect of any extension of credit, without prejudicing their right
to assert them in whole or in part in respect of any other extension of credit.




ARTICLE 13

DEFAULT AND REMEDIES



13.1 Events of Default. Upon the occurrence of any one or more of the following
events, unless expressly waived in accordance with Section 14.4:





	 	(a)	 	the Borrowers (or any one or more of them) default in payment of any
amount which is payable by the Borrowers (or any one or more of them) under the
Loan Documents when the same is due and payable;










 



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81.


	 	(b)	 	the commencement by any Company of proceedings for the dissolution,
liquidation or winding-up of such Company or any such proceedings are commenced
against any Company by a third party and such proceedings commenced by a third
party are not being contested in good faith and by appropriate proceedings or,
if so contested, such proceedings continue, without being stayed, for more than
20 Banking Days;
	 
	 	(c)	 	any Company ceases or threatens to cease to carry on its business or
is adjudged or declared bankrupt or insolvent or admits its inability to pay
its debts generally as they become due or fails to pay its debts generally as
they become due or files an assignment or petition in bankruptcy or a petition
to take advantage of any insolvency statute or makes an assignment for the
general benefit of its creditors, petitions or applies to any tribunal for, or
consents to, the appointment of a receiver or trustee for it or for any part of
its property (or such a receiver or trustee is appointed for it or any part of
its property), or files a notice of intention to file a proposal, or commences
(or any other Person commences) any proceedings relating to it under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction whether now or hereafter in
effect (provided that, if such proceedings are commenced by another Person,
such proceedings are being diligently defended and have not been discharged,
vacated or stayed within 20 Banking Days after commencement), or by any act
indicates its consent to, approval of, or acquiescence in, any such proceeding
for it or for any part of its property, or suffers the appointment of any
receiver or trustee, sequestrator or other custodian;
	 
	 	(d)	 	any representation or warranty made by any Company in any Loan
Document or in any other document, agreement or instrument delivered pursuant
hereto or referred to herein proves to have been incorrect in any material
respect when made or furnished;
	 
	 	(e)	 	one or more judgments for the payment of money which are not covered
by insurance in an aggregate amount in excess of US$3,000,000 shall be rendered
against any Borrower, any other Obligor or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of any Borrower or any
other Obligor to enforce any such judgment that is not promptly stayed;
	 
	 	(f)	 	an ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of any Borrower
and the Subsidiaries with respect to any Plan, in an aggregate amount exceeding
US$3,000,000 from and after the Effective Date; or
	 
	 	(g)	 	the breach or failure of due observance or performance by any Company
of any covenant or provision of any of the Loan Documents, other than those
heretofore or hereafter dealt with in this Section 13.1, which is not remedied
within five Banking Days after written notice of such breach or failure has
been given by the Agent to the Borrowers;










 



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82.


	 	(h)	 	one or more encumbrancers, lienors or landlords take possession of any
property, assets or undertaking of any Company having a fair market value in
excess of US$3,000,000 or the Canadian Dollar Equivalent thereof or enforce
their security or other remedies against any part of the assets, property and
undertaking of any Company having a fair market value in excess of US$3,000,000
or the Canadian Dollar Equivalent thereof and such action is not being
contested in good faith and by appropriate proceedings or, if so contested,
such possession or enforcement proceedings continue, without being discharged,
vacated or stayed, for more than 20 Banking Days;
	 
	 	(i)	 	an event of default (after the giving of all applicable notices or the
expiry of all applicable grace periods) under any one or more agreements,
indentures or instruments under which any Company has outstanding Debt in
excess of US$3,000,000 or the Canadian Dollar Equivalent thereof or under which
Debt in excess of US$3,000,000 or the Canadian Dollar Equivalent thereof is
outstanding which is guaranteed by any Company shall happen and be continuing,
or Debt of or guaranteed by any Company in excess of US$3,000,000 or the
Canadian Dollar Equivalent thereof which is payable on demand is not paid on
demand;
	 
	 	(j)	 	the occurrence of a Material Adverse Change;
	 
	 	(k)	 	any one or more of the Loan Documents is determined by a court of
competent jurisdiction not to be a legal, valid and binding obligation of the
Company which is a party thereto, enforceable by the Agent against such Company
and such Loan Document has not been replaced by a legal, valid, binding and
enforceable
document which is equivalent in effect to such Loan Document, in form and
substance acceptable to the Agent, within 30 days of such determination,
provided, however, that such grace period shall only be provided if the
applicable Company actively cooperates with the Agent to so replace such
Loan Document;
	 
	 	(l)	 	Vitran Express, the U.S. Borrower or any other Obligor ceases to be a
Subsidiary; or
	 
	 	(m)	 	any Person or group of Persons acting in concert acquires beneficial
ownership of shares of Vitran having attached thereto at least 20% of the
voting rights attached to all of the shares of Vitran,




the Agent, at the direction of the Majority Lenders, by notice to the Borrowers and subject to
Section 14.8, may terminate the Credit Facilities and, by such notice or by further notice, may
declare all indebtedness of the Borrowers to the Lenders pursuant to this agreement (including all
accrued and unpaid interest and fees hereunder) to be immediately due and payable whereupon all
such indebtedness shall immediately become and be due and payable and the Security shall
immediately become enforceable without further demand or other notice of any kind, all of which are
expressly waived by the Borrowers to the extent permitted by Applicable Laws (provided, however,
that the Credit Facilities shall terminate, all such indebtedness of the Borrowers to the Lenders
shall automatically become due and payable and the Security shall immediately become enforceable,
without demand or notice of any kind, upon the occurrence of an event described in clause (b) or
(c) above). The repayment of the aforesaid indebtedness shall include, without limitation, the
prepayment of all outstanding Bankers’ Acceptances and Letters of Credit.










 



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83.



13.2 Refund of Overpayments. With respect to each Letter of Credit for which the
Issuing Lender has been paid all of its contingent liability pursuant to Section 9.2, 9.7 or 13.1
and provided that all amounts due by the Borrowers to the Agent under Section 9.2, 9.7 or 13.1 have
been paid, the Issuing Lender agrees to pay to the Borrowers, upon the earlier of:





	 	(a)	 	the date on which either the original counterpart of such Letter of
Credit is returned to the Issuing Lender for cancellation or the Issuing Lender
is released by the beneficiary thereof from any further obligations in respect
of such Letter of Credit;
	 
	 	(b)	 	the expiry of such Letter of Credit; and
	 
	 	(c)	 	the Issuing Lender is permanently enjoined by a court of competent
jurisdiction from honouring such Letter of Credit pursuant to a final Order;




an amount equal to any excess of the amount received by the Issuing Lender hereunder in respect of
its contingent liability under such Letter of Credit over the total of amounts applied to reimburse
the Issuing Lender for amounts paid by it under or in connection with such Letter of Credit (the
Issuing Lender having the right to so appropriate such funds).



13.3 Remedies Cumulative. Each of the Borrowers expressly agrees that the rights
and remedies of the Agent and the Lenders under this agreement are cumulative and in addition to
and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the Agent or any of the Lenders
of any right or remedy for a default or breach of any term, covenant or condition in this agreement
does not waive, alter, affect or prejudice any other right or remedy to which the Agent or such
Lender may be lawfully entitled for the same default or breach. Any waiver by the Agent with the
approval of the Majority Lenders of the strict observance, performance or compliance with any term,
covenant or condition of this agreement is not a waiver of any subsequent default and any
indulgence by the Lenders with respect to any failure to strictly observe, perform or comply with
any term, covenant or condition of this agreement is not a waiver of the entire term, covenant or
condition or any subsequent default.



13.4 Set Off. In addition to any rights now or hereafter granted under Applicable
Law, and not by way of limitation of any such rights, after the occurrence of an Event of Default
which is continuing, the Agent and each Lender is authorized, without notice to the Borrowers or to
any other person, any such notice being expressly waived by the Borrowers, to set off, appropriate
and apply any and all deposits, matured or unmatured, general or special, and any other
indebtedness at any time held by or owing by the Agent or such Lender, as the case may be, to or
for the credit of or the account of any Borrower against and on account of the obligations and
liabilities of such Borrower which are due and payable to the Agent or such Lender, as the case may
be, under this agreement.




ARTICLE 14

THE AGENT





	14.1	 	Appointment and Authorization of Agent.






	 	(a)	 	Each Lender hereby appoints and authorizes, and hereby agrees that it
will require any assignee of any of its interests herein (other than the holder
of a participation in its interests herein) to appoint and authorize the Agent
to take such actions as agent on its behalf and to exercise such powers
hereunder as are delegated to the Agent by such Lender by the terms hereof,
together with
such










 




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84.


	 	 	 	powers as are reasonably incidental thereto. Neither the
Agent nor any of its directors, officers, employees or agents shall be liable
to any of the Lenders for any action taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its own gross negligence or
wilful misconduct and each Lender hereby acknowledges that the Agent is
entering into the provisions of this Section 14.1 on its own behalf and as
agent and trustee for its directors, officers, employees and agents.
	 
	 	(b)	 	Without prejudice to the provisions of Section 14.1(a) or under any
other Loan Document and to the extent applicable, each of the Lenders hereby
acknowledges that the Agent (or a collateral agent designated by the Agent)
shall, for the purposes of holding any security granted any Obligor on the
property of such Obligor pursuant to the laws of the Province of Quebec, be the
holder of an irrevocable power of attorney (fondé de pouvoir) (within the
meaning of Article 2692 of the Civil Code of Quebec) for all present and future
Lenders and in particular for all present and future holders of any bond issued
an Obligor to the Agent and secured by a hypothec granted by such Obligor
pursuant to the laws of the Province of Quebec. Each of the Lenders hereby
irrevocably constitutes, to the extent necessary, the Agent (or such designated
collateral agent) as the holder of such irrevocable power of attorney (fondé de
pouvoir) (within the meaning of Article 2692 of the Civil Code of Quebec) in
order to hold security granted by
such Obligor in the Province of Quebec. Each Transferee shall be deemed to
have confirmed and ratified the constitution of the Agent as the holder of
such irrevocable power of attorney (fondé de pouvoir) by execution of the
relevant form of assignment. Notwithstanding the provisions of Section 32 of
An Act respecting the Special Powers of Legal Persons (Quebec), the
Borrowers, for and on their own behalf on behalf of the Guarantors, and the
Lenders irrevocably agree that the Agent may acquire and be the holder of
any bond issued by an Obligor and secured by a hypothec granted by the such
Obligor pursuant to the laws of the Province of Quebec at any time and from
time to time. The Borrowers, for and on their own behalf on behalf of the
Guarantors, hereby acknowledge that any such bond constitutes a title of
indebtedness, as such term is used in Article 2692 of the Civil Code of
Quebec.




14.2
Interest Holders. The Agent may treat each Lender set forth in
Schedule B
hereto or the person designated in the last notice delivered to
it under Section 16.6 as the holder of all of the interests of such Lender hereunder.



14.3 Consultation with Counsel. The Agent may consult with legal counsel selected
by it as counsel for the Agent and the Lenders and shall not be liable for any action taken or not
taken or suffered by it in good faith and in accordance with the advice and opinion of such
counsel.



14.4 Documents. The Agent shall not be under any duty to the Lenders to examine,
enquire into or pass upon the validity, effectiveness or genuineness of this agreement or any
instrument, document or communication furnished pursuant to or in connection herewith and the Agent
shall, as regards the Lenders, be entitled to assume that the same are valid, effective and
genuine, have been signed or sent by the proper parties and are what they purport to be.



14.5 Agent as Lender. With respect to those portions of the Credit Facilities made
available by it, the Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not the Agent. The Agent and its affiliates may accept
deposits from, lend









 



Schedule O
85.



money to and generally engage in any kind of business with the Borrowers and
their affiliates and persons doing business with the Borrowers and/or any of their affiliates as if
it were not the Agent and without any obligation to account to the Lenders therefor.



14.6 Responsibility of Agent. The duties and obligations of the Agent to the
Lenders hereunder are only those expressly set forth herein. The Agent shall not have any duty to
the Lenders to investigate whether a Default or an Event of Default has occurred. The Agent shall,
as regards the Lenders, be entitled to assume that no Default or Event of Default has occurred and
is continuing unless the Agent has actual knowledge or has been notified by the Borrowers of such
fact or has been notified by a Lender that such Lender considers that a Default or Event of Default
has occurred and is continuing, such notification to specify in detail the nature thereof.



14.7 Action by Agent. The Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be vested in it on behalf
of the Lenders by and under this agreement; provided, however, that the Agent shall not exercise
any rights under Section 13.1 or expressed to be on behalf of or with the approval of the Majority
Lenders without the request, consent or instructions of the Majority Lenders. Furthermore, any
rights of the Agent expressed to be on behalf of or with the approval of the Majority Lenders shall
be exercised by the Agent upon the request or instructions of the Majority Lenders. The Agent
shall incur no liability to the Lenders hereunder with respect to anything which it may do or
refrain from doing in the reasonable exercise of its judgment or which may seem to it to be
necessary or desirable in the circumstances, except for its gross negligence or wilful misconduct.
The Agent shall in all cases be fully protected in acting or refraining from acting hereunder in
accordance with the instructions of the Majority Lenders and any action taken or failure to act
pursuant to such instructions shall be binding on all Lenders. In respect of any notice by or
action taken by the Agent hereunder, the Borrowers shall at no time be obliged to enquire as to the
right or authority of the Agent to so notify or act.



14.8 Notice of Events of Default. In the event that the Agent shall acquire actual
knowledge or shall have been notified of any Default or Event of Default, the Agent shall promptly
notify the Lenders and shall take such action and assert such rights under Section 13.1 of this
agreement as the Majority Lenders shall request in writing and the Agent shall not be subject to
any liability by reason of its acting pursuant to any such request. If the Majority Lenders shall
fail for five Banking Days after receipt of the notice of any Default or Event of Default to
request the Agent to take such action or to assert such rights in respect of such Default or Event
of Default, the Agent may, but shall not be required to, and subject to subsequent specific
instructions from the Majority Lenders, take such action or assert such rights (other than rights
under Section 13.1 of this agreement and other than giving an express waiver of any Default or any
Event of Default) as it deems in its discretion to be advisable for the protection of the Lenders
except that, if the Majority Lenders have instructed the Agent not to take such action or assert
such rights, in no event shall the Agent act contrary to such instructions unless required by law
to do so.



14.9 Responsibility Disclaimed. The Agent shall be under no liability or
responsibility whatsoever as agent hereunder:





	 	(a)	 	to the Borrowers or any other person as a consequence of any failure
or delay in the performance by, or any breach by, any other Lender or Lenders
of any of its or their obligations hereunder;
	 
	 	(b)	 	to any Lender or Lenders as a consequence of any failure or delay in
performance by, or any breach by, the Borrowers of any of their obligations
hereunder; or










 



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86.


	 	(c)	 	to any Lender or Lenders for any statements, representations or
warranties herein or in any other documents contemplated hereby or in any other
information provided pursuant to this agreement or any other documents
contemplated hereby or for the validity, effectiveness, enforceability or
sufficiency of this agreement or any other document contemplated hereby.




14.10 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed by the Borrowers) pro
rata according to the Pro Rata Share of each of them from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this agreement or any other document contemplated
hereby or any action taken or omitted by the Agent under this agreement or any document
contemplated hereby, except that no Lender shall be liable to the Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of the Agent.



14.11 Credit Decision. Each Lender represents and warrants to the Agent that:





	 	(a)	 	in making its decision to enter into this agreement and to make its
Pro Rata Share of an extension of credit available to the Borrowers (or any one
or more of them), it is independently taking whatever steps it considers
necessary to evaluate the financial condition and affairs of the Borrowers (and
each of them) and that it has made an independent credit judgment without
reliance upon any information furnished by the Agent; and
	 
	 	(b)	 	so long as any portion of the Credit Facilities is being utilized by
the Borrowers (or any one or more of them), it will continue to make its own
independent evaluation of the financial condition and affairs of the Borrowers
(and each of them).




14.12 Successor Agent.





	 	(a)	 	Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving 30 days written
notice thereof to the Lenders. Upon any such resignation, the Majority Lenders
shall have the right to appoint a successor Agent who shall be one of the
Lenders unless none of the Lenders wishes to accept such appointment. If no
successor Agent shall have been so appointed and shall have accepted such
appointment by the time of such resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall be a bank listed
in Schedule I, II or III to the Bank Act (Canada) which has an office in
Toronto. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties and obligations of the
retiring Agent (in its capacity as Agent but not in its capacity as a Lender)
and the retiring Agent shall be discharged from its duties and obligations
hereunder (in its capacity as Agent but not in its capacity as a Lender).
After any retiring Agent’s resignation or removal hereunder as the Agent,
provisions of this Article 14 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Agent.










 



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87.


	 	(b)	 	The Lenders (other than the Agent in its capacity as Lender) shall
have the right, upon unanimous agreement of such Lenders, to terminate by
notice in writing to the Agent the appointment of the Agent hereunder in the
event of the wilful misconduct or gross negligence by the Agent of its
obligations as Agent hereunder. Upon such termination, such Lenders may
appoint a successor Agent in the same manner as set out in Section 14.12(a)
above.




14.13 Delegation by Agent. With the prior approval of the Majority Lenders, the
Agent shall have the right to delegate any of its duties or obligations hereunder as Agent to any
affiliate of the Agent so long as the Agent shall not thereby be relieved of such duties or
obligations.



14.14 Waivers and Amendments.





	 	(a)	 	Subject to Sections 14.14(b) and (c), any term, covenant or condition
of this agreement may only be amended with the consent of the Borrowers and the
Majority Lenders or compliance therewith may be waived (either generally or in
a particular instance and either retroactively or prospectively) by the
Majority Lenders and in any such event the failure to observe, perform or
discharge any such covenant, condition or obligation, so amended or waived
(whether such amendment is executed or such consent or waiver is given before
or after such failure), shall not be construed as a breach of such covenant,
condition or obligation or as a Default or Event of Default.
	 
	 	(b)	 	Notwithstanding Section 14.14(a), without the prior written consent of
each Lender, no such amendment or waiver shall directly:






	 	(i)	 	increase the amount of any Credit Facility or the amount of
the Individual Commitment of any Lender;
	 
	 	(ii)	 	extend the Maturity Date;
	 
	 	(iii)	 	extend the time for the payment of the interest on any Loan,
forgive any portion of principal thereof, reduce the amount of any
instalment under Section 9.1, reduce the stated rate of interest
thereon or amend the requirement of pro rata application of all amounts
received by the Agent in respect thereof;
	 
	 	(iv)	 	change the percentage of the Lenders’ requirement to
constitute the Majority Lenders or otherwise amend the definition of
Majority Lenders;
	 
	 	(v)	 	reduce the stated amount of any interest or fees to be paid
pursuant to Article 7 of this agreement;
	 
	 	(vi)	 	permit any subordination of the indebtedness hereunder;
	 
	 	(vii)	 	release a Guarantee or any Security Documents in whole or in part;
	 
	 	(viii)	 	alter the terms of this Section 14.14;










 



Schedule O
88.


	 	(ix)	 	for so long as there are three or fewer Lenders, amend or
waive any of Sections 11.1(b)-(g); or
	 
	 	(x)	 	amend the definition of Pro Rata Share.






	 	(c)	 	Without the prior written consent of the Agent, no amendment to or
waiver of Sections 14.1 through 14.13 or any other provision hereof to the
extent it affects the rights or obligations of the Agent shall be effective.
	 
	 	(d)	 	Without the prior written consent of the Issuing Lender, no amendment
to or waiver of Article 14 or any other provision hereof to the extent it
affects the rights or obligations of the Issuing Lender shall be effective.
	 
	 	(e)	 	Notwithstanding Section 14.14(b)(vii), the Agent shall be entitled,
without the consent of any Lender, to execute and deliver a release or
discharge of any Security over any assets of the Obligors at the time of any
Permitted Disposition with respect to such assets.




14.15 Determination by Agent Conclusive and Binding. Any determination to be made
by the Agent on behalf of or with the approval of the Lenders or the Majority Lenders under this
agreement shall be made by the Agent in good faith and, if so made, shall be binding on all
parties, absent manifest error.



14.16 Redistribution of Payment. If a Lender shall receive payment of a portion of
the aggregate amount of principal and interest due to it under the Credit Facilities which is
greater than the proportion received by any other Lender in respect of the aggregate amount of
principal and interest due in respect of the Credit Facilities (having regard to the respective
Individual Commitments of the Lenders with respect to the Credit Facilities), the Lender receiving
such proportionately greater payment shall purchase a participation (which shall be deemed to have
been done simultaneously with receipt of such payment) in that portion of the aggregate outstanding
credit of the other Lender or Lenders under the Credit Facilities so that the respective receipts
shall be pro rata to their respective participation in the extensions of credit under the Credit
Facilities; provided, however, that if all or part of such proportionately greater payment received
by such purchasing Lender shall be recovered from the Borrowers, such purchase shall be rescinded
and the purchase price paid for such participation shall be returned by such selling Lender or
Lenders to the extent of such recovery, but without interest.



14.17 Adjustments among Lenders after Acceleration.





	 	(a)	 	The relevant Lenders agree that, at any time after all indebtedness of
the Borrowers to such Lenders pursuant hereto has become immediately due and
payable pursuant to Section 13.1 or after the cancellation or termination of a
Credit Facility, they will at any time or from time to time upon the request of
any relevant Lender through the Agent purchase portions of the availments made
available by the other relevant Lenders which remain outstanding, and make any
other adjustments which may be necessary or appropriate, in order that the
amounts of the availments made available by the respective Lenders which remain
outstanding, as adjusted pursuant to this Section 14.17, will be in the same
proportions as their respective Pro Rata Shares thereof with respect to such
Credit Facility immediately prior to such acceleration, cancellation or
termination.










 



Schedule O
89.


	 	(b)	 	The relevant Lenders agree that, at any time after all indebtedness of
the relevant Borrowers to such Lenders pursuant hereto has become immediately
due and
payable pursuant to Section 13.1 or after the cancellation or termination of
a Credit Facility, the amount of any repayment made by such Borrowers under
this agreement, and the amount of any proceeds of the exercise of any rights
or remedies of such Lenders under the Loan Documents, which are to be
applied against amounts owing hereunder as principal, will be so applied in
a manner such that to the extent possible, the availments made available by
the respective Lenders which remain outstanding, after giving effect to such
application, will be in the same proportions as their respective Pro Rata
Shares thereof with respect to such Credit Facility immediately prior to the
cancellation of termination thereof immediately prior to such acceleration,
cancellation or termination.
	 
	 	(c)	 	For greater certainty, the Lenders acknowledge and agree that without
limiting the generality of the provisions of Section 14.17(a) and 14.17(b),
such provisions will have application if and whenever any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, compensation, or otherwise) on account of any monies owing or
payable by a Borrower to it under the Loan Documents in excess of its pro rata
share of payments on account of monies owing by such Borrower to all Lenders
hereunder.
	 
	 	(d)	 	Each Borrower agrees to be bound by and to do all things necessary or
appropriate to give effect to any and all purchases and other adjustments made
by and between the Lenders pursuant to this Section 14.17.




14.18 Distribution of Notices. Within one Banking Day of receipt by the Agent of
any notice or other document which is delivered to the Agent hereunder on behalf of the Lenders,
the Agent shall use its best efforts to provide a copy of such notice or other document to each of
the Lenders.



14.19 Decision to Enforce Security. The Security shall become enforceable as
provided in Article 13. Upon the Security becoming enforceable as aforesaid, the Agent shall
promptly so notify each of the Lenders. Any Lender may thereafter provide the Agent with a written
request to enforce the Security. Forthwith after the receipt of such a request, the Agent shall
seek the instructions of the Majority Lenders as to whether the Security should be enforced and the
manner in which the Security should be enforced. In seeking such instructions, the Agent shall
submit a specific proposal to the Lenders. The Agent shall promptly notify the Lenders of all
instructions and approvals of the Majority Lenders.



14.20 Enforcement. The Agent reserves the sole right to enforce, or otherwise deal
with, the Security and to deal with the Obligors in connection therewith; provided, however, that
the Agent shall so enforce, or otherwise deal with, the Security as the Majority Lenders shall
instruct.



14.21 Application of Cash Proceeds of Realization.





	 	(a)	 	All Proceeds of Realization not in the form of cash shall be forthwith
delivered to the Agent and disposed of, or realized upon, by the Agent in such
manner as the Majority Lenders may approve so as to produce Cash Proceeds of
Realization.










 



Schedule O
90.








	 	(b)	 	Subject to the claims, if any, of secured creditors of the Obligors
whose security ranks in priority to the Security, all Cash Proceeds of
Realization shall be applied and distributed, and the claims of the Lenders
shall be deemed to have the relative priorities which would result in the Cash
Proceeds of Realization being applied and distributed, as follows:






	 	(i)	 	firstly, to the payment of all reasonable costs and expenses
incurred by or on behalf of the Agent (including, without limitation,
all legal fees and disbursements) in the exercise of all or any of the
powers granted to it hereunder or under the Security Documents or the
Guarantees and in payment of all of the remuneration of any Receiver
and all costs and expenses properly incurred by such Receiver
(including, without limitation, all legal fees and disbursements) in
the exercise of all or any powers granted to it under the Security
Documents;
	 
	 	(ii)	 	secondly, in payment of all amounts of money borrowed or
advanced by the Agent or such Receiver pursuant to the Security
Documents and any interest thereon;
	 
	 	(iii)	 	thirdly, to the payment or prepayment of the Secured
Obligations (including holding as cash collateral to be applied against
Secured Obligations which have not then matured) to the Finance Parties
pro rata in accordance with the relative amount of the Secured
Obligations owing to each of them irrespective of whether (a) such
Secured Obligations are owing by a Canadian Obligor or U.S. Obligor,
and (b) such Cash Proceeds of Realization were derived from the sale,
disposition or other realization of Secured Assets of Canadian Obligors
or US. Obligors; and
	 
	 	(iv)	 	the balance, if any, to the Borrowers or otherwise in
accordance with Applicable Law.




14.22 Security Documents. As continuing collateral security for the Secured
Obligations, the Borrowers shall and shall cause the Guarantors to, execute and deliver the
Guarantees and the Security Documents. The Guarantees and the Security Documents shall be entered
into in favour of the Agent for the rateable benefit of the Finance Parties. The Agent declares
that it shall hold the Security, the Secured Assets charged by the Security Documents and the
rights granted to it under the Loan Documents for its own benefit and in its capacity as agent for
the rateable benefit of each Finance Party.



14.23 Discharge of Security.





	 	(a)	 	To the extent a sale or other disposition of the Secured Assets is
permitted pursuant to the provisions hereof, the Lenders hereby authorize the
Agent, at the cost and expense of the Borrowers, to execute such discharges and
other instruments which are necessary for the purposes of releasing and
discharging the security interest of the Lenders and the Agent therein or for
the purposes of recording the provisions or effect thereof in any office where
the Security Documents may be registered or recorded or for the purpose of more
fully and effectively carrying out the provisions of this Section 14.23.










 



Schedule O
91.








	 	(b)	 	The Security shall terminate when the Credit Facilities have
terminated and the Secured Obligations have been fully satisfied. Upon the
Security terminating, the Agent shall execute and deliver, at the sole expense
of the Borrowers, all such discharges and releases as the Borrowers may
reasonably require to give effect thereto.





ARTICLE 15

GUARANTEE OF BORROWERS



15.1 Guarantee. The U.S. Borrower hereby unconditionally, absolutely and irrevocably
guarantees the full and punctual payment to the Finance Parties as and when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all of the
Secured Obligations of the other Borrowers in the same currency as the currency of the Secured
Obligations of such other Borrowers, whether for principal, interest, fees, expenses, indemnities
or otherwise. Each of the Canadian Borrowers hereby unconditionally, absolutely and irrevocably
guarantees the full and punctual payment to the Finance Parties as and when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all of the
Secured Obligations of the other Canadian Borrower in the same currency as the currency of the
Secured Obligations of such other Canadian Borrower, whether for principal, interest, fees,
expenses, indemnities or otherwise.



15.2 Nature of Guarantee. The agreement of each Borrower under Section 15.1 shall in
all respects be a continuing, absolute, unconditional and irrevocable guarantee of payment when due
and not of collection, and shall remain in full force and effect until all Secured Obligations of
the other Borrowers have been paid in full, all obligations of such Borrower under this Article 15
have been paid in full and any and all commitments, actual or contingent, of the Finance Parties to
the other Borrowers have been permanently terminated. The U.S. Borrower guarantees that the Secured
Obligations of the other Borrowers will be paid strictly in accordance with their respective terms,
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Finance Parties with respect thereto (provided the U.S.
Borrower shall not be in breach of any such law, regulation or order by doing so). Each of the
Canadian Borrowers guarantees that the Secured Obligations of the other Canadian Borrower will be
paid strictly in accordance with their respective terms, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the
Finance Parties with respect thereto (provided the Canadian Borrowers shall not be in breach of any
such law, regulation or order by doing so).



15.3 Liability Not Lessened or Limited. Subject to the provisions hereof, the
liability of the Borrowers under this Article 15 shall be absolute, unconditional and irrevocable
irrespective of, and without being lessened or limited by:





	 	(a)	 	any lack of validity, legality, effectiveness or enforceability of any
of the agreements or instruments evidencing any of the Secured Obligations of
the Borrowers;






	 	(b)	 	the failure of any Finance Party:






	 	(i)	 	to assert any claim or demand or to enforce any right or
remedy against the Borrowers or any other Person (including any other
guarantor) under the provisions of any of the agreements or instruments
evidencing any of the Secured Obligations of the Borrowers, or
otherwise, or











 



Schedule O
92.

	 	(ii)	 	to exercise any right or remedy against any other guarantor
of, or collateral securing, any of the Secured Obligations of the
Borrowers;






	 	(c)	 	any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations of the Borrowers, or any other
extension, compromise, indulgence or renewal of any Secured Obligations of the
Borrowers;






	 	(d)	 	any reduction, limitation, variation, impairment, discontinuance or
termination of the Secured Obligations of the Borrowers for any reason (other
than by reason of any payment which is not required to be rescinded), including
any claim of waiver, release, discharge, surrender, alteration or compromise,
and shall not be subject to (and the Borrowers hereby waive any right to or
claim of) any defence or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, the Secured Obligations of the Borrowers or otherwise (other than by
reason of any payment which is not required to be rescinded);
	 
	 	(e)	 	any amendment to, rescission, waiver or other modification of, or any
consent to any departure from, any of the terms of any of the agreements or
instruments evidencing any of the Secured Obligations of the Borrowers or any
other guarantees or security;
	 
	 	(f)	 	any addition, exchange, release, discharge, renewal, realization or
non-perfection of any collateral security for the Secured Obligations of the
Borrowers or any amendment to, or waiver or release or addition of, or consent
to departure from, any other guarantee held by any Finance Party as security
for any of the Secured Obligations of the Borrowers;
	 
	 	(g)	 	the loss of or in respect of or the unenforceability of any other
guarantee or other security which any Finance Party may now or hereafter hold
in respect of the Secured Obligations of the Borrowers, whether occasioned by
the fault of any Finance Party or otherwise;
	 
	 	(h)	 	any change in the name of any Borrower, the articles of incorporation,
capital structure, capacity or constitution of any Borrower, the bankruptcy or
insolvency of any Borrower, the sale of any or all of the business or assets of
any Borrower or any Borrower being consolidated, merged or amalgamated with any
other Person;
	 
	 	(i)	 	any payment received on account of the Secured Obligations of the
Borrowers by any Finance Party that it is obliged to repay pursuant to any
Applicable Law or for any other reason; or
	 
	 	(j)	 	any other circumstance which might otherwise constitute a defence
available to, or a legal or equitable discharge of, the Borrowers, any surety
or any guarantor.




15.4 Agent not Bound to Exhaust Recourse. The Agent shall not be bound to pursue
or exhaust its recourse against any Borrower or others or any security or other guarantees it may
at any time







 



Schedule O
93.




hold before being entitled to payment under this Article 15 from the other Borrowers or
to enforce its rights against any Borrower under the Security Documents to which such Borrower is a
party.



15.5 Enforcement. Upon any of the Secured Obligations of either Canadian Borrower
becoming due and payable, each of the other Canadian Borrower and the U.S. Borrower shall, upon
demand by the Agent, forthwith pay to the Agent in immediately available funds at the address of
the Agent set forth herein the total amount of the Secured Obligations of such Borrower and the
Agent may forthwith enforce its rights against each of the other Canadian Borrower and the U.S.
Borrower under the Security Documents to which the each of the other Canadian Borrower and the U.S.
Borrower is a party and the Agent shall apply the sums so paid and realized in such manner as
provided for herein. A written statement of the Agent as to the amount of the Secured Obligations
of any Borrower remaining unpaid to the Finance Parties at any time shall be prima facie evidence
against each other Borrower, absent manifest error, as to the amount of the Secured Obligations of
such Borrower remaining unpaid to the Lenders at such time.



15.6 Guarantee in Addition to Other Security. The guarantees contained in this
Article 15 shall be in addition to and not in substitution for any other guarantee or other
security which the Agent may now or hereafter hold in respect of the Secured Obligations of the
Borrowers, and the Agent shall be under no obligation to marshal in favour of the Borrowers any
other guarantee or other security or any moneys or other assets which the Agent may be entitled to
receive or may have a claim upon.



15.7 Reinstatement. The guarantees contained in this Article 15 and all other
terms of this Article 15 shall continue to be effective or shall be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any of the Secured Obligations of any Borrower
is rescinded or must otherwise be returned or restored by any Finance Party by reason of the
insolvency, bankruptcy or reorganization of such Borrower or for any other reason not involving the
gross negligence or wilful misconduct of any Finance Party, all as though such payment had not been
made.



15.8 Waiver of Notice, etc. To the extent permitted by Applicable Law, each
Borrower hereby waives promptness, diligence, notice of acceptance and any other notice with
respect to any of the Secured Obligations of each other Borrower and this agreement.



15.9 Subrogation Rights. Until satisfaction in full of all of the Secured
Obligations of a particular Borrower and the termination of all commitments, actual or contingent,
of the Finance Parties to such Borrower, all dividends, compositions, proceeds of security or
payments received by any Finance Party from any other
Borrower or any other Person in respect of the Secured Obligations of such particular Borrower
shall be regarded for all purposes as payments in gross without any right on the part of the other
Borrowers to claim the benefit thereof in reduction of their liability under this agreement. Except
to the extent necessary to preserve their rights, none of the Borrowers will exercise any rights
which it may acquire by way of subrogation under this agreement, by any payment made hereunder or
otherwise, until the prior satisfaction in full of all of the Secured Obligations of the Borrowers.
Any amount paid to any Borrower on account of any such subrogation rights prior to the satisfaction
in full of all Secured Obligations of the Borrowers shall be held in trust for the benefit of the
Finance Parties and shall immediately be paid to the Agent and credited and applied against the
Secured Obligations of such Borrower, whether matured or unmatured; provided, however, that if:





	 	(a)	 	any Borrower has made payment to the Agent of all or any part of the
Secured Obligations of the other Borrowers, and










 



Schedule O
94.


	 	(b)	 	all Secured Obligations of the other Borrowers have been paid in full
and all commitments of the Finance Parties to the Borrowers have been
permanently terminated,




the Agent agrees that, at such Borrower’s request, the Agent will execute and deliver to such
Borrower appropriate documents (without recourse and without representation or warranty) necessary
to evidence the transfer by subrogation to such Borrower of an interest in the Secured Obligations
of the other Borrowers resulting from such payment by such Borrower.



15.10 Postponement and Subordination of Claims. If and for so long as an Event of
Default has occurred and is continuing, each Borrower agrees to postpone any and all claims it may
have against the other Borrowers or any Guarantor (collectively, the “Debtors”) to the claims of
the Finance Parties against the Debtors, and agrees to refrain from taking any action or commencing
any proceeding against the Debtors or their respective successors or assigns, whether in connection
with a bankruptcy proceeding or otherwise, to recover any amounts in respect of payments made
hereunder to the Agent, although the Borrowers may take such actions as may be necessary to
preserve their claims against the Debtors. Each Borrower agrees that, if and for so long as an
Event of Default has occurred and is continuing, all indebtedness and liabilities owing by any
Debtor to such Borrower shall be subordinate and junior in right of payment to the payment in full,
in cash or cash equivalents of all of the Secured Obligations of the Borrowers. In the event any
payments are made by a particular Debtor in contravention of the preceding sentences, the relevant
Borrower shall hold the amount so received in trust for the Finance Parties and shall forthwith pay
such amount to the Agent.



15.11 Advances After Certain Events. All advances, renewals and credits made or
granted by the Finance Parties to or for any Borrower hereunder after the bankruptcy or insolvency
of such Borrower, but before the Finance Parties have received notice thereof, shall be deemed to
form part of the Secured Obligations of the Borrowers, and all advances, renewals and credits
obtained from the Finance Parties by or on behalf of the Borrowers hereunder shall be deemed to
form part of the Secured Obligations of the Borrowers, notwithstanding any lack or limitation of
power, incapacity or disability of such Borrower or of the directors or agents thereof and
notwithstanding that such Borrower may not be a legal entity and notwithstanding any irregularity,
defect or informality in the obtaining of such advances, renewals or credits, whether or not the
Finance Parties have knowledge thereof.




ARTICLE 16

MISCELLANEOUS



16.1 Waivers. No failure or delay by the Agent, the Lenders or the Majority
Lenders in exercising any remedy, right or power hereunder or otherwise shall operate as a waiver
thereof, except a waiver which is specifically given in writing by the Agent, and no single or
partial exercise of any power, right or privilege hereunder will preclude any other or further
exercise thereof or the exercise of any other power, right or privilege.



16.2 Notices. All notices, demands and other communications provided for herein
shall be in writing and shall be personally delivered to an officer or other responsible employee
of the addressee or sent by telefacsimile, charges prepaid, at or to the applicable addresses or
telefacsimile numbers, as the case may be, set opposite the party’s name on the signature page
hereof or at or to such other address or addresses or telefacsimile number or numbers as any party
hereto may from time to time designate to the other parties in such manner (except in the case of
the giving of the copies of Drawdown Notices, Rollover Notices and Conversion Notices by the Agent
to the Lenders which shall be effected in accordance with instructions given by the Lenders to the
Agent). Notwithstanding the foregoing, any Drawdown Notice, Rollover Notice or Conversion Notice
may be given by the Borrowers to the Agent













 





Schedule O

95.



verbally by telephone provided that such verbal notice is promptly confirmed in writing, such
confirmation to be provided in accordance with this Section 16.2. Any communication which is
personally delivered as aforesaid shall be deemed to have been validly and effectively given on the
date of such delivery if such date is a Banking Day and such delivery was made during normal
business hours of the recipient; otherwise, it shall be deemed to have been validly and effectively
given on the Banking Day next following such date of delivery. Any communication which is
transmitted by telefacsimile as aforesaid shall be deemed to have been validly and effectively
given on the date of transmission if such date is a Banking Day and such transmission was made
during normal business hours of the recipient; otherwise, it shall be deemed to have been validly
and effectively given on the Banking Day next following such date of transmission.



16.3 Severability. Any provision hereof which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof.



16.4 Counterparts. This agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original and all of which taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed counterpart of a signature page of this agreement
by telecopy or email shall be effective as delivery of a manually executed counterpart of this
agreement.



16.5 Successors and Assigns. This agreement shall enure to the benefit of and shall be binding
upon the parties hereto and their respective successors and permitted assigns.



16.6 Participations and Assignments.





	 	(a)	 	Neither this agreement nor the other Loan Documents nor the benefit
hereof or thereof may be assigned by the Borrowers.
	 
	 	(b)	 	A Lender may at any time sell to one or more other persons
(“Participants”) participating interests in any extension of credit outstanding
hereunder, any commitment of the Lender hereunder or any other interest of the
Lender under the Loan Documents. In the event of any such sale by a Lender of
a participating interest to a Participant, the Lender’s obligations under this
agreement to the Borrowers shall remain unchanged, the Lender shall remain
solely responsible for the performance thereof and the Borrowers shall continue
to be obligated to the Lender in connection with the Lender’s rights under this
agreement. The Borrowers agree that if amounts outstanding under this
agreement are due and unpaid, or shall have been declared to be or shall have
become due and payable further to the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this agreement to the same extent
as if the amount of its participating interest were owing directly to it as the
Lender under this agreement. The Borrowers also agree that each Participant
shall be entitled to the benefits of
Sections 8.2, 8.6 and 9.10 with respect to its participation hereunder;
provided, that no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the Lender would have been entitled to
receive in respect of the amount of the participation transferred by the
Lender to such Participant had no such transfer occurred. Any agreement or
instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this
agreement and to approve any amendment, modification or waiver of any
provision of this agreement; provided that such agreement or




 









 











Schedule O

96.





	 	 	 	instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in Section 14.14(b)
that affects such Participant.
	 
	 	(c)	 	Subject to the consent of the Borrowers and the Agent, such consent
not to be unreasonably withheld, a Lender may at any time sell all or any part
of its rights and obligations under the Credit Facilities to one or more
persons (“Purchasing Lenders”) provided that (i) such sale must be in a minimum
amount of US$5,000,000 (unless such amount represents all of such Lender’s
rights and obligations under the Credit Facilities or unless otherwise agreed
to by the Borrowers and the Agent), (ii) immediately after such sale, the
aggregate Individual Commitments of such Lender must be either nil or at least
US$5,000,000 and (iii) the consent of the Borrowers shall not be required if an
Event of Default has occurred and is continuing or if such sale is to a Lender,
an affiliate of a Lender or an Approved Fund. Upon such sale, the Lender
shall, to the extent of such sale, be released from its obligations under the
Credit Facilities and each of the Purchasing Lenders shall become a party
hereto to the extent of the interest so purchased. Upon such sale, such Lender
shall pay to the Agent an assignment fee in the amount of US$3,500 for each
Purchasing Lender. Any such assignment by a Lender shall not be effective
unless and until the assignee has executed an instrument substantially in the
form of Schedule D hereto whereby such
assignee has agreed to be bound by the terms hereof as a Lender and has agreed
to a specific Individual Commitment with respect to the Credit Facilities and a
specific address and telefacsimile number for the purpose of notices as
provided in Section 16.2. A copy of a fully executed copy of such instrument
shall be promptly delivered to each of the Agent and the Borrowers by the
Purchasing Lender. Upon any such assignment becoming effective, Schedule B
hereto shall be deemed to be amended to include the assignee as a Lender with
the specific Individual Commitment, address and telefacsimile number as
aforesaid and the Individual Commitment of the Lender making such assignment
shall be deemed to be reduced by the amount of the Individual Commitment of the
assignee. The Borrowers also agree that each Purchasing Lender shall be
entitled to the benefits of Section 8.6 with respect to its purchase hereunder;
provided that no Purchasing Lender shall otherwise be entitled to receive any
greater amount pursuant to such Section then the Lender would have been
entitled to receive in respect of the amount sold by the Lender to such
Purchasing Lender had no such sale occurred.
	 
	 	(d)	 	The Borrowers authorize the Agent and the Lenders to disclose to any
Participant or Purchasing Lender (each, a “Transferee”) and any prospective
Transferee and authorizes each of the Lenders to disclose to any other Lender
any and all financial information in their possession concerning the Borrowers
(other than
information which the Borrowers have designated as confidential) which has
been delivered to them by or on behalf of the Borrowers pursuant to this
agreement or which has been delivered to them by or on behalf of the
Borrowers in connection with their credit evaluation of the Borrowers prior
to becoming a party to this agreement, so long as any such Transferee agrees
not to disclose any confidential, non-public information to any person other
than its non-brokerage affiliates, employees, accountants or legal counsel,
unless required by law, regulation, subpoena or similar legal process, in
connection with the exercise of





 









 










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97.





	 	 	 	any remedies hereunder or the enforcement of
rights under the Loan Documents, or as requested by regulatory authorities.
	 
	 	(e)	 	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 without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
	 
	 	(f)	 	On one or more occasions, one or more Additional Lenders may be
admitted as Lenders party to this agreement in connection with an increase of
the total Commitment pursuant to Section 2.6, subject to (i) execution and
delivery by any such Additional Lender to the Agent of an Instrument of
Adherence substantially in the form of Schedule O hereto (an “Instrument of
Adherence”), and (ii) acceptance of such Instrument of Adherence by each of the
Agent and the Borrowers by their respective executions thereof. Upon the
satisfaction of the foregoing conditions, from and after the effective date
specified in each such Instrument of Adherence, the Additional Lender shall be
a Lender party hereto and have the rights and obligations of a Lender
hereunder.




Entire Agreement. This agreement, the Fee Letter and the agreements referred to herein and
delivered pursuant hereto constitute the entire agreement between the parties hereto and supersede
any prior agreements, commitment letters, undertakings, declarations, representations and
understandings, both written and verbal, in respect of the subject matter hereof.



Further Assurances. The Borrowers shall from time to time and at all times hereafter, upon
every reasonable request of the Agent, make, do, execute, and deliver or cause to be made, done,
executed and delivered all such further acts, deeds, assurances and things as may be necessary in
the opinion of the Agent for more effectually implementing and carrying out the true intent and
meaning of this agreement or any agreement delivered pursuant thereto as the Agent may from time to
time request, in form and substance satisfactory to the Agent.



16.9 Judgment Currency.





	 	(a)	 	If, for the purpose of obtaining or enforcing judgment against any
Borrower in any court in any jurisdiction, it becomes necessary to convert into
a particular currency (such currency being hereinafter in this Section 16.9
referred to as the
“Judgment Currency”) an amount due in another currency (such other currency
being hereinafter in this Section 16.9 referred to as the “Indebtedness
Currency”) under this agreement, the conversion shall be made at the rate of
exchange prevailing on the Banking Day immediately preceding:






	 	(i)	 	the date of actual payment of the amount due, in the case of
any proceeding in the courts of the Province of Ontario or in the
courts of any other jurisdiction that will give effect to such
conversion being made on such date; or
	 
	 	(ii)	 	the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the date as of
which such conversion





 









 






Schedule O

98.




	 	 	 	is made pursuant to this Section 16.9(a)(ii)
being hereinafter in this Section 16.9 referred to as the “Judgment
Conversion Date”).






	 	(b)	 	If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 16.9(a)(ii), there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of actual payment
of the amount due, the Borrowers shall pay to the appropriate judgment creditor
or creditors such additional amount (if any, but in any event not a lesser
amount) as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Indebtedness Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial order at the rate of exchange prevailing on the Judgment Conversion
Date.
	 
	 	(c)	 	Any amount due from the Borrowers under the provisions of Section
16.9(b) shall be due to the appropriate judgment creditor or creditors as a
separate debt and shall not be affected by judgment being obtained for any
other amounts due under or in respect of this agreement.
	 
	 	(d)	 	The term “rate of exchange” in this Section 16.9 means the noon spot
rate of exchange for Canadian interbank transactions applied in converting the
Indebtedness Currency into the Judgment Currency published by the Bank of
Canada for the day in question.




16.10 Waivers of Jury Trial.



EACH OF THE BORROWERS, THE LENDERS AND THE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY COUNTERCLAIM THEREIN.



16.11 Expenses. The Borrowers shall pay, jointly and severally, (i) all reasonable out-of-pocket
expenses incurred by the Agent and its affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agent, in connection with the preparation, execution, delivery and
administration of this agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Lender in connection with the
issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Agent, the Issuing Lender or any Lender, including the fees,
charges and disbursements of any counsel for the Agent, the Issuing Lender or any Lender, in
connection with the enforcement or protection of its rights after a Default in connection with this
agreement, including its rights under this Section, or in connection with the Loans made or Letters
of Credit or Bankers’ Acceptances issued hereunder after a Default, including all such
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans, Letters of Credit or Bankers’ Acceptances.



16.12 USA PATRIOT Act. Each Lender hereby notifies the Borrowers that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain, verify and record information that identifies each Obligor, which
information includes the name and address of each Obligor and other information that will allow
such Lender to identify such Obligor in accordance with the Act.




 









 








Schedule O

99.



16.13 Confidentiality. Each of the Borrowers hereby confirms and agrees with the Agent and each of the
Lenders that this agreement, the other Loan Documents and the terms and conditions of the Credit
Facilities (collectively, the “Confidential Information”) are confidential and proprietary to the
Agent and the Lenders and that the Agent and the Lenders could incur or sustain losses or damages
if any of such Confidential Information or the substance thereof were disclosed to any Person or to
the public or placed on any public file and accordingly each of the Borrowers covenants to and
agrees with the Agent and the Lenders that it shall not, and shall not permit any of its employees,
officers, directors, agents, or advisors to disclose directly or indirectly any of such
Confidential Information to any Person except (a) to their respective officers, directors,
employees, accountants, lawyers and other professional advisors who are directly involved in
negotiating this agreement and the other Loan Documents or administering its compliance herewith,
and then only on a “need to know” basis and subject to the same confidentiality restrictions in
favour of the Agent and the Lenders as are set out herein; (b) as may be compelled in a judicial or
administrative proceeding by an Official Body or (c) as required by any Applicable Law.
Notwithstanding the foregoing, the Borrowers may make public disclosure of the existence of this
agreement and the total amount of the Credit Facilities but not of any of the other Confidential
Information, save as aforesaid. Each of the Borrowers hereby confirms and agrees with the Agent and
the Lenders that this agreement was entered into in the ordinary course of the Borrowers’ business.
If a Borrower is required to make certain other disclosure of the Confidential Information
pursuant to any Applicable Law, it may make public disclosure of only those certain terms and
conditions hereof necessary to comply with such Applicable Law upon consultation with and with the
prior written consent of the Agent. Any proposed filing or disclosure of any Confidential
Information in connection therewith shall be subject to the terms of this Section. The terms of
this Section shall survive the Maturity Date.




[The remainder of this page is intentionally left blank.]




 









 








Schedule O

100.




          IN WITNESS WHEREOF the parties hereto have executed this agreement.




	 	 	 	 	 
	Vitran Corporation Inc.	 	VITRAN CORPORATION INC.
	185 The West Mall
	 	 	 	 
	Suite 701
	 	 	 	 
	Toronto, ON M9C 5L5
	 	 	 	 
	 

	 	By:
	 	/s/ Richard E. Gaetz
	 

	 	 	 	 
	Attention: President and CEO

	 	 	 	Name: Richard E. Gaetz
	Telefax: (416) 596 8039

	 	 	 	Title: President and CEO
	 
	 	 	 	 
	Vitran Express Canada Inc.	 	VITRAN EXPRESS CANADA INC.
	751 Bowes Road
	 	 	 	 
	Concord, ON L4K 5C9
	 	 	 	 
	 

	 	By:
	 	/s/ Richard E. Gaetz
	 

	 	 	 	 
	Attention: CEO

	 	 	 	Name: Richard E. Gaetz
	Telefax: (416) 596 8039

	 	 	 	Title: CEO
	 
	 	 	 	 
	Vitran Corporation	 	VITRAN CORPORATION
	6500 East 30th Street
	 	 	 	 
	Indianapolis, IN 46219
	 	 	 	 
	 
	 	 	 	 
	Attention: CEO

	 	By:
	 	/s/ Richard E. Gaetz
	 

	 	 	 	 
	Telefax: (416) 596 8039

	 	 	 	Name: Richard E. Gaetz
	 

	 	 	 	Title: CEO






 









 






Schedule O

101.




	 	 	 	 	 
	JPMorgan Chase Bank, N.A.,	 	JPMORGAN CHASE BANK, N.A., as Agent
	Toronto Branch
	 	 	 	 
	Suite 1800, Royal Bank Plaza
	 	 	 	 
	South Tower, 200 Bay Street
	 	 	 	 
	Toronto, ON M5J 2J2
	 	 	 	 
	 

	 	By:
	 	/s/ Steven P. Sullivan
	 

	 	 	 	 
	Attention: Mr. Christopher Jamroz

	 	 	 	Name: Steven P. Sullivan
	Telefax: (416) 981-9278

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	JPMorgan Chase Bank, N.A.,	 	JPMORGAN CHASE BANK, N.A., Toronto
	Toronto Branch	 	Branch, as Canadian Lender
	Suite 1800, Royal Bank Plaza
	 	 	 	 
	South Tower, 200 Bay Street
	 	 	 	 
	Toronto, ON M5J 2J2
	 	 	 	 
	 

	 	By:
	 	/s/Jeffrey Coleman
	 

	 	 	 	 
	Attention: Mr. Christopher Jamroz

	 	 	 	Name: Jeffrey Coleman
	Telefax: (416) 981-9278

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	JPMorgan Chase Bank, N.A.	 	JPMORGAN CHASE BANK, N.A., as U.S.
	10 South Dearborn	 	Lender
	Chicago, IL 60603
	 	 	 	 
	USA
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/Steven P. Sullivan
	 

	 	 	 	 
	Attention: Mr. Jeff Coleman

	 	 	 	Name: Steven P. Sullivan
	Telefax: (416) 981-9278

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:






 









 






Schedule O

102.




	 	 	 	 	 
	 	 	FIFTH THIRD BANK, as U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William Krumman
	 

	 	 	 	 
	Attention: William Krummen

	 	 	 	Name: William Krumman
	Telefax: (317) 383-2320

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/Kevin Hipskind
	 

	 	 	 	 
	 

	 	 	 	Name: Kevin Hipskind
	 

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 	 	FIFTH THIRD BANK, Canadian Branch, as Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Stephen Pepper
	 

	 	 	 	 
	Attention: Stephen Pepper

	 	 	 	Name: Stephen Pepper
	Telefax: (647) 436-1156

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/Jeremiah Hynes
	 

	 	 	 	 
	 

	 	 	 	Name: Jeremiah Hynes
	 

	 	 	 	Title: Vice President and Principal Officer
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, N.A., as U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Joseph Bianchin
	 

	 	 	 	 
	Attention: Joseph Bianchin

	 	 	 	Name: Joseph Bianchin
	Telefax: (412) 263-2255

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	WELLS FARGO FINANCIAL CORPORATION
	 	 	CANADA, as Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Steve Malone
	 

	 	 	 	 
	Attention: Nick Scarfo

	 	 	 	Name: Steve Malone
	Telefax: (905) 755-7106

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:






 









 






Schedule O

103.




	 	 	 	 	 
	 	 	NATIONAL CITY BANK, as U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Cristina Feden
	 

	 	 	 	 
	Attention: Cristina Feden

	 	 	 	Name: Cristina Feden
	Telefax: (412) 471-4883

	 	 	 	Title: Assistant Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/Emil Kwaczala
	 

	 	 	 	 
	 

	 	 	 	Name: Emil Kwaczala
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	NATIONAL CITY BANK, Canada Branch, as
	 	 	Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Caroline Stade
	 

	 	 	 	 
	Attention: Caroline Stade

	 	 	 	Name: Caroline Stade
	Telefax: (416) 361-0085

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BANK OF MONTREAL – Chicago Branch,
	 	 	as U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Bruce Pietka
	 

	 	 	 	 
	Attention: Kristy Burden

	 	 	 	Name: Bruce Pietka
	Telefax: (312) 293-5068

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BANK OF MONTREAL, as Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Sean Gallaway
	 

	 	 	 	 
	Attention: Sean Gallaway

	 	 	 	Name: Sean Gallaway
	Telefax: (416) 359-7796

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:






 









 






Schedule O

104.




	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as U.S. Lender
	 
	 

	 	By:
	 	/s/Stephen Sullivan
	 

	 	 	 	 
	Attention: Stephen O’Sullivan

	 	 	 	Name: Stephen Sullivan
	Telefax: (617) 434-4929

	 	 	 	Title: Principal
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BANK OF AMERICA,
N.A., Canada Branch, 

as Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Nelson Lam
	 

	 	 	 	 
	Attention: Nelson Lam

	 	 	 	Name: Nelson Lam
	Telefax: (416) 349-4282

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	NATIONAL BANK OF CANADA, New York
	 	 	Branch, as U.S. Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Vincent Lima
	 

	 	 	 	 
	Attention: Jeffrey Forgach

	 	 	 	Name: Vincent Lima
	Telefax: (212) 632-8509

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/Monique Ballergeau
	 

	 	 	 	 
	 

	 	 	 	Name: Monique Ballirgeau
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	NATIONAL BANK OF CANADA, as
	 	 	Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Ian Gillespie
	 

	 	 	 	 
	Attention: Ian Gillespie

	 	 	 	Name: Ian Gillespie
	Telefax: (416) 869-6545

	 	 	 	Title: Managing Director
	 
	 	 	 	 
	 

	 	By:
	 	/s/Craig Squires
	 

	 	 	 	 
	 

	 	 	 	Name: Craig Squires
	 

	 	 	 	Title: Vice President






 









 






Schedule O

105.




	 	 	 	 	 
	 	 	LAURENTIAN BANK OF CANADA, as Canadian Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/Rick Arnone
	 

	 	 	 	 
	Attention: Veronica Pereira

	 	 	 	Name: Rick Arnone
	Telefax: (905) 564-7796

	 	 	 	Title: Assistant Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/Veronica Pereira
	 

	 	 	 	 
	 

	 	 	 	Name: Veronica Pereira
	 

	 	 	 	Title: Senior Manager